April 18, 2011 5:00am PT by Matthew Belloni
Charlie Sheen: What Tuesday's L.A. Court Battle Means
The Charlie Sheen legal circus returns Tuesday for another act, as attorneys for the actor, Warner Bros. and Chuck Lorre will be back in a Santa Monica courtroom arguing over whether the case will be heard in public or private.
In advance of the showdown, let’s break down the issues, what can be expected in court, and why it’s important to the Warlock’s ultimate case.
So what’s this whole legal case all about?
Readers of this space know that shortly after terminating Sheen from Two and a Half Men, studio Warner Bros first initiated an arbitration proceeding against the star, asking the dispute-resolution service JAMS to help figure out everybody’s rights with respect to Sheen’s exit from TV’s most-watched comedy.
Sheen’s lawyer Marty Singer quickly responded with a $100 million lawsuit in state court against Warners and Lorre, arguing that the studio and its most-prized comedy showrunner conspired to improperly terminate Sheen from the show, costing Sheen and everybody who works on Men significant damage. Sheen’s bad behavior had never been a problem in the past, the lawsuit argues. Only when Sheen made comments critical of Lorre (in his nonstop media rants) was the star summarily fired, and that’s not fair, Sheen says.
OK, so why are they fighting over whether the case will be public or private?
Sheen wants his $100 million lawsuit heard in open court, not in a private conference room in front of former appeals court justice Richard Neal (the JAMS-appointed arbitrator). Besides wanting his fans to be able to follow the case, Sheen’s legal team smartly recognizes that the threat of airing sensitive financial documents in open court in front of what would certainly be a horde of press could be embarrassing for Warners—and might be a great reason to pay Sheen to settle the case. Plus, juries tend to favor celebrities, even the crazy ones.
For these reasons, Singer went to court last month and asked that the state court judge exercise jurisdiction over the case, potentially taking it away from the arbitrator.
But Charlie’s contract has an airtight arbitration clause. How can he get around that?
In court on Tuesday, Sheen is expected to argue, among other things, that the arbitration clause in his contract with Warner Bros. is “unconscionable” and shouldn’t be enforced against him. Singer’s position in legal papers is that the clause is essentially a non-negotiable element of Warner Bros. talent contracts, rendering it unreasonable on its face and against public policy.
To support this argument, Singer earlier this month took the deposition of Warner Bros. legal affairs executive Jody Zucker, who was asked, according to our sources, to cite examples of Warners contracts that do NOT have a strict arbitration clause. Zucker is said to have testified that WB has made some deals with different or no arbitration language. Still, it’s no secret that the standard contract, even for big talent with leverage, includes an agreement to arbitrate disputes (and remember, back when Sheen first signed his Men deal containing the clause, he wasn’t TV’s No. 1 star, he was a fading film actor).
Even so, Warner Bros. has a strong argument that the arbitration clause should be enforced, right?
Yes. The studio, led by attorney John Spiegel of Munger Tolles & Olson, has filed a separate motion to compel arbitration asking the judge to do exactly that—offload the case to the JAMS arbitration, as Sheen’s contract with Warners provides. That will be argued in front of Judge Allan Goodman on Tuesday. Judges typically adhere to arbitration clauses.
Where does Chuck Lorre fit into all of this?
Lorre is another interesting element in this legal puzzle. Sheen’s deal is with Warner Bros., not Lorre, so he will argue that even if his beef with Warners goes to arbitration, he should be allowed to litigate publicly with Lorre, whom he believes was behind the decision to boot him from Men. The studio will counter that the arbitration clause in Sheen’s deal covers all disputes that “arise” out of his work on Men, which would include claims against Lorre. The showrunner and his lead lawyer Howard Weitzman have so far backed Warners in legal filings and they are expected to appear with a unified voice at the hearing on Tuesday. The judge could allow the Sheen/WB case to go to arbitration while the Sheen/Lorre case proceeds in court, but it’s unlikely the case will be split up like that.
So what happens if Charlie loses on Tuesday?
If the judge sides with Warners and Lorre and grants the motion to compel arbitration, the case will likely proceed in front of Justice Neal. That means the two sides will file their opening briefs and begin to put together their cases to be argued privately.
And if Charlie wins?
If the judge sides with Sheen and asserts jurisdiction over the case, Warners and Lorre could appeal (denials of motions to compel arbitration are appealable). If so, the case would be put on hold while that issue is worked out. If there is no appeal, Sheen’s case would proceed toward a public trial.
Does any of this impact whether Charlie will ultimately win the case?
Yes and no. The substantive issues remain the same whether the case is public or private. But a private judge described to us as conservative and by-the-book would likely hear evidence differently than a jury of Sheen’s peers (does a rock star from Mars even have any peers?). And, of course, keeping everything private would make the whole thing a lot less interesting for observers like ourselves.