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Judge Leans Toward Agencies’ Position in Writers Guild Antitrust Suit

A federal judge indicated on Friday that he will allow the three major agencies to pursue their antitrust lawsuit against the Writers Guild of America.

The WGA has urged U.S. District Judge Andre Birotte to throw out the suit, arguing that its actions in its ongoing battle with the agencies are protected under antitrust law.

But over the course of more than an hour of arguments on Friday, it appeared that Birotte believes the agencies’ claims are sufficiently plausible to move forward.

Birotte provided a tentative ruling on the WGA’s motion to the attorneys, but said he would not make a final determination until late next week at the earliest. If he ultimately denies the WGA’s motion to dismiss, the case would move into discovery and then to trial.

The hearing marks a key moment in the eight-month standoff between the agents and the writers over agency packaging fees, which the Writers Guild of America argues suppress writers’ wages and pose a clear conflict of interest.

Much of Friday’s argument centered on the role of showrunners, who act as both writers and producers and are represented by the WGA. The agencies claim that the guild has coerced showrunners to fire their agents, and in so doing has colluded with a “non-labor party,” in violation of the antitrust laws.

The agencies also contend that the WGA has gone beyond advocating for its members’ economic interests in attempting to eliminate packaging entirely, and in trying to force the agencies to give up affiliate production.

“Consumers are being hurt,” said Jeffrey Kessler, arguing on behalf of WME. “The directors and actors are being hurt… The affiliates would be driven out of business if this boycott succeeds.”

Stacey Leyton, arguing for the WGA, argued that the union is well within its rights to seek to adopt a conflict of interest code that eliminates packaging fees. She argued that sports players’ unions have done the same thing with their agents.

“We’re in the second golden age of television,” she said. “The effect of packaging fees has gotten worse and worse for writers.”

The Department of Justice Antitrust Division weighed in on the case last week, filing a brief siding against the union. The division argued that the WGA may have gone beyond the protections of the labor exemption, and asked permission to argue its point of view at Friday’s hearing.

Birotte declined that request, and the Antitrust Division’s views of the case were never mentioned in Friday’s hearing.

The WGA has also filed a countersuit against the agencies, accusing them of violating antitrust law by coordinating their bargaining through their trade organization, the Association of Talent Agents. A hearing on a motion to dismiss that suit is set for Jan. 17.

Update: The WGA has issued a statement about the hearing.

“We appreciated the thoughtfulness and time the court gave to this issue,” the union said. “Our lawyers clearly articulated why the agencies’ complaint should be dismissed. We look forward to seeing the court’s ruling.”

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