Declaring that “even in Hollywood, a deal’s a deal,” a state court judge sent the Marvel vs. Sony lawsuit over Spider-Man rights to a private judge Tuesday.
At a lengthy hearing, L.A. Superior Court Judge Alexander Williams sided with Sony in upholding a provision of the 1999 contract between Marvel and Sony providing that disputes be resolved in a reference proceeding overseen by a retired judge. Williams also rejected Marvel’s bid for a jury trial.
At an earlier hearing Williams indicated that he was opposed to references, but on Tuesday he concluded that because the contract provided for such, he felt compelled to enforce it. In a reference, the Superior Court retains ultimate control over the case but it is presided over by a retired judge and usually takes place in private offices. Unlike an arbitration, references are public, and judgments can be appealed as if a state court judge heard the case.
Marvel argued that because its complaint alleges the contract was induced by fraud, none of the provisions, including the dispute resolution provision, should be honored. But Williams, who described the suit as “a custody fight on steroids,” said the fraud alleged was neither specific enough nor closely enough related to the dispute resolution provision for him to reject the reference. Williams also rejected a proposal that the case stay in his court while Marvel took depositions related to the fraud issue.
The basis of Marvel’s fraud claim is that Sony hid its intention to dissociate Spider-Man from its creator, Marvel, and thereby destroy Marvel’s core merchandising business.
But Williams said Marvel essentially had a breach of contract claim against Sony and that it might be difficult to prove Sony entered into the deal with bad intent.
Marvel attorney Carole Handler said the company has not yet decided whether it will appeal this decision. “We’re disappointed, but it’s not a decision on the merits,” she said.
Handler stressed that she expected Marvel to prevail no matter what the forum and that the case would be open to the public as the result of an earlier decision by Williams, following a motion by Daily Variety and the Los Angeles Daily Journal.
The fireworks between Marvel and Sony broke out in April when Marvel’s $50 million lawsuit was unveiled. Marvel seeks termination of the contract after “Spider-Man 2” is filmed. It claims Sony hijacked Spider-Man by doing everything in its power to distance Marvel in the minds of retailers from its most significant character.
Specifically, Marvel claims Sony has interfered with the marketing of classic Spider-Man merchandise, reneged on its promise to use its sister companies to promote Spider-Man games and failed to get expected tie-ins with the large fast-food chains.
In a countersuit, Sony accuses Marvel of using the litigation to try to force a renegotiation of the contract and of improper accounting on merchandising.
With “Spider-Man” still the record box office opener with its three-day take of $115 million and a high-profile sequel in the works, the Marvel-Sony fight has been closely watched. Earlier this month, Fox’s “X-Men” sequel, based on Marvel characters, set B.O. records with a worldwide opening of $155 million. Universal will release “The Hulk,” also based on a Marvel character, this summer.