Hollywood Docket: 'Wolf of Wall Street' Fight Moves to Arbitration

A roundup of entertainment legal news involving Red Granite, Selena Gomez, Disney, Walmart and more.
Paramount Pictures/Photofest

The most recent legal battle over The Wolf of Wall Street is moving behind closed doors as Jordan Belfort and Red Granite have agreed to arbitrate their claims — but not before the producer filed a scathing motion attacking the Stratton Oakmont co-founder's $300 million fraud suit. 

In January, Belfort sued Red Granite, claiming the company was too nervous to further monetize his story rights because of its involvement in an international crime scandal. He also says he never would have sold those rights if he knew the film was funded with dirty money. 

In a March 17 motion to compel arbitration, Red Granite attorney Matthew L. Schwartz opened by describing Belfort as "a man famous equally (and only) for deceit and inebriation" before noting that the Oscar-nominated film made more than $392 million at the worldwide box office and made Belfort famous. On top of that, Schwartz argues, Red Granite paid him more than $1 million for the rights and was under no obligation to actually produce anything based on his story. 

He also nods to a series of interviews, including one as far back as 2011, in which Belfort said things like "these guys are fucking criminals" and "anybody who does this has stolen money." (Read the filing here.)

"Forget all of those things, which demonstrate why Belfort's claims are as morally bankrupt as he is," writes Schwartz. "Those issues are for another day, and another forum, because Belfort forgot that he agreed to arbitrate any disputes with Red Granite, not take them to court."

On April 6, Red Granite filed a notice that it was withdrawing its motion as moot because Belfort agreed to drop his lawsuit and take his claims to arbitration instead. The court on Monday issued an order that the matter would be sent to binding arbitration and the complaint would be dismissed without prejudice.

In other entertainment legal news:

— A California federal bankruptcy judge has entered final judgment in favor of Cecci Gori Pictures against G&G productions after previously finding CG was the rightful owner of 42 film scripts, including Martin Scorsese's Silence, that had been fraudulently transferred. CG in 2017 sued G&G claiming the rights were snatched amid a "power vacuum" that was created when the company's founder was convicted of financial crimes in Italy. Niels Juul was running the company as a consultant at the time, and G&G fired back by attacking his credibility and accusing him of inflating the value of assets in CG's bankruptcy proceedings — which Juul vehemently denies and says was a punishment for "refusing to join their fraudulent scheme." The court also awarded CG more than $21 million in sanctions against G&G's principals. Juul, who is still a consultant for CG and is overseeing its assets, sent a statement to The Hollywood Reporter via email. "It's been a long time coming and very complex litigation," he says. "Thanks to the work of a great legal team, what gives us most pleasure is now being able to continue the development of the many great scripts and projects in the Cecchi Gori library of assets."

— Disney has again defeated a claim from a childhood development expert who says the media giant stole her ideas for Inside Out. Denise Daniels in June 2017 sued Disney, claiming the movie is based on her program called The Moodsters, which she says was pitched to the company every year from 2005 to 2009. The 9th U.S. Circuit Court of Appeals on March 16 upheld a California federal judge's dismissal of Daniels' complaint. It found the Moodsters characters are not sufficiently distinctive to warrant copyright protection and that her claim for breach of implied contract is merely "a boiler-plate allegation, devoid of any relevant details."

— Selena Gomez is suing an app developer for misappropriating her likeness in a mobile fashion game called "Clothes Forever — Styling Game." (Rihanna, Kendall Jenner, Gigi Hadid, Taylor Swift and Kim Kardashian are also featured in the game.) The actress-singer is one of the most followed people on Instagram, according to the complaint filed by Venable's Alex Weingarten, and it's been publicly reported that she earns as much as $800,000 per paid post. She's also extremely careful about maintaining her image and reputation and never would have given the game permission — especially since it "relies on the unsavory practice of luring its users to make in-game purchases in amounts as much as $99.99 to fund imaginary spending in the Game and unlock features." Defendants include Forgame, which has referred to the game at issue as "self-developed"; Mutantbox, which holds the game's copyrights according to Apple's app store; and Guangzhou Feidong Software Technology which is listed as the seller of the game.

— Drew Barrymore and Walmart have been drawn into a legal pillow fight. They're being sued by an L.A.-based fabric design company called Rule of Three Studio for allegedly copying its "Turkish Plume" pattern for Barrymore's Flower Home line. Rule of Three claims its design was not only used on products but also on hangtags for the collection, according to the complaint filed April 30 in L.A. County Superior Court. It's suing for damages, an injunction and an order that defendants recall the products and turn them over for destruction. 

— A fight over the rights to the Everly Brothers' classic "Cathy's Clown" is back on, as the 6th U.S. Circuit Court of Appeals has reversed a Tennessee federal judge's decision to grant summary judgment. Don Everly, who claims to have been the sole author of the work, in 2017 sued the heirs of his late brother Phil Everly, who claim it was a joint project. U.S. District Judge Aleta Arthur Trauger in November 2018 granted summary judgment in Don's favor, finding he expressly repudiated in 2011 the claim that his brother co-authored the song and therefore any claim of joint authorship was barred by the statute of limitations. The 6th Circuit isn't convinced that Don's actions didn't merely repudiate ownership as opposed to authorship and found the dispute fit for a jury. In his dissent, Senior Judge Ralph B. Guy Jr. argues that regardless of whether the brothers really wrote "Cathy's Clown" together, Don's rejection of that fact started the clock for the statute of limitations and the dispute is untimely. (Read the full opinion here.)