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Ninth Circuit Tosses $8M Award in Decades-Long Steinbeck War

A Ninth Circuit panel on Monday threw out a jury award of $8 million in punitive damages to John Steinbeck’s stepdaughter over a copyright dispute involving the author’s famous works. 

(CN) – A Ninth Circuit panel on Monday threw out a jury award of $8 million in punitive damages to John Steinbeck’s stepdaughter over a copyright dispute involving the author’s famous works.

Waverly Scott Kaffaga, Steinbeck’s stepdaughter, claimed Steinbeck’s late son and widow interfered with negotiations between Dreamworks Studios and Universal Studios to bring adaptations of “Grapes of Wrath” and “East of Eden” to the silver screen.

The interference led to multiple Hollywood producers abandoning film projects involving well-known actors, Kaffaga said, who claimed slander of title and breach of contract in the case.

In 2017, a federal jury awarded Kaffaga $5 million in compensatory damages and $8 million in punitive damages against Gail Knight Steinbeck – the wife of Steinbeck’s deceased son Thomas Steinbeck – and their company, The Palladin Group.

In August, on appeal before the Ninth Circuit, Gail Knight Steinbeck’s attorneys argued the damages awarded were excessive and claimed a new termination provision in U.S. copyright law allowed for reclamation of licensing rights.

Kaffaga also failed to present sufficient evidence at trial demonstrating Gail Knight Steinbeck’s income from royalties and her ability to personally pay $5.9 million in punitive damages, the attorneys argued.

At trial, Gail Knight Steinbeck testified she receives between $120,000 and $200,000 annually from domestic book royalties for the Nobel Prize winner’s works.

In a 23-page opinion by U.S. Circuit Judge Richard Tallman, the panel held the $7.9 million in punitive damages against Palladin and Gail Knight Steinbeck was “disproportionately large” compared to her finances and that Kaffaga failed to produce an accurate assessment of Gail Knight Steinbeck’s wealth.

“In reviewing the record, we are unable to come to even a reasonable approximation of Gail’s net worth,” wrote Tallman, a Bill Clinton appointee. “And, in so many words, even if the evidence is sufficient to sustain some amount of punitive damages, the $5.9 million awarded against Gail is disproportionately large compared to her financial condition.”

The panel affirmed the compensatory damages award and summary judgment ruling on breach of contract and slander of title, finding that substantial evidence of defendants’ “tortious conduct” was presented to the jury at trial.

Arguments of “double recovery” in the damages awarded were not strong enough to reverse the jury’s verdict, the panel said in the opinion.

Tallman noted a 1983 settlement between the parties vested control rights exclusively with Kaffaga and that defendants must stop saying that have any intellectual property rights over Steinbeck’s works.

“Defendants must now stop attempting to relitigate the validity and enforceability of the 1983 agreement, including whether it is an “agreement to the contrary,” and their understanding of the 1983 agreement and the plethora of court decisions interpreting it,” Tallman wrote for the panel. “This has to end. We cannot say it any clearer.”

At last month’s hearing, Tallman had 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 at the Aug. 6 hearing.

U.S. Circuit Judges Sandra Segal Ikuta and N. Randy Smith, both George W. Bush appointees, joined in the opinion.

In addition to tossing the punitive damages and upholding the compensatory damages, the panel gave the trial court the green light to “reconsider Kaffaga’s request for an injunction to put an end to this recidivist litigation.”

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