WGA sees judge dismissing antitrust claims against agencies; Some complaints remain – deadline


UPDATED with more details: A federal judge has dismissed huge parts of the WGA’s antitrust lawsuit against Hollywood’s Big 3 talent agencies, but will allow other aspects of his case to go to trial. In a decision released Monday, US District Court judge Andre Birotte Jr. ruled that the WGA:

1. Does not have antitrust standing to pursue federal pricing claim

2. Lack of organization to present claims for breach of fiduciary duty and fraudulent fraud on behalf of their members.

3. Does not have Article III to initiate a cause of action on its behalf under unfair competition law.

4. Failed to plead racketeering.

5. And did not indicate the allegations on which reparation can be granted in relation to And that their “collective boycott claim

Big 3 Talent agencies say COVID-19 presents new “difficulties” in legal battle with WGA over packaging costs

The judge, however, dismissed a motion filed by WME, CAA and UTA to dismiss the Guild Cartwright Act’s pricing claim, and will allow several individual claimants to pursue their claims in court, including:

1. Their individual allegations of breach of fiduciary duty.

2. Their individual requests under unfair competition law.

3. And Barbara Hall’s claim for contact violation.

On January 6, the judge dismissed the WGA’s motion to dismiss the agencies’s antitrust lawsuits against it, which means that all of their complaints can go ahead. He heard oral arguments on the WGA’s request to dismiss the agencies’ claims on January 24.

Read today’s decision here.

In granting the agencies’ motion to dismiss the federal guild’s pricing claim, the judge wrote that the agencies contend that the allegations made by the WGA East and West, who are the cross-plaintiffs in the lawsuit, even if they are accepted as true, “demonstrate that the counter-applicants (the guilds) do not participate in the same market as the agencies and only suffer secondary damage. In particular, the agencies contend that the allegations of the counterclaims demonstrate that they do not buy or sell packaging and that they do not participate in any market in which the packaging is bought and sold.

“In contrast, the cross-plaintiffs do not argue that they buy or sell packages, or that they participate in the talent market where packages are bought and sold. Indeed, the claims of the counterclaims demonstrate unambiguously that the studios – and not the guilds or their author-members – buy packages from agencies, and that agencies and their non-party competitors sell packages to studios. The core of the counterclaims’ inherent pricing demand is that “rather than competing with each other, the agencies and their co-conspirators have collusively agreed to offer the same packaging cost terms to [production] The injuries that the cross-plaintiffs allege – that the writer-members suffer a drop in their profit sharing, a decrease in job opportunities, a drop in the quality of production and that guilds receive lower union dues all by spending money to educate their members about the harms of packaging and to publicly argue against the practice – all derive from the allegedly higher prices paid by production studios that employ writers.

“Consequently, because the allegations of the counterclaims demonstrate that they do not buy or sell talent representation services and that their injuries are entirely derived from the allegedly higher prices paid by the production studios, the plaintiffs do not have not demonstrated antitrust harm. The Court therefore GRANTS without authority to vary the agencies ‘motion to dismiss the counterclaims’ first cause of action for price fixing per se, in violation of Sherman law. “

In a major ruling in favor of the guild, however, the judge ruled that the WGA’s pricing claim under California’s Cartwright antitrust law could go ahead. In dismissing the agencies’ motion to dismiss this aspect of the case, the judge noted that “California requires a high degree of particularity in the plea for Cartwright Act violations. . . and therefore, widespread allegations of violations of antitrust laws are generally insufficient. Here, the guilds alleged that “in or around 1995-1996,” the exact start date being unknown, the agencies and their co-conspirators entered into a permanent agreement to repair and maintain the packaging 3- 3-10. pricing structure and bill the same basic license fees to the studios. “

The judge noted that the WGA alleges that “this pricing plot was established at a meeting by Lee Gabler of CAA and Ari Emanuel of then Endeavor and now WME, and that the agencies maintained this fixing plot prices by sharing competitively sensitive information when they jointly package television series. The cross-plaintiffs (the guilds) further allege that they have suffered prejudice as a result of this price-fixing scheme in the form of a reduction in remuneration and employment opportunities, and in a reduced quality of services. talent representation. Consequently, the counterclaims argued specific factual allegations showing the formation and functioning of a conspiracy, the unlawful acts committed under the conspiracy and the harm caused thereby, shifting the allegations of the counterclaims from conception to plausibility . Accordingly, the Court REJECTS the agencies’ motion to dismiss the third claim of the counterclaims for price fixing per se, in violation of Cartwright law. “

In granting the agencies’ request to dismiss the request for a guild group boycott, the judge wrote that “To establish a per se violation of Sherman law for an illegal group boycott,” the WGA “must argue that there had a horizontal agreement between direct competitors. He also noted that “mere participation in meetings of trade organizations where information is exchanged and strategies advocated does not suggest an illegal agreement.”

Here, he writes, the guilds allege that the agencies “have entered into a horizontal agreement to: (1) take a common position with the guilds in negotiations on a new franchise agreement, (2) refuse to negotiate with the guilds on an individual (3) threatening lawyers and talent managers with litigation and (4) blacklisting any agency that accepts the Guilds Code of Conduct. He noted, however, that the specific factual allegations by the WGA only show that the Association of Talent Agents, (1) a professional association of talent agents, (1) expressed disapproval of the talent agencies negotiating individually with the guilds , (2) sent two warning letters of the potential legal consequences of negotiating terms of employment for Guild members by talent managers or lawyers (3) said acceptance of the Code of conduct would interfere with the activities of a talent agency and (4) distributed to ATA members a response from a talent agency to the Guilds. ‘Request to negotiate individually.

“Rather than demonstrate a horizontal agreement between competitors, these allegations show, at most, the participation of agencies” in meetings of professional associations where information is exchanged and strategies are advocated “.”

Furthermore, “WGA allegations that individual talent agencies refused to negotiate individually with guilds in similarly formulated responses do not plausibly allege a horizontal agency-to-agency agreement,” noting case law which says that “mere allegations of parallel driving – even consciously parallel driving – are insufficient to make a claim under § 1 of the Sherman Act. “

As a result, because the guilds “have not plausibly alleged a horizontal agreement between the agencies, the Court ACCEPTS the agencies’ motion to dismiss” the guild’s second and fourth causes of action.


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