May 27, 2011 1:47pm PT by Eriq Gardner
Hollywood Heist: How a Burglary May Impact the Future Of 'Superman' (Analysis)
The billion-dollar battle over who controls the future of the Superman franchise is now in its second decade. But one story that hasn't been fully told is the heist of documents from Marc Toberoff, the legal adversary and arch nemesis of Warner Bros., who has been fighting the studio over rights to the Man of Steel for years.
The story might make a good John Grisham novel. After sensitive documents were taken from Toberoff a couple years ago and sent anonymously to Warner Bros., the heist became the subject of a probe by federal prosecutors, leading to a rather extraordinary decision Wednesday by a United States magistrate judge.
First, some background.
Toberoff represents the estates of Superman co-creators Jerry Siegel and Joe Shuster, who for the past decade have been attempting to terminate copyright grants over their early work, which includes some of Superman’s defining characteristics, such as his costume, Clark Kent and his origin story. They've been very successful. For example, In March, a federal judge handed the Siegel estate partial summary judgment affirming Siegel's termination. The dispute may now be headed to the Ninth Circuit Court of Appeals.
Once that happens, if things go well for the Siegels and Shusters, they might be able to effectively control the Superman franchise (or at least a significant part of it) as early as 2013. Warner Bros. would arguably no longer be able to make new Superman movies, which would be unfortunate considering the studio is spending hundreds of millions of dollars on a Superman "reboot" from director Zack Snyder and producer Christopher Nolan.
Next: Warners has a plan.
Last year, Warner Bros. sued Toberoff for tortiously interfering with its rights, claiming he engineered an improper arrangement between the Siegels and Shusters not to make any deal with the studio.
At the time the lawsuit was announced, Toberoff put out a statement that hinted at some shenanigans: "Warner oddly attached to their complaint an anonymous, inadmissible letter spewing unsubstantiated and unattributed accusations against Mr. Toberoff," he wrote in the third person. "The anonymous letter was supposedly included with a large pile of privileged documents that were brazenly stolen from Mr. Toberoff's law offices and mysteriously arrived at Warner Bros.' doorstep in the midst of this billion-dollar litigation."
All of that is true. We've confirmed it.
A declaration Toberoff later gave identified a perpetrator. The theft of those documents came from "a disgruntled attorney" employed by his own firm. That lawyer (whose name we've decided to withhold) allegedly called all of Toberoff's clients in an attempt to win their business with reduced fees. It didn't work, so the alleged culprit gave Warner Bros. some ammunition to destroy Toberoff.
After the documents were taken, what did Toberoff do?
He called law enforcement, which launched a criminal investigation.
Federal prosecutors, buttressed by grand jury subpoena powers, then asked Toberoff to identify the precise nature of the documents stolen from him. Toberoff talked. (Legal scholars can debate the wisdom of such a move. More on that in a bit.)
And after the documents were delivered, what did Warner Bros. do?
One of those documents is a letter dated May 13, 2003, from Michael Siegel, son of Jerry, to his half-sister, Laura Siegel Larson, who now is in charge of the estate after her mother's death. According to sources, Michael Siegel was never close with his father, but as a member of the family was due a certain share of the proceeds from the outcome in the Superman case. Toberoff is said to have tried to bring Michael Siegel on board, but instead was rebuffed.
Instead, Michael warned Laura about getting involved with Toberoff.
In his letter to his half-sister, he describes Toberoff as a "mysterious billionaire" who was teaming with super-agent Ari Emanuel at WME on a secret agenda to control Superman for themselves. The letter contains some details about Toberoff's dealings and many disparaging characterizations of Toberoff. Interestingly, the letter's language seemed to become the basis for the cover document that Toberoff's ex-associate sent Warner Bros. with those heisted documents.
Ever since Warner filed the lawsuit against Toberoff last year, the studio and its ligitator Daniel Petrocelli have been trying to obtain all of the previously-stolen documents. The studio also tried to attain documents containing a "consent agreement" between the Siegel and Shuster estates not to independently do business with Warners, plus a formula for how the two estates will share proceeds on Superman were they to successfully terminate Warners' rights to the lucrative franchise.
Warners' first attempt to attain those documents through legitimate channels failed.
United States Magistrate Judge Ralph Zaresky ruled that the documents were protected by attorney-client privilege. But then, Warners got its hands on Michael's letter -- legitimately, this time -- which it waived around to the judge as a smoking gun that Toberoff was up to bad stuff. Plus, there was that little matter of what Toberoff had told federal prosecutors.
Next: A judge relents and gives Warner what it wants
On Wednesday, Judge Zarefsky ruled that Warners should have access to those previously stolen documents.
He based the decision on the fact that Toberoff had already disclosed the nature of those documents to law enforcement authorities who were investigating the theft. In other words, Toberoff became victimized twice by the burglary of those documents. Judge Zarefsky found that Toberoff "could have responded to the subpoena by standing on [attorney-client] privilege," but didn't.
In making the ruling, Zarefsky noted that the Ninth Circuit has never addressed the issue of whether stolen documents in a criminal investigation could be used in a civil matter.
Contacted for comment, Toberoff says he's considering appealing the decision to federal judge Otis Wright, who oversees the case.
Assuming Warners gets the go-ahead, it believes it will now have documents that purportedly show what it has suspected all along -- that Toberoff persuaded the Siegels and Shusters to act in concert and deprive the studio of Superman rights.
This doesn't necessarily mean that Toberoff did anything wrong. It's more than possible that a judge will see Toberoff's work as garden-variety client solicitation rather than a shady business arrangement, and it's also reasonable that a judge will see the Siegels and Shusters teaming together as nothing more than some form of collective bargaining unit.
In the meantime, though, Warners gets access to evidence to help support its arguments against Toberoff. Plus, the studio continues to make life difficult for him.
But the studio isn't getting everything it wants. For example, Petrocelli wanted to explore the full nature of the relationship between Toberoff and Emanuel (and indeed has deposed Emanuel in this case, we've learned). But the judge is only making Toberoff produce documents pertaining to Superman, Superboy, the Siegels and the Shusters.
As they say in the comics business, to be continued...