Caitlin Sanchez, the teenager who starred on Nickelodeon's Dora the Explorer until she reached puberty, will have to live with the $500,000 she got to settle a $10 million lawsuit she filed against the network in 2010.
The former child star alleged that she was "duped" into a deal that when factoring tax payments and lawyer contingency fees, left her with basically nothing. She accused her former attorney of forcing her to take a bad deal and wanted to revive a battle against Nickelodeon and MTV Networks that made headlines throughout the world.
But on Tuesday, the Second Circuit Court of Appeals dealt her a crushing blow. Three circuit judges have affirmed a lower court's decision to affirm the settlement agreement.
In Sanchez's original lawsuit, she said that when she had made a deal to voice Dora the Explorer, she was given just 22 minutes to sign the contract for the job without an experienced lawyer. She did so with the alleged promise that she'd receive residuals for her work plus money from merchandising.
Dora the Explorer went onto become an $11 billion global brand, according to reports, and Sanchez attempted to sue the Viacom divisions for underpaying her on an "unconscionable" contract.
When the lawsuit was filed in 2010, it drew a lot of tabloid attention thanks to statements made by Sanchez's attorney John Balestriere that if Nickelodeon refused to pay up by a certain date, he'd expose humiliating secrets about the network.
The posturing resulted in a settlement, but Sanchez later said the deal hadn't really benefited her. She got $500,000 to cover an advance on future residuals and merchandising, according to court papers, plus five percent royalties on future merchandise sales, some guarantees that she would continue certain voiceover work at the AFTRA rate and the right to conduct audits on the producer's financial books.
Meanwhile, Balestriere was to have gotten 37.5 percent of her royalties.
Later, Sanchez challenged the agreement, saying that Balestriere yelled at her family, threatening that he would lose the case and that they would owe him some $300,000. Her mother told a judge that more than $100,000 in tax payments "zeroes out what little settlement Mr. Balestriere gave to Caitlin after he took his excessive fees and disbursements never approved by this Court."
Balestriere defended himself, intervening in court to save his payments and telling THR last year that he "obtained an excellent result for Ms. Sanchez, in fairly short order, where our firm largely bore the financial risk, and where the court who approved the settlement has repeatedly praised the result our work obtained."
New York judge Thomas Griesa declined to overturn the settlement, although he trimmed Balestriere's requested 30 percent of Sanchez' future recoveries of royalties to 15 percent.
Sanchez appealed up to the Second Circuit, which resulted in a ruling on Tuesday.
In the decision, the appellate court finds that the lower court judge didn't obey all protocol for reviewing a settlement by a minor, but nevertheless finds that the judge had proper jurisdiction and was within his discretion to bless the 2010 deal.
According to the ruling, "Sanchez was ably represented by counsel and by her parents throughout the settlement negotiations, and in approving the settlement, the district court had before it substantially all of the documentary submissions required by New York law."
The Second Circuit also declined to disturb the judge's order on Balestriere's legal fees, saying it was "within the district court’s sound discretion."
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