Appeals Court Declines to Revive Antitrust Suit Against Big Talent Agencies

With respect to packaging fees, the 9th Circuit sees only allegations of parallel conduct and using a lawful trade organization.
Illustration by: Laemeur

Big talent agencies can breathe a bit easier after the 9th U.S. Circuit Court of Appeals affirmed the dismissal of an antitrust lawsuit over "packaging fees," otherwise known as the way that WME, UTA, CAA and ICM line up the major creative elements for a television project in exchange for a portion of profits.

Lenhoff & Lenhoff, Charles Lenhoff's boutique agency, sued UTA and ICM with the allegation that packaging was the "uber agency" way of locking control of the scripted-series market. Lenhoff's complaint asserted that when it comes to packaging the talent on such programs, these big agencies work almost exclusively with each other, coerce television networks and studios, and harm the marketplace by locking writers, actors and directors — especially minorities and their reps — out of the system.

The lawsuit generated contentious briefs from some of Hollywood's top lawyers, but the problem for Lenhoff, as earlier articulated in a federal court decision in April 2016, is that he hasn't pled sufficient facts to support the notion of conspiracy.

A 9th Circuit decision on Friday reiterates the conclusion that, at best, Lenhoff "pleads parallel conduct without alleging the 'something more' required to state a claim."

The judges aren't impressed either with Lenhoff's nod to how UTA and ICM allegedly used the Association of Talent Agents to get the Screen Actors Guild to back away from Rule 16(g) of the franchise agreement, which required agents "to be independent" and not "possess any financial interest in a production or distribution company or vice versa."

According to the 9th Circuit panel, "these facts amount to nothing more than an allegation that defendants participated in a lawful trade organization, and mere participation in trade-organization meetings ... does not suggest an illegal agreement."

The last legal word on "packaging fees" may not be written, but with the appellate court's short, nonprecedential memorandum, this particular dispute won't generate anything groundbreaking.

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