1:14pm PT by Jonathan Handel
Judge Rejects Writers Guild Bid to Dismiss Agencies’ Antitrust Case
Talent agencies suing the Writers Guild of America have made sufficiently detailed allegations that their antitrust and labor law case can proceed towards trial, a federal judge ruled Monday, rejecting the WGA’s motion to dismiss the agency claims, which include assertions that the guild — in seeking to end agency packaging fees — is engaged in an illegal group boycott that amounts to an unlawful restraint of trade.
The order was expected, as it elaborates on a tentative ruling delivered from the bench Dec. 6 by the judge, André Birotte, as previously reported. It nonetheless marks a setback for the WGA, which took something of a gamble in seeking to dismiss the lawsuit at an early stage. In ruling on a motion to dismiss a complaint, the court is required to accept the allegations in the complaint as true, which can create a high barrier to such motions — especially when the complaint is lengthy and detailed, as the agencies’ 68-page complaint is.
“Despite every attempt by the WGA leadership to avoid judicial scrutiny of their illegal actions, today the Court ruled that the agencies may move forward with their antitrust claims against the Guild,” WME, CAA and UTA said in a statement. “The actions of this Guild’s leadership have exposed its members to significant legal and financial exposure. We will continue to take all steps necessary to defend our respective businesses and will aggressively move forward to address the issues in this litigation.”
The statement added, “While the legal process runs its course, we strongly believe it is in the best interests of writers to be represented by their agents.” Last April, over 7,000 writers fired their agents under orders from the WGA.
The WGA downplayed the 18-page order. “A dismissal would have been welcomed, but we appreciate the court’s desire to have a more complete factual record,” the guild said in a statement. “We continue to move forward with our case and are confident that the evidence uncovered through discovery will prove the agencies’ conflicts of interest and breach of fiduciary duty that we have detailed in our complaint.”
That last is a reference to the WGA’s own suit against the agencies, which was filed last April in state court but now lives on as counterclaims in the federal case that the agencies filed in response. The agencies are rolling dice, too: They have moved to dismiss the WGA claims, which run to about 96 pages and encompass a range of federal and state causes of action. A hearing on the motion is set for Jan. 17.
At the heart of both sides’ claims is the dispute over packaging fees. Unions are permitted to regulate agents, but the essence of the agencies’ lawsuit is that the WGA 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 and is thereby restraining trade (a violation of antitrust law) and engaging in coercive acts amounting to a boycott (a violation of federal labor law).
Meanwhile, the WGA and a group of individual writer plaintiffs contend that agencies have engaged in price-fixing (a violation of antitrust law) by jointly setting packaging fees, a group boycott (by refusing to deal with agencies that don’t package), a breach of fiduciary duty and other claims.
A trial is set for March 2021.