‘Copshop’ Writer’s Lawsuit Against Managers Over Conflict of Interest on Pay Revived on Appeal

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In simpler terms, if a screenplay written by an author gets purchased for a fee based on the film’s original budget, but later the budget increases due to a popular actor joining the cast, do the writer’s representatives (who are also producers of the movie) have to reveal this increase and renegotiate the writer’s compensation?

The lawsuit filed by screenwriter Kurt McLeod against Zero Gravity Management over a potential conflict of interest in the negotiation of his deal for writing “Copshop” was reinstated by the 9th U.S. Circuit Court of Appeals on Thursday. This reverses the dismissal made by a federal judge last year, who had determined that the founders of Zero Gravity, Eric and Mark Williams, were not liable for allegations claiming they prioritized their own payments for producing the movie over McLeod’s interests by failing to disclose an increase in the film’s budget.

2022 saw me, as a screenwriter, stepping into a legal fray against Zero Gravity Studios over allegations of broken contracts and breach of fiduciary duty – all stemming from the payout I was owed for co-writing a movie featuring Gerard Butler. You see, my earnings were contingent on the film’s budget (capped at $125,000), with initial assurances that it would fall between $3 million and $10 million. However, once Gerard joined the project, I discovered the budget soared to an astounding $45 million! That’s when the legal battle began.

In Hollywood, unlike agents, managers are not prohibited from being involved in projects featuring their clients. However, such situations often present conflicts of interest. For example, if a manager is also a producer, receiving more money for a film could mean less payment for the writer who is also a client. In these cases, it’s the responsibility of the manager to prioritize their client’s interests over their own, ensuring they receive fair compensation.

Easing up on manager involvement when it comes to creating titles that feature their clients is one factor contributing to a growing trend among agents to venture into management.

In this case, there are two significant agreements being discussed. The first agreement, signed in 2011, was between Zero Gravity and McLeod, which granted the Williamses a 15% share of the writer’s earnings and the authority to produce any film based on their screenplay. This arrangement allowed McLeod to write the script for the movie “Copshop” under its terms.

Following the expiration of the management agreement in 2013, McLeod claimed he made an informal arrangement with the Williamses to carry on managing him. However, the court dismissed this claim when it ruled that both parties had agreed for Zero Gravity to be McLeod’s sole manager instead.

On Thursday, the court highlighted that the Williams family and I had personally agreed to take on McLeod’s case.

According to the decision, McLeod’s statement implies that a fair jury might conclude that the Williamses were involved in the oral contract and acted as McLeod’s personal managers based on the conditions of that agreement.

The court referred to testimony showing that Mark Williams, famously known for executive producing and writing Ozark, talked about his responsibilities as both manager and producer for Copshop. This was supported by his listing as a manager on the Writers Guild of America website and evidence that he acted in this capacity during filming for the movie.

The 9th Circuit panel determined that McLeod may have been entitled to extra payment if he was aware of the expanded budget. For example, the Williamses were able to access their production fees, potentially earning McLeod hundreds of thousands of dollars additional income.

The legal dispute involves a disagreement with the Writers Guild of America concerning writing credits for a movie, due to claims that Mark Williams inappropriately claimed co-writing credit for the screenplay. The guild decided that the “story by” credit should go to McLeod and Mark Williams, while the “screenplay by” credit should belong to McLeod and Joe Carnahan, who directed Copshop. McLeod alleged that Zero Gravity concocted documents to give Mark Williams authorship on the script.

In regard to the fraud allegations concerning the title of the film, the lower court’s decision was upheld. The appellate court determined that there was no deceit or wrongdoing in Mark Williams being granted a joint “story by” credit.

If there’s no agreement reached, McLeod’s allegations of breach of contract, breach of trust, and breach of the implied promise of honesty and fairness will be reviewed by a court jury.

Devin McRae, representing McLeod, chose not to provide a statement, while Zero Gravity has yet to offer comments following our inquiry.

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2025-05-22 23:54