Wednesday, May 26, 2010

Ladd v. Warner Bros. Entertainment (Cal. Ct. App. - May 25, 2010)

Two lessons.

First, if you're a filmmaker, studios sc**w you. Admittedly, I know nothing about the "industry," but the result of this case strikes me as entirely right. Here, Alan Ladd develops (and has "points") in Blade Runner, Body Heat, Night Shift, Tequila Sunrise, Outland, Chariots of Fire, and Police Academy 1-6. In short, some good movies, some crappy movies, and some downright bad movies, but lots of movies people have heard of. Warner Brothers distributes these films and numerous others, and sells a huge block of films -- including Ladd's -- to cable companies for a set fee in the hundreds of millions of dollars.

Some of the movies in that block -- including Ladd's -- were popular. Others are total "filler" and/or complete unknowns, including many films owned entirely by Warner Brothers. Warner Brothers internally labels films As, Bs and Cs. Say you get $900 million for selling 900 films, some of which are well-known and hence valuable (As) and some of which are otherwise (Cs). How should the $900 million be allocated for purpose of paying people, like Ladd, with points? On a straight-line method, with each film worth $1 million? Or by actual value; say, with As worth three times as much as Cs?

Needless to say, Warner Brothers uses the straight-line method. Ladd sues. And wins at trial.

Maybe Warner Brothers really did use this method for "convenience". But something tells me that the true motivation may be otherwise. And I have a feeling that the jury may have felt the same way.

So that's one lesson. Don't produce movies.

Second, a lesson for us lawyers. Be careful when you go for broke.

After Warner Brothers loses, its lawyers file a motion for new trial and a JNOV. But then they deliberately "go for broke" by withdrawing the new trial motion. Leaving the trial judge with an option only of entering a judgment in its favor or upholding the verdict. No new trial.

Gutsy. But wrong. At the hearing, the trial judge recognizes that Warner Brothers makes some good arguments about the jury's verdict and the evidence at trial. But states that while these deficiencies might well justify a new trial, Warner Brothers withdrew that motion, and there's technically enough evidence to support the verdict, so denies the JNOV motion and upholds the verdict.