Disney, DreamWorks and Other Hollywood Studios Named in Two Additional Antitrust Class Actions

disneyFollowing a very successful year in the wake of Frozen and other blockbuster hits, multiple Hollywood Studios have been named in several antitrust class actions. As I discussed in my blog entry of September 30, Plaintiff Robert Nitsch filed an antitrust class action against The Walt Disney Company, Walt Disney Animation Studios, DreamWorks Animation SKG, Inc., Pixar, Lucasfilm Ltd., LLC, Digital Domain 3.0, Inc., ImageMovers, LLC, ImageMovers Digital, Sony Pictures Animation, Inc. and Sony Pictures Imageworks, Inc. Plaintiff Nitsch accused the Defendants of participating in a conspiracy in which the companies agreed that they would not raid the other companies’ employees. See Nitsch v. DreamWorks Animation SKG Inc., et al., Case No. 14-cv-04062-LHK, U.S. District Court for the Northern District of California.

Since the Nitsch matter was filed, two additional antitrust class actions have been filed recently in the same federal district court against the same group of defendants, involving substantially similar allegations. See Wentworth v. Lucasfilm LTD. LLC et al., Case No. 14-cv-04422-JCS, and Cano v. Pixar, et al., Case No. 14-cv-4203. The complaints in these two cases also allege that there were non-solicitation agreements among the defendants, and that the Defendants intended to suppress wages for animators, digital artists, software engineers, and other technical and creative workers.

These three antitrust class actions are another reminder of the importance of companies’ involving legal counsel in any agreements among competitors and pricing decisions, so that legal counsel may evaluate compliance with antitrust laws and unfair competition laws. Not only might a prudent company reduce the likelihood of a lawsuit, but a company might reduce the likelihood of several lawsuits.

Posted by Stephen Weigand
Class Action
October 24, 2014

New Lawsuit Alleges Minor League Salaries Fail to Meet Minimum Wage

minor league class actionIn the latest chapter of what has been a landmark year in sports law, several current and former minor league baseball players have filed a class action and collective action lawsuit against Major League Baseball (“MLB”) and all 30 individual teams for failing to pay salaries that met or exceeded the minimum wage on a per-hour basis, in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the wage and hour laws in five states. The suit, Senne v. Office of the Commissioner of Major League Baseball (3:14-cv-608-JCS, N.D. Cal. 2014), brings to the forefront the disparity in salaries earned by professional baseball players, puts MLB’s antitrust exemption under renewed scrutiny, and threatens to alter the business of organized baseball, which earned more than $8 billion in revenue in 2013. While the annual minimum salary for an MLB player is $500,000, and the average salary more than $3 million, the Plaintiff class claims that below the “AAA” level–the level right below the major leagues–the median salary is no more than $1500 per month. Second Amended Class Action Complaint (“Complaint”), ¶ 16. This disparity has been termed by baseball economist Andrew Zimbalist as the “struggling apprentice predicament,” in which minor leaguers, like other aspirants in highly competitive entertainment fields such as art and music, often work long hours for low wages in the hopes of achieving wealth and success. Andrew Zimbalist, Baseball and Billions: A Probing Look Inside the Big Business of Our National Pastime, BasicBooks (1994), p. 119. The players claim that, between games, practice, and training, they work more than 50 hours per week during the five month season, and sometimes 70 hours, while receiving no overtime pay. Id. ¶ 9. Thus, assuming an average workweek of 50 hours per week, the hourly wage would be below the federal minimum wage at every level of minor league baseball below AAA. The Plaintiff class also claims that MLB and its teams have been on notice since at least 1995 and 1998, when the Cincinnati Reds had two FLSA cases decided against them, that they are not exempt from federal minimum wage laws. (Id. ¶ 14, citing Bridewell v. The Cincinnati Reds, 68 F.3d 136, 139 (6th Cir. 1995), cert. denied, 516 U.S. 1172 (1996); Bridewell v. The Cincinnati Reds, 155 F.3d 828, 829 (6th Cir. 1998).

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Posted by Jim Smerbeck
Class Action
October 17, 2014

Did Bill Simmons Defame Roger Goodell? Let’s Hope That Roger Goodell Thinks So.

defameRecently, long-time ESPN columnist and TV personality Bill Simmons, speaking of NFL Commissioner Roger Goodell, said that “[Goodell] is lying. I think that dude is lying. If you put him up on a lie detector test, that guy would fail.” Simmons was criticizing Goodell for his insistence that, prior to the NFL’s suspending Baltimore Ravens running back Ray Rice for only two games, the NFL had not viewed a video tape of Rice punching his then-fiancée, Janay Palmer. Simmons’s sharp criticisms of Goodell drew a stern response from ESPN; the sports-media giant slapped Simmons with a three week suspension for failing to live up to ESPN’s journalistic standards. Some have suggested that, in addition to undermining ESPN’s standards, Simmons could also be civilly liable for defaming Roger Goodell. Should Goodell file suit? Probably not, but I sure hope that he does.

We all should welcome a Goodell-initiated lawsuit against Simmons because, as the old adage goes, “The truth shall set you free.” A common defense to defamation claims is that the defendant was telling the truth. For Simmons, that means that—regardless of the merits of his defamation lawsuit, which are not discussed here—he would be able to assert that Goodell’s claim fails because Goodell did, in fact, lie. In other words, if Goodell lied about his knowledge of the Ray Rice video tape, then Bill Simmons would not liable for defamation.

To prove that Goodell is a liar, Simmons would be entitled to discovery, including the opportunity to pore over NFL documents, emails, and records. Simmons would have the right to depose Goodell and other NFL personnel with knowledge of the Ray Rice situation. Simmons would also be able to serve interrogatories, requests for admission, and subpoenas to third parties. The courts employ liberal rules regarding discovery and the open exchange of information, and surely, Simmons would push these liberal rules to their limits.

Most importantly, though, Simmons would be able to reveal to the public what he uncovered in discovery. In court filings and dispositive motions, which are presumptively open to the public, Simmons would be able to argue his version of the truth. It’s also safe to assume that Simmons would not present his evidence in an NFL-friendly PR statement, similar to those Goodell has already released. Thus, for the first time, the public would have access to the other side of the Goodell story, and thanks to the adversarial process, the public would be able to determine whether Roger Goodell lied (and as an aside, whether Bill Simmons is liable for defamation).

As Simmons’s comments about Goodell illustrate, much more than a few hurtful statements play into the decision to bring a defamation lawsuit. A Plaintiff who asserts a defamation claim should be prepared to open up his filing cabinets and email inboxes. Not only can the truth set the defendant free, but the evidence uncovered during discovery may be, and often is, less flattering than the initial defamatory statement. In Goodell’s case, that means he might want to keep his complaints about Simmons out of a courtroom, which unfortunately for us, means that we’ll never know if Goodell is, in fact, a liar.

Posted by Jeff DeBeer
Business Litigation
October 9, 2014

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