'Godzilla' Studio Denied Arbitration in Producers Dispute

Godzilla (2014) One Sheet - P 2014

Legendary Pictures, the studio behind the upcoming reboot of Godzilla, suffered a setback in court Friday in its dispute with three producers who claim they were unfairly ousted from the project.

Producers Dan Lin, Roy Lee and Doug Davidson claim in a January lawsuit in Los Angeles Superior Court that they brought the Godzilla project to Legendary and worked on the film for more than a year before being summarily dumped. Legendary claims in its own suit that it has no obligation to the producers. The dispute has generated high interest in Hollywood because Legendary's moves are in contrast to typical studio/producer relationships in which those who generate a movie project are included when the project gets made.   

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Legendary wanted the dispute to be litigated in a private arbitration, filing a motion with the court to enforce an arbitration clause in a long-form contract between Legendary and the producers. But that long-form deal never was signed, and in a ruling Friday, Judge Abraham Kahn found that it was not enforceable for the purposes of an arbitration. 

So the case now will proceed in court after a required mediation. And although the judge's ruling that the long-form agreement wasn't enforceable applies only to the arbitration clause, the ruling is likely a blow to Legendary because its case is based in part on the overall enforceability of that contract, which it claims gives it the right to make Godzilla without Lin, Lee and Davidson. The producers argue that they had an oral agreement to be included on the movie. 

“We are delighted that the judge agreed with us that the draft long-form agreement was not binding on the parties requiring arbitration," the producers' lawyer Larry Stein tells The Hollywood Reporter. "We look forward to trying this case in court. The defendants’ attempt to force it to arbitration failed. ”

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In a statement, Legendary's lead lawyer Dale Kinsella says: "In today’s hearing, the Los Angeles Superior Court determined the litigation would proceed in court rather than in private arbitration. The judge’s decision has no bearing on the merits of the parties’ respective claims, and Legendary remains confident that it will prevail in the case."

Email: Matthew.Belloni@thr.com

Twitter: @THRMattBelloni