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Judge backs DGA on foreign levies

No cause to modify settlement, jurist rules

The Directors Guild of America is in line with its 2008 foreign levies class-action settlement, and there is no cause to modify it, a state court judge supervising three such cases has ruled.

The Wednesday ruling came over strenuous objections that the DGA has been stonewalling over how it handles millions in funds. Neville Johnson, attorney for plaintiff William Webb, complained that the guild’s single-page yearly accounting violates the spirit of the agreement, adding that the DGA has stymied his efforts to obtain information in areas such as administrative fees.

“It’s been like dealing with the Kremlin,” Johnson said. “The reports are incoherent.”

Los Angeles Superior Court Judge John Wiley declared repeatedly during an hourlong hearing that his role precluded him from revising the settlement and denied Johnson’s motion “with prejudice” — meaning he will not entertain another request.

“I’m a legal bureaucrat,” he added.

DGA attorney Daniel Schechter told Wiley that Johnson had not raised the issue during the first three years of the settlement and accused him of wanting to rewrite the terms.

Webb’s suit alleged the DGA did not have the authority to make foreign collections, had not communicated that info to non-members and had not paid them. The monies — which began to flow two decades ago — are due to copyright holders as compensation for reuse, such as taxes on video rentals, cable retransmissions and purchases of blank videocassettes and DVDs.

In the 2008 settlement, the DGA said it had distributed $48 million in levies to DGA members and more than $4.9 million to directors who were not DGA members. Those figures have more than doubled.

“The DGA has distributed over $121 million in foreign levies, including over $13 million to more than 3,400 non-members,” a DGA spokesperson said. “It was a hard-fought effort to attain these funds and we are very proud of our efforts. We are pleased with the judge’s decision today to deny with prejudice the plaintiff’s motions.”

The settlement provided for an outside accounting firm to conduct an independent review of the foreign levies program, but Johnson said the DGA has not provided accountability and transparency.

Wiley asserted during the hearing that Johnson should have negotiated different terms. “A deal is a deal,” he added.

Wiley also cited similar grounds for rebuffing Johnson’s motions for attorney fees and consultant fees in the three suits against the DGA, Screen Actors Guild and the Writers Guild of America. The jurist noted the settlements specified that there would be no additional attorney fees, brushing aside Johnson’s assertions that SAG and the DGA had been uncooperative and hostile.

Johnson said the WGA had been far more cooperative than the other two guilds following its own 2010 settlement. He indicated that he would file a motion to appoint a new counsel in the DGA case.

The plaintiff in the WGA case, William Richert (“Winter Kills”), also appeared in court Wednesday to complain about the lack of disclosure in the wake of the settlement, signed by the now-retired Judge Carl West. “I signed the settlement because Judge West told me that he would watch this closely for the next three years,” he added. “The court is now saying ‘drop dead’ to American writers.”

Wiley again responded that terms of the settlements prevented him from requiring the guilds to do more.

The WGA reported earlier this year it had collected nearly $130 million in foreign levies over the past two decades and distributed $104 million of those funds. SAG, which settled Ken Osmond’s suit last year, reported last year that it had collected $20.7 million and distributed $9.8 million.

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