Judge Rejects Antitrust Lawsuit Over Studio Antipoaching Pacts

Sony, Disney and DreamWorks Animation are able to dismiss a class action lawsuit from visual effects workers who alleged being denied better work opportunities via a conspiracy.
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George Lucas

On Friday, a California federal judge threw out a lawsuit alleging an antitrust conspiracy by Sony, Disney, DreamWorks Animation and others.

A consolidated lawsuit accused the studios of collaborating to deny workers in the visual effects community better work opportunities. In an opinion, U.S. District Judge Lucy Koh says the plaintiffs were too late in filing their complaint and hadn't offered a valid reason to overcome statute of limitations.

The lawsuits from Robert Nitsch Jr. and others followed an investigation by the U.S. Justice Department in 2010 and subsequent litigation against Pixar, Lucasfilm, Apple, Google, Adobe and Intuit. Those companies arrived at settlements, but controversy over alleged antipoaching pacts spurred more litigation.

In the Nitsch lawsuit, combined with others, the plaintiffs alleged a scheme not to actively solicit each other’s employees dating back to an agreement worked out by George Lucas and Pixar president Ed Catmull. In the middle of the last decade, Catmull allegedly brought other studios into the fold of the antipoaching agreement, and according to the plaintiffs, personnel from DreamWorks, Pixar, Lucasfilm, Disney, ImageMovers Digital, Sony, Blue Sky and Digital Domain met at least once a year in California.

The meetings were said to have been organized by Croner Company, which collected industry-specific salary information, and at the meetings, the companies "agreed upon and set wage and salary ranges" for workers. The plaintiffs also accused the companies of communicating with each other on the side over compensation issues and more.

Judge Koh rules under dueling arguments that antitrust and unfair competition claims should accrue from the time plaintiffs were injured rather than from the time plaintiffs discovered their injuries.

"The Court observes the rather conspicuous absence of specific dates for many of Plaintiffs’ factual allegations, but those allegations that do contain specific dates all pre-date 2009, with the vast majority occurring between 2004 and 2007," she writes.

This puts the claims outside the applicable four-year statute of limitations, something that the suing workers could only overcome if they alleged "continued violations" or "fraudulent concealment."

On the first, the judge waives away plaintiffs' arguments of "continued violations" without allegations of wrongful communications or specific conduct in the last few years. She also rejects the theory that plaintiffs "suffered antitrust injury each time they received 'price-fixed' compensation," saying that it doesn't rise to an "overt act" by any of the studios.

The judge also can't find "fraudulent concealment" from supposed secret meetings, efforts to minimize written records of the alleged conspiracy and efforts to mislead the public through use of the Croner compensation survey. Being secret is not enough.

"Here, while Plaintiffs do provide detailed allegations of when and where certain Defendants met and conspired, these allegations do not support the conclusion that Defendants took active, affirmative steps to mislead Plaintiffs about the existence of Plaintiffs’ claims," writes Judge Koh. "Instead, Plaintiffs’ allegations show only that Defendants engaged in a conspiracy, that 'by nature [is] self-concealing.' ”

The motion to dismiss is granted, though the plaintiffs have been given 30 days to attempt an amended lawsuit that cures the deficiencies.

Email: Eriq.Gardner@THR.com
Twitter: @eriqgardner

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