Judge in Buchwald Case Limits Inquiry on Paramount

During an occasionally heated hearing in columnist Art Buchwald’s lawsuit against Paramount Pictures, Los Angeles Superior Court Judge Harvey Schneider sharply restricted a planned inquiry into Paramount’s overall profitability after a studio attorney said he didn’t intend to argue that “net profit” provisions in film contracts are necessary to the company’s economic survival.

The judge, who has already ruled that Paramount’s “Coming to America” was based on a project owned by Buchwald and producer Alain Bernheim, is conducting hearings to determine damages in the long-running case.

In Thursday’s hearing, Schneider began to address a long list of questions about studio profitability to a “special master” who was to examine Paramount’s books. But he stopped short when Paramount attorney Charles Diamond of O’Melveny & Myers said the studio never intended to argue that existing net profit provisions in Paramount’s contract with Buchwald and Bernheim must be defended as necessary to the studio’s survival. “This case has become incredibly more simple in the last 10 minutes,” the judge said.

Buchwald’s attorney, Pierce O’Donnell of Kaye, Scholer, Fierman, Hays & Handler, has argued that Paramount’s agreement with the writer and producer is “unconscionable” because the net profit provision is constructed to make no payments to participants until a film has earned a vast return for the studio.

Paramount’s Diamond argued Thursday that market conditions in 1982, when the contract was signed, and the sophistication of Buchwald’s and Bernheim’s legal representatives at the time, are appropriate gauges of conscionability.

When the judge insisted that Paramount had earlier tried to defend the net profit position as necessary to studio survival, Diamond said: “Mr. O’Donnell has planted that in the court’s mind.” In reply, O’Donnell said he was happy that Paramount had backed away from a perceived defense.

Schneider said he needed time to consider what he believed to be Paramount’s changed position and would schedule a hearing soon on the remaining issues.