Trial for House of Cards Lawsuit Begins

The trial started yesterday and centers on whether Media Rights Capital (MRC) can recover over $100 million in losses linked to the final season of House of Cards.

This lawsuit arises from MRC’s effort to reclaim costs from Fireman’s Fund, an insurance company, after production was halted due to Kevin Spacey not participating in season six. Previously, Spacey was awarded more than $31 million in arbitration for a breach of contract, but this figure was later reduced to $1 million following an agreement to share medical records and tax returns regarding the ongoing insurance dispute.

The crux of the case seems to be this: Was Spacey’s absence due to an “illness” that MRC’s policy covers, or was it a managerial decision influenced by public allegations of sexual misconduct?

By late October 2017, the team had already filmed the first two episodes of the season. Then, on October 29, BuzzFeed reported the allegations against Spacey, prompting MRC to suspend production just two days later. Following that, there were further reports of additional crew accusations, and on November 2, Spacey entered treatment at the Meadows. Shortly after that, MRC announced his suspension.

Communication from both sides was somewhat contradictory. On November 4, Spacey’s lawyer informed MRC that he was “ready and willing” to fulfill his contractual obligations, while earlier indications suggested he was “ill” and would require an extended absence of at least six months. Eventually, the season was reworked to exclude Spacey’s character.

The Firefighters Fund argues that MRC’s suspension of Spacey was based on reputational risks and business considerations rather than due to any illness. They emphasize Netflix’s involvement in retaining certain contractual rights concerning creative decisions, particularly highlighting that the rights are “all about” character removal, according to testimony from an ex-MRC executive.

MRC disputed this view, asserting that their decision was grounded in Spacey’s health and his capacity to work. In sworn testimony, MRC CEO Scott Tenley indicated that when questioned about Spacey’s lawyer’s claims of his ability to act, he stated he was simply “taking a legal position.”

The jury is tasked with determining whether the losses from the sixth season were directly and solely caused by the illness outlined in the policy. Spacey is expected to testify that he was unable to work when the allegations emerged and that he needed ongoing medical treatment.

The outcome could clarify how production insurance contracts handle disruptions related to health issues, especially when both conduct and medical circumstances come into play.