Depp Oral Contract with Entertainment Lawyer Invalid, Says CA Court
In an oral opinion regarding an oral contract, a California state court judge ruled that a percentage fee deal between Johnny Depp and his long-time and now former entertainment lawyer Jake Bloom is invalid under California law. The ruling highlights the reality that the way some Hollywood deals are implemented runs afoul of ethics rules.
Depp filed the lawsuit looking for a refund of all fees paid to Bloom and his law firm under a 1999 oral agreement between the parties, which he calculates at more than $30 million. Bloom countersued seeking a declaration that the agreement was valid or in the alternative, that he was at least entitled to quantum meruit, or the reasonable value, of the services he provided.
At the heart of Depp’s argument is California Business & Professions Code sec. 6147, which requires that contingent fees agreements between clients and attorneys be in writing. Bloom’s lawyer argued that percentage fee agreements like the one with Depp are different than contingent fee arrangements because contingent agreements are speculative and involve one party, attorneys, taking the risk of failing in a matter and thus not getting paid at all for their work.
However, Judge Terry Green did not agree, stating “[i]t’s a classic contingent fee agreement…What else could it be? It rises and falls like the tides.” Regarding the statute in question, Judge Green said “[a]t some point, we have to comply with the law…6147 has to mean something.” The judge also had choice words regarding the Hollywood legal culture that allowed such agreements to flourish: “I don’t know what people were thinking in this case. Why not have a writing here? Why not?…I’m aware that show business people think they live in a separate universe, but they don’t. Not a separate legal universe.”
In a statement released to The Hollywood Reporter after the hearing, counsel for Depp said:
Johnny Depp is gratified by today’s ruling in his favor against one of the most powerful law firms in Hollywood. This ruling is a victory for Mr. Depp, but importantly it sends a clear message to the legal industry that the laws apply to them too. Industry ‘customs’ that have been used in Hollywood for decades to take advantage of artists are not legally binding. Johnny Depp stood up for all artists in Hollywood and won; this ruling should cause a change for the better.
As a practical matter, when dealing with attorneys licensed in California, artists and film makers should insist on having percentage fee arrangements such as Depp’s in writing, as well as having in place engagement agreements with attorneys whenever a representation is anticipated to incur over $1000 in legal fees, which attorneys are required to have under California Business & Professions Code sec. 6148.
