LOS ANGELES (CN) — A federal judge in Los Angeles has tossed the bulk of claims by the Writers Guild of America accusing three Hollywood talent agencies of engaging in illegal packaging deals that undercut writers’ pay.
Most TV and film writers work with talent agencies to find work and negotiate package deals — or contracts that bundle multiple talent for a project — with studios, often on a freelance basis. The guild claims agencies negotiate deals that favor studios’ terms and suppress writers’ maximum wages, decrease their job opportunities and cut the guild’s union fees.
William Morris Endeavor, United Talent Agency and Creative Artists Agency say in counterclaims the guild stifled entertainment industry competition by directing thousands of writers to fire agents who didn’t agree with the guild’s bid to invalidate the fees.
In January, U.S. District Judge Andre Birotte Jr. advanced agencies’ antitrust claims that the guild unlawfully directed members to fire agents who didn’t sign-on to the guild’s new labor rules.
Attorneys for the guild said in court proceedings that writers have suffered under a scheme where studios’ production budgets are fixed, writer pay has flattened and packaging fees have increased. The guild claims agencies violated their fiduciary duties by allowing close relationships with studios to conflict with their role in contract negotiations.
In court papers, attorneys for talent agencies have said writers’ alleged injuries are too complex to divide under antitrust proceedings.
In a 21-page order issued Monday, Birotte threw out the guild’s Sherman Act claim that talent agencies violated antitrust law by engaging in unlawful price-fixing when securing package deals.
“Accordingly, because [the guild’s] allegations demonstrate that they neither buy nor sell talent representation services, and that their injuries are entirely derivative of the allegedly higher prices paid by production studios, [the guild has] not shown antitrust injury,” Birotte wrote.
Birotte also dismissed without leave to amend the guild’s claims that agencies engaged in racketeering by accepting packaging fees from studios.
But Birotte denied the agencies’ bid to dismiss the guild’s claims under the Cartwright Act of per se price-fixing.
A spokesperson for the agencies did not immediately respond to a request for comment on the ruling.
The guild claims in its lawsuit the three talent agencies engaged in an illegal group boycott and threatened to blacklist other agencies that agreed to the guild’s labor rules, but Birotte granted the agencies’ bid to dismiss those claims.
Meanwhile, the guild lacks standing to bring forward constructive fraud and breach of fiduciary duties claims against the agencies, Birotte ruled.
“Here, the guilds’ allegations demonstrate that a litany of individualized assessments would be necessary to determine whether the agencies breached their fiduciary duties to individual writer-members,” he wrote.
But individual writers who are part of the lawsuit can pursue claims that agencies breached their fiduciary duties by not disclosing information on packaging fees, Birotte ruled.
Individual writers’ constructive fraud claims were not specific enough as to when fraud occurred, the order states, granting the agencies’ bid to dismiss that portion of the lawsuit.
A guild spokesperson did not immediately respond to a request for comment.