U.S. District Court Judge James Otero rejected the anti SAG-AFTRA merger efforts by Martin Sheen, Ed Harris, Diane Ladd, and others to render the vote void before it is conducted. So now the SAG-AFTRA merger referendum results will be known after 1 PM Friday. But the judge noted that while he would not dismiss the anti-merger forces’ claims that the SAG board breached fiduciary duties in the proposed merger, especially its effects on SAG member’s pension and health plans, “If the merger is approved by the Membership, and the Members eventually see a decrease in benefits, it will be the result of their informed decision to vote for merger without the benefit of an actuarial study. The democratic process does not always yield the most desirable results for all.” The judge also rejected SAG’s attempt to dismiss the suit outright and allowed the anti-merger forces’ breach of contract claim to continue. Today’s decision comes just over a week after the judge cancelled a March 26 hearing on the matter and chose instead to issue an order.
Here’s partial reaction from the antimerger force that brought the lawsuit:
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.
Here’s the SAG announcement:
Los Angeles, Calif.– Federal Judge James Otero today denied the plaintiffs’ motion for preliminary injunction in Sheen v SAG clearing the way for Screen Actors Guild’s merger referendum ballot counting to go forward as scheduled on Friday, March 30.
The Judge’s ruling read in part, “Voting in favor of merger may or may not be in the best interest of the majority of Union Members. But the decision, for better or worse, belongs to the Members – not to Plaintiffs, and certainly not to the Court.” He also stated that, “[I]t appears that SAG’s democratic process is functioning properly.”
As to the question of Pension and Health benefits, the Court ruled, “Although diminution of health and pension benefits is a serious matter, Plaintiffs have failed to demonstrate that such harm is likely to occur upon merger.”
Judge Otero also dismissed one of the four remaining causes of action. He decided not to dismiss the other three claims based on the legal presumption in favor of plaintiffs on a motion to dismiss, but found in his ruling on the injunction that the plaintiffs are unlikely to prevail on those claims.
SAG Deputy National Executive Director and General Counsel Duncan Crabtree-Ireland said, “We are pleased with the court’s action denying the requested injunction and dismissing one of the plaintiff’s major claims in this matter. We are are also gratified that the court has indicated that the plaintiffs are unlikely to prevail on their other claims. It has been our position all along that these complaints were completely without merit and that the members will ultimately decide the future of their unions.”
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