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NBCU Prevails in Epic 'Ghost Hunters' Legal Battle

The dispute, litigated for more than seven years, alleged that the show about a team of paranormal investigators was stolen.

Ghost Hunters
Alik Keplicz/Syfy
"Ghost Hunters"

After more than seven years of litigation, including at one point a bad setback that NBCUniversal attempted to bring to the Supreme Court's attention, the entertainment giant has finally beaten a lawsuit that claimed it had stolen the idea behind the hit Syfy reality show Ghost Hunters. This week, a California appeals court ordered a lower court to grant the studio summary judgment because the plaintiffs hadn't brought their claims in a timely fashion. The ruling follows a vindication several months ago for series producer Pilgrim Films & Television.

The case was originally filed in 2006 by Larry Montz, a parapsychologist, and Daena Smoller, a publicist, who alleged they conceived the idea of a show about a team of paranormal investigators who go into haunted locations. The two claimed to have presented screenplays, videos and other materials to NBCU execs between 1996 and 2001.

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In suing NBCU and Pilgrim over Ghost Hunters, Montz and Smoller looked to leverage a legal claim that's been trendy in the past decade. After first suing for copyright -- which is notoriously tough for plaintiffs because the law only protects expression and not ideas -- the two sued for breach of an implied contract, which essentially means that when something is submitted and accepted for review, there's an expectation that if the material is later used, the idea presenter will get something.

Hollywood studios have argued that writers are merely disguising their copyright claims as contract claims, but judges have given the green light to these lawsuits so long as plaintiffs can assert an "extra element," like a promise of payment.

In 2010, a three-judge panel at the 9th Circuit Court of Appeals said that Montz and Smoller hadn't alleged a promise of payment, only a promise of partnership. The case seemed like it was going to stop there. Then the following year, the 9th Circuit granted a rehearing en banc and found "no meaningful difference" between the conditioning of use on payment or partnership.

Montz and Smoller were thus handed a surprising appellate victory and the ruling was so concerning to Hollywood studios that NBCU filed a petition for certiorari at the U.S. Supreme Court. With some concern that its members would suddenly be facing a rash of idea theft lawsuits, the MPAA filed an amicus brief. Unfortunately, the high court turned down a review.

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So a new lawsuit was lodged in L.A. Superior Court by the plaintiffs, which put the allegations to the test.

Well, not so fast.

NBCU challenged the original 2006 claims as coming beyond a two-year statute of limitations. Ghost Hunters premiered on Syfy channel on October 2004. Smoller said that she did not discover her claims until she saw an episode of the show sometime in 2005. The lawsuit was filed in November 2006, more than two years after the show had premiered.

This touched upon another hot-button legal issue. Courts throughout the nation have struggled to determine when to start the clock on the accrual of legal claims in theft cases. Some courts have determined that it should be upon first publication. Others have determined that it should be upon first discovery. On Friday, in a copyright lawsuit involving a photographer and a textbook publisher, the 2nd Circuit Court of Appeals weighed in on the discovery side. But as noted above, copyright cases and contract cases are different.

In this long-running battle over Ghost Hunters, a California appeals court has said that in cases grounded upon idea disclosures, the accrual date is generally the date on which the work is released to the general public. The appeals court notes the exception of the "discovery rule," but says it's up to Montz and Smoller to demonstrate their entitlement to delayed accrual of their causes of action.

According to California appeals court judge Nora Margaret Manella's ruling, "Here, while [Montz and Smoller] have pled facts showing the time and manner of their discovery of their causes of action [Smoller’s viewing of an episode of Ghost Hunters in 2005], they have not pled facts showing an inability to discover their claims earlier despite reasonable diligence … [Montz and Smoller] do not contend, nor does the evidence show, that petitioners fraudulently concealed the broadcast from them, or that they lacked a meaningful ability to view it."

And so, the appeals court ordered the lower court judge to set aside and vacate its order denying a motion for summary judgment and enter a new order granting summary judgment for NBCU.

This means that, barring further appeals, NBCU has finally won an incredibly hard-fought battle that has haunted a federal court, a state court, a federal appeals court and a state appeals court. It seems that only the Supreme Court would not be spooked by this case.

Email: Eriq.Gardner@THR.com
Twitter: @eriqgardner