'Grapes of Wrath' Movie Adaptation Dispute Headed to Supreme Court

John Steinbeck - Getty - H 2017

A new decade begins, but some are still stuck in the past. That includes the heirs of John Steinbeck, the Nobel Prize-winning author of East of Eden and Grapes of Wrath, plus some big-name Hollywood producers who would love a chance at adapting the old work. Will the U.S. Supreme Court have anything to say about this?

Two years ago, a Los Angeles jury decided to punish Gail Knight Steinbeck — the wife of John's eldest son Thom — for interfering in attempts to negotiate film adaptations of Steinbeck's works. The jury awarded $13 million to Waverly Scott Kaffaga, the daughter of Steinbeck's third wife, Elaine, who inherited control over rights to some of Steinbeck's most famous novels. In September, the Ninth Circuit Court of Appeals trimmed that to $5.25 million in compensatory damages after wiping out punitive damages

As previously recounted, the history of the heirs' battle is complicated, but involves Steinbeck's will, dealmaking, a fight for royalties and a provision of copyright law known as termination rights. Kaffaga has come out ahead, but Gail Knight Steinbeck continues to live up to her vow to not stop litigating until her "last breath." On Thursday, her attorney previewed a forthcoming petition to the Supreme Court.

Kaffaga's supremacy stems from a 1983 deal. Back then, Thom received royalties, and Elaine got copyright interests. Before Elaine died, she also obtained the "complete power and authority to negotiate, authorize and take action with respect to the exploitation and/or termination of rights in the works of John Steinbeck."

Under copyright law, authors — or their heirs — must wait a set amount of time (35 years for post-1978 works, 56 years for older ones) and then are allowed to reclaim rights granted to publishers.  It was Congress' intention in enacting the termination provision to let authors have another bite at the apple during the later part of the copyright term. And to preserve these termination powers for authors who often sign over work when they are young and up-and-coming and have little bargaining power, copyright law provides,“Termination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant.”

Gail Knight Steinbeck contends that the 1983 deal is unenforceable precisely because of this section of copyright law.

The problem for her is that courts haven't been receptive to the "agreement to the contrary" arguments. (For example, see this Second Circuit Court of Appeals decision back in 2008.) As a result, when it came time to fight the claim she interfered in negotiations for a Steven Spielberg adaptation of Grapes of Wrath, among other things, the trial judge wouldn't let her present the validity of the prior decisions or her understanding of the 1983 deal as a defense. In September, the Ninth Circuit upheld the ruling that the defense was barred on collateral estoppel grounds.

In an application for more time to file a cert petition (read here), Gail's attorney writes, "The appeals court did not identify any decision that actually decided whether or not the 1983 agreement is an 'agreement to the contrary'... To this day, not a single court decision has interpreted and applied § 304(c)(5) to determine — one way or the other — whether the 1983 Agreement is a permissible restraint on termination rights."

If this was a straight-up appeal about the copyright termination provision, it'd be a potential blockbuster, given a flurry of termination notices to Hollywood studios from authors seeking to reclaim rights. As the application notes, "The Ninth Circuit’s unwillingness to independently assess the proper application of 17 U.S.C. § 304(c)(5) in the present case will continue the uncertainty surrounding the proper application of termination rights for authors and artists."

That noted, the petition could be sidetracked by the long history and particularly unique set of facts of this particular dispute. There's also Lucky Brand Dungarees Inc. v. Marcel Fashion Group Inc., a trademark case being heard by the Supreme Court on Jan. 13. The issue presented in Lucky Brand is whether federal preclusion principles can bar a defendant from raising defenses that were not actually litigated and resolved in any prior case between the parties. The application seems to acknowledge some overlap.