Friday’s scheduled hearing on the Big 3 talent agencies’ motions to dismiss the WGA’s antitrust suit against them has been rescheduled for January 24. U.S. District Court Judge Andre Birotte Jr. gave no reason for the one-week postponement.
Earlier this month, the judge denied the WGA’s motion to dismiss the agencies’ counter-claims, and if he follows suit and denies the WME, CAA and UTA motions to dismiss the WGA’s suit, the case will be headed for discovery – and a trial that isn’t expected to begin until next year.
The dispute began in April when the WGA ordered all of its members to fire their agents who refused to sign its Code of Conduct, which banned packaging fees and agency ties to corporately affiliated production entities. The guild filed suit and WME, CAA and UTA filed countersuits.
The agencies claim that the WGA, in its nine-month campaign to end film and TV packaging, has restrained competition “on a staggering scale” through illegal means, including agreements with non-labor parties in service of a group boycott and “overly restrictive restraints in commercial markets that the union has no authority to regulate.”
The guild alleges that the three agencies’ packaging fee model violates federal antitrust laws and the Racketeer Influenced and Corrupt Organizations (RICO) Act. The WGA also claims that packaging fees violate the agencies’ fiduciary duty to their clients and constitutes “a system of illegal kickbacks and price-fixing under federal law.”
In denying the WGA’s motion to dismiss on Jan. 7, the judge noted that the agencies allege that the guild “combined with several purported non-labor groups, including (1) other talent agencies, (2) showrunners acting in a producer-only capacity who are thus exempt from the Minimum Basic Agreement (with the studios), and (3) unlicensed lawyers and managers.”
Without ruling on the merits of the case, and construing the agencies’ allegations “in the light most favorable” to them – as he is required to do under the Federal Rule of Civil Procedure – the judge denied the WGA’s motion to dismiss after finding that their allegations “raise a plausible inference that Defendants (the WGA East and West) have combined with a non-labor group in enforcing the Code of Conduct.”
Conversely, when he rules on the agencies’ motions to dismiss the WGA’s lawsuit, the judge will then have to view the WGA’s claims in a light that is “most favorable” to the guild – which could set the stage for a trial that is tentatively scheduled to being in March 2021.
After he denied the WGA’s motion to dismiss, the guild said that “A dismissal would have been welcomed, but we appreciate the court’s desire to have a more complete factual record. We continue to move forward with our case and are confident that the evidence uncovered through discovery will prove the agencies’ conflicts of interest and breach of fiduciary duty that we have detailed in our complaint.”
In their response, the three agencies said that “The actions of this guild’s leadership have exposed its members to significant legal and financial exposure. We will continue to take all steps necessary to defend our respective businesses and will aggressively move forward to address the issues in this litigation. While the legal process runs its course, we strongly believe it is in the best interests of writers to be represented by their agents.”