CAA Amends UTA Lawsuit to Add 3 New Claims (Exclusive)

The war over defecting agents is expanding with claims of aiding and abetting breach of contract and breach of fiduciary duty and the duty of loyalty.
Illustration by: Taylor Callery

The legal battle between two of Hollywood's most powerful talent agencies is getting bigger and more heated.

On Friday, Creative Artists Agency filed an amended lawsuit adding three additional claims against United Talent Agency and agents Gregory Cavic and Gregory McKnight, part of a group of CAA comedy agents who defected to UTA in late March. The amended complaint, a copy of which was obtained by The Hollywood Reporter, alleges that UTA and the agents induced a breach of contract, aided and abetted a breach of fiduciary duty, and aided and abetted a breach of the duty of loyalty. Those claims are on top of allegations of intentional interference with contractual relations against UTA and claims of breach of fiduciary duty and breach of the duty of loyalty against the agents that were filed in April.

In response to that suit, UTA filed a demurrer, attempting to knock out key portions of the suit at the pleading stage. But now CAA has amended its lawsuit in an effort to address those arguments and add additional claims. CAA declined to comment on the new complaint. UTA did not respond to a request for comment.

The move is the latest volley in a nasty back-and-forth between the two Hollywood agencies that began when Cavic, McKnight and about a dozen others left CAA for UTA with clients including Chris Pratt, Will Ferrell and Ed Helms. CAA called the defections a "lawless midnight raid" while UTA responded by arguing that "despite what CAA would like to believe, its front doors are not a one-way turnstile." The case, which has seen some of the town's most powerful agents sit for depositions, is being closely watched in the industry because it is one of the few times that a CAA rival has dared challenge the industry's 800-pound gorilla.

The new filing does not allege significantly different facts from its original suit, but the "aiding and abetting" claims focus on CAA's argument that UTA and some of the defecting agents recruited agents under contract to CAA to jump ship (illegally, CAA argues).

In addition, CAA has attached employment contracts to the amended complaint. They concern agents Nick Nuciforo, Jason Heyman and Martin Lesak, who were targeted in a separate private arbitration proceeding because their contracts with CAA contained arbitration clauses. The deals attached to the amended complaint, from various years between 2005 and 2012, are included as exhibits because, according to CAA, they counter UTA's argument that the agents' employment contracts violated California's "seven-year rule," which prevents personal services contracts from lasting longer than seven years. (For some background on the law, click here.)

The seven-year rule was discussed at length in the UTA demurrer, which argued that certain CAA deals were extended in such a way that they violated California law and thus are not valid. "As CAA is well aware, those employment contracts have collectively long exceeded the seven-year rule," UTA argued. "Heyman and Lesak's contracts are therefore unenforceable, rendering CAA's causes of action for interference with those contracts legally unsustainable."

Now, the amended complaint and exhibits argue that the employment arrangements with the agents were for three years and thereafter as "at will" employees. They were signed at various three- and four-year intervals. So CAA believes it has addressed those questions. (Certain elements of the contracts, including compensation, bonuses and heath coverage were redacted due to privacy concerns.)

CAA, represented by Anthony Oncidi, Jeremy Mittman and Keith Goodwin of Proskauer Rose, now alleges causes of action for international interference with contractual relations, inducing breach of contract, intentional interference with prospective advantage, breach of fiduciary duty, conspiracy to breach fiduciary duty, aiding and abetting breach of fiduciary duty, breach of duty of loyalty, conspiracy to breach duty of loyalty, aiding and abetting breach of duty of loyalty, and unfair competition.

UTA is represented by Bryan Freedman, Brian Turnauer and Sean Hardy of Freedman & Taitelman.

Email: Matthew.Belloni@THR.com
Twitter: @THRMattBelloni

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