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27
3 YEARS

SAG-AFTRA Merger: Lawsuit Is Repeat Performance for Opponents

The current suit is the fourth in six years –- and in a bizarre twist, the judge in a 2003 anti-merger action will now hear the current one.

SAG AFTRA Logo - P 2012

When federal judge James Otero convenes a hearing March 26 in the merger opponents’ lawsuit against SAG, don’t be surprised if his first words are, “Haven’t I seen this show before?”

Indeed he has. By a quirk of fate, the case – randomly assigned, as they generally are in the court – has ended up in front of the same judge as Scott Wilson’s 2003 suit against the guild, which sought to block the last merger attempt.

Wilson’s suit, filed a day before ballots were counted, was rejected as untimely, but no matter: the merger failed when the SAG vote fell 2 percent short of the required 60 percent supermajority.

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That result is attributed to merger opponents’ characterization of the so-called Mercer Report, which emerged as another litigation-related blast from the past when opponents cited it in the current suit. The report remained confidential and not publicly available until The Hollywood Reporter published it last week.

A day after it was filed, Wilson’s case itself was dismissed as moot.

But while Otero was granted a six-year reprieve from internecine guild disputes, SAG itself was not so lucky. Fourteen months after losing his first suit, Wilson was back in federal court – in front of a different judge – suing SAG’s then executive director, Robert Pisano, who was an architect of the 2003 merger attempt. Wilson alleged that Pisano had a conflict of interest by virtue of being on the Netflix board of directors. SAG intervened as co-defendant.

That suit too was rejected, and Wilson’s appeal was dismissed by agreement of the parties.

By that time, though, control of the guild had shifted to MembershipFirst – the group run by then-president Alan Rosenberg, current board members Anne-Marie Johnson and David Jolliffe and others – and the board voted to reimburse Wilson’s attorney fees in the 28 month suit. That was in addition, of course, to SAG bearing its own. The total expenditure of member dues couldn't have been less than several hundred thousand dollars for each side's fees.

Two years later, in 2008, it was Rosenberg and Johnson’s turn, as they joined two others in once again suing the guild. This time, they were attempting to undo the newly-elected pro-merger majority’s decision to fire executive director Doug Allen and reconstitute the guild’s negotiating committee in order to restart stalled contract talks with the studios.

Their case too was dismissed – in relatively short order – but it spawned two appeals and dragged on for eighteen months before fizzling out. The guild's legal fees were about $300,000, THR has confirmed.

The plaintiffs in the current suit will again be seeking reimbursement of their attorneys’ fees, this time asking for an order of the court if they prevail on the merits. SAG will be firing back, demanding repayment of its fees if it prevails. Both sets of papers were expected to be filed yesterday, but will probably go in on Monday.

Such fee shifting is contrary to the general rule in U.S. lawsuits, which is that each side bears its own fees and costs, but that rule doesn’t apply when statutes, such as the ones invoked here, explicitly provide otherwise.

Merger advocates are incensed at opponents’ repeated efforts – one of them successful – to get the guild to pay for litigation against itself – and the latter feel likewise about what they view as advocates’ efforts to weaken the guild and merge it out of existence.

Rosenberg, Johnson and Jolliffe now are among the plaintiffs in the current action, while Otero will reprise his role as arbiter of yet another lawsuit against SAG – the fourth in six years by merger opponents against their own union.

Email: jhandel@att.net

Twitter: @jhandel