10 million reasons why playing slots (and even losing) will bring you “Happy Days”

By Ari Rada

Reviewed By Cynthia Amis

Picture this; you were a famous television actor/actress who used to be on one of the biggest television sitcoms in this country thirty to forty years ago.  You probably have children or even grandchildren and  perhaps your financial situation isn’t what it used to be.  One day you walk into a casino to play some slots, perfect for a person entering the golden years of their life, in search of some good old-fashioned luck.  Quarters in your hand, a smile on your face, you are ready to take your chances.  You sit down at one of the slots and see a picture of yourself and your fellow cast members on the slot machine.  Maybe you start to reminisce on the olden days. More astutely, you may realize, “Wait, my image is used for merchandising, and I remember I contracted for a certain percentage for merchandising my image! Where’s my money?”

Such was the case for the cast of Happy Days, who were not so happy to discover their images were still being used without any compensation. On April 19, 2011, the cast of the hit 1970’s American television sitcom filed suit against CBS and Paramount to the tune of $10 million in Los Angeles Superior Court.  Happy Days was initially produced by Paramount, yet a corporate split in 2005 eventually led to the hit show becoming a part of CBS Studios.  Plaintiffs in the suit include: Anson Williams (Warren ‘Potsie’ Weber), Marion Ross (Marion Cunningham), Don Most (Ralph Malph), Erin Moran (Joanie) and Patricia Bosley , who is executor of the will of her husband ,the late Tom Bosley (Howard Cunningham)Noticeably absent from the suit are Happy Days two most iconic stars,  Ron Howard, who played Richie Cunningham, and Henry Winkler, who played “the Fonz.”

The suit alleges that CBS Studios continuously markets and sells the Happy Days brand to merchandisers without giving just compensation to the cast.  Examples of CBS Studios marketing and merchandising include images of the cast on slot machines in casinos (which apparently sparked this entire lawsuit to begin with) and DVD releases in box sets with images of the cast inside.  CBS Studios also conducts online merchandising of the Happy Days cast with images of the cast on items ranging from T-shirts to coffee mugs.

Although the plaintiffs contracted to different salaries regarding their participation in Happy Days, each cast member had identical contracts regarding merchandising in relation to the show. According to the contracts, each cast member was to receive a percentage of the net proceeds from merchandising after CBS Studios would take half of the revenue as a “handling fee.”  Not only does the suit seek the plaintiff’s right for just compensation, but also raises the issue of whether or not this “handling fee” is a violation of “the implied covenant of good fair and fair deal in the agreement.”  The lawsuit states that Paramount and CBS Studios are “guilty of oppression, fraud, and malice,” in regards to their breach of contract.  The plaintiffs are seeking $10 million plus interest, in addition to punitive damages and repayment of legal costs in bringing this suit.

This recent development raises several legal issues and concerns.  The legal issues presented here primarily include breach of contract, but also brings to light several other issues such as right of publicity, misappropriation and invasion of privacy concerns.  When two parties enter into a written binding contract, both parties are obligated to perform the duties dictated in the contract.  When one party fails to perform one of their duties, such as failing to compensate the other party for use of their image for merchandising, a breach of contract occurs.  According to California contract law, damages regarding breach of contract depend on several factors: 1) the loss one incurred by the breach of contract; 2) whether the contract itself had a clause regarding a breach; and 3) whether or not the breach is material or not.  Assuming the contract between the cast members and CBS/Paramount is valid, it is clear that failing to pay the cast members for merchandising was a material breach which resulted in an incurred loss for cast members over the years.  The only question which lies at this point is how much do cast members (non-breaching party) deserve?  Courts in California tend to put the non-breaching party in the position they would have been in if the contract had not been breached.  Therefore, the cast members would get the amount truly owed to them had they been compensated for their merchandising.  Punitive damages are also available if the plaintiff’s (cast members) can prove that the defendants (CBS/Paramount) breached the contract with “malice”.

In some circumstances when a contract doesn’t exist, celebrities and public figures maintain a right of publicity.  According to California Civil Code Section 3344, states that “Any person who knowingly uses another’s name, voice, signature, photograph likeness, in any manner on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of products, merchandise, goods or services, without such person’s prior consent… shall be liable for any damages sustained by the person or persons injured as a result thereof.”  Therefore, even if the contract between the cast members and CBS/Paramount is seen as invalid, a right of publicity claim will likely still exist if the plaintiffs can prove that the defendants used their picture for merchandising and economic gain.

Based on California contract law, and the facts as they appear in the “Happy Days lawsuit,” it appears that the cast members have a strong case and one that will likely result in a large payday.  In fact, a person speaking on behalf of CBS Consumer Products stated that “We agree that funds are owed to the actors and have been working with them for quite some time to resolve the issue.”  There are two basic lessons to be learned from this pending lawsuit.  First, is that breaching a binding contract will have harsh penalties for the breaching party.  Second, is that you don’t have to win in slots to necessarily hit the jackpot!



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