November 07, 2011 1:59pm PT by Eriq Gardner
Supreme Court Deals Setback to Hollywood, Won't Hear Key 'Ghost Hunters' Case
The U.S. Supreme Court won't allow NBC Universal to appeal a decision that revived allegations by two plaintiffs that the idea behind the hit Syfy reality show Ghost Hunters was stolen. In rejecting the studio's petition for a writ of certiorari, Hollywood won't get a chance to address an issue that has left studios open to more lawsuits for stealing scripts.
The case is Montz v. Pilgrim Films & Television, originally filed in 2006 by Larry Montz, a parapsychologist, and Daena Smoller, a publicist, who said they conceived the idea of a show about a team of paranormal investigators who go into haunted locations. The two individuals presented screenplays and videos to NBCU execs between 1996 and 2003, and had their ideas rejected, which prompted a lawsuit claiming that the studio had breached an implied agreement to pay them if their material was later used.
Originally, the lawsuit was thrown out, but then the allegations were revived in 2010 when the 9th Circuit Court of Appeals found that an implied promise of partnership met the "extra element" needed to transform a copyright claim into a bona fide contract breach claim.
NBCU appealed the decision with the full support of the MPAA and other studios, who argued that federal copyright law usurped state contract law. Hollywood hoped that the high court would address this issue because studios are under frequent attack for ripping off ideas, and copyright claims are much less successful in court than contract claims.
The Supreme Court has decided against giving Hollywood that opportunity.
Some attorneys already are predicting that the development will cause great uncertainty in the entertainment industry. Other circuits, such as the 2nd and 4th, have denied plaintiffs the opportunity of dressing up idea theft claims as implied breaches of contract, but now, studios must figure the worst case scenario -- that the 9th Circuit's allowances will be controlling.
Dominique R. Shelton, an IP litigator at Edwards Wildman Palmer, believes the Supreme Court's decision will open up the door to more idea theft lawsuits and may even change practices in how studios take pitches from established veterans.
“Even though most companies do not take unsolicited pitches for fear of litigation, companies may become even more reserved about the solicited pitches that are entertained,” Shelton says. “From the plaintiffs’ perspective, will California and other 9th Circuit venues become the jurisdictions of choice for filing idea theft cases based upon state law?”