November 20, 2020 12:28pm
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WGA; WME; CAA
UPDATED with more details: CAA and WME have asked a federal judge to deny the WGA East and West’s request for an eight-week continuance of the hearing date on the agencies’ motion for a preliminary injunction that would force the guilds to drop their group boycott against the agencies. A hearing is currently scheduled for December 18, but the guilds wants it put off until February 12. CAA, however, told the judge that “Any further delay puts at serious risk CAA’s relationship with WGA members and guarantees the loss of opportunities that will never be regained.”
Bryan Lourd, CAA’s managing partner, said in a declaration filed today that “It is my understanding that the WGA and its counsel now seek to delay resolution of CAA’s motion by two months until February 2021 so that the WGA’s counsel can take discovery. That delay is unacceptable, and further evidence that the Guilds’ leadership’s strategy is not to make a deal with CAA, but in fact to do as much harm as possible to destabilize and destroy CAA’s ability to work with writers.”
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Earlier this week, WGA attorney Casey Pitts asked U.S. District Court Judge Andre Birotte Jr. for the continuance, saying that “As counsel for CAA is aware, the timing of CAA and WME’s filing is extremely inconvenient for me. Since late January, my husband and I have planned to take off the week of Thanksgiving (Saturday, November 21 through Sunday, November 29) in order to celebrate a significant life milestone. I will not be working during that time. On November 5, 2020, during a phone call with CAA’s counsel Patrick Somers to discuss deposition timing, I informed Mr. Somers that I would be taking this time off. Many of my co-counsel are also unavailable next week. Stacey Leyton, Ethan Litwin, and Andrew Kushner will all be unavailable for portions of the holiday week.”
“Every minute that the Guilds engage in more delays, ignore court orders to mediate, and rebuff CAA’s agreement to the Guilds’ own terms, writers lose out,” CAA said in its motion today. “It is inexcusable that the Guilds still deny thousands of their own members the opportunity to benefit from the advocacy of their preferred agents in a challenging marketplace. CAA has agreed to stop packaging and has reduced its ownership in affiliate production to the level the Guilds insisted upon. What in the world are the WGA leaders legitimately protecting writers from at this point? The answer, of course, is that the Guilds’ leaders are not protecting writers, they are serving their own interests— ratcheting up their self-declared “power grab” from CAA and WME—in violation of the antitrust laws and at the irreparable expense of CAA and the Guilds’ own members. The Court should not countenance the Guilds’ delay strategy by postponing the hearing in the matter beyond the 28-day notice period that almost all preliminary injunction motions receive in this District. The Guilds’ ex parte application should be denied.”
The dispute arose in April 2019 when the WGA ordered its members to fire their agents who refused to sign the guild’s Code of Conduct, which banned packaging fees and agency affiliations with related production companies. Since then, every major agency except CAA and WME have signed a modified code that phases out packaging fees and reduces ownership interests of production companies to just 20%.
CAA thought it had a deal with the guilds to months ago to end their long-running legal battle over packaging fees its affiliation with wiip, its corporately related production entity. The WGA, however, said no such deal had been reached, citing outstanding issues over the CAA ownership of wiip.
Lourd, in his declaration, said that “CAA prides itself on finding and creating opportunities for clients-in good times and bad. The time is now for CAA to get back to what it does best in representing WGA members so that CAA can find and create opportunities for them. Each day that passes without any form of resolution magnifies that harm exponentially. CAA agents and their former clients do not have the time to wait for a resolution any longer. Numerous WGA members have contacted me about the need to end the dispute now because they cannot hold out any longer waiting for the WGA to franchise CAA. They have made clear that they are suffering real harm, despite the WGA’s rhetoric to the contrary, and that they need and want to work with CAA. A delay of even a month, let alone two, puts at serious risk CAA’s relationship with WGA members and the loss of unique opportunities. It is inexcusable that the WGA still denies thousands of its own members the opportunity to benefit from the advocacy of their preferred agents in a challenging marketplace. CAA has agreed to stop packaging and has reduced its ownership in affiliate production to the level the WGA insisted upon. There is simply no justification for the WGA’s response, and, respectfully, it is essential that this Court address the issues raised by the Motion without any further delay.”
Lourd went on to say that the WGA’s recent actions and statements have made clear that it “is in no hurry to sign CAA to the Franchise Agreement,” and that the agency “has permanently lost long-time clients to other talent agencies and unlicensed managers. Despite condemning agencies for accepting packaging fees, the Guilds have turned a blind eye to the unlicensed managers who receive both packaging and producing fees and have rushed (with the Guilds’ active encouragement and promises of indemnification against violations of the Talent Agencies Act) to fill the void left by the Guilds’ boycott of CAA. Some CAA agents have left to become managers and represent the very writers and showrunners that the WGA has ordered, on pain of discipline, not to work with CAA. As each day goes by, CAA faces additional permanent losses of clients and defections of talent agents. Each new loss magnifies the impact of the prior losses on CAA’s business, posing an existential threat to CAA’s representation of writers and showrunners if the boycott does not end now.”
WME said that its motion for preliminary injunction, “was filed on November 18 following months of fruitless negotiation on a new franchise agreement. October 16, 2020 was the inflection point. On that date, the Guilds sent a letter stating in no uncertain terms that despite all of WME’s concessions they had no intention of franchising WME, and revealing that the Guilds had been roping WME along the whole time. It was only then, with new evidence and new (and irreparable) harm mounting, that WME determined that it had no choice but to seek a preliminary injunction. The Guilds have not come close to establishing the requisite good cause to delay WME’s motion for eight weeks. The Guilds do not dispute that eight more weeks of its unlawful group boycott will cause WME to lose more clients and more employees – classic irreparable harm. Instead, they obfuscate by misrepresenting WME’s filing as a delayed reaction to two other agencies signing franchise agreements with the Guilds during the summer. That is false. WME’s Motion and evidence are crystal clear that the reality that the Guilds’ negotiations were a charade, and the stark evidence that their boycott is motivated by the illegitimate objective of putting WME out of the business of representing writers, came to light on October 16 and the next few days. This was after WME had succumbed to the pressure of the group boycott and said ‘yes’ to the Guilds’ demands on packaging and the 20 percent ownership cap on content affiliates.
“The Guilds premise their request for two months of delay on their desire for expedited discovery in connection with WME’s motion, but…they have not demonstrated good cause for the discovery or the delay. To the contrary, all of the critical fact issues raised by WME’s motion are based on the Guilds’ conduct and information already available to them. The Guilds’ extraordinary request for extensive expedited discovery before responding to WME’s Motion is nothing more than another pretext for delay.”
CAA’s motion says that “Ignoring the potential harm to CAA and WGA members, the Guilds point to the Thanksgiving holiday and the vacation schedule of the Guilds’ counsel. Under the Court’s rules, it is worth noting that the Guilds’ opposition, which is due twenty-one days before the hearing date, not including Court holidays, is actually due on Wednesday, November 25 – before Thanksgiving. But CAA, as it made clear in the parties’ meet-and-confer, has no objection to reasonably accommodating counsel’s holiday schedule. CAA’s counsel (as well as WME’s counsel) suggested to Guild counsel that CAA would not oppose a request by the Guilds for more time to file their oppositions while maintaining a December 18, 2020 hearing date, or for a non-Friday hearing date in December (e.g., December 21), so long as the motion could be promptly heard, in all events before the end of the year. The Guilds flatly rejected that proposal. They stated that they would not agree to any briefing schedule with a hearing date in 2020, and that there was ‘no room’ to keep discussing the matter. Clearly, the issue for the Guilds is not really its Thanksgiving holiday for counsel, but a desire to delay the hearing date so that harm to CAA can continue unabated.”
WME’s motion notes that the guilds “assert that one of their counsel is taking a nine-day vacation until November 29 and three others have unspecified conflicts for portions of next week. WME counsel has conflicts and commitments, too – but time is of the essence. And WME made a number of proposals to give the Guilds a reasonable extension to address their scheduling issues while still permitting the hearing to go forward in 2020.”
In his declaration, WME attorney Jeffrey Kessler said that “With respect to the Guilds stating that they need expedited discovery . . . These pending discovery requests are not relevant to the issues on WME’s motion…Nor is it correct that WME has stonewalled any of this discovery. WME agreed to produce substantial documents from its centralized packaging files — and to date has produced nearly 60,000 pages of such documents. On the other hand, the Guilds have produced only 27,690 pages of documents to date.”
WME, he said, “also has yet to receive any substantive responses to the multiple third-party subpoenas that were served by WME and CAA in this action four and a half months ago. For example, WME served subpoenas on members of the Guilds’ Negotiating Committee in early July and have not received a single document in response, despite the fact that their counsel (who also represent the Guilds) previously agreed to do so by the end of October.”