Ninth Circuit Ready to Toss $8M Award in Steinbeck Spat

(CN) – The Ninth Circuit appeared poised Tuesday to toss nearly $8 million in punitive damages awarded to John Steinbeck’s stepdaughter in a decades-long copyright spat between the Nobel Prize laureate’s heirs.

This undated file photo shows American author John Steinbeck, winner of the 1940 Pulitzer Prize for his novel “The Grapes of Wrath.” (AP Photo, File)

U.S. Circuit Judges Richard Tallman, Sandra Segal Ikuta and N. Randy Smith heard from attorneys representing Waverly Scott Kaffaga, Steinbeck’s stepdaughter and the daughter of his third wife Elaine Anderson Steinbeck, and Steinbeck’s deceased son Thomas Steinbeck and his wife Gail Knight Steinbeck and their company, The Palladin Group Inc., regarding whether they should toss a hefty punitive damages award jurors handed Kaffaga in 2017.

A federal jury in Los Angeles awarded $13 million to Kaffaga on claims Steinbeck’s late son and widow interfered with negotiations between Dreamworks Studios and Universal Studios to bring “Grapes of Wrath” and “East of Eden” to the big screen.

In a hearing on the matter held Tuesday at the Old Federal Building in Anchorage, Alaska, Tallman compared the decades-long copyright spat over Steinbeck’s works to Charles Dicken’s 20-episode serial “Bleak House,” which involves a host of characters and sub-plots.

“I’ll tell you what’s really bothering about this case: It’s beginning to take on the appearance of ‘Bleak House.’ This litigation has been ongoing now for what, 40 years, approaching 50? The parties are dying, they’re being replaced by successors who in turn are dying, and there’s just no end to it,” Tallman told Steinbeck attorney Matthew Dowd.

Tallman asked Dowd “why shouldn’t the fair resolution here” be to uphold a prior Ninth Circuit panel decision in the case, foreclose additional argument regarding a 1983 settlement between the parties and affirm the decision by the jury in the 2017 trial.

Dowd argued the issue will come up in the future based on the termination right provision of the 1976 Copyright Act, which allows for rights to previously licensed works to be clawed back.

Smith said the jury should be given some benefit of the doubt, suggesting there was fraud and malice in the case, but that the punitive damages could be tossed due to Gail Steinbeck’s inability to pay the $8 million award.

At trial, it was revealed Gail Steinbeck makes up to $200,000 a year in book royalties though no financial forensic expert testified as to her overall wealth.

While the judges all seemed inclined to remand the punitive damages award issue to the trial court, Tallman warned Kaffaga’s attorney Susan Kohlmann doing so will prolong the litigation and prevent the payout of a $5.25 million compensatory damages award also awarded at trial.

Kohlmann agreed “there has been enough litigation,” noting her client has been involved in the copyright dispute for 15 years.

Tallman also asked Kohlmann if she even expected her client will recover the compensatory damages award.

“It is my hope when these works are free from interference there will be, at the very least, substantial royalties,” Kohlmann said, though she likened conceding on the punitive damages to “throwing up our hands.”

Tallman disagreed. “You may be walking away from $8 million in punitives, but that is not an insignificant amount of money,” he said.

The judges took the matter under submission.

%d bloggers like this: