Anti SAG-AFTRA Merger Plaintiffs On Today's Court Decision: “Only Time Will Tell”

Below is a statement issued by the plaintiffs through their attorneys, Wasserman, Comden, Casselman & Esensten about today’s court decision:

The Court issued a thoughtful, 25 page, single spaced opinion. It overrules the SAG defendants motion to strike the breach of fiduciary duty cause of action, seeking a recovery of attorney’s fees. It also rejects defendants motions to dismiss the federal breach of fiduciary duty claim, the California breach of fiduciary duty claim, the federal breach of contract claim and reserves jurisdiction to address all of those causes of action by trial on the merits. Therefore, the litigation continues on the merits, even though the Court declined to grant the requested preliminary injunction.

We are disappointed by the decision not to issue a preliminary injunction, but we are encouraged by the detail of the analysis of the Court. It includes specific findings allowing the lawsuit to proceed on the merits, including the right to recover damages and attorneys fees. Among other disputed issues, the Court considered the SAG claim that Appendix I was no longer in effect after March 29, 2008. After considering all of the evidence, the Court elected to “work under the assumption that Appendix I is in effect.”

At its core, the decision indicates that because of the efforts of the plaintiffs, the members had reason to know that no actuarial study was done analyzing the impact of a merger on their pension or health benefits. The Court found that members received ample information from the Plaintiffs Voter Information Packet and website to alert them to the absence of an actuarial study. To the extent that this lawsuit provided beneficial information to the members, it served a valuable purpose. Unfortunately, only time will tell whether or not the concerns brought to light by this litigation were heeded.

Our greatest concern is that a year from now, members who voted for the merger will find out that, as this lawsuit predicts, their pension and health benefits will be diminished and the split earnings issue will effectively continue. Members will still be unable to qualify for benefits because their combined earnings will likely have to exceed an increased earnings threshold. Plaintiffs continue to believe that the decision of the union not to conduct a professional, actuarial study, was done intentionally to hide those findings from a membership that needed to know the truth. The Court made no finding to the contrary.

The bottom line is the decision to press for merger, claiming that lawyers, not actuaries, could assure the members that their benefits will be safe, may well end up creating legal liability for the consequences of things to come. Assuming the merger passes and benefits decline as predicted, there is ample information in the record to justify class-action lawsuits against those responsible for inducing “yes” for merger votes. Hopefully, no member will be harmed as a result of what transpires. Only time will tell.”