Raquel Welch v. Metro-Goldwyn Mayer Film Co.

In 1986 Metro-Goldwyn Mayer Film Co. (MGM) (defendant) was found to have violated its employment contract with actress Raquel Welch when it terminated her and replaced her with another actress in a film entitled Cannery Row. Both MGM’s accusation that Welch breached the contract and her termination caused significant damage to Welch’s reputation. The allegation signaled to other filmmakers that Welch was not dependable. Although Welch made six movies in the seven years immediately preceding her termination, Welch did not make another film afterward, as offers ceased. One film opportunity failed to materialize for financial reasons. Welch’s other two post-termination offers were to play a vampire and a Nazi, which were not acceptable. With her career in ruins in Hollywood, Welch moved to New York and performed on Broadway, did television commercials, did a concert tour, and had success with a book on health and beauty. Yet Welch could still have pursued filmmaking in addition to these activities if roles had been available to her. When making movies, Welch had made as much as $350,000 on a single film, and by the time the trial occurred in 1986, some actresses were making as much as $5 million per movie. On Welch’s claim for breach of the implied covenant of good faith and fair dealing, the jury awarded Welch $1 million for her loss of income and $750,000 for damage to her reputation. The jury also awarded Welch punitive damages in the amount of $7.65 million against MGM, whose net worth was $215 million, and $500,000 against Cannery Row’s producer, whose net worth was $5 million dollars. MGM appealed the award of damages.