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Netflix Sees $1.5B Lawsuit From Relativity Slimmed Down By Judge

Deadline logo Deadline 2/28/2017 Dominic Patten
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Netflix didn’t quite get the $1.5 billion lawsuit from the struggling Relativity tossed out as it desired but the streaming service certainly saw the matter slimmed down late last week.

In a February 24 hearing, Santa Clara County Judge Theodore Zayner cut the Ryan Kavanaugh founded company’s claims that the consequences of Netflix’s actions in a dispute over the streaming of two movies amounted to “trade libel” and a breach of the covenant of good faith. “While statements disparaging Plaintiff’s ability to produce its products might theoretically support a claim for libel or defamation of Plaintiff itself or a claim for intentional interference with prospective economic relations, they simply do not constitute Trade Libel,” wrote Judge Zayner.

The much leaner case for those big buck damages still sees a claim of breach of contract in the mix from Relativity against Netflix. Neither Netflix nor Relativity responded to request for comment on the matter and its latest turn.

Spilling over from Relativity’s Bankruptcy Court efforts, the multi-coast, multi-case long battle between the two companies originated over a year ago over Relativity’s intent for big screen distribution of The Disappointments Room and Masterminds. Relativity have said that Netflix’s legally expressed doubts about the capacity of the then trying to get back on its feet company to make a success of the flicks forced them to sell a big stake to Singapore-based YuuZoo.

The two had very different opinions on a 2010 agreement that would have enabled Netflix to run the two films last June, ahead of their ultimately unsuccessful theatrical releases – releases that Relativity were hoping would save their now seemingly cooked bottom line bacon. The NYC-based judge leaned towards Relativity and in May last year gave them an opportunity to put the Zach Galifianakis and Kate Beckinsale starring pics in theaters before they went online.

The studio then went after Netflix last October for the big bucks with declarations that Netflix’s now proven doubts about the company’s ability to make a go of the two flicks were extremely damaging to their reputation – which is saying something if you’ve been following the Relativity saga the past couple of years.

In December, Netflix hit back with their attempt to get the matter thrown out. Which brings us to the two down, one to go place we are now.


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