UPDATED with Bones lawyer and Fox statements: In a stunning win for Fox, a California judge on Thursday tossed most of a $179 million judgment that Bones stars Emily Deschanel and David Boreanaz and executive producers Barry Josephson and Kathy Reichs were awarded by an arbitrator earlier this year.
Mere days after punting in a confirmation hearing on the profit participation matter, Judge Richard Rico today stripped all of the $128 million in punitive damages Fox was contesting off the award granted by former judge Peter Lichtman in late February.
“The motion to confirm the award is denied, the motion to correct the award is granted,” Rico wrote in his brief minute order Thursday (read it here). “Punitive damages shall be stricken from the award. The award will be corrected and confirmed as so modified.”
Uncontested by Fox, the $50 million in non-punitive damages that the actors and EPs received from Lichtman in his final award.
“We are pleased with the Court’s decision to strike punitive damages from the award and vindicating our position,” said Fox in distinctly understated remarks as they must be picking themselves up off the floor at the rare and unexpected legal gift they just received. “We look forward to concluding the litigation.”
The win must be even sweeter for Fox because Lichtman lambasted the defendants in his final order. The former judge hit hard with accusations of the likes of now Disney employed Dana Walden and Peter Rice giving “false testimony” and being part of a “company-wide culture and an accepted climate that enveloped an aversion for the truth.”
Soon after Rico’s minute order was issued, the lead lawyer said the Bones team plans to take this latest twist in the almost four-year legal matter to an appeal ASAP.
“Today’s decision in no way impacts the arbitrator’s findings that our clients are owed more than $50 million for Fox’s fraudulent and deceitful accounting,” Daniel Saunders told Deadline.
“It deals only with the technical issue of whether our clients waived their right to receive punitive damages,” the Kasowitz Benson Torres lawyer for Deschanel, Boreanaz and Reichs added. “As the arbitrator concluded, they did not – and we look forward to showing the Court of Appeal why it should reverse today’s ruling.”
Josephson’s own attorney reiterated the legal response of “this ain’t over.”
“We respectfully and profoundly disagree with the trial court’s order eliminating the punitive damages award against Fox,” declared Dale Kinsella.
“While the ruling contains no reasoning, we are confident that when the appellate court reviews the Award with the required deference, without regard to the trial court’s finding, the original award will be reinstated,” the Kinsella Weitzman Iser Kump & Aldisert noted. “The balance of the award for compensatory damages, attorneys’ fees and prejudgment interest in excess of $50 million dollars remains intact, and today’s ruling does not disturb the Arbitrator’s findings in any way.”
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.
As the legal matter was removed from public eyes, Bones concluded its 12-season run on March 28, 2017.
With attorney Daniel Petrocelli of O’Melveny & Myers taking the lead for Fox’s appeal of the condemning arbitration decision, the Fox hit back at Lichtman with a strident stance. The then still Murdoch-owned studio asserted that the arbitrator had overstepped the bounds of his brief in awarding “punitive damages in the face of a contractual provision explicitly denying him that power.” Looking to vacate the award, as they have today, the defendants filed their response within minutes of the arbitration order being made public on the Los Angeles Superior Court docket.
Now there’s a whole lot more filings to come in more dockets.