L. A. lawyer says Hol­ly­wood stu­dios are short­chang­ing his clients

Los Angeles Times - - BUSINESS - By Richard Verrier

He’s one of the most feared lit­i­ga­tors in Hol­ly­wood. Over a four­decade ca­reer, Neville John­son has wran­gled more than $ 350 mil­lion for ac­tors, writ­ers and other clients he con­tends were short­changed their fair share of roy­al­ties and prof­its.

John­son has taken on stu­dios and en­ter­tain­ment unions alike, earn­ing a rep­u­ta­tion as a pug­na­cious at­tor­ney who never shrinks from a fight.

“He’s kind of the go- to guy if you feel you’ve been screwed by your agent, your stu­dio or your net­work,” says writer- pro­ducer Michael Elias, whose cred­its in­clude “The Jerk” and the sit­com “Head of the Class.” “He’s not afraid to take on the stu­dios.”

Many lawyers can be “in­tim­i­dated by the power of the stu­dios,” says at­tor­ney Paul Kiesel, pres­i­den­t­elect of the L. A. County Bar Assn. “Neville John­son is many things, but in­tim­i­dated is not one of them.”

Hol­ly­wood ac­count­ing has long been no­to­ri­ous as an im­pen­e­tra­ble dark art. In one fa­mous case, hu­morist Art Buch­wald ac­cused Para- mount Pic­tures of steal­ing his idea for the hit movie “Com­ing to Amer­ica” and de­priv­ing him of the prof­its. Para­mount coun­tered that the stu­dio earned no net profit on the film, even though it made $ 288 mil­lion at the box of­fice.

John­son, 65, has con­tin­ued in that tra­di­tion, shin­ing a light on the opaque book­keep­ing prac­tices of stu­dios and record com­pa­nies and how they share prof­its with tal­ent — although most of his clients tend to be lesser- known ac­tors, writ­ers and song­writ­ers.

“The com­pa­nies are ruth­less and ra­pa­cious and are go­ing to do ev­ery­thing that they can to squeeze prof­its, and that comes at the ex­pense of tal­ent,” he said in an in­ter­view from his Bev­erly Hills of­fice.

Such heated rhetoric comes nat­u­rally to John­son, who nonethe­less com­mands a healthy re­spect among at­tor­neys rep­re­sent­ing the stu­dios. “If I said to them I’ve got a new case that Neville brought, their at­ti­tude is ‘ We’re in for a fight, this is se­ri­ous stuff,’ ” said Los An­ge­les at­tor­ney Gary Bost­wick, who has rep­re­sented Fox, Sony, NBC and CBS.

That junk­yard dog rep­u­ta­tion

was bur­nished in May when John­son and his part­ners set­tled a $ 26- mil­lion clas­s­ac­tion law­suit with Uni­ver­sal to com­pen­sate ac­tors, writ­ers, di­rec­tors and oth­ers who al­leged were short­changed over profit par­tic­i­pa­tion deals on movies re­leased be­fore 1981.

The set­tle­ment could be the first of sev­eral mul­ti­mil­lion- dol­lar agree­ments with ma­jor film stu­dios over home video roy­al­ties. Sim­i­lar class- ac­tion cases are pend­ing against Para­mount Pic­tures, 20th Cen­tury Fox, Warner Bros. and Sony Pic­tures. John­son also is rep­re­sent­ing Sony em­ploy­ees who are su­ing the stu­dio over the breach of pri­vacy caused by last year’s com­puter hack.

The cases could be lu­cra­tive for John­son, who earns most of his in­come on con­tin­gency pay­ments, which can amount to as much as 50% of set­tle­ment amounts.

An L. A. na­tive, John­son be­gan his ca­reer as a mu­sic at­tor­ney in the mid- 1970s af­ter grad­u­at­ing from South­west­ern Univer­sity School of Law.

He went to work for prom­i­nent mu­sic at­tor­ney Owen Sloane, rep­re­sent­ing such per­form­ers as Fleet­wood Mac’s Ste­vie Nicks and Lind­sey Buck­ing­ham. His work with mu­si­cians inspired him to write and per­form his own coun­try- folk songs, which he regularly per­forms at clubs and events around L. A.

By 1978 he launched his own law firm and picked up big- name clients, in­clud­ing Yoko Ono, serv­ing as her prin­ci­pal lawyer in the early 1980s.

Be­yond han­dling con­tracts, John­son as­sisted the heirs of artists such as Buddy Holly and Ricky Nel­son in col­lect­ing roy­al­ties from record la­bels. He also helped put to­gether a clas­s­ac­tion law­suit over un­paid dig­i­tal roy­al­ties on be­half of artists such as Ron Tyson of the Temp­ta­tions and Dave Ma­son of Traf­fic. Uni­ver­sal Mu­sic Group re­cently agreed to pay up to $ 11.5 mil­lion to set­tle.

John­son’s Eureka mo­ment came in the mid- 1980s when mem­bers of Mitch Ry­der & the Detroit Wheels asked him for help to col­lect roy­al­ties from “Devil with a Blue Dress On” and other hits from the 1960s and 1970s. They won a six- fig­ure set­tle­ment from Rhino Records.

“I was ap­palled,” he says. “Ev­ery­body else made money ex­cept the artists.”

Since then, John­son has mainly fo­cused on tak­ing the stu­dios to task.

When ac­tor Jack Klug­man sus­pected he was be­ing cheated out of mil­lions of dol­lars from his work on the decades- old TV crime se­ries “Quincy M. E.,” he turned to John­son.

Klug­man sued NBC Uni­ver­sal in 2008, con­tend­ing he was en­ti­tled to 25% of the “net profit” from the show. NBC Uni­ver­sal pro­vided him with an ac­count­ing state­ment that the se­ries lost $ 66 mil­lion from 1998 through 2006, the com­plaint said.

The case was set­tled two years later; the terms were undis­closed. But John­son con­tin­ued his fight with Uni­ver­sal. In 2011 he filed another law­suit against Uni­ver­sal on be­half of TV pro­ducer Glen Lar­son, al­leg­ing the stu­dio with­held mil­lions of dol­lars in prof­its from hit TV shows he cre­ated, in­clud­ing “Knight Rider” and “Mag­num P. I.”

“It’s Hol­ly­wood’s ver­sion of be­ing a share­crop­per,” the law­suit states.

Uni­ver­sal coun­tered that Lar­son was well- com­pen­sated for his work on the stu­dio’s shows and did not con­duct an au­dit to sup­port his claim.

Other clients reached out to John­son with sim­i­lar com­plaints. Among them was a busi­ness man­ager rep­re­sent­ing a well- known movie ac­tor who he sus­pected was be­ing cheated out of mil­lions of dol­lars in roy­al­ties from home video pay­ments.

John­son hired a foren­sic au­di­tor to re­view the net profit state­ments of the ac­tor. The au­di­tor con­firmed that the stu­dio was in­deed short­chang­ing the ac­tor by mil­lions of dol­lars, he said.

John­son and his team spent the next six months ex­am­in­ing the pay state­ments of other ac­tors, writ­ers and pro­duc­ers. They found a sim­i­lar pat­tern.

“We de­ter­mined it was a wide­spread prac­tice,” he says. “It was a Hol­ly­wood se­cret.”

In a se­ries of class- ac­tion law­suits filed in Jan­uary 2013, John­son’s clients al­leged the stu­dios con­sis­tently underpaid home video roy­al­ties. The clients in­cluded film­maker Stan­ley Do­nen, who sued Fox over his 1975 movie “Lucky Lady,” and the trustee of the late ac­tor Charles Bron­son, who sued Sony over the 1975 film “Hard Times.”

The suits al­lege that stu- dios have cal­cu­lated profit par­tic­i­pa­tion amounts based on 20% of home video rev­enue in­stead of the full 100%. The prac­tice dates to the ad­vent of the VCR in 1980s, when stu­dios would pay in­de­pen­dent com­pa­nies to pro­duce and dis­trib­ute VHS copies of their films and re­ceive 20% of the rev­enue.

Af­ter stu­dios opened their own home dis­tri­bu­tion di­vi­sions, they con­tin­ued cal­cu­lat­ing the profit par­tic­i­pants’ earn­ings from 20% of the home- video rev­enues. The stu­dios have ar­gued that roy­alty pay­ments were proper and based on long­stand­ing in­dus­try prac­tice. But John­son says his clients never agreed to the pro­vi­sion.

Why did it take so long for the dis­crep­ancy to come to light?

John­son cites var­i­ous rea­sons: pay state­ments make it hard to de­ci­pher how net prof­its are cal­cu­lated; dis­putes over profit state­ments are han­dled through se­cret ar­bi­tra­tions and au­di­tors must sign strict con­fi­den­tial­ity agree­ments; and many ac­tors, writ­ers and di­rec­tors are loath to speak out for fear of be­ing black­listed by their em­ploy­ers.

John­son also takes pride in shin­ing a light on the ob­scure roy­al­ties known as for­eign levies, which are spe­cial taxes levied in for­eign coun­tries to com­pen­sate au­thors for the re­use and copy of their work.

In 2005, he brought a class- ac­tion law­suit against the Writ­ers Guild of Amer­ica, West, al­leg­ing the union was im­prop­erly hold­ing on to money that be­longed to writ­ers. Guild of­fi­cials dis­puted the al­le­ga­tion, cit­ing the dif­fi­culty of track­ing down re­cip­i­ents, many of whom are de­ceased. Sim­i­lar cases were brought against other unions, in­clud­ing one filed by “Leave It to Beaver” star Ken Os­mond against the Screen Ac­tors Guild.

“They had all these mil­lions of dol­lars sit­ting in the bank and gath­er­ing in­ter­est, and if no­body forced them to do some­thing it wouldn’t have got­ten done,” Os­mond says. “They were high and mighty and he [ John­son] just knocked them down a peg.”

The cases were sub­se­quently set­tled. The guilds de­nied wrong­do­ing but vowed to im­prove the dis­tri­bu­tion of funds. They have paid out more than $ 200 mil­lion in for­eign levy funds to mem­bers.

Some union mem­bers, how­ever, were un­happy.

“The job was left un­fin­ished,” said writer- di­rec­tor Wil­liam Richert, the lead plain­tiff in the writ­ers guild case. He com­plained the set­tle­ment did not have enough teeth to en­sure writ­ers would get paid.

“We did the best we could, and it was ap­proved by the court,” John­son says. “Two-hun­dred mil­lion dol­lars has been paid out. What ex­actly did I do wrong?”

On a warm af­ter­noon in Bak­ers­field, Trevor McShane clasped the mi­cro­phone and in­tro­duced an orig­i­nal com­po­si­tion called “There’s No Me and You.”

“It’s a weeper,” the den­im­clad singer warned the crowd of 50 sit­ting in plas­tic chairs out­side the Kern County Mu­seum. “Give me back my love, the one you stole from me,” he crooned with a slight Elvis vi­brato.

The mel­low bal­ladeer on­stage at the Bak­ers­field Rock & Coun­try Mu­sic & Art Fes­ti­val a few weeks ago was in fact John­son. He uses the stage name McShane — a trib­ute to his Ir­ish an­ces­try — be­cause he doesn’t “want peo­ple to mis­in­ter­pret my in­ten­tion to be a full- time at­tor­ney.”

A long­time guitar player, John­son be­gan writ­ing and record­ing his own Amer­i­cana- style songs when a client en­cour­aged him. He’s not the only prom­i­nent Hol­ly­wood at­tor­ney with artis­tic pur­suits. Skip Brit­ten­ham writes graphic nov­els and Bert Fields has penned nov­els as D. Kin­caid.

Along with per­form­ing, John­son writes non­fic­tion books, love po­ems and songs. He and his wife, Cindy, a for­mer ac­tress turned lawyer, own a com­pany that has pub­lished sev­eral books, in­clud­ing one he wrote on leg­endary bas­ket­ball coach John Wooden and his “Pyra­mid of Suc­cess” phi­los­o­phy.

“I loved learn­ing about him, and that’s why I did it,” John­son said. His great­est pas­sion, though, is mu­sic. John­son has re­leased sev­eral CDs and regularly per­forms coun­try- folk and blues tunes at clubs with his nine- mem­ber band, sev­eral of whom are pro­fes­sional mu­si­cians.

“The le­gal busi­ness is fraught with ten­sion and con­flict, and this is not,” he said af­ter per­form­ing nearly a dozen songs in Bak­ers­field. “It’s a tremen­dous artis­tic re­lease.”

‘ The com­pa­nies are ruth­less and ra­pa­cious and are go­ing to do ev­ery­thing that they can to squeeze prof­its.’

— Neville John­son, Bev­erly Hills at­tor­ney

Kirk McKoy Los An­ge­les Times

NEVILLE JOHN­SON, 65, has taken on stu­dios and unions alike, earn­ing a rep­u­ta­tion as an at­tor­ney who never shrinks from a f ight.

Charles Rex Arbogast As­so­ci­ated Press

CLIENTS of John­son have in­cluded, clock­wise from top left, Yoko Ono, Jack Klug­man, Mitch Ry­der and Ste­vie Nicks. Most of his clients tend to be lesser- known ac­tors, writ­ers and song­writ­ers.

Charles Sykes As­so­ci­ated Press

Scott Dudelson Getty I mages

Con Keyes Los An­ge­les Times

Gina Ferazzi Los An­ge­les Times


with mu­si­cians inspired Neville John­son to per­form his own coun­try- folk songs. Above, on­stage in Bak­ers­field last month.

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