Court of Appeal affirms $3.2 million judgment for movie studio’s underpayment of profit participation and reverses a nonsuit on fraud and other claims

Alan Ladd Jr. v. Warner Bros. Entertainment, Inc. (2010) 184 Cal.App.4th 1298 (California Second Appellate District, Division Three) [partially published]. GMSR represented Academy Award-winning producers Alan Ladd Jr. and Jay Kanter, whose films include Chariots of Fire, Blade Runner and Body Heat. They sued Warner for consistently undervaluing the television license fees for their movies when Warner licensed movies in groups, including a practice known as “straightlining” that allocated the same licensing fee to each movie regardless of its actual value. They also sued Warner for fraudulently misrepresenting that Blade Runner would never be profitabe, for miscalculating Blade Runner profits, and for wrongfully removing credits and logos from hundreds of thousands of DVD copies. A jury awarded $3.2 million for Warner’s undervaluation of the movies, but the trial court nonsuited the other claims, finding that a settlement barred the Blade Runner profit claims and that there was insufficient evidence of fraud and of financial damage from the credit/logo deletions. The Court of Appeal affirmed the $3.2 million jury verdict in the opinion’s published portion, among other things rejecting Warner’s attempt to limit damages on the basis of the statute of limitations because of a failure of proof at trial. In the opinion’s unpublished portion, the Court reversed the nonsuited claims and remanded them for trial.