Just over a month after the trio of class-action lawsuits against Disney, Sony, DreamWorks Animation and other animation studios were consolidated into a single complaint, some of the heavyweight defendants in the alleged anti-poaching and wage-fixing case have struck back – on several fronts.
The first line of attack is a dense filing in federal court late last week by the studios seeking to have the amended class action from digital artists David Wentworth, Robert Nitsch Jr. and Georgia Cano dismissed “in its entirety with prejudice” (read it here). The primary thrust of their argument is that the statute of limitations has expired on the trio’s claims.
“The DOJ’s 2009 investigation, in turn, led to the High-Tech Employee Antitrust Litigation, filed in 2011,” says the January 9 motion, citing the federal investigation and still on-going legal action against Apple, Google and others that revealed details of the toon studios’ supposed anti-poaching shenanigans. “But the present plaintiffs did not bring litigation either in response to the DOJ investigation or after the High-Tech cases were filed. Instead, they waited nearly five years after the DOJ commenced its investigation. In an effort to manufacture new claims not covered by the HighTech lawsuits, plaintiffs assert that animation studios, other than High-Tech defendants Pixar and Lucasfilm, also participated in the alleged conspiracy. However, plaintiffs’ attempt is futile as a matter of law and comes far too late.”
Taking his case to the courts on September 8 last year, former DWA visual effects artist Nitsch was the first to file against the studios. Cano’s case soon followed and Wentworth was the third to file on October 2. The cases were consolidated into one class action and filed as an amended complaint on December 2.
For the animation studios it’s all hot air and old news. “They cite no allegedly wrongful communications or actions at all within the past five years,” the motion continues, noting also that the statute of limitations on such matter is 4 years. “Instead, they refer to communications and actions by some defendants that occurred before the DOJ investigation and then conclusorily assert that defendants’ alleged conduct continued despite the obvious peril of conspiring in the face of such intense scrutiny.”
Also noting “insufficient” evidence in the consolidated complaint that anyone’s wages were actually fixed or suppressed by illegal multi-corporate consensus, Disney, DWA, Sony and Blue Sky Studios are seeking a March 26 hearing on their motion in front of Judge Lucy H. Koh. That could be a rough ride for the defendants. Presiding over the High-Tech Employee Litigation and rejecting the tech-giants proposed $325 million settlement as too low, Judge Koh agreed last September to take over the ‘toon cases after a request from Nitsch based on his assertion they were related.
If that wasn’t enough of a move to shut down the potentially sprawling class action, DWA, Disney, Sony and others also filed a separate motion last Friday seeking to stay the case and compel arbitration of Nitsch’s claims. Hedging their bets if the requested dismissal motion falters, the ‘toon studios want an April 23 hearing in Judge Koh’s San Jose courtroom on this motion, which they assert is binding under two employment agreements Nitsch had with DWA in 2007 and 2010.
“A court must compel arbitration where (1) a valid arbitration agreement exists and (2) the arbitration agreement encompasses the claims at issue,” says the 14-page motion (read it here). “Here, there can be no question that Nitsch entered into valid arbitration agreements with DreamWorks Animation. The agreements expressly provide for arbitration under AAA (American Arbitration Association) Rules. As such, they clearly manifest the parties’ intent that questions of arbitrability be decided by the arbitrator. Furthermore, the assertion of arbitrability is not wholly groundless. The broad language in Nitsch’s agreements plainly encompasses his compensation-based claims for antitrust violations and unfair competition.”
Weaving legal knots, the gaggle of studios is actually seeking three nicely interconnected orders in this motion. An order that Nitsch must arbitrate his claims against former employer DWA and a perhaps over-reaching order that the visual effects artist must arbitrate his claims against Disney, Sony and the others. Lastly, they want an order putting the whole case on ice while Nitsch’s claims are before the arbitrator. There is a nice symmetry to all this. Not only does it hit the pause button on Nitsch’s allegations and an embarrassing public airing of them, but with the matter being a consolidated case, getting those orders would pretty much freeze Cano and Wentworth’s claims too.
Let’s see if Judge Koh will go for any of it or Sony and Blue Sky’s additional attempt to seal portions of emails from then Blue Sky exec Chris Meledandri and others as well as the likes of Pixar’s internal “Competitors List” document (read it here).
Fitting a big deal case like this, the studios are represented by a slew of big time law firms such as Gibson, Dunn & Crutcher, Covington and Burling, Orrick, Herrington & Sutcliffe LLP, Williams & Connolly plus McManis Faulkner.
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