TO ALL PARTIES, OBJECTORS AND THE COURT:

PLEASE TAKE NOTICE that it is the intention of Objectors Art Eisenson and Stefan Avalos, and Objector Eric Hughes (whose motion to intervene is pending) (collectively, “Objectors”), to appear at the regularly scheduled Final Approval Hearing, currently set for March 9, 2010, and seek a continuance to give them time to file a Reply Memorandum addressing many of the outstanding issues left unresolved by the parties’ Motions for Final Approval. 

The Court’s briefing order did not provide an opportunity for objectors to respond to the Motions for Final Approval, but given the uniqueness and complexity of the issues raised on the Objections and Motions, Objectors believe the Court would benefit from such a Reply Memorandum. 

                                 REASONS FOR REQUESTED CONTINUANCE

There are several reasons why Objectors seeks this continuance, but chief among them are:

(i)     To respond to the parties’ negative and incorrect characterization of Objectors as opposing the very notion of collective administration of foreign levy royalties.

(ii)    To afford Objectors time to try to resolve any disagreements that the parties currently have concerning factual issues which may be capable of resolution on an informal basis.  (For example, Robert Hadl asserts that there already exist collecting societies that receive and distribute the Authors Share of adult films, and Objectors are unaware of any such entities in the United States); and

(iii) To afford Objectors a reasonable opportunity to respond to some of the factual and legal points raised in the moving papers – especially because in several instances plaintiffs and the WGA contradict each other and the Court should not approve any settlement in which the warring factions themselves do not agree as to the meaning of the settlement or its ramifications.

(iv)   Finally, because the parties acknowledge that the current Release is or may be construed to be excessively broad with respect to claims against employers and involving primary rights (Plaintiff’s Motion, p. 22:14-16; WGA Motion, p. 10:10-22.), Objectors would welcome an opportunity to work with the parties to try to address those issues relating to the Release.

As things stand now, holding a hearing only one week after service of the final approval papers prejudices the ability of the Objectors to place all relevant issues and evidence before the Court for its fairness review.

                                                           OFFER OF PROOF

As an offer of proof showing why good cause exists for granting a reasonable continuance, Objectors highlight some of these outstanding issues:

·           WGA now admits that it has contractually authorized MPA production companies to take 50% of the Foreign Levy royalties of non-covered writers, even though it has no representational status as to those writers such as it has for covered writers who worked under collective bargaining agreements.  This critical and complex issue deserves further briefing before any settlement authorizing this practice is approved.

·           The moving parties’ division of labor (WGA Motion, p. 5:14-18), in which the WGA asserted that it would address  “administration of the foreign levies program,” curiously left it to plaintiffs to defend the WGA’s alleged violation of California escheat laws.  Yet plaintiffs reluctantly confirmed that the WGA has kept undeliverable money rather than turned it over to California; more importantly, the proposed settlement would probably place the Court’s imprimatur on future violations of California escheat law.^[1] 

·           The WGA argues that the Guild had to “wrest a share of the money from the studios.” Objectors would welcome an opportunity to explain to the court why this is incorrect, and that this distinction is critical to framing a fair settlement.  In fact, foreign levy royalties are payable only to Authors, not companies, because Authors Rights are not copyrights.  Authors Rights protect the rights of the original creator - the writer - while copyrights protect the “owners” of those rights - like production companies under a “work-for-hire” regime.  The WGA did not “wrest” the foreign levies from production companies; to the contrary, the WGA voluntarily assigned its members’ Authors rights (and the rights of non-covered writers with whom it has no legal relationship) to the production companies.^[2]  Objectors believe the Court’s consideration of settlement would benefit from further briefing by all sides on this apparent attempt by WGA to put the cart before the horse.

·           Fundamental fairness requires that the Objectors have an opportunity  to respond to the false and defamatory barbs thrown by plaintiffs’ counsel Neville Johnson against Mr. Hughes.  We believe that it is completely inappropriate for Mr. Johnson to have made this battle “personal,” but now that he has, Mr. Hughes should be given an opportunity to clear his name and ensure that the final record in this case is not one-sided. The same applies to Art Eisenson, whose motives were wrongfully and unnecessarily impugned.

·           Contrary to the statement made in the Plaintiff’s Motion for Final  Approval  regarding  a “presumption” of  fairness  in light  of  the  preliminary  approval,   no  such  presumption attaches because the parties expanded  the  settlement  class beyond that which was preliminarily approved by the Court.

·           Below is a list of inconsistencies and contradictions between plaintiffs and the WGA, within the WGA motion itself, or in one  case  between  plaintiffs and  IATSE 839,  in  how  they responded to issues raised by Objectors.Objectors would like an  opportunity  to discuss the impact of these contradictions on any proposed settlement.

                                                               CONCLUSION

Objectors seek to augment the record with additional argument and objective evidence (such as can be procured outside formal discovery) so that the Court can better assess the merits of the Objections.  Objectors also seek to trim away issues through mutual negotiation over the Release (if the parties are willing to do so).  Objectors are unable to do this, however, under the truncated time frame established by the current schedule, and thus ask for a reasonable continuance and further briefing schedule.