LOS ANGELES, FEB. 11 -- A Superior Court judge here today gave Paramount Pictures four weeks to detail its intended defense of its accounting practices, a move that could reopen legal arguments thought to have been settled in the ongoing lawsuit between Art Buchwald and Paramount.
In a surprising move, Paramount today even offered to open its books to prove that its purported expenses were reasonable. In an earlier phase of the case, the studio had contested having those books examined, at the same time arguing that its expenses were justified by the risky nature of the film business. But it abandoned that argument dramatically on the same day a court-appointed auditor arrived to examine its books. The move was widely interpreted as a sign of the studio's reluctance to open its internal accounts to the world.
Judge Harvey A. Schneider's decision today came during an often-heated 40-minute hearing. Schneider repeatedly chastised Paramount attorney Charles Diamond, often literally shaking his finger at him. After Diamond said he just wanted his constitutional day in court, Schneider cut him off. "Don't wave the flag at me, Mr. Diamond," he said.
At issue is the distribution of profits from Eddie Murphy's hit 1988 movie "Coming to America." In the first phase of the case, Schneider ruled that the movie was based on a treatment written by Buchwald under contract for Paramount Pictures. This ruling meant Buchwald and his co-producer, Alain Bernheim, were entitled to as much as 41 1/2 percent of the movie's net profits. But then Paramount argued that although the movie grossed in excess of $300 million, there were no net profits as defined under Buchwald's contract.
In late December, Schneider issued a tentative ruling in Buchwald's favor, finding at least seven provisions in Paramount's contract "unconscionable" -- that is, so unfair that the court was ready to overturn them and dole a "reasonable" profit to Buchwald.
A month later Paramount asked for a chance to prove that Schneider was wrong about the individual provisions ruled unfair, citing a stipulation filed with the court last June in which attorneys for both sides agreed to give Paramount a chance to defend individual provisions of the contract. Although today's hearing was scheduled to arrange the next phase of the trial, in which penalties against the studio would be determined, it was instead given over to Paramount's new argument on the old issue.
Schneider seemed hostile to Paramount from the beginning. "You're doing what every attorney would love to do," he said. "Argue a case, lose, then come back and try again."
Buchwald's attorney, Pierce O'Donnell, said he felt like he was caught in quicksand. Paramount was bluffing and stalling, he insisted.
In the end, though, Schneider grudgingly gave Diamond a chance to make his argument. "I thought we were getting to the end of this case, but apparently we're just beginning," he said. Giving Diamond four weeks to prepare the proffer and O'Donnell two weeks to prepare a reply, he observed wryly: "That means we shall meet again on April 1 -- entirely appropriate under the circumstances."