A family's decades-long battle over the rights to the work of literary giant John Steinbeck appears to have come to an end. The Ninth U.S. Circuit Court of Appeals sided with Steinbeck's step daughter, affirming a compensatory damage award against his daughter-in-law in their fight for control over royalties and the future of the author's works.
The litigation, as epic and sprawling as any of Steinbeck's novels, demonstrates what can go wrong when an estate fight spills over into the next generation of heirs, and control ends up in the hands of sometimes unexpected individuals.
When the award-winning author of novels The Grapes of Wrath and East of Eden, among others, died in 1968, he was survived by his third wife, Elaine Steinbeck, and two sons from his second marriage, John Steinbeck IV and Thomas Steinbeck.
The author left his widow the copyrights to his works and left his sons each $50,000. But arguments soon arose over royalties because, under federal copyright law, all three heirs were entitled to royalties for works that had their copyrights renewed after the author's death, according to court documents.
A settlement agreement reached in 1983 seemed to resolve the dispute, with the sons giving up their rights to certain works in exchange for an increased share of royalty payments. John Steinbeck IV died in 1991, leaving behind a daughter, Blake Smyle. Elaine Steinbeck died in 2003.
Then the family feud escalated.
In 2004, Thomas Steinbeck and Blake Smyle sued Waverly Scott Kaffaga, Elaine Steinbeck's daughter and the executor of her estate, and others in a New York federal court over the terms of the 1983 agreement. The Second Circuit U.S. Circuit Court of Appeals eventually held that the agreement was valid and enforceable.
The author's son and daughter-in-law, Gail Knight Steinbeck, and their company, Palladin Group Inc., later filed a similar lawsuit in 2014 challenging the 1983 agreement in a California federal court. Kaffaga responded by filing counterclaims of her own.
Then, Thomas Steinbeck died in 2016, leaving his wife Gail as the executor of his estate.
The California federal court dismissed Steinbeck and Smyle's suit on the grounds that the Second Circuit had already ruled on the agreement, and the Ninth Circuit affirmed in 2017.
$13.1 Million Award
Kaffaga's counterclaims for alleged breach of the agreement, slander of title, and tortious interference with economic advantage remained, along with claims for punitive damages. Among other assertions, the author's stepdaughter argued that the Steinbecks' interference had scuttled negotiations with Hollywood producers to remake the films based on The Grapes of Wrath and East of Eden.
Following a trial in the California federal court, the jury found in Kaffaga's favor and awarded her $13.1 million, which included $7.9 million in punitive damages. The federal court denied Gail Steinbeck's post-trial motions in 2018.
'This Has to End'
On appeal, the Ninth Circuit affirmed in part, but agreed to vacate the punitive damage award. It concluded that, while there was enough evidence of malice in Gail Steinbeck's actions to warrant a punitive damage award, there was little evidence she would be able to pay such an amount.
Judge Richard C. Tallman, who wrote the opinion, plainly told Gail Steinbeck and Palladin to stop trying to overturn the 1983 agreement, which had been validated by numerous courts at this point. "They must also stop representing to the marketplace that they have any intellectual property rights or control over John Steinbeck's works," the judge added.
"Various federal courts, including this one, have repeatedly affirmed Elaine and Kaffaga's exclusive control," Judge Tallman wrote. "This has to end. We cannot say it any clearer."
Tellingly, the judge pointed out that Thomas Steinbeck sued Kaffaga out of anger over her retaining control of his father's estate. "Thom himself penned that he sued Kaffaga in New York because he 'didn't agree with her maintaining [his] father's inheritance,'" Judge Tallman noted.
Certainly, the author's failure to ensure that the copyright and royalty issues surrounding his works were resolved before his death played a big role in the litigation over his estate that followed.
In this situation, where millions in royalties are at stake for current and future generations of the family, proper planning and considering a neutral, third party to administer the author's estate could have helped navigate family animosity while making the right decisions to make the most of his considerable legacy.