WGA Rejects DOJ Request To Appear At Big 3 Agencies’ Antitrust Hearing Next Week – Update

Dominic Patten and Erik Pedersen

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UPDATED, 3:48 PM: In a move reminiscent of its recent Supreme Court co-headlining appearance with Comcast, the Department of Justice today is seeking to speak at a pivotal upcoming hearing in the Writer Guild of America’s antitrust dust-up with WME, CAA and UTA.

The Makan Delrahim-led antitrust unit of Donald Trump’s DOJ filed paperwork in the federal docket Wednesday requesting time at the December 6 hearing in Los Angeles. With the Justice Department coming down hard against the WGA’s attempt to have the Big 3 agencies’ cases against the union dismissed, it is no surprise that WME, CAA and UTA already are in favor of the federal lawyers appearing at that hearing. Conversely, the David A. Goodman-led WGA is no fan of the DOJ showing up in person, like it was no fan of the DOJ’s intervention Tuesday.

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We expect that Judge Andre Birotte will rule on the DOJ’s request in the coming days after the holiday. However, there is a chance that the request might require a hearing, which could push back the gathering next Friday in DTLA.

PREVIOUSLY, 5:29 PM: The Department of Justice today leaped into the labor octagon antitrust battle between the Writers Guild of America and Hollywood’s three biggest agencies, and now the guild’s West Coast boss David A. Goodman has taken a swing of his own in response.

“It’s not surprising that Trump’s Justice Department has filed a brief designed to weaken a labor union’s effort to protect its members and eliminate conflicts of interest by talent agencies,” the WGA West president proclaimed Tuesday after the surprise brief from the DOJ weighed in on WME, CAA and UTA’s favor.

In the same tone and spirit that has characterized the nearly nine-month, bare-knuckles clash over packaging and production, The Orville EP added, “The agencies’ antitrust claims are contrary to Supreme Court precedent, and we remain confident that the court will dismiss them.”

The labor UFC action next will be in the legal ring in a downtown Los Angeles hearing on December 6, on the WGA’s desire to see WME, CAA and UTA’s antitrust lawsuits tossed out — something the ex-WME client Donald Trump’s DOJ has now strongly recommend the judge in charge doesn’t do.

The Writers Guild of America just got possibly the worst Thanksgiving guest ever in its ongoing antitrust lawsuits with WME, CAA, and UTA.

In an unexpected brief from the Department of Justice, the federal government today urged the courts to reject the WGA’s attempts to have the Big 3 agencies’ individual antitrust violation lawsuits against the guild dismissed.

“The United States urges this Court to reject defendants’ argument that it can apply the labor exemptions from the antitrust laws in this case on the pleadings,” reads the 25-page brief submitted by DOJ (read it here). “Development of a factual record is necessary to ensure that both the federal antitrust laws and the labor exemptions from the antitrust laws are given their proper scope, and that the fundamental national values protecting competition embodied in the federal antitrust laws are not displaced improperly.

At least, the WGA can take some solace from the DOJ’s brief when it asserts that “the United States takes no position on the merits of this case.”

Then again, that relief is pretty short-lived as the GOP controlled and hence not necessarily union friendly Justice Department filing also states that “while unions can restrict agent compensation when pursuing a legitimate union goal such as avoiding conflicts of interest, it is not a legitimate goal for a union to exert monopsony power over agents simply to extract additional rents.” Slicing and dicing the WGA’s position on its exception and the widespread pulling of representation by scribes in the battle over packaging and production, Attorney General Bill Barr’s team is clearly rallying behind the agencies.

Case in point, the suddenly Tinseltown activist DOJ also cautions Judge Andre Birotte that, in its POV, “only after resolving these factual issues can this Court address the legal question of whether the alleged boycott falls outside the statutory labor exemption because it includes a non-labor group.”

The individual lawsuits that the agencies have filed against the guild are scheduled for their next court appearance on December 6 – under what now might be very different circumstances.

Attempts to reach the WGA for comment on the DOJ’s intervention today were unsuccessful. We will update the story with the guild’s response if and when we get one.

In the meantime, how did this splintering Hollywood labor issue ended up on the DOJ’s radar?

In what is the second time in as many weeks that the Makan Delrahim-led Antitrust Division has turned a spotlight on Hollywood, sources tell us that the savvy L.A.-raised lawyer is ambitious and knows the kind of actions that will get him positive attention from the former Celebrity Apprentice host occupying the Oval Office. On November 22, after moves by Delrahim, the DOJ officially filed paperwork to terminate the Paramount consent decrees that have restricted studio distributors’ control over exhibition for 71-years – something that couldn’t have gone unnoticed in certain high circles, if you know what we mean?

As for this knife fight, the WGA filed suit in state court against the Big 4 agencies on April 17 – just days after it ordered all of its members to fire their agents who refuse to sign its original Code of Conduct, which banned packaging fees. CAA, WME and UTA countersued in federal court in June, claiming that the guild was involved in an “unlawful group boycott.” In August, the guild dropped its lawsuit in state court and consolidated its claims in federal court against three of the Big 4 agencies, who promptly countersued – which is where this all now sits.

Set on the calendar before the DOJ waded in, the next court date early next month is intended to hear the guild’s motion to dismiss the agencies’ consolidated anti-trust complaint. ICM Partners had originally been a defendant in the state case – which the guild dropped in August – and was not named as a defendant when the WGA consolidated its claims in federal court, leading that agency to claim “victory.”

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