Rep for Superman Heirs Won’t Face Sanctions

LOS ANGELES (CN) - Though "deeply troubled" by an attorney's discovery failures in tortured litigation over Superman rights, a federal judge refused to enter sanctions.

It marked the second time DC Comics has sought sanctions against Marc Toberoff, the attorney for families of the late Superman creators Jerome Siegel and Joe Shuster.

The families have been in a long-running battle with Warners Bros. and its subsidiary DC Comics over ownership of rights to the Man of Steel.

Earlier this year, the 9th Circuit found that Warners owns the iconic character, but legal disputes remain.

The publishers claim that Toberoff persuaded Siegel and Shuster's heirs to terminate their agreements with DC Comics and file copyright notices. Toberoff then allegedly acquired a controlling stake in the heirs' interest in the superhero character after they entered into a joint venture with Toberoff's Pacific Pictures Corp.

D.C. Comics filed a 2010 complaint against Toberoff after gaining access to one of many documents that had allegedly been stolen from Toberoff's law firm by another attorney and handed to Warner Bros. during an earlier incarnation of the dispute.

The documents at issue were unearthed during a theft investigation by the U.S. Attorney's Office, and detailed Toberoff's interactions with the estates, including an alleged plan to snag the Superman character.

Last year, the 9th Circuit ruled that Toberoff had waived attorney-client privilege when he handed over the legal documents to the government.

The latest chapter of the dispute involves an attempt by DC Comics to revive a claim that Marc Toberoff had "engaged in gross discovery misconduct."

U.S. District Judge Otis Wright concluded Friday, however, that the "motion for evidentiary sanctions is really just a rehashing of the tortured course of discovery in these Superman matters."

"Now with the benefit of hindsight (and relatively new found possession of a multitude of documents to which DC may not have been entitled but for the theft of those documents from Toberoff's office and their subsequent disclosure to Warner Brothers), DC seeks to open a wide-reaching inquiry into attorney and defendant Marc Toberoff's prior privilege assertions and privilege-logging practices," Wright wrote.

The judge said he was "deeply troubled" by Toberoff's failure to record letters between Superman heirs Michael Siegel and his half-sister Laura Siegel Larson - even though DC had "explicitly asked for" such letters.

"Nevertheless, the record does not support a clear inference that this logging inaccuracy was the result of a deliberate attempt to mislead the court or DC Comics; rather, it appears more likely the result of a misplaced reliance on the attorney-client privilege and the related joint-litigation privilege," Wright wrote. "Indeed, at various stages in this litigation, Toberoff's joint-litigation privilege assertions were upheld in some respects and overruled in others. That his assertions have been upheld - even if such assertions were ultimately determined to be unwarranted - establishes that the privilege assertions were at least colorable, and therefore do not rise to willful attempts to mislead."

Wright said he was "skeptical" that Toberoff's alleged deceptions had caused DC "any real prejudice."

"The letters at issue here actually serve more to discredit DC's cries of intentional interference than they do to bolster them," the three-page order states. "For example, DC's fifth claim alleges that 'Toberoff approached the Siegel Heirs and their representatives in late 2001 and 2002 to express interest in purchasing their Superman rights' with full knowledge that 'the Siegel Heirs had already reached an agreement with DC Comics,'" the judge wrote, citing a first amended complaint. "DC also contends that '[a]s a direct result of Toberoff's misdeeds, the Siegel Heirs repudiated the Siegel-DC Comics agreement with DC Comics.' ... But the November 2, 2002 letter from Laura Siegel to Michael Siegel unambiguously reveals that Joanne and Laura Siegel fired Kevin Marks (who had been representing them in negotiations with DC Comics in late 2001 and early 2002) upon their 'dissatisf[action]' with 'the revolting offer from DC' in February 2002 - six months before they first learned that Toberoff had made an offer to Marks in August 2002."

"The court could go on, but to no productive end," Wright concluded.

In addition to denying DC's motion for sanctions, the judge likewise denied a motion from Toberoff and the heirs to review a different ruling that precluded discovery related to timeline-related documents.

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