Concern about copycat liability grips major Hollywood studios.

Hollywood studios are feeling increasingly vulnerable to liability stemming from people imitating dangerous or destructive acts portrayed in movies and television shows, said entertainment industry sources.

Although none of the major studios would comment on the highly charged issue, local entertainment attorneys confirmed that studio executives have become much more sensitized in recent weeks.

Ken Suddleson, head of the entertainment group at the Century City law firm Kaye Scholer Fierman Hays & Handler, said studios are always concerned about high-profile or emotional litigation because of the damage to their image.

But at this particular moment, he said, "there is increased sensitivity because of potential liability issues, and Washington is taking a look at the industry."

"Both Congress and the courts are taking a closer look at areas that inspire copying by young people, especially gullible young people," said Fred Leopold, one of Los Angeles' pre-eminent entertainment lawyers.

Leopold said any extreme acts of violence depicted in a movie or TV show are going to be given a second thought to ensure that they are really important to the plot.

The industry's heightened concern follows on the heels of and, to some extent is being caused by, recent decisions by two major entertainment conglomerates.

The Walt Disney Co. cut a scene out of its recently released movie "The Program." That scene showed college football players lying in the middle of a busy highway to prove their nerves of steel. That stunt was imitated in real life by a handful of teen-agers on the East Coast, which resulted in one death and several injuries.

The other decision was made by Viacom Inc. when it moved its controversial MTV show "Beavis and Butt-head" to a later time slot. That rescheduling came after an Ohio mother blamed the show for a fire set by her 5-year old son. That fire, which killed the woman's 2-year-old daughter, was a re-enactment of a "Beavis and Butt-head" episode in which the show's characters played with matches, the mother is alleging.

Almost simultaneous with the decisions by Disney and Viacom Inc., U.S. Attorney Gen. Janet Reno issued a warning to the entertainment industry to reduce television violence voluntarily or else "government action will be imperative."

Reno issued that warning Oct. 20 while appearing before the U.S. Senate Commerce Committee.

Television violence has indeed become a hot topic once again in Washington. And Reno made it clear that, if the entertainment industry does not take steps to voluntarily reduce violence on TV and in movies, the Clinton administration would support pending Senate legislation that addresses the problem.

With such a growing backlash against televised violence, attorneys said, juries may no longer feel sympathetic about a studio's First Amendment rights. What's more, insurance experts said, a studio's insurance policy would probably not cover damages or even attorneys' fees if it was hit with a lawsuit stemming from a copycat incident.

Suddleson said, although the First Amendment clearly would shield a studio from liability for such incidents, juries don't always arrive at the correct legal decision because they are swayed by emotion.

"Studios could lose that case at the trial level," he said, even though previous court decision related to copycat incidents have consistently sided with the entertainment industry.

Of the higher-profile copycat cases, the U.S. Supreme Court threw out two lawsuits in October 1992 that accused rock star Ozzy Osbourne, his record company and other parties involved in producing Osbourne's "Suicide Solution" album of "inciting" two teen-agers to commit suicide in Georgia and South Carolina. That suit arose because the teen-agers had been listening to the album prior to killing themselves.

And in 1981, a California appellate court rejected a lawsuit filed on behalf of a 9-year-old girl who had been raped with an inanimate object by several assailants who said they watched a similar scene in the TV movie "Born Innocent."

One entertainment insider, who asked not to be identified, said he didn't see how any studio could be held responsible for someone else's "sheer stupidity." However, he later conceded that there are a lot of talented lawyers who could find a cause of action holding a studio liable.

Insurance experts were divided over whether or not a studio's insurance policy would protect it from liability stemming from a copycat incident.

Some asserted a studio's general liability policy would provide adequate protection, but others said such incidents would probably not be covered.

"Copycat crimes aren't covered under insurance because they are not covered under the law," said Albert Reider, senior vice president of Aon Entertainment Ltd., an insurance company that deals exclusively with the entertainment business.

He said errors-and-omissions insurance is the form of malpractice insurance typically carried by entertainment companies. And such policies only cover specific occurrences, and copycat incidents are not among them.

Examples of areas covered by errors-and-omissions policies include copyright infringement, unfair competition, libel, slander, defamation of character, invasion of privacy and breach of contract, Reider said.

Insurance experts added that, even if a studio's insurance did cover attorneys' fees and damages for copycat-related lawsuits, the studio's deductible on such a policy would be as high as $1 million.