In a decision closely watched by Hollywood, a Los Angeles judge Monday ordered Paramount Pictures to pay humor columnist Art Buchwald and his producing partner $900,000 in a breach of contract suit over the Eddie Murphy film “Coming to America.”
The ruling by Superior Court Judge Harvey A. Schneider was far lower than the $6.2 million sought by attorneys for Buchwald and producer Alain Bernheim, but sizable nonetheless.
Schneider said that in reaching his decision, which gave Buchwald $150,000 and Bernheim $750,000, he wanted to produce a “fair and equitable result” that was neither a windfall to the plaintiffs nor an unjust enrichment for Paramount.
Both sides immediately hailed the ruling.
“This decision is a victory for Paramount and clearly a loss for Buchwald and Bernheim,” said Paramount spokesman John Scanlon. “Their lawyers spent more than $2.5 million and three years for this award.”
But Scanlon added that although the studio was pleased by the ruling, it planned to appeal earlier rulings by the judge that “Coming to America” was based on a 2 1/2-page treatment by Buchwald and that Paramount unfairly breached its contract with the humorist to develop the idea.
Buchwald, on the other hand, said he was “delighted” by the award and said he and Bernheim will divide it equally.
“We had a pool (during) the trial and I picked $1 million, so I not only get what Paramount has to pay me but $60 from the pool,” Buchwald said.
Asked what he thought of Paramount calling the judgment a victory, Buchwald replied: “It cost them $3 million (in legal fees) and (we got) $1 million . . . and they call that a victory? They have to change every contract they ever made and they call it a victory? . . . Look, (the decision) might stop those guys from stealing--but I doubt it.”
Buchwald’s attorney, Pierce O’Donnell, characterized Schneider’s ruling as “Solomonic” in that neither side got everything it wanted, but he said that in the final analysis Hollywood’s creative community won a significant battle with the studios.
In two previous phases of the case, the judge not only ruled that the movie was inspired by Buchwald’s treatment, but he branded certain provisions of Paramount’s net profit formula as “unconscionable.”
“The whole case is a great victory for the creative community,” O’Donnell said. “David hit Goliath twice in the eyes with a slingshot. This time Goliath got a glancing blow on the head.”
Schneider’s opinion--his third in the long-running case--followed a week of testimony during which a dozen witnesses offered their opinions of the value of Buchwald and Bernheim’s contribution to the hit comedy. Testimony concluded March 6.
In closing arguments, O’Donnell urged the judge to award his clients a total of $6.2 million--the same sum John Landis got for directing “Coming to America.” Paramount has said the pair are entitled to no more than the fixed fees set forth in Bernheim’s 1983 contract with the studio.
Under that contract, Buchwald was to receive a flat fee of $65,000 plus 1.5% of the profits when the film was produced. Bernheim was guaranteed a producer’s fee of $200,000 and 17.5% of the net profits.
The judge rejected the plaintiffs’ evidence on the value of their effort as “unpersuasive,” but added that Paramount’s experts ascribed too low a value to the plaintiffs’ work.
Schneider also noted that, given the fact that it was stipulated that Paramount had earned tens of millions of dollars of gross profits from the film, the compensation he awarded to Bernheim represented less than 1% of Paramount’s gross profits if “Coming to America” generated gross profits as high as $100 million, and less than 5% if it made as little as $20 million.
In January, 1990, the judge held that “Coming to America,” which tells the story of an African prince who leaves his homeland to find a wife, was based on Buchwald’s treatment, “King for a Day.”
The following December, Schneider created a storm in Hollywood by ruling that Paramount used an “unconscionable” formula to deny Buchwald and Bernheim net profit and “royalties.”
In effect, the judge in his second ruling struck down the net profits formula, a standard component of movie deals. Paramount has said the movie is unlikely ever to return net profits, even though the film has grossed $145 million so far for the studio.
While waiting for further developments, however, some studios are hedging their bets by excising the words net profit points from their contracts. As “Coming to America” star Eddie Murphy said at an earlier stage of the Buchwald case, net profit points have long been scoffed at in the industry as meaningless “monkey points.”
At one studio, for example, language referring to gross and net participants has been eliminated; instead, the agreements refer to “contractually defined participation points.” At other studios, net profits have changed into “net proceeds,” “formula break-even points,” or “contingent payments.” In some instances, the change in language predated the Buchwald case.
If Schneider’s ruling on net profits is upheld, some lawyers expect a flood of litigation, while others say the high cost of suing a studio is likely to deter many from filing suit. O’Donnell, who took the case on a contingency basis, has estimated that the case has cost his firm $2.5 million.
He said he is considering asking the court to order Paramount to pay those legal fees.
Some entertainment lawyers believe the implications of the Buchwald case reach far beyond the movie business. Taken to its logical extreme, the judge’s decision could be applied to any deal in which one party was unable to negotiate the terms, according to attorney Bertram Fields.
“I believe (Schneider’s ruling) would really set disastrous economic policy if you follow this opinion to its logical conclusion,” Fields said. “It should be and will be reversed on appeal.”
Buchwald said he personally spent $190,000 fighting the legal war against Paramount. “I’m a better man for having done it,” he said.