Appeals Court Rejects Libel Judgment

(AP By KELLY P. KISSEL) - A federal appeals court Tuesday threw out a defamation judgment against a filmmaker critical of former President Clinton saying one of the conspiracy-laden videos blurred the line between fact and fiction, but two sheriff's deputies mentioned in the film had no standing to sue.

In dismissing a $598,750 judgment against Patrick Matrisciana, the 8th U.S. Circuit Court of Appeals in St. Louis wrote that it was not saying he was ethical or fair in his documentary about the railroad track deaths of two Saline County teen-agers.

The video, "Obstruction of Justice: the Mena Connection," focused on the unsolved deaths of Kevin Ives and Don Henry. In the documentary, Pulaski County sheriff's Lts. Jay Campbell and Kirk Lane were listed among six law enforcement officers that alleged eyewitnesses said could be implicated "in the murders and the subsequent cover-up."

The court said the sheriff's lieutenants were public figures and had to prove Matrisciana knew the information was false or that he was reckless in weighing information presented in the film.

Ives and Henry were found dead in 1987 after being hit by a train while laying on the tracks. Their deaths were initially ruled accidental due to marijuana intoxication, but after a second autopsy and a lawsuit filed by Ives' parents, the deaths were ruled homicides.

"As the theory goes, they were first killed and their bodies then laid on the tracks to make their deaths appear accidental," the court wrote.  Matrisciana's defense at his trial centered on his right to freedom of expression.

He said that, according to his research, the boys were walking down the train tracks about 4 a.m. on Aug. 23, 1987, when they came upon a small plane dropping a cargo of illegal drugs as it flew without lights 100 feet from the ground. A witness reported seeing the boys seized by two men, and their bodies were found after they had been run over by a train.

Various conspiracy theories floated during the Clinton administration suggested that illegal drugs were routinely flown into the airport at Mena in western Arkansas during the 1980s and that Clinton, then Arkansas' governor, knew about it but did nothing to combat it.

Matrisciana, who also produced "The Clinton Chronicles," which took a highly critical view of the former president, said in a telephone interview from Los Angeles that justice had been served.

Stone' s Basic Instinct: Sue the producers

Sharon Stone yesterday filed a lawsuit against the producers of the aborted Basic Instinct sequel claiming that they reneged on an oral contract. The actress, who had planned to reprise her role as vixenish novelist Catherine Tramell, is seeking up to $100m in damages from producers Andrew Vajna and Mario Kassar.

The lawsuit is Stone's furious response to MGM's apparent decision to halt production on the movie. Officially the sequel is still in development, but insiders predict that it will now never be made. "Unfortunately it's not going to happen," Variety quotes MGM chairman Alex Yemenidjian as saying. Meanwhile, Vajna and Kassar have already moved on to production work on Terminator 3.

In hindsight it would seem that Basic Instinct 2 was doomed from the start. First Stone's original co-star Michael Douglas turned down the offer to star in the film, then MGM struggled to find a director for the film. At one stage it looked, bizarrely, as if David Cronenberg would take the job, but he dropped out because of rumored "creative differences" with Stone. In the meantime various actors (including Harrison Ford, Kurt Russell, Benjamin Bratt and Bruce Greenwood) were lured and then lost in the hunt for Stone's co-star. The final death knell for the film sounded last month when confirmed director John McTiernan abruptly bailed out.

Hollywood insiders have speculated that Basic Instinct 2 was unlikely to be made as soon as Michael Douglas turned it down as they feel that Stone is no longer enough of a box office draw to support a film in her own right. The 43 year-old actress shot to fame with her role in the original 1992 thriller and later belated critical acclaim for her turn as Robert De Niro's trophy bride in Martin Scorsese's Casino. But she has now suffered a string of recent box office flops, including Gloria, The Muse and Simpatico. In Hollywood terms, Stone, once so hot, is now colder than Christmas.

Once-Buzzed-About Walter Mitty Remake Lives on in Lawsuit Against New Line

(By Denise Levin)

News reports about New Line's planned remake of The Secret Life of Walter Mitty -- the Danny Kaye film based on James Thurber's famous daydreamer -- were peppered with A-list names like director Ron Howard, writing partners Lowell Ganz and Babaloo Mandel and $20 million actor Jim Carrey. But the fanfare surrounding a new version of the 1947 classic has since died down, and what remains is legal wrangling between New Line Cinema and Samuel Goldwyn Jr., son of the legendary mogul, who oversees the family trust and heads up indie-film company Samuel Goldwyn Productions.

Goldwyn Sr. produced the original Walter Mitty, about a loser who conjures up great adventures. The Goldwyn Family Trust owns all rights related to the film, according to a lawsuit filed in Los Angeles Superior Court by the Goldwyn companies.

In about 1995, New Line approached Goldwyn seeking the rights to remake Walter Mitty. Goldwyn Entertainment Company began negotiating with New Line, and made it clear that the only way the rights of the "very prestigious property" would be granted to New Line was if Goldwyn Jr. and his production company were involved in "all aspects of the creative development of the remake project and in the production of any remake motion picture itself," the lawsuit states.

New Line agreed and, because two different corporations controlled by Goldwyn were handling the two aspects of the negotiations, two written deals were signed: A rights agreement, which covered New Line's option to the rights from Goldwyn Entertainment, and a producer agreement between Goldwyn Productions and New Line addressing Goldwyn Jr.'s creative involvement with the project, according to the lawsuit.

Goldwyn contends that, even though two agreements were made, they were considered by all parties as one agreement, according to the lawsuit, and therefore one arm of the agreement could not be terminated without the other. In addition, the provisions of the agreement included one that prohibited New Line from assigning its rights to the film to a non-affiliated third party, the suit says.

The option period was extended several times over the years, most recently to May 31. However, within the last few months, New Line indicated to Goldwyn that it decided not to do the remake and it wanted to assign its option and rights to a third party, the lawsuit says. Then, within the last month, New Line added that it wanted Goldwyn Jr. to give up his rights to involvement in the production that were granted in the producer agreement, the lawsuit adds.

"Goldwyn and Goldwyn Productions responded to New Line's request by pointing out that what New Line was asking Goldwyn and Goldwyn Productions to do would undermine the entire purpose of the transaction as had been explained to New Line from the outset of the negotiation, during the negotiations and as embodied in the agreements that New Line was seeking to modify," the lawsuit says. Goldwyn thus rejected New Line's request.

"New Line took an aggressive approach," the suit claims, and for the first time contended that it could terminate the producer agreement at any time it wanted and eviscerate all prerogatives regarding approval that Goldwyn held on the remake. Goldwyn responded that New Line's contention amounted to anticipatory repudiation of both agreements, and demanded that New Line withdraw its threat, the lawsuit adds.

New Line refused and has instead stated that it plans to exercise its option rights and intends to send Goldwyn a check for the purchase price of the options agreed to in the rights agreement, the lawsuit says.

The lawsuit, filed May 25, seeks a court order declaring that the rights and producer agreements are "part and parcel of the same transaction," which New Line anticipatorily breached the agreement, and that, because of New Line's conduct, Goldwyn is entitled to suspend their performances under the agreements. It also seeks court costs.

The lawsuit was filed by attorneys Marc R. Stein, Valerie V. Flugge and Dilan A. Esper of Stein & Flugge. A New Line spokesman said Wednesday that he had not seen the suit and could not comment on it.

Miramax Sued for Allegedly Gouging German Distributor

(By Denise Levin)

Miramax overstated its film license fees to a German distributor by so much, the bill was sometimes more than the cost of producing the entire film, according to a lawsuit filed late Monday.

Scotia, which distributes films in German-speaking territories of Europe, also claims in its Los Angeles Superior Court lawsuit that Miramax forced it to buy distribution rights in packages that included films of widely varying quality, only to have Miramax take back the rights to the most promising titles, leaving Scotia with the flops.

The license fees Miramax charged Scotia were intentionally so inflated that Scotia was "led to believe Miramax licensed it the film equivalent of brand new Mercedes, when in fact, Miramax sold Scotia the film equivalent of broken Yugos," the lawsuit states.

In a statement, Miramax claims that Scotia's lawsuit is a "misguided attempt to avoid responding to Miramax's claims against it for substantial damages."

Miramax began arbitration against Scotia on April 26 through an industry trade group, American Film Marketing Association. Scotia was required to respond to the arbitration Tuesday, but filed the lawsuit instead. On an emergency motion filed simultaneously with the lawsuit, Scotia attempted to have a judge stop the arbitration with a temporary restraining order. The TRO was denied Tuesday, according to Miramax, and the parties will return to court later this month for arguments on a preliminary injunction.

Meanwhile, the arbitration continues. "Miramax is confident that the arbitration claims it asserted against Scotia in April for breach of contract and for non-payment will succeed," Miramax representatives said. "We are pleased that the Court denied Scotia's effort to block the arbitration, and we are looking forward to presenting the case to the arbitrator and to receiving a prompt decision on the merits."

Minimum guarantees (the fees paid by distributors for the right to release a film in a given territory) are typically calculated as a percentage of the negative cost. At the time Scotia licensed the film packages from Miramax, the customary minimum guarantee was between 8 and 12 percent of the film's negative cost, the lawsuit states. Scotia claims it never knew what the budgets were for the films it was licensing, many of which were incomplete, and that it relied in good faith on Miramax to propose reasonable and customary minimum guarantees. That reliance allegedly backfired.

Of the eight film packages Scotia licensed from Miramax from 1994 to 1998, only two were fair, the lawsuit says. The packages included 29 films and cost Scotia a total of $26 million in minimum guarantees. It was not until recently that Scotia discovered that the reported negative costs for the subsequent films it licensed were lower than the minimum guarantee indicated they should be, the lawsuit states. "For example, in some cases, Miramax charged heavily inflated license fees of 70 percent, 133 percent and 140 percent of the reported negative costs," the lawsuit claims.

In addition, Miramax used "bait and switch tactics," the lawsuit contends. "With respect to at least two of the packages, Miramax failed to deliver to Scotia the most marketable film of the package, which film had, at least in part, induced Scotia to license the remaining films in the package."

Scotia licensed a package in February 1997 based on Miramax's representation that it would contain the Quentin Tarantino film Jackie Brown and Bad Moon Rising, which was to be directed by horror-film maven Wes Craven. Based on Miramax's representation, Scotia claims it accepted the package despite the fact that it included several films it would not otherwise have wanted. (The other films in that package included The Mighty, Wings of the Dove, Wide Awake and Talk of Angels.)

Shortly after accepting the package, the lawsuit contends, Miramax told Scotia that it would not be making Bad Moon Rising so that Craven could direct Scream II and Scream III. Miramax licensed Scream and its sequels to a competing distributor in the territory and, contrary to customary practice, never replaced Bad Moon Rising with a comparable film, the lawsuit says.

A similar exchange happened with the package that included Shakespeare in Love, the lawsuit alleges. After agreeing to license the Gwyneth Paltrow-starring love story to Scotia in a package in February 1998, Miramax yanked the rights away because it allegedly had given it to Universal Pictures. Again, despite promises that Miramax would "make it up" to Scotia, Shakespeare in Love was never replaced, the lawsuit says. (The film went on to make approximately $16.67 million from theatrical exhibition in Germany in 1999, the lawsuit adds.)

At the Cannes Film Festival last year, Miramax President Harvey Weinstein allegedly told Scotia founder and chairman, Sam Waynberg, that he had discussed Miramax's wrongdoing with his brother and co-founder Bob Weinstein, and they were offering him $100,000 to make up for it, the lawsuit says. Waynberg ignored the offer, "which did nothing to remedy the millions of dollars Scotia lost by not distributing Shakespeare in Love, having been given no substitute and being forced to keep the less desirable titles in the package," the lawsuit states.

The license agreements Scotia made with Miramax do nothing to help the distributor, and are unenforceable and unfair, the lawsuit says. For example, the agreements allow Miramax many "outs," but do not allow a mechanism for Scotia to recoup damages caused when Miramax abandons projects. Scotia is required to "use its best efforts and skill in the distribution and exploitation of the films," but not Miramax, thus allowing Miramax to abandon any release of its films in the U.S. This made it difficult for Scotia to market those films in Europe because it signaled theater owners, video distributors and television stations that the films were not suitable for theatrical release.

The lawsuit also accuses Miramax of failing to deliver what are called "laboratory access letters" on time and in the right form. The letters are needed by Scotia to finance the minimum-guarantee payments, fund its operations and allow it to license other films. In addition, Miramax is also accused of reneging on an IPO as a jointly-owned company. While discussions on the plan were going on for eight months, Miramax International President Rick Sands allegedly told Scotia not to release the films it hadn't yet because "he knew they were all 'dogs' and would devalue the share priced of the proposed stock offering," the suit says.

In March, Miramax ceased IPO discussions, leaving Scotia with 10 unreleased films and a tarnished reputation, thus inhibiting the 30-year old company from making its own IPO. Despite telling Scotia to stall on the release of the films, Miramax nevertheless allegedly continued to pursue the minimum guarantees on nine of the unreleased films, the suit says, and began threatening legal action. That is when Miramax commenced its AFMA arbitration.

The lawsuit seeks more than $18 million in damages, plus punitive damages, for breach of contract, breach of the implied covenant of good faith and fair dealing, fraud, negligent misrepresentation and unfair business practices. The lawsuit was filed by attorneys Larry Stein, Karen L. Dillon, Jeremy E. Pendry and Gina M. Simas of Alschuler Grossman Stein & Kahan. Coincidentally, that's also the same law firm that is defending Franchise Pictures against claims of inflated budgets by German film distributor Intertainment

Linda Fiorentino files suit over sex scenes

Actress Linda Fiorentino has countersued German film production company Art Oko Film that alleges she ruined a Georgia O'Keefe biopic by refusing to show up on the set.

According to Variety, Fiorentino (Dogma, Men in Black) filed a cross-complaint against Art Oko Film on Tuesday in Los Angeles Superior Court. She accuses the producers of Till the End of Time of attempting to coerce her into doing "prurient sex scenes" she never approved.

Art Oko Film is suing Fiorentino for $5 million, claiming that she feigned illness and did not come in for rehearsals, camera tests, or makeup sessions. Instead, the suit alleges, the actress attended social functions — including a party at the Playboy mansion — when she was supposedly sick.

The plug was pulled on Till the End of Time last August. Fiorentino was to have starred as painter O'Keefe and Ben Kingsley was to portray photographer Alfred Stieglitz.

In her filing, Fiorentino accuses the producers of promising the picture's investors that she would "perform the full frontal nudity and prurient sex scenes that they had added to the script without Fiorentino's approval." She is seeking unspecified damages for defamation, breach of contract, and false advertising.

In March, Variety reported that producers of the Hudson's Law TV pilot were deciding whether to sue the actress after they couldn't locate her to begin work. The role was eventually recast with actress Kyra Sedgwick.

Kevin Smith, who directed Fiorentino in Dogma, once stated that he will never work with the actress again after the pair battled bitterly on the set of his religious satire.

Producer Accuses DreamWorks of Fraud

LOS ANGELES (AP) - The producer of a comedy sympathetic to the Irish Republican Army has added a fraud claim Tuesday to his lawsuit against DreamWorks and is now seeking $100 million in punitive damages. The suit accuses the studio, which is co-managed by Steven Spielberg, of suppressing the film to appease British officials.

The lawsuit, which originally sought only $10 million when it was filed in February in Manhattan federal court, was also moved to Los Angeles federal court on Tuesday, plaintiff Jerome O'Connor said. He claims that he had an agreement with DreamWorks to distribute "An Everlasting Piece" in 800 U.S. theaters but it was shown on only eight screens and earned a paltry $75,000 before being removed.

The plaintiff claims he would have received at least $10 million in royalties with wider distribution. With the new fraud claim, O'Connor states that DreamWorks engaged in deliberate deception and misled the filmmakers into working at the studio. For that, O'Connor is seeking an additional $100 million in punitive damages. DreamWorks did not immediately return calls for comment Tuesday but has previously called the suit "patently ludicrous."

Songwriters sue Internet music site MP3.com

By GARY GENTILE, Associated Press

LOS ANGELES Songwriters Tom Waits, Randy Newman and members of the rock band Heart have filed a $40.5 million copyright infringement lawsuit against Internet music site MP3.com.

The songwriters, who all own the copyrights to their music, assert that the San Diego-based Web site illegally gives listeners access to their songs over the My.Mp3.com service. The suit was filed Monday in U.S. District Court in Los Angeles.

The suit claims that songs such as Newman's hits "I Love LA" and "Short People" as well as "Downtown Train" by Waits and "Barracuda" by Heart, were copied illegally onto MP3.com's computers and made available for listening to anyone who "proved" ownership of the artist's music by briefly inserting a compact disc into a computer.

The songwriters claim that about 270 songs are illegally available through the service. They are asking for the maximum penalty of $150,000 for each song. "Unless the major artists band together to do this, everyone else is taken advantage of as well," plaintiff's attorney Henry Gradstein said Tuesday.

Contact: Henry D. Gradstein, Gradstein, Luskin & Van Dalsem 12100 Wilshire Boulevard, Suite 350 Los Angeles, California 90025 (Los Angeles Co.) Telephone: 310-571-1700 Fax: 310-571-1717

A spokesman for MP3.com said Tuesday the company has not been served with the suit and couldn't comment. Last November, MP3.com agreed to pay $53.4 million to Universal Music Group, which ended the company's disputes with major music makers. Earlier, a federal court judge in New York ruled that MP3.com had intentionally violated the copyrights of the music companies.

The National Music Publishers' Association Inc. filed a separate suit and last October, MP3.com agreed to pay them $34 million to make more than 1 million musical compositions available on the site.

A sworn Declaration made by former Stan Lee Media, Inc. Executive Vice President Stephen Gordon

in January and reported in the Industry Standard and other media in the US, Europe and Asia, was corrected today in a "Further Declaration" made by Gordon in a Los Angeles Superior Court action brought against Gordon & Paul by their former attorneys. The declaration contained new information regarding the activities of the current President and CEO of the internet-based public company built around comic book icon Stan Lee.