Judge Narrows Issues in SAG-AFTRA Case
October 7, 2013 | 11:27AM PT
The 30-minute hearing before Judge Manuel Real brought sharp reactions from the parties, underscoring the high stakes involved.
Attorneys for the union declared vindication and labeled the suit “frivolous” but the plaintiffs indicated that they will proceed. And plaintiffs’ attorney Sunny Wise said she plans to file a second suit alleging corruption and breach of fiduciary duty against SAG-AFTRA national exec director David White and Chief Administrative Officer and General Counsel Duncan Crabtree-Ireland.
“We’re not walking away from this,” Wise added.
The prospect of another suit evoked a pointed rebuke from Crabtree-Ireland, who asserted that the Asner litigation is a waste of SAG-AFTRA’s funds.
“Regrettably, it appears that the plaintiffs may choose to litigate the remnants of their complaint resulting in continued unnecessary expenditure of member dues money to defend against this frivolous action,” he said.
Real granted portions of the union’s motion to strike the allegations but allowed the naming of White in the suit in connection with his work at Entertainment Strategies Group prior to his 2009 appointment to the top SAG post. Convicted felon Marc Dreier invested in Entertainment Strategies Group, which closed down after Dreier was charged with masterminding a massive fraud scheme.
Wise noted that Real’s ruling did not exclude residuals and allowed three of the 16 plaintiffs — former SAG national board members Steve Barr, Terrence Beasor and Clancy Brown — to proceed with their claims on unpaid foreign royalties since they had opted out of the settlement of Ken Osmond’s class-action suit against SAG in 2010. The remaining 13 plaintiffs will not be able to pursue foreign royalty claims.
“This isn’t about damages,” Wise said. “It’s about accountability and transparency.”
Real struck down the suit’s accusations that SAG-AFTRA’s move to reincorporate in Delaware as part of last year’s merger was designed to give the union better access to unpaid residuals. The judge said that the state of incorporation was not legally relevant to the case.
The suit alleges that SAG-AFTRA has improperly withheld funds and stonewalled requests for information about $130 million held in trust by the union — including domestic residuals and foreign royalties collected by the union through foreign collecting societies without authorization or knowledge of union members. The suit also alleges that the union has cashed residuals checks and then claimed an inability to locate the actors to whom it owes money.
Additionally, the action alleges that the union has withheld information by filing incomplete LM-2 annual reports with the U.S. Dept of Labor and by moving to seal court records.
Robert Bush, an attorney for SAG-AFTRA, declared a near-total victory.
“We applaud the judge’s action today,” he said. “We basically got everything we asked for and the vast bulk of the plaintiff’s frivolous complaint has been dismissed, as it should have been.”
Bush also said after the hearing that the rulings by Real backed up the union’s assertion that the Asner case does not have far-reaching implications. “Our contention is that this is a small case, not a big case,” he added.
Bush also said that the Asner complaint would have to be “completely re-written,” adding, “I think it’s a waste of time and money.”
He took issue with the suit’s allegations that SAG-AFTRA has repeatedly stonewalled the plaintiffs in providing information about how the funds are collected and disbursed. “We have always been transparent,” he added.
Crabtree-Ireland repeated that assertion, saying, “In addition to our more than 1,000 pages of annual disclosure documents available on line to anyone, we have and continue to maintain a policy of responsiveness to legitimate member requests for information.”
But Wise pointed out that Brown, who attended the hearing, was on the SAG board in January 2012 when he wrote to SAG officials about being kept in the dark over details on SAG’s foreign funds and agreements with collecting societies.
“This is still a foreign royalties case,” Wise said. “Clancy asked for that information 22 months ago and never got any response.”
William Richert, one of the 16 plaintiffs, declared outside the courtroom that he’s never received any foreign payments for his acting work in “My Private Idaho” or “The Client.” Richert was the lead plaintiff in a 2005 class-action suit over foreign royalties against the Writers Guild of America that was settled in 2011.
“I believe SAG-AFTRA is corrupt through and through,” he added.
Beasor, who also attended the hearing, expressed amazement that he has received miniscule royalty checks from the union for some of his films and TV shows without any explanation of when shows were viewed abroad.
“I got a 35 cent check for ‘Walk Hard: the Dewey Cox Story’ with no explanation as to the origin,” he added.
Crabtree-Ireland reiterated SAG-AFTRA’s position that members would not have received any funds without the union’s efforts.
“SAG-AFTRA remains focused on collection and distribution of foreign royalties and distribution of unclaimed residuals, programs of which we are justifiably proud,” he said. “Over the last six years we have distributed more than $17.5 million in foreign royalties to SAG-AFTRA members – including most of the plaintiffs — money that would have been lost to them forever had we not taken action.”
Eric Hughes, one of the plaintiffs and a consultant on Richert’s case, noted that the union continues to avoid providing the requested documents — some of which were sealed during the Osmond litigation.
“Our request to be provided all collective bargaining agreements into which SAG-AFTRA has entered is not only a legitimate request but our right under the law,” Hughes said. “As for transparency, the financial records of a labor organization are public information. Why is it that we are having to file a motion to unseal the complete but unreported financial history on SAG and foreign royalties which White and Crabtree-Ireland had permanently sealed in Los Angeles Superior Court?”
According to SAG-AFTRA Attorney Bush “Our contention is that this is a small case, not a big case,” he added. Ah, you think that’s because it’s about the membership’s money? No big deal? A few Million of the memberships money here and there…..ah, once again NO BIG DEAL!!!! On the other hand, if it were a few grand out of his pocket, you think he might have a different take on it?
The sad thing is that this dude’s salary is coming out of the membership’s pockets!!!!!!
The Ol’ SAG Watchdog
Monday October 7, 2013 @ 11:13am PDT
A federal judge this morning has ruled that a multimillion-dollar lawsuit against the union by former SAG president Ed Asner and the 15 members of the self-titled United Screen Actors Committee will not go forward in its original form. In a hearing downtown, Judge Manuel Real granted large portions of SAG AFTRA‘s motion to dismiss the lawsuit over $130 million in allegedly improperly dispersed foreign residuals. Asner and the other plaintiffs first filed their suit May 24. After the hearing, plaintiff’s attorney Helena Wise said “we’re not backing away from this”. The lawyer added that because some aspects of the foreign residuals in the case remain partially intact, she is considering amending the complaint. In his decision today, the judge also granted the majority of SAG AFTRA’s motions to strike portions of the original complaint. He did not agree to strike the naming of the union’s national executive director David White, which could be significant as Wise said today she is also considering launching an action of breach of fiduciary duty and corruption against various union executives including White and general counsel Duncan Crabtree-Ireland. In the hearing earlier, Wise told the judge that she would likely add White and others to the suit if it was allowed to go forward for their alleged role in the foreign residuals pay-outs. Also outside the courtroom after the hearing, plaintiff Bill Richert accused the union of being “corrupt” from “top to bottom.”
Richert and several other plaintiffs attended the hearing today. Asner was not among them. SAG AFTRA lawyer Robert Bush said following the 30-minute hearing that “the complaint will have to be completely re-written”, adding that in his opinion “this is a small case, not a big case”.In their motion to dismiss in late July, the union had called the suit a “virtual verbatim restatement” of the 2007 class action by Ken Osmond of Leave It To Beaver fame and other actors accusing SAG of not properly paying out $8.1 million in overseas royalties. That case was resolved back in 2010 with a settlement. Not unexpectedly, in September, the plaintiffs disagreed with the comparison to the Osmond case. The USCA called the union’s actions in their particular case an “extreme web these parties have woven to steal money that rightfully belongs to U.S. performers, if not others as well.” In reading out his dense ruling to the courtroom, Judge Real not the plaintiff’s contention that SAG and the now merged SAG-AFTRA are not the same parties but still fundamentally agreed not to re-hear a case in federal court that had been resolved in state court three years ago.
Deadline’s Dominic Patten – tip him here.
Hmmm…the fact that the reporter for “self-titled” Deadline Hollywood labeled Asner’s group “as self-titled” is a tad inane. Or AT least that’s the opinion of the Ol’ “self-titled” SAG Watchdog!
The Ol’ SAG Watchdog
*Photo provided Watchdog