Hollywood Docket: 'Hannah Montana' Profits; Harvey Weinstein Insurance; 'Disaster Artist' Lawsuit

A roundup of entertainment law news.
Photofest
'Hannah Montana'

A California appeals court won't give the co-creators and writers of Hannah Montana another shot in a dispute over contingent profits from the Disney children’s show starring a young Miley Cyrus. On Monday, an appellate panel refused to overturn an arbitration award.

The dispute dates back almost a decade as show co-creator Michael Poryes filed one case against Disney and its subsidiaries with Barry O'Brien and Richard Correll filing a second case. Poryes settled his contract and accounting claims, and O'Brien and Correll subsequently demanded disclosure of financial information produced during the Poryes arbitration. The request was refused by an arbitrator, who ultimately decided agreed with Disney's interpretation that merchandising, film and concert revenues were excluded in the net profit calculation.

With tens of millions on the line, O'Brien and Correll through loan-out companies then went to open court and argued they were substantially prejudiced by the exclusion of Poryes arbitration materials.

"We find no evidence (or offer of proof) in the record that suggests consideration of the omitted evidence is reasonably likely to lead to an increase in Hannah Montana’s 'Defined Receipts,'" states the appellate opinion (read here). "Unless there is a reasonable likelihood of an increase in 'Defined Receipts,' appellants have failed to establish they were substantially prejudiced by the arbitrator’s refusal to consider the omitted evidence.

In other entertainment law news:

— In Spanksi Enterprises v. Telewizja Polska, the U.S. Court of Appeals for the D.C. Circuit has sided with the U.S. government and Hollywood studios in an important copyright case that explored the reach of copyright law as well as whether infringing activity needs to include volitional conduct. This dispute involved the streaming of a Polish broadcaster's programming and, specifically, whether a foreign website uploading content abroad to U.S. viewers could be deemed as committing an infringing performance under domestic law. Judge David Tatel writes the opinion (read here) that leans on the Supreme Court's Aereo decision for the proposition that even automated VOD services aren't insulated from liability. As for the extraterritorial applications of U.S. copyright law, Tatel writes, "Congress had good reason to allow domestic copyright holders to enforce their rights against foreign broadcasters who direct infringing performances into the United States. Given the ease of transnational internet transmissions, a statutory scheme that affords copyright holders no protection from such broadcasters would leave the door open to widespread infringement, rendering copyright in works capable of online transmission largely nugatory."

— Several insurers including Chubb have asked a New York Supreme Court to declare they don't have to provide a defense or indemnity to Harvey Weinstein in 11 cases of alleged sexual harassment or assault. The insurers say various exclusions apply including for intentional acts. Read the complaint here.

— James Franco's production company has been hit with a lawsuit in Los Angeles Superior Court from Ryan Moody over The Disaster Artist. The plaintiff alleges he took one of Franco's classes at UCLA and prepared a screenplay for the film before being convinced to sell it for $5,000 in exchange for the opportunity to work on a different movie project that would have a $5 million to $10 million budget. But Moody says he only got $50,000 for that other film and that he wasn't credited on Disaster Artist.

— The U.S. Attorney's Office in New York has announced the conviction of producer David Bergstein in a scheme to defraud investors of $26 million. The conviction comes after a four-week trial where Bergstein was accused of concealing material information to investors, transferring funds from one pool of investors to another pool of investors without disclosures and misappropriating funds from investor accounts. He faces the potential for 20 years in prison and will be sentenced June 8.