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CAA-UTA Legal Battle Gets Ugly — And Trial Hasn’t Even Begun

The legal battle between CAA and UTA over the agent defections that rocked the talent representation biz in March is still in the earliest phase of discovery, and already getting nasty.

Sparring between the lawyers in the suit filed on the heels of the March 31 “midnight raid,” as CAA has described it, has become testy enough that one of the three depositions taken so far had to be conducted in front of a judge, by order of Los Angeles Superior Court Judge Lisa Hart Cole. Cole is presiding over the case unfolding at the Santa Monica courthouse.

CAA’s civil lawsuit names as defendants UTA and two of the five agents who led the exodus of more than a dozen CAA agents to UTA in March and April: Gregory Cavic and Gregory McKnight. The other three — Jason Heyman, Martin Lesak and Nick Nuciforo — had contracts with CAA that called for disputes to be handled through arbitration. Richard Chernick of arbitration service Jams has been set to preside over that private proceeding.

The lawyers will go before Judge Cole on July 20 for a case management conference. Focus largely will be confined to procedural matters such as hearing dates and the timing of document exchanges and depositions. The first hearings on UTA’s challenges to CAA’s lawsuit, filed April 2, are scheduled for Dec. 11 and 18. Leading the charge for CAA is Proskauer Rose’s Anthony Oncidi. Bryan Freedman of Freedman and Taitelman is steering the case for UTA. (Freedman and Taitelman represents Variety’s parent company Penske Media Corporation.)

The crux of CAA’s argument against Heyman, Lesak and Nuciforo is that the three were under contract to the agency, and had no right to leave. For Cavic and McKnight, CAA asserts that they were part of a conspiracy along with the other three to interfere with CAA’s business, and that conspiracy amounted to a breach of the employees’ fiduciary and loyalty obligations to their employer. Although Heyman, Lesak and Nuciforo are not defendants in the civil lawsuit, they are referenced throughout the complaint’s conspiracy narrative.

UTA to date has mounted two counterattacks. For the trio under contract, lawyers have asserted that those agreements were unenforceable because they had all worked for the agency for more than seven years. And UTA lawyers have scoffed at the notion that Cavic and McKnight had any fiduciary or loyalty obligations to CAA.

The litigation began in earnest on May 12 at the Century City offices of Freedman and Taitelman, when CAA president Richard Lovett sat for the first deposition in the case.

There are conflicting reports of what happened during the day-long session with Lovett, which was videotaped. But there was enough rancor between the lawyers that the sides went back to Judge Cole to sort out some issues before the May 18 deposition of CAA managing partner Bryan Lourd. Cole mandated that the Lourd deposition take place before a judge. The sides found themselves in a little-known courtroom at Los Angeles Intl. Airport, because Cole was out of town that day.

Sources close to CAA maintain that the UTA lawyers sought to postpone the depositions of Lourd and CAA managing partner Kevin Huvane after the Lovett session. In CAA’s view, UTA’s move to quickly schedule depositions was a bluff that CAA called. From UTA’s perspective, CAA’s lawyers were unreasonably combative during the Lovett questioning.

The questioning returned to the offices of Freedman and Taitelman by the time Huvane was deposed on May 27. Depositions of at least six other CAA leaders had been scheduled in the initial round of notices, but those have been postponed in order for the sides to focus on assembling discovery documents. Sources say such schedule jockeying is common. CAA is expected to hold its first depositions of UTA’s key players, which will include the five agents who defected, starting in August.

Sources said the questioning from the UTA camp has so far largely focused on CAA’s history of recruiting agents from other shops, a clear effort to establish that CAA has done the same kind of poaching that brought the five agents to UTA. Sources said CAA’s top brass were grilled, with the mind-numbing detail that is part of the psychological warfare of the deposition process, on the details of CAA’s history of employment contracts for new hires.

The CAA heavyweights were also pressed in the depositions on the agency’s relationship with private equity investor TPG Capital, which now owns a majority interest in the agency. The questioning, sources said, was aimed at drawing out how much the top CAA leaders personally profited from TPG’s equity investments in 2010 and 2014. That may well be used to bolster the argument that the defecting agents saw no chance of advancement at CAA because the riches went to a select few.

As the discovery process continues to unfold this summer and fall, CAA v. UTA is sure to be Hollywood’s most-watched legal drama.

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