Disney, Sony &; DreamWorks Toons Slammed Over Antitrust Class Action

The animation studios may want to see the consolidated class action against them — alleging anti-poaching and wage-fixing deals — thrown out of court, but the digital-artist plaintiffs say that’s not gonna happen. “Each of Plaintiffs’ federal and state causes of action is timely,” according to the response from David Wentworth, Robert Nitsch Jr. and Georgia Cano to Disney, Sony, DreamWorks Animation and other studios’ motion to dismiss. In their motion of January 9, the ‘toon companies cited the 4-year statute of limitations in such matters. They claimed that because the issue has been known since 2009 (when a Department of Justice investigation into similar dealings by high tech companies was first reported) and the first lawsuit was filed on September 8 last year by former DWA visual effects artist Nitsch, math proves their point. That’s bad math claim Wentworth, Nitsch and Cano. Correspondingly, they want the motion to dismiss effectively dismissed.

“Plaintiffs have presented a detailed Complaint which, taken as a whole, demonstrates not only the existence of a conspiracy to suppress compensation to employees in the animation and visual effects industry, but also many overt acts by Defendants to implement this conspiracy,” says the February 9 opposition from the trio (read it here). “Plaintiffs further allege the steps that Defendants have taken to ensure this conspiracy was discovered no earlier than 2013, meaning that this suit was filed well within the appropriate statute of limitations period.”

“Plaintiffs diligently investigated their injuries once this Court unsealed documents in the High-Tech litigation in 2013 and 2014, which gave the first indication of Defendants’ involvement in the conspiracy,” adds the 48-page federal court filing. “Plaintiffs promptly filed their Complaint thereafter.” A hearing on the motion is scheduled for March 26 at the federal courthouse in San Jose.

This probably is all rather amusing to presiding Judge Lucy H. Koh. The federal judge also was in charge of the High-Tech Employee Litigation by 64,000 tech workers against Apple, Google, Intel and Adobe that followed the DOJ investigation. The discovery process in that case first revealed the alleged antics of the animation companies. Last year, Koh rejected the tech giants’ proposed $325 million settlement as too low. It’s now under appeal.

Because of Koh’s detailed knowledge of the matter and the players, Nitsch saw his case as related and asked on September 16 for for the judge to take it over. She did so on September 24 and took over the other two class actions cases as well. On December 2, the trio sought to have their cases merged.

Earlier this week, Nitsch also filed paperwork rejecting DWA and other defendants’ attempt to compel arbitration on his case or a stay on the overall case, based on the employment contract he signed when at the Jeffrey Katzenberg-run studio from 2007 to 2011 – in part. “DreamWorks has no colorable argument that Nitsch must arbitrate the entirety of his claims against it,” notes a February 9 memo in opposition.

“The language of the arbitration clause, properly read, does not cover the claims in this case,” the document argues. “But Plaintiffs recognize that — as to Nitsch’s claim against DreamWorks for underpayment by DreamWorks —Defendants’ interpretation is not groundless and must be decided by the arbitrator. But under no credible reading does the clause encompass Nitsch’s claim against DreamWorks for the amount he was underpaid while employed by a different Defendant, Sony. Nor is there any reasonable argument that Nitsch’s release upon his departure from Sony applies to any Defendant other than the Sony Defendants.” This part of the case will be addressed at what could be a moot April 23 hearing in front of Judge Koh, depending on what happens at that March 26 hearing.

Daniel A. Small of DC’s Cohen Milstein Sellers & Toll PLLC; Steve Berman of Seattle’s Hagens Berman Sobel Shapiro LLP; and Marc Seltzer of LA’s Susman Godfrey LLP are lead lawyers for the plaintiffs. A collection of firms including Gibson, Dunn & Crutcher, Covington and Burling, Orrick, Herrington & Sutcliffe LLP, Williams & Connolly plus McManis Faulkner are representing the animation studios.