Court of Appeal:
Chaney’s Opinion Says $47 Million-a-Year Salary Paid to Star of Syndicated Series Precluded Existence of Net Profits From Which to Pay a Percent to the Company of the Man Who ‘Discovered’ Sheindlin
By a MetNews Staff Writer
The talent agency run by the man who “discovered” former New York County (Manhattan) Family Court Judge Judith Sheindlin and conceived the idea of the “Judge Judy” program was properly denied redress in its action against CBS because the agency’s five percent of the “proceeds” amounted to zero in light of the star’s $47 million-a-year salary which prevented profits in the final years, the Court of Appeal for this district has held.
Justice Victoria Chaney of Div. One authored the opinion affirming Los Angeles Superior Court Judge Rupert A. Byrdsong grant of summary judgment in favor of a CBS subsidiary, Big Ticket Television, Inc., which produced the series from its inception in 1996 until the conclusion of taping this year, and CBS Studios, Inc. and CBS Corporation which distribute the show, re-runs of which are being aired nationally. The opinion was filed Friday and not certified for publication.
Plaintiff/appellant Rebel Entertainment Partners, Inc. was contractually entitled to a cut of “defined proceeds” which were tied to “costs of production,” an element of which was salaries. It insisted that CBS unjustifiably defined as “salary” the entire sum paid to Sheindlin from 2010 on, rather than denominating some of the amount as a “participation share” which would have minimized production costs and thus not precluded it from receiving revenues.
Reasonableness of Salary
It also challenged the reasonableness of paying Sheindlin the amount it did. In 2010, when CBS agreed to double her wages to $45 million (boosting that figure by $2 million three years later) television personalities David Letterman, Jay Leno, and Conan O’Brien were pulling annual pay of $28 million or less.
As of the time the complaint was filed on March 14, 2016, Rebel—whose president, Richard Lawrence, in 1995 successfully pitched the idea to CBS of a courtroom show starring Sheindlin—had received no payments for six years based on the lack of profits of “Judge Judy.”
The show, patterned after producer Stu Billett’s “People’s Court,” initially starring former Los Angeles Superior Court Judge Joseph Wapner (now deceased), features actual disputants arguing their minor cases on a studio set before cameras in a simulated court setting. Proceedings are in reality binding arbitrations.
The “cost of production” of “Judge Judy” is defined under the contract between the agency and CBS as all expenditures by Big Ticket made “in good faith, on a reasonable basis, and consistent with customary practice in the United States television industry.”
Above is a CBS publicity shot of Judith Sheindlin, a former New York judge who for 25 years after her judicial career portrayed the judge presiding over a mock small claims court on the syndicated television series, “Judge Judy.” The Court of Appeal for this district has affirmed a judgment in favor of CBS in an action by a talent agency contending that compensation to Sheindlin was so structured as to deprive it of its contractual entitlement to five percent of the proceeds.
A declaration from an expert, CPA Sabrina K. Robinson, founding partner of Robinson Granatt LLP, says:
“[I]t is the custom and practice in the television industry that, if a production company elects to pay talent an increased upfront fee, such increased fee will not be of such a magnitude as to deprive profit participants from realizing any profit participation benefits. It is further the custom and practice in the television industry for a production company to act reasonably toward profit participants with respect to allocation of the production costs of a television series, including the salaries of talent.”
Robinson opined that the $45 million a year salary that CBS agreed in 2009 to pay as of the following year was “significantly in excess of a reasonable salary and inconsistent with customary practice in the United States television industry.”
However, in an April 3, 2018 ruling summarily adjudicating issues, then-Los Angeles Superior Court Judge Joanne O’Donnell (now a private judge) said of the hefty salary:
“Defendants have…established that such salary is being paid ‘in good faith, on a reasonable basis, and consistent in the United States television industry.’ There is no evidence presented that Judge Sheindlin’s salary was negotiated in bad faith or is unreasonable. Judge Sheindlin has re-negotiated her agreements to star in Judge Judy during the show’s airing….Her present salary was the result of arms-length negotiation and Judge Sheindlin’s final ‘take-it-or-leave-it offer.’…That Judge Scheindlin is paid more than other television hosts does not establish her salary is unreasonable or that Defendants’ negotiated the salary in bad faith.”
“At the time CBS Television announced during Season 12, which aired from 2007 through 2008, that Judge Scheindlin signed a new multiyear contract to continue on Judge Judy through 2012, Judge Judy was the top-rated half-hour syndicated court television show since its premiere and was the only first-run syndicated television show that season to increase its ratings year-to-year….At the time CBS Television announced during Season 19, which aired from 2014 through 2015, that an agreement was reached to extend Judge Sheindlin’s contract for Judge Judy through 2020, Judge Judy was the highest-rated first-run syndication show for five years and the highest-rated court show for 969 consecutive weeks with an average of 10.3 million viewers….Plaintiff has presented no evidence that the salary was negotiated in bad faith or is unreasonable in light of the undisputed ‘resounding success’ of Judge Judy and the fact that without its namesake star the show could not continue.”
The plaintiff also contended that “Hot Bench,” a show created by Sheindlin debuting Sept. 15, 2014 and still on the air, was a “Judge Judy” spin-off, claiming entitlement to a share of the proceeds. O’Donnell found there were triable issues of fact as to that matter, denying summary adjudication.
O’Donnell retired from the bench on April 30, 2016; the case was first bounced to Judge Yvette M. Palazuelos; it was then reassigned to Byrdsong on Jan. 23, 2019. To facilitate an immediate appeal, the parties stipulated that the cause of action relating to “Hot Bench” would be dismissed and summary judgment entered on the two causes of action relating to profits from “Judge Judy.”
Byrdsong signed the judgment on April 7, 2020.
Affirms Summary Judgment
In her opinion affirming the judgment, Chaney wrote:
“Rebel lost benefits under the agency agreement not because of any action by CBS but because Sheindlin demanded a large salary, the agreement provided that the salary of a performer constitutes a cost of production, and the agreement further provided Rebel’s benefit would be reduced by the costs of production.”
She noted Sheindlin’s testimony that she would give CBS an ultimatum every three years: pay the salary she specified or lose her services. Chaney said the testimony established three things:
“First, CBS’s obligations to Sheindlin were incurred in good faith, as it had no choice but to accept her demands in order to keep Judge Judy on the air. Second, CB’s obligations to Sheindlin were consistent with customary practice, which, as Robinson’s declaration showed, is to pay indispensable top performers handsomely. Third, the payments to Sheindlin were made for her services, which payments the agency agreement classified as production costs. Rebel apparently disputes none of these facts.”
With that much established, she said, the burden befell Rebel “to demonstrate a triable issue as to whether CBS breached its contractual obligation to make or incur direct out of pocket payments to Sheindlin in good faith, on a reasonable basis, and consistent with customary practice,” and it failed to do so.
Rebel asserted that CBS was at least obliged by virtue of its duty of good faith sand fair dealing to seek assent by Sheindlin to receiving part of her compensation in the form of a participation share. Chaney responded:
“Assuming for the sake of argument that some form of non-production compensation would have been as reliable as a salary, a matter on which the record is silent, the undisputed evidence was that Sheindlin brooked no counterproposals, but instead made demands on a take-it-or-leave-it basis, saying, ‘This is not a negotiation.’ The only time she was presented with a counterproposal, she rejected it unread. No principle or authority obligated CBS to cajole Sheindlin into considering counterproposals.”
The case is Rebel Entertainment v. Big Ticket Television, B305862.
Representing Rebel on appeal were Bryan J. Freedman and Sean M. Hardy of the Century City firm of Freedman + Taitelman, along with Robin Meadow and Gary J. Wax of the appellate firm of Greines, Martin, Stein & Richland.
James A. Curry and Daniel J. Friedman of Loeb & Loeb acted for the CBS defendants.
Sheindlin on March 16, 2016, two days after Rebel filed its action, told ABC News:
“The fact that Richard Lawrence is complaining about my salary is actually hilarious. I met Mr. Lawrence for 2 hours some 21 years ago. Neither I nor anyone involved in the day-to-day production of my program has heard from him in 20 years. Not a card, not a gift, not a flower, not a congratulations. Yet he has somehow received over $17,000,000 from my program. My rudimentary math translates that into $8,500,000 an hour for Mr. Lawrence. Not a bad payday.”
“Now complaining about not getting enough money, that’s real chutzpah! Since I have not spoken with Mr. Lawrence in over 20 years to suggest that he had any involvement in my creating Hot Bench is equally laughable.”
CBS, in seeking summary adjudication or summary judgment in 2016, likewise alleged:
“Judge Sheindlin, her producers and crew have worked for 20 years in producing a successful syndicated program. Lawrence has never been on the set of the program in 20 years, nor has he had any communication with his talent.”
A footnote in Chaney’s opinion says: “Neither Lawrence nor Rebel was ever Sheindlin’s agent.” That fact formed the basis of a contention by CBS, in opposing summary adjudication/judgment, that it was tricked, through non-disclosure, into agreeing to a five percent slice of proceeds going to the predecessor of Rebel.
CBS charged that Lawrence “intended to conceal the fact that he did not actually represent Judge Sheindlin, and was motivated to conceal the true nature of the extent of his representation of the project as a ‘package’ in order to extract an unjustified commission for ‘packaging services’ from Big Ticket.”
That claim sparked Sheindlin’s own Los Angeles Superior Court action against Lawrence and Rebel in which she claimed that Lawrence, through Rebel’s predecessor, Abrarns Rubaloff & Lawrence, had raked in more than $22 million from CBS by virtue of its false representation that it had represented her, resulting in a drop in her proceeds. Los Angeles Superior Court Judge Richard Burdge last Feb. 24 sustained a demurrer to Sheindlin’s complaint, with leave to amend, proclaiming the pleading to be inadequate.
Sheindlin did not amend, saying in a press statement:
“[W]e decline to file an amended complaint as Mr. Lawrence has insisted that I join Big Ticket (CBS) as a defendant.
“The court has declined to rule that CBS is not a necessary party. Mr. Lawrence is the culprit in this fiasco of a packaging deal which has netted him $22 million. CBS inherited this deal. I have been in business with CBS for 20 years. I’m not suing them when they are not the wrongdoer. Sometimes justice gets lost in the weeds of legalese gobbledygook. This is one of those times. Sad.”
She broke with CBS, Sheindlin said in June, in part because it put a priority on a talk show hosted by actress Drew Barrymore over “Hot Bench.”
A new courtroom show featuring her, “Judy Justice,” is scheduled to emerge next year.
Copyright 2021, Metropolitan News Company