TEXT:
October 25, 2011
In an
extraordinary show of contempt for the rights of members of the Screen Actors
Guild, on October 11, 2011, the Screen Actors Guild filed a motion in Los
Angeles Superior Court to seal its financial disclosures relating to the
so-called Foreign Levies Program in the Osmond vs. SAG settlement.
Essentially, SAG's Motion
to Seal is a motion to seal from members of SAG the financial data on SAG
members' foreign royalties.
This action by the Screen Actors Guild is unprecedented in U.S. labor history.
And in the annals of really dumb moves, Screen Actors Guild National Executive Director David White and Deputy National Executive Director and
General Counsel Duncan
Crabtree-Ireland have hit it way the fuck out
of the
ballpark.
Late today, White and Crabtree-Ireland got smacked upside their respective
heads by the real world.
Neville L. Johnson and Noelle C. Brown, Attorneys for Plaintiff and the
Plaintiff Class in Osmond vs. SAG, filed
in Los Angeles Superior Court a SUPPLEMENTAL BRIEF TO PLAINTIFF'S OPPOSITION TO
DEFENDANT'S MOTION TO SEAL.
It follows:
INTRODUCTION
On October 11, 2011, Defendant Screen Actors Guild, Inc. ("SAG") filed a
motion to seal Exhibit 1 to the Joint Statement of Remaining Issues with
Execution of Class Settlement Agreement, submitted on September 28, 2011
("Motion to Seal"). Exhibit 1 is a Foreign Royalty Status Table
detailing the status of SAG's foreign levy program, including specific dollar
amounts collected from the inception of the program through March 21,
2011. Plaintiff filed an opposition to Defendant's Motion to Seal
Exhibit 1 on October 17, 2011 (""Opposition to Demurrer") asserting that
Defendant had not alleged all of the elements necessary to show an order to
seal is proper. Plaintiff further showed
that Defendant will not be prejudiced by having
Exhibit 1 open to the public.
Since filing the Opposition to Demurrer, the following information
evidencing that Exhibit 1 should be made public has been brought to Plaintiff's
attention.
LEGAL ARGUMENT
Every labor organization subject to the Labor-Management Reporting Act,
as amended (""LMRDA") must file a financial report and a Form LM-2 each year
with the Office of Labor-Management Standards of the U.S. Department of Labor's
Employment Standards Administration. (See the Labor-Management
Reporting and Disclosure Act of 1959, As Amended, attached hereto as Exhibit 1; See also,
Instructions for Form LM-2 Labor Organization Annual Report attached hereto as
Exhibit 2). The LMRDA grants certain rights to union members and
protects their interest by promoting democratic procedures with labor
organizations. The LMRDA sought to address the particular problems posed
by labor organization reporting by requiring reports containing "such detail
as may be necessary to disclose its financial conditions and operations."
(29 U.S.C. 431(b).) The LMRDA states:
Every labor organization required to submit a
report under this title shall make available the information to be contained in
such a report to all of its members, and every such labor organization and its
officers shall be under a duty enforceable at the suit of any member of such
organization in any State court of competent jurisdiction or in the district
court of the United States for the district in which such labor organization maintains its principal office, to permit
such member for just cause to examine any books, records, and accounts
necessary to verify such report.
See LMRDA Section 201(c), attached hereto as Exhibit 1.
The Department of Labor ("DOL") has developed and implemented, with
direction from Congress to do so, an extensive system for making available on
the Internet the labor organization annual financial reports filed with the
Department for the years 2000 and thereafter. (29 U.S.C. 433.) Using
this system, any member of a labor organization or the general public
with Internet access can review all such reports. Moreover,
Section 205 of the LMRDA provides that the reports filed with the DOL under
Title II of the LMRDA"shall be public
information" and permits the Secretary of Labor to publish any
information obtained. (29 U.S.C. 435.)
One such report that is required to be filed
under the LMRDA is the Form LM-2. The Form LM-2 is a detailed annual
report that must be filed by unions with total annual receipts of $250,000 or
more. (See Office of Labor-Management Standards webpage, section
entitled "Reporting Forms," attached hereto as Exhibit 3). Under the
LM-2, unions must report on "six functional schedules itemizing individual
receipts or disbursements of $5,000 or more and total receipts or disbursements
to a single entity or individual that aggregate to $5,000 or more." (See Office
of Labor-Management Standards webpage, section entitled "Form LM-2," attached
hereto as Exhibit 3). Moreover, on the Form LM-2 the
labor organization must report financial information "for all funds of the
labor organization...even if they are not part of the labor organization's general
treasury." (See Instructions for Form LM-2 Labor Organization
Annual Report, Section VIII "Funds to be Reported,"
attached hereto as Exhibit 2). Further, "receipts must be
recorded when money is actually received by the labor organization
and disbursements must be recorded when money is actually paid out by the labor
organization. The purpose of Statement B is to report
the flow of cash in and out of the labor organization during the
reporting period." (See Instructions for Form
LM-2 Labor Organization Annual Report, page 33-34 "Statement B Recipients and
Disbursements," attached hereto as Exhibit 2).
SAG is required to file and has filed a Form LM-2. (See SAG's
Form LM-2 attached hereto as Exhibit 4). The Exhibit Defendants have
requested to be sealed contains information that is required to be made public
under the LMRDA. Exhibit 1 details the foreign levy monies collected
and distributed by SAG. 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. 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.
CONCLUSION
In
conclusion, the information in Exhibit 1 is required to be made public in SAG's
report to the DOL. Therefore, because the contents of Exhibit 1 are
to be made public, SAG will not be prejudiced by its disclosure. As a result,
the Court should not seal Exhibit 1.
In 2007, when it was
determined that I had provided sufficient evidence for an investigation, the
DOL found that so-called foreign levies monies are "union funds"
because such monies "are under the control and management of "
these unions.
Specifically, the foreign levies fund is a union fund that
releases union checks that pay union members for
their works that are sold, distributed and aired abroad.
The Labor-Management Reporting and Disclosure Act of
1959 as amended (LMRDA) grants certain rights to union members and protects
their interests.
Under the LMRDA, union officers are subject to criminal penalties for willful failure to file a required financial report and for
false reporting.
False reporting includes making any false statement or misrepresentation of a
material fact while knowing it to be false, or for knowingly failing to
disclose a material fact in a required report or in the information required to
be contained in it or in any information required to be submitted with it.
The reporting labor organization and the officers
required to sign Form LM-2 are also subject to civil prosecution for violations
of the filing requirements.
The officers responsible for signing Form LM-2 are also subject to criminal
penalties for false reporting and perjury under Sections 1001 of Title 18 and
1746 of Title 28 of the United States Code.
SAG has variously concealed or falsely reported so-called foreign levies on the
union's LM-2 filings.
The LMRDA was enacted in the aftermath of a congressional investigation in the
1950s that found corruption in union leadership and a disregard for the rights
of the rank-and-file. (Wirtz v. Hotel,Motel &
Club Emp. Union, Local 6, 391 U.S. 492, 497-98 (1968).)
The over-riding purpose of the reporting provisions of the LMRDA is to provide
union members with "all the vital information necessary for them to
take effective action in regulating affairs of their organization". (S. Rep. 187, 86th
Cong., 1st Session, p.9, 1959 U.S.C.C.A.N. 2318, 2325 (1959).)
The Senate Labor Committee declared: "The
members who are the real owners of the money and property of the organization
are entitled to a full accounting of all transactions involving their property."
(S. Rep. 187 at p., 1959 U.S.C.C.A.N. at
2324.)
On December 27, 2002, the DOL issued a notice proposing revisions of the forms
used by labor organizations to file the annual
financial reports required by section 201(b) of the LMRDA. (29 U.S.C. 431(b).)
The notice explained that the proposed revisions were based upon the fact that
the U.S. workforce and labor organizations
had changed dramatically over the last forty years and the fact that the form
used by labor organizations to report financial
information had not changed significantly in the same time period.
The proposed revisions also reflected the DOL's belief that more detailed and
transparent reporting of labor organizations'
financial information would be more useful to union members, more effectively
deter fraud, and enable OLMS investigators to more easily discover fraud when
it occurs.
In its Motion to Seal, SAG writes: "Courts have recognized the
protection of 'confidential matters relating to . . . business
operations' as overriding interests for purposes of a motion to
seal. See Universal City Studios, Inc. v. Sup. Ct., 110 Cal. App. 4th
1273, 1281 (2003)."
But although in Universal City Studios, Inc., the court
noted that contractual obligation to not reveal certain information to protect
business interests could be an overriding interest, it concluded however that
since the defendant did not show how revealing the settlement agreement would
hurt business interests that the party seeking the sealing order did not meet
the burden required to seal the documents. (See Universal City Studios, Inc. v. Sup. Ct., 110 Cal. App. 4th
1273, 1284(2003).)
Here SAG does not even attempt to show how revealing this information will hurt
SAG's "business interests".
SAG writes: "The proposed parts of the record to be permanently sealed
are narrowly tailored so as to maintain the integrity of the record and not
infringe upon the public's interest in accessing court records."
SAG never addresses why permanently sealing the "proposed parts of the
record to be permanently sealed" does not infringe upon the statutory
rights of union members, the members of the class.
SAG writes: "SAG does not share this information with the public or any
third parties unless such disclosure is either legally required or necessary to
assist SAG in the operation of its business."
SAG is required by federal statute to disclose this information to members of
the union.
SAG writes: "There is no public interest that would be served by
disclosure of the confidential financial information contained in the
Confidential Exhibit, let alone an interest sufficient to overcome
SAG's interest and right to protect the business confidentiality of the
information. Cal. R. Ct. 2.550(d)."
Under the Duty of Fair Representation, SAG must not act against the interests
of its members.
SAG never addresses the statutory rights of members to this information nor the
individual right of each member to his/her own financial information.
SAG never cites, in its Motion to Seal, the National Labor
Relations Act (NLRA) or any labor law and engages in
deception by never once referencing the members of the union, who are the
members of the class and the true target of SAG's "confidentiality".
SAG writes: "Indeed, the engagement agreement proposed by
the Consultants on March 4,2011, contained a confidentiality
clause requiring the Consultants to maintain the confidentiality of all data
and information (a) relating to the finances of SAG, its
members and members of the settlement class..."
It is, in point of fact, "data and information...relating to the
finances of...its members and members of the settlement class"
that SAG is attempting to seal from access by "its members and members
of the settlement class".
SAG writes: "There is no public interest that would be served by
disclosure of the confidential financial information contained in the
Confidential Exhibit, let alone an interest sufficient to overcome
SAG's interest and right to protect the business confidentiality of the
information. Cal. R. Ct. 2.550(d)."
The 2002 revisions on the Form LM-2 reflected the DOL's belief that more
detailed and transparent reporting of labor
organizations' financial information would be more useful to union members,
more effectively deter fraud, and enable OLMS investigators to more easily
discover fraud when it occurs.
SAG writes: "There is no public interest
that would be served by disclosure of the confidential financial information contained in the Confidential Exhibit, let alone an interest sufficient to
overcome SAG's interest and right to protect the business
confidentiality of the information. Cal. R. Ct. 2.550(d)."
There are two related
overarching purposes of union reporting: to
fully inform union members, on a yearly basis, about their union's "financial
condition and operations", (29 U.S.C.431(b))
and, by public disclosure of this information, to deter
union officials and employees from abusing their stewardship duties and to
allow members, the DOL, and the public an opportunity to review a union's
financial information as a check on the actions of its officials and employees.
(United States v. Budzanoski, 462 F.2d 443,
450 (3d Cir.), cert. denied, 409 U.S.949 (1972); Int'l
Bhd. of Teamsters, et al. v. Wirtz, 346 F.2d 827,
831 (D.C. Cir. 1965).)
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