Big 3 Agencies Win Protective Order In Ongoing Legal Battle With WGA Over Packaging Fees

The Big 3 talent agencies have won another skirmish in their ongoing legal battle with the WGA over packaging fees – this time over a protective order they proposed that would prohibit the guilds’ in-house lawyers from having access to certain confidential financial and business records that the agencies have agreed to turn over during the discovery phase of the case.

Before Wednesday’s ruling, agencies WME, CAA and UTA had expressed concerns that the guilds’ in-house lawyers – WGA West general counsel Anthony Segall and WGA East general counsel Ann Burdick – might use the agencies’ client lists to uncover and discipline writers who have returned to their agencies in defiance of the guilds’ April 2019 order to fire their agents who have refused to sign the WGA’s code of conduct. They also said that Segall and Burdick might share these sensitive documents with the Big 3’s competitors, and could use the documents against them at a later date if they ever enter into negotiations with the guilds for a new franchise agreement.

The WGA, however, had argued that that the guilds “will be seriously prejudiced if the agencies’ proposal to prohibit the guilds’ two general counsels from reviewing this and other information is accepted,” and that “restricting these two attorneys’ access to the many categories of documents that the agencies deem sensitive…would severely handicap outside counsel’s ability to understand the facts relevant to this dispute, evaluate the agencies’ purported damages and settlement proposals, and otherwise litigate this matter.”

In his ruling today, U.S. Magistrate Judge Alexander MacKinnon, who’s overseeing the discovery portion of the case, sided with the agencies – at least for now. The protective order proposed by the agencies, he found, “generally follows the Court’s model protective order – with the addition of attorneys’ eyes only (AEO) and outside counsel eyes only (OCEO) categories of documents and restrictions.” Currently, no documents have been produced by the agencies under the OCEO designation.

After reviewing the two sides’ briefings on the matter, he ruled that after the agencies have produced documents using the OCEO designation, “the issue regarding Segal and Burdick will be more focused on a practical level. There may also need to be discussions between the parties whether the OCEO designation for specific documents are appropriate. If at that point an issue still exists concerning access by Mr. Segal and Ms. Burdick to certain OCEO documents produced by (the agencies), the Court will then schedule a hearing to address that issue.

“Until the issue is resolved either by agreement between the parties or by further order of the Court, Mr. Segal and Ms. Burdick shall not have access to OCEO documents produced by (the agencies).”

On April 27, U.S. District Court Judge Andre Birotte Jr., the trial judge in the case, threw out major portions of the WGA’s lawsuit, ruling that the guild lacks antitrust standing to pursue its federal price-fixing claim; lacks organizational standing to bring claims for breach of fiduciary duty and constructive fraud on behalf of its members; lacks standing to bring an Unfair Competition Law cause of action on its own behalf; failed to plead racketeering activity by the agencies; and failed to state claims upon which relief can be granted with respect to its group boycott claims.

Birotte, however, allowed the guild to proceed with its state price-fixing claim and will allow several individual plaintiffs to pursue their claims for breach of fiduciary duty, unfair competition and breach of contract.

The cutoff date for the completion of discovery is October 21, with the trail set for March 23, 2021.

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