January 01, 2015

All About Eve: The Fickle Director and the Demanding Star—Welch v. Metro-Goldwyn-Mayer Film Co.

Carol Robertson

Note: This article was excerpted from The Little Book of Movie Law, by Carol Robertson, available in the ABA webstore.

Welch v. Metro-Goldwyn-Mayer Film Co., 207 Cal. App. 3d 164 (2d Dist. 1988)

You think that because I’m a movie star I don’t have feelings. Well you’re wrong. I’m an actress. I’ve got all of them!

—Goldie Hawn as Elise in First Wives Club (1996)

After the De Havilland case and the Paramount decision, actors had a growing amount of power and influence over the types of roles they would play and the way they were treated on the set. By the 1980s, many had followed the lead of innovators such as Bette Davis and later Warren Beatty and had established their own production companies in order to take control of their careers. The terms of their engagement for a film performance were covered in detailed contracts with the studios and the actors’ production companies.

One thing that did not change since the early days of the cinema was the fickleness of movie producers and directors and their ability since before the Goudal case was decided1 to terminate contracts of stars they found to be too demanding. And once they had done so, they did not hesitate to respond to any breach of contract claim made by the star by blaming her and branding her as “difficult.” Hollywood is also replete with tales—both in screenplays and real life—of aging stars who are replaced by ambitious younger ones. All About Eve (1950) tells the story of a mature Broadway star, played by the redoubtable Bette Davis (who also in real life was branded as one of those difficult ones), who is befriended, and ultimately finds herself upstaged by, a younger actress, played in the film by Anne Baxter.

And for a true chronicle, there is the story of Raquel Welch, an aging star trying to prove her worth in serious films, and Debra Winger, a new face in the movie business, eager to claim bigger and better dramatic parts. In this case, unlike the film All About Eve, neither star appeared to bear animosity toward the other until decisions were made that brought them into competition with each other through no actions of their own, but rather because of manipulation and hardball tactics of the studio.

By 1980, Raquel Welch had appeared in approximately thirty films. In her first motion pictures, such as One Million Years BC (1966), where she appeared as a scantily clad buxom prehistoric woman, she was generally typecast as a sex symbol. This was the case even in films where she received good reviews, such as The Wild Party (1975) and Kansas City Bomber (1972). She won a Golden Globe for her performance in The Three Musketeers: The Queen’s Diamonds (1973), playing a sexy lady-in-waiting to the French queen. At forty years old, she was seeking to break out as a serious actress, but had a reputation as a strong-willed professional who sometimes clashed with directors.

Debra Winger was a talented young actress who, in 1980, had just completed her first break-through performance in the role of Sissy, John Travolta’s wife, in Urban Cowboy (1980). She would later move into memorable roles in films such as An Officer and a Gentleman (1982), opposite Richard Gere, and Terms of Endearment (1983), a Best Picture winner. In the early 1980s, she was a sought-after actress. She also gained a reputation for being demanding, although this would not have been as evident in 1980 when she was first being introduced to a broader movie-going public.

In early 1980, successful Academy Award winners Michael Phillips and David Ward,2 developed a film package based on John Steinbeck’s two novellas about life in California’s Monterey Bay, Cannery Row, and Sweet Thursday. Ward had written the screenplay and planned to direct the film; Phillips was to be the movie’s producer. They selected Nick Nolte to portray the leading male character and were seeking a strong actress to play the lead female role, that of Suzy, the prostitute. Various well-known actresses were considered for the part, including both Raquel Welch and Debra Winger.

Welch was eager for the opportunity and made several important concessions to get it. She even agreed to audition for the part, something that was not usually required of an established actress. She was cast in the role and in October 1980, her production company, Raquel Welch Productions, signed a contract with Metro-Goldwyn-Mayer (MGM)—which had accepted the Ward-Phillips project and agreed to finance it—to provide Welch’s services for the movie. Under the standard “play-or-pay” clause in her contract, the studio had the right to terminate her from the film at any time but her fee was a guaranteed $250,000 (with payments to be divided into weekly increments during filming), which the studio was obliged to pay in full unless she failed to fulfill her obligations under the agreement. Welch agreed to be available for rehearsals and wardrobe fittings for the two-week period before shooting began.

But Welch for her part had negotiated several concessions from the studio. The studio was required to provide her with a fully equipped “star-type” trailer on the set for makeup purposes. She also was to have her choice of hairdresser and makeup artist, on first call to her, as well as a wardrobe assistant. And she requested additional consideration in morning call times. In general, the other actors had a morning call time at 7:00 or 7:30 a.m., and set calls at 8:00 or 8:30 a.m., whereas Welch had requested and was allowed two hours for makeup and hair, but she had a preparation routine that included an additional hour for yoga and exercise. Accordingly, she had a makeup call time at 6:30 or 7:00 a.m., with a set time three hours later.

Welch was initially provided a trailer that was too small, leaving insufficient room for makeup in front of a mirror. She was then provided a larger trailer with a makeup mirror and chair but this still did not meet her needs because it was too narrow and became overcrowded when her assistants were preparing her for her set calls. Her makeup artist could not move around without climbing over either Welch or the television set. The TV was eventually removed at Welch’s request. She also asked for and received a small empty trailer for her daily yoga exercises.

Principal photography began on December 1, 1980, and Welch was first called for filming on Thursday, December 4, when the movie was already behind schedule and $84,000 over budget. Those first days, even though Welch arrived on time at 7:00 a.m. for her makeup call, she generally was not used until after lunch and sometimes late in the afternoon. The crowded conditions in her trailer remained a problem for her. Eventually, she requested and received permission to make up at her home until the trailer situation could be sorted out. The film’s production manager delivered an MGM makeup mirror to her house for her use. Neither the producer, Phillips, nor the director, Ward, raised any objections to this new arrangement (although in testimony later in the trial, the production manager claimed that he had delivered the makeup mirror to her home not to allow her to do her makeup there but only to allow her to “get a head start on her makeup”).

However, Phillips and Ward were not happy about Welch’s making up at home and claimed to have agreed to it only to avoid a confrontation with her. They were also unhappy about her later set calls, because these required the director to begin filming each morning on scenes that did not require her presence, and this usually meant that the filming of her scenes would have to take place later in the day, which in turn cut down on the number of takes he could make of her scenes. The producer, Phillips, thought that three hours for makeup was extravagant and he believed that her late availability for shooting would cause problems when filming of her major scenes began. However, no one told Welch that she couldn’t make up at home and the daily call sheets continued to allow her three hours for makeup. She was always on the set in time for her first call even though the director did not use her at the time. And Phillips even called Welch at home to compliment her on how good she looked in the dailies.

In the meantime, the production crew was experiencing significant cost overruns. In particular, several scenes in which Welch was not involved went greatly over budget. On Thursday, December 18, MGM studio heads met with Phillips to express their dissatisfaction with the dailies that he had provided (none of which involved Welch) and also with the fact that the film was over budget so early in shooting. They raised concerns about the experience level of first-time director Ward and wondered if this was causing the cost overruns. Phillips deflected criticism of Ward by blaming Welch, claiming that she was causing the production delays, which in turn were causing the costs to increase. He noted her unusual three-hour makeup period and the fact that she was making up at home (while failing to note that this had been a temporary arrangement for the prior three days while they located an adequate makeup trailer for Welch).

The studio heads became alarmed by Phillips’s assertions, worrying that both Phillips and Ward were intimidated by Welch. It was against studio policy to allow an actress to make up at home both because it was an advantage for the production to have her available for rehearsal during the makeup period and because of the increased liability risks incurred when studio staff had to travel to her home to work. Phillips later claimed that at the time of his meeting with the studio executives, they told him to let Welch know that MGM intended to send her a letter notifying her that she was in breach of her contract unless she agreed to come to the studio the next morning for makeup. The meeting with studio heads had occurred on a Thursday. Phillips later claimed that he was also advised that this matter would not wait until the following Monday, but that Welch had to be notified that same day. The executives later testified to the contrary—that there had been no discussion at that time of sending any such “breach letter’ to Welch and that Phillips had requested the meeting in the first place.

On that Thursday evening, after his meeting at MGM, Phillips claimed he called Welch and told her that studio executives believed that she was responsible for the production delays and that they would be sending her a notice that she was in breach of her contract. He informed her that the letter was being sent out that evening. He also claimed that he told her that she had to be at the studio the next morning for makeup. Welch later asserted that she had not received the message and was surprised the next day (Friday, December 19) when her makeup artist and hairdresser did not arrive at her home. Her husband drove her to the studio and she arrived one hour earlier than her set call and without any delay. She performed as requested throughout the day.

In the meantime, Phillips reported to MGM management that Welch had disobeyed his instruction to make up at the studio that morning. He also called Welch’s agent, Michael Levy, to tell him that the studio was sending his client a notice of breach. This was the studio’s first contact with Levy, even though the usual first step in resolving a serious problem with a movie star would be to call her agent. Phillips told Levy that the studio was pressuring him even though Welch had caused no delays. At the request of studio management, MGM’s general counsel sent a letter to Welch that Friday morning, stating that Welch was in substantial breach of her obligations under her agreement with MGM, which also contained a threat to terminate its agreement with her.

Welch learned that the letter had gone out that day but continued working through that Friday afternoon. Her agent, Levy, called MGM’s President, David Begelman, and was told not to tell him how to run his business. Levy agreed that Welch would arrive at the studio at 6:30 a.m. on Monday morning for two hours of makeup. He thought that the problem had been resolved. At the end of the day’s filming, Welch was shown a long-unused studio makeup room that she accepted.

Phillips and Welch did not talk on Friday. Over the weekend, he left an urgent message on her answering machine. She asked her agent to return the call. Phillips and Levy had a series of conversations that weekend, during which Phillips asked to meet with Welch. She promised through her agent that she would meet with him at 9:00 a.m. on Monday morning. Phillips allegedly told others that he wanted Welch to be on edge because they would be shooting a tense scene on Monday.

On Sunday morning, studio executives informed MGM’s general counsel that neither Welch nor her agent had unequivocally committed to follow the studio’s orders. Phillips called the film’s director, Ward, and told him that the studio might replace Welch because she had failed to meet with Phillips that weekend. Ward was unhappy, as he had never suggested that Welch should be terminated. But, in fact, by Sunday afternoon, MGM President Begelman had decided to terminate Welch because she had disobeyed his order to make up at the studio on Friday morning and had refused to talk with Phillips over the weekend. Welch’s lawyer called Welch to give her the bad news. She was devastated. By this time, about 1/6 of her scenes had been shot.

On Monday, December 22, Welch received the letter from MGM informing her that the employment agreement was terminated due to her failure to comply with her contract obligations. She responded with a letter demanding payment from MGM of $194,444, which was the balance of the guaranteed fee that was owed pursuant to the agreement. MGM refused to pay and Welch sued.

Now, you may ask, why would a studio so precipitously terminate the contract of an actress in a film that was already running behind schedule and that was experiencing cost overruns, especially where it did not really appear that she was the cause of the film’s troubles? And even if she had caused delays, why would the studio terminate her after she had agreed, through her agent, to give up the special treatment—late call time, three hours for makeup—that allegedly was causing the delays. It did not seem to make sense; it appeared almost as if the studio was inventing problems just to fire her from the film. But why would the studio executives want to do that? This is where the plot thickens.

Welch was replaced by Debra Winger in the movie. Winger received $150,000 to play the role. It cost almost $200,000 to replace Welch with Winger and to reshoot the scenes in which Welch had appeared. How had the studio managed to bring Winger in so quickly after terminating Welch?

To understand this, we need to go back to that same fateful weekend when Phillips, Levy, and Welch’s attorney were negotiating the makeup situation and the supposed “breach letter.” During that same time period, as the evidence in the trial revealed, Phillips and MGM executives were also engaged in a series of secret meetings with representatives of Debra Winger. As early as the Thursday prior to Welch’s termination, David Chasman, a studio executive, had inquired of Winger’s personal manager whether Winger could be available to start a film on short notice and was informed that she was available.

During that weekend, when MGM President Begelman made the decision to terminate Welch, Chasman called Winger’s manager and told her that Welch had left the cast of Cannery Row and that the studio wanted Winger to return to Los Angeles (she was on vacation for the holidays) as soon as possible. Winger accepted the offer. On either Saturday or Sunday, Winger’s manager engaged her attorney to negotiate a deal with MGM for Winger to appear in the movie. The deal was negotiated that weekend and was signed that Monday. On that Sunday night, Winger called her agent to let him know that she was replacing Welch on the film. At the trial, all the MGM executives denied that there had been any discussions with Winger before they terminated Welch that Monday, but the evidence contradicted those denials.

Welch received numerous inquiries from the press once the news of her termination became public. Many people assumed that she had failed to show up for work, which was generally the reason why actresses are removed from a film. Industry newspapers reported that she had been fired. An article recounting the incident appeared in the April 2, 1981, issue of Rolling Stone, a magazine with a weekly circulation at the time of over 700,000, with a wide readership in the motion picture industry. According to the article, the film’s director, Ward, stated that Welch had been a “casting mistake” who was not necessarily a bad actress but who was not delivering a performance that he could live with. MGM President Begelman was quoted as saying that the studio “had a general feeling she had not lived up to her contract. We had no alternative. It is up to executives to tell people in this business we will not stand for that. The producer gave her appropriate directions and she failed to obey.” These were words that he later most certainly came to regret.

By the time Welch’s case came to trial, she had not made another movie and to date has not had a major role in any motion picture (although she has had small parts in films such as Legally Blonde (2001)). She had obtained a reputation in the industry as someone who was not dependable. In contrast, she had made six films between 1973 and 1980, with compensation ranging between $150,000 and $350,000.

In her lawsuit against MGM, Welch alleged that Phillips had conspired with the studio executives to interfere with MGM’s contract with Welch in order to replace her with another actress without having to pay her the guaranteed fee in her contract. She claimed that they tried to make it appear that she, rather than Phillips or Ward, was responsible for the picture’s budget problems. She sought $194,444 in actual damages (the amount of the guaranteed fee remaining to be paid under her contract at the time she was terminated) and $5 million in punitive damages for the contract interference. The jury voted in her favor, awarding her the balance of her fee, as well as $500,000 in punitive damages against Phillips and $3,750,000 in punitive damages against MGM. Ward was exonerated.

Welch also sued MGM for breach of the implied covenant of good faith and fair dealing—in other words, for bad faith dealing. For this count, the jury awarded her $400,000 in lost contract benefits, $1 million in lost promotional income, $750,000 for damage to reputation, and $3,750,000 in punitive damages. And Welch also sued for slander, based on Begelman’s statement to the Rolling Stone reporter. For this statement, the jury awarded $300,000 in compensatory damages against Begelman, $150,000 in punitive damages against MGM, and $2,500 in punitive damages against Begelman.

MGM appealed.

On appeal, MGM argued first that Welch could not claim a conspiracy between Phillips and MGM because Phillips was acting as MGM’s agent and MGM could not interfere with its own contract. As a general rule, a party to a contract can be liable for interfering with that contract if he conspires with a third party to breach it. But Phillips argued that he could not be considered a third-party conspirator with MGM executives because he was the studio’s agent. Thus, his activities were “privileged.” In other words, he claimed to be entitled, with an impersonal or disinterested motive, to endeavor to protect the interests of his principal—that is, MGM—by counseling the breach of the contract with a third party that he reasonably believed to be harmful to his employer’s best interests. According to the court, this so-called privilege applies when the agent acts solely in the principal’s interest and does not apply when the agent acts solely in his or her own self-interest. MGM and Phillips argued that Phillips was acting with mixed motives. By acting as he did, he may have benefited himself, but he also helped MGM. These types of actions should also be privileged, they asserted.

The court disagreed. First, the court believed that Phillips was acting in his own self-interest: Welch’s evidence at trial, which the jury must have believed in order to render its verdict, suggested that Phillips was reacting to the threat of losing his own job and the resulting damage to his career by making Welch the scapegoat for the film’s budget problems. Even though others may have had their reasons for replacing Welch, this appeared to be Phillips’s main motivation. If the jury had believed that Phillips had provided MGM truthful information or that he had desired to benefit MGM, it would not have found him to be liable. The fact that they did shows that they believed that he acted in his own self-interest and his actions were therefore not privileged.

On the bad faith argument, the jury’s verdict also showed that they believed Welch’s version of events. When Welch filed her lawsuit, her attorney tacked on a request for punitive damages because, from the start, MGM had adopted a “stonewall,” “see you in court” attitude toward her. MGM complained about the punitive damage award. But the court pointed out that, as this was a bad faith discharge case, Welch was entitled to claim and to receive punitive damages. And it was clear to the court that the evidence presented at trial more than supported her case. Whatever the parties’ motivations—whether Phillips’s desire to protect himself from removal from the film because of its spiraling production costs, or MGM executives’ need to demonstrate their power in dealing with demanding film stars, or MGM’s “buyer’s remorse” over a bad casting decision and desire to put a different actress into the role—the result was a conspiracy to falsely blame Welch for the movie’s problems and to create a pretext for firing her so that MGM would not have to pay her the fee that was guaranteed under her contract.

As the court saw it, MGM’s bad faith was further evidenced by the numerous facts brought out at trial: the false statements by MGM witnesses about the timing of their negotiations with Debra Winger, which were contradicted by both Winger’s manager and her attorney; Phillips’s informing Welch and her lawyer on Thursday night that a breach letter was going out even though she had not yet disobeyed the studio’s makeup order for Friday morning; the failure to contact Welch’s agent, Levy, before threatening Welch, even when MGM’s expert testified that problems with a star were usually handled through the agent; Phillips’s insistence, contrary to Welch’s agent’s testimony, that he was never told that Welch had agreed to use the new makeup room on Monday; Phillips’s insisting that Welch refused to meet with him over the weekend when her agent had been in constant communication with him and Welch had agreed to a Monday morning meeting; and the abrupt firing on Sunday without waiting to see if she would fulfill her promises for Monday and at a time when most of the terms of Winger’s contract to replace her in the film had already been agreed to.

The court intimated that there seemed to be something more to the studio’s insistence that Welch make up at the studio that Friday morning rather than allowing her time to check out the new makeup room at the studio. This was especially troubling where she had been allowed to make up at home, had never been late for filming (which is what should have been important to the studio), was upset from Phillips’s threat of a breach letter, and was facing her first major dialogue scene on that Monday. Although the court did not state it outright, there was an implication in its assessment of these facts that the studio executives had intentionally set Welch up so that they could replace her.

The court seemed equally perturbed by the slander evidence. To them, MGM President Begelman’s quote in Rolling Stone magazine was egregious.3 MGM dismissed it as merely an expression of Begelman’s opinion, maintaining that there was no evidence of malice. This latter was important because in order to prevail, because she was a public figure, Welch had to prove not only that Begelman had slandered her, that is, stated something false about her that would tend to cause injury to her reputation, but also, even if the statement were false, that it had been made with knowledge of its falsity or with reckless disregard for the truth.4

The court found that, although Begelman’s statement included words that sounded like an expression of opinion (such as “we had a general feeling”), it also described facts (“she failed to obey”) that had been communicated to him, as the head of the studio, by the movie’s producer. Not only did the court believe it reasonable for the jury to conclude that Begelman was stating a fact that was false, but there also was, in the court’s view, sufficient evidence to support the jury’s finding of malice because Begelman knew that Welch had complied with her obligations and that he, in conjunction with other studio executives and with Phillips, had manufactured a pretext to fire her. Therefore, he must have known that his statement to the Rolling Stone reporter was false. It was a grandiose statement by a man trying to give an impression of strength and toughness in dealing with a star, and without caring about the damage that those words in a public interview might wreak on the actress’s future career prospects. These are the type of heedless statements that executives later come to regret and that make general counsels cringe.

MGM particularly objected to the various monetary awards, which when tallied up, came to close to $10 million. They disputed, for example, the $1 million award for loss of professional income in the bad faith count. MGM argued that Welch did not have a reasonably certain future as a serious film actress. The court disagreed, believing that the compensation was justified: Welch had received significant income as an actress prior to entering into her contract with MGM and she had received no film offers after her firing from Cannery Row. Based on the compensation that film stars were making at the time of the trial, $1 million was not unreasonable.

MGM also claimed that prior to signing her contract with the studio, Welch had been considered to be a difficult actress and therefore she suffered no damage by Begelman’s slander. But there again, the court disagreed. Even if she had been considered to be difficult prior to performing in Cannery Row, she was still considered to be a professional actress. After her dismissal, she became known as a contract breaker who had been fired from a film because she did not show up for work.

Finally, MGM objected to the $7 million in punitive damages. But the court pointed out that this amount was half what Welch had requested and amounted to only 3.6 percent of MGM’s net worth at the time of trial. The court acknowledged that MGM had lost money on the movie and that the $500,000 damage award levied against Phillips (for conspiracy to induce breach of contract), was $300,000 more than the $200,000 production fee that Phillips received from MGM. But the court had no sympathy for any of the defendants, especially when balancing their “complete disregard of the likelihood that the unjustified firing would ruin Welch’s film career,” against “the relatively high actual damages that she suffered” and the permanent damage to her reputation.

In the end, everyone lost out in this case. The court’s statement about Welch’s future film career prospects proved to be prophetic. Even though the lawsuit vindicated her position that she had been set up to take the fall for others’ mistakes, her reputation as a problematic star was cemented and her multimillion dollar judgment against MGM did not help her. In fact, if anything it labeled her as trouble. After the suit, she performed on stage, notably in Woman of the Year on Broadway, and in television programs, but she did not achieve her desire to be considered as a serious film star.

Cannery Row opened in early 1982 to dismal reviews. The movie was a major box office failure and MGM lost close to $16 million. The New York Times’ film critic commented that Welch should have felt happy that she was fired from the film,5 although it is certain that Welch would never have seen it that way.

There was no evidence that Debra Winger knew any of the circumstances surrounding Welch’s firing at the time she was engaged to perform in Cannery Row. She would have had no reason to suspect the falsity in MGM’s assertions that Welch had left the film. She appears to have been an innocent beneficiary of MGM’s manipulation. But she was left to pick up the pieces of an expensive and already botched film production. Fortunately, she was able to overcome the bad press from this flop and went on to star in several more memorable films that brought her two Academy Award nominations—for Best Actress in An Officer and a Gentleman (1982) and in Terms of Endearment (1983).

But her career petered out soon after. After performing in several unsuccessful films, she took a break from film acting just when she was at the top of her career, and returned only intermittently afterwards. She played the lead roles both in A Dangerous Woman and Shadowlands in 1993, receiving her third Best Actress nomination for her performance in this latter film. More recently, she played the role of Anne Hathaway’s mother in Rachel Getting Married (2008). Ironically, in her years in Hollywood, Winger also gained a reputation as a “difficult” and “demanding” actress. From Goudal to de Havilland, from Bette Davis to Raquel Welch and Debra Winger, Hollywood studios have always had problems trying to rein in and control the talented actresses who have appeared in their films. When the motion picture is successful, the complaints are minor, but studio executives rush in to affix blame when the movies fail.

End Notes

1. See Reel 6 (Little Book of Holiday Law, by Carol Robertson, published 2012 by the American Bar Association), A Star is Born, Goudal v. DeMille Pictures Corp., 118 Cal. App. 407 (2d Dist. 1931).

2. For The Sting (1973).

3. “We had a general feeling she had not lived up to her contract ... we had no alternative.... The producer gave her appropriate direction and she failed to obey.”

4. The New York Times Co. v. Sullivan, 376 U.S. 254 (1964).

Reprinted with permission from The Little Book of Movie Law, by Carol Robertson. Copyright 2014 by the American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

Carol Robertson

Carol Robertson has been a practicing attorney for over 25 years with major Bay Area law firms and companies and currently is a practicing corporate counsel. Her book, The Little Book of Movie Law, was published by the American Bar Association.