Agreement will be narrower than what guild sought

Following extensive objections, a state court judge has indicated he’ll finalize the settlement in the tangled WGA foreign levies case — with a much narrower agreement than the guild sought.

Superior Court Judge Carl West on Monday said he’s confident that attorneys can resolve the remaining issues raised by the objections. After a two-hour hearing,West set a May 11 teleconference with attorneys to review those issues.

“I don’t want to have arguments left on the table,” the jurist added.

The 2005 suit, filed by William Richert (“Winter Kills”), centers on the WGA’s authority to collect foreign funds due to scribes as compensation for reuse, and the guild’s handling of those funds — estimated by the WGA as at least $80 million. Unlike in the U.S., a foreign distributor cannot assume total ownership of the copyrights on an artist’s work.

Much of the discussion during the hearing centered on the issue of the scope of the settlement. In a key development, West indicated he agreed that the settlement only covers the 50% of funds that

foreign collecting societies have allocated to the WGA for distribution to writers — but not the 50% of funds allocated to producers under agreements approved by the WGA but never submitted to members for ratification.

“The 50% giveaway has not been litigated in this case,” said Steven J. Kaplan, who represents several objectors. “If that is unlawful, writers should have the right to pursue that issue against the WGA.”

West agreed, saying the case does not address funds not handled by the WGA. “All we’re dealing with here is how those funds were allocated and how to divvy that out,” he added.

But, in a sign that the case may need more time to be resolved, Anthony Segall, general counsel for the WGA West, did not concede the point about the scope of the settlement. He told West that he would need to “think” about the jurist’s comments.

West also reiterated earlier promises that, under the proposed settlement, the WGA will have to allow the foreign money to “escheat” to the state if it can’t locate the writers or their heirs and that foreign collecting societies won’t be released from claims by writers.

After the hearing, Segall told Daily Variety that progress has been made toward a final settlement and that the guild continues to pay writers the foreign funds.

West promised at several points Monday that he’ll closely monitor the settlement, which calls for payment of all foreign funds within three years along with an independent accounting review of the program, with any unclaimed funds to be paid to the Actors Fund.

Attorneys for the WGA West have asserted that the guild has already paid out $80 million in foreign funds to writers. And the WGA West disclosed last year in its annual report that, as of March 31, 2009, it had $30.3 million in “funds held in trust for members,” including foreign levies, client trust accounts, undeliverable funds and a residuals trust fund — although it didn’t break out how much of that money was from foreign funds.

Richert said after Monday’s hearing that he’s pleased that the foreign levies program will be subject to judicial oversight. “There’s going to be a real accounting and the guild is going to have to be forthcoming at long last,” he added.

Only 14 writers opted out of the settlement after 16,600 mailed notices and 6,000 emails were sent following last fall’s preliminary approval. Objections were filed by WGA members Art Eisenson and Eric Hughes, non-member Stefan Avalos along with two organizations — Local 839 of the Intl. Alliance of Theatrical and Stage Employees and the Australian Writers Guild Authorship Collecting Society.

Several objections were raised over WGA West exec director David Young’s characterization in a letter to members last fall that asserted that West’s preliminary approval had found “nothing improper” about how the WGA handled the funds. In a comment Monday, West acknowledged his ruling had been mischaracterized in the missive, while not naming Young.

Foreign levies for American 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 settled a similar suit in 2008 and its website declares the DGA has disbursed over $77 million in foreign levies, including over $8 million to more than 2,400 non-members. SAG’s facing a similar suit from member Ken Osmond that’s yet to be resolved.

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