First the Watchmen and now The Hobbit.

[GreenScar]

The AP reported the following about the ongoing legal battle:

LOS ANGELES (AP) — A judge has barred the estate of "Lord of the Rings" author J.R.R. Tolkien from seeking punitive damages against the studio that brought the trilogy to the big screen.

Tolkien's heirs claim New Line Cinema has failed to pay any royalties from the estimated $6 billion they say the movie has grossed worldwide. The lawsuit is seeking more than $150 million in compensatory damages based on breach of contract, fraud and other claims.

Los Angeles Superior Court Judge Ann I. Jones also ruled this week that the estate and Tolkien heirs have established a legal basis for the fraud claim against New Line.

As part of that allegation, the lawsuit claims New Line sent millions of dollars to Time Warner Inc.'s AOL, improperly claiming they were for advertising expenses. The lawsuit also claims the studio built production offices and facilities in New Zealand and listed them as expenses for the "Lord of the Rings" films, although the heirs claim they are now being used for other New Line projects.

New Line's attorneys successfully argued that Tolkien's heirs had to demonstrate a "public wrong" under New York law — which governs the contracts — to claim punitive damages if they win at trial. Jones ruled that the heirs' grievance "is clearly seeking to vindicate private wrongs."

Tolkien signed agreements in 1969 with United Artists governing the movie rights to the "Lord of the Rings" books as well as "The Hobbit."

After the author's death, his heirs created The Tolkien Trust, a British charity.

The charity's trustees, which include Tolkien's heirs, joined publisher HarperCollins to sue the studio in February. Besides damages, the lawsuit seeks a court order that would terminate New Line's rights to make a two-film prequel based on "The Hobbit."

Guillermo del Toro has signed on to direct that film and its sequel in New Zealand alongside executive producer Peter Jackson.

Attorneys for New Line and The Tolkien Trust did not immediately return calls seeking comment on Thursday.

New Line now has 10 days to answer the lawsuit. A trial has been scheduled for October 2009.

The studio was absorbed into Warner Bros. Entertainment in February.

[Slackr89]

They better not cancel the hobbit. ill be p/o'ed.
And whats with everyone suing everything lately, it's getting ridiculous.

[Adhamhnon]

Originally Posted by Slackr89

They better not cancel the hobbit. ill be p/o'ed.
And whats with everyone suing everything lately, it's getting ridiculous.

Well, in this case, the Tolkien family does have a legitimate claim. New Line has screwed them over pretty badly.

[Moefiz]

Didn't New Line screw Peter Jackson out of some funds also.

[Josh]

This can't be good. If work stops, Del Toro might have to decomit!

[tacoreed]

These are the only two movies that are officially greenlighted or complete that I was officially excited to see, and now I'm getting screwed over.

[Maximus]

If New Line lose the Hobbit, I would expect MGM to partner with Sony and do it.

It would literally be a case of scrubbing New Line from the title screen and putting Sony there instead. The cast/crew would all stay in place as the films have already started pre-production and will start filming late next year.

The project will release in 2011. Make no mistake.

The only worry I have is the ownership of the LOTR trilogy, if the case is successful TW could be sued for the ownership of the movies and New Line would be credited as the production house. That could delay a Blu-ray release...

[X400]

corporation, sigh, always the evil bloodsucker