12:44pm PT by Jonathan Handel
Court Appears to Reject Writers Guild Motion to Dismiss Agency Case
A federal judge at a hearing in downtown Los Angeles issued a non-public tentative ruling Friday morning allowing the major talent agencies to proceed with their antitrust lawsuit against the Writers Guild of America, according to a source who has read a copy of the ruling.
The move marks a setback for the union in its legal battle with WME, CAA and UTA.
“I thought [the tentative ruling] was extremely well-reasoned and persuasive,” said CAA’s attorney, Richard Kendall of Kendall Brill & Kelly.
Judge André Birotte indicated that he would issue a final ruling by the end of next week or the beginning of the following week, but nothing in the tenor of his intricate questioning of lawyers from both sides suggested that he intended to reverse his view, articulated in a tentative ruling said to be 12 to 16 pages long, that the talent agencies had pled a sufficiently detailed claim of illegal boycott by the Writers Guild such that the case could proceed towards trial.
“We appreciated the thoughtfulness and time the court gave to this issue,” said the WGA. “Our lawyers clearly articulated why the agencies’ complaint should be dismissed. We look forward to seeing the court’s ruling.”
Unions are permitted to regulate agents, but the essence of the agencies’ lawsuit is that the Writers Guild exceeded its rightful authority when it promulgated an agency Code of Conduct banning packaging fees and affiliate production, and that the guild is therefore conducting an illegal boycott of non-signatory agencies in violation of antitrust law.
The 80-minute hearing, held in a modern, airy courtroom before a capacity crowd of about 50 spectators, was somewhat unusual in style: rather than inviting attorneys from each side to make their case, the judge — having basically made up his mind based on the written briefs — posed a laundry list of antitrust and labor law questions. A number of those queries focused on showrunners. A lawyer for the WGA, Stacey Leyton, acknowledged that non-writing showrunners are not restricted in their choice of agents. “The Code doesn’t cover showrunners acting only as producers,” she said, seeming to contradict a guild FAQ, since removed, that had described producing and writing services as inextricably intertwined.
The other, and probably more central focus, of discussion was whether the guild’s Code, now also known as a franchise agreement, improperly regulates the way television product is produced, thereby affecting markets beyond the labor market for writers. That question seemed too knotty to dispose of without further factual development.
The judge’s ruling, assuming the tentative opinion stands, does not mean he agrees with the agencies’ contentions nor that he agrees with the Writers Guild position, but rather that he finds that the agencies have made enough of a case in their complaint that they are entitled to proceed further down the road towards trial.
The agencies’ claims are not the only ones in play. The Writers Guild is also suing the agencies, alleging that packaging fees violate the law in various ways. The agencies have moved to dismiss those claims, and a Jan. 17 hearing will be held separately on that motion to dismiss.
Over 7,000 writers fired their agents in April and the guild initiated litigation against the four major agencies at that time. ICM Partners has since dropped out of the legal battle. A number of midsize and smaller agencies have signed the Writers Guild franchise agreement, which in its latest version permits packaging fees to continue during a sunset period and a limited degree of ownership by agencies of affiliates that engage in production.
Dec. 6, 3:55 p.m. PST Updated with statements and additional detail.