Attorneys for WME and the WGA appeared virtually in federal court Friday for a hearing on WME’s request for a preliminary injunction that would end the guild’s boycott of the agency until their antitrust case can go to trial next August. WME is the last major agency not to have signed the guilds’ franchise agreement, which phases out packaging fees and reduces ownership interests in production compfaanies to just 20%. CAA signed the agreement on Wednesday.
During the 70-minute hearing, U.S. District Court Judge André Birotte Jr repeatedly urged WME and the union to settle their dispute before it goes to trial. “Come on folks. Get together. Get this done,” he told the 11 lawyers who attended via Zoom.
At the start of the hearing, Birotte gave an overview of his understanding of the case. “It seems to me that what this litigation is about is two sides who seemingly want the same thing, and seemingly want it to happen sooner than later. It just looks like they disagree about how to do it. Both sides want to advocate for the writers. The agencies want to zealously represent them, and the guilds want to protect them. I say that because I hope you will keep that in mind as you move forward. And I say that because I worry, and I could be wrong, that in the heat of litigation, with exceptional lawyers and executives – and the egos that may sometimes come with that – and when you combine that with the money and power dynamics, folks can lose focus. And those most affected by litigation, I worry, are sort of laid out in the wings. I think it’s fair to say that the folks that are most affected by this litigation are not us. It’s not the lawyers, not likely even the executives. It’s the writers and the agents who have been in this state of tumult while you all fight loudly and publicly about this.”
The dispute arose in April 2019 when the WGA ordered its members to fire their agents who refused to sign the guild’s Code of Conduct, which banned packaging fees and agency affiliations with related production companies. Since then, every major agency except WME has signed a modified code that phases out packaging fees and reduces ownership interests of production companies to just 20%. After the news that CAA signed Wednesday, WME said the deal between CAA and the guild “is a positive development and suggests a path forward for WME to reach an agreement as well.”
“Now don’t get me wrong,” the judge continued. “I love having excellent lawyers come in, argue cases – that’s what I get paid to do. So it’s not that. But we all go home at night, and I’m not sure how much we are affected, in a real sense, by virtue of this litigation. I don’t want to minimize or suggest that being high-powered lawyers representing high-pressure clients is not stressful and has its own challenges. But I would submit that that pressure and stress is far less than some of the things I read in the (court) papers – you know, someone wrestling with the decision of whether or not to terminate a relationship with someone who’s been a confidant and trusted advisor from the beginning until now. People who just want to work, but at the same time, they want to be treated fairly; and people who don’t want to feel boxed in by some sort of deals or are being held at ransom by some sort of deals that have little or no impact on them.
“I say that to say that this dispute affects a lot of folks here. And my sense is that there is a lot of real worry, anxiety and concern. People are being forced to make decisions that they never thought they would have to make. They’re having to fear about their livelihoods, their well-being — that of their families — and this is all going on while we’re trying to navigate through a global pandemic.
“And again, this is just me, for whatever it’s worth, giving my thoughts and observations. WGA, clearly, you have raised an issue that has resonated with the people. But again, there are a lot of folks out there who are stressed out about this. You are asking for a paradigm shift, and I’m not criticizing that at all. But that takes time, and I just hope you consider that as you move forward.
“Similarly, WME, it looks like, from what I’ve been seeing in the flurry of papers that have come across chambers, you may be the last person standing. And if in fact, as I’ve read, your client is encouraged by the settlement that CAA submitted in the last couple of days, and your client believes and suggests a path forward, I would submit you need to get that shovel that you’ve been using to dig out the snow and create that path forward for the agency. Find a path; try to resolve this. Real people are paying a price during this dispute. And I would submit that the folks need and want you all to try to work this out. They are grateful to the union for protecting their interests, and they’re also grateful and thankful to the agencies that have helped them achieve their dreams — to make it big in Hollywood.
“With that, I would hope you all would think about this and put your Twitter fingers back in their holsters, stop all this hashtag rhetoric, and get about the business of trying to make sure that the folks that matter get the best representation and that they are all treated fairly.”
After attorneys for both sides presented their oral arguments summarizing their cases for and against a preliminary injunction, the judge concluded the hearing by saying he would take the matter under submission, adding: “I hope the things I said at the beginning of this hearing will resonate.”
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