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654328/2013
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SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK
----------------------------------------------------------x
:
FRANK DARABONT, FERENC, INC., :
DARKWOODS PRODUCTIONS, INC., and :
CREATIVE ARTISTS AGENCY, LLC, : Index No.: 654328/2013
:
Plaintiffs, : Part 3 (Cohen, J.)
:
-against- : Motion Seq. No. 026
:
AMC NETWORKS ENTERTAINMENT
:
LLC, AMC FILM HOLDINGS LLC, AMC
:
NETWORKS INC., STU SEGALL
:
PRODUCTIONS, INC., and DOES 1
:
THROUGH 10,
:
Defendants. :
----------------------------------------------------------x

DEFENDANTS’ MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFFS’

MOTION IN LIMINE TO PRECLUDE DEFENDANTS FROM OFFERING OR
REFERRING TO IRRELEVANT AND UNDULY PREJUDICIAL EVIDENCE

GIBSON, DUNN & CRUTCHER LLP

200 Park Avenue
New York, New York 10166-0193
(212) 351-4000

Attorneys for Defendants

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TABLE OF CONTENTS

PRELIMINARY STATEMENT .................................................................................................... 1

ARGUMENT .................................................................................................................................. 3

I. Evidence About AMC’s Reasons For Terminating Darabont Is Admissible. ............... 3

A. Evidence About AMC’s Reasons For Terminating Darabont Is Relevant. ........... 4

B. Precluding Evidence About Darabont’s Termination Will Unfairly

Prejudice AMC By Leaving A Gap In The Record. .............................................. 6

C. Admitting Evidence Of Darabont’s Termination Will Not Unfairly

Prejudice Plaintiffs................................................................................................. 9

II. Plaintiffs’ Motion To Preclude Evidence Of The WGA Lawsuit Should Be

Denied As Moot. .......................................................................................................... 11

A. AMC Already Told Plaintiffs That It Will Not Seek To Introduce At Trial
The WGA Lawsuit And The Allegations Asserted In That Lawsuit................... 11

B. Plaintiffs’ Position Advanced In Meet And Confers (But Not In Their

Motion) That Evidence Of The Implications Of CAA’s Packaging Deal Is
Irrelevant Is Waived And Erroneous. .................................................................. 11

CONCLUSION .................................................................................................................... 15

ii

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TABLE OF AUTHORITIES

Page(s)

Cases

Blue Cross & Blue Shield of New Jersey, Inc. v. Philip Morris, Inc.,
138 F. Supp. 2d 357 (E.D.N.Y. 2001) ...................................................................................7, 8

Caster v. Increda-Meal,
238 A.D.2d 917 (4th Dep’t 1997) ............................................................................................10

Int’l Business Machines Corp. v. BGC Partners, Inc.,

2013 WL 1775437 (S.D.N.Y. Apr. 25, 2013)............................................................................7

Kenneth D. Laub & Co., Inc. v. 101 Park Ave. Assocs.,

162 A.D.2d 294 (1st Dep’t 1990) ............................................................................................14

Mazella v. Beals,
27 N.Y.3d 694 (2016) ................................................................................................................9

Nycal Corp. v. Inoco PLC,

988 F. Supp. 296 (S.D.N.Y. 1997)...........................................................................................12

Park West Radiology v. CareCore Nat’l LLC,

675 F. Supp. 2d 314 (S.D.N.Y. 2009)......................................................................................10

Paulling v. City Car & Limousine Servs., Inc.,

155 A.D.3d 481 (1st Dep’t 2017) ............................................................................................11

People v. Andrade,
87 A.D. 3d 160 (1st Dep’t 2011) ...............................................................................................7

People v. Brooks,
210 A.D.2d 148 (1st Dep’t 1994) ..............................................................................................4

People v. Brown,
162 A.D.3d 899 (2d Dep’t 2018) ...............................................................................................4

People v. Flood,
213 A.D.2d 556 (2d Dep’t 1995) ...............................................................................................4

People v. Harris,
177 Misc. 2d 903 (Sup. Ct. Kings Cnty. 1998)....................................................................8, 14

People v. Larkins,
153 A.D.3d 1584 (4th Dep’t 2017) ....................................................................................4, 6, 8

iii

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People v. Morris,
21 N.Y.3d 588 (2013) ................................................................................................................4

People v. Mountain,
66 N.Y.2d 197 (1985) ................................................................................................................4

Process America, Inc. v. Cynergy Holdings, LLC,

2014 WL 3844626 (E.D.N.Y. Apr. 30, 2014) .........................................................................14

Shmidt v. Magnetic Head Corp.,

97 A.D.2d 151 (2d Dep’t 1983) ...............................................................................................12

SR Int’l Business Ins. Co., Ltd. v. World Trade Center Prop., LLC,
467 F.3d 107 (2d Cir. 2006).....................................................................................................12

Tate-Mitros v. MTA N.Y.C. Transit,

144 A.D.3d 454 (1st Dep’t 2016) ..............................................................................................7

United States v. Amante,

418 F.3d 220, 224 (2d Cir. 2005)...............................................................................................7
Winston v. Mezzanine Invs.,
170 Misc.2d 241 (Sup. Ct. N.Y. Cnty. 1996) ....................................................................12, 14

iv

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PRELIMINARY STATEMENT

Plaintiffs seek to exclude one category of evidence their complaint makes highly relevant

and another category that Defendants have no intention of introducing at trial. The first category

is emails demonstrating Darabont’s disruptive, abusive, and unprofessional conduct on The

Walking Dead. These emails are relevant because Plaintiffs have put at issue the question of

why AMC terminated Darabont after he worked on just one full season of the show. (It was

because he was an abusive manager who was not running the show effectively.) The second

category is evidence of a lawsuit between the Writers Guild Association (“WGA”) and Plaintiff

CAA and other talent agencies. Defendants have told Plaintiffs they do not intend to offer at trial

evidence of this lawsuit. Plaintiffs’ Motion should be denied.

1. Evidence of the Reasons AMC Terminated Darabont. In their Second Amended

Complaint (“SAC”), Plaintiffs allege that AMC terminated Darabont as part of a scheme to

deprive him of additional compensation—i.e., terminating him early so that he would not serve

long enough for additional compensation rights to vest. Pls.’ Ex. 21 (Second Amended Compl.,

Index No. 654328/2013) (“SAC”) ¶ 46.1 Evidence about the actual reason AMC terminated

Darabont, as reflected in the emails Plaintiffs seek to exclude, is relevant both as essential

background to allow the jury to understand why AMC terminated Darabont when it did, and to

rebut Plaintiffs’ false accusation that AMC fired Darabont for ulterior reasons.

Plaintiffs’ arguments that these emails are “unduly” prejudicial does not warrant their

exclusion. All highly probative evidence is prejudicial and smoking-gun evidence even more

so—but prejudicial evidence should not be excluded, only unfairly prejudicial evidence.

1
Citations to “Pls.’ Ex. __” are to the exhibits attached to the Affirmation of Jerry D. Bernstein in Support of
Plaintiffs’ Motion in Limine to Preclude Defendants from Offering or Referring to Irrelevant and Unduly
Prejudicial Evidence, dated August 11, 2020.

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Nothing in Darabont’s emails unfairly prejudices Plaintiffs—but AMC will suffer unfair

prejudice if it cannot explain to the jury why it fired Darabont. The jury should be allowed to

see, in Darabont’s own words, how his abusive mistreatment of his colleagues resulted in his

ouster.

2. Evidence of the WGA Lawsuit. AMC has no intention of offering evidence of, or

referring to, the WGA lawsuit or the allegations made in that case. AMC explained this to

Plaintiffs in multiple meet and confers leading up to the filing of this Motion. Plaintiffs’ Motion

to preclude evidence of the WGA lawsuit therefore should be denied as moot.

As AMC repeatedly told Plaintiffs, AMC is not going to refer to the WGA lawsuit at

trial. AMC will, of course, explain to the jury the nature of the relationship between a talent

agency, like Plaintiff CAA, and its client, like Darabont, and how that relationship impacted the

negotiations at issue here. AMC will explain the practice of “packaging”—an agreement

between a talent agency and a company financing a television show in which the company

directly compensates the agency for providing its client’s services, as opposed to the agency

taking a percentage of its client’s earnings. AMC also will explain why a talent agency, like

CAA, might negotiate its package deal first, before it negotiates its client’s deal (as CAA did

here)—and how this sequencing impacts the structure and dynamics of the later negotiations of

the client’s deal, as it did here. Talent agencies have been widely criticized for the practice of

securing their own packaging deals while also negotiating their clients’ contracts on the same

project. AMC will not focus on the WGA litigation relating to this practice. But AMC must be

able to explain to the jury how CAA’s and Darabont’s respective deals were negotiated and the

role CAA played in each and how CAA’s and their client’s interests may have diverged, because

it constitutes objective evidence of the parties’ intent with respect to key contract terms in

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dispute—in particular, the parties’ agreement that AMC “shall specify” an imputed license fee in

the MAGR definition that the parties agreed “shall” govern. Pls.’ Ex. 2 (“2010 Agreement”)

§ 13(d)(ii).

* * *

Darabont’s abusive emails are relevant and admissible, and AMC already agreed it would

not introduce evidence of the WGA lawsuit at trial. This Court should deny Plaintiffs’ Motion.

ARGUMENT

I. Evidence About AMC’s Reasons For Terminating Darabont Is Admissible.

Plaintiffs seek to preclude evidence of the emails that precipitated Darabont’s termination

as showrunner of The Walking Dead. In these emails, as Plaintiffs concede, Darabont was crude,

hostile, and generally abusive to those working for him. Plaintiffs argue these emails are

irrelevant and will cause unfair prejudice. Neither is true. In fact, Plaintiffs’ SAC expressly puts

at issue AMC’s motive for terminating Darabont by alleging that AMC terminated Darabont as

part of a scheme to deprive him of additional compensation. SAC ¶ 46. Evidence of the real

reason AMC terminated Darabont is relevant to rebut Plaintiffs’ false narrative.

Any “prejudice” Darabont will experience from the jury reading these emails—his own

words and proof of his untenable conduct—is hardly the type of unfair prejudice that warrants

exclusion. How Darabont ran the show is directly relevant to this case—where AMC terminated

him just over one season into the show, even though AMC had to keep paying him after doing

so. If anything, excluding Darabont’s emails from trial will unfairly prejudice AMC, leaving a

gaping hole in the record, depriving AMC of the ability to explain to the jury why it terminated

Darabont after only one full season, and leaving AMC without any evidence to rebut Plaintiffs’

false narrative that AMC terminated Darabont to pay him less rather than to protect The Walking

Dead—a show AMC was spending millions per episode to make.

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A. Evidence About AMC’s Reasons For Terminating Darabont Is Relevant.

Evidence is relevant when it provides “background information and . . . complete[s] a

witness’s narrative to assist the jury in its comprehension” of the facts alleged. People v. Brown,

162 A.D.3d 899, 899 (2d Dep’t 2018). Evidence of a party’s conduct, even if not the conduct

directly at issue in the complaint, can be relevant “to complete the narrative of the events” at

issue, “and to provide necessary background information.” People v. Morris, 21 N.Y.3d 588,

594 (2013) (collecting cases). This is especially so where excluding such evidence “would . . .

place[] a mystery before the jury.” People v. Larkins, 153 A.D.3d 1584, 1586-87 (4th Dep’t

2017) (citations omitted). Similarly, New York courts routinely find evidence admissible for the

purpose of rebuttal where it is intended to disprove an affirmative fact which the opposing party

has endeavored to prove. See e.g., People v. Brooks, 210 A.D.2d 148, 148-49 (1st Dep’t 1994)

(evidence deemed relevant to rebut opposing party’s theories of the case); People v. Flood, 213

A.D.2d 556, 557 (2d Dep’t 1995) (same). This includes evidence necessary to rebut allegations

concerning a party’s motive. See, e.g., People v. Mountain, 66 N.Y.2d 197, 203-04 (1985)

(evidence deemed relevant “to rebut the defendant’s contention that [a witness] had a pecuniary

motive” to testify a certain way).

Here, evidence about why AMC terminated Darabont is both relevant as background and

to rebut core allegations Plaintiffs assert in the SAC (but fail to mention in their Motion).

Specifically, two of Plaintiffs’ contract claims put AMC’s motivation for terminating Darabont

directly at issue: (1) that AMC breached the so-called vesting provision of Darabont’s 2010

Agreement with AMC by treating Darabont’s contingent compensation as only 75% vested, see

SAC ¶¶ 54-56, 63(E), and (2) that AMC breached a provision in the Season 2 Amendment by

failing to pay Darabont an additional 2.5% of MAGR with respect to all episodes produced

during Season 2 and for the life of the series, id. ¶¶ 53, 57-59, 63(E). Evidence about why AMC

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terminated Darabont, prior to the conclusion of production on Season 2, is directly relevant to

rebut Plaintiffs’ theories of liability as to these two claims.

Under Section 13(c) of the 2010 Agreement, Darabont’s contingent compensation vests

in four quarters. The final quarter vests at the “conclusion of [the] second season of the Series,

provided that [Darabont] renders executive producing services on all episodes produced during

the production of the second season.” 2010 Agreement § 13(c) (emphases added). Relatedly,

under Section 3(a) of the Season 2 Amendment, Darabont is entitled to an increase in MAGR

from 10% to 12.5% on “all episodes of the series,” “[p]rovided that [Darabont] renders executive

producer/showrunner services on all episodes produced during Season 2 pursuant to this

Season 2 Amendment.” Ex. A (Season 2 Amend.) § 3(a) (emphasis added).2 Whether Darabont

satisfied these conditions precedent—that he render the pertinent services on “all” episodes

produced during Season 2—is disputed, and how AMC terminated Darabont is relevant to that

dispute.

AMC contends, and will prove at trial, that Darabont did not render executive producing

services “on all episodes during the production of the second season,” 2010 Agreement § 13(c),

nor “all episodes produced during Season 2 pursuant to th[e] Season 2 Amendment,” Season 2

Amend. § 3(a). As a result, the final quarter of Darabont’s contingent compensation never

vested, see 2010 Agreement § 13(c), and he is not entitled to an additional 2.5% of MAGR under

the Season 2 Amendment, see Season 2 Amend. § 3(a). This is because Darabont was

terminated well before the conclusion of production of Season 2 of the series.

2
Citations to “Ex. __” are to the exhibits attached to the Affirmation of Brian C. Ascher, dated September 8,
2020, filed in support of this motion.

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AMC’s motive for terminating Darabont is relevant because Plaintiffs alleged in the SAC

that “AMC . . . fired Darabont without cause shortly before Season 2 aired precisely in order to

avoid its contractual obligations to pay him increased Profits (which vested fully at the

conclusion of Season 2),” and “as part of Defendants’ plan to deprive Darabont of . . . his

compensation under the Agreement and Amendment.” SAC ¶ 46 (emphases added). Plaintiffs

will tell the jury that AMC terminated Darabont before Season 2 concluded so that it could claim

that Darabont did not satisfy the condition precedents in the 2010 Agreement and Season 2

Amendment, and pay him less as a result.

But AMC’s termination of Darabont had nothing to do with any intent to prevent

Darabont’s contingent compensation from becoming fully vested or to prevent Darabont from

obtaining an increase in MAGR under the Season 2 Amendment. AMC terminated Darabont

because of his intolerable conduct towards the show’s staff. That conduct is reflected in the

emails Plaintiffs seek to preclude AMC from offering at trial. AMC has the right to present this

background, to explain to the jury why Darabont was terminated after working on only one full

season on the show, and to rebut Plaintiffs’ false narrative that AMC fired Darabont to pay him

less. In a case where AMC’s good faith is squarely at issue, AMC must be able to prove that its

actions were motivated by fair, reasonable, and just intentions. Excluding this evidence will

place “a mystery before the jury” in connection with these factual disputes relevant to Plaintiffs’

breach of contract claims. Larkins, 153 A.D.3d at 1586-87.

B. Precluding Evidence About Darabont’s Termination Will Unfairly Prejudice

AMC By Leaving A Gap In The Record.

Permitting Plaintiffs to tell the jury that AMC terminated Darabont before Season 2

ended in order to avoid paying him additional compensation under the 2010 Agreement—while

precluding AMC from introducing critical background and rebuttal evidence—would unfairly

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prejudice AMC. See Tate-Mitros v. MTA N.Y.C. Transit, 144 A.D.3d 454, 457 (1st Dep’t 2016)

(holding trial court abused its discretion in denying a party’s request to introduce rebuttal

evidence from a witness). “Juror[ies] do not decide cases based purely on logic or jury

instructions,” but also “in terms of stories they can relate to.” Blue Cross & Blue Shield of New

Jersey, Inc. v. Philip Morris, Inc., 138 F. Supp. 2d 357, 367 (E.D.N.Y. 2001) (collecting

commentary). Jurors “who hear a story interrupted by gaps of abstraction may be puzzled at the

missing chapters.” United States v. Amante, 418 F.3d 220, 224 (2d Cir. 2005); Int’l Business

Machines Corp. v. BGC Partners, Inc., 2013 WL 1775437, at *8 (S.D.N.Y. Apr. 25, 2013). And

if jurors perceive a missing chapter, they may be tempted to fill that chapter based on prejudicial

misconceptions about the parties before them. See Amante, 418 F.3d at 224.

That is why the court in Blue Cross, for example, admitted at trial evidence about the

effects of insurance premiums in the insurance industry—even though such evidence was

“outside the traditional scope of relevancy.” 138 F. Supp. 2d at 371. That court recognized that,

in the absence of such evidence, the “prejudicial preconceptions” of jurors about the impact of

insurance premiums “may skew calculations of liability and damages.” Id. The court admitted

evidence about these premiums “to dispel them as factors to be considered during deliberation,”

in order “to have the positive effect of ensuring that the jury makes lawful findings, without

conscious or unconscious formulations distorting the verdict.” Id.; see also People v. Andrade,

87 A.D. 3d 160, 167 (1st Dep’t 2011) (government entitled to introduce video evidence to

“present th[e] full picture to carry their burden of disproving” one of defendant’s legal theories).

Here, even if Plaintiffs do not expressly tell the jury that AMC terminated Darabont for

improper purposes, Plaintiffs will implicitly invite the jury to reach that conclusion: if Plaintiffs

argue that Darabont was terminated right before additional compensation vested, Plaintiffs will

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create the implication that AMC fired Darabont to pay him less money. Permitting that

implication to go unexplained is unfairly prejudicial to AMC and will leave a “mystery before

the jury” of the type courts have been instructed to prevent. Larkins, 153 A.D.3d at 1586-87.

In the absence of any evidence about why Darabont was terminated, AMC will be

“‘seemingly responsible for cloaking something’” and jurors accordingly will “‘wonder what

they are being kept from knowing.’” People v. Harris, 177 Misc.2d 903, 905 (Sup. Ct. Kings

Cnty. 1998) (citation omitted); accord Larkins, 153 A.D.3d at 1586-87. In other words, jurors

will be forced to speculate about why AMC terminated Darabont prior to the conclusion of

production on Season 2 of the series and before he would have been entitled to additional

compensation. Given AMC’s position that Darabont is not entitled to compensation because he

was removed before his compensation vested, jurors will inevitably question whether AMC

terminated Darabont in bad faith precisely so that he would not be entitled to that compensation.

“[D]ispel[ling these questions] as factors to be considered during deliberations”—by permitting

AMC to explain why Darabont was terminated—will ensure that the jury properly carries out its

duty to resolve the factual disputes at issue without the prejudicial cloud of smoke surrounding

Darabont’s termination on which Plaintiffs are trying to capitalize. Blue Cross, 138 F. Supp. 2d

at 371.

Evidence of the reasons for Darabont’s termination fills a gap in the narrative of this case

that the jury needs filled to resolve critical factual disputes, such as whether Darabont rendered

executive producer/showrunner services on all episodes of Season 2. See 2010 Agreement

§ 13(c); Season 2 Amend. § 3(a). Those factual disputes go to the heart of Plaintiffs’ claims that

Darabont’s contingent compensation should be deemed fully vested, and that he should be

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entitled to an additional 2.5% of MAGR under the Season 2 Amendment. Excluding evidence of

the reasons for Darabont’s termination will unfairly prejudice AMC’s defense of those claims.3

C. Admitting Evidence Of Darabont’s Termination Will Not Unfairly Prejudice

Plaintiffs.

By contrast, admitting Darabont’s emails and evidence about his disruptive, abusive, and

unprofessional managerial style would by no means unfairly prejudice Plaintiffs.

Plaintiffs argue that this evidence is inadmissible propensity evidence. This argument

makes no sense, and the only case Plaintiffs cite in support—Mazella v. Beals, 27 N.Y.3d 694

(2016)—does not support their argument. In Mazella, a medical malpractice action, the court

found that evidence of a prior consent order between the defendant doctor and the Office of

Professional Medical Conduct, concerning defendant’s unrelated negligent treatment of 12 other

patients, was inadmissible propensity evidence seeking to establish that the doctor was negligent

with respect to the plaintiff at hand. Id. at 710. Here, AMC is not seeking to introduce evidence

of Darabont’s prior bad acts, or to show that he has a propensity for poor behavior, as a means to

suggest that he was poorly behaved and should be discredited here. Rather, AMC is offering

evidence of Darabont’s misconduct during the events that are the subject of this very case.

Plaintiffs concede that propensity evidence is inadmissible only where it involves prior,

“unrelated bad acts,” Pls.’ Mot. at 16, but fail to explain why Darabont’s conduct that led to his

termination is “unrelated” to that termination—because it is related. That evidence is necessary

to rebut Plaintiffs’ theory that AMC terminated Darabont to create an excuse to pay him less than

what he claims he is owed under his 2010 Agreement.

3
Plaintiffs contend that Darabont’s emails are irrelevant because “this is not an employment case” and because
AMC did not fire Darabont “for cause.” Pls.’ Mot. at 1, 7, 14. But the existence of employment-law claims
alone is not the touchstone of whether a manager’s poor leadership style is admissible—particularly where, as
here, a plaintiff’s complaint puts at issue the question of why that manager was fired.

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Nor is Plaintiffs’ prejudice argument supported by the other authorities on which they

rely. In Caster v. Increda-Meal, 238 A.D.2d 917 (4th Dep’t 1997), an employment dispute, the

Fourth Department held that evidence concerning the plaintiff’s alleged wrongful termination

would unduly prejudice the jury because it was irrelevant to the claims that remained in the case

(fraud and conversion). Id. at 918. But evidence concerning Darabont’s termination is directly

relevant to claims that do remain in this case: whether AMC is obligated to pay Darabont

additional compensation under the 2010 Agreement and Season 2 Amendment—obligations

which Plaintiffs allege AMC sought to avoid by terminating Darabont when it did. SAC ¶ 46.

And in Park West Radiology v. CareCore Nat’l LLC, 675 F. Supp. 2d 314 (S.D.N.Y. 2009), the

court found that emails were only nominally probative of certain witnesses’ positive bias

towards the Plaintiff. Id. at 323. Here, by contrast, the probative value of the emails is not

tethered to any bias, but rather to Plaintiffs’ allegations, and AMC’s defenses, concerning claims

seeking millions of dollars from AMC (AMC has never argued that Darabont’s emails have

anything to do with bias, despite Plaintiffs’ false representations to the contrary, Pls.’ Mot. at 15

& n.4). Plaintiffs’ failure to support their prejudice argument with relevant legal authority shows

that their cries of prejudice ring hollow.

So too does Plaintiffs’ claim that AMC intends to have a mini-trial on its rationale for

terminating Darabont. The emails at issue will not result in a mini-trial. Nor will they be

cumulative, as AMC does not intend to introduce every one of Darabont’s abusive emails or

launch a protracted character assassination against him. AMC will keep its presentation of

Darabont’s emails and his conduct that led to termination limited—to establish the simple

proposition that AMC did not terminate Darabont before Season 2 ended for any improper

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purpose. The emails will provide background for the termination and rebut Plaintiffs’

suggestions that AMC terminated Darabont to avoid paying him additional compensation.

II. Plaintiffs’ Motion To Preclude Evidence Of The WGA Lawsuit Should Be Denied
As Moot.

A. AMC Already Told Plaintiffs That It Will Not Seek To Introduce At Trial
The WGA Lawsuit And The Allegations Asserted In That Lawsuit.

During a June 24, 2020 meet and confer between the parties, AMC told Plaintiffs’

counsel that AMC has no intention of offering or referring to evidence about the WGA lawsuit,

the allegations contained in that lawsuit, or the WGA “white paper” in that lawsuit that discusses

the conflicted relationship between CAA and Darabont in this case. AMC’s position on this

issue has not changed. Plaintiffs’ Motion—which seeks to exclude evidence related to the WGA

lawsuit and the allegations made in that lawsuit—therefore should be denied as moot.

B. Plaintiffs’ Position Advanced In Meet And Confers (But Not In Their

Motion) That Evidence Of The Implications Of CAA’s Packaging Deal Is
Irrelevant Is Waived And Erroneous.

During the parties’ meet and confers, Plaintiffs said that AMC also should be precluded

from arguing to the jury about CAA’s packaging deal. Plaintiffs’ Motion abandons that

position—arguing for exclusion only of evidence related to the WGA lawsuit. Consequently,

Plaintiffs have waived their argument for exclusion of any evidence about CAA’s packaging

deal, see, e.g., Paulling v. City Car & Limousine Servs., Inc., 155 A.D.3d 481, 481 (1st Dep’t

2017) (arguments that movant does not raise until in their reply papers are waived), and AMC

therefore should be permitted to introduce at trial evidence of the packaging deal and its impact

on the structure and dynamics of the negotiations at issue in this case.

Even if Plaintiffs had moved to preclude AMC from introducing evidence of CAA’s

packaging deal at trial, such a motion would fail because the evidence is relevant to the issues of

contract interpretation in this case. “In construing the provisions of a contract, ascertainment of

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the intention of the parties is paramount.” Shmidt v. Magnetic Head Corp., 97 A.D.2d 151, 157

(2d Dep’t 1983) (citations omitted); see also Nycal Corp. v. Inoco PLC, 988 F. Supp. 296, 301

(S.D.N.Y. 1997) (the very “purpose of contract interpretation”—“to determine the intentions of

the parties”). “Under New York law, this is accomplished by examining the objective

manifestations of the parties’ intentions.” Id. “Under th[is] objective theory of contract, the

parties[’] ‘reasonable expectations’ are determined based on an objective understanding of the

attendant circumstances in which the agreement was made, the situation of the parties, and the

objectives they were striving to attain.” SR Int’l Business Ins. Co., Ltd. v. World Trade Center

Prop., LLC, 467 F.3d 107, 125 (2d Cir. 2006). Evidence of “negotiations and agreements made

prior to or contemporaneous with the contract in question, and relating to the subject matter of

the contract, the relationship of the parties, the purpose or object of the contract . . . or of a

specific provision of the contract . . . is admissible to explain an ambiguity.” Winston v.

Mezzanine Invs., 170 Misc.2d 241, 249 (Sup. Ct. N.Y. Cnty. 1996).

Evidence of Plaintiffs’ motives in negotiating the 2010 Agreement is relevant to

understanding the parties’ intent behind the key contractual provisions in this case. Here,

Plaintiff CAA finalized its package agreement on April 23, 2010, before finalizing Darabont’s

2010 Agreement that August. See Pls.’ Ex. 3 at 1; 2010 Agreement. Talent agencies, like CAA,

have been criticized for structuring their own deals first, and their clients’ deals second. How

CAA negotiated its package deal, finalizing it before it finalized Darabont’s contract, and how

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that sequence impacted CAA’s motivations in representing Darabont in connection with the 2010

Agreement at issue in this case will be important evidence at trial.4

For example, Plaintiffs claim that they never would have agreed to give AMC the right to

set the imputed license fee in AMC’s MAGR definition, despite language in the 2010 Agreement

stating that “MAGR shall be defined, computed and paid by [AMC] in accordance with AMC’s

MAGR definition,” including that “AMC’s MAGR definition . . . shall specify an imputed

license fee.” 2010 Agreement § 13(d)(ii). But by August 2010, when Darabont signed the 2010

Agreement, CAA had already negotiated as part of its package deal its own imputed license fee

of $833,000 (a percentage of such imputed license fee would be paid to CAA as a guaranteed

front-end payment for each episode of the show). See Pls.’ Ex. 3 (Apr. 23, 2010 Email from J.

Ringquist to R. Arar) at 3. Having agreed to its own imputed license fee of $833,000 per

episode, CAA knew and presumably was comfortable with the range of the imputed license fee

that AMC would set in its MAGR definition governing the calculation of profit participation

later—which explains why CAA advised Darabont to sign the 2010 Agreement giving AMC that

right. In fact, AMC set that second imputed license fee—the one Plaintiffs complain of in this

case—at a much higher amount than the imputed license fee number to which CAA agreed

4
Plaintiffs dispute the premise that CAA secured the terms of its own compensation arrangement before
finalizing the terms of Darabont’s compensation. They claim that because a September 24, 2009 “deal memo”
outlined high level terms of both Darabont’s and CAA’s compensation, CAA effectively secured its
compensation terms at the same time as Darabont. This is wrong. The September 24, 2009 “deal memo” did
not finalize either party’s Agreement. With respect to CAA, the memo does not include CAA’s specific
compensation terms—it merely establishes that CAA will receive a package fee “in accordance with CAA’s
customary package fee arrangements.” See Pls.’ Ex. 1 (Sept. 24, 2009 Deal Proposal) at 10 ¶ 24. CAA’s
compensation terms were finalized on April 23, 2010. Pls.’ Ex. 3 (Apr. 23, 2010 Email from J. Ringquist to R.
Arar) at 1. With respect to Darabont, his compensation terms were finalized when he executed the long-form
2010 Agreement almost four months later, on August 7, 2010. See 2010 Agreement. And the 2010 Agreement
superseded the September 2009 deal memo pursuant to the 2010 Agreement’s integration clause. Id. § 21(e).
CAA’s compensation terms were indisputably finalized before Darabont’s.

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(initially $1.45 million per episode, which was later increased via Darabont’s most favored

nation rights, see 2010 Agreement § 13(d)(ii)(G) & 13(d)(iv)).

Evidence of CAA’s motivations in negotiating Darabont’s 2010 Agreement, as revealed

by the terms and timing of its package agreement, is the type of extrinsic evidence of the

circumstances surrounding the negotiation of Darabont’s 2010 Agreement that is relevant to

AMC’s case. See, e.g., Winston, 170 Misc.2d at 249-51 (addressing “criteria for contract

interpretation,” and relying on evidence that the negotiator of a contract was “of divided loyalty,”

and that he was “not a disinterested representative” of investors on whose behalf he negotiated

the contract); see also Kenneth D. Laub & Co., Inc. v. 101 Park Ave. Assocs., 162 A.D.2d 294,

295 (1st Dep’t 1990) (considering evidence “reveal[ing] that [a] brokerage agreement was

entered into at [the] insistence [of a party]” in interpreting agreement); Process America, Inc. v.

Cynergy Holdings, LLC, 2014 WL 3844626, at *2 (E.D.N.Y. Apr. 30, 2014) (recognizing that

“[p]arties may eagerly enter into contracts that contain unequal terms in order to take advantage

of business opportunities they otherwise could not,” in affirming, on reconsideration, the court’s

interpretation of a contract). This evidence is admissible under hornbook New York law.5

Plaintiffs’ conjecture that admitting evidence about the timing and terms of CAA’s

package agreement and their impact on the negotiations of Darabont’s 2010 Agreement will

create a protracted mini-trial on collateral issues is meritless. There is nothing collateral about

the structure and dynamics of the negotiations surrounding the contract at issue in this breach of

contract case. In a jury trial about a contract that this Court has deemed ambiguous, these are the

core disputes.

5
Plaintiffs argue that CAA had no conflict of interests or motivations when it negotiated the Darabont’s 2010
Agreement. Plaintiffs are welcome to present any such evidence in support of this argument at trial. Such
evidence is far more probative than prejudicial—and, in any event, is not unfairly prejudicial as required to
justify its suppression. See Harris, 177 Misc.2d at 905.

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CONCLUSION

For the foregoing reasons, Plaintiffs’ Motion to preclude should be denied in its entirety.

Dated: September 8, 2020

New York, New York

GIBSON, DUNN & CRUTCHER LLP

By: /s/ Orin Snyder

Orin Snyder
Brian Ascher
Lee R. Crain
200 Park Avenue
New York, New York 10166-0193
Telephone: 212.351.4000
OSnyder@gibsondunn.com
BAscher@gibsondunn.com
LCrain@gibsondunn.com

Scott A. Edelman (pro hac vice)

2029 Century Park East, Suite 4000
Los Angeles, California 90067-3026
Telephone: 310.557.8061
SEdelman@gibsondunn.com

Ilissa Samplin
333 South Grand Avenue
Los Angeles, California 90071-3197
Telephone: 213.229.7354
ISamplin@gibsondunn.com

Attorneys for Defendants

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ATTORNEY CERTIFICATION PURSUANT TO COMMERCIAL DIVISION RULE 17

I, Orin Snyder, an attorney duly admitted to practice law before the courts of the State of

New York, hereby certify that this Memorandum of Law in Opposition to Plaintiffs’ Motion In

Limine to Preclude Defendants from Offering or Referring to Irrelevant and Unduly Prejudicial

Evidence complies with the word count limit set forth in Rule 17 of the Commercial Division of

the Supreme Court (22 NYCRR 202.70(g)) because it contains 4,644 words, excluding the parts

of the memorandum exempted by Rule 17. In preparing this certification, I have relied on the

word count of the word-processing system used to prepare this memorandum of law.

Dated: September 8, 2020

New York, New York

GIBSON, DUNN & CRUTCHER LLP

By: /s/ Orin Snyder

Orin Snyder

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