Locke v. Warner Bros., Inc.
California Court of Appeal
66 Cal. Rptr. 2d 921 (1997)
Locke (plaintiff) entered a 'non-exclusive first look deal' with Warner Bros. (defendant), fostered as part of a settlement with Clint Eastwood, requiring Locke to submit any picture she wanted to develop for Warner's approval or rejection within 30 days. Warner never hired Locke to direct anything and never developed any of her submitted projects; a Warner executive privately stated in a phone conversation, 'we're not going to work with her,' and another employee similarly said Warner wouldn't make a movie with Locke. Locke sued alleging breach of the implied covenant of good faith and fraud; the trial court granted Warner summary judgment on both claims, and Locke appealed.
Whether a party to a contract can require the other party to exercise a contractually granted discretionary power in good faith.