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Smithers v. MGM Studios

139 Cal. App. 3d 643, 189 Cal. Rptr. 20 (1983)

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Smithers v. MGM Studios

California Court of Appeal

139 Cal. App. 3d 643, 189 Cal. Rptr. 20 (1983)

Facts

William Smithers (plaintiff) was a well-regarded actor who was cast to appear in the television series Executive Suite. The show was produced by Metro-Goldwyn-Mayer Studios, Inc. (MGM) (defendant). MGM’s president and vice president at the time were Harris Katleman (defendant) and Bernard Weitzman (defendant), respectively. After being cast, Smithers’s agent negotiated the billing agreement with MGM to include a most-favored-nation clause in exchange for a lower starting compensation. The clause stated that, with the exception of three higher-billed actors, if any other performer were to receive higher compensation than Smithers, he would receive that amount as well. Additionally, the clause stated that no performer, other than those three actors, would receive more prominent billing than Smithers. The clause was included in the interim-deal memo. However, the clause ultimately did not make it into the long-form contract, which was never signed. Ultimately, other performers received more prominent billing than Smithers. Eventually, Smithers complained that his billing was not in conformity with the clause, which led him to discover it was never included in the long-form contract. Smithers’s character was later written off the show. Katleman told Smithers that if he did not waive the most-favored-nation clause, he would blacklist him from performing on certain programming. Smithers filed suit for breach of contract, tortious breach of an implied covenant of good faith and fair dealing, fraud, and punitive damages. The jury awarded Smithers $1 million in economic damages and $2 million in punitive damages. MGM moved for the court to enter a judgment notwithstanding the verdict, arguing that the amount of damages were speculative and unascertainable. The trial court denied the motion but reduced the amount of Smithers’s damages. MGM appealed the denial of its motion, and Smithers appealed the remittitur.

Rule of Law

Issue

Holding and Reasoning (Nelson, J.)

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