CAA has filed a motion to dismiss the WGA’s lawsuit against the Big 4 talent agencies, asking the court to remove the guild as a complainant because it allegedly lacks standing under state law to represent members in such a case.
The lawsuit, filed in Los Angeles Superior Court on April 17, accused the agencies of violating state and federal laws by taking packaging fees on TV shows they packaged. The longstanding practice, the guild’s suit claimed, “Constitute unlawful kickbacks from an employer” in violation of the Taft-Hartley Act, which makes it unlawful for employers “to pay, lend, or deliver, or agree to pay, lend, or deliver, any money or other thing of value … to any representative of any of his employees who are employed in an industry affecting commerce.”
CAA Answers Packaging Fees Lawsuit, Calls Allegations “Preposterous”
CAA has also moved to strike these unlawful kickback allegations on the grounds that the federal anti-bribery statute is confined to the bribery of union officials, and doesn’t apply to package fees or other commercial dealings.
In its latest filing, CAA said that “The WGA does not allege that it has a fiduciary relationship with CAA. Instead, the WGA asserts a breach of fiduciary duty claim on behalf of the individual plaintiffs and all unnamed members of the WGA who have ever been represented by CAA. The law prohibits such a claim.”
“The circumstances in which a union, like the WGA, may assert a claim on behalf of its members are limited,” CAA said in its latest answer. “To do so, a union must establish that it has ‘associational standing,’ which requires proof that neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.”
“This problem in the WGA’s claim is not hypothetical,” CAA said, noting that “there are unique issues as to each individual plaintiff that demonstrate the plaintiff’s knowledge and consent to the use of packaging on particular projects. These facts are supported by contemporaneous documents about the interactions particular agents had with particular individual plaintiffs. Those facts, which are specific to each individual writer client, could — and should — lead a trier of fact reasonably to find that the writer was aware of any potential conflict of interest and consented to it. This means that the WGA’s claim cannot be brought in a representative capacity because the validity of such a claim is subject to individual proof and individual member participation.”
CAA claims that “the union cannot bring the cause of action” because “whatever injury must have been suffered is peculiar to the individual member concerned, and both the fact and extent of injury would require individualized proof.” The courts have ruled that there can be no associational standing when claims “require individualized proof in order to both determine liability and accord relief.”
“The law is well established that the scope of a fiduciary’s obligations depends on specific facts of the case,” CAA said in its filing. “This, in turn, requires, among other things, proof that the fiduciary engaged in conduct that was adverse to the interests of his principal. That assessment necessarily is individualized because a fiduciary does not breach its duty if the principal consents to the conduct. Indeed, a required element of proof for a breach of the fiduciary duty is that the plaintiff did not give informed consent to the fiduciary’s conduct.”
As in its first answer to the suits brought by named plaintiffs and former CAA clients David Simon and Meredith Stiehm, CAA says that named plaintiffs Patricia Carr, Ashley Gable, Barbara Hall, Deric Hughes — all of whom were once represented by the agency, are “meritless.”
“Ms. Carr’s claims are meritless,” CAA said in its answer. “Ms. Carr expressly accepted the use of packaging fees in her written agreements with CAA beginning no later than August, 2000, and thus consented to their use and has waived any claim. In so doing, Ms. Carr was advised by a prominent and well-established entertainment lawyer. That attorney and Ms. Carr were aware of all packaging arrangements and neither he nor Ms. Carr ever objected to them. Not only are her current allegations false, they are untimely. Indeed, Ms. Carr never asked that CAA take a 10% commission of her earnings and forgo any packaging fee. Ms. Carr has received benefits from packaging, including saving significant money by not having to pay CAA any commission on a packaged project.It is clear that Ms. Carr’s claims are barred for many reasons, including the doctrines of waiver and consent, and the running of the statutes of limitations.”
“Ms. Gable’s claims are meritless. Ms. Gable never participated in the development of any of the shows identified in the first amended complaint and was never eligible for any form of back-end participation. For each of Ms. Gable’s projects, she was informed that the show was a package and that, as a result, she would be excused from any obligation to pay CAA a commission. Ms. Gable never asked that CAA forgo a packaging fee, nor did she ever ask that she be charged a commission instead of CAA receiving a packaging fee. It is clear that Ms. Carr’s claims are barred for many reasons, including the doctrines of waiver and consent, and the running of the statutes of limitations.”
“Ms. Hall’s claims against CAA are meritless,” CAA said. “As an initial matter, Ms. Hall does not have any valid claim against CAA because she was represented by a different agency at the time of her projects for Judging Amy and Madam Secretary. Nor could she have a valid claim against CAA. Ms. Hall as expressly informed about how packaging fees work and at no point did she ever request that she be charged a commission or that CAA forgo a packaging fee. Beginning no later than 2003, Ms. Hall was aware that Joan of Arcadia involved a packaging fee. And, more than that, CAA secured Ms. Hall a lucrative overall deal with a studio that commenced on June 1, 2007, which expressly acknowledged that CAA will receive a standard packaging fee. Ms. Hall agreed to that deal and never objected to a packaging fee, nor did she ask to pay commissions in lieu of a packaging fee. Accordingly, at the very least, Ms. Hall needed to bring a claim related to packaging by 2011. There can be no doubt that Ms. Hall’s claims are barred for many reasons, including the doctrines of waiver and consent, and the running of the statutes of limitations.
Similarly, CAA said that Hughes’ claims are also meritless. “Mr. Hughes never participated in the development of any of the shows identified in the first amended complaint and was never eligible for any form of back-end participation. For each of Mr. Hughes’ projects, he was informed that the show was a package and that as a result he would not have to pay CAA a commission. Mr. Hughes never asked that CAA forgo a packaging fee or asked that he be charged a commission in lieu of CAA receiving a packaging fee. It is clear that Mr. Hughes’ claims are barred for many reasons, including the doctrines of waiver and consent.”
The agency’s answer also said that claims by writer George Johannessen and Deirdre Mangan are “meritless” because they were never CAA clients and don’t “identify any alleged action that CAA took that directly caused (them) any harm.”
The three other agenices that are defendants in the WGA’s lawsuit — WME, UTA and ICM Partners — have until June 24 to file their answers to the complaint.
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.