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James Franco Will Pay $2.2 Million To Settle A Fraud And Sexual Harassment Lawsuit

As part of the settlement, Franco and his production company denied all of the fraud and sexual harassment complaints leveled against him in 2019.

Posted on June 30, 2021, at 7:59 p.m. ET

Charles Sykes / AP

James Franco and partners at his production company have agreed to pay $2.2 million to settle fraud and sexual harassment claims brought by his former acting students, according to court records made public Wednesday.

As part of the settlement agreement, which has not yet been approved by a judge, Franco, his partners, and Rabbit Bandini Productions denied breaking any laws and are maintaining that they "made no false representation to students and that they provided students with all services and benefits promised to them."

They also denied all of the sexual harassment and exploitation claims made in the 2019 lawsuit.

"Defendants have concluded that any further defense of the action would be protracted and expensive for all parties, and that substantial amounts of defendants' time, energy, and resources have been and would continue to be devoted to the defense of asserted claims," the settlement, filed on June 24 in Los Angeles County Superior Court, states. "Although defendants contend they are not liable for any of the claims alleged, they have agreed to settle in the manner and upon the terms of the proposed agreement."

The Los Angeles Times was first to report the settlement on Wednesday.

The lawsuit was first filed in October 2019 by Sarah Tither-Kaplan and Toni Gaal, who alleged the school defrauded acting students by claiming that its "master classes" would provide them with opportunities for auditions.

Instead, they claimed, they were encouraged in some of the classes taught by Franco to perform partially or fully nude in simulated sex scenes. The classes also required them to sign away their rights to tapes made during the courses.

Attorneys for Tither-Kaplan and Gaal did not immediately respond to requests for comment.

The lawsuit was filed after a Los Angeles Times investigation in 2018 in which five women accused the Oscar-nominated actor of sexually inappropriate and coercive behavior. One of those women was Tither-Kaplan, who said she felt the school cultivated a culture of exploiting women and making them feel "replaceable."

Another of the five women, Violet Paley, also told BuzzFeed News that Franco had coerced her to perform oral sex on him.

Part of the financial agreement — $894,000 — will be to settle "sexual exploitation claims," according to court records.

The agreement also prohibits any of the parties in the lawsuit from making any statement about it other than a public statement included in the settlement.

"While Defendants continue to deny the allegations in the Complaint, they acknowledge that Plaintiffs have raised important issues; and all parties strongly believe that now is a critical time to focus on addressing the mistreatment of women in Hollywood," the court filing states. "All agree on the need to make sure that no one in the entertainment industry — regardless of sex, race, religion, disability, ethnicity, background, gender or sexual orientation — faces discrimination, harassment or prejudice of any kind."

When asked for comment, attorneys for Franco sent the joint statement included in the settlement.

The agreement came after two days of "arms-length" mediation sessions in the case, according to court records, which occurred in June and August 2020. About 50 former students and actors were interviewed as part of the lawsuit.

The allegations against Franco have prompted some blowback in the industry, particularly among actors who have worked with him in the past.

In an Instagram post, Charlyne Yi, who worked with him in The Disaster Artist, called out Franco's "white male 'feminist' peers" for not "holding him accountable for abusing women and then using his power and platform to gaslight them."

In May, Seth Rogen, who has worked with Franco in multiple films, told the Sunday Times he had no plans to work with him in the future.

Rogen didn't say whether he believed the allegations, only that he "despise[d] abuse and harassment."

"I would never cover or conceal the actions of someone doing it, or knowingly put someone in a situation where they were around someone like that," he said.

A BuzzFeed News investigation, in partnership with the International Consortium of Investigative Journalists, based on thousands of documents the government didn't want you to see.