'Roger Rabbit' novelist fights uphill battle in suit

Gary Wolf's case has spawned judicial precedent 

Toward the end of Robert Zemeckis' 1988 animated/live- action mystery "Who Framed Roger Rabbit," a distraught Roger confronts the aptly named Judge Doom, who, it has become clear, set the rabbit up for the murder of Toontown magnate Marvin Acme.

"So you thought you could get away with it, didn't you?" Roger says. "Ha! We toons may act idiotic, but we're not stupid. We demand justice!"

Twenty years later, Gary Wolf, the science fiction author whose 1981 novel formed the basis of the movie, is still fighting his own crusade for cartoon justice -- or at least a pile of money from Disney, the film's distributor.

Unfortunately for Wolf, he hasn't been as successful as his hare-brained creation.

Mention the Wolf case to seasoned entertainment litigators and you'll hear either a groan or a chuckle depending on which side of the talent-vs.-studios battle the lawyer fights. The case has spawned at least two significant judicial setbacks for profit participants trying to collect damages from studios. And this month, a California court of appeal sent a portion of the case back to the trial court, illustrating the uphill and often unending battle facing talent who dare challenge studio accounting.

Like many authors, Wolf signed a 1983 agreement that gave him 5% of "gross receipts" from Disney's exploitation of neurotic Roger, curvy Jessica Rabbit, cigar-chomping Baby Herman and the rest of his characters. The parties didn't bother to define "gross receipts" (hey, this was the early 1980s), and Wolf later claimed he was owed millions for his share of everything from nonmonetary promotional partnerships with McDonalds to the value of Roger Rabbit "walk arounds" at Disney parks.

Strike 1 against Wolf came in 2003, when the court ruled that the right to collect contingent compensation from Disney doesn't create a "fiduciary" relationship with the studio. The limitation seems minor, but a breach of fiduciary duty lawsuit could entitle a participant like Wolf to punitive damages, which often are as much as 10 times the damages as a mere contract claim. Thanks in part to Wolf, that leverage largely has disappeared in profits cases.

"It's a major problem," says Neville Johnson, a litigator who has brought accounting claims against studios. "It's not a good case for us."

Wolf seemingly recovered in 2004 when a court ruled that "gross receipts" might include the value of tens of millions of dollars worth of noncash promotional consideration. But at trial Wolf won just $180,000, far less than the $8 million he sought.

Meanwhile, Disney's lawyers, led by Marty Katz at Sheppard Mullin, claimed they discovered an oddity in the accounting statements: Wolf actually had been overpaid for 10 years. More appeals came, and on May 9 the trial court was asked to figure out what, if anything, Wolf is owed.

When the dust in Toontown finally settles, it could be Wolf owing Disney money, not the other way around.

"Be careful what you wish for," warns Katz, one of a handful of studio bulldogs as versed in bean-counting protocols as civil procedure. "When pressing for an accurate or more detailed accounting, a participant is just as likely to uncover an overpayment as an underpayment. Fairness is a two-way street."

Wolf still could get his payday, of course. His longtime lawyer, Larson Jaenicke, declined comment, but it's no secret that "Hollywood accounting" is alive and well. In the past year, Los Angeles juries returned multimillion-dollar verdicts against Warner Bros. and NBC in favor of producer Alan Ladd Jr. and the creators of "Will & Grace," respectively. At the same time, a WGA-backed bill in the California Legislature aimed at regulating self-dealing transactions among studios cleared its first hurdle in April.

As studio revenue streams have diversified and talent contracts have become dizzyingly complex, it's understandable that many profit participants believe they're getting screwed. But as Wolf's case shows, when it comes to studio accounting, "justice" might be as tough to define as it is to achieve.

"Why, the real meaning of the word probably hits you like a ton of bricks," Roger Rabbit says to Judge Doom in that scene. Then, of course, Roger is buried by a falling ton of actual bricks.