Fox Hit With Massive Bill In ‘Bones’ Profit Battle; Vows To Gut Award In Appeal

Almost two years after Bones ended its run of more than a decade at Fox, the stars and executive producer of the crime drama have partially prevailed in their profit participation battle with the company, for now.

Emily Deschanel and David Boreanaz and EP Barry Josephson have been issued a hefty award of almost $179 million in the case, it was revealed today in a court petition by attorney Dale Kinsella and lawyers for the actors.  However, the matter looks to be far from over as Fox is appealing the awarding of more than $128 million in punitive damages that it says are in contradiction to the initial contracts the actors and Josephson inked for Bones years ago.

“This is a tremendous victory for the Bones profit participants who created and starred in the longest-running drama series to air on the FOX network,” Josephson lawyer Kinsella said today about what is one of the largest awards in TV legal history (read the award here).

“Fox’s fraudulent conduct toward the series’ creators and stars, perpetrated over many years, has finally been brought to light, and Fox has been held accountable for its actions,” the Kinsella Weitzman Iser Kump & Aldisert attorney wrote. “After extensive testimony, the arbitrator found that Fox manifests ‘a company-wide and accepted climate that envelops an aversion for the truth.’ ”

“What we have exposed in this case is going to profoundly change the way Hollywood does business for many years to come,” says John Berlinski, who represents Deschanel, Boreanaz and Bones EP and author Kathy Reichs. “Our clients’ creativity and hard work brought Fox its longest-running and most profitable drama ever,” the Kasowitz Benson Torres LLP attorney notes. “Now Fox needs to – at long last – do the right thing and pay them what they are owed.”

“The punitive damages assessed by the arbitrator reflect the severity and reprehensibility of Fox’s conduct and that of many senior Fox executives,” Kinsella noted of the “wrongdoing” Fox is labeled with and the disrepute Peter Rice and soon-to-be former Fox TV bosses Dana Walden and Gary Newman come under in arbitrator Peter D. Lichtman’s award filing. “This award—exposing Fox’s self-dealing and the harm it visits on profit participants—represents a victory for not only the Bones profit participants, but for all creative talent in the television industry.”

That is not how the still Rupert Murdoch-owned Fox sees this bone crunching matter, at all.

“The ruling by this private arbitrator is categorically wrong on the merits and exceeded his arbitration powers,” said 21st Century Fox this morning as the company filed its own paperwork disputing the award, which arbitrator and former Los Angeles Superior Court Judge Lichtman ruled on earlier this month. “Fox will not allow this flagrant injustice, riddled with errors and gratuitous character attacks, to stand and will vigorously challenge the ruling in a court of law,” the company added, as it brought giant-slaying attorney Daniel Petrocelli plus Molly Lens of O’Melveny & Myers on board for the appeal.

While seeking to have the vast majority of the huge award tossed out, Fox is not contesting the non-punitive damages of $50,240,048 that a JAMS arbitrator handed out to the Bones EPs.

“This Court ordered arbitration of most of their claims pursuant to the arbitration clause of their contracts, which—like many commercial agreements—expressly prohibits punitive remedies for any arbitral claims asserted in connection with alleged breaches,” today’s filing by Fox’s O’Melveny & Myers and Munger, Tolles & Olseon lawyers declared.

“The arbitrator, however, refused to apply that unambiguous limitation on his authority,” they added in their desire to see the award vacated. “He made many other errors, to be sure, but none so glaring and indefensible as his arrogation of power to award punitive damages in the face of a contractual provision explicitly denying him that power.”

It should be pointed out that Arbitrator Lichtman took more than a few swipes at what he refer to as Fox’s “last minute arguments” on his call in his award. “The Arbitrator disagrees entirely with Fox’s assertions, which represent a transparent attempt to derail this Arbitration before the final award is issued,” the Amended Final Award document states.

Today’s unveiling of sorts and the newly pitched legal front follows a sit-down in Judge Richard Rico’s chambers Monday by the parties’ lawyers. It also comes after nearly three years in arbitration and mediation with 20th Century Fox Corp, Fox Broadcasting Co and Fox Entertainment Group by the Bones squad.

Industry vet Josephson first filed his wide-ranging breach of contract and fraudulent inducement complaint hitting the “unrelenting” Fox with “underreporting” the finances of Bones to the tune of millions and millions back on November 25, 2015. Actors and fellow Bones producers Deschanel and Boreanaz threw down with their own lawsuit five days later alleging that they and Reichs had been “cheated out of more than $100 million in gross revenues and being overcharged many additional millions of dollars in alleged expenses.”

Five months later, on April 8 2016, the consolidated cases saw Josephson and the actors suffer a loss as Rico agreed with Fox and tossed most of the case behind closed doors to arbitration. As the self-dealing issues were being handled in private, the rest of the case was stayed.

Now, maybe Fox probably wishes it had tried to make its legal bones in open court – but it turns out it will be anyway with the arbitration appeal going before Rico, with a request initial hearing date of April 29. Once all the filings and briefings are done, a locked-in hearing date will be set for LASC and arguments on the punitive damages aspect of the arbitration made before the judge.

In the final days before the multibillion-dollar acquisition of most of Fox by Disney looks to be a fully done deal thanks to a sign-off expected today by Brazilian regulators, this matter will surely spill over to the new corporate overlords. As a point of fact, Disney is not well known for backing down on such legal dust-ups.

For a bigger picture and a deeper dive into the books, it is also worth noting that Hollywood heavyweight firm Kinsella Weitzman Iser Kump & Aldisert have been representing former The Walking Dead EP Frank Darabont and CAA in their over five-year, $300 million profit participation beef with AMC over the zombie apocalypse series. With TWD comic creator and series EP Robert Kirkman, EP Gale Anne Hurd, ex-showrunner Glen Mazzara and others also suing AMC in August 2017 over millions in profits that they claim they were cheated out of too, the Darabont & CAA case is finally going to trial on May 11, 2020.

Bones wrapped up its 12th and final season on March 28, 2017.

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