The Los Angeles courtroom of U.S. District Judge Andre Birotte was packed with well-dressed lawyers on Friday morning, eager to watch a high-stakes brawl between Hollywood’s largest talent agencies and the Writers Guild of America.
Birotte allowed only four lawyers from each side to sit at each table, leaving the vast majority of the attorneys to sit in the audience, where they were joined by agency brass including Rick Rosen, of WME, and Jay Sures of UTA.
The judge distributed his tentative ruling beforehand, and from the body language, it was clear who won. The attorneys representing the Guild had a sober demeanor, while the lawyers on the agencies’ side were all smiles.
Indeed, Birotte’s ruling sided with the agencies, rejecting the guild’s motion to dismiss the agencies’ antitrust suit. The ruling was not final, though, so the attorneys took one last opportunity to try to sway the judge’s opinion, with arguments lasting more than an hour.
Jeffrey Kessler, co-executive chairman of Winston & Strawn, represented WME in the hearing and did the most talking for the agencies. Kessler is best known for representing professional athletes’ unions, but on Friday he was taking the anti-labor position, arguing that the Writers Guild had exceeded its legitimate authority under the antitrust laws.
Kessler’s main point was that the guild’s boycott of the major agencies, and its attempt to eliminate packaging fees, has profound effects on actors, directors, and others who are not covered by Writers Guild contracts, and therefore should not be protected by the labor exemption to the Sherman Act.
He spent much of his time arguing about showrunners, referencing Dick Wolf, the executive producer of the “Law & Order” franchise, as an example of someone who has been dragged into the fight even though he no longer writes episodes.
“He is part of this boycott,” Kessler argued. “He fired his agent.”
Kessler argued that showrunners who serve as producers should not be considered “labor parties” under the law — a distinction that is important to the WGA’s case. “If you’re a producer, you’re not in wage competition with the writers.”
Birotte asked several pointed questions of Kessler, at one point asking whether it was strange to see powerful agencies using antitrust law to go after writers.
“The Writers Guild is not some mom ‘n’ pop shop,” Kessler countered, saying the guild wields dominant market power as it represents all film and TV writers in the country. He argued that when the guild uses its power to end packaging or do away with affiliate production, it is engaged in anticompetitive practices.
“They’re trying to use (their power) to restrain trade in the product market… We allege this is going to have very adverse effects on the production market of television shows,” he said. “That is an illegitimate union purpose. It’s not a traditional means, and it’s not a traditional objective.”
Stacey Leyton, an attorney at Altshuler Berzon, argued the case for the WGA.
She argued that showrunners are not forbidden from dealing with non-franchised agents if the showrunners are acting only as producers. If part of their job involves writing, however, they are covered by the guild’s contract and subject to its Code of Conduct.
“The hyphenate status is a very common status,” she argued.
Birotte expressed discomfort with remarks by David Goodman, the president of WGA West, earlier this year in which Goodman said he was engaged in a “power grab” by taking on the agencies.
“Can this court conclude that the stated desire to conquer or grab power is a legitimate union objective?” Birotte asked Leyton.
Leyton argued that Goodman was making an explicit reference to enhancing the union’s power to boost its members’ wages, which she said is “absolutely the central function of a union.”
Leyton also emphasized that the guild is not seeking to end packaging — only to end packaging fees.
“Targeting that conflict of interest is a very traditional union function,” she said.
Birotte also asked why the union had consented to packaging fees for the last 40 years if they are so objectionable. Leyton noted that the guild has never endorsed packaging fees, and in 1976 — when the issue last came up — the guild explicitly reserved its right to object to them.
“That’s a long time to reserve it,” Birotte noted, dryly.
Kessler argued that the guild was asserting facts that should be more fully developed in discovery or at trial, and were not suited to a motion to dismiss.
“We allege the power grab is to destroy packaging,” he said. “Let this case go forward. Someone else will decide whether the labor exemption applies — probably a jury.”
Richard Kendall, representing CAA, returned to the subject of showrunners, saying that showrunners were coerced into firing their agents out of fear of being expelled from the Writers Guild.
“They could never write again,” he said.
Leyton urged Birotte not to be the first judge to deny a union its rights to protect its members’ interest under the labor exemption.