Guild Reaches Deal on Foreign Levies

August 11, 2010
Guild Reaches Deal on Foreign Levies

By Jean-Luc Renault
Daily Journal Staff Writer

LOS ANGELES – The Screen Actors Guild reached a tentative settlement with its members to end a lawsuit that accused the union of failing to distribute millions of dollars in foreign distribution levies to film and television actors, according to the plaintiffs’ lawyer.

The class action against SAG, filed in 2007 by attorney Neville Johnson, claimed that the union withheld more than $8 million in funds collected from countries that impose taxes on television broadcasts and video rentals.

Lead plaintiff Ken Osmond, who played Eddie Haskell on the television show “Leave it to Beaver” and later became an officer with the Los Angeles Police Department, filed the suit in Los Angeles County Superior Court on behalf of a class comprised of at least 30,000 actors.

If it receives judicial approval, the settlement will bring to an end a long-running legal effort against three Hollywood guilds that were accused in separate suits of failing to disburse more than $50 million worth of levy payments in total.

“This is a great victory for all actors who are going to be fully compensated for monies accruing since 1992,” said Johnson, who is co-counsel on the case with Paul Kiesel of Kiesel, Boucher & Larson.

Johnson, who also represented the plaintiffs in the other two cases, added that the amount of levies that SAG is holding has increased to more than $12 million since filing the lawsuit.

A spokeswoman from SAG declined to comment, but the union in 2007 contended that it did not have adequate computer systems to distribute the funds to the various recipients.

SAG’s lawyer, Latham & Watkins partner Daniel Schecter, also declined to comment on the settlement.

The SAG agreement closely resembles settlements in similar class actions against the Directors Guild of America and the Writers Guild of America West that also involved undistributed foreign levies, according to Johnson.

The previous settlements with the other two entertainment guilds required them to use their best efforts to pay out undistributed funds within three years.

In addition to comprehensive accountings of the foreign levy programs by outside firms, the previous agreements also required the guilds to maintain online databases where potential recipients can check to see if they are owed money.

The databases also included a system to register works that might one day generate foreign levies.

Under the previous agreements, funds for which recipients can’t be identified are to be donated to charity.

The foreign levies issue surfaced in the 1980s when European and South American countries began imposing taxes on the distribution of American works in television broadcasts and video rentals to compensate actors, writers and directors.

Starting in the early 1990s, those funds were sent to the guilds, which were supposed to distribute the money to union and non-union recipients.

Although the unions did pay out some of the foreign levy funds, they attributed the pooling money to difficulties in tracking down recipients and processing payments.

Both sides in the SAG case are set to file a preliminary settlement agreement next month with Los Angeles County Superior Court Judge Carl West, who also presided over the previous two foreign levy class actions.

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