Following extensive objections by Writers Guild of America members, a state court judge has delayed for at least a month approval of the final settlement in the tangled WGA foreign levies case.
Superior Court Judge Carl West made the decision Tuesday, setting April 16 as the next hearing date in the class-action suit against the WGA and telling attorneys for both sides that they need to revise the settlement to address more than half a dozen specific objections that have been raised.
“I’m certainly not in a position to grant final approval today,” West said during the hearing before ordering the attorneys to work out a joint statement by March 26.
The 2005 suit, filed by William Richert (“Winter Kills”), centers on the WGA’s authority to collect foreign funds due to scribes as compensation for reuse, and the guild’s handling of those funds. Unlike in the U.S., a foreign distributor cannot assume total ownership of the copyrights on an artist’s work.
West noted only 14 writers opted out of the settlement after 16,600 mailed notices and 6,000 emails were sent following last fall’s preliminary approval. He also noted that objections had been filed by WGA members Art Eisenson and Eric Hughes, non-member Stefan Avalos along with two organizations — Local 839 of the Intl. Alliance of Theatrical and Stage Employees and the Australian Writers Guild Authorship Collecting Society.
Anthony Segall, general counsel for the WGA West, told West that he didn’t see “insurmountable” obstacles in finalizing the settlement. He asserted the WGA has paid out $80 million in foreign funds to writers, including $10 million over the past week.
Segall also took issue with an objection that asserted the WGA had transferred foreign funds to its own accounts and insisted that the guild has never taken that step.
After the hearing, Segall said, “We are moving toward a settlement, which is good.”
Several key points West made during the hourlong hearing included his pledge that he’ll monitor the settlement. It calls for payment of all foreign funds within three years along with an independent accounting review of the program, with any unclaimed funds to be paid to the Actors Fund.
“I will continue to take an active role,” West said. “This will not be a close-the-book situation.”
The WGA West disclosed in its annual report that, as of March 31, it had $30.3 million in “funds held in trust for members,” including foreign levies, client trust accounts, undeliverable funds and a residuals trust fund — although it didn’t break out how much of that money was from foreign funds.
West also promised that the WGA will have to allow the foreign money to “escheat” to the state if it can’t locate the writers or their heirs and that foreign collecting societies won’t be released from claims by writers.
WGA members Avalos and Eisenson, who filed last month to intervene, said after the hearing that they were pleased by West’s moves to bring more transparency to how the foreign funds are handled.
“It puts the entertainment industry on notice that they can’t just make up numbers any more,” Eisenson said.
The foreign levies for American creatives began to flow after the U.S. agreement in 1989 to terms of the Berne Convention, which establishes the right of authorship for individuals who create works of art.
Hughes, who had previously been a consultant for the plaintiffs on the suit, had also objected to the settlement but said Tuesday that he was pleased that writers will still be able to seek funds from foreign collecting societies. “We have a lot of work to do to make it a better settlement with a release of claims that does not deprive both members and nonmembers of rights the litigation did not address,” he added.
The DGA settled a similar suit in 2008; its web site declares the DGA has disbursed over $77 million in foreign levies, including over $8 million to more than 2,400 non members. SAG’s facing a similar suit from member Ken Osmond that’s yet to be resolved.
Richert said after the hearing that the settlement would provide a window into what he termed the “labyrinth of corruption” at the WGA.