As Marvel fans are well aware, Disney recently released the much-anticipated movie Black Widow starring Scarlett Johansson as the superhero and member of the Avengers. How the movie got released, however, is the subject of current litigation between Disney and Johansson. Johansson claims Marvel had a contract with her to release the movie in theaters first, then release it via Disney’s streaming services later. Johansson’s lawsuit claims that Disney interfered with that contract by releasing the movie in theaters and via Disney’s streaming service at the same time. Releasing the movie first in theaters would have made more money for the film, Johansson claims, and correspondingly, more money for her.
The latest step in the litigation is that Disney has asked the court to move the litigation to arbitration, meaning the case would not be heard by a jury in a public courtroom that reporters can access. Instead, the case would be heard and decided privately by an arbitrator, an individual selected by the parties to act as judge and jury. A ruling on that issue will likely have a significant impact on the future of the case.
While many businesses will not be involved in high-profile business litigation like Johansson’s Black Widow lawsuit, there are some crucial lessons all businesses can learn with respect to their contractual arrangements and potential business litigation issues.
- How do you prove business losses in litigation?
One of the first questions that may have popped into your mind is, “How will Johansson prove how much was lost since no one knows what the film would have made in theaters first?” Good question. This is where the issue of proving lost business profits arises. Oftentimes breach of contract or other business lawsuits require experts to testify about potential lost revenue. It may necessitate looking at prior transactions (in Johansson’s case, previous Marvel superhero films) to serve as a precedent for what a business may claim as damages. The takeaway is that before filing a lawsuit, a business should consider how it will show its damages and what types of information is necessary for that proof.
- Do you want to arbitrate or litigate in court?
As described above, Disney claims that Johansson’s lawsuit is subject to an arbitration clause requiring the parties to resolve any legal disputes in private without a jury. Arbitration clauses are standard in business contracts, and many businesses prefer arbitration over court for several reasons. In arbitration, the parties can:
- select an arbitrator who has experience in the contract’s subject matter;
- minimize discovery and other pre-trial costs;
- have control over trial and other important dates, allowing a quicker resolution of the breach of contract or other claims;
- better protect sensitive company information in the litigation process.
However, not every business may want to arbitrate all lawsuits or even all aspects of various lawsuits. Businesses should review and consider their contractual arrangements with an eye toward which ones may be more appropriate for an arbitration arrangement.
Can you require specific performance of a contract term?
Specific performance is a legal term for making someone perform their agreed-upon actions under a contract. Oftentimes courts or juries will only be able to award monetary damages for a breach of contract, with the idea that those damages will put the wronged parties back where they would have been absent from the breach. But in certain circumstances, a court will order specific performance instead of damages, meaning that the court will make the other party perform its obligations rather than just awarding monetary damages. While Johansson’s lawsuit does not request specific performance making Disney distribute the film first in theaters, businesses litigating over breach of contract issues should not overlook this as a possible remedy. This is especially true where the contract involves unique services or items that cannot easily be secured in the marketplace.
There may be various parties that are liable under different business litigation theories.
Note that Johansson’s actual contract is with Marvel, which is a separate business entity from Disney. But Johansson did not sue Marvel, choosing instead to litigate against Disney. Why? By suing Disney, Johansson may avoid the arbitration clause that would apply if she sued Marvel. Johansson may feel that having the case in a public courtroom before a jury of ordinary people—versus having the case heard solely by an arbitrator in a private setting—may provide her a better chance to recover.
The lesson for businesses here is that oftentimes when dealing with contractual relationships, there may be more than one party against whom a business claim can be brought to recover for damages.
Under legal theories, deciding which entities to sue can be a critical step when analyzing litigation alternatives related to breach of contract and related claims.
Most certainly, the Black Widow litigation will continue to provide an interesting look at business litigation issues. Stay tuned for the next episode ….