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16. "Buchwald v. Paramount"
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http://en.wikipedia.org/wiki/Buchwald_v._Paramount

Buchwald v. Paramount
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Buchwald v. Paramount (1990) was a breach of contract lawsuit filed and decided in California in which humorist and writer Art Buchwald alleged that Paramount Pictures stole his script idea and turned it into the 1988 movie Coming to America. Buchwald won the lawsuit and was awarded damages, and then accepted a settlement from Paramount before any appeal took place.

The decision was important mainly for the court's determination in the penalty phase of the trial that Paramount used "unconscionable" means of determining how much to pay authors. Paramount claimed, and provided accounting evidence to support the claim, that despite the movie's US$350 million in revenues, it had earned no net profit, according to the definition of "net profit" in Buchwald's contract, and hence Buchwald was owed nothing: a classic example of Hollywood accounting. The court agreed with Buchwald's argument that this was "unconscionable", and therefore invalid. Fearing a loss if it appealed, and the subsequent implications of the unconscionability decision across all its other contracts, Paramount settled for undisclosed terms. The case was the subject of a 1992 book, Fatal Subtraction: The Inside Story of Buchwald v. Paramount by Pierce O'Donnell, the lawyer who represented Buchwald, and Los Angeles Times reporter Dennis McDougal.

Timeline

In 1982, Buchwald wrote a screen treatment that was pitched to Jeffrey Katzenberg of Paramount, with the intention of starring Eddie Murphy, who was under contract to Paramount at the time. Paramount optioned the treatment in early 1983 and commissioned several unsuccessful scripts from several screenwriters. John Landis was considered as the director from time to time. After two years of development hell, Paramount decided to abandon the project in March 1985.

In May 1986, Paramount's rival Warner Bros. optioned Buchwald's treatment.

In the summer of 1987, Paramount began to develop a movie that was credited as being based on a story by Eddie Murphy, and which was to be directed by John Landis. The story outline seemed similar to Buchwald's story idea, and to the failed Paramount scripts that had been based on it.

In January 1988, Warner Bros. cancelled their version of Buchwald's project, citing the Paramount project.

When the movie Coming to America was released by Paramount in 1988, Eddie Murphy was given story credit. Buchwald was not paid, or credited as the story writer. Buchwald sued Paramount for breach of contract, as his contract with Paramount stated that he would be paid a certain amount if his treatment were made into a film.

Decision

The California Superior Court decided in 1990 that Buchwald had demonstrated by a preponderance of the evidence that his story treatment—and Paramount's unsuccessful scripts based on the treatment—were "similar" to that of the Coming to America movie. Together with the evidence that Murphy and Landis previously had access to Buchwald's treatment, the court determined that the movie's story was indeed "based upon" Buchwald's treatment. Since Paramount never paid Buchwald, as the option agreement specified would occur if a movie based on his treatment were ever released, Paramount did indeed breach the contract.

(The court went out of its way to avoid criticizing Murphy, who, it said in its holding, was a "creative genius" just as Buchwald was, and the fault in the whole matter lay with Paramount.)

In the second phase of the trial in which the court determined the appropriate amount of damages to be paid to Buchwald, Paramount testified that despite the movie's US$350 million in ticket sales, it had spent so much money on the movie's development and marketing that, according to the formula specified in Buchwald's contract, Paramount had made "no net profit". The court then found that the formula was "unconscionable" and that Buchwald therefore could pursue a separate tort lawsuit against the company.

Fearing a loss on appeal and, presumably, a wave of lawsuits by authors claiming they, too, had been wronged by the unconscionable net profit formula, Paramount settled with Buchwald for an undisclosed amount of money. As part of the settlement, the "unconscionability" decision was vacated.

Implications

Hollywood accounting has long been derided as a cynical attempt by movie studios to cheat individual authors out of royalty payments. The accounting formulas used by the studios have allegedly been designed specifically to ensure that it is almost mathematically impossible for any movie to show a net profit. Specifically, the net profit formula in authors' contracts does not correspond to the net profit formula of generally accepted accounting principles that the movie studios use when creating their financial statements that are reported to the U.S. Securities and Exchange Commission and to the investing public. The "unconscionable" formula in the authors' contracts effectively double-counts many costs borne by the movie studio.

Some commentators have claimed this lawsuit was a watershed that would affect Hollywood's payments to anyone who enjoyed "profit participation", by forcing a change to the net profit formulas. However, another California Superior Court ruled in Batfilm Productions v. Warner Bros. in the case of the 1989 Batman movie that a similar formula was not unconscionable. To date, there has been no review of this type of claim by an appellate court, meaning that the superior courts cannot look to an appellate court's decision for guidance. The "watershed" role of this lawsuit has therefore not been demonstrated.

Still, the case has caused nearly all studios and production companies to be more careful about how they handle scripts. Concerned that "similarities" between future script drafts and movies could cause lawsuits, nearly all studios and production companies now return unsolicited scripts to their authors unopened.
Retrieved from "http://en.wikipedia.org/wiki/Buchwald_v._Paramount"

Categories: United States contract case law | United States tort case law | California state case law

  

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So just post a handful of perfect films you've seen [View all] , Deebot, Fri Mar-30-07 11:20 PM
 
Subject Author Message Date ID
RE: So just post a handful of perfect films you've seen
Mar 30th 2007
1
RE: So just post a handful of perfect films you've seen
Apr 01st 2007
29
2.
Mar 30th 2007
2
cool hand luke
Mar 31st 2007
3
I will co-sign this. It is a perfect movie. n/m
Apr 01st 2007
33
Godfather I and II; Big Lebowski
Mar 31st 2007
4
ONLY reason I didn't put Godfather I:
Mar 31st 2007
6
I can see that
Apr 02nd 2007
38
Ok maybe I'm post-jacking a bit here
Mar 31st 2007
7
      No. Not in my opinion.
Mar 31st 2007
13
Diary of a Country Priest
Mar 31st 2007
5
hey cool....Nights of Cabiria is the first Netflix DVD i ordered
Mar 31st 2007
12
Friday
Mar 31st 2007
8
co-sign Fight Club
Apr 06th 2007
52
The Graduate
Mar 31st 2007
9
Coming to America
Mar 31st 2007
10
Does the fact that they stole it sour the movie at all for you?
Mar 31st 2007
11
      expound.
Mar 31st 2007
14
     
           hah! thanks.
Apr 01st 2007
20
      No and here's why:
Mar 31st 2007
17
      You're really wrong about some things here.
Mar 31st 2007
18
           uh-huh...and all of this makes the movie a non classic??
Apr 01st 2007
30
                I never said it did.
Apr 01st 2007
36
      Art Buchwald was a syndicated columnist in my local paper
Apr 02nd 2007
45
           Again, no one said he wrote the screenplay.
Apr 06th 2007
56
                Please shit on orgasms, bags of money & love
Apr 06th 2007
58
                     Only on OkayPlayer does stating the facts = shitting on something.
Apr 06th 2007
59
Goodfellas, Chinatown, Blood Simple, Miller's Crossing, Before Sunrise
Mar 31st 2007
15
the first that come to mind are
Apr 01st 2007
19
Hmmm.
Apr 01st 2007
21
Office Space
Apr 01st 2007
22
yes
Apr 01st 2007
23
American Psycho
Apr 01st 2007
24
post 54.
Apr 06th 2007
55
The Empire Strikes Back
Apr 01st 2007
25
Casino
Apr 01st 2007
26
Batman Begins
Apr 01st 2007
27
ROTFL . . . . yup . . . the last quater of that movie had no flaws
Apr 01st 2007
32
those not mentioned
Apr 01st 2007
28
Once Upon a Time in America
Apr 01st 2007
31
Clerks
Apr 01st 2007
34
The Shawshank Redemption
Apr 01st 2007
35
sympathy for lady vengeance
Apr 02nd 2007
37
Back to the Future, Ferris Bueller's Day Off
Apr 02nd 2007
39
RE: Back to the Future, Ferris Bueller's Day Off
Apr 02nd 2007
46
pulp fiction
Apr 02nd 2007
40
Pee Wee's Big Adventure, Aliens
Apr 02nd 2007
41
Spiderman 2 is perfect
Apr 02nd 2007
42
Billy Madison, The Princess Bride, Jackass 1 and 2
Apr 02nd 2007
43
RE: So just post a handful of perfect films you've seen
Apr 02nd 2007
44
Memento, 25th Hour, L.A. Confidential, Hero,
Apr 05th 2007
47
fresh
Apr 05th 2007
48
Uhh . . . you gotta be kidding me
Apr 05th 2007
50
hmmm...
Apr 05th 2007
49
Robocop owns this post
Apr 05th 2007
51
do the right thing. field of dreams. nightmare on elm street
Apr 06th 2007
53
American Psycho.
Apr 06th 2007
54
Mine
Apr 06th 2007
57

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