In the latest twist in the dispute between Hollywood writers and agents, the Writers Guild of America (WGA) has filed claims against William Morris Endeavor (WME), Creative Artists Agency (CAA) and United Talent Agency (UTA) charging that packaging fees violate federal antitrust laws and the Racketeer Influenced and Corrupt Organizations (RICO) Act.
At the same time, the WGA has withdrawn the California state court lawsuit it filed in April against WME, CAA, UTA and ICM Partners. The state court claims will now be consolidated and decided as part of the federal court action, filed in the US District Court.
The new filings also, said the WGA, “respond to and deny as baseless” the antitrust claims WME, CAA and UTA filed against the Guild since the Guild’s original state court action.
A Guild spokesman said the new action does not include ICM because that agency did not file against the WGA. But, he added, “we are considering our options with respect to bringing claims against ICM and other agencies in federal court.”
The WGA’s new 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.” It also 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.”
In a statement, WGA West president David Goodman said: “Over the years the major agencies have repeatedly broken federal antitrust law by conspiring to fix the price of packaging fees. 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.”
In its own statement responding to the WGA move, UTA said: ”The WGA’s dismissal of its own State court lawsuit today represents a complete retreat by Guild leadership, who were fully aware they faced certain defeat in the courts in a few weeks. The lawsuit represented the WGA’s ill-considered and poorly executed campaign that continues to harm writers, who labour on unnecessarily without effective representation. The new claims are equally ill-considered, vitriolic and baseless. UTA is confident that they will ultimately be dismissed as well.”