December 10, 2012 4:42pm PT by Eriq Gardner
Fox, James Cameron Ordered to Share Secret 'Avatar' Financials in Idea Theft Lawsuit
About a year ago, there was a mad rush to the courthouse on the part of those who claimed a piece of James Cameron's Avatar. The 2009 film is the highest-grossing of all time with nearly $2.8 billion at the worldwide box office and has two sequels on the way. Given that Hollywood studios are sued all the time on allegations of ripping off ideas, it's hardly surprising that such an enormous hit would trigger a slew of lawsuits.
In the year since various authors staked copyright and contract claims, some plaintiffs have been frustrated in their attempts to win billions (Kelly Van, Elijah Schkeiban, etc.), but two individuals have been causing Cameron's Lightstorm Entertainment to sweat a little. The first is Eric Ryder, who claims to have written a story entitled "K.R.Z. 2068" that he says he shared with Cameron under an alleged implied contract. The case still is pending in Los Angeles Superior Court.
The second comes from Gerald Morawski, who, like Ryder -- and probably not coincidentally -- alleges some personal contact with Cameron. More details in a moment.
Lightstorm is attempting to defeat Morawski's lawsuit on summary judgment, but the plaintiff already has scored a bit of success, getting a California federal judge to order that Lightstorm and third party 20th Century Fox produce documents relating to potential damages -- not just a summary of net profits on the film but also profit-participation documents and other underlying agreements governing Avatar.
In his lawsuit, Morawski claims that he pitched a film project entitled Guardians of Eden, about an epic struggle taking place between evil mining interests that would destroy the planet to satisfy their greed and an indigenous tribe that lives at one with its rain forest environment.
Morawski met Cameron in 1991. The famed director admits this, saying he was interested in acquiring Morawski's artwork in connection with a then-project called Burning Chrome, based on a short story by William Gibson. Cameron purchased four items from Morawski for $4,000 and says that in 1992, he also lent the struggling artist $5,000, which allegedly was never repaid.
Then, the stories from each of the sides diverge.
Morawski says that after he sold his work, he asked Cameron to consider a film project being developed. Morawski allegedly was sent a Non-Disclosure Agreement and signed a version that stated, "Should Lightstorm wish to acquire your property, the parties will negotiate therefor."
In December 1991, Morawski says he had two pitch meetings -- one where Cameron and another Lightstorm creative executive were present, the second where only Cameron was there. At the end of the second meeting, Cameron allegedly declared he liked the project and that Morawski should take a few days to think about how much money it would take to work on a first draft. A few days later, a letter was sent identifying financial requirements for Guardians of Eden, which Lightstorm still had when the case was filed. Lightstorm's president allegedly called Morawski that December to discuss financials but later stated that the company would be unable to do a deal because one of Lightstorm's financial backers was experiencing difficulties.
Cameron, on the other hand, says he has no recollection of Morawski pitching him.
Regardless, the director says that what Morawski turned in to Lightstorm -- a document entitled "Conceptual Summary of Guardians of Eden -- wasn't the film Avatar, and, in an extraordinary 45-page declaration, Cameron describes how he independently came up with the hit film. (Read the entire declaration here.) It is a 50-year journey told by Cameron about his works, starting from when he was a child in the 1960s and dreamed of being a scientist to a project that he began developing in the late '70s that he says was the beginning of Avatar (as well as its sequels) to Cameron's discussions of the themes and characters of his various films over the years.
In a motion for summary judgment, the defendants say, "The incontrovertible evidence of independent creation defeats all claims."
But in a filing Thursday, Morawski's side rejects that view. According to his documents, "In Plaintiff's view, it is no coincidence that, even though those alleged prior works had been in existence for 10 or 20 years, Cameron did not write the scriptment for Avatar until a few years after Plaintiff pitched GOE to Defendants. In addition, if Defendants had in fact already created works that were similar to GOE, they would have stopped Plaintiff's pitch once the alleged similarity became apparent, and would not have offered Plaintiff a deal for GOE."
Before a judge rules on whether to throw out the lawsuit or pave the path toward trial, the two sides are in the midst of discovery.
In November, Magistrate Judge Jay Gandhi handed Cameron's side a bit of a defeat by granting the plaintiff's motion to compel damages discovery.
According to the judge's notes, Morawski argued that he was entitled to damages of lost profits from Avatar, while Cameron and Fox asserted that he should only be entitled, if anything, to the market value of Guardians of Eden. The judge said he is siding with Morawski.
The basis for the ruling was a 9th Circuit decision on what California law allows for in the recovery of a dispute over breach of an implied-in-fact contract. "At this juncture, particularly during the discovery stage, information concerning profits appears relevant and necessary under the circumstances presented here," said the judge.
Gandhi also rejected arguments by Fox and Lightstorm that the documents were confidential ("Bottom line, the documents at issue may be highly sensitive, but that is not cause alone to prohibit their production") and also rejected arguments that the requests were overly broad ("Net profit alone … may not fully capture the entire mosaic of monies that flowed here").
The order compelling discovery indicates that Lightstorm and Fox might appeal to the District Court judge. The Hollywood Reporter has reached out to Fox and will update if we hear anything.
Correction: The original post said that Ryder was a former Lightstom employee. He never alleged that. The post has been amended.
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