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MAR
1
3 YEARS

SAG/AFTRA Anti-Merger Lawsuit: Court Paves Ways for Plaintiffs to Seek Attorneys Fees

The federal judge also allows merger opponents to seek damages against SAG officers –- on behalf of the union itself. The hearing on the case is set for March 26.

SAG AFTRA Logo - P 2012

Federal judge James Otero granted a motion Wednesday that allows anti-merger plaintiffs to add a claim against SAG’s officers asserting that they’ve violated their fiduciary duty to the union under federal labor law.

The new claim brings with it a demand for attorneys fees, and also interposes a demand in the name of SAG itself that the officers pay damages to the union.

The plaintiffs’ attorney, David B. Casselman of Wasserman, Comden, Casselman & Esensten, told The Hollywood Reporter that “the order fairly applies the applicable law and (was) a procedural step en route to a hearing on the merits.”

Approval of the motion was not surprising – although SAG had fought it vigorously – but only means that the court will review whether a claim might be legally and factually supportable. It doesn’t signal whether or not the court agrees with the claim.

In most areas of litigation, plaintiffs can file whatever claims they think appropriate, but sometimes – as is the case here – statutes require them to seek court permission even to assert the claim.

SAG blasted the suit when it was filed last week as “completely without merit (and a) preposterous . . . attempt at circumventing the will of the membership.” Casselman responded at the time “members are entitled to full disclosure, not half truths and misleading and unsupported promises” – a characterization of the situation that SAG disputes.

The judge’s decision on the fiduciary duty motion does not indicate whether he will award attorneys fees against SAG. Rather, it means that if the plaintiffs prevail on the fiduciary duty claim, the judge will have the discretion to award the fees.

Meanwhile, SAG has made a demand for attorneys fees against the plaintiffs, in connection with its motion to strike a California state law fiduciary duty claim using the California anti-SLAPP statute. That’s a provision that seeks to block lawsuits from deterring speech on matter of public interest.

Read about the history of merger opponents’ litigation against SAG.

The federal fiduciary duty claim is made in SAG’s name, even though the plaintiffs are suing SAG as well as its officers. In other words, they are making a claim on behalf of one defendant (SAG) against the other defendants (the officers). Although this may sound strange, it’s permissible under the statute, and is somewhat analogous to a shareholders derivative suit in corporate law.

The SAG officers, as well as many of the other board members (who, in any event, are not named in the suit), have insurance that may cover such liability if the court finds against them.

The motion for damages and cross-motions for attorneys fees are a matter of tactics rather than overarching strategy. The key demand in the lawsuit is a motion for a preliminary injunction preemptively voiding the merger referendum and preventing ballots from being tallied.

The motion, and SAG’s counter-motions – including a motion to dismiss the case altogether – will be heard on March 26, four days before the ballots will be tallied – unless the court blocks the count. The count, like most or all of SAG’s, will be conducted by an independent services company if the court permits it, not by the guild itself.

Defendants in the suit are SAG, guild president Ken Howard, secretary-treasurer Amy Aquino and vice-presidents Ned Vaughn, Mike Hodge and David Hartley-Margolin. In addition, national executive director David White is listed in the caption (i.e., title) of the case, but omitted from the list of defendants in the body of the document.

The plaintiffs are Martin Sheen, Edward Asner, Ed Harris, Valerie Harper, Clancy Brown, James Remar, George Coe, Diane Ladd, Lainie Kazan, Nichelle Nichols, Renee Aubry, Jane Austin, Erick Avari, Steve Barr, Sara Barrett, Terrance Beasor, Michael Bell, Warren Berlinger, Joe Bologna, Ralph Brennen, Alexandra Castro, Jude Ciccolella, Cynthia Lea Clark, David Clennon, Joe D’Angerio, Patricia D’Arbanville, Dick Gautier, Dorothy Goulah, Marty Grey, Sumi Haru, Angel Harper, Basil Hoffman, David Huddleston, Anne-Marie Johnson, David Jolliffe, Kerrie Keane, Peter Kwong, Kurt Lott, Barbara Luna, Eric Lutes, Stephen Macht, Michael McConnohie, Peter Antico, Susan McNabb, Phyllis Timbes, Marguerite Moreau, Traci Murray, Nicole Mandich, Larry Newman, Barbara Niven, Kathleen Nolan, Jack Ong, Peggy Lane O’Rourke, Leslie Parrish, Scott Pierce, Robin Riker, Stephanie Rose, Alan Rosenberg, Alan Ruck, Wendy Schaal, Tascha Schaal, Nancy Sinatra, Cynthia Steele, Renee Taylor, Malachi Throne, Beverly Todd, Jessica WrightandMomo Yashima. In addition, there are a number of other clients in the litigation who are not listed as plaintiffs, including Paul Edney.

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Email: jhandel@att.net

Twitter: @jhandel