The Legal Mistakes That Can Cost Filmmakers Everything
An interview with entertainment litigator, Justin Sobodash, on knowing when to fight, when to settle, why your own emails can undermine your case, and how to protect your money before a dispute reaches the courtroom.
There's a particular kind of frustration that comes with knowing somebody owes you money, having the contract to prove it, and realizing that getting paid might cost more than the amount you're trying to collect. It's a situation that independent filmmakers, producers, distributors, and financiers are all too familiar with, and one that can become considerably more expensive when emotions take over.
A distributor misses a minimum guarantee payment. A producer discovers that somebody is interfering with rights they believed were secured. An investor wants answers, a filmmaker wants control, or a disagreement between parties threatens to derail a release that everybody was previously working toward.
The instinct is often to get angry, send an aggressive email, and threaten legal action. Unfortunately, that can be precisely the wrong thing to do, even when you're absolutely convinced that the law is on your side.
For this week's Below the Line, I sat down with entertainment litigation attorney Justin Sobodash to discuss what filmmakers, producers, distributors, and other industry professionals should do when a business disagreement begins moving toward litigation. We covered everything from evaluating whether a dispute is worth pursuing to negotiating leverage, international enforcement, finding the right attorney, and the growing risks of relying on artificial intelligence for legal advice.
Justin was admitted to the California Bar in 2001 after attending UCLA for both his undergraduate and legal education. He began his career at large law firms before eventually establishing his own practice in 2010 In his practice he represents production companies, talent, publishers, and other businesses in disputes involving film financing, intellectual property, contracts, defamation, rights of publicity, business torts, and related matters. His work also includes film and book clearance reviews, talent and production agreements, and resolving disputes before they become lawsuits.
He's obtained favorable trial verdicts and arbitration awards, but much of his practice involves something considerably more appealing to most of us: resolving disputes through negotiation before litigation becomes necessary.
A disclosure before we get into it: Justin is one of my attorneys, although our relationship began under rather different circumstances.
I first encountered Justin on the opposing side of a dispute. His client was pursuing a claim against one of our clients, and the situation was interfering with work that Scatena & Rosner needed to perform. Having been raised by attorneys and spent much of my career negotiating deals and navigating contractual disagreements, I'm not particularly intimidated by legal disputes or the people handling them.
But I was impressed by Justin's approach. We eventually developed a professional relationship, and I subsequently became his client.
That history is relevant because this isn't an interview in which I simply asked a lawyer to explain why everybody should hire a lawyer. In fact, one of Justin's first points was that some disputes shouldn't involve an attorney at all.
The more interesting question is knowing the difference, and understanding what you might inadvertently do to damage your position before you ever pick up the phone to call one.
The First Mistake: Confusing Being Right With Having a Case Worth Pursuing
When I asked Justin about the early warning signs that a business disagreement might turn into litigation, he didn't begin with missed payments or contractual violations. He began with emotion, explaining that a high level of emotion can be an early indicator that the parties are moving away from commercial problem-solving and toward a more adversarial confrontation.
He also suggested looking at the opposing party's track record, including whether they've frequently been involved in litigation and what others in the industry have experienced when dealing with them. In independent film, that last point can be particularly useful because the business is smaller than it sometimes appears, and producers, distributors, sales agents, and financiers often know people who've worked with the same counterparties.
But there's a distinction between identifying a potential problem and deciding that it's worth fighting over.
Justin suggested beginning with a basic question: Is there a genuine dispute involving money, intellectual property, credits, production schedules, or another business interest? Or are the parties primarily fighting over ego?
That question may sound elementary, but I've watched perfectly capable professionals spend extraordinary amounts of time arguing over matters that have little practical effect on their businesses. And as Justin pointed out, the cost of a dispute isn't limited to attorney fees.
There's the time spent reviewing correspondence, gathering documents, talking to counsel, and worrying about what happens next. There's the business you could have conducted instead, the projects you could have advanced, and the personal time you won't get back.
During our conversation, I asked Justin whether he'd ever advise a client to accept what appeared to be an unfavorable settlement, even when the client was clearly in the right. My reasoning was that the amount you might eventually recover is only part of the equation, particularly when pursuing it could mean years of stress, substantial legal bills, lost productivity, and time away from your family.
His response was simple:
"Well, in some of those situations, for the reasons you just stated, it's not an unfavorable settlement."
Justin explained that the value of a resolution has to account for everything involved in reaching it, including the opportunity cost of your time, the money spent pursuing the claim, and the quality of life you're sacrificing in the process. A settlement that appears disappointing on paper can be a considerably better business decision once those factors are included.
But he also made an important distinction. There are circumstances where pursuing a dispute beyond what the immediate economics might justify is necessary to establish that you won't allow people to disregard your contractual rights.
As Justin explained, being known as reasonably assertive about your boundaries has value. Sometimes that means refusing a smaller settlement because the long-term cost of appearing unwilling to enforce your agreements could be greater than the cost of the immediate dispute.
I agree with that distinction, particularly in an industry where the same companies and individuals repeatedly do business with one another. You don't want a reputation for suing everybody, but you certainly don't want a reputation for being somebody who can be ignored without consequence.
The objective isn't to become either a pushover or a professional plaintiff. It's to make decisions that protect your business over time.
The Email You Send Today Could Become Your Biggest Problem Tomorrow
One of the most revealing parts of our conversation concerned a mistake Justin regularly encounters when reviewing disputes that have already developed. Businesspeople often make legal-sounding assertions without actually understanding the law, and those assertions can create problems that didn't previously exist.
They write emails explaining what they believe a contract means, what they consider fair, or why the other side is supposedly violating their rights. The problem is that their intuitive understanding of the situation may have very little to do with the legal standards that ultimately apply.
Justin explained that people frequently assume the law must align with their personal sense of right and wrong. Unfortunately, legislation, contractual interpretation, and judicial decisions don't always produce outcomes that feel intuitively fair to somebody involved in a particular dispute.
Worse, those assertions can commit them to positions that later become difficult to defend. A person trying to explain themselves or resolve a disagreement may inadvertently acknowledge facts that help the opposing party establish a legal claim.
This is particularly dangerous in entertainment, where so much business is conducted through informal email exchanges, text messages, and conversations among people who may have worked together for years. The fact that you've known somebody for a decade doesn't mean your correspondence with them will be treated as an informal conversation if the relationship deteriorates.
Justin's broader observation was that people sometimes continue arguing long after they should have stopped and sought advice. They believe they're strengthening their position, when they may actually be supplying the opposing party with evidence.
There's another complication that most businesspeople probably don't consider. The person on the other end of that exchange may already have an attorney helping them decide what to say, even though every message appears to be coming directly from that person.
That possibility changes how a producer or distributor should think about the next message they send. It also raises a more consequential question: How can you protect your position, preserve your leverage, and potentially resolve a dispute before either side spends a fortune?
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The most expensive legal mistakes often happen before a lawsuit is filed. By the time an attorney reviews the correspondence, the contract, and the opposing party's financial position, some of the leverage that could have produced an inexpensive settlement may already be gone.
But Justin's advice also reveals opportunities to resolve disputes faster, protect intellectual property, and avoid spending money on claims that may never produce a recovery.
Continue reading to learn about:
● When to hire counsel: How early legal involvement can change the economics of a $75,000 dispute.
● How to handle a dispute when you don’t have money to litigate.
● The negotiation tactic most people overlook: Selfish Empathy.
● Getting paid when the other side won't pay: Why collection priority, intellectual property, and security interests can matter more than proving a breach.
● Protecting international deals: The contract provisions that can determine whether enforcing a foreign agreement is economically realistic.
● Using AI without creating legal exposure: Why confident AI-generated legal arguments may be particularly dangerous.
● Hiring the right attorney: How to evaluate experience, cost, and candor before committing to a legal fight.
These are practical lessons from an attorney who regularly handles entertainment disputes, including matters resolved without filing suit.
Before sending another demand, threatening a lawsuit, or signing your next distribution agreement, understand which decisions could determine whether you recover your money—or spend it fighting.
