Anti-merger suit against SAG to proceed

Federal judge sez plaintiffs have shown cause for action

The federal judge in the anti-merger lawsuit against the Screen Actors Guild has authorized the plaintiffs to proceed with their amended complaint, which asks for a jury trial, attorneys fees and monetary damages.

U.S. District Court Judge James Otero granted the motion Wednesday, a week after the initial four-count civil complaint was filed in Los Angeles. Plaintiffs allege the SAG and its leaders are attempting to merge with the American Federation of Television and Radio Artists “without conducting the necessary due diligence.” SAG has labeled the suit “a clear attempt at circumventing the will of the membership” and “a public relations stunt” and filed a motion this week to dismiss it.

“Having considered the evidence and legal arguments, this court finds that plaintiffs have satisfied all pre-suit requirements pursuant to statute and demonstrated good cause for the action to proceed,” Otero said in his order.

A total of 131,000 ballots are being mailed to SAG and AFTRA members, touting the combo as giving performers more bargaining clout. To be approved, the merger must receive at least 60% of the votes from each union. The suit is aimed at preventing SAG from counting the votes on March 30.

The plaintiffs — who include Martin Sheen and Ed Harris — are claiming that the SAG and its leaders are actively denying SAG members the right to full and fair disclosures and a meaningful vote regarding merger. The finding by Otero means that statutory pre-suit requirements have been met to pursue a breach of fiduciary duty claim.

The lawsuit, filed by more than 60 SAG members, also contends that SAG is violating its own rules by not conducting a comprehensive analysis of combining the SAG and AFTRA pension and health plans, which are operated separately from the unions and overseen by union-industry boards. The unions’ summary of the feasibility study, containing opinions of seven attorneys with experience in the field, noted that several hundred multi-employer pensions have merged over the past 25 years and that there is no legal obstacle to merging the SAG and AFTRA pension and health plans.

Merger proponents have obtained endorsements from over 1,000 SAG members, including high-profile members such as George Clooney, Tom Hanks and Octavia Spencer. Opponents have staged four protests in front of SAG headquarters on Thursdays for the past month.

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