One in a series of Deadline stories that look back on 2013 and ahead to 2014.
It was a year that saw the Weinsteins and Warner Bros clash over the title of The Butler and then get into the ring again for The Hobbitsequels. 2013 also witnessed the first fired Walking Dead showrunner wanting to take a bite out ofAMC for his piece of the cable blockbuster, a Ray Donovan EP nailed by the feds in a big-time gambling scheme right out of the Showtime Hollywood fixer series and a monster of a legal drama in the making as Legendary Pictures tried to swat some seasoned producers off its Godzilla reboot. In the end, with those cases and more, the Hollywood legal landscape of 2013 proved to be a stringent reminder of why they call it show business and not show friends.
With money and rights at the basis of most of the disputes, the complaints and motions were as numerous as locusts and as prevalent as rats, with many of them spilling over into 2014 and perhaps beyond. Just ask Barry Diller and Les Moonves as streaming service Aereo and CBS and other broadcasters suit up for a potential Supreme Court winner-takes-all showdown next year. Or Prospect Park as it fights ABC in a $125 million suit over licensed soaps All My Children and One Life To Live while having to contend with a complaint from co-founder Jeff Kwatinetz seeking a declaratory judgment from the court over non-compete clauses in his contract with the company. Sure, sometimes weapons are lowered like when Paramount and asset management firm Content Partners reached an undisclosed settlement on December 12 in their $45 million film financing slate dust-up after three years going at it in the courts. With a pivotal hearing looming, that was realpolitik in action as the sudden deal allowed the studio to sidestep dragging JPMorgan Chase, which corporate parent Viacom has significant banking dealings with, into the protracted case despite the blessing of the presiding judge. However, with the grinding duration of a lot of the legal disputes in this town, such resolution is rare, even when the end seems in sight.
Look for instance at Warner Bros and the seemingly never-ending Superman heirs’ rights battle. After a string of seemingly conclusive legal wins this year, WB and subsidiary DC Comics now could face more Krypton courtroom drama in 2014. On December 10, the co-creators heirs’ attorneys Marc Toberoff and Keith G. Adams petitioned the 9th Circuit for either a rehearing by the panel that found in the studio’s favor on November 21 or by the full court itself. If that effort fails, they could take the matter to the SCOTUS. Even with all the billings that O’Melveny & Myers get to make to WB after years of litigation, the sharp-elbowed Daniel Petrocelli and Matthew Kline must want to be able to declare a super-lawyer victory and move on – after all, they also have the Trouble With The Curve copyright suit to handle for the studio and a February 24 hearing on a summary judgment motion in that case by plaintiffs Ryan A. Brooks and Gold Glove Productions to fend off.
The longevity of the appeals process and the complexities of the cases themselves often translate into plaintiffs and defendants never having to say it’s over. Yes, come June, former Ray Donovan EP Bryan Zuriff will have completed the six months of home confinement he was sentenced to by a federal judge on November 25 for his role in a $100 million illegal gambling group. After that, Zuriff has another year and a half of probation, but the producer looks sure to at the very least resume his consultant role on the hit Showtime series – just in time for its second season. But that’s the exception as the world of Hollywood lawsuits are peppered with hair-trigger mines waiting to go off. In fact, some of the most explosive are old squabbles simply manifested in new venues. A January 6 hearing could have seen the remaining portions of the $130 million residuals suit filed on May 24 against SAG-AFTRA by former SAG President Ed Asner and 15 other members of the self-titled United Screen Actors Committee tossed out as the union desires. However, federal Judge Manuel Real vacated that hearing on December 23, taking the motions under submission for a ruling “on the matter in due course.” When that ruling comes it may settle this round of the assumed battle for the union’s soul by anti-merger activists. Then again, depending on how it goes, the ruling could also just provide another stepping stone to a June 24 trial start in the salacious case, just before the now-merged SAG-AFTRA’s latest three-year contract expires. For sure, the upcoming Golden Globes on January 12 again will take place in shotgun-wedding circumstances as the Hollywood Foreign Press Association and its lawyer Petrocelli await a ruling on the appeal of aspects of its unsuccessful case against Dick Clark Productions over who actually owns the lucrative TV rights to the annual ceremony currently on NBC. Once that’s dealt with, there’s a whole other phase of the case to be delved into, including digital rights, pre-show rights and opening up dcp’s accounting methods. Then there’s the fluidity of the law and the opportunities that can present. After losing a bid this fall for a second Desperate Housewives trial, Nicollette Sheridan is counting on a January 29 reconsideration hearing looking at some recent legislative changes in California labor law to revive parts of her 2010 case against ABC/Touchstone for wrongful termination. That potentially poignant case, which stemmed from an altercation with EP Marc Cherry in September 2008 and Sheridan being dropped from the now-wrapped series in early 2009, originally ended in a mistrial in March 2012 after the jury deadlocked 8-4.
With those examples in mind from the year that was, here are 5 cases to watch in 2014:
Aereo vs. The Networks At The Supreme Court
The Supreme Court hasn’t yet said it will hear the case and no date for argument has even been scheduled, but this is the undisputed heavyweight legal fight of the year for the industry right now. Potentially billions are at stake, both in advertising and carriage fees, as ABC, CBS, Fox, NBC and several other broadcasters sought in their October 11 petition to have the highest court in the land rule in their ongoing trench warfare fight with the Diller-backed streaming service. Surprisingly, Aereo said in its response brief on December 12 that it welcomed the challenge. In essence, the broadcasters want the SCOTUS to review an April 1 ruling by the U.S. Courts of Appeals in New York that rejected their request for a preliminary injunction against Aereo. But it’s really about much more than that: The future of the airwaves and TV industry is in play here. After suffering defeats in a number of jurisdictions in what they see as a blatant violation of their public performance rights, network bosses like Moonves have said they might go cable if Aereo can’t be shut down. That may be hyperbole but everyone knows that the technology that got the situation to where it is now isn’t going to go away anytime soon. A similar argument pervades the efforts by ABC, Fox and others to shut down Dish Network’s ad-jumping Hopper DVR service. Meanwhile, the two-and-change-year-old Aereo keeps adding new markets and getting sued anew in the likes of Utah and Massachusetts. This is going to get bare knuckles in D.C., and something will change one way or another.
Harvey & Bob Battle Warner Bros Over ‘Hobbit’ Sequel Cash
The players are familiar, but the prize is new – well “newish.” Unless someone steps it back very quickly, 2014 will see Harvey and Bob Weinstein and their old company Miramax fighting it out with Warner Bros for the $75 million or more the former claim the latter owes them from sequels to The Hobbit. In their multimillion-dollar lawsuit filed in NY Superior Court on December 10, just days before The Hobbit: The Desolation Of Smaug was released, Miramax and the brothers claim that a 1998 agreement where the WB-owned New Line took over the rights to the J.R.R. Tolkien property entitles them to profits from further pics because the studio is spinning three movies out of the one Hobbit book. WB says that’s not the deal they reached back in ’98 and the approximately $100 million that Miramax and Harvey and Bob made off the first three Lord Of The Rings movies and 2012’s The Hobbit: An Unexpected Journey is all they’re getting. Last week the plaintiffs filed paperwork to end the arbitration the two sides were simultaneously pursuing, as mandated by the 1998 deal, and seek direct resolution to their damages claims in the NY Courts. With the box office success of Smaug and expected haul for The Hobbit: There And Back Again, out in December 2014, WB is going to aim for a decisive TKO in this one – especially with the bad blood still lingering between the studio and the Weinsteins over the title fight this summer for what was ultimately called Lee Daniels’ The Butler. However, as the TV world has discovered in the not-so-distant past, definitions of terms such as “sequel” and “remake” can take on very different meanings depending on what side of the table you are sitting on.
Former EP Returns For His Piece Of AMC’s ‘The Walking Dead’
Frank Darabont isn’t the only showrunner to be pink slipped from The Walking Dead by AMC, but he is the first one to hit back. More than two and a half years after Darabont was abruptly canned from the ratings powerhouse zombie apocalypse series, the December 17 complaint the Mob City EP and CAA filed in NY Supreme Court aired some pretty dirty laundry. AMC has until mid-January at the latest to respond to the soiled allegations. Its reply will be a pretty good indication of just how much of a curb stomp this vertical integration action will be if it even gets to the trial Darabont and his agency are requesting. The discovery and deposition process alone could provide plenty of drama and lots of revealing information on what the financial and creative bones of Dead really are. For one thing, among other alleged misdeeds, the detailed filing portrays AMC as an unscrupulous company playing a limbo-low license-fee shell game to the show based on Robert Kirkman’s graphic novels to enrich itself, grab some tax money from the state of Georgia and still run the in-house produced hit series at an ongoing multimillion-dollar deficit. Among other things, those supposed actions have the consequence of ensuring Dead has zero profits on paper and denying the wrongful terminated Darabont his contractually obligated “tens of millions of dollars in profits” from the massively successful series as well as his assured credit on Dead and its spinoffs. In fact the complaint alleges that the real reason Darabont was fired in July 2011 during production on Season 2 of Dead was so AMC could get out of paying him increased fees he would be entitled to in Season 2 and 3 under an agreement the EP and the company had worked out in February of that year. While such cases often result in eleventh-hour out-of-court settlements to stop them from going to trial, AMC is going to have to hand over a lot to placate Darabont. Added to that is the fact that his top lawyer in strong-arming litigator Dale Kinsella. He’s the same attorney who pulled some significant settlement teeth for his Smallville co-creators/writers clients Miles Millar and Alfred Gough in their $100 million breach-of-contract and conflict-of-interest case against Warner Bros TV in May. Kinsella also represented American Idol creator Simon Fuller in his two-year breach-of-contract lawsuit against Fox and FremantleMedia over The X Factor. That suit was settled out of court on March 29. All of which goes to say, AMC may end up wishing zombies had attacked it instead.
California Dreaming At Prospect Park
The online licensed soaps themselves may have been short lived, but Prospect Park’s $125 million breach-of-contract fracas with ABC over All My Children and One Life To Live continues to weaves its way through the courts. However, with no response from the network to the company’s amended complaint of November 13, Prospect Park and its recent investors have an equally significant legal volley to deal with from within. On November 21, PP co-founder Jeff Kwatinetzfiled a 10-claim complaint against the company as well as Boston-based ABRY Senior Equity IV, L.P., ABRY Investment Partnership, L.P., and ABRY Senior Equity Co-Investment Fund IV seeking a declaratory judgment over non-compete clauses in the December 31, 2012, employment agreement he signed. While continuing to work at PP, which Kwatinetz formed with ex-Walt Disney Studios president Richard Frank in 2008, the producer wants to explore what his options are in case his difference of opinion with ABRY over the direction of the company grows and he did decide to leave. Specifically to that end, Kwatinetz, who filed his complaint in LA Superior Court last month, wants California laws and jurisdiction to take precedent in the matter. That’s for the fact that non-complete clauses themselves and additional penalties they might have are, on the whole, severely restricted here despite their appearance in many similar employment contracts. Which is why ABRY put pedal to the metal on December 19 seeking a January 21 hearing to dismiss or stay Kwatinetz’s attempt to set the proceedings in the Golden State. ABRY wants the case to be heard instead in non-compete clause friendly New York State as designated by the December 2012 employment agreement. As the defendants push for urgent ex parte action, Kwatinetz’s lawyer Michael Taitelman of LA firm Freedman & Taitelman, which also has served as outside counsel to Deadline’s parent company PMC, is taking another tack in the potentially important case. Earlier this month, Taitelman filed paperwork on behalf of Kwatinetz with the court seeking a February 6 hearing on the matter to have a trial start date set – a trial that would take place here in California. Whatever hearing gets the nod, this could all be decided within a month and a half or it could become a long, dragged-out affair. Bet on the latter.
The Godzilla War: Legendary vs. Producers
Almost a year after the lawsuits started smashing into each other, the legal cage match between Legendary Pictures and producers Roy Lee, Dan Lin and Doug Davison over the upcoming Godzilla reboot looks likely to be heading to a trial – though it’ll almost certainly start after the Warner Bros distributed pic comes out on May 16. On January 9, Legendary filed a complaint to remove Lin, Lee and Davison from the project with a Lilliputian $25,000 payout. In their initial suit, filed to avert a temporary restraining order they say the three threatened, Legendary claimed that WB lot-based Lin and Lee, as well as Davison, were brought on board in March 2010 soon after the company acquired the rights to the Godzilla character from Japanese corporation Toho. Legendary’s lawyers allege the established producers had nothing to do with that deal and hence held no ownership or underlying rights to the giant monster or any movies based on him. According to Legendary, the puny payout was all the three were entitled to under the March 2011 Producer Loan Agreement between them and the company. As expected, Lin, Lee and Davison had a very different POV. In their breach-of-contract cross complaint, filed on January 17, the trio asserted that Legendary only filed its complaint to begin with because the producers had made it clear that they were going to assert their claims to a project that they say they had brought to the company and that they developed. Those claims, of course, include credit and a rewarding backend on an almost certain global franchise – and not getting iced out of either. Always aiming for a trial, the producers sought millions in compensatory damages, screen credit, and participation in Godzilla sequels, prequels, or further remakes. Since those fireworks, things have mostly stayed out of the public eye, as Legendary has desired in the matter. However, the mediation the court mandated this past May 10 hasn’t really gone anywhere, sources tell me. Which means the scheduled March 20 status conference is just a perfunctory step to get the discovery process started, open up Legendary’s books and see CEO Thomas Tull, President/CCO Jon Jashni and other execs on the stand. If they want to prevent that spotlight being turned on, Legendary, who exited WB for a multi-year deal with Universal last summer, might have to hammer out a costly settlement quick. Or let the beast be unleashed.