Scarlett Johansson sues Walt Disney Co. for damages for intentional interference in her contract with Marvel Studios

Scarlett Johansson recently filed a law suit against Walt Disney Co. (Disney) alleging that the studio engaged in the tort of intentional interference by releasing Black Widow on Disney+ at the same time as it was released in theatres. She alleges that this interference caused Marvel Studios (Marvel), a subsidiary of Disney, to breach the terms of their contract with her. She is seeking both compensatory and punitive (also called exemplary) damages. This article will provide further insight into the elements of the tort of intentional interference in Australia and how it relates to Johansson’s claim.

Background for Johansson’s claim against Disney

Johansson alleges that Disney caused Marvel to breach the terms of her contract, by releasing Black Widow on Disney+ simultaneously with the theatrical release. Her compensation for the film was “based largely on ‘box office’ receipts”. This has been common practice within the industry for decades where stars are often paid an upfront fee along with receiving a portion of the back end profits which are dependent on box office success.

Johansson’s claim exposes the current shift within the film industry towards prioritising streaming services as a result of the COVID-19 pandemic, which will impact the future cinematic experience. COVID-19 has pushed film companies to adopt a hybrid release model, where movies are released in cinemas and on streaming platforms simultaneously. While Netflix offers larger up front deals to actors who forego cinematic releases, this claim highlights that many film companies have not shifted their payment practices in accordance with this new model. This claim will potentially set a precedent for other actors contracted under the same model. Disney has accused Johansson of “callous disregard for the horrific and prolonged global effects of the COVID-19 pandemic”, adding that there was “no merit whatsoever” to the claim.

Tort of intentional interference

Johansson alleges that Disney intentionally interfered with her contract with Marvel, thereby committing a civil wrong as they were subject to a duty not to do so. According to the influential case of Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd [1995] FCA 1368, this tort allows damages to be claimed against a defendant who induces or procures an entity to act or refrain from acting whilst being aware that doing so would result in the entity breaching their contractual obligations to the plaintiff.

The recent case of Daebo Shipping Co Ltd v The Ship Go Star [2012] FCAFC 156 outlines the elements needed to establish this:

• There must be a contract between the plaintiff (Johansson) and a third party (Marvel).
  • In this case, Johansson must establish that her contract with Marvel specifies that Black Widow would have an exclusive theatrical screening for a period of time. Johansson will likely argue that the agreement for a ‘wide theatrical release of the picture’ will be understood to expressly or impliedly promise this exclusive release. If this is proven, Disney would have intentionally disregarded this contract by simultaneously releasing the film on their streaming platform.
• The defendant (Disney) must know that such a contract exists.
• The defendant (Disney) must know that if the third party (Marvel) does, or fails to do, a particular act (provide an exclusive theatrical release) that conduct of the third party would be a breach of contract.
• The defendant (Disney) must intend to induce or procure the third party (Marvel) to breach the contract through that conduct (failing to provide an exclusive theatrical release).
  • To establish this, the defendant (Disney) must have a “fairly good idea” that the contract benefits another person in the respect which they are intervening in. Reckless indifference or wilful blindness can amount to his knowledge.
• Knowledge of the contract can infer that there was “actual” or “subjective” intention within the state of mind of the defendant (Disney).
• The breach must cause loss or damage to the plaintiff (Johansson).
  • Johansson will likely allege that Disney presumably released the film on Disney+ to increase the share price, at Johansson’s expense as it likely interfered with box office sales.

Johansson is seeking both compensatory and punitive damages

Compensatory damages aim to put the plaintiff (Johansson) into the position they would have been in, had the defendant (Disney) not committed the civil wrong. These damages are calculated according to the size of the plaintiff’s loss, which will be difficult to calculate in this matter given the effects of COVID-19 on the industry globally and the uncertainty of the specific revenue expected from an exclusive cinematic release.

Punitive damages are only available in the USA for tortious claims (not for breach of contract), and aim to punish the defendant (Disney) for egregious conduct, acting as a deterrent for future actions. Awards of punitive damages in the USA are often significantly larger than that of compensatory damages. However, punitive damages are rarely available in Australia, and only for very rare personal injury matters.

How Etheringtons Solicitors can help

 A solicitor at Etheringtons Solicitors can provide clarification of the relevant law in relation to your individual circumstances. If you need further advice or assistance with contractual or tortious matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.