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The Incredible Sulk: Stan Lee Lawsuit Dismissed Under Rule 60

By Robyn Hagan Cain | Last updated on

Our spidey-sense tells us that we haven’t seen the last of the Stan Lee lawsuits.

Stan Lee Media Inc., (SLMI) lost a challenge in the Second Circuit Court of Appeals this week to intervene in a seven-year-old settlement between Stan Lee (the man) and Marvel over rights to some of Lee’s most famous characters.

Lee and Marvel settled a claim in 2005 over rights to several popular, Lee-created comics -- like Spider-Man, the Incredible Hulk, and the Fantastic Four. SLMI, which was trying stake its claim on the characters by alleging that Lee did not validly terminate his contract with SLMI in the early aughts, attempted to intervene in the case as the real party of interest, reports the Hollywood Reporter.

SLMI asked the Second Circuit Court of Appeals to direct a district court to hear its claims against Lee and Marvel, despite the fact that the court dismissed an early SLMI shareholder lawsuit, Abadin v. Marvel Entertainment, in 2010 for lack of standing.

On March 8, SLMI told the Second Circuit that the court should disrupt the 2005 Marvel/Lee judgment because SLMI now has standing to sue for the multi-billion dollar properties.

Federal Rule of Civil Procedure 60 lists the reasons for which a court may relieve a party or its legal representative from a final judgment, order, or proceeding. SLMI claimed that it qualified for relief under Rule 60(b)(5), which states "the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable."

Regardless of standing, the Second Circuit ruled that SLMI's attempt was untimely under Rule 60(c)(1). That rule requires a motion for intervention to be filed within a "reasonable time." SLMI waited more than five years after final judgment to seek to vacate the judgment. Much shorter periods of time, the court noted, have been held unreasonable.

While the Second Circuit ruling leaves SLMI down, the company's still not out. SLMI is also pursuing claims against Lee, personally, in California.

Last year, a California judge stayed that Golden State claims pending the Second Circuit's decision. The California court said that SLMI could continue with its claims against Lee as long as the Second Circuit didn't slap SLMI's case with a res judicata label, according to the Hollywood Reporter. Since the appellate court's ruling was restricted to Rule 60 interpretations, SLMI can proceed in California with its Stan Lee lawsuit.

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