SAN FRANCISCO (AP) --- A federal appeals court has left intact a massive class-action suit challenging Hollywood studio accounting practices that calculate some high-grossing films as money-losers.
U.S. District Judge Robert Takasugi of Los Angeles jolted studio executives in June 1996 by certifying the antitrust suit filed by heirs of attorney Jim Garrison as a class action on behalf of as many as 10,000 actors, writers and directors.
With Takasugi's permission, major studios appealed his ruling to the 9th U.S. Circuit Court of Appeals, arguing that a class action would be unmanageable and would take many years to try. But Friday, the court refused to review the ruling, without comment.
The order was signed by Judges Arthur Alarcon and William Canby.
"This was the monumental procedural hurdle to move this case forward," plaintiffs' lawyer Joseph Cotchett said Tuesday.
"They're (the studios) willing to fight these battles one at a time. This case says all of these people can join in one lawsuit, and it can be determined across-the-board whether or not the studios have been committing antitrust violations."
Frank Rothman and Harriet Posner, lawyers for the studios on the issue, were away from their offices Tuesday and unavailable for comment.
The suit was filed by the heirs of Garrison, whose book was used for the 1991 Oliver Stone film "JFK."
The movie's worldwide revenues exceed $120 million. But Warner Bros. says it shows a loss of nearly $60 million under the net-profit formula used by major studios and challenged in the lawsuit. Garrison's heirs, entitled to a percentage of the profits, have received nothing.
In claiming an antitrust violation, the suit charges that studios agreed in the late 1980s to issue standard contracts with terms that guaranteed most movies would never show a net profit.
The appeals court's order clears the way for plaintiffs' lawyers to question movie executives, probably starting in two to three months, Cotchett said.
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