Disney Loses $319 Million Appeal on ABC Case
The largest verdict in a profits case in Hollywood history has been upheld on appeal.
The 9th Circuit Court of Appeal on Monday denied the Walt Disney Co.'s request for a new trial of its $319 million loss to the producer of the former hit ABC series Who Wants to Be a Millionaire.
In a short ruling issued Monday, the three-judge appeals court panel upheld U.S. District Court Judge Virginia Phillips' decision to deny Disney a new trial in the case. That means the damage award, which shocked Hollywood when it was announced by a federal jury in 2010, will stand unless the U.S. Supreme Court intervenes.
"What the court of appeal did today validates what a careful and thoughtful trial judge and a quite attentive jury did two years ago," Celador lead litigator Roman Silberfeld tells The Hollywood Reporter. "We're pleased for the client."
"We are extremely disappointed with the decision, as ABC and Buena Vista Television continue to believe that they fully adhered to the Millionaire agreement," a Disney rep tells THR in a statement.
U.K.-based Celador's suit claimed that ABC and its affiliated companies failed to include ABC's profits when calculating the profit participation owed to Celador and had improperly deducted merchandising and other expenses associated with the hit show. After a five-week trial, the jury ordered Disney to pay Celador nearly $270 million for breaching its license agreement. About $50 million in interest charges was added later.
The decision acknowledges that the contractual relationship between Celador and the Disney entities -- forged in 1998, at the dawn of the reality TV era -- was ambiguous and subject to multiple interpretations. However, ambiguities in contracts are to be left to a jury to decide which interpretation to endorse, and that's what happened in this case.
"Although the Disney affiliates advanced a persuasive case at oral argument for their interpretation of the contract, Celador's reading is also plausible," the appeals panel wrote.
Silberfeld repped Celador with Robins Kaplan Miller & Ciresi partners Bernice Conn, Marcia Harris and Bridgette Taylor, along with appellate counsel at Greines Martin Stein & Richland. Disney was repped by Marty Katz, Whitney Walters, Lisa Stutz at Sheppard Mulling Richter & Hampton, with appellate counsel at Wilmer Hale and Horvitz Levy.
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