COUNSEL CONCERNSDC Comics Denied Sanctions in Superman Copyright Dispute

Jerome Siegel and Joseph Shuster co-created Superman during the 1930s and later assigned their rights to DC Comics. On May 10, 2004, the Siegel heirs sued DC Comics seeking to terminate its previous copyright grants to Superman. They alleged trademark infringement and sought unpaid profits. DC Comics filed its suit on May 14, 2010, against Jerome Siegel's widow, Joanne Siegel, and his daughter, Laura Siegel Larson; Mark Warren Peary, the nephew of Joseph Shuster; and Toberoff and his related companies, Pacific Pictures Corp. and IP Worldwide LLC.

The studio accused Toberoff and his companies of violating the U.S. Copyright Act by interfering with a 1992 agreement with the Shuster heirs and the 2001 agreement with the Siegel heirs. 'In or about 2001, Toberoff learned of these agreements between DC Comics and the Siegel and Shuster heirs and engineered a course of conduct to induce the heirs to repudiate those agreements, file invalid and erroneous copyright termination notices, and enter into new agreements with Toberoff and his companies netting him the controlling stake in the heirs' asserted interests in Superman,' Petrocelli wrote in the complaint.

Specifically, the complaint alleged that Toberoff induced the Shuster heirs to repudiate their agreement and enter into a 50/50 joint venture with his company, Pacific Pictures. As for the Siegels, Petrocelli alleged that Toberoff told their attorney, Kevin Marks of Gang Tyre Ramer & Brown in Beverly Hills, CA, that a 'billionaire investor' was prepared to pay them $15 million to back out of their agreement with DC Comics, which would have granted them $3 million, and to enter into a new deal with IP Worldwide and his business partner, Ari Emanuel, who heads entertainment talent agency William Morris Endeavor LLC.

The original sanctions motion, filed on Oct. 10, 2012, accused Toberoff of 'gross discovery misconduct' in concealing the letters, which according to Petrocelli showed he had induced the Siegel heirs to break their agreement with DC Comics. 'The nature and even existence of these documents were covered up by Toberoff through a systematic course of deceptive conduct dating back to the Siegel lawsuit filed against DC by Toberoff on behalf of the Siegels, and continuing throughout this case,' Petrocelli wrote. 'Toberoff withheld documents in violation of court orders, submitted fraudulent privilege logs to conceal non-privileged documents, falsely denied the existence and defendants' possession of documents and, when questioned about this by DC and the Court, responded with false and misleading explanations.'

In the letters, Laura Siegel and her half-brother, Michael Siegel, in 2002 and 2003, specifically discuss the 'billionaire investor' and $15 million offer. The studio obtained the letters after they were stolen from Toberoff's office.

Toberoff and his lawyer, Laura Brill of Kendall Brill & Klieger in Los Angeles, played down the significance of the letters. 'Terminating sanctions cannot be justified,' they wrote in a November 14 opposition document. 'DC points to no finding that Defendants violated any Court orders, no prior imposition of sanctions ' ever ' over eight years of litigating this case and Siegel, and no warning by any Court that such sanctions were even a remote possibility.'

On December 5, Wright denied the motion on jurisdictional grounds, because the discovery at issue was tied to DC Comics' allegation that Toberoff had intervened in repudiating the 2001 agreement ' a claim pending before the U.S. Court of Appeals for the Ninth Circuit at the time. But he allowed DC Comics to renew its motion, which it did on February 4.
In the order denying sanctions, Judge Wright noted that a Nov. 2, 2002, letter refuted DC Comics' claim because it showed that the Siegel heirs had fired Marks, their previous attorney, six months before they learned about Toberoff's offer.

On Jan. 10, 2013, the Ninth Circuit reversed a summary judgment ruling for the Siegel heirs, upholding the 2001 agreement with DC Comics. DC Comics v. Pacific Pictures Corp., 11-56934.

On remand, Judge Wright, in March 2013, followed the Ninth Circuit's conclusion.

Amanda Bronstad is a Staff Reporter for The National Law Journal, an ALM affiliate of Entertainment Law & Finance.

The U.S. District Court for the Central District of California, although 'deeply troubled' by his behavior, refused to sanction prominent entertainment attorney Marc Toberoff for alleged discovery violations during his lengthy court battle over the rights to Superman. DC Comics v. Pacific Pictures Corp., 2:10-cv-03633. Toberoff, of Toberoff & Associates in Malibu, CA, represents the heirs to one of the co-creators of Superman. They sued DC Comics, a subsidiary of Warner Bros. Entertainment Inc., to terminate the studio's rights to the comic book hero's copyright.'

DC Comics later sued the heirs and Toberoff, alleging that he illegally sought to repudiate a 2001 agreement with the studio so that he could become a business partner with his clients in a new deal over the Superman rights. As part of the later suit, DC Comics attorney Daniel Petrocelli, a partner at Los Angeles-based O'Melveny & Myers, sought terminating sanctions against Toberoff after he failed to reveal several letters in his privilege logs. Petrocelli also sought an evidentiary hearing and, if needed, a special master.

In March 2013, U.S. District Judge Otis Wright in Los Angeles refused to go along, concluding that the motion 'is really just a rehashing of the tortured course of discovery in these Superman matters.' Even though he was 'deeply troubled' by Toberoff's failure to update his privilege logs, he concluded that the behavior did not 'rise to willful attempts to mislead' the judge or DC Comics. 'In any event, the Court is skeptical of DC's contention that any perceived deception here caused it any real prejudice, as the letters at issue here actually serve more to discredit DC's cries of intentional interference than they do to bolster them,' Judge Wright wrote.

Jerome Siegel and Joseph Shuster co-created Superman during the 1930s and later assigned their rights to DC Comics. On May 10, 2004, the Siegel heirs sued DC Comics seeking to terminate its previous copyright grants to Superman. They alleged trademark infringement and sought unpaid profits. DC Comics filed its suit on May 14, 2010, against Jerome Siegel's widow, Joanne Siegel, and his daughter, Laura Siegel Larson; Mark Warren Peary, the nephew of Joseph Shuster; and Toberoff and his related companies, Pacific Pictures Corp. and IP Worldwide LLC.

The studio accused Toberoff and his companies of violating the U.S. Copyright Act by interfering with a 1992 agreement with the Shuster heirs and the 2001 agreement with the Siegel heirs. 'In or about 2001, Toberoff learned of these agreements between DC Comics and the Siegel and Shuster heirs and engineered a course of conduct to induce the heirs to repudiate those agreements, file invalid and erroneous copyright termination notices, and enter into new agreements with Toberoff and his companies netting him the controlling stake in the heirs' asserted interests in Superman,' Petrocelli wrote in the complaint.

Specifically, the complaint alleged that Toberoff induced the Shuster heirs to repudiate their agreement and enter into a 50/50 joint venture with his company, Pacific Pictures. As for the Siegels, Petrocelli alleged that Toberoff told their attorney, Kevin Marks of Gang Tyre Ramer & Brown in Beverly Hills, CA, that a 'billionaire investor' was prepared to pay them $15 million to back out of their agreement with DC Comics, which would have granted them $3 million, and to enter into a new deal with IP Worldwide and his business partner, Ari Emanuel, who heads entertainment talent agency William Morris Endeavor LLC.

The original sanctions motion, filed on Oct. 10, 2012, accused Toberoff of 'gross discovery misconduct' in concealing the letters, which according to Petrocelli showed he had induced the Siegel heirs to break their agreement with DC Comics. 'The nature and even existence of these documents were covered up by Toberoff through a systematic course of deceptive conduct dating back to the Siegel lawsuit filed against DC by Toberoff on behalf of the Siegels, and continuing throughout this case,' Petrocelli wrote. 'Toberoff withheld documents in violation of court orders, submitted fraudulent privilege logs to conceal non-privileged documents, falsely denied the existence and defendants' possession of documents and, when questioned about this by DC and the Court, responded with false and misleading explanations.'

In the letters, Laura Siegel and her half-brother, Michael Siegel, in 2002 and 2003, specifically discuss the 'billionaire investor' and $15 million offer. The studio obtained the letters after they were stolen from Toberoff's office.

Toberoff and his lawyer, Laura Brill of Kendall Brill & Klieger in Los Angeles, played down the significance of the letters. 'Terminating sanctions cannot be justified,' they wrote in a November 14 opposition document. 'DC points to no finding that Defendants violated any Court orders, no prior imposition of sanctions ' ever ' over eight years of litigating this case and Siegel, and no warning by any Court that such sanctions were even a remote possibility.'

On December 5, Wright denied the motion on jurisdictional grounds, because the discovery at issue was tied to DC Comics' allegation that Toberoff had intervened in repudiating the 2001 agreement ' a claim pending before the U.S. Court of Appeals for the Ninth Circuit at the time. But he allowed DC Comics to renew its motion, which it did on February 4.
In the order denying sanctions, Judge Wright noted that a Nov. 2, 2002, letter refuted DC Comics' claim because it showed that the Siegel heirs had fired Marks, their previous attorney, six months before they learned about Toberoff's offer.

On Jan. 10, 2013, the Ninth Circuit reversed a summary judgment ruling for the Siegel heirs, upholding the 2001 agreement with DC Comics. DC Comics v. Pacific Pictures Corp., 11-56934.

On remand, Judge Wright, in March 2013, followed the Ninth Circuit's conclusion.

Amanda Bronstad is a Staff Reporter for The National Law Journal, an ALM affiliate of Entertainment Law & Finance.