Jury sides with producers in Warners film spat

A Los Angeles jury Thursday awarded producers Alan Ladd Jr. and Jay Kanter precisely the $3.2 million in damages on their allocation claim against Warner Bros. that attorney John Gatti asked for in closing arguments Monday.

The 12-member jury voted unanimously in favor of liability and 10-2 on damages.

“We are very happy with the verdict,” said Gatti, who also is Ladd’s son-in-law. “The evidence supported Laddie and Jay’s claim. Laddie and Jay contributed greatly to Warner Bros. with the making of these great films and they were owed the money that has been awarded to them.”

A spokesman for Warner Bros. Entertainment Inc. said, “While we are disappointed by the jury’s verdict, we understand their confusion over damages. We will now look at this entire proceeding and hope to rectify this erroneous decision at this level or on appeal.”

Veteran entertainment attorney Michael Bergman, who tried the case for Warners, added, “We have not yet begun to fight.”

Ladd and Jay Kanter, his partner in the Ladd Co., claimed that when 11 of their films — including “Blade Runner,” “Body Heat,” “Chariots of Fire,” “Night Shift” and the “Police Academy movies” — were licensed to the domestic and international television and cable market, they were packaged with inferior films and the fees attributed to their films were unfairly under-allocated. They sued Warners in 2003.

They also claimed they were entitled to millions more in damages because the Ladd Co. logo was omitted on the packaging on a number of DVDs including “Chariots of Fire,” “Night Shift,” “The Right Stuff” and “Once Upon a Time in America” from 1997-2003.

Warners claimed the omission, which affected approximately 300,000 units, was inadvertent. The problem was fixed in 2003, but not before an additional 40,000 units were shipped without the logo over Ladd’s objection.

At the end of Ladd’s case, L.A. Superior Court Judge Ricardo Torres dismissed the credit claim on the grounds that the damages were too speculative. A claim involving profit participation on “Blade Runner” also was dismissed because it breached a prior settlement with the studio.

Relying on the plaintiffs’ expert witness, Gatti told jurors Monday that Warners had undervalued the films to the tune of $97.2 million. Because the Ladd Co. had a 5% profit participation on most of these films, Gatti asked the jury to award $3,190,625 as the Ladd Co.’s portion.

Bergman told jurors that Warners had earned nearly $300 million in license fees on these films and it had no motive to undersell them because it kept the vast bulk of the fee. He also disputed Ladd’s damage figures, arguing that they were based on a nine-year period, even though the judge limited damages to four years before the filing of the complaint.

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