The 30-minute hearing before Judge Manuel Real brought sharp reactions from the parties, underscoring the high stakes involved.
Attorneys for the union declared vindication and labeled the suit “frivolous” but the plaintiffs indicated that they will proceed. And plaintiffs’ attorney Sunny Wise said she plans to file a second suit alleging corruption and breach of fiduciary duty against SAG-AFTRA national exec director David White and Chief Administrative Officer and General Counsel Duncan Crabtree-Ireland.
“We’re not walking away from this,” Wise added.
The prospect of another suit evoked a pointed rebuke from Crabtree-Ireland, who asserted that the Asner litigation is a waste of SAG-AFTRA’s funds.
“Regrettably, it appears that the plaintiffs may choose to litigate the remnants of their complaint resulting in continued unnecessary expenditure of member dues money to defend against this frivolous action,” he said.
Real granted portions of the union’s motion to strike the allegations but allowed the naming of White in the suit in connection with his work at Entertainment Strategies Group prior to his 2009 appointment to the top SAG post. Convicted felon Marc Dreier invested in Entertainment Strategies Group, which closed down after Dreier was charged with masterminding a massive fraud scheme.
Wise noted that Real’s ruling did not exclude residuals and allowed three of the 16 plaintiffs — former SAG national board members Steve Barr, Terrence Beasor and Clancy Brown — to proceed with their claims on unpaid foreign royalties since they had opted out of the settlement of Ken Osmond’s class-action suit against SAG in 2010. The remaining 13 plaintiffs will not be able to pursue foreign royalty claims.
“This isn’t about damages,” Wise said. “It’s about accountability and transparency.”
Real struck down the suit’s accusations that SAG-AFTRA’s move to reincorporate in Delaware as part of last year’s merger was designed to give the union better access to unpaid residuals. The judge said that the state of incorporation was not legally relevant to the case.
The suit alleges that SAG-AFTRA has improperly withheld funds and stonewalled requests for information about $130 million held in trust by the union — including domestic residuals and foreign royalties collected by the union through foreign collecting societies without authorization or knowledge of union members. The suit also alleges that the union has cashed residuals checks and then claimed an inability to locate the actors to whom it owes money.
Additionally, the action alleges that the union has withheld information by filing incomplete LM-2 annual reports with the U.S. Dept of Labor and by moving to seal court records.
Robert Bush, an attorney for SAG-AFTRA, declared a near-total victory.
“We applaud the judge’s action today,” he said. “We basically got everything we asked for and the vast bulk of the plaintiff’s frivolous complaint has been dismissed, as it should have been.”
Bush also said after the hearing that the rulings by Real backed up the union’s assertion that the Asner case does not have far-reaching implications. “Our contention is that this is a small case, not a big case,” he added.
Bush also said that the Asner complaint would have to be “completely re-written,” adding, “I think it’s a waste of time and money.”
He took issue with the suit’s allegations that SAG-AFTRA has repeatedly stonewalled the plaintiffs in providing information about how the funds are collected and disbursed. “We have always been transparent,” he added.
Crabtree-Ireland repeated that assertion, saying, “In addition to our more than 1,000 pages of annual disclosure documents available on line to anyone, we have and continue to maintain a policy of responsiveness to legitimate member requests for information.”
But Wise pointed out that Brown, who attended the hearing, was on the SAG board in January 2012 when he wrote to SAG officials about being kept in the dark over details on SAG’s foreign funds and agreements with collecting societies.
“This is still a foreign royalties case,” Wise said. “Clancy asked for that information 22 months ago and never got any response.”
William Richert, one of the 16 plaintiffs, declared outside the courtroom that he’s never received any foreign payments for his acting work in “My Private Idaho” or “The Client.” Richert was the lead plaintiff in a 2005 class-action suit over foreign royalties against the Writers Guild of America that was settled in 2011.
“I believe SAG-AFTRA is corrupt through and through,” he added.
Beasor, who also attended the hearing, expressed amazement that he has received miniscule royalty checks from the union for some of his films and TV shows without any explanation of when shows were viewed abroad.
“I got a 35 cent check for ‘Walk Hard: the Dewey Cox Story’ with no explanation as to the origin,” he added.
Crabtree-Ireland reiterated SAG-AFTRA’s position that members would not have received any funds without the union’s efforts.
“SAG-AFTRA remains focused on collection and distribution of foreign royalties and distribution of unclaimed residuals, programs of which we are justifiably proud,” he said. “Over the last six years we have distributed more than $17.5 million in foreign royalties to SAG-AFTRA members – including most of the plaintiffs — money that would have been lost to them forever had we not taken action.”
Eric Hughes, one of the plaintiffs and a consultant on Richert’s case, noted that the union continues to avoid providing the requested documents — some of which were sealed during the Osmond litigation.
“Our request to be provided all collective bargaining agreements into which SAG-AFTRA has entered is not only a legitimate request but our right under the law,” Hughes said. “As for transparency, the financial records of a labor organization are public information. Why is it that we are having to file a motion to unseal the complete but unreported financial history on SAG and foreign royalties which White and Crabtree-Ireland had permanently sealed in Los Angeles Superior Court?”