US: Writers Guild loses bid to toss agencies’ antitrust suit

A federal judge on Tuesday allowed the three major agencies to pursue a lawsuit against the Writers Guild of America, finding that the guild’s agency boycott is not immune from antitrust scrutiny, reported Variety. 

US District Judge Andre Birotte denied the guild’s motion to dismiss the suit, brought by WME, CAA and UTA, holding that the agencies have made a plausible claim that the boycott was a “predatory device” intended to harm the agencies.

The ruling marks a significant win for the agencies, which have accused the WGA of an unlawful “power grab” in its war on packaging fees. In his ruling, Birotte showed little sympathy for the WGA’s claim that it is merely seeking to promote its members’ best interests by stamping out a pernicious conflict of interest.

Birotte said that the WGA had “not provided a plausible argument that prohibiting packaging enhances overall efficiency and makes markets more competitive.”

Instead, Birotte held that the agencies made a credible case that the boycott violates antitrust law by stifling competition in the market for writer representation. Birotte also found that the WGA had “expressly permitted” packaging fees for the last 40 years — a point the guild disputes.

Birotte also credited the agencies’ argument that the WGA had combined with “non-labor” parties, including showrunners, attorneys and managers,  in effectuating the boycott. The WGA has argued that showrunners — who are members of the guild — are not bound by the guild’s new anti-packaging rules if they are not performing work as writers. But Birotte found that the agencies’ suit had adequately alleged that showrunners have been coerced into firing their agents even when they act solely as producers.

The ruling is a severe blow to the WGA, which had claimed that its actions are entirely protected by the labor exemptions to federal antitrust law. The agencies’ lawyers have argued that the guild has gone well beyond that protection with its boycott, threatening to harm directors, actors and ultimately consumers.