The Writers Guild of America is an association that advances the interests of TV and film authors. The Guild is suing talent agencies that represent the writers in marketing the writers’ work to studios that produce movies and TV shows. The Guild claims the agencies have violated their fiduciary duty through the use of packaging fees.
A fiduciary duty is a legal responsibility to act solely in the best interest of another party. A person with a fiduciary duty owes an undivided loyalty to that other person, and must put that person’s interests ahead of his own. For example, partners in a business owe a fiduciary duty to each other. Doctors have a fiduciary duty to their patients. So too do lawyers to their clients.
Packaging fees are commissions paid when the agents don’t just shop a new script (attempt to sell the work of a client) to studios, but rather offer to provide in addition the production talent such as actors and directors needed to produce the show. These “packaged series” have included such popular titles as Madame Secretary, Beverly Hills 90210, Homeland, and Buffy the Vampire Slayer. Some agencies have even begun to develop production divisions to expand their offerings and enhance their ability to negotiate packaging fees.
Writers claim their interests are compromised when agents pitch a full production rather than just the script. Writers further assert that the agencies, by seeking packaging fees, are putting their own interests ahead of those of the writers. Said a representative of the Guild, “Our agents owe us their loyalty. That is what we pay for. . . writers need true allies, not deeply conflicted ones.”
The lawsuit alleges a violation of the California Unfair Competition Law. That law bans unfair, unlawful and fraudulent business practices. Most states have a similar statute. An unfair business practice is one that has the tendency to deceive customers or clients. A practice is unlawful if it violates any statute, regulation or rule. The California statute, and similar laws in most states, are intentionally broad to give courts the maximum authority to outlaw new scams.
Remedies for violations of the Unfair Competition Law include an injunction ( a court order that requires a party to stop doing something), and restitution (compensation). Additionally, a successful plaintiff can obtain compensation for attorney’s fees. Interestingly, while attorney’s fees are normally based on hours worked, the California statute allows a lawyer an enhanced fee if the case establishes an important precedent and thereby benefits the public.
The remedy sought by the writers is an injunction barring agencies from pursuing packaging fees, and restitution of revenue lost to writers as a result of the packaging fees. The Guild asserts that members’ pay has decreased in recent years due to agents mixed loyalties despite the high demand for TV content attributable to streaming, Netflix, HUL, and the like.
The defendants are the four largest talent agencies for writers: William Morris Endeavor, Creative Artists Agency, United Talent Agency, and ICM Partners.
Prior to the lawsuit, the Guild had developed a code of conduct for agencies that includes banning packaging fees. Ninety-five percent of the Guild’s members voted in favor of implementing the code. The Guild then presented it to the agencies but the four defendants refused to comply.
There are seven plaintiffs in the lawsuit in addition to the Writers Guild. Among them are prominent Hollywood creators including “Cold Case” writer Meredith Stiehm and “The Wire” writer David Simon. All allege they have been exploited by the use of packaging fees.
Some writers disagree with the Guild’s “hard-line stance.” They seek a more “mature, measured, and considered” approach.
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