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Variety Covers Johnson & Johnson's Litigation Over SAG's Handling of Foreign Levies (Oct. 26, 2011)

Posted by Johnson & Johnson, LLP | Oct 26, 2011 | 0 Comments

Guild cites confidentiality in request to state judge


Oct 26, 2011

By Dave McNary

The Screen Actors Guild has asked a state court judge to seal information about how it handles millions of dollars of foreign levies as part of the settlement in the tangled class-action suit over the funds.

Lawyers for Ken Osmond, who filed the suit over the funds in 2007, oppose the motion and assert that SAG is required by federal labor law to disclose any disbursements of more than $5,000.

At issue is an exhibit dubbed a Foreign Royalty Status Table, which details the status of SAG's foreign levy program, including specific dollar amounts collected from the inception of the program through March 21, 2011.

SAG is insisting that it has “an overriding interest” in protecting its confidential financial information which outweighs “right of public access” to the information. “If this motion is denied, then sensitive confidential financial information will be exposed, to SAG deteriment,” the guild said in a filing to Superior Court Judge Carl West.

The judge met with attorneys for more than an hour Wednesday and said he'd decided not to hold a public hearing that had been scheduled to address unresolved issues that he didn't identify, adding that he's scheduled a Jan. 10 hearing.

“We have identified several open issues and reporting requirements,” he told William Richert, the lead plaintiff in a similar suit filed against the Writers Guild of America.

Neville Johnson, attorney for Richert and Osmond, said Wednesday that the confidentiality issue remains unresolved. He's contended that SAG's required to disclose the information to the U.S. Dept. of Labor under the Labor-Management Reporting Act in a Form LM-2 and that the majority of the dollar amounts detailed on Exhibit 1 are in excess of $5,000.

“Further, the foreign levy funds detailed in Exhibit 1 are being paid out to members of the class, and thus are distributions of SAG,” Johnson contended. “Therefore, the contents of Exhibit 1 are to be included in SAG's report to the DOL and must be included on the Form LM-2. As stated above, such report is to be made public.As a result, SAG has an obligation to make the contents of Exhibit 1 public.”

The Osmond suit was settled earlier this year and the Richert suit was setted in June 2010. In 2008, the Directors Guild of America settled a suit filed by William Webb.

The lawsuits stem from “foreign levies” for American actors, writers and directors — which began to flow in 1989 after the U.S. agreed to the terms of the Berne Convention, which established the right of authorship for individuals who create works of art. SAG, the WGA and the DGA began collecting the foreign funds in the early 1990s on behalf of members and nonmembers who had a stake in films and TV programs.

The funds are collected from countries through mechanisms such as taxes on video sales and rentals to compensate copyright holders for reuse. All three guilds have denied any wrongdoing. SAG announced earlier this year that it had created an online Foreign Royalties tracker for actors and asserted that the guild has collected $18.1 million in foreign royalties for performers and had distributed $8.78 million in more than 273,000 checks to more than 76,000 individuals.

Johnson said that both sides have resolved long-standing disagreements on the issue of engaging consultants Donald Jasko and Daniel Gervais to review the foreign levies programs at SAG and the WGA West.

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