If you blinked, then you probably missed what was being termed as the CBS Happy Days fraud. That is, according to the former actors of the show, an effort by the CBS corporation to rip off the “Happy Days” stars from receiving merchandising royalties that were due to them.
The case actually started in the spring of 2011, when cast members Anson Williams, Don Most, Marion Ross and Erin Moran decided to sue CBS, claiming that the broadcast company failed to pay them for merchandising revenues – specifically stemming from new casino slot machines that featured their images.
Beyond the slot machines that triggered the case, the actors all said that other Happy Days products like comic books, T-shirts, trading cards, games and more – were all sold with proceeds reaching CBS, but no money reaching the actors, despite the fact that their contracts included clauses for such merchandising revenue.
The case picked up steam in 2011, then faltered toward the end of the year when the actors were defeated in one particular judgement when the Happy Days fraud allegation itself was thrown out by a California judge. The actors could not receive the millions in punitive damages they were hoping for.
However, the remaining breach of contract suit could continue – and it did.
CBS Versus the “Little People”
Jon Pfeiffer, the lawyer for the actors listed in the 2011 lawsuit, did not hold back any punches. He made it clear that he felt CBS had knowingly committed fraud in withholding payments from the actors.
He told CNN:
“They (the studio) made a promise to pay, they broke their promise — that’s breach of contract. Number two, they made a promise to pay, they purposefully didn’t pay, they broke their promise — the fraud.”
It appeared at the time that the actors had a strong case. CBS was admitting that it owed the actors money – but only on the order of $8,500 to $9,000, nowhere near the millions being claimed by the actors. (1)
Many also believed that the driving force behind the lawsuit was the fact that at least one of the actors, Erin Moran, was in financial straights. She had lost her California home to foreclosure after acting jobs dried up, and she was primarily depending on the Happy Days royalties to draw some sort of income. Unfortunately, the most she and the other actors ever received were a few hundred dollars here and there.
When the Happy Days fraud allegation got thrown out in October of 2011, that meant that the millions the actors were asking for were off the table, but the breach of contract lawsuit would continue on.
The Breach of Contract Settlement
The case carried on into 2012, and was scheduled to go to trial on July 17th in Los Angeles. On July 7th, in an apparent effort to avoid an actual trial, the two sides finally came to an agreement.
Jon Pfeiffer, the attorney for the actors, issued the following announcement:
“We have settled our lawsuit with CBS and Paramount. The terms of the settlement are confidential, but we are satisfied with the outcome. We will continue to receive all of the merchandising royalties promised to us in our contracts.”
The key to the settlement appeared to be the fact that the earlier court ruling stipulated that the actors were in fact entitled to revenues from the sale of DVDs that featured their images. However, after the settlement, CBS also attempted to portray the settlement as favorable for their position.
“[CBS] never refused to pay the members of the ‘Happy Days’ cast any of the money they are owed under their contracts, and we’ll continue to honor those obligations.”
While the final settlement was kept confidential, Pfeiffer reported that CBS had at least sent the actors about $10,000 each during the negotiations. The issue, apparently, is that the slot machines that caught the actors’ attention actually weren’t bringing in a great deal of revenue, so in the end, there wasn’t a whole lot of money to go around anyway.
The real moral of this story, even after the final settlement in 2012, is the issue of just how fairly major studios treat actors and whether contracts are honored.
When you’ve got actors that no longer have much expendable cash after their television shows have long gone off the air, going up against major corporations with a team of lawyers, quite often those corporations feel invincible, even when clearly in breach of a contract.