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CAA’s Packaging Fee Becomes Flashpoint in ‘Walking Dead’ Litigation

UPDATED with new statement and response filing

The issue that is at the heart of the WGA’s present standoff with talent agencies has flared up as a source of tension in the litigation between AMC Networks and Frank Darabont and CAA over profit participation on “The Walking Dead.”

Attorneys for Darabont and CAA called AMC’s move a “publicity stunt” and a delay tactic. Plaintiffs’ attorneys also accused AMC’s lawyers of behaving improperly during the deposition process.

The practice of talent agencies receiving packaging fees for helping to assemble the creative elements of a television series has come up as a question posed by AMC Networks’ attorneys in the latest round of depositions for the long-running lawsuit. The WGA last month filed a lawsuit against Hollywood’s four largest agencies over packaging fees, calling them an inherent conflict of interest that violates the fiduciary duties of licensed talent agents.

AMC Networks attorneys have sought to question Darabont and others involved in depositions related to the “Walking Dead” case on their knowledge of CAA’s packaging fee arrangements on the show, which Darabont shepherded for AMC in its first season. But AMC reps maintain that Dale Kinsella, lead attorney for Darabont and CAA, has improperly told witnesses not to answer those questions.

Lawyers for AMC have asked New York Superior Court judge overseeing the case for a hearing to address what AMC reps described as “improper and obstructive deposition conduct” by Kinsella in a letter sent to Judge Joel Cohen on Monday. Lead AMC Networks attorney Orin Snyder asserted that Kinsella is trying to shut down questioning related to CAA’s profit participation definition and how it may differ from the definition that the agency negotiated for its client Darabont on “Walking Dead.”

“Defendants have struck a raw nerve by exposing fundamental flaws in Plaintiffs’ case. Kinsella does not want Defendants to probe his clients’ contradictory positions on the (modified adjusted gross receipts) definition,” Snyder wrote. “Even more, he does not want Defendants to expose the egregious conflict of interest between Darabont and his agents at CAA. The dirty secret in Hollywood is that talent agencies often sell their clients down the river in exchange for bigger packaging fees for themselves.”

Snyder’s letter also accuses Kinsella of making insulting remarks about AMC’s legal team during the deposition questioning process. One example cited in the AMC letter asserts that Kinsella told a deposition witness: “Don’t get dragged down into the gutter of nonsense questions by Mr. Snyder.”

On Tuesday, Darabont/CAA attorney Jerry Bernstein and Kinsella fired back and urged the judge to deny the hearing request.

“As revealed in our letter to the court, AMC’s effort to disrupt and delay the existing trial date by creating sham discovery disputes is never ending,” Kinsella said in a statement. “Understandably obsessed with focusing attention on anything but its own despicable behavior toward the profit participants, AMC has opportunistically attempted to link the WGA’s dispute with talent agencies as somehow relevant to AMC’s defense to Mr. Darabont’s claims regarding unpaid back end profits. We are optimistic the court will see through Mr. Snyder’s specious arguments and keep the parties on track for the scheduled trial.”

In the response letter, Bernstein details what he describes as AMC’s effort to “make a mockery” of the deposition process.

“Mr. Snyder took an outrageous, unprecedented, and almost entirely improper deposition of Darabont aimed solely at harassment and intimidation rather than fact discovery,” Bernstein’s letter states. “Yet, after spending most of its time asking hopelessly irrelevant questions, AMC now claims that it should be entitled to additional deposition time with Darabont and his representatives. Mr. Snyder’s deposition conduct was designed to harass, intimidate, invade the attorney-client privilege, and attempted to drive wedges between Darabont, CAA, and Darabont’s legal representatives.”

The “Walking Dead” lawsuit is targeted to go to trial in May 2020.

The WGA and Association of Talent Agents have been at war since April 12, when the guild instructed its nearly 15,000 members to fire talent agents who would not sign the guild’s newly established Agency Code of Conduct. The guild’s new code bars agencies from receiving packaging fees from production entities, among other reforms.

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