A jury will decide whether Warner Bros Television owes the producers and creators of Smallville $100 million in damages. In a five-page ruling released Tuesday, Judge Michael Johnson cited a number of “triable issues” in the conflict of interest case. In doing so, he rejected WBTV and other WB defendants’ motion for summary judgment over the show about the young Superman. The case will now likely go to trial sometime in mid-2013.
In the suit, first filed in March 2010, Tollin/Robbins Productions and Smallville co-creators/writers Miles Millar and Alfred Gough claim that WBTV signed low-balling licensing deals with the WB and later the CW that were not at the requisite arms-length nor conducted with the good faith that they should have been. Smallville debuted on the WB Network on October 21, 2001. It ran until May 13, 2011, ending on the CW, which itself debuted in 2006 after the merger of the WB and CBS’ UPN. The producers and co-creators allege that this apparent cozy relationship between different elements of the Warner Bros corporate entity allowed the company to dramatically reduce the value of Smallville and hence their share of the show’s profits. WBTV of course disagreed and the parties have been at each other in the courts ever since.
For instance, as Judge Johnson noted, “WBTV argues that Plaintiffs’ damages are speculative because they cannot establish greater profits if the Series had been licensed to Fox or another network or if the Series’ license agreements had contained more favorable terms.”
In his ruling, based on an August 28 hearing, Johnson also pointed out that “WBTV argues that it did not breach any of its express or implied contractual duties with Plaintiffs because it had the absolute discretion to determine the terms of its license agreements and to do business with its affiliates.” He then added that Plaintiffs have demonstrated triable issues regarding these provisions: whether WBTV complied with its arms-length obligations, whether a provision which proposed to add that the agreements be “for fair market rates consistent with licenses granted by Warner to non-affiliates” was included in the Producers’ MAGD (Modified Adjusted Gross Definition); whether the absolute discretion clause applies to the Producers without limit; and whether the Producers’ MAGD inherently included the equivalent of an affiliate, arms-length provision. These triable issues prevent summary adjudication of both the express and implied contractual claims.” Warner Bros. had no comment on the ruling today. Plaintiffs Tollin/Robbins Productions, Killara Productions and Leonardtown Productions are represented by the Santa Monica firm of Kinsella Weitzman Iser Kump & Aldisert.