U.S. District Court Judge Andre Birotte has denied a request by the Department of Justice to take part in a hearing on Friday between the Writers Guild of America and three of Hollywood’s top agencies in which the WGA will move to have the agencies’ lawsuit against them dismissed.
“The United States’ request to participate in the December 6, 2019 hearing on Defendants’ motion to dismiss is denied. It is so ordered,” read the judge’s ruling.
This past summer, William Morris Endeavor, Creative Artists Agency and United Talent Agency sued the WGA on claims that it was participating in an “illegal boycott” by having thousands of its writers terminate their representation in order to pressure the agencies to eliminate packaging fees. The lawsuit was filed also in part as a response to WGA’s own lawsuit against the three agencies and ICM Partners, arguing that packaging fees — payments from a studio to agents in exchange for packaging talent for a project — violate labor law by serving as a kickback payment from an employer to an employee’s representative.
In their motion to dismiss, the WGA argues that antitrust laws preventing illegal boycotts do not apply to them, citing labor laws that allow for unions to improve their working conditions through self-organizing.
But in a legal brief filed last Tuesday, the DOJ argued that use of labor exemptions in this case is “not so facile” as the WGA membership’s mass termination of agency representation included TV showrunners who can hold other roles on a project, most commonly as a producer.
“While any construction of the labor exemptions must allow unions to restrict competition in labor markets in pursuit of legitimate labor law goals, courts must also be careful to circumscribe the application of these exemptions lest unions be ‘giv[en] free rein to extend their substantial economic power into markets for goods and services other than labor.’”
The DOJ’s Antitrust Division, led by Assistant Attorney General and Trump appointee Makan Delrahim, has gotten itself involved in Hollywood affairs via the courtroom multiple times. Two weeks ago, Delrahim announced that the DOJ would seek to repeal the 1948 Paramount consent decrees, a landmark Supreme Court ruling that forced Hollywood studios to give up their ownership of theater chains.
The decision was denounced by the Directors Guild of America in a statement on Monday while the Motion Picture Association of America and the National Association of Theatre Owners have both said that they will closely monitor the division’s legal arguments for repealing the decrees.
The WGA did not immediately respond to TheWrap’s request for comment regarding the judge’s latest decision, but President David A. Goodman criticized Delrahim’s attempt to step into the legal proceedings last week.
“It’s not surprising that Trump’s Justice Department has filed a brief designed to weaken a labor union’s effort to protect its members and eliminate conflicts of interest by talent agencies,” Goodman wrote. “The agencies’ antitrust claims are contrary to Supreme Court precedent, and we remain confident that the court will dismiss them.”
Pamela Chelin contributed to this report.