To the rest of the civilization, Los Angeles truly is the “entertainment capital of the world,” a sunny spot where officials calculate there were the equivalent of 45,484 days of permitted production (movie or television shooting) in 2011 alone. But to anyone who has channel-surfed at any time recently, it’s also clear that a growing share of contemporary programming has channeled itself into a Wild, Wild West — the hair-raising or norm-lowering genre of so-called “reality” shows, with bored and affluent housewives, bored and brawling kids from questionable shores or bored but challenged participants in a medley of talent, survival or other kinds of human contests. With all manner of pitches for such programming flying, and with crews descending on locations across the Southland, a crucial legal question is emerging for those who make these types of show or who are in entertainment law: Just how much protection can a few pieces of paper afford? Can the inking of a release lead to legal nirvana?
At a recent conference, Angels and Demons: Navigating Tricky Entertainment and Media Issues to Reach Legal Nirvana, hosted by the Biederman Entertainment & Media Law Institute and the Media Law Resource Center, a panel — “Exorcising Rights: Releasing the Demons in Reality Programming — explored reality TV releases, how much they cover and how far these documents can be stretched to assist in expanding this genre. Jean-Paul Jassy of Bostwick & Jassy LLP moderated the session, with panelists: John Farrell, an attorney for Endemol USA, a production firm; attorney Glen Kulik from Kulik, Gottesman, of Mouton & Siegel, LLP; and attorney Louis P. Petrich, from Leopod Petrich & Smith.
The panelists first dealt with Section 1668 of the California Civil Code, noting that all reality show producers should be aware of this area of law, which prevents intentional torts from contractual release in California. Section 1668 provides:
All contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person or property of another or violation of law, whether willful or negligent, are against the policy of the law.
This section of the civil code, the lawyer-panelists noted, should be taken into careful consideration because contractual releases do not protect producers from intentional tort claims, whether they are included in a release agreement or not. An interesting current case dealing with this issue is Dieu v. McGraw, 2011 WL 38031 (Cal. Ct. App. Jan. 6, 2011), dealing with a case in which participants recruited for a Dr. Phil reality show sued for claims of negligence and intentional tort. The appellate court held that the waiver-and-release agreements signed by participants did not preclude liability for claims beyond negligence.
The panelists also noted that any type of release may be vitiated by fraud, diminished capacity or unconscionability. This is a huge concern for those who make reality TV and their lawyers, as there are many situations in which a contract can be undermined: Many reality program release agreements, for example, contain arbitration provisions — which can be invalidated if incorrectly executed.
In Duick v. Toyota, an arbitration provision was voided as a result of fraud in the inception. In this case, a marketing recipient sued an automobile manufacturer and its marketing company, alleging eight causes of action, including intentional infliction of emotional distress, negligence and false advertising arising out of an internet-based advertising campaign. Toyota Motor Corp. filed a motion to compel arbitration under terms of the contract. The appellate court held that the agreement, which contained an arbitration provision, was void because of fraud in the inception. Fraud in the inception or “execution” of a contract arises where “the promisor is deceived as to the nature of his act and actually does not intend to enter into a contract at all, mutual assent is lacking, and [the contract] is void.” Rosenthal v. Great Western Financial Securities Corp., 14 Cal.4th 394, 415 (1996).
Panelists emphasized that lawyers, if they wish to increase the likelihood of their handiwork surviving legal challenges, must spend the time necessary to ensure that: provisions of any release agreement are clear; parties signing the pact receive ample chance to review agreement terms before signing; and there are clear headings and language to define agreement terms.