Outside accounting firm to review program

The DGA has settled a 2006 lawsuit over its practice of collecting foreign levies for helmers who aren’t DGA members.

The action, filed by helmer William Webb, alleged the DGA did not have the authority to make foreign collections, had not communicated that info to members and had not paid them. The monies are due to copyright holders as compensation for reuse, such as taxes on video rentals, cable retransmissions and purchases of blank videocassettes and DVDs.

Webb alleged the DGA collected foreign levies due him on “Delta Fever,” released domestically in 1987, and the 1993 telepic “The Hit List” but had not paid him.

In Monday’s settlement announcement, the DGA said it has distributed $48 million in levies to DGA members and more than $4.9 million to more than 2,000 directors who are not DGA members. The settlement provides for an outside accounting firm to conduct an independent review of the foreign levies program and requires the DGA offer a registration function on its website along with making information on unpaid levies available on the site.

“The DGA is proud of its efforts to obtain and ensure each director’s right to a share of foreign levies, and that we have distributed tens of millions of dollars of levies to so many directors in our industry,” said DGA assistant exec director Morgan Rumpf in a statement. “Although we dispute the fundamental premise of the litigation, and stand by our efforts and results in distributing foreign levies to members and nonmembers alike, we are pleased to have resolved this dispute amicably in its early stages and to be moving forward.”

Webb’s attorney, Neville Johnson, said in a statement, “This settlement brings accountability and transparency to the DGA’s foreign levies program, and assures that nonmembers will have full disclosure of the DGA’s distribution of foreign levies.”

The foreign levies for U.S. creatives began to flow after the U.S. agreement in 1989 to terms of the Berne Convention, which establishes the right of authorship for individuals who create works of art.

The DGA reiterated Monday earlier assertions that it and the WGA had started tapping into those funds in the early 1990s to resolve a dispute that arose between the guilds and member companies of the Motion Picture Assn. and the Alliance of Motion Picture & Television Producers. According to the DGA, the companies had asserted they were entitled to receive all the monies under the collective bargaining agreements, U.S. copyright law, and the work for hire and assignment clauses in individual employment contracts.

The DGA said that under a 1990 agreement, the guilds and the companies agreed that the “author’s share” of the foreign levies collected on films and TV would be distributed to the DGA and WGA even if it were not covered by a collective bargaining agreement. It also said the portion of the combined author’s share the DGA has obtained has “steadily and significantly” increased over time from 15% to 50%.

The DGA also said it had also spent “considerable time and effort” in concluding agreements with 14 European collecting societies. “Negotiations are also in progress in additional countries where foreign levies are collected,” the DGA added.

Similar suits have been filed against the WGA by William Richert (“The Man in the Iron Mask”) and against SAG by Ken Osmond (“Leave It to Beaver”). A federal judge has written in both cases that the guilds have limited the rights of the plaintiffs to recover those funds as part of granting motions to move the cases out of federal court and back to state court.

Both suits contend the guilds overstepped their authority to make those agreements and had not disclosed the agreements until facing legal action. According to Johnson, the WGA suit was certified earlier this year as a class-action.

Neither SAG nor the WGA offered comment on the DGA settlement.

WGA member Eric Hughes, who is monitoring the issue at his screenrights.net site, took issue Monday with the DGA’s announcement on several fronts. He noted it did not include the disclosure that settlement mediator Joel Grossman was a signer of the 1990 agreement on behalf of Columbia Pictures Industries along with DGA exec director Jay Roth (who was then an attorney) and AMPTP president Nick Counter.

“In filings in both federal and state court,  the DGA states that the companies were collecting these monies,” Hughes said. “That is not true. Only associations representing individual artists can access monies for writers, actors and directors.”

Hughes also questions whether the DGA will inform all those for whom it has collected funds, such as directors in France and Mexico, porn directors in Germany and the heirs of silent movie directors in Italy.

“Transparency does not seem to include the disclosure of every agreement from 1990 on signed with the AMPTP and every agreement signed with foreign rights societies,” Hughes said. “Accountability does not seem to include what’s happened to all the monies wire transferred to the DGA since 1990. And there is no indication that the DGA will be obtaining the necessary liability insurance to secure those foreign agreements.”

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