Vivendi Looks to Knock Out Fraud Claim in 'Spinal Tap' Suit

'This Is Spinal Tap'
Courtesy of Everett Collection

After All in the Family went off the air, Rob Reiner and friends were developing the famous mockumentary about a fictional heavy metal band. Lear funded through his Embassy Pictures. He writes, "Rob had me from the minute he recited the names of the band members: David St. Hubbins, Derek Smalls, and Nigel Tufnel."

This Is Spinal Tap co-creators Harry Shearer, Rob Reiner, Michael McKean and Christopher Guest have spent the year in court getting their names on a $400-million profits lawsuit against Vivendi. Now comes the tough part. With standing issues addressed and an amended lawsuit filed, Vivendi and Universal Music Group threw a pair of dismissal motions at the plaintiffs on Thursday.

Vivendi challenges the fraud claim being brought, although not before again alleging that Shearer's crew never requested an audit, and how the movie generated less than $5 million in theaters when it came out in 1984.

"At the first opportunity, defendants will present facts that will show the absurdity of plaintiffs’ allegations and dispose of their contract claims," states the dismissal motion prepared by attorneys at Irell & Manella. "In the meantime, the Court should again dismiss plaintiffs’ Third Cause of Action for Fraud by Concealment and Misrepresentation — this time with prejudice."

As is often the case in litigation over Hollywood accounting, the question becomes whether the defendant made knowing misrepresentations or whether the dispute just boils down to what's owed under contracts.

"Now that plaintiffs have detailed additional facts underlying their fraud claim, it is clear that this cause of action arises from defendants’ performance (or lack thereof) under the Agreement and nothing more," continues Vivendi's motion. "Plaintiffs’ fraud claim can be boiled down to the following: (1) defendants failed to provide complete and accurate participation statements as required by the Agreement; (2) defendants failed to maximize revenues for the Spinal Tap creators as purportedly required by the Agreement; and (3) defendants told plaintiffs that they were providing accurate statements and maximizing revenue, even though they were not."

At this stage, the judge is obligated to accept facts pled as true. Nevertheless, Vivendi asserts that the co-creators have nothing more than an "ordinary breach of contract claim" and that allegations towards how the studio attempted delaying discovery of claims or didn't enforce intellectual property rights don't "tortify" the dispute.

As for UMG, an affiliate of Vivendi that's dragged into the dispute because they control the music associated with Spinal Tap, Glenn Pomerantz at Munger, Tolles demands his client be let out of the lawsuit because Shearer, Reiner, McKean and Guest don't have any direct contractual relationship nor any fiduciary relationship.

"In fact, Plaintiffs expressly allege that UMG has an obligation to report to and pay Studiocanal," states the dismissal brief, referring to another Vivendi subsidiary and a co-defendant here.

UMG also addresses the bid by Shearer to execute termination notices and reclaim rights to the music. While Vivendi is prepared to go forward on that front with the argument that Shearer's authorship was made as a work-for-hire, UMG says 'not so fast.'

"Plaintiffs seek declaratory relief concerning copyright reversion 'to answer together Vivendi’s threats of retaliation for [Plaintiffs’] filing of copyright termination notices [sic] to reclaim their creative ownership of Spinal Tap,'" states the motion. "Those alleged 'threats,' however, were not made by UMG — they were made by Studiocanal, in a brief filed before this Court, before UMG was ever a party to this litigation, with respect to the termination notices concerning the motion picture and musical compositions. Although Plaintiffs sent separate termination notices to UMG with respect to certain sound recordings, UMG has taken no position in this litigation (or elsewhere) with respect to its sound recording copyrights. Thus, Plaintiffs’ claim is not ripe against UMG and must be dismissed."