Court Denies Request by Miramax to Rehear Ruling

A U.S. appeals court Tuesday rejected a request by Miramax Film Corp. to rehear a decision that might have created an implied contract between film studios and writers who pitch movie ideas and scripts.

The U.S. 9th Circuit Court of Appeals in San Francisco denied a request by Miramax, which was joined by several other Hollywood studios, for a rehearing of the September decision. In that ruling, the court reinstated a claim by screenwriter Jeff Grosso, who alleged that Miramax used elements of his script in the 1998 Matt Damon film “Rounders.”

The 9th Circuit decision expanded the protection offered to writers by allowing them to sue for breach of an implied contract that the writers would be compensated for the use of their ideas.

Studios responded by asking writers to waive their rights to bring implied contract claims before they make a pitch, according to Aaron Moss, an attorney who isn’t involved in the case.

“If you don’t have the leverage, you’re forced to sign” the waivers, said Moss, an entertainment attorney with Greenberg Glusker Fields Claman Machtinger & Kinsella in Los Angeles.

“It really just makes the difference between established writers and lower-end writers even greater,” Moss said.

The trial judge’s ruling came in the early stages of litigation, and Miramax may still have the case dismissed before trial if Grosso fails to prove that anyone at Miramax saw his script, Moss said.

“We remain extremely confident that this claim will not be proven,” said Matthew Hiltzik, a spokesman for Miramax, which is owned by Walt Disney Co.

The 9th Circuit on Tuesday amended its opinion to add that its decision was based solely on a legal question and didn’t consider whether the trial court record “or any future record, yet to be developed, supports” Grosso’s claim.

Grosso in 1995 wrote a movie about Texas Hold-Em poker called “The Shell Game,” and sent his unsolicited script to Gotham Entertainment Group. Grosso claims that Gotham had a first-look deal with Miramax and was housed in the same New York office building.

Neither Gotham Entertainment nor Miramax purchased Grosso’s script.

Grosso contends that elements of his plot and characters were used in “Rounders.”

Courts typically rule that state breach-of-implied-contract claims are preempted by the federal Copyright Act. The appeals court in this case said that implied agreement constituted an “extra element” not found in a copyright claim.

“This really changed the landscape with regard to preemption and the ability of the writers to now have two bites of the apple,” Moss said.

The appeals court upheld the trial judge’s dismissal of a copyright infringement claim, saying that the two works are “not substantially similar” and “both works have poker settings but the only similarities in dialogue between the two works come from the use of common, unprotectable poker jargon.”