Screenwriters Deal Approved

June 09, 2010

Screenwriters Deal Approved

By Jean-Luc Renault

Daily Journal Staff Writer

LOS ANGELES – A judge has approved a final settlement agreement between a class of screenwriters and the Writers Guild of America West, bringing to an end a five-year lawsuit involving tens of millions of dollars in revenue from foreign distribution levies that were never paid out.

While the initial dispute has come to a resolution, a new issue has emerged – whether lawyers for three objectors to the settlement are entitled to nearly $200,000 in legal fees generated from seven months of work on the long-running case. Those fees come on top of more than $1 million already requested by other attorneys involved in the case.

Writer William Richert, represented by Neville Johnson of Johnson & Johnson and Paul Kiesel of Kiesel, Boucher & Larson, filed the lawsuit against the WGAW in 2005 on behalf of 17,000 guild and non-guild writers to whom the union owed money.

A number of European and South American countries began to impose taxes in the 1980s on distribution of copyrighted American works in television broadcasts and video rentals.

Starting in 1991, those funds were paid to WGAW, which placed them into a trust. The guild is supposed to disburse the money, whether the recipients are union members or not.

According to a guild report released in August last year, the WGAW had amassed a backlog of about $30 million in undistributed levy funds. The guild said it could not disburse the accumulating money because it could not locate the recipients.

Los Angeles County Superior Court Judge Carl West signed the final settlement agreement last week, which required the guild to “use its best efforts to pay all foreign levy funds in its possession” under the continued direction of the court.

The settlement also required the guild to post on its website a database where writers can either check to see if they’re owed money or register works that may one day entitle them to foreign levies.

The settlement calls for a one-time audit of the levy program, “from inception to present,” by one of the “Big Four” accounting firms – PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young or KPMG.

The audit, which will tally the total amount of money that’s ever been brought into the program, the interest accrued and the amount distributed to writers, will be posted on the WGAW website for five years and paid for with interest generated from the funds held in trust.

Money allotted for writers who can’t be identified will be donated to a court-approved charity and payments intended for writers, who can be identified but not located, will become unclaimed property subject to California law.

Initially, the guild claimed it should be able to keep funds intended for identifiable writers who could not be located, but three writers objected and pushed to have the undeliverable payments become unclaimed property.

Objecting writers Eric Hughes, Art Eisenson and Stefan Avalos also succeeded in limiting the guild’s scope of release, giving some class members the ability to pursue legal remedies not covered in the lawsuit.

Their lawyers, who first became involved in the case after West’s approval of a preliminary settlement agreement last October, filed objections with the settlement in February and continued to be involved in negotiations until the final agreement was signed.

Those lawyers – solo practitioners Jeffrey Winikow and Steven Kaplan – requested $193,800 in fees, plus $1,023 in costs for their combined 323 logged hours in papers filed with the court late last month.

Kiesel, who did not immediately return a call seeking comment, requested $231,897 for about 300 hours of work starting in March 2008, when Kiesel became co-counsel on the case.

Winikow, who logged a total of 77 hours for the case, said he believed West will recognize the impact the objectors had on the final settlement when a motion to approve the fees goes in front of the judge at a July 1 hearing.

“It’s well established that when objectors’ participation presents a benefit to the class, that entitles you to reasonable attorneys’ fees,” Winikow said in an interview.

Kaplan did not immediately return a call seeking comment.

Although a disagreement over attorneys’ fees will not impact the settlement, counsel for both sides can object to fee requests.

Johnson, who is requesting $800,299.80 in fees for his work on the case since 2005, declined comment on whether he would formally object to the objectors’ fees, which would be paid out from the guild’s unclaimed funds.

Anthony Segall, a partner with Rothner, Segall, Greenstone & Leheny who represented the guild, did not return calls seeking comment on the requested fees. 

Writers Guild of America –