Warner Bros. snatched victory from the jaws of defeat Tuesday when the California Court of Appeal reversed the $80 million jury verdict Francis Coppola won in 1998 in the much-watched “Pinocchio” case.
The three-judge appellate panel reversed the $20 million in compensatory damages the jury awarded the director and they upheld the trial judge’s 1998 post-trial ruling setting aside the $60 million in punitive damages.
Coppola sued Warners for “tortious interference” in 1995. Although he had a live-action “Pinocchio” feature in development at Warners, Coppola claimed he did not have a signed deal and was free to bring a “Pinocchio” project with a new script to Columbia pictures in 1993.
Warners informed Columbia by letter of its rights to any Coppola “Pinocchio” project. After Columbia ultimately pulled out of the project in 1994, Coppola sued WB.
In its 18-page opinion, the Court of Appeal held that the letter sent by Warner to Columbia was protected by litigation and common-interest privileges and could not be the basis for a tort claim.
The court stated, “We conclude that a reasonable attorney, considering the facts before the court, would believe that Warner had a legally tenable claim in any Coppola ‘Pinocchio’ project and that such claim was not totally and completely without merit.”
Fred Cohen, of Horvitz and Levy, who handled the appeal for Warner Bros., said, “The studios are going to be very relieved by this decision. After the jury’s verdict, people were nervous about sending these kinds of letters putting others on notice of their rights. This opinion says they don’t need to worry about trying to resolve matters informally without a lawsuit.”
Coppola’s attorney Robert Chapman said, “We think the Court of Appeal was wrong and the jury was right. We intend to appeal this to the Supreme Court. The people who saw the witnesses and heard the testimony decided overwhelmingly for Coppola and we believe that was the correct decision.”
While Coppola can seek a rehearing before the same panel or petition the California Court of Appeal for review, both avenues are a long shot.
The court on Tuesday did not need to decide the much-pondered question of when a deal is a deal in the movie business because Warner only had to show that it had a reasonable belief that it had a legal right to the project.
The court pointed out that Warner and Coppola had worked together for approximately two years on “Pinocchio” and he had two other pictures in development there. Coppola also signed a certificate of employment and Warner expended $350,000 on the project.
Said attorney Carole Handler, who has represented several studios: “Everyone in the industry knows that while a signed contract is a nice thing, a contractual relationship does not depend on a signature. Much more important is the expectations of the parties and the course of dealing between them. When a large corporation sees an artist through the rough times, it has every reason to expect that the artist will honor his contract even though his bargaining position may have improved.”