An iceberg floated into view recently and as is customary with this
frigid geological phenomenon, 90 per cent of it was out of sight. In addition,
like the famously implacable block of ice that sank the Titanic, this iceberg
looks strong enough to sink a flotilla of Hollywood elites, in a case as
outrageous if not more so than the AIG or Madoff scandals.
This iceberg arrived in the form of an article in Variety published on Monday, March 23, and concerning an
unusual action brought by William Richert against the Writers Guild of America.
A lawsuit against the Guild by a writer is not unusual. One of the
little known yet open secrets of Hollywood is that writers are suing their own
Guild all the time, as illustrated in only one of many instances by Gore Vidal's
suit against the Guild over its authorship arbitration policies, brought in
connection with his work on the film The Sicilian. Some suits are not always necessarily filed in
anger, however. Instead they often necessitated by legal machinations. But the Richert
action is not one suit brought by a single writer against his union in the wake
of an authorship arbitration ruling. It is a large-scale class action suit
representing numerous writers known and unknown, alive and dead.
As with an iceberg, much of the story seems to lie below the surface.
In the article, written by Dave McNary, the ostensible narrative concerns a
snag in a settlement hearing between the WGA and Richert. According to Mr.
McNary, writer-director William Richert ( Winter Kills ,
brought a class action suit in 2005 against the Writers Guild of America on
behalf of numerous writers who have allegedly gone unpaid for foreign income on
their work. Last summer the WGA and Richert's counsel initiated negotiations
for a settlement. Then mysteriously, Mr. Richert decided to abandon the role of
lead plaintiff. Monday's event was "a state court hearing that had
originally been set to approve a preliminary settlement agreement and to
dismiss William Richert as lead plaintiff at his request." But it came to
pass that Mr. Richert had changed his mind, due to his discovery of
"evidence detailing alleged embezzlement in how the WGA has handled the
foreign funds," according to the story, and decided to remain as lead
plaintiff. In addition, he now wanted to fire his attorney, Neville Johnson.
The result at the end of the day was that, according to the story's lead, the
writers on whose behalf Mr. Richert brought this suit were no closer to getting
the monies owed them.
But the story gets more complicated. There are numerous countersuits
and other actions. A consultant on Richert's case, Eric Hughes, has filed a
curious complaint with a state lawyer disciplinary board against Mr. Johnson
for failing to disclose to the court, among other things, that Mr. Richert was
not a Guild member. The widow of one writer, the controversial Philip Yordan,
has brought a criminal charge against the Guild. A former Guild employee named
Terri Mial is bringing a second action against her former employer, which is
curious since she won a settlement two years ago in an earlier, wrongful
termination case. In addition, Ms. Mial has also, according to the Hughes
complaint, made a criminal complaint against Mr. Richert and his lawyer for
harassment.
In another weird twist, one of the plaintiffs Pearl Retchin, the heir
of writer Norman Retchin (Uranium Boom, 1956), died in 2008, to be replaced by her daughter as the family's
representative, said information going unannounced to the court.
A key paragraph in Mr. McNary's article reads, "At stake in the
suit are millions in foreign funds due to copyright holders as compensation for
reuse -- such as taxes on video rentals, cable retransmissions and purchases of
blank videocassettes and DVDs. Unlike in the U.S., writers, actors and
directors in most other nations cannot surrender the copyright on their
works."
Ms. Mial is apparently the whistleblower who brought the WGA's
allegedly criminal activities to the attention of federal investigators,
revealing that, in the words of the Hughes complaint, "The unions are not
holding these monies as any consequence of the so-called Foreign Levy
Agreement, but instead by falsely claiming in foreign countries to foreign
collecting societies that they are legally authorized to collect monies
generated by copyright."
What the hell is going on here? This case seems like a big deal, but
I'd never heard of it. Mr. McNary can't be blamed for not summarizing a whole
complicated case in what is intended to be a bulletin updating trade journal
readers assumed to be intensely familiar with the subject, so a bit of research
reveals that there indeed have been several stories about the situation,
including one by
Dennis McDougal (author of Fatal Subtraction: How Hollywood Really Does
Business, about the Art Buchwald
- Paramount suit, and a recent biography of Lew Wasserman) at the L.A. Weekly,
which reveals why Ms. Mial was ostensibly fired from the WGA. Another story by
Mr. McDougal for the New York Times
appears to have introduced the story to national non-specialist readers.
Explaining the root issue of the case, Mr. McDougal notes that,
"Unlike television residuals, which producers and studios have been
obligated to pay since the 1950's, foreign levies stem from VCR, DVD and
Internet technology. While American viewers can tape programs from their
television sets free of charge, in other nations people pay taxes like one on
blank videocassettes and DVD's, or assessments on cassette rentals so the
copyright holders can be compensated." He goes on to explain that since 1990,
the WGA, along with the Screen Actors Guild and the Directors Guild have been
extracting this money from most European countries, amounting, in 2004, to some
$23 million dollars for the writers alone.
MacDougal's L. A. Weekly
account appears to be the one-stop shopping site for everything you'd want to
know about this tricky case, including the shocking possibility, according to
outside observers, that the Writers Guild has diverted "92.5 percent of
writers' pay from foreign airings of their works to Hollywood studios,
producers and, perhaps most galling, to the Writers Guild of America West
itself. Since 1990, these critics contend, the guild has quietly been paying a
king's ransom in writers' foreign earnings ... to powerful Hollywood entities
without the writers’ agreement or knowledge."
Despite all this good information, however a number of questions come
up. Among these are:
• Who is William Richert representing? Since it turns out that he is
not even a Guild member, is he representing both Guild and non-Guild members?
And if so, how did the Guild manage to find a role as caretakers of income for
writers not in the union? How can a union have a supervisory role over money
owed non-union writers?
• Where is all this money? What has the Guild been doing with it
while allegedly seeking out the true recipients? The New York Times story reveals that the foreign levies money
represented, at that time, 40 per cent of the Guild's assets. In the Weekly, critics charge, as mentioned above, that the
Guild is allegedly in collusion with the studios to spirit away much of the
income. As a representative of Hollywood's writers, how would the Guild justify
this alleged betrayal of its membership's interests?
• How could one of the plaintiffs be dead and the court not hear
about it? Is this why Mr. Richert wants to dismiss Johnson? Or is it solely
because Mr. Johnson wants a settlement while Mr. Richert wants a jury trial? If
so, why does Mr. Johnson want to settle for a settlement?
• On which side is Eric Hughes on? It turns out, from collating both
the Times and the Weekly's stories, that Mr. Hughes is not a lawyer but a
screenwriter (Against All Odds,
White Nights) who ran for the
WGA presidency 2004. His run for the presidency apparently unveiled to him the
Guild's Byzantine monetary practices. If so, what does he really have against
Mr. Richert's case?
• What happened to the federal investigation in which Ms. Mial was a
whistleblower? And what is her real problem with Mr. Richert and Mr. Johnson's
case?
The answer to all these questions may lie in the vaults and file
cabinets of the WGA's headquarters at Third Street and Fairfax, waiting to be
unlocked by Mr. Richert's trumpet of Gideon.
William Goldman, one of the film industry's most respected screenwriters, coined the phrase "Follow the money" as a bit of dialogue for Deep Throat in his adaptation of All the President's Men, a phrase not found in the book. Yes, "Follow the money." Never was the phrase more apt than in the case of Richert, et al, v. The Writers Guild of America.
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