Judge Issues Mixed Ruling in CAA’s Poaching Suit Against UTA

A Los Angeles Superior Court judge declined to dismiss some of the so-called “inflammatory” portions of CAA’s lawsuit over the defection of agents to UTA last year.

But Superior Court Judge Lisa Hart Cole struck punitive damages allegations against UTA — although not against two of the defecting agents, Gregory Cavic and Gregory McKnight — and also threw out CAA’s claims for attorneys fees. Cole said that those costs were not recoverable for the claims being made.

The rulings were the latest developments in litigation between the two agencies, fueled by the departure of Cavic and McKnight a year ago along with Jason Heyman, Martin Lesak and Nick Nuciforo. A dispute over the departure of those three agents is now going through a private arbitration proceeding.

CAA claims that UTA and other defendants engaged in an “illegal and unethical conspiracy” to get a number of agents who were under contract to breach their agreements and take positions at a rival agency.

UTA contended that CAA made inflammatory allegations that were “irrelevant, false, improper or immaterial matters, which have absolutely nothing to do with this action but are prejudicial to the defendants.” They had sought dismissal of claims, contending that CAA’s complaint uses “hyperbolic prose befitting a dime store novel” that have nothing to do with the case against the defendants.

But Cole wrote in a ruling that the allegations of conspiracy to “steal clients and employees” from CAA, as well as “the clandestine manner in which they carried out their plans” are relevant to CAA’s claims for intentional interference and breach of fiduciary duty.

She did grant UTA’s move to strike CAA’s allegations for punitive damages, which are available in case of oppression, fraud or malice. She noted that CAA’s allegations include a claim that Cavic and McKnight signed potential CAA clients with UTA during the 2015 Sundance Film Festival, even though they were there on behalf of CAA. But Cole wrote that CAA’s complaint lacked allegations that “officers, directors or managing agents” of UTA “ratified or authorized” Cavic and McKnight’s actions. CAA will be allowed to file an amended complaint with more specifics, which they plan to do.

Cole refused to strike the punitive damages claims against the two defecting agents.

She also struck CAA’s claims for attorneys fees, finding that they are “not recoverable as part of the underlying claims alleged.” She rejected the argument that the fees could be recovered under the “tort of another” doctrine, in which litigants can recover compensation for loss of time, legal costs and other expenditures.

The case in arbitration revolves around the question of the contracts that three of the agents — Heyman, Lesak and Nuciforo — had with CAA at the time of their departure. UTA’s lawyers maintain they were invalid because the length of the contract exceeded seven years, which is a violation of California law.

CAA maintains the contracts were valid because the threesome had struck renewal deals with the agency over the years, which constituted new contracts that did not exceed the seven-year time frame.

Cavic and McKnight were not under contract and are part of the civil suit.

Bryan Freedman, attorney for UTA, said in a statement, “We are thrilled the court granted UTA’s motion and decided to strike CAA’s claim for attorneys fees and also decided to strike the punitive damages allegations against UTA.”

Anthony Oncidi of Proskauer Rose, representing CAA, said, “The judge ruled on a pleading CAA filed last September. Since that time, CAA has learned through discovery that UTA’s high-level management was directly involved in the wrongful actions that they and the individual agents undertook.  Judge Cole invited CAA to amend its pleading to add those additional facts to the pending lawsuit, which CAA said it would do within 20 days.”

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