The estate of THE LORD OF THE RINGS author J.R.R. Tolkien lost a round in its ongoing dispute with New Line Cinema, per VARIETY (via THE ASSOCIATED PRESS). A judge has barred the estate from seeking punitive damages against the studio who brought the highly-profitable trilogy to the big screen.
Tolkien's heirs content that New Line did not pay them any royalties from the estimated $6 billion the films have grossed worldwide. The lawsuit seeks more than $150 million in compensatory damages based on breach of contract, fraud and other claims.
However, Los Angeles Superior Court Judge Ann I. Jones also ruled this week that the estate has established a legal basis for the fraud claim against New Line.
In the suit, the heirs claim New Line sent millions to Time Warner's AOL, claiming improperly the money was for advertising expenses. It also says the studio built production offices and facilities in New Zealand, claiming them as LORD OF THE RINGS expenses but using them now for other New Line projects.
New Line attorneys successfully argued that Tolkien's heirs had to demonstrate a "public wrong" under New York law (which governs the contracts) to claim punitive damages if they win at trial. Jones ruled that the suit "is clearly seeking to vindicate private wrongs."
In 1969, Tolkien gave United Artists the movie rights to LORD OF THE RINGS and THE HOBBIT. After his death, his heirs created The Tolkien Trust, a charity based in Britain.
The charity's trustees, including Tolkien's heirs, joined publisher HarperCollins to sue the studio in February. The suit also seeks to terminate New Line's rights to make the two-film prequel of THE HOBBIT, which is in development with Guillermo del Toro signed on to direct.
Calls to New Line and The Tolkien Trust did not immediately return calls to the AP on Thursday.
New Line has 10 days to answer the lawsuit. A trial has been scheduled for October 2009.