‘Pinocchio’ case splinters biz deals

Pic prod'n has 'unique business environment,' court sez

HOLLYWOOD — Last week’s appellate court decision reversing an $80 million jury award to Francis Ford Coppola over his aborted 1995 “Pinocchio” project at Warners gave Hollywood studios plenty to cheer about — and the artistic community new cause for worry over the murky area of creative contracts.

In language that comforts the studios, the court described motion picture production as a “unique business environment” in which “multimillion-dollar film projects are developed on the basis of loose, artistic understandings without written, signed contracts.”

In a swipe at Hollywood’s legendary handshake agreements, the judges said the issue of a letter — sent by Warners to Columbia to reiterate its claims to the project — “certainly doesn’t seem to be a priority until a relationship disintegrates into court proceedings. Then, of course, the absence of a written, signed contract becomes paramount in the minds of at least one side to the dispute.”

Robert Chapman, who represents Coppola, sees this part of the opinion as the most damaging, an ill omen for artists who challenge their deals with the studios.

“The court said moviemaking is a unique business, so any kind of swashbuckling can go on,” Chapman says. “This language is going to be cited again and again to tie up creative people when there is even less in writing than there was in this case.”

Chapman says the decision reinforces Hollywood’s archaic studio traditions.

“Francis believes the court supported the status quo and the way the movie business is always done, which continues to put the artist at a disadvantage.”

The “Pinocchio” dispute began in 1995 when Coppola sued Warners for tortious interference. Although he had a live-action “Pinocchio” feature in development at Warners for two years, Coppola claimed he didn’t have a signed contract and was free to bring another “Pinocchio” project, with a new script, to Columbia Pictures in 1993. Warners informed Col by letter of its rights to any Coppola “Pinocchio” project. Col ultimately pulled out of the project in 1994.

In 1998, a jury returned a verdict in favor of Coppola for $20 million in compensatory damages and $60 million in punitives. The trial judge set aside the punitives, and both sides appealed.

“It is just a terrible decision,” Chapman says of the reversal. “It deprives creative types of a jury trial because it substitutes the higher court’s view of the facts for the jury’s. It also sets the lowest possible standard for studio conduct. It says a studio can send out a scary lawyer’s letter with impunity if they think they have even a tenable claim.”

Chapman isn’t alone in his cautions.

Entertainment attorney Robert Marshall agrees there’s reason for concern. “This opinion seems to lessen the standard for when you can claim a privilege, and it could give the studios more of a greenlight to assert rights over properties,” he says.

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