Judge Returns Diandra Douglas’ Settlement Case to California Courts

Diandra Douglas suffered another legal setback this month in her effort to claim a share of ex-husband Michael’s earnings from the film Wall Street 2: Money Never Sleeps. When last we left Diandra and the legal system, her attorneys were arguing before a New York court that Michael Douglas’ earnings from the sequel to his Oscar-winning performance in 1987’s Wall Street are subject to California’s community property laws, despite the couple having been divorced for more than a decade.

According to the celebrity-watching website Monsters and Critics, however, a Manhattan judge “rejected her request to overturn his original ruling (of) last year.” In doing so he reaffirmed his original opinion that if Diandra’s case is to be heard at all it should be in California, where the couple’s divorce was finalized back in 2000. The website quotes Diandra’s attorneys vowing to appeal the decision.

As I noted when originally discussing this case last year, Diandra’s claim does not amount to a demand for a California post-settlement modification. It turns instead on an essentially philosophical question: what, artistically speaking, is the relationship of a sequel to its original? The original Wall Street film was made during the Douglas’ marriage. Therefore, under California’s community property laws, Diandra is entitled to a piece of any ongoing income Michael makes from the film: residuals and royalties, for example.

The question is whether a sequel is a new and distinct work of art or whether it is, artistically speaking, a continuation of the original. If the former, then the new film is a piece of post-divorce Michael Douglas work and, therefore, not subject to community property rules. If, however, it is the latter (similar, say, to re-issuing the original film on Blue-Ray, a technology that did not exist in 1987) then the income would be subject to community property rules. It is a fascinating legal question – but one which this case has not resolved, since the New York court, in effect, punted the issue back to California without addressing the substance of Diandra’s claim.

Viewed another way, the case is a reminder of an important role Los Angeles and Orange County divorce lawyers fill for clients. As legal experts, family law specialists can offer clients invaluable assistance in understanding the often arcane world of the law. Deciding on one’s approach is one of the most important decisions anyone makes when beginning a legal process. It is also the place where experienced legal advice is most valuable.

Monsters and Critics: Diandra Douglas loses appeal to get ex-husband Michael’s money