Although an April 27 federal court ruling struck a severe blow to efforts by the Writers Guild of America to force packaging fee and ethical reforms on the nation’s biggest talent agencies, the fight that has seen 7,000 writers fire their agents and has torn Hollywood apart for a year is far from over.
It won’t be stopped by the current pandemic and resulting recession, high unemployment, mounting legal costs, or the reality that the WGA’s master contract with producers, major studios, and those very same talent agents expires on May 1, threatening crucial health benefits.
Both sides are adamant in their positions and believe deeply that they are right—and both appear to believe their continued existence is dependent on the outcome.
In April 2019, a series of negotiations between the guild representing screenwriters and the talent agents who represent them broke down in acrimony.
The writers charged that agents were putting their own interests ahead of the best interests of their clients, most notably through lucrative “packaging deals,” which involved the agency getting a share of a show or movie’s profits.
The writers were also angry that the top agencies—notably Creative Artists Agency (CAA), ICM Partners, William Morris Endeavor, and United Talent Agency (UTA)—were expanding into being TV and film producers, putting them on both sides of the bargaining table. The agencies argued production was in separate subsidiaries.
The agents were willing to discuss numerous issues, but not the historic structural changes demanded by agents.
The guild—led by David Young, a career labor organizer who had worked for the garment workers and teamsters and guild president, scriptwriter David Goodman—compared agencies’ packaging fees to organized criminals demanding payoffs.
“David’s tough,” Goodman told The Hollywood Reporter of David Young in January. “David’s protecting the interests of writers, and he’s doing it at our request. We’re challenging the agencies’ business model and David has become their target.”
Less than a week later, the guild filed a lawsuit charging the four biggest agencies with breach of fiduciary duty and unfair competition, invoking the RICO acts designed to fight corruption. The agencies countersued with antitrust lawsuits, charging that the WGA was leading an illegal boycott.
At a contentious hearing on January 23 in federal court in Los Angeles, the two sides faced off over antitrust laws, an anti-kickback statue, allegations of racketeering, and a technical argument over whether the WGA even had standing to bring the suit.
In court on Monday, U.S. District Judge André Birotte appeared to side with the agencies. He threw out 14 WGA claims in the guild’s countersuit and nine claims brought by the guild. Claims made by eight showrunners who joined the litigation as individuals will be allowed to continue.
He dismissed the racketeering allegations, ruling the law was aimed at corrupt union officials not talent agents. He held that the agencies didn’t violate antitrust legislation by consulting and jointly negotiating through their trade group. The key claims under federal law of price fixing and racketeering were dismissed with prejudice, meaning they can’t be refiled.
He ruled the WGA did not have standing to bring the federal price fixing claim since the guild does not actually buy any talent representation services.
The judge left intact price-fixing charges under California law, and set a trial on that for March 2021.
The talent agencies celebrated the court ruling as a “resounding victory,” adding: “What has become crystal clear is that David Young, David Goodman, and this WGA leadership have led thousands of writers over a cliff, wasted their member dues on failed lawsuits, and left them without agents to represent and advocate for them for more than a year.”
“While the agencies value the WGA’s role,” the agency statement added, “the Guild’s current leadership has overstepped, recklessly damaging personal and professional relationships and forcing agents to defend their integrity and their livelihoods against the Guild’s false claims and inflammatory rhetoric.”
Goodman said in a statement that he was pleased some of their key points were still alive: “We obviously would have preferred a complete victory. But the court’s decision assures that the guild’s core claims, namely that packaging is a breach of fiduciary duty and that agencies have committed antitrust violations by fixing the price of those packages, will be explored through discovery, and ultimately in court. That’s what we wanted.”
In an interview last July, Goodman addressed the possibility that the push for major restructuring might not succeed, but explained that he felt it would be worth the effort all the same.
“We took on this fight that nobody else would take on,” Goodman said. “And we have changed the conversation. We have brought it out into the light. No matter what happens going forward, we’ve already succeeded because we put something out in the light, that nobody was talking about but everybody knew about and most everybody hated.”
One thing’s for sure: this is far from over.
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