Taking the Raging Bull by the Horns: A Statute of Limitations That Never Expires?

Stephen Carlisle July 30, 2014

One of the jobs of the Supreme Court of the United States is to settle disputes between Circuit Court of Appeals. This occurs when two or more Federal Circuit Courts, have considered similar disputes, but reached different results. This caused the Court to take up the case of Petrella v. Metro-Goldwyn-Mayer, a dispute over ownership rights to the screenplay to the film Raging Bull.

Released in 1980, Raging Bull told the story of real life boxer, Jake LaMotta. It was a modest commercial success, with a to-date gross of $23 million dollars, which placed it 27^th among the pictures released that year. ¹ However, Raging Bull proved to be a smash hit with the critics and motion picture community. It received 8 Academy Award nominations, with two wins, most notably to Robert DeNiro for Best Actor. ² This factor insured that it would have a long life on home video and later, DVD. It is consistently featured on the lists of the “Greatest American Movies,” including being inducted into the National Film Registry in 1990, thus being marked for historic preservation by the Library of Congress. ³

The background of the case is significant, as it may have influenced the Court’s decision. The claimant is Paula Petrella, the daughter of the original screenwriter, Frank Petrella. He, along with Jake LaMotta, created a book and two screenplays based upon LaMotta’s life. In 1976, they sold the motion picture rights to these works to Chartoff-Winkler Productions, who in turn transferred them to United Artists, a subsidiary of MGM. The film was produced and released to theaters in 1980.

Frank Petrella died the next year, bringing into play one of the most infrequently invoked areas of copyright law: the Abend recapture. In 1976, copyright lasted for two consecutive 28 year periods, the initial period and the “renewal” period, which required a physical filing with the Copyright Office. Standard contracts during this period required the author to sign away both the initial and renewal periods. However, the Courts ruled that the promise of the further assignment of the renewal term did not come into play until the 28^th year commenced. So if the author died before the 28^th year commenced, there was no further assignment because the author was dead, and the heirs of the author were under no legal obligation to make the previously agreed assignment. If the heirs filed the renewal notice timely, they recaptured the copyright, and the previous owner was divested of the copyright. This is what happened here, and Paula Petrella, the daughter of Frank, recaptured the copyright to the screenplay previously assigned to Chartoff-Winkler Productions.

Seven years after filing, Ms. Petrella, through an attorney, advised MGM that she had reclaimed the copyright in the Raging Bull screenplay, and any further exploitation of the film would be actionable copyright infringement. Petrella’s attorney and the attorneys for MGM exchanged letters for the next two years, but no suit was filed. In all, Petrella waited nine more years, and a total of 16 years after her recapture, to finally file a copyright infringement lawsuit against MGM.

MGM defended on a number of grounds, including the statute of limitations and laches. The statute of limitations is understood to be a fixed period of time, from when the Plaintiff knows, or reasonably should have known, that it had a claim. Claims filed after the expiration of the statute of limitations, are barred from proceeding.

Laches, on the other hand, has no set time limit, but prevents the lawsuit from going forward on the grounds that the Plaintiff has waited too long to file the suit, and the passage of time has served to harm the ability of the Defendants to defend the case. This can happen because evidence has been lost or destroyed, thinking it would not be needed. Laches can also be invoked because witnesses’ memories have faded as to the precise series of events, or one or more pivotal witnesses are deceased.

The Supreme Court first took up the issue of the statute of limitations. Rather than hold that the three year statute of limitations runs out three years from when the claimant is first aware of a copyright infringement claim, the Court held that as long as the infringement continues, the statute of limitations never runs out, because each act of infringement starts the statute of limitations all over again. So each copy of Raging Bull that was shown, sold or streamed, started a new three year statute of limitations. So as a critically acclaimed, Academy Award winning film, it’s always in the marketplace somewhere, and so we are now faced with the strange situation of a statute of limitations that never expires.

So what does it limit? Well, the Court said that the statute of limitations only reached the three years immediately prior to the date of the filing of the lawsuit, and of course all infringements occurring in the future. So the damages, if any, of the defendant would be limited to that time period.

As to the defense of laches, the problem that the Court pointed out was that the statute of limitations was still running. Therefore, if the statute of limitations had not run out, the doctrine of laches (as an equitable rule, not hard and fast law), could not be applied. This has a certain inescapable logic to it. But the problems it raises are myriad.

The majority opinion acknowledged that a Plaintiff could “sit and wait” until the appropriate time to file a lawsuit. With a statute of limitations that never runs out, this could make for some risky times for copyright owners and exclusive licensees. The majority reasoned that a copyright owner who was aware of the claim could strike first, by filing an action for declaratory relief, pre-empting the filing of the copyright infringement action. This, of course, supposes that the copyright owner has actual knowledge of the claim.

The dissenting opinion filed by three Justices pointed to the case of Danjaq LLC v. Sony Corp. ⁴ as a potential for abuse by a copyright claimant based upon theory advanced by the majority opinion. This case involved a fight over the rights to the character of James Bond, the highest grossing film series of all time. ⁵ It was not that the parties were unfamiliar with each other; they had been fighting in Court both here and abroad, for over 40 years. ⁶ It was the nature of the claim that proved to be a shock. Film director Kevin McClory, one of the co-writers of the Thunderball film script, claimed decades later that he was a co-creator of the “cinematic version” of James Bond and sued for a cut of the profits. This claim was made from 36 to 19 years after the release of the films in question.

The District Court ruled, and the Ninth Circuit affirmed, that McClory had waited too long to bring this rather breathtaking claim, and was barred by laches. Key to this ruling was the fact that many of the witnesses, who might counter these claims, were all dead. These included Bond creator Ian Fleming, Bond film producers Albert R. Broccoli and Harry Saltzman and Bond screenwriter Richard Maibaum. The dissent in Petrella raises this very real possibility, contending that three “key witnesses” had died before the suit was brought. This is a very logical and foreseeable consequence of ruling that the statute of limitations never runs out on a continuing infringement.

Perhaps the majority in the Raging Bull were unduly swayed by the situation of the Plaintiff in the case. She was not just making a claim of infringement, but there was absolutely no doubt that she had legally recaptured the copyrights and owned this material. However, the question of what she might be entitled to based upon these ownership rights is significant. The film Raging Bull is credited to two screenwriters, neither of whom is Frank Petrella, further writing credits are granted to two more people, neither of whom is Frank Petrella, ⁷ and finally there is a further “based on the book by” credit to Jake LaMotta. Nowhere is Frank Pretella granted a writing credit.

Remember that the story of Jake LaMotta is based on facts, and no one has a copyright on a fact. While the entire genre of Hollywood films which claim to be “based on a true story,” yet are so riddled with fictionalized events and things that never happened, as to make this claim flatly ridiculous, ⁸ the question remains, what material did Frank Petrella create that was not based on fact? And of that material, what material that was created by Frank Petrella, actually wound up in the movie? The trial of the case will tell us.

The Justices of the Supreme Court cannot be charged with knowing the ins and outs of the film business, but in an industry where millions of dollars are invested, and made, the legal requirements for getting a film off the ground can be formidable. This is particularly shown by the stringent requirements for showing “chain of title” to a work, where the producers of a film are charged with creating and registering many documents to demonstrate clear title to a motion picture, some of which are rather superfluous. ⁹ This may force film companies to file unnecessary declaratory actions at significant expense, just to get the financing or distribution required to release the film.

This ruling by the Supreme Court has injected another level of uncertainty and concern into a business that is already highly speculative. This is, of course, not the concern of the Supreme Court, but one we will have to learn to deal with.

The era of the statute of limitations that never expires is upon us.