Judge Denies WME-CAA Motion To Dismiss Remainder Of WGA Packaging Fees L:awsuit

A federal judge has denied WME’s and CAA’s motions to dismiss the remainder of the WGA’s fraud and price-fixing allegations, sending the case to trial to determine whether agency packaging fees are legal.

In his 17-page ruling today (read it here), U.S. District Court Judge Andre Birotte Jr. denied the agencies’ motions to dismiss the WGA’s claims for breach of fiduciary duty, constructive fraud, violation of California’s Cartwright Act, and violation of California’s Unfair Competition Law. The judge also denied the agencies’ motion to dismiss the WGA’s representative claim for constructive fraud and claims filed by individual guild members for constructive fraud.

The WGA East and West first sued the agencies in April 2019, but on April 27, 2020, the court granted the agencies’ motions to dismiss large portions of the WGA East and West’s case, including their claims for federal price-fixing, violation of the Corrupt Organization Act, federal and state group boycott, breach of fiduciary duty and constructive fraud, individual members’ claims of constructive fraud and Unfair Competition Law claims brought by the guilds.

At that time, however, the judge let stand the guild’s price-fixing claims under California’s Cartwright Act, the Individual Counterclaimants’ claim for breach of fiduciary duty, the Individual Counterclaimants’ claim under California’s Unfair Competition Law, the guild’s claim for declaratory relief and writer Barbara Hall’s claim for breach of contract and promissory estoppel. UTA, which originally was a party to the lawsuits, has since reached a deal with the guilds and has been dropped from the case.

The agencies then sought to dismiss those remaining claims, which the judge has now denied, sending the case to trial next March.

WGA West president David A. Goodman hailed the judge’s ruling to allow the case to move forward.

“We are pleased with today’s ruling of the court to deny WME and CAA’s motion to dismiss our claims. Our goal since the beginning of this campaign has been to realign agencies’ interests with those of their writer clients. As this case moves forward we are confident that the evidence uncovered through discovery will prove the agencies’ breach of fiduciary duty, constructive fraud, and violation of California’s Unfair Competition Law that we’ve detailed in our lawsuit.”

CAA attorney Richard Kendall said that “This is simply the court saying the guild has the right to try to prove their false allegations. We remain confident we will prevail at that time.”