Steinbeck Family Battle Appealed to Supreme Court

Steven T. Lowe

On March 10, 2020, John Steinbeck’s heirs filed an appeal to the United States Supreme Court concerning a decades-long battle over creative rights to the author’s literary works. In taking up the fight, the California Society of Entertainment Lawyers (“CSEL”), a non-profit organization of attorneys representing creative professionals in the entertainment industry, also submitted an amicus curiae brief on April 29, 2020 in support of the Steinbeck estate.

The somewhat complicated fact pattern and salient legal issues are as follows:

Literary legend, John Steinbeck, wrote many quintessential novels including “The Grapes of Wrath,” “East of Eden,” and “Of Mice and Men.” After he died in 1968, he left the copyright interests in his works to his third wife, Elaine Steinbeck. However, Steinbeck’s sons, John IV and Thom (not from his marriage to Elaine), had also acquired an interest in some of his works. In 1974, in an attempt to resolve their competing copyright interests, the three of them entered into an agreement to share the royalties from his books.

Then in 1981, Steinbeck’s sons sued Elaine for fraud, and subsequently the three parties decided to split the royalties equally among them in a 1983 settlement agreement. It is in this 1983 Agreement that, in exchange for the sons’ increased share of royalties, Elaine received “complete power and authority to negotiate, authorize and take action with respect to the exploitation and/or termination of rights” in the works.

In 1991, John Steinbeck’s son, John, died, leaving his rights to his daughter, Blake Smyle. John Steinbeck’s son, Thom, then married Gail in 1995.

In 2003, Elaine died and her daughter, Waverly Kaffaga, became the successor of her estate.

In 2004, the year following Elaine’s death, Thom Steinbeck and Blake sued Kaffaga in the Southern District of New York over the 1983 Agreement. The subsequent litigation resulted in multiple decisions by the New York District Court as well as The United States Court of Appeals for the Second Circuit. The Second Circuit concluded in 2010 that the 1983 Agreement was valid and enforceable.

Nevertheless, despite this setback, Thom and Blake sued Kaffaga again in 2014, this time in the United States District Court for the Central District of California, over the 1983 assignment of termination rights in Steinbeck’s works. A California federal judge, however, dismissed the suit in 2015, holding that their claims were precluded by the fact that the Second Circuit had already determined the validity of the 1983 agreement.

In 2014, Kaffaga countersued Steinbeck’s heirs in the Central District of California, seeking damages on the basis that the author’s sons and heirs hindered her from developing screenplays for Steinbeck’s classics with prominent actors and producers. In 2017, the district court conducted a jury trial and eventually awarded Kaffaga $13.15 million in compensatory and punitive damages. John IV’s estate and Gail, who took over the lawsuit after Thom died in 2016, promptly appealed that decision.

Furthermore, in November of 2017, the Ninth Circuit affirmed the district court’s 2015 ruling, determining that the sons and their estates did not have “a right to issue and exploit copyright terminations of Steinbeck’s works.”

Nevertheless, in September 2019, the Ninth Circuit revoked $5.9 million in punitive damages, but affirmed $5.25 million in compensatory damages, concluding that “this dispute is indeed over.”

Although the Ninth Circuit remarked that several federal courts have repeatedly affirmed that Elaine Steinbeck and Kaffaga retain complete control over Steinbeck’s works, Gail Steinbeck has continuously argued that a central issue has never been decided—and that is whether the 1983 royalty agreement violates Sections 203 and 304 of the Copyright Act. Fundamentally, these sections provide that “termination rights” cannot be relinquished through an agreement.

“Termination rights” are intended to benefit creators by giving them a second bite at the apple; essentially, the reasoning behind “termination rights,” which can be exercised in a window of 35 years after a creator first assigns his work to a third party, is that the creator had little to no bargaining leverage in connection with the original assignment. Thus, if the copyright became valuable, he should have a second chance to benefit from his work. To ensure that creative professionals and their families’ future interests in their works are indeed protected, Congress made termination rights inalienable under the Copyright Act of 1976, sections 203 and 304.

CSEL, as stated in its brief, found the Ninth Circuit’s ruling on this current matter “deeply troubling” because if it remains good law, then “studios, publishers, distributors, and film producers all across the United States will seek new and creative ways to extinguish creators’ termination rights by way of assignment.” The brief further stressed that if the court declines Ms. Steinbeck’s petition then “courts will operate under the presumption that termination rights may be alienated by the author,” when in fact Sections 203 and 304 of the Copyright Act provide that they cannot be alienated or assigned by a written agreement.

The Steinbecks are represented by Matthew J. Dowd and Robert J. Scheffel of Dowd Scheffel PLLC.

Waverly Kaffaga was represented by Susan J. Kohlmann of Jenner & Block LLP before the Ninth Circuit.

Steven T. Lowe is a founding member and current President of CSEL.

The case is The Estate of Thomas Steinbeck et al. v. Waverly Scott Kaffaga, case number 18-55336, in the U.S. Supreme Court.