We've Got Hollywood Covered

WGA Drops State Lawsuit Against Agencies, Files Antitrust and RICO Claims in Federal Court

Writers Guild will consolidate litigation against WME, CAA and UTA into federal lawsuit

The Writers Guild of America announced on Monday that it is withdrawing its California lawsuit against the top agencies in Hollywood while adding antitrust and racketeering charges to a federal lawsuit against William Morris Endeavor, Creative Artists Agency, and United Talent Agency.

The new suit filed in U.S. District Court argue that packaging fees — payments made by a studio to agencies in exchange for packaging talent for a project — violate federal antitrust laws and the Racketeer Influenced and Corrupt Organizations (RICO) Act.

The lawsuit also responds to antitrust lawsuits filed by the three agencies against the WGA, saying that arguments that the WGA has instigated an “unlawful group boycott” by having its members leave agencies en masse to pressure them into eliminating packaging fees are “baseless.”

“Over the years the major agencies have repeatedly broken federal antitrust law by conspiring to fix the price of packaging fees,” WGA West President David A. Goodman said in a statement. “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 new lawsuit repeats the claims made in the state lawsuit that was filed in April, including the claim that packaging fees are a violation of agencies’ fiduciary duty to their clients and serve as a system of kickbacks and price-fixing that are illegal under federal law.

The suit 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. The Writers Guild’s negotiating committee is currently attempting to negotiate with agencies on an individual basis rather than continue talks with the Association of Talent Agents.

Three ATA-affiliated agencies — Pantheon, Kaplan Stahler and Buchwald — have forged agreements with the guild that will see them adhere to the guild membership-approved Code of Conduct, which requires agencies to eliminate packaging fees in order to represent WGA members.

WGA is seeking a declaration from a federal judge that packaging fees are unlawful as well as a court order requiring agencies to provide an accounting of all packaging fee deals involving Guild members and disgorge all profits generated from those fees.