Sandy Veith and Vuelta International, Inc. v. MCA, Inc.

Television writer Sandy Veith (plaintiff) entered a contract with Universal City Studios, Inc. (Universal) (defendant) for Veith’s creative services. The contract stipulated that in addition to a fixed salary, Veith would receive additional sums if his creative efforts led to the licensing of a prime-time television series. Veith and Universal were both signatories to a collective-bargaining agreement between the Writer’s Guild of America, West, Inc. (Writer’s Guild) and the Alliance of Motion Picture & Television Producers, Inc. The collective-bargaining agreement did not require or provide for arbitration outside of disputes over credits. The National Broadcasting Company purchased an option to produce one of Veith’s concepts, “Coletta,” but the network later decided not to produce the series. Similarly, the American Broadcasting Company entered an option agreement for a “Coletta” script before deciding not to go forward with the series. Four years later, Veith became aware of a successful TV series, Northern Exposure, which shared many similarities to Veith’s unproduced concept but for which Veith received neither credit nor compensation as stipulated in the contract with Universal. Veith and Vuelta International, Inc. (plaintiff) brought suit against Universal and a related company, MCA, Inc. (defendant), as well as Creative Artists Agency, Inc. (Creative Artists) (defendant) for breach of a written contract, breach of an implied contract, and breach of a fiduciary duty. Evidence suggested that Universal executives had intentionally shared aspects of “Coletta” with parties associated with the development of Northern Exposure. The jury found in favor of Veith and assessed damages at $7.29 million to account for the lost future value that Veith was likely to have gained from being the creator of a successful series. Universal moved for judgment notwithstanding the verdict and for a new trial. The motions were denied. Universal appealed, arguing that the collective-bargaining agreement required Veith to arbitrate his claim. The California Court of Appeal granted certiorari.