Seven Summits says the dispute erupted after the star sold her entertainment website for tens of millions of dollars.
New Girl star Zooey Deschanel is the latest celebrity to be hauled into court over an alleged failure to pay commissions.
In a complaint filed on Wednesday in Los Angeles Superior Court, Seven Summits Pictures & Management asserts that it has represented Deschanel “from 1996, when she was an unknown actress, until 2013, by which time she was one of the most famous actresses in the world, a Grammy Award-nominated singer and the co-founder of a successful entertainment website www.hellogiggles.com.”
Seven Summits asserts entitlement to 10 percent of her earnings for all entertainment activities, and while it says it had previously been paid post-termination commissions for Deschanel’s role on New Girl, once the management firm demanded payment for the female-focused site Hello Giggles, the flow of money stopped altogether.
The lawsuit cites the firm’s work getting Hello Giggles off the ground as well as working with Fox to realize the synergy. According to press reports, Hello Giggles was sold anywhere between $20 million to $30 million in October. The management firm wants its cut, saying it is entertainment activity.
“On November 16, 2015, after Seven Summits learned that Deschanel received money in connection with the sale of Hello Giggles, Seven Summits requested that Deschanel pay Seven Summits’ 10% commission on her income from Hello Giggles … but Deschanel refused to pay any such commissions,” states the complaint (read in full here).
Deschanel is also said to have provided notice to the firm last month that she was ceasing payment of commissions in connection with New Girl. The firm is also looking for money from her work on an advertising campaign for Tommy Hilfiger. The complaint leaves out exact dollar figures, though if the case doesn’t settle, her paychecks could become public.
In a statement, Deschanel said the lawsuit was “completely absurd and meritless and was filed in retaliation.” She also says that her former management firm has no right to seek commissions from her “completely unrelated sale” of Hello Giggles, which her side doesn’t see as involving the actress’ activities in the entertainment industry and thus not triggering obligations on commissions.
There also appears to be a whiff of California’s Talent Agencies Act coming into play. The law provides that only licensed agents can procure employment for entertainers. According to Deschanel’s reps, she filed a petition with the California Labor Commissioner last month arguing that Seven Summits and its principal Sarah Jackson had been acting as unlicensed talent agents.
The lawsuit responds, “Deschanel is making the false claim that Seven Summits procured employment for Deschanel when it was not legally permitted to do so. Aside from being untrue, Deschanel’s claim is not a reasonable excuse for deciding to withhold payment for services from a dutiful adviser who worked diligently for 17 years. Whereas most actors would be thrilled to have a manager put them on a successful career trajectory, Deschanel is now making a claim against Seven Summits for supposedly doing too much to make her successful and for supposedly doing too much to help her earn a giant fortune.”
Seven Summits is repped by Bryan Freedman and Steven Stiglitz at Freedman + Taitelman.
The lawsuit could be paused as the California Labor Commissioner addresses Deschanel’s own complaint.
Says Deschanel attorney Marty Singer, “I fully expect that the claims will be adjudicated before the California Labor Commissioner, and my client will prevail in this matter.”