$80-Million Verdict for Coppola Sets a Record

In the largest civil verdict ever against a Hollywood studio, a Los Angeles jury Thursday awarded Francis Ford Coppola $60 million in punitive damages on top of $20 million given him last week stemming from the Oscar-winning director’s charges that Warner Bros. torpedoed a version of “Pinocchio” he wanted to make.

Although from a legal standpoint the dispute is considered a relatively narrow one, news about the size of the award quickly sent shock waves through the studios and Hollywood’s clubby legal community.

Observers believe that the $80-million award, which hinged largely on Coppola’s having never signed a formal contract with Warner Bros., may result in a change in the sometimes loose way Hollywood does business. In an industry in which handshakes or longtime personal ties are frequently all it takes to close a deal, studios are now likely to be far more cautions, requiring detailed legal agreements rather than short “memos” that often serve as binding contracts when projects are in their infancy.

“There is going to be a tragic loss of trust and collegiality,” said one of Hollywood’s top lawyers.

In a brief statement, Warner Bros. called the judgment “simply ludicrous” and expressed confidence that the studio will win on appeal.

The verdict in Los Angeles Superior Court marks another high-profile turn in Coppola’s colorful, and sometimes rocky, career as a filmmaker.

He burst into the limelight as a young director in 1972 when he made “The Godfather,” widely considered one of Hollywood’s greatest films. He won an Oscar for directing “The Godfather, Part II” in 1974, and made the Vietnam War epic “Apocalypse Now” in 1979.

Yet he has been plagued by various business problems and bad investments, which forced him into U.S. Bankruptcy Court three times in 10 years.

Coppola was surrounded by jurors outside the courtroom after the verdict was read. Wearing a rumpled blue suit, the bearded, graying director signed autographs for jurors, even inviting them to visit his winery in Napa.

“I feel totally vindicated,” Coppola said. “I went into this knowing I’d never work at Warner Bros. again . . . but they are just bullies. I hope they can realize in the future that creative people are the source of their wealth.”

Coppola said he was one of the minority of filmmakers who could afford to pursue such a lawsuit and risk the wrath of a major studio, because he has a separate source of income from his winery.

Attempt to Switch Studios Quashed

Coppola had planned to make a version of Carlo Collodi’s classic tale as a live-action and computer-animated musical set in Europe during World War II. The filmmaker argued that after the project reached an impasse at Warner Bros., he took his idea to Columbia Pictures, which was ready to make a deal until its executives were notified by Warner that that studio held the rights to the project.

Coppola sued Warner in 1995, charging that it improperly said it owned the project and interfered with his ability to get the movie made.

During the trial, some of Warner’s top current and former leaders testified, including studio co-chairman Terry Semel and former executive Lisa Henson, now an independent producer.

But jurors clearly liked Coppola, viewing him as a sympathetic David up against Warner’s Goliath. In comments made to reporters after the verdict, panelists said they felt that Warner executives came off as arrogant in the courtroom.

But a Warner spokeswoman said that jurors questioned by the studio’s lawyers after the verdict were unable to name a single wrongful act on the company’s part.

“Juries are looking for good guys and bad guys. Studios better be wary about going to jury against sympathetic plaintiffs,” said one studio executive, who requested anonymity.

David Halberstadter, a partner with the law firm of Troop, Meisinger, Stuber & Pasich, said representatives of directors and actors often resist having their clients sign a formal agreement.

“If one studio says they’re not going to do business with the client for that reason, he can go to another studio that probably will,” said Halberstadter, whose firm frequently represents the major studios.

At least one studio says it demands a lengthy, signed contract spelling out all relevant details before any money changes hands. Said Darcie Denkert, head of business affairs for Metro-Goldwyn-Mayer: “We already have a signed long-form policy; all of the elements in our development deals need to have signed long forms before anyone gets paid. So for us, this won’t mean any change in our policy.”

Coppola attorney Robert Chapman was buoyed by the large assessment.

“I think the jury was clearly sending a message that large studios can’t treat individuals this way. It sends a message that executives can’t act unethically,” he said.

Last week, jurors awarded Coppola the $20 million to compensate him for losing the project, which set the stage for Thursday’s award of the larger punitive damages.

One juror said that, during deliberations, opinions on how much to award in punitive damages ranged from $10 million to $120 million. The $60-million figure is slightly less than the $63 million attorney Chapman had earlier suggested, which he said represented about 1% of Warner Bros.’ worth.

Verdict May Have ‘Chilling Effect’

Pierce O’Donnell, the attorney who represented Art Buchwald in his breach-of-contract suit against Paramount Pictures over “Coming to America” in 1992, agrees that the verdict may make studios think twice before claiming ownership of projects.

“It’s a common practice in Hollywood to send these kinds of threatening lawyer letters, saying we have this right, you don’t have this right. I think this may have a chilling effect on such letters, even though Hollywood is based on intellectual property rights,” O’Donnell said.

Although Buchwald eventually won his suit, he and his producing partner were awarded less than $1 million. Actress Kim Basinger was ordered to pay Main Line Pictures $8.9 million in 1993 for backing out of an agreement to star in the film “Boxing Helena,” although that verdict was appealed and the cased ended up being settled. Director Ron Shelton was awarded $9.8 million last year, after claiming that 20th Century Fox didn’t pay him profits promised. Fox is appealing.

The largest previous verdict over a Hollywood business deal is believed to be a $53-million judgment in 1994 for producer Adam Kidron in a feud with Columbia Pictures TV, Viacom and a production company involving a TV drama, “Catwalk.” But that judgment was reversed last year, said Bert Deixler, the lead defense attorney in the case.

“This kind of verdict is about chemistry,” O’Donnell said. “Corporate America has to take away from this that there is a democratic impulse among jurors.” In this case, though the David was already worth millions, jurors found the Goliath heartless and arrogant. O’Donnell added, “Celebrities will always win in the Superior Courthouse.”