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Anti-SAG-AFTRA Lawsuit Raises Many Issues, Targets Union Leadership (Analysis)

Earlier Litigation

The central allegations of the suit -- namely, that the union has improperly withheld funds and stonewalled requests for information about millions of dollars held in trust by the union, and that the union has no authority to collect foreign royalties -- are not unfamiliar. Whether Hollywood unions even have the right to collect foreign royalties, let alone on behalf of nonmembers and/or for movies and TV shows that aren’t under their jurisdiction, was the subject of three state-court class-action lawsuits -- one each against the DGA, SAG and WGA -- filed in the mid-2000s.

In essence, the unions contended that without their willingness to step up and take on the collecting and disbursement role, all of the collected monies would have gone to the studios and producers -- or have been retained by foreign collecting societies. Meanwhile, the plaintiffs argued that the unions cut a bad deal with the studios (i.e., that more or all of the monies should go to talent), that they had done a poor job administering, accounting for and disbursing the sums they do receive and that they had unlawfully retained a large portion of the foreign royalties due performers.

Those lawsuits were settled, with the unions permitted to make collections and disbursements, subject to reporting. Attorney Neville Johnson, who filed all three suits, says the process since then has not been smooth.

“The DGA is very closed and uncooperative in providing information … and is hostile to those making inquiries,” Johnson told THR. In contrast, he said, “the WGA seems to be making progress, but we’re getting anecdotal evidence that they’re uncooperative with members inquiring about payments.”

Regarding SAG-AFTRA, Johnson said that two consultants are just starting their examination of the union as part of a reporting process set up in the settlement of the Osmond case against SAG. The new lawsuit “raises very serious questions about SAG-AFTRA’s administrative process,” Johnson said. “We hope the plaintiffs are successful in opening the books and relevant agreements.”

Johnson is not connected to the new suit -- which, in fact, would effectively undo the Osmond settlement by requesting appointment of “an independent body” to collect and pay foreign levies received in the U.S.

Whether the latest suit, filed in federal court, is barred by the settlement of the earlier state-court action is likely to be hotly disputed. Wise told THR that unlike the new suit, the Osmond action was not filed under federal labor law, did not address residuals, did not “seek to enforce a member’s rights to accountability and transparency in Union finances” and did not encompass AFTRA’s finances. She suggested that these differences would insulate the new action from any preclusive effect of the old. In addition, a Sept. 11, 2012, letter from individuals who later became the plaintiffs to the union co-presidents said that “we the undersigned were either among the 31 performers who either opted out of the Osmond litigation or were never even given notice of the Osmond litigation.”

The union responded that “it’s incredible that anyone would think that yet another lawsuit rehashing the same territory would be helpful. All it will do is waste further member money and union resources on unnecessary legal fees and defense costs.”

In addition, the union said that only three of the plaintiffs had opted out of the Osmond litigation.

Litigation and Elections

Also an issue: The new suit “seek(s) to recover damages on behalf of members and non-members alike,” yet is not filed as a class action. The union told THR that this is improper pleading and said that the Federal Rules of Civil Procedure (FRCP) and case law make it clear that litigation is pursued solely on behalf of the named parties unless a class action under FRCP 23 is initiated.

In addition to Asner, the plaintiffs in the suit are Clancy Brown, George Coe, Tom Bower, Dennis Hayden, William Richert, Louis Reeko Meserole, Terrence Beasor, Alex McArthur, Ed O’Ross, Roger Callard, Steven Barr, Russell Gannon, Stephen Wastell, James A. Osburn, and Eric Hughes aka Jon Whiteley, who identify themselves collectively as the United Screen Actors Committee (USAC). Several are former SAG board members.

Although operating under a new moniker, several of the individuals have been plaintiffs in previous lawsuits against SAG prior to the merger with AFTRA. Hughes, who is also a WGA member, was an objector to the settlement of the state-court action against that union as well as an objector to the Osmond settlement.

Some of the USAC plaintiffs were associated with the SAG political group MembershipFirst, which controlled the union from 2005 through early 2009. It’s not known, however, whether USAC will operate as a political group in this year’s SAG-AFTRA elections, which are already in the early stages. Nominating petitions have been available since mid-May and are due back June 14. Candidate lists will be released several days thereafter, but until then the identity of candidates is not publicly known.

Given the timing, the litigation will likely be reflected in the election as an effort to tie the current elected leadership to the alleged issues surrounding foreign royalties. White was appointed as national executive director in January 2009 at a time when the union’s board was narrowly controlled by the same political groups -- including L.A.’s Unite for Strength -- that control the union today. That appointment came with the firing of then-director Doug Allen, who was identified with MembershipFirst. Three years later, the union membership voted 82 percent in favor of the merger, a stunning reversal of fortune for MembershipFirst.

“Our membership knows and understands what the union is doing, and our plans for the future have been validated by the overwhelming vote of the membership approving the constitution and merger plans,” said Crabtree-Ireland. “Historically, our members have expressed their collective frustration with people who try to use the legal system to interfere with our democratic processes.”