The Unsuccessful Motion to Dismiss/Strike the Counterclaims
On March 28, 2013, plaintiffs brought motion to dismiss or to strike the counterclaims, asserting that these claims were a “patently absurd” attempt to bring a premature claim for malicious prosecution. They asserted that the counterclaims were SLAPPS, or Strategic Lawsuits Against Public Participation, brought only to try to bully them into dropping the original lawsuit. They made an additional claim that the actions defendants complain about are protected under California law by an absolute privilege for any communications made in, or in connection with, judicial proceedings, and thus cannot be the subject of a cause of action. (As an aside, a number of documents were filed under seal to protect their confidentiality, including most interestingly the September 2009 settlement agreement that resolved the previous Tolkien v. New Line lawsuit. A look at that document would have revealed the total settlement amount, a question about which much speculation has been engaged. Also included in the documents filed under seal, unfortunately, was the September 2010 regrant agreement itself.
This past Thursday, July 11, 2013, U.S. District Judge Audrey Collins denied a motion to dismiss, saying what Warner Bros. and Zaentz were doing wasn’t “disguised claims for malicious prosecution.”
“Simply stated,” the judge writes, “these claims arise out of the parties’ divergent understanding of the Warner Parties’ and Zaentz’s rights to The Lord of the Rings and The Hobbit. They are routine contract-based claims and counterclaims.” The judge also says that although the other side might argue that Warners has dressed up a challenge to exploitation into “repudiation,” that term appropriately characterizes the claim that the Tolkien estate has “revoked rights it already granted.” The judge also rejected plaintiffs’ claim that the claims stemmed from “protected” speech.
What Happens Next?
Unless the Estate tries to appeal this latest ruling (a move that would have a very small chance of success, in my opinion), the parties will now move on to actually litigating their respective claims against each other. This will involve taking depositions and requesting documents and other “discovery”. If the previous lawsuit is any guide, the two sides will have numerous disputes and arguments about what information should or should not be required to be turned over. Eventually, however, both sides are likely to file motions for what is called “summary judgment” in which they asked the judge to declare that as a matter of law, the evidence available is not sufficient to support the other side’s claims.
Unfortunately, however, unlike with the previous lawsuit in which I was able to obtain copies of a wealth of material related to the series of agreements in which the film rights were passed from Tolkien to United Artists, then Zaentz, then licensed by Zaentz to Miramax, and finally passed on to New Line, all of which had been attached to New Line’s motion for summary judgment, this time it is unlikely that I will get a chance to see a copy of the 2010 regrant agreement (or, probably, most of the other documentation that Zaentz and Warners say they have) over the course of the lawsuit, since even if it reaches the point where motions for summary judgment are filed, they will likely again be filed under seal. Therefore it will be difficult for me to judge the accuracy of the claims. With the material that I have been able to review, at this stage it appears to me that Zaentz and WB have a pretty compelling case as the issue of online games. It is, of course, possibly that Zaentz and WB are misrepresenting the history and that the true facts will support the position of the Estate and Harper Collins, but right now it looks to me like they are on pretty shaky legal grounds.
I think that the Estate may have a stronger position with regard to the slot machines. While Zaentz’s and WB’s argue that the Estate and WB has long conceded that that online gaming is part of rights sold, I have not seen any similar material regarding slot machines or other gambling. If the Estate had just gone after that, they might be in a stronger position. This suggests to me that the case is really more about the online games, even though they made a bigger deal about the slot machines, which sounds more offensive to most people.
My sympathies are mostly with the plaintiffs in this case, although I’m not sure how strong their claims will turn out to be legally. As I mentioned above, the case doesn’t have any direct effect on the films, except for the potential negative publicity (and perhaps lost profits for WB and Zaentz). However, the case potentially has profound ramifications for the future of Tolkien fandom. I do think that Zaentz in particular is angling to get a final determination that he can do some of the things that he has long wanted to do, like a Middle-earth theme park, which I am sure that the Estate would object to if they can, regardless of the rumors to the contrary. If he and WB prevail, it could mean a much greater commercialization of the Tolkien universe than we have seen thus far. On the other hand, if the Estate prevails, it could lead to the end of such popular activities as the MMORPG (massively multiplayer online role-playing game) The Lord of the Rings Online, which certainly would be a disappointment to many fans. In essence, the resolution of the case will go a long way towards determining who has the final say in how Tolkien’s most popular and enduring works are exploited and expanded upon.
Douglas C. Kane is a civil rights attorney and Tolkien scholar living in California. His first book, Arda Reconstructed: The Creation of the Published Silmarillion was published by the Lehigh University Press in 2009, and reissued in paperback in 2011. His article about the previous Tolkien v. New Line lawsuit was Clearing up Misconceptions Regarding the Tolkien vs. New Line Lawsuit. He posts here at TORN as Voronwë_the_Faithful.
