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Nicollette Sheridan Suffers Court of Appeal Setback in 'Desperate Housewives' Case

A new ruling says her wrongful termination claim is barred but she can refile her case to claim a labor code violation.

Nicollette Sheridan People's Choice Awards - P 2012
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A California court of appeal has largely sided with ABC and Touchstone television in ruling that actress Nicollette Sheridan was not unlawfully terminated when she was killed off the hit series Desperate Housewives. Sheridan's key wrongful-termination claim has been knocked out, but she can refile her case to allege a violation of the state's Labor Code.

Read the Full Ruling Here

The ruling is the latest salvo in a long-running legal battle over Sheridan's claim that she was fired from Housewives in retaliation for complaining about being hit in the head by series creator Marc Cherry. A jury failed to reach a verdict earlier this year in a high-profile trial, but as a second trial was being planned, the state's court of appeal intervened at ABC/Touchstone's request and ruled that the judge should have issued a directed verdict for ABC/Touchstone because Sheridan wasn't fired, her contract simply was not renewed between seasons 5 and 6 of the show.

Sheridan, who initially had sued for $20 million, appealed that preliminary ruling, and the court of appeals has now solidified that decision.

"We conclude that the trial court erred in denying Touchstone’s motion for a directed verdict," the ruling states. "A cause of action for wrongful termination in violation of public policy does not lie if an employer decides simply not to exercise an option to renew a contract."

EXCLUSIVE: Appeals Court Calls Off 'Desperate Housewives' Retrial

To hold otherwise would require the creation of a new tort for "nonrenewal of a fixed-term employment contract in violation of public policy," the court continues. "We decline to do so. However, we conclude also that Sheridan should be permitted to file an amended complaint alleging a cause of action under Labor Code section 6310 that Touchstone retaliated against her for complaining about unsafe working conditions (e.g., Cherry’s conduct) by deciding not to exercise its option to renew her contract."

ABC/Touchstone's lead lawyer called the ruling a win for the studio.

"The Court of Appeal correctly found that Ms. Sheridan was not terminated," attorney Adam Levin tells The Hollywood Reporter in a statement. "Instead, her employment ended because Touchstone elected not to renew her contract after her character, Edie Britt, died on the show.  Her last remaining claim for wrongful termination is gone, and while she may seek to add an OSHA claim, we believe we will prevail on that claim as well."

We've reached out to Sheridan's attorney Mark Baute for comment. UPDATE: Baute sends THR this statement: "We will prosecute Touchstone to the full extent of the law under Labor Code Section 6310."

Before and during the trial, ABC/Touchstone had advanced the theory that Sheridan was never fired, but Judge Elizabeth Allen White had declined to allow it. The ruling of the three-judge appeals panel specifically overturns that reasoning.

"Contrary to what she claims, she was not fired, discharged or terminated," the ruling states. "Instead, Touchstone chose only not to exercise its option to renew her contract for the next season. She continued to work through Season 5 and was compensated as required by contract."

Sheridan's next steps aren't clear. She can appeal the ruling to the state supreme court or ask that the opinion be decertified, but those requests are rarely granted. If the case returns to the trial court, White likely will allow Sheridan to amend her case to assert the labor claim. If she does, the case — first filed in April 2010 — would start all over again.

Email: Matthew.Belloni@thr.com

Twitter: @THRMattBelloni