SAG-AFTRA Seeks Dismissal Of $130M Residuals Suit! (A Closer Look)

By DOMINIC PATTEN | Wednesday November 20, 2013 @ 12:44pm PST

In a legal move that comes as no surprise, the union today moved to have the remaining elements of the multi-million dollar suit filed by former SAG President Ed Asner and the 15 other members of the self-titled United Screen Actors Committee tossed out of court. In filings (read them here and here) Wednesday in federal court, SAG-AFTRA lawyers said that the amended complaint by the plaintiffs is covered by federal labor law not state law as they are asserting and should be dismissed. The union also says Asner and the United Screen Committee, who first filed their suit on May 24, are over-reaching in their claims of representation. “While Plaintiffs can maintain a cause of action on their own behalf alleging that their own funds have been converted, Plaintiffs have no right to possession or transfer of amounts allegedly owed to others and therefore their claims for others must once again be dismissed,” says the motion to dismiss the plaintiff’s first amended complaint. A hearing on the dismissal and motion to strike is scheduled for January 6, 2014. That hearing could see this case come to an end or allow Asner and crew to file another amended complaint.

Today’s filings come just over a month after District Judge Real set a June 24, 2014 trial date in the case. Earlier in October, the federal judge granted the union’s motion to dismiss a large portion of the suit over $130 million in allegedly improperly dispersed foreign residuals. The amended complaint was filed on October 23. The union has called the initial claims “completely without merit” and 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 in 2010 with a settlement. Judge Real did not cut residuals from the current case and has given three of the original 16 plaintiffs who opted out of the Osmond settlement the right to move forward on unpaid claims.

Additionally, in its filings today SAG-AFTRA wants to strike elements of the plaintiff’s amended complaint about its incorporation in Delaware and the advantages that may or may not have offered union Executive Director David White and a business associate of his that Judge Manuel Real had previously ordered removed from the suit. “The new language is practically identical to the allegations this Court struck, with the few changed words scattered throughout the passage failing to alter the core fact that Plaintiffs have simply restated allegations that this Court has already held impertinent, immaterial and prejudicial,” says the union.


Hearing set for Jan. 6


SAG-AFTRA has asked a federal judge to dismiss the amended complaint by Ed Asner and 15 other members over alleged mishandling of $130 million in residuals and foreign royalties.

The union filed the 18-page motion Wednesday, asserting that the plaintiffs’ claims under state law should be tossed because they are “completely preempted by federal labor law” and that the plaintiffs “do not have the authority to sue on behalf of anyone other than themselves.”

SAG-AFTRA  also insisted that it has complied with the demand for access to review of its financial records — attempting to parry extensive allegations that members and elected leaders have been kept in the dark about the funds.

“While plaintiffs can maintain a cause of action on their own behalf alleging that their own funds have been converted, plaintiffs have no right to possession or transfer of amounts allegedly owed to others and therefore their claims for others must once again be dismissed,” the motion said.

Sunny Wise, attorney for the plaintiffs, said, “Plaintiffs will resist all motions and believe defendants motions are designed once again to mislead and diffuse issues.”

A hearing has been set for Jan. 6 before U.S. District Court Judge Manuel Real.

The plaintiffs’ amended complaint was filed Oct. 23. “Defendants have failed to pay plaintiffs and others the money it has collected in a time frame acceptable under any reasonable business practice,” it alleged. “Defendants have likewise taken an unauthorized commission or fee for the collection of residuals and foreign royalties/foreign levies.”

The motion, filed by attorney Robert Bush, came in response to this amended complaint. SAG-AFTRA had filed its original dismissal motion on July 31 and Real narrowed the issues on Oct. 7, allowing the suit to include residuals and three of the 16 plaintiffs to proceed with their claims on unpaid foreign royalties.

Real had also denied a motion to strike a reference to SAG-AFTRA national exec director David 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.

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.

After the Oct. 7 hearing, attorneys for SAG-AFTRA declared victory and labeled the suit “frivolous.” But the plaintiffs had indicated they would proceed along with filing a second suit alleging corruption and breach of fiduciary duty against White and chief administrative officer and general counsel Duncan Crabtree-Ireland.


Hmmm…so now we in Hollywood will be like most of the country.  We’ll have union suits on our minds. 


The Ol’ SAG Watchdog

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