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Oh, Precious! Judge Fines New Line
Score one for Peter Jackson in his battle to recoup the bling he believes New Line Cinema still owes him for The Lord of the Rings.
A ticked-off federal judge in Los Angeles has ordered the studio to pony up a $125,000 penalty for failing to turn over documents related to the case, in which Jackson claims the studio used creative accounting to cheat him out of millions in royalties from the first chapter in his big-screen trilogy, 2001's The Lord of the Rings: The Fellowship of the Ring.
In his Sept. 18 ruling, U.S. Magistrate Steven Hillman said New Line not only failed to comply with his previous court orders to produce the paperwork and emails, but he suggests that New Line "haphazardly" searched for the requested documents and may have destroyed potential evidence.
"No witness can say with any degree of certainty what individuals searched their own email files or how any of those searches were conducted," the judge wrote.
"New Line did not suspend the automatic deletion of emails and other electronic documents as part of a litigation hold; instead, to this day, emails continue to be purged from every employee's inbox every thirty days."
The LOTR trilogy generated upwards of $3 billion in global ticket sales. Jackson and his production house, Winghut Films, sued New Line in March 2005, accusing the company of cooking the books when it came to accounting for DVD sales.
In addition to the fine, which was partly levied to cover costs rung up by the director's legal team, the judge also instructed New Line to hire an outside document-retrieval expert within the next three weeks to make sure further electronic records are saved.
New Line had no comment on the ruling, citing pending litigation.
Hillman said that when new sales and licensing documentation surface, he will most likely allow Jackson's camp to depose any pertinent witnesses again. The studio has previously argued against producing such detailed agreements out of proprietary and privacy concerns.
This isn't the only complaint lording over the Time Warner-owned mini-major.
Fifteen Kiwi actors who appeared in various guises throughout The Lord of the Rings trilogy filed suit in June contending New Line's new math screwed them out of their 5 percent cut of an estimated $100 million in profits pertaining to movie merchandise including videogames, clothing, lunchboxes and other LOTR merchandise.
Two years before that, legendary producer Saul Zaentz filed a lawsuit claiming New Line owed him $20 million in Orc-related royalties as a previous rights holder. Zaentz sold the films rights to the company. He eventually settled for an undisclosed amount.
As for Jackson's legal action, it has strained his once chummy relationship with the studio and jeopardized his role on the anticipated Rings prequel, The Hobbit., which New Line is developing with MGM.
MGM, which owns the distribution rights to The Hobbit, has publicly stated that Jackson is still a possibility to direct.
Industry observers have postulated that Jackson and New Line are engaged in high-stakes brinksmanship and may eventually reach a private settlement.
Jackson is scheduled to begin shooting his latest film, an adaptation of Alice Sebold's spectral drama The Lovely Bones, in Pennsylvania next month.
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