Locke v. Warner Bros., Inc.

Sondra Locke (plaintiff) and Clint Eastwood had a long-term romantic and professional relationship that ended badly and in litigation. To settle that litigation, Eastwood convinced Warner Brothers (defendant) to give Locke a three-year pay-or-play deal to direct movies for the studio, supposedly to further her directing career. The deal gave the studio the discretion to choose whether to hire Locke for any potential directing projects she submitted. Later, Locke received information indicating that Eastwood had brokered the alleged settlement deal to secretly kill her directing career by having the studio ignore all her submissions. Indeed, despite pitching numerous movies to the studio, Locke did not get any directing roles. When at least two studio employees asked about hiring Locke for directing roles during the deal, studio executives responded that, even though Locke was talented, the studio was not going to work with her. Locke sued the studio in California state court. Among other claims, Locke alleged that the studio had breached its implied contractual duty of good faith and fair dealing because it never honestly considered any of her proposed directing projects. Locke also alleged that the studio had committed fraud because it had entered the deal without ever intending to honor it. The trial court granted summary judgement for the studio on the breach-of-contract claim, holding that the studio had no obligation to act on any of Locke's proposals because the contract gave the studio the discretion to pass on all of them. Next, because the studio had not breached any contractual obligation, it could not have fraudulently entered the contract with the intent to breach any obligation. Thus, the trial court dismissed both claims. Locke appealed to the California Court of Appeal.