Director Hal Needham Sues Warner Bros. in Growing Home-Video Royalty Flap

Five studios have been sued in a class-action lawsuit alleging underreporting of home-video revenue.

The Hollywood Reporter

Jan. 29, 2013

By Matthew Belloni

Director Hal Needham has sued Warner Bros. in an expanding class-action case targeting the way studios calculate home-video royalties for profit participants.

Needham, the director of Cannonball Run, Smokey and the Bandit and Hooper, filed suit Tuesday in Los Angeles Superior Court claiming that he's been shortchanged revenue from the latter film due to the Warner Bros. practice of calculating his profit participation using only 20 percent of the home-video revenue received by the studio.

Read the complaint here.

The move comes a week after 20th Century Fox, Paramount, Universal and Sony were sued by talent whose decades-old contracts allow them to share in the revenue from hit films. Stanley Donen (Lucky Lady), Charles Bronson (Hard Times) and Colin Higgins (Foul Play and The Best Little Whorehouse in Texas) are the lead plaintiffs in the other cases. Read those lawsuits Here, Here, Here.

As THR reported, studios began paying talent based on a 20-percent royalty rate in the early 1980s as VCRs became popular. The lawsuits have been filed by profit participants whose contracts predate the 1980s, so they argue that they should be entitled to share in 100 percent of home-video revenue.

Warners' accounting practices “have allowed WB to wrongfully withhold a substantial amount of money it receives from home video distribution at the expense of Plaintiff and the Class,” the Needham lawsuit states.

Exact damages are not alleged, but the claims could total in the millions of dollars.

A Warner Bros. rep declined to comment.

The suit alleges causes of action for breach of contract, breach of implied covenant, conversion, money had and received, declaratory judgment and a violation of California's business and professions code. The plaintiff is repped by teams from L.A.'s Johnson & Johnson, Kiesel & Larson, and Pearson Simon Warshaw & Penny.