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Check Won't Be in the Mail: Lost Postal Receipts Cost Studios Millions

Universal and MGM fail to prove they sent their requests in time to claim film royalties.

March 26, 2004|Meg James | Times Staff Writer

It was a case of "the dog ate my certified mail receipt."

Lost U.S. Postal Service slips have cost two Hollywood movie studios -- Universal Studios, owned by Vivendi Universal Entertainment, and Metro-Goldwyn-Mayer Inc. -- more than $25 million in royalties.

Universal and MGM missed a deadline nearly three years ago to submit applications for royalties for the use of their films by cable television and satellite providers. Because the studios couldn't prove they had mailed their applications to the U.S. Copyright Office by July 31, 2001, they weren't entitled to the money, according to a federal judge in Washington.

Cable and satellite TV companies deposit royalties each year with the copyright agency, which then distributes them.

MGM's request for nearly $10 million in royalties arrived on Aug. 2, 2001. The following day, the office received Universal's request for more than $15 million.

The office accepts late submissions -- as long as they hold a U.S. postmark certifying the application was mailed before midnight on deadline day.

Universal and MGM executives testified that they no longer had the certified mail receipts verifying that they had put their packages in the mail on time.

Instead, the studios submitted as evidence the business meter postmarks from their Pitney Bowes Inc. machines, along with an affidavit from a Pitney Bowes employee saying that the equipment couldn't be manipulated for backdating.

Universal also submitted 100 envelopes sent to Washington from Van Nuys. The aim was to prove that mail takes at least three days to arrive and, thus, the studio had in fact adhered to the July deadline.

But that didn't wash with the judge.

"A claim received after July 31 is plainly and simply late unless the sender can demonstrate that it has a USPS date stamp in the month of July," U.S. District Judge Rosemary M. Collyer wrote in her ruling Wednesday.

In court papers, Universal argued that it was unfair to expect its staff to hang on to "an index-card-sized" postal receipt during a period "when mailrooms of Hollywood studios faced the upheaval of the anthrax scare."

Universal executives declined to comment further Thursday. A spokeswoman for MGM said the company planned to appeal.

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