(I have just been informed that this is NOT a Ruling( by someone I trust completely!) I’m leaving it up to remind myself to be more careful. And I apologize to all my readers!!!! (Arl)
|Paul Edney||6:44pm Mar 19|
The document that has been circulating is not the final ruling by Judge Otero. It’s just a proposal. Let’s all remain calm about this until the ruling is officially announced.
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
MARTIN SHEEN, et. al.
SCREEN ACTORS GUILD, a Labor
Union; KEN HOWARD, an Individual;
AMY AQUINO, an Individual; NED
VAUGHN, an Individual; MIKE
HODGE, an Individual; DAVID
Individual; and DOES 1-50,
CASE NO. CV 12-01468 SJO (AJWx)
[PROPOSED] ORDER GRANTING
MOTION OF PLAINTIFFS FOR
Case 2:12-cv-01468-SJO-AJW Document 13-2 Filed 02/27/12 Page 1 of 5 Page ID #:401
1017914.1 1 CASE NO. CV 12-01468 SJO (AJWx)
[PROPOSED] ORDER GRANTING MOTION OF PLAINTIFFS FOR PRELIMINARY INJUNCTION WASSERMAN, COMDEN, CASSELMAN &
ESENSTEN, L.L.P. 5567 RESEDA BOULEVARD, SUITE 330
POST OFFICE BOX 7033
TARZANA, CALIFORNIA 91357-7033
The above matter came before the Court upon Motion of Plaintiffs for
Preliminary Injunction. Having considered the evidence and legal arguments, this Court finds that Plaintiffs have demonstrated a likelihood of success on the merits oftheir claims and a likelihood of irreparable harm.
Plaintiffs have established that the Constitution of the Screen Actors Guild
(“SAG”) was amended in 1981, by the addition of Appendix I. It set forth clear
obligations and requirements to be followed in any future effort to merge SAG with another union, known as The American Federation of Radio and Television Artists(“AFTRA”).
The provisions of Appendix I, specifically paragraphs 12 and 13, require the
SAG National Executive Committee to recommend a series of studies to be
conducted before a merger, so that the results of those studies would inform thedevelopment and finalization of any ultimate merger proposal and the votes of the members on that proposal.
On of the merger requirements in the SAG Constitution concerns the need for
a study designed to determine “what, if any, merger plan can be achieved which will satisfy the requirements of law and the protection of all eligible members against loss of benefits, presently or in the future.” (SAG Constitution, Appendix I,paragraph 13 Plaintiffs have submitted the testimony of an ERISA law expert, Alex Brucker, and Actuary, Patrick Byrnes. These experts opined that, in order to fulfill their fiduciary obligations Defendants were required to exercise due diligence to
protect SAG member pension and/or health benefits. Such due diligence requiredthem to recommend and complete an actuarial study of the SAG and AFTRA pension and health plans prior to the merger proposal.
No such study was been recommended or completed. The so-called
“Feasibility Study”, prepared by Defendants consisted of letters from seven ERISA lawyers, sent only after the merger proposal had been designed and was being promoted by Defendants. These lawyers provide an overview of Labor law and a generalized discussion of mergers, without any review or analysis specifically directed to the actual SAG and AFTRA pension and health plans which, if merged, could well cause a loss of SAG member benefits.
Without the benefit of an actuarial study, SAG members are being promised
by Defendants that “merger is the best way to protect our benefits” and “merging the unions and the Plans would only benefit Plan participants.” These claims are, according to Plaintiffs’ experts, are false and unsupportable. The conclusions ofPlaintiffs’ experts are supported by a study previously prepared in 2003, known asthe Mercer report. The Mercer Report concluded that SAG benefits (as they then existed) would decline if the SAG and AFTRA plans were merged into one plan.
By comparison, Defendants have not consulted any actuaries, done no studies andthus have no basis to advise SAG members that merger of their benefit plans willnot negatively affect SAG member benefits.
Additional studies enumerated by Appendix I were similarly not
recommended or conducted. Board resolutions reaffirm the need for study of the issues articulated by the Constitution.
SAG members cannot hold a meaningful vote for merger if their fiduciaries
have falsely advised them and/or omitted material disclosures concerning the
absence of necessary due diligence. Any proposal or election regarding mergerdeveloped in violation of the safeguards set forth in the SAG Constitution and Bylaws and Board Resolutions, would be an improper use of union funds inviolation of the fiduciary duties owed by Defendants to the SAG members. If thevote is allowed to proceed prior to the resolution of this action, it will be virtuallyimpossible to untie the knot and return the parties back to the status quo.
Accordingly, the balance of the equities weigh in favor of Plaintiffs, and the
public interest is served by enjoining Defendants from proceeding further with the merger vote until the necessary due diligence is completed and members areproperly informed. Therefore, the Motion of Plaintiffs for a Preliminary Injunctionis GRANTED.
NOW, THEREFORE, IT IS HEREBY ORDERED THAT:
Defendants SCREEN ACTORS GUILD (“SAG”), KEN HOWARD, AMY
AQUINO, NED VAUGHN, MIKE HODGE, and DAVID HARTLEY-MARGOLIN and their officers, agents, servants, employees and attorneys are enjoined and prohibited from tallying the merger vote or publicly announcing the results of the merger vote until such time that Defendants can adequately verify for the Court thatthe following has been done:
a. The SAG National Executive Committee has recommended, in
conjunction with the development of any merger proposal to be voted upon by the members, all necessary studies required by Appendix I of the SAG Constitution, including an independent study detailing the actuarial effect of any proposed merger of the pension and/or health plans; and
b. A truthful and complete disclosure to the members of all aspects of the
proposed merger plan, acknowledging its limitations and omissions, including any potential adverse impacts.
Plaintiffs have no obligation to post a bond pursuant to Fed. R. Civ. Proc.,
Rule 65(c) because Defendants assumed the costs to proceed with an invalid
Case 2:12-cv-01468-SJO-AJW Document 13-2 Filed
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