Suit Also Charges That the Agencies’ Ongoing Campaign to Preserve Packaging Fee Model Violates Federal Law
LOS ANGELES – The Writers Guild of America today expanded its litigation against the industry’s major talent agencies (WME, CAA and UTA) by filing claims in United States District Court charging that packaging fees violate federal antitrust laws and the Racketeer Influenced and Corrupt Organizations (RICO) Act. Today’s filings also respond to and deny as baseless the antitrust claims brought against the Guild by the three agencies.
“Over the years the major agencies have repeatedly broken federal antitrust law by conspiring to fix the price of packaging fees,” said WGAW President David A. Goodman. “Their current campaign to preserve the packaging fee model by strong-arming smaller agencies also violates the law. We are simply asking the court to stop these agencies from illegally enriching themselves at the expense of writers.”
The suit charges that the agencies’ packaging fee model violates the agencies’ fiduciary duty to their clients and constitutes a system of illegal kickbacks and price-fixing under federal law. Furthermore, the suit charges that the agencies’ “collusive agreement not to negotiate individually with the Guilds” and “collusive agreement to blacklist writers or other individuals or entities who object to packaging fees or agree to the Guild's Code of Conduct” violate federal antitrust laws.
In addition to a declaration that packaging fees are unlawful, the suit asks the court to order agencies to provide an accounting of all packaging fee deals involving Guild members and disgorge all profits generated from unlawful and unfair packaging fees.
Prior to filing the federal suits today, the WGA withdrew the state court lawsuit it filed in April. The state court claims will be consolidated and decided as part of the federal court action.
More than 7,000 WGA members fired their agents in April after the biggest talent agencies refused to reach agreement on a new franchise agreement. Since then, WGA has successfully negotiated agreements with four talent agencies that realign their economic interests with those of their writer clients and provide other protections for WGA members.
The Writers Guild of America West (WGAW) and the Writers Guild of America, East (WGAE) are labor unions representing writers in motion pictures, television, cable, digital media, and broadcast news. The Guilds negotiate and administer contracts that protect the creative and economic rights of their members; conduct programs, seminars, and events on issues of interest to writers; and present writers’ views to various bodies of government. For more information on the Writers Guild of America, West, visit www.wga.org. For more information on the Writers Guild of America, East, visit www.wgaeast.org.