The battle between the Writers Guild of America and the major agencies has been waged on two fronts for over a year, with mixed results.
Attention recently has focused primarily on the WGA’s pressure campaign to require agencies to sign a Code of Conduct renouncing package commissions and ownership of production companies as a condition of representing its members. This campaign has proved largely successful. Most of the boutique and mid-sized agencies and two of the big four, UTA and ICM Partners, have signed agreements to this effect, leaving only CAA and WME insisting on their rights to package and produce. The Guild made some compromises, but it’s fair to say that it has largely attained this goal.
The second front in the battle has been federal court litigation. The outcomes here have been more mixed.
The litigation originally pitted the WGA West and East and some individual Guild members against WME, CAA and UTA. Since making its deal with the WGA, UTA has withdrawn from the lawsuit.
The agencies sued the WGA in June, 2019 when the Guild first instructed its members to fire their agents unless they signed the Code of Conduct. The complaint alleged that the Guild was in violation of the Sherman Antitrust Act. The Guild asserted counterclaims under federal antitrust and racketeering statutes, price-fixing under California’s Cartwright Act and state claims for unfair competition, constructive fraud and breach of fiduciary duty.
In response to the agencies’ motion to dismiss, the District Judge, Andre̒ Birotte, Jr., dismissed the federal claims outright for lack of standing. Among other rulings, he also dismissed for lack of associational standing the Guild’s claims brought on behalf of its members for breach of fiduciary duty and constructive fraud, and dismissed the claim brought by the Guild under California Unfair Competition Law. The judge held that the WGA did, however, have standing to sue the agencies for price-fixing under California’s Cartwright Act.
The WGA then filed an amended complaint and did rather better the second time around. It held off the agencies’ challenge to the court’s prior ruling that it had standing to pursue its Cartwright Act claims. It was also successful in reinstating causes of action that had been dismissed. It convinced the court of its associational standing to bring breach of fiduciary duty and constructive fraud claims on behalf of its members. More to the point, the court recognized the Guild’s standing to obtain injunctive relief. This was fundamental to its goal in the lawsuit, namely to prohibit the agencies from receiving packaging fees.
This is an incremental victory for the Guild, but it keeps it alive on the litigation front. In light of the movement to settlement by the other agencies, one would think that WME and CAA will themselves come to the table at some point if the WGA is also willing to deal.