Appeals Court Ruling May Shift Power to Writers

October 13, 2004

Appeals Court Ruling May Shift Power to Writers

By ANNE THOMPSON

LOS ANGELES, Oct. 12 - Since the dawn of the film industry, it has been common practice for writers to send scripts and pitch stories to movie executives and producers. And for almost as long, scores of writers have sued the studios for stealing their ideas, only to have suits, filed on hard-to-prove copyright infringement grounds, which are dismissed or quietly settled.

But a recently published opinion from the United States Court of Appeals for the Ninth Circuit, in Jeff Grosso v. Miramax Film Corporation, may soon shift the balance of power in this age-old tug of war.

For the last month, Hollywood legal circles have been puzzling over the decision, which declares that movie and television executives enter an implied contract every time they read a script or hear a pitch. The ruling, if it stands, appears to strengthen the position of writers. But industry watchers say it may also put a new chill on the already frosty business of selling ideas, by forcing studios and networks to spell out terms or seek legal waivers before they read or listen to a word.

"How bizarre that Disney and Miramax would allow this matter to become a case," said Daniel H. Black of the Greenberg Traurig law firm. "In situations like this historically, it's not worth going to a judge; you settle quietly."

In a lawsuit filed in California in 1999, Jeff Grosso, a freelance magazine writer and high-stakes poker player, contended that Miramax had stolen his original script "The Shell Game," which he wrote in 1995. Mr. Grosso sent an unsolicited copy of the script to a production company that had offices in the same TriBeCa building as Miramax and a had first-look deal with the company. Later, he came to believe that many of its plot and character ideas had been folded into "Rounders," which starred Matt Damon.

"Texas hold 'em had never been used in a movie before," Mr. Grosso said in a telephone interview from his home in Chesterton, Ohio. "It was obvious to me that they stole my movie. Those two works couldn't be mutually exclusive. They realized that I was not powerful, had no connections, that they could rewrite the script and use it, for free."

John Marder, a partner at Manny & Marder, Kass, Ellrod, Ramirez agreed to take the case on a contingency basis. "We filed a complaint in state court on breach of contract," Mr. Marder said. "If you approach a producer and give them an idea for a movie or TV show, it is implied that if they use them, they are going to pay you for it. Miramax insisted that copyright was the only remedy. With copyright there are a lot of ideas that you can't protect."

The Federal District Court here dismissed the suit's copyright provisions, saying that while the two works share poker settings and jargon, they are not substantially similar.

But in a decision that could have long-term ramifications on future writers submitting their ideas to producers and studios, the United States Court of Appeals for the Ninth Circuit said Miramax must go to trial on a claim that it violated an implied contract with the writer. Under California law, Judge Mary M. Schroeder wrote in a ruling for a three-judge panel on Sept. 8, "a contract sometimes may be implied even in the absence of an express promise to pay."

The court "has imposed a contract on every writer talking to a producer," Mr. Marder said of the decision. "If they use your product, they have to pay for it. Now the studio playgrounds will have rules."

A Miramax spokesman declined to discuss details of the case but said the company planned to ask for another hearing from a larger panel of the Court of Appeals and is prepared to appeal to the United States Supreme Court.

It is common in Hollywood for similar ideas to arise, from boxer reality television shows to biopics about Alexander the Great. Despite frequent complaints about material theft, writers who are represented by established agents and lawyers typically engage in relatively freewheeling exchanges with film and television executives, counting on their representatives' influence and industry custom to protect them from misappropriation.

But some lawyers are predicting that will change if the new ruling stands. "The studios have to respond to this opinion in their own backyard," said Mr. Black, who has represented writers, directors and actors. "When they have meetings with people receiving pitches, they need to make clear that they have no expectation of doing anything." Aaron Moss of Greenberg, Glusker, Fields, Claman, Machtinger & Kinsella said the new ruling could require a written contract even before a pitch is heard. "I fully expect to see contracts put into place stating, 'I am pitching you this script; I understand I am not seeking protection for these ideas,' " he said.

Any such tightening is likely to make life more difficult for unknowns, who already find companies wary of unsolicited material that can lead to legal trouble when a picture is made. "Every successful movie ever made has had a raft of crazy lawsuits," said Linda Lichter, a Los Angeles entertainment lawyer. "Most of them are settled."

As for Mr. Grosso, he has abandoned high-stakes gambling of all kinds, including screenwriting. He moved from Los Angeles to Chesterton to live closer to his in-laws, and now buys and sell antique clocks.

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