Tolkien Estate Sues New Line, The Hobbit Not Yet Threatened

[Voronwë the Faithful]

Let's not turn this into a TORN-bashing session. I'm sure that they have their reasons, and while I don't necessarily understand them, I respect them.

[N.E. Brigand]

I believe TORN already denied Voronwë the right to post a link to his own site, N.E. Voronwë should correct me if I misunderstood him.

They removed a reference to HoF from the short bio that I included with the piece and told me that I could not advertise a competing messageboard. I didn't ask whether I could include a link to HoF in my user profile, but the message was pretty clear.

They should realize that the more that board cross-promote one another, the more traffic they all get.

I'm sure that they have their reasons, and while I don't necessarily understand them, I respect them.

Sorry, didn't mean to start a ruckus. While TORN's message-board terms of service include a rule that "No image banners or advertisements for other sites and/or discussion boards are allowed. The companies and websites that advertise on TORn have paid for that privilege" they also note that "Exceptions include text links to your personal home page or website in your profile and/or footer." I can see why a message on TORN's home page might not qualify for that exception. But I do know that within individual messages, there have been links to HoF, TORc, the Mythsoc list, and other fora when the content is appropriate to the discussion at hand, and the admins have let those stand.

[Voronwë the Faithful]

Thanks, N.E.B. I'm sure that links to threads here at HoF on the messageboard there would be fine. And if I didn't want to do the essay for them, I wouldn't have done so. I was a little disappointed that they removed the reference to HoF in the bio, but certainly not angry.

[Jnyusa]

But the follow-ups will be on our front page, right?

[Primula Baggins]

That might be a neat little strategy. Then they'd have to link to us.

Voronwë, I do think you should put the HoF link in your profile.

[solicitr]

An excellnt summary Vor.

I notice however that your discussion of fraud with emphasis on reliance is the focused estoppel form: there however is (or at least was at equity) also fraud per se: certain conduct, e.g. forgery, which is considered fraudulent and tortious in itself. New York might well condsider destruction and concealment of documents to be per se fraud.

[halplm]

TORN is evil

[Primula Baggins]

I strongly disagree.

[Jnyusa]

They're in business to make money, hal, whereas we're in business for our own pleasure. So our practices will naturally be different. I can understand Voronwë being willing to do them a favor when they asked him to. It does us no harm.

But I do hope the follow-ups will be here, and that the article will go in our forums as well and be linked on our front page, because TORN doesn't own Voronwë's work. They can't demand that he post it nowhere else unless they buy the rights from him. It will help bring people over here, and growth of our membership is something we've been putting a lot of work into recently.

[halplm]

Well, the fact their out to make money is one issue, but "paying" someone who does a favor for them by linking to said person's site costs them nothing, and everyone is happy. Claiming it as their own and forcing contributors to bow to them and get nothing is piracy. They're bullies and they always have been. They shouldn't be allowed to associate themselves with anything remotely connected to Tolkien, IMHO.

[Primula Baggins]

It's not piracy, Hal; it's a private site, private property, and they can run it as they choose. Those who don't like it can vote with their feet; there are always other sites. That's how it works on the web.

[Jnyusa]

someone who does a favor for them by linking to said person's site costs them nothing, and everyone is happy.

No, it does cost them, hal. That's what N.E. was explaining above. Exclusivity is one of the demands made by their advertisers. They have no choice but to abide by those rules. And the fact that things are posted over there does not stop us from discussing them here.

[Frelga]

Right. Besides, we got Soli and nel, and they don't, so there. I think V would be perfectly within his right to direct any follow-up discussion to his own board.

[Voronwë the Faithful]

I notice however that your discussion of fraud with emphasis on reliance is the focused estoppel form: there however is (or at least was at equity) also fraud per se: certain conduct, e.g. forgery, which is considered fraudulent and tortious in itself. New York might well condsider destruction and concealment of documents to be per se fraud.

True, soli, and I do touch on that briefly. But that doesn't seem to be the basis of their fraud claim as stated in the Complaint. And we do have rules for heigthened specifity in fraud claims here in California.

Edit: I have now read the plaintiff's opposition to the demurrer, and New Line's reply. The plaintiffs still don't allege fraud per se. They do assert in their opposition that New Line misrepresented "underlying data" constituting fraud independent of the breach of it contractual duty, but as New Line points out, there are no such allegations in the Complaint, and they are certainly not pled with the kind of specificity required for fraud claims under California's procedural rules. There are no allegations, similar, for instance, to the allegations in the Apple Records v. Capitol Records case (the Beatles case) in which the plaintiffs alleged that the defendants claimed to have destroyed millions of albums that they actually sold. There is no comparable claim here, for instance, that New Line is claiming that less tickets were sold than actually were sold, or less DVDs. Moreover, the plaintiffs assert the frankly bizarre argument that they were damaged by their reliance on New Line's misrepresentations because it caused them to delay seeking to terminate the contract until after New Line agreed to make the Hobbit films. How that delay actually caused them damages they don't make clear. (Nor do they make clear how they would have terminated the contracts without a final determination by the court that they the contracts had been breached, when that is what the contracts specifically state.)

As to the Fiduciary Duty cause of action, the plaintiffs cite the Apple Records case to support their position. But in that case, there really was a record of a close commercial relationship over the course of decades. In this case, there was no relationship at all between the plaintiffs and New Line until 1998, and contractual obligations regarding the Tolkien films are basis of that relationship.

The Tolkien plaintiffs also oppose New Line's request that the court take judicial notice of the actual 1969 agreements. It is quite telling that the publisher plaintiffs do not join in this opposition. Essentially the Tolkien plaintiffs are saying that the court should rely on what they say the agreements say, rather than what the agreements actually say, a most disappointing legal position to take.

All in all, I think that New Line's attorneys make much stronger legal arguments. The Tolkien plaintiffs' attorneys in particular continue to assert rhetoric that is over the top and in some cases completely irrelevant to the actual issues presented in this case. If I were the judge, I would grant the demurrer without leave to amend as to the fiduciary duty cause of action, and grant it as to the fraud cause of action with leave to amend the complaint to assert with greater specificity how New Line allegedly misrepresented "underlying data" and how these misrepresentations actually caused the plaintiffs harm independent of the breach of the contracts.

[solicitr]

I'll take your word for it that the plaintiffs' response is ill-drafted, which would be a shame.

As to fiduciary duty: is it not transferable? It would seem that the relationship was established with UA in 1969 (just a year after Apple Corps was formed).


On the fraud count- I see your point about specificity in pleadings. However it occurred to me that there may be a factual basis for the reliance claim, if what plaintiffs are trying to say is that over the last couple of years NL negotiated in bad faith, stalling and stonewalling over financial records until they had settled with MGM and Zaentz and Jackson, and only after the Hobbit's path was cleared saying "oops, we lost 'em."

And, as I think you have mentioned somewhere, the defense's position on the rights recission is fortified the more work and money they have tied up in The Hobbit.

[Voronwë the Faithful]

I'll take your word for it that the plaintiffs' response is ill-drafted, which would be a shame.

Well, perhaps it's just my bias; I really don't like their style (I'm referring to the attorneys, obviously, not the Tolkien family).

As to fiduciary duty: is it not transferable? It would seem that the relationship was established with UA in 1969 (just a year after Apple Corps was formed).

That is certainly their argument, claiming that since New Line "stands in the shoes" of UA, Zaentz and Miramax, they should assume ALL obligations. But they fail to provide ANY authority to support that claim. Moreover, even if that is true, this situation is still distinguishable from the Apple case, where there were multiple transactions between the parties over the years. Here there is only the one.

On the fraud count- I see your point about specificity in pleadings. However it occurred to me that there may be a factual basis for the reliance claim, if what plaintiffs are trying to say is that over the last couple of years NL negotiated in bad faith, stalling and stonewalling over financial records until they had settled with MGM and Zaentz and Jackson, and only after the Hobbit's path was cleared saying "oops, we lost 'em."

And, as I think you have mentioned somewhere, the defense's position on the rights recission is fortified the more work and money they have tied up in The Hobbit.

Yes, I can kind of see that. I suppose that the argument could be made that the plaintiffs were harmed by the delay because they could have terminated New Line's right to make The Hobbit and allowed Zaentz to make the film(s) with someone else who was less likely to screw them out of their profits. But they actually make that argument, at least not in so many words.

[Voronwë the Faithful]

I'll take your word for it that the plaintiffs' response is ill-drafted, which would be a shame.

Well, perhaps it's just my bias; I really don't like their style (I'm referring to the attorneys, obviously, not the Tolkien family).

As to fiduciary duty: is it not transferable? It would seem that the relationship was established with UA in 1969 (just a year after Apple Corps was formed).

That is certainly their argument, claiming that since New Line "stands in the shoes" of UA, Zaentz and Miramax, they should assume ALL obligations. But they fail to provide ANY authority to support that claim. Moreover, even if that is true, this situation is still distinguishable from the Apple case, where there were multiple transactions between the parties over the years. Here there is only the one.

On the fraud count- I see your point about specificity in pleadings. However it occurred to me that there may be a factual basis for the reliance claim, if what plaintiffs are trying to say is that over the last couple of years NL negotiated in bad faith, stalling and stonewalling over financial records until they had settled with MGM and Zaentz and Jackson, and only after the Hobbit's path was cleared saying "oops, we lost 'em."

And, as I think you have mentioned somewhere, the defense's position on the rights recission is fortified the more work and money they have tied up in The Hobbit.

Yes, I can kind of see that. I suppose that the argument could be made that the plaintiffs were harmed by the delay because they could have terminated New Line's right to make The Hobbit and allowed Zaentz to make the film(s) with someone else who was less likely to screw them out of their profits. But they actually make that argument, at least not in so many words.

[solicitr]

From the News in Brief:
http://www.timesonline.co.uk/tol/news/u ... 187864.ece

In our report of the litigation between the Tolkien family and New Line Cinema, producers of The Lord of the Rings (May 25), we did not make it clear that Christopher Tolkien is suing as a trustee of the Tolkien Trust, a registered charity, and the JRR Tolkien 1967 Discretionary Settlement. It was another member of the family who referred to the action as “one last crusade”, not Mr Tolkien, and the hearing on June 6 was to fix a date for the eventual trial, not actually to halt Hollywood plans to film The Hobbit. We apologise to the trustees and Mr Tolkien for these errors.

[Voronwë the Faithful]

Thanks for posting that, soli. I'm glad that they clarified some of their egregious errors. But it still is really irresponsible journalism, particularly the part about it being "another member of the family" who referred to the action as "one last crusade". Either say who said, and what the context really was, or don't say anything at all about it. That kind of thing annoys the heck out of me.

[Voronwë the Faithful]

Well, it looks like my take on the demurrer was pretty darn accurate. The court sustained the demurrer with leave to amend within 20 days. The court explicitly held that the allegations in the Complaint support nothing more than a breach of contract cause of action. Assuming that the plaintiffs are unable to satisfactorily amend the complaint to assert new allegations that support the fraud and/or breach of fiduciary duty causes of action (a virtual impossibility), those causes of action are out, and New Line is protected from the possibility of an award of punitive damages.