'Hunger Games' Studio Hit With $10 Million Lawsuit Over Nail Polish Deal (Exclusive)

2:05 PM PST 11/25/2011 by Matthew Belloni

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UPDATED: American International Industries says it has a deal to create the nail polish as part of the film's upcoming promotional campaign but that Lionsgate has improperly terminated the contract.

Lionsgate

"The Hunger Games"

Lionsgate, the studio behind the upcoming film version of The Hunger Games, has been sued for $10 million by a beauty products company that claims it is being jerked around over a deal to create special nail polish in connection with the movie's March release.

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Los Angeles-based American International Industries, which says it is the country's largest privately-held manufacturer of personal care and beauty products, filed a lawsuit Wednesday in LA Superior Court. The company claims that it closed a deal in late October to create a Hunger Games-branded version of its "China Glaze" nail polish, as well as contribute to the promotional campaign for the adaptation of the popular Suzanne Collins novel that Lionsgate is hoping will be a mega-blockbuster movie series similar to Twilight.

But shortly after Lionsgate executives signed the contract, according to the complaint, the studio made statements to the press that the deal was "not happening," and asked American to say that the parties "were merely 'discussing' a 'possible' promotional deal." American says it refused to lie, prompting a Lionsgate attorney to send an email on Nov. 17 saying that the studio was "terminating" the contract.

"However, the contract does not permit Lionsgate to unilaterally terminate," argues the complaint, a copy of which was obtained by THR. "Lionsgate attempted to justify its actions by claiming that American had supposedly 'leaked' information about the contract to the press. The claim was and is completely untrue--American did not 'leak' any information, and so informed Lionsgate immediately."

American says it purchased millions of dollars in nail polish materials and expended substantial time and labor in reliance on the fully-executed contract, and it wants $10 million in damages.

We've reached out to Lionsgate for comment and will update with a response.

The suit, filed by Charles Harder and Michelle Goodman of LA's Wolf Rifkin Shapiro Schulman & Rabkin, alleges one cause of action for breach of contract.

Lionsgate declined to comment on the suit.

Email: Matthew.Belloni@thr.com

Twitter: @THRMattBelloni