A federal decide on Monday dismissed most of the Writers Guild of America’s lawsuit in opposition to the main expertise businesses, together with claims that packaging charges quantity to unlawful kickbacks and had been a kind of racketeering.
U.S. District Judge Andre Birotte dismissed eight of the 14 claims introduced by the WGA in its countersuit. The countersuit, filed final fall, is a component of a broader battle between the guild and the main businesses over the observe of packaging.
The decide threw out eight of the 9 claims introduced in opposition to WME, CAA and UTA by the guild however allowed the claims of eight showrunners who joined the litigation as people, though one of these plaintiffs, David Simon, was already pressured to drop out as a result of of a earlier authorized settlement.
The decide’s ruling was seen as a setback for the WGA’s trigger within the authorized enviornment. The WGA and businesses haven’t had significant discussions in months about resolving their variations on packaging price and affiliated manufacturing entities, which spurred the guild’s antitrust lawsuit in opposition to Hollywood’s Large Three businesses.
“The WGA’s claims in opposition to the main expertise businesses had been gutted right this moment by the federal courtroom. This can be a resounding victory for CAA, UTA and WME,” the three businesses mentioned in a joint assertion. “What has turn out to be crystal clear is that David Younger, David Goodman and this WGA management have led hundreds of writers over a cliff, wasted their member dues on failed lawsuits, and left them with out brokers to symbolize and advocate for them for greater than a yr.”
Representatives for the WGA West didn’t instantly reply to a request for remark.
The battle ignited a yr in the past when the WGA imposed new guidelines for expertise brokers that symbolize guild members. The businesses balked on the guild’s effort to ban packaging and businesses having ties to manufacturing entities, which led to the mass firing of hundreds of brokers by WGA members in April 209 and sparked the present litigation in Los Angeles federal courtroom.
WME, CAA and UTA are additionally suing the WGA in federal courtroom, claiming that the WGA’s new franchise guidelines for expertise businesses quantities to an unlawful boycott and an overreach of the guild’s authority. If the case makes it to trial, the case will hinge on whether or not the businesses can show the WGA is participating in an illegal boycott. On the heels of two favorable rulings for the businesses from Birotte, company sources mentioned the Large Three had been inclined to proceed an aggressive authorized technique and “bury the WGA” in paperwork and authorized payments with discovery and deposition requests.
A trial date has been set for March 2021, and has been estimated to run 20-30 days.
The union argues that packaging charges — normal observe within the business for many years — pose a battle of curiosity, as brokers are incentivized to suppress their purchasers’ wages.
The guild has been defending the businesses’ antitrust swimsuit, and filed its personal countersuit in October. Within the countersuit, the guild leveled its personal antitrust allegations, accusing the businesses of refusing to discount individually, and as a substitute working solely via their commerce group.
The countersuit additionally alleged that businesses had set an business normal packaging price schedule, which amounted to unlawful price-fixing. Additional, the guild contended that the businesses’ acceptance of packaging charges from producers amounted to an unlawful kickback beneath racketeering regulation.
Birotte dismissed the racketeering allegations, discovering that the regulation was geared toward corrupt union officers and was not meant to use to expertise brokers.
He additionally dismissed federal price-fixing claims, discovering that the WGA didn’t have standing to carry the declare as a result of, as a union, it doesn’t purchase expertise illustration providers, and subsequently can’t declare to have been injured by a price-fixing conspiracy.
The decide additionally held that the businesses had not violated antitrust regulation by working via their commerce group.
The decide did permit the WGA to pursue its price-fixing allegations beneath the Cartwright Act, the California antitrust regulation. The guild claims that Lee Gabler of CAA and Ari Emanuel conspired within the 1990s to set the “3-3-10” TV packaging price construction, and that the businesses have since exchanged delicate info to keep up this cartel.
Birotte held that the guild pleaded sufficiently particular allegations to nudge the declare “throughout the road from conceivable to believable.”
Birotte additionally let stand the guild’s breach of fiduciary obligation and unfair competitors allegations on behalf of a number of particular person members.
The 2 sides are nonetheless in for a protracted courtroom battle, assuming they don’t attain a settlement. In January, Birotte denied the WGA’s movement to dismiss the businesses’ antitrust swimsuit, discovering a believable declare that the union’s hardball techniques had violated the regulation.
A trial date has been set for March 2021, and a trial is predicted to take 20-30 days.
Cynthia Littleton contributed to this report.