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CAA Challenges Writers Guild of America’s Legal Standing in Packaging Fee Lawsuit

CAA has challenged the Writers Guild of America’s legal standing for bringing forth the lawsuit against Hollywood’s four largest talent agencies over the issue of packaging fees.

CAA’s latest legal response to the suit filed by the WGA in Los Angeles Superior Court in April asserts that the guild does not have the right to sue over the issue of packaging fees on behalf of its 15,000 members. CAA’s filing on Thursday also blasts the WGA’s legal rationale behind its fraud and bribery claims in the suit that stemmed from the WGA’s effort to reform the rules for talent agents that represent WGA members.

The WGA West and WGA East filed suit against CAA, WME, UTA and ICM Partners, along with eight individual writers who assert they have been harmed by the decades-old industry practice of talent agents receiving packaging fees on TV series from production companies. Agencies waive the standard 10% client commission for all clients working on a packaged show.

CAA’s response maintains that the WGA as a collective bargaining agent cannot sue on behalf of members because of the type of commercial transactions at the heart of the packaging fee dispute. It also maintains that WGA has not demonstrated that the guild has suffered any direct harm from the packaging fee practice.

The WGA did not immediately respond to requests for comment.

“The WGA does not itself have a fiduciary relationship with CAA. Nor may the WGA establish associational standing to bring this claim on behalf of its 15,000 member-writers because such claims would require individualized proof of unknown thousands of unique transactions over a multi-decade period and individual member participation in the lawsuit,” CAA’s response states. “Moreover, CAA is entitled to obtain evidence of each member’s knowledge of and consent to packaging fees and to present individual defenses to such a claim.”

CAA in its filing asserts that six of the individual writer plaintiffs were aware that CAA was receiving packaging fees on TV series that the plaintiffs worked on. Nor did the plaintiffs in question ever request that they “be charged a commission or that CAA forgo a packaging fee.” CAA notes that two of the eight plaintiffs have no claims against CAA because they have never been clients of the agency. CAA last week filed a separate response addressing specific claims made by two other plaintiffs, former clients David Simon — who did have an agreement with CAA barring them from packaging any of his projects — and Meredith Stiehm.

The WGA asserts that the growth of packaging fee income has had the effect of “misaligning” agents’ interests with their clients as they have more incentive to keep writer salaries low in order to maximize potential profits down the road from the points that come through packaging fee arrangements. The WGA as of April 12 directed its members to fire agents that refuse to sign on to the agency’s newly established Agency Code of Conduct, which bans packaging fees and agencies have corporate ties to production-distribution entities.

The WGA’s suit hinges on the assertion that agents have violated their fiduciary duties to clients by failing to maximize their compensation on shows because of the motivation to keep costs down. CAA’s response assets that such a claim would require discovery on the earnings potential of each individual member, which it points to as more evidence that the WGA itself does not have the standing to be part of the suit.

“When the WGA alleges that CAA failed to maximize how much a member was paid on a particular deal, that requires an individualized assessment of that particular member’s opportunities and deal, as well as actual evidence— as opposed to bloviated rhetoric — to support such an assertion,” the complaint states.

CAA is the only one of the four agencies to respond to the WGA’s litigation. The Association of Talent Agents presented a new proposal on June 7 aimed at ending the standoff with an offer to share 2% of agency packaging fee revenue with writers on packaged shows who would otherwise not have profit participation points.

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