Edition: U.S. / Global

Paramount Settles Buchwald's Compensation Suit

Published: September 12, 1995

After seven years of legal wrangling, Paramount Pictures and Art Buchwald have agreed to settle a compensation dispute from the film "Coming to America," with Mr. Buchwald and a co-plaintiff, Alain Bernheim, being paid more than $1 million.

The settlement, which has been accepted by a state appellate court in California, ends a battle that began in 1988, when Mr. Buchwald, the syndicated humor columnist, and Mr. Bernheim sued Paramount for breach of contract. They contended that the film, which starred Eddie Murphy, was based on a two-page treatment that Mr. Buchwald had sold to the studio in 1983.

Mr. Buchwald and his producer-partner, Mr. Bernheim, who had been hired to develop the treatment, argued that their original contract with Paramount also entitled them to a share of the film's net profit -- a form of contingent compensation based on a complex, but standard, studio accounting formula.

During a lengthy Superior Court trial in Los Angeles, Paramount denied the film was based on Mr. Buchwald's treatment. Moreover, the studio argued that even if it were, Mr. Buchwald and Mr. Bernheim were not entitled to any payments because the film had yet to generate a net profit, even though Paramount's share of the film's worldwide gross receipts was more than $140 million.


In January 1990, Judge Harvey Schneider of Superior Court ruled that the film had indeed been based on Mr. Buchwald's treatment. Eleven months later, the judge also ruled that many of the net-profit terms in the studio's contract with Mr. Buchwald and Mr. Bernheim were "unconscionable."

The trial ended in March 1992, when Judge Schneider ordered Paramount to pay Mr. Buchwald and Mr. Bernheim $900,000 in damages and $120,000 in trial expenses. They had sought $6.2 million.

Four months later, Paramount filed an appeal with the California Court of Appeal. As part of the settlement, Paramount filed a motion to dismiss its appeal on Aug. 23, which the appellate court accepted. The case now returns to the lower court, where Mr. Buchwald and Mr. Bernheim are to file a similar motion.

By settling the case, Paramount, which is now a unit of Viacom Inc., avoids having the Buchwald case cited as a legal precedent in other compensation lawsuits involving net-profit calculations.