1 LATHAM & WATKINS LLP

Marvin S. Putnam (Bar No. 212839)

2 marvin.putnam@lw.com
Jessica Stebbins Bina (Bar No. 248485)
3 jessica.stebbinsbina@lw.com
10250 Constellation Blvd., Suite 1100
4 Los Angeles, California 90067
Telephone: +1.424.653.5500
5 Facsimile: +1.424.653.5501

6 Attorneys for Defendant

International Creative Management Partners, LLC
7

8 SUPERIOR COURT OF THE STATE OF CALIFORNIA

9 COUNTY OF LOS ANGELES
10

11 WRITERS GUILD OF AMERICA, WEST, Case No. 19SMCV00725

INC.; WRITERS GUILD OF AMERICA,
12 EAST, INC.; PATRICIA CARR; ASHLEY DEFENDANT INTERNATIONAL
GABLE; BARBARA HALL; DERIC A. CREATIVE MANAGEMENT PARTNERS’
13 HUGHES; GEORGE JOHANNESSEN; NOTICE OF DEMURRER; DEMURRER
DEIRDRE MANGAN; DAVID SIMON; and TO PLAINTIFFS’ FIRST AMENDED
14 MEREDITH STIEHM, COMPLAINT; MEMORANDUM OF
POINTS AND AUTHORITIES IN
15 Plaintiffs, SUPPORT THEREOF
16 v. [Motion to Strike, Request for Judicial Notice,
and Declaration of Jessica Stebbins Bina Filed
17 WME ENTERTAINMENT; CREATIVE Concurrently Herewith; and [Proposed] Orders
ARTISTS AGENCY; UNITED TALENT Lodged Concurrently Herewith]
18 AGENTS; INTERNATIONAL CREATIVE
MANAGEMENT PARTNERS; and DOES 1- Hon. William F. Highberger, Dept. 10
19 10, inclusive,
Hearing Date: September 19, 2019
20 Defendants. Hearing Time: 1:30 p.m.
Dept.: 10
21
Complaint Filed: April 17, 2019
22 FAC Filed: May 20, 2019
Trial Date: Not yet set
23
RESERVATION ID: Date Set by Court
24

25

26
27

28

DEFENDANT ICM’S DEMURRER

ATTORNEYS AT LAW
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 1 DEMURRER

2 ICM demurs to the first, second, and third causes of action set forth in the first amended

3 complaint on the following grounds:

4 DEMURRER TO THE FIRST CAUSE OF ACTION

5 1. The first cause of action for breach of fiduciary duty fails to state facts sufficient to

6 constitute a cause of action. See Cal. Code Civ. P. § 430.10(e). The WGA lacks standing to assert

7 the cause of action against ICM. The first cause of action for breach of fiduciary duty further fails

8 to state facts sufficient to constitute a cause of action as to any plaintiff, and certain of its

9 allegations are contradicted by judicially noticeable facts. See id.

10 DEMURRER TO THE SECOND CAUSE OF ACTION

11 2. The second cause of action for constructive fraud in alleged violation of California

12 Civil Code section 1573 fails to state facts sufficient to constitute a cause of action. See Cal. Code

13 Civ. P. § 430.10(e). The WGA lacks standing to assert the cause of action against ICM. The

14 second cause of action for constructive fraud further fails to state facts sufficient to constitute a

15 cause of action as to any plaintiff, and certain of its allegations are contradicted by judicially

16 noticeable facts. See id. Moreover, plaintiffs have not pled their constructive fraud claim against

17 ICM with the requisite level of specificity; thus, their constructive fraud claim fails as a matter of

18 law. See id.

19 DEMURRER TO THE THIRD CAUSE OF ACTION

20 3. The third cause of action for unfair competition in violation of California Business

21 & Professions Code section 17200 et seq. (i.e., the Unfair Competition Law, or “UCL”) also fails

22 to state facts sufficient to constitute a cause of action. See Cal. Code Civ. P. § 430.10(e). Plaintiffs

23 fail to sufficiently plead that ICM’s conduct was “unlawful.” Moreover, section 302 of the federal

24 Labor-Management Relations Act preempts plaintiffs’ claims. Plaintiffs further fail to allege that

25 ICM engaged in any “unfair” conduct under the UCL.

26
27

28
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 1 TABLE OF CONTENTS

2
I. INTRODUCTION .......................................................................................................................... 9
3
II. FACTUAL BACKGROUND AND PLAINTIFFS’ ALLEGATIONS ........................................ 10
4
A. The Entertainment Industry And Packaging. ....................................................... 10
5
B. The WGA’s 1976 Agreement With Talent Agencies. ......................................... 11
6
C. Plaintiffs’ Claims. ................................................................................................ 12
7
III. LEGAL STANDARD................................................................................................................... 12
8
IV. THE FIDUCIARY DUTY CAUSES OF ACTION FAIL............................................................ 13
9
A. The Fiduciary Causes Of Action Are Precluded By The AMBA. ....................... 13
10
B. The WGA Lacks Standing To Bring Fiduciary Claims. ...................................... 14
11
C. Carr Does Not State A Fiduciary Breach Claim. ................................................. 16
12
V. THE CONSTRUCTIVE FRAUD CAUSES OF ACTION FAIL ................................................ 16
13
A. The Constructive Fraud Claim Fails For The Same Reasons As
14 The Fiduciary Duty Claim. .................................................................................. 16
15 B. No Plaintiff Pleads Constructive Fraud With Specificity. ................................... 17
16 VI. THE UCL CAUSES OF ACTION LIKEWISE FAIL.................................................................. 18
17 A. Plaintiffs Cannot Base Their UCL Claim On Purported Fiduciary
Breaches Or Constructive Fraud. ......................................................................... 18
18
B. Plaintiffs Cannot Base Their UCL Claim On The LMRA. ................................. 19
19
1. Section 302 Does Not Apply To Agents.................................................. 20
20
2. The UCL Claims Based On The LMRA Are Preempted. ....................... 21
21
C. Packaging Fees Are Not “Unfair” Under Any Theory. ....................................... 22
22
D. Carr Fails To Adequately Plead A UCL Claim. .................................................. 23
23
VII. CONCLUSION ............................................................................................................................. 23
24

25

26
27

28
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DEFENDANT ICM’S DEMURRER
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 1 TABLE OF AUTHORITIES

2
CASES
3 Arroyo v. United States, 359 U.S. 419 (1959) ...................................................................... 19, 21
4 Award Metals, Inc. v. Superior Court,
228 Cal. App. 3d 1128 (1991) .............................................................................................. 13
5
Breiner v. City of L.A.,
6 22 Cal. App. 3d 382 (1971) .................................................................................................. 14
7 Byars v. SCME Mortg. Bankers, Inc.,
109 Cal. App. 4th 1134 (2003) ............................................................................................. 23
8
Cong. of Cal. Seniors v. Catholic Healthcare W.,
9 87 Cal. App. 4th 491 (2001) ........................................................................................... 21, 22
10 Daugherty v. Am. Honda Motor Co., Inc.,
144 Cal. App. 4th 824 (2006) ............................................................................................... 22
11
Desert Outdoor Advert. v. Superior Court,
12 196 Cal. App. 4th 866 (2011) ............................................................................................... 15
13 Ga. State AFL-CIO v. Olens,
No. 13-cv-03745-WCO, 2015 WL 13260393 (N.D. Ga. July 20, 2015).............................. 22
14
Graham v. Bank of Am., N.A.,
15 226 Cal. App. 4th 594 (2014) ......................................................................................... 18, 23
16 Gregory v. Albertson’s, Inc.,
104 Cal. App. 4th 845 (2002) ............................................................................................... 23
17
Int’l Ass’n of Machinists Dist. Ten and Local Lodge 873 v. Allen,
18 904 F.3d 490 (7th Cir. 2018) ................................................................................................ 21
19 Jones v. Wagner,
90 Cal. App. 4th 466 (2001) ................................................................................................. 16
20
Kaldenbach v. Mutual of Omaha Life Ins. Co.,
21 178 Cal. App. 4th 830 (2009) ............................................................................................... 19
22 Knox v. Dean,
205 Cal. App. 4th 417 (2012) ............................................................................................... 17
23
McAllister v. Cty. of Monterey,
24 147 Cal. App. 4th 253 (2007) ............................................................................................... 13
25 Nat’l Coal. Gov’t of Union of Burma v. Unocal, Inc.,
176 F.R.D. 329 (C.D. Cal. 1997) .......................................................................................... 15
26
Nolte v. Cedars-Sinai Med. Ctr.,
27 236 Cal. App. 4th 1401 (2015) ............................................................................................. 23
28
6
DEFENDANT ICM’S DEMURRER
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 1 O’Riordan v. Fed. Kemper Life Assurance,
36 Cal. 4th 281 (2005) .......................................................................................................... 14
2
Pellegrini v. Weiss,
3 165 Cal. App. 4th 515 (2008) ............................................................................................... 15

4 Porter v. Quillin,
123 Cal. App. 3d 869 (1981) ................................................................................................ 14
5
Poseidon Dev., Inc. v. Woodland Lane Estates, LLC,
6 152 Cal. App. 4th 1106 (2007) ............................................................................................. 13

7 Rest. Law Ctr. v. City of N.Y.,

360 F. Supp. 3d 192 (S.D.N.Y. 2019)................................................................................... 20
8
Roots Ready Made Garments Co., W.L.L. v. Gap, Inc.,
9 405 Fed. App’x 120 (9th Cir. 2010) ..................................................................................... 23

10 Roy Allan Slurry Seal, Inc. v. Am. Asphalt S., Inc.,

2 Cal. 5th 505 (2017) ............................................................................................................ 16
11
S. Bay Chevrolet v. Gen. Motors Acceptance Corp.,
12 72 Cal. App. 4th 861 (1999) ................................................................................................. 23

13 Scripps Clinic v. Superior Court,

108 Cal. App. 4th 917 (2003) ............................................................................................... 22
14
SeaPAK v. Indus., Tech. & Prof. Emps., Div. of Nat’l Maritime Union, AFL-CIO,
15 300 F. Supp. 1197 (S.D. Ga. 1969) ....................................................................................... 22

16 Sequoia Vacuum Sys. v. Stranksy,

229 Cal. App. 2d 281 (1964) ................................................................................................ 13
17
Stalberg v. W. Title Ins. Co.,
18 230 Cal. App. 3d 1223 (1991) .............................................................................................. 16

19 Stansfield v. Starkey,
220 Cal. App. 3d 59 (1990) .................................................................................................. 17
20
Tindell v. Murphy,
21 22 Cal. App. 5th 1239 (2018) ......................................................................................... 16, 17

22 Turner v. Local Union No. 302, Int’l Bhd. of Teamsters, Chauffeurs,

Warehousemen and Helpers of Am.,
23 604 F.2d 1219 (9th Cir. 1979) .............................................................................................. 19

24 United Auto., Aerospace & Agric. Implement Workers of Am. Local 3047 v.
Hardin Cty., Ky.,
25 842 F.3d 407 (6th Cir. 2016) ................................................................................................ 21

26 United Farmers Agents Ass’n, Inc. v. Farmers Grp., Inc.,

32 Cal. App. 5th 478 (2019) ..................................................................................... 14, 15, 17
27
United States v. Bloch,
28 696 F.2d 1213 (9th Cir. 1982) .............................................................................................. 21
7
DEFENDANT ICM’S DEMURRER
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 1 United States v. Millis,
621 F.3d 914 (9th Cir. 2010) ................................................................................................ 21
2
Wal-Mart Stores, Inc. v. Dukes,
3 564 U.S. 338 (2011) .............................................................................................................. 15

4 Woodring v. Basso,
195 Cal. App. 2d 459 (1961) ................................................................................................ 17
5

6 STATUTES
29 U.S.C. § 141 ........................................................................................................................... 19
7
29 U.S.C. § 152(4) ...................................................................................................................... 20
8
29 U.S.C. § 152(5) ...................................................................................................................... 20
9
29 U.S.C. § 158(a)(3) .................................................................................................................. 20
10
29 U.S.C. § 159(a) ...................................................................................................................... 20
11
29 U.S.C. § 186 ..................................................................................................................... 21, 22
12
29 U.S.C. §186(a) ................................................................................................................. 18, 20
13
29 U.S.C. § 186(a)(1) .................................................................................................................. 19
14
29 U.S.C. § 186(c) ...................................................................................................................... 22
15
80 Cong. Rec. 582 (1947) ........................................................................................................... 20
16
80 Cong. Rec. 677 (1947) ........................................................................................................... 20
17
Cal. Civ. Code § 1573 ............................................................................................................. 3, 16
18
Cal. Code Civ. P. § 343............................................................................................................... 16
19
Cal. Code Civ. P. § 430.10(e) ................................................................................................. 3, 13
20
Labor Management Relations Act § 302 .................................................. 3, 10, 18, 19, 20, 21, 22
21

22

23

24

25

26
27

28
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 1 MEMORANDUM OF POINTS AND AUTHORITIES

2 I. INTRODUCTION

3 In a remarkable and naked attempt at a power grab, plaintiffs—a top-heavy writers’ union

4 and some of the most influential and wealthiest writers and TV producers in Hollywood—seek to

5 eliminate the industry-wide practice of “packaging.” Yet, this very same union, and these same

6 writer-producers, expressly consented to and benefitted from packaging for nearly five decades.

7 Moreover, television packaging—the practice by which talent agencies are paid by a network or

8 studio to “package” intellectual property with writers, actors, producers, and directors and support

9 the project’s development—is indisputably legal. In fact, until just before this lawsuit was filed,

10 it was expressly permitted by the judicially noticeable agreement between the WGA1 and the

11 agencies they now sue. Indeed, even after filing the lawsuit, the WGA has publicly offered to

12 “allow” packaging to continue through mid-2020—something it would hardly do if it actually

13 believed packaging violated federal law or harmed writers.

14 Plaintiffs first attempted their power grab through an unlawful group boycott and mandated

15 mass firing of the agents who represented their writers for decades. Now, plaintiffs seek to

16 eliminate packaging by abusing the court system, brazenly asking this Court to declare packaging

17 illegal. But they have no legal basis to do so. Their claims are barred by their own express consent

18 to packaging. Even absent that consent, the claims are not legally cognizable. The WGA’s

19 fiduciary duty and constructive fraud claims fail because the WGA—a union of more than 14,000

20 individuals (only a fraction of whom have ever participated in packaging)—has no standing to

21 bring such individualized claims. This is not a class action, and the individual WGA members’

22 common law claims may not be aggregated and transformed into an industry-wide action. And of

23 the two individual plaintiffs who have sued ICM, Patricia Carr fails to plead the elements of

24 fiduciary breach2—and all plaintiffs fail to plead constructive fraud.

25 Plaintiffs’ unfair competition claims are equally baseless. The purported fiduciary

26 1
Writers Guild of America, East, Inc., and Writers Guild of America, West, Inc., are referred to
collectively as the “WGA.”
27 2
George (“Chip”) Johannessen, the only other individual plaintiff suing ICM, does at least allege
ICM packaged his show Saints and Strangers, FAC ¶¶ 11(e), 42. That allegation, however, is
28 wholly false; ICM did not package Saints and Strangers. The allegation is nonetheless accepted
as true, as required, solely for the purposes of this demurrer.
9
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 1 breaches are individualized torts, as are the constructive fraud claims, and neither can serve as a

2 UCL predicate. Plaintiffs’ final theory—that packaging violates a federal criminal law that

3 prohibits bribing union officials (which agents are most certainly not)—is absurd on its face.

4 Section 302 of the Labor Management Relations Act has never been applied outside the union

5 context in its 72-year history and has no application here. Finally, plaintiffs’ section 302 claims

6 are otherwise preempted.

7 ICM’s demurrer should be sustained without leave to amend.

8 II. FACTUAL BACKGROUND AND PLAINTIFFS’ ALLEGATIONS3

9 A. The Entertainment Industry And Packaging.

10 The individual plaintiffs in this action are television writer-producers. First Amended

11 Complaint (“FAC”) ¶ 11. In that capacity, they are represented by the WGA, the writers’

12 representative for collective bargaining in the film and television industry. Id. ¶¶ 9-10. As the

13 labor union for writers, the WGA negotiates and executes an ongoing collective bargaining

14 agreement (the 2017 Theatrical and Television Basic Agreement (“MBA”)) with the major studios,

15 networks, and production companies. Id. ¶¶ 24-25. The MBA establishes minimum terms for

16 writers’ covered work, including minimum compensation (i.e., “scale” wages), but reserves to

17 individual writers the right to negotiate above these union-negotiated minimums (i.e., “overscale”

18 compensation and other terms such as credit). Id. ¶¶ 22, 25. This structure is what enables the

19 WGA to represent both (1) rank-and-file television writers who earn union scale, and (2) television

20 showrunners, extremely high-earning writer-producers who effectively employ those writers

21 (showrunners’ interests thus conflict at times with their fellow WGA members). The WGA does

22 not negotiate with the studios for “overscale” compensation or compensation for non-writing

23 services, id.; to do so would be outside its jurisdiction and against its duty of fair representation.

24 The four defendants in this action are licensed California talent agencies that represent a

25 variety of artists, including writers, but also actors, directors, producers, book authors, lecturers,

26 comedians, singers, and musicians. ICM has been a licensed talent agency since 1975. Artists,
27
3
Because plaintiffs’ complaint includes almost no background facts, ICM includes some
28 background for the Court’s context. That said, ICM relies only on judicially noticeable facts and
on claimed facts in the complaint for its demurrer.
10
DEFENDANT ICM’S DEMURRER
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 1 including writers, engage talent agents, like those at ICM, to help procure employment, negotiate

2 compensation, and perform other professional services on their individual behalves. FAC ¶ 26.

3 In television, talent agencies are primarily compensated in one of two ways. In some cases,

4 agencies take a ten percent commission based on their artist client’s earnings. FAC ¶¶ 27, 34. In

5 other instances, agencies instead take a “package” fee from studios for assembling key intellectual

6 property elements—such as an idea or a script—with key talent, often including writers and

7 producers. Id. ¶¶ 4-5, 30, 61. When an agency takes a package fee, it does not take a commission

8 from included talent. Id. ¶ 61.

9 B. The WGA’s 1976 Agreement With Talent Agencies.

10 Both the standard percentage commission for writer services and the agreement to forego

11 that commission on packaged shows were negotiated as part of the longtime contract outlining the

12 relationship between writers and their agents called the Artists’ Managers Basic Agreement. See

13 Request for Judicial Notice (“RJN”) ¶ 1; Declaration of Jessica Stebbins Bina (“Bina Decl.”) ¶ 2,

14 Ex. A (Artists’ Managers Basic Agreement of 1976, and its incorporated Rider W (collectively,

15 the “AMBA”)).4 Between 1976 and April 2019, the AMBA bound all parties to this action, and

16 governed their relationship. Id. Section 6 of the AMBA permits both packaging and the

17 engagement of WGA member writers on packaged television programs, and paragraph 5 of Rider

18 W specifies the compensation structure (i.e., that agencies may not collect commission from

19 writers on a packaged show, because the studios pay package fees). AMBA § 6(c), Rider W ¶ 5.

20 For more than 43 years, the WGA operated under the AMBA, during which time it never

21 claimed thereunder that packaging was illegal, unethical, or practiced in a way that violated a

22 fiduciary relationship. To the contrary, the AMBA has been posted on the WGA’s website from

23 at least 2006 through the present, see Bina Decl. ¶¶ 2, 4, Exs. A, G, and for many years, the WGA

24 explicitly identified “packaging agencies” for the benefit of its members. See id. ¶¶ 5-6, Exs. H-

25 I. As such, between 1976 and April 13, 2019, thousands of writers participated in television

26 packaging pursuant to the AMBA—without paying commission to their agents when doing so. A
27 4
The FAC refers to the AMBA in several places, thereby incorporating it by reference. See, e.g.,
FAC ¶ 26 (referring to the agencies exercising authority “delegated to them by the WGA”); ¶ 103
28 (same); ¶ 61 (referring to agreement not to commission packaged shows).
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 1 published estimate suggests that WGA members saved more than $49 million in just a single

2 television season (2017-18) as a result of this commission forbearance.5

3 C. Plaintiffs’ Claims.

4 In April 2018, the WGA gave notice of intent to terminate the AMBA, effective one year

5 later—and demanded the complete elimination of packaging, not only for WGA writers, but for

6 all artists (all of whom have benefitted from avoiding paying commission on packaged programs).

7 ICM and other members of the Association of Talent Agents (“ATA”) tried to negotiate a new

8 agreement, but the WGA refused any proposal that did not entirely eliminate packaging. On April

9 13, 2019, the WGA ceased negotiations and demanded that all agencies sign a “Code of Conduct,”

10 which forbade packaging for all talent. The overwhelming majority of agencies, including ICM,

11 refused, and the WGA ordered all of its members to fire their agents. All named plaintiffs did so.

12 See FAC ¶¶ 11 (a)-(h); see also Bina Decl. ¶¶ 7-8, Exs. J-K. Thus, none of the individual plaintiffs

13 is currently represented by ICM. Id.

14 Failing to eliminate packaging by this coordinated exertion of economic pressure, plaintiffs

15 filed this lawsuit (and, after being informed of this planned demurrer, filed the FAC). Plaintiffs

16 allege that packaging is unlawful, and assert claims for breach of fiduciary duty, constructive fraud,

17 and unfair competition. The WGA purports to bring its fiduciary and constructive fraud claims

18 “on behalf of [its] members,” see FAC ¶¶ 79, 91, and its UCL claim “on [its] own behalf,” see id.

19 ¶ 105. Of the ten individual plaintiffs, only individual plaintiffs Patricia Carr and Chip

20 Johannessen bring claims against ICM. Id. ¶¶ 11(a), 11(e), 75, 105.

21 After filing this lawsuit, in June 2019, the WGA publicly offered to extend packaging for

22 one calendar year to any agency willing to sign onto its other terms and conditions. See RJN ¶ 7;

23 Bina Decl. ¶ 9, Ex. L at page 9, § 9. The WGA’s offer is squarely at odds with its stated litigation

24 position that participation in packaging is illegal.

25 III. LEGAL STANDARD

26 A cause of action survives demurrer only if it states facts sufficient to establish some right
27
5
Memorandum from L.E.K. Consulting LLC, Analysis of Economic Impact of Eliminating Front-
28 End Packaging Fees (Mar. 17, 2019), available at https://www.agentassociation.com/
clientuploads/Front-End_Packaging_Elimination_Effect_Analysis-March_17_2019_V30.pdf.
12
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 1 to relief. See Award Metals, Inc. v. Superior Court, 228 Cal. App. 3d 1128, 1131 (1991); see also

2 Cal. Code Civ. P. § 430.10(e). While well-pleaded facts must be accepted on demurrer,

3 “conclusions of fact or law, opinions, speculation or allegations which are contrary either to law

4 or judicially noticed facts” must be disregarded. McAllister v. Cty. of Monterey, 147 Cal. App. 4th

5 253, 289 (2007). “A court may take judicial notice of something that cannot reasonably be

6 controverted, even if it negates an express allegation of the pleading.” Poseidon Dev., Inc. v.

7 Woodland Lane Estates, LLC, 152 Cal. App. 4th 1106, 1117 (2007).

8 IV. THE FIDUCIARY DUTY CAUSES OF ACTION FAIL

9 A. The Fiduciary Causes Of Action Are Precluded By The AMBA.

10 Plaintiffs broadly allege that ICM—through the mere practice and structure of television

11 packaging, necessarily and routinely breached its fiduciary duty of loyalty as a result of

12 packaging’s alleged inherent conflicts of interest. FAC ¶¶ 37-61, 71, 79. Yet, plaintiffs expressly

13 consented to the practice and structure of packaging, barring their claims here.

14 The duty of loyalty is breached when an agent “undertake[s] or participate[s] in activities

15 adverse to the interests of [the] principal” without the principal’s consent. Sequoia Vacuum Sys.

16 v. Stranksy, 229 Cal. App. 2d 281, 287 (1964). Lack of informed consent is an affirmative element

17 that plaintiffs must allege to state a claim for breach of the duty of loyalty. See CACI 4102; see

18 also Sequoia Vacuum, 229 Cal. App. 2d at 287. Plaintiffs allege that the core structure of

19 packaging breaches fiduciary duties. FAC ¶¶ 37-61, 71, 79. Plaintiffs cannot maintain this claim,

20 however, because they gave informed consent to this core structure in the AMBA. See AMBA §

21 6(c), Rider W ¶ 5; Poseidon Dev., 152 Cal. App. 4th at 1117 (allegations may not be sustained

22 when contradicted by judicially noticed documents). The AMBA describes packaging, and,

23 critically, informs all writers that the reason they do not pay commission on packaged shows is

24 because the agency receives a package fee from a studio instead. AMBA § 6(c)(E), Rider W

25 ¶ 5(a)(ii). The AMBA thus demonstrates plaintiffs’ knowledge of, and consent to, the practice

26 and structure of packaging—i.e., payment by studios to agencies for packaging services.

27 As a signatory to the document, the WGA is clearly bound by the AMBA. AMBA § 11.

28 The individual plaintiffs are likewise bound. The WGA is the “labor union representing [all]

13
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 1 professional writers who write content for television shows.” FAC ¶¶ 9-10. As such, the WGA

2 “has the authority to bind [its] members . . . to the terms of a collective agreement . . . whether or

3 not they were employed in the bargaining unit at the time the agreement was entered into or

4 ratified.” Porter v. Quillin, 123 Cal. App. 3d 869, 874 (1981); see also O’Riordan v. Fed. Kemper

5 Life Assurance Co., 36 Cal. 4th 281, 288 (2005). Section 2 of the AMBA provides that Rider W,

6 which explicitly contemplates packaging, “shall be deemed to be a part of any . . . contract between

7 the subscribing [agent] and a WGA member . . . , whether Rider W is physically affixed to said

8 contract and whether such contract be in existence on the date the [agency] executes this

9 agreement.” AMBA § 2. Through the AMBA, plaintiffs all consented to the structural aspects of

10 packaging. They thus cannot allege a fiduciary breach based on the practice of packaging alone.

11 B. The WGA Lacks Standing To Bring Fiduciary Claims.

12 Separate and apart from its informed consent, the WGA also lacks standing. The WGA

13 does not—and cannot—allege that ICM breached fiduciary duties owed to the WGA; the agencies

14 are indisputably not fiduciaries of the WGA. Rather, the WGA purports to assert claims on behalf

15 of some undisclosed number of its approximately 14,000 members (only a fraction of whom were

16 ever represented by ICM). FAC ¶¶ 70, 79. In essence, the WGA asks this Court to issue an

17 advisory opinion declaring that “packaging fees,” as a general proposition—and in every single

18 instance—“constitute a breach of the Agencies’ fiduciary duty to their writer clients.” FAC Prayer

19 for Relief ¶ 1.6 This is impossible, as it would require the Court to assume facts as to each specific

20 writer who is not a party to the litigation, and otherwise base its opinion upon a hypothetical set of

21 facts that may or may not apply to each individual agency-writer relationship. Not only is this a

22 clear misuse of the declaratory relief statute, see, e.g., Breiner v. City of L.A., 22 Cal. App. 3d 382,

23 388 (1971) (courts may not issue “advisory opinion[s] upon a particular or hypothetical state of

24 facts”), but such a claim fails for lack of standing.

25 An association, including a union, has standing to bring claims on behalf of its members

26 only when “neither the claim asserted nor the relief requested requires the participation of
27 individual members in the lawsuit.” United Farmers Agents Ass’n, Inc. v. Farmers Grp., Inc., 32

28
6
It is unclear whether the WGA seeks other relief based on this claim. See FAC ¶ 79.
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 1 Cal. App. 5th 478, 488-89 (2019). Where individualized proof would be necessary to prove any

2 component of a claim, standing is lacking, and the claim must be dismissed. See, e.g., id. at 490-

3 94; Nat’l Coal. Gov’t of Union of Burma v. Unocal, Inc., 176 F.R.D. 329, 344 (C.D. Cal. 1997).

4 Breach of fiduciary duty is exactly the type of fact-intensive inquiry that would require

5 participation of individual writers and individualized proof to determine, inter alia, (1) whether a

6 fiduciary duty existed between each plaintiff and each defendant, (2) whether such an alleged duty

7 was breached, and (3) whether the writer was damaged by the alleged breach. See United Farmers

8 Agents, 32 Cal. App. 5th at 490-94; Desert Outdoor Advert. v. Superior Court, 196 Cal. App. 4th

9 866, 873 (2011) (“The scope of a fiduciary’s obligations depends on the specific facts of the

10 case.”); Pellegrini v. Weiss, 165 Cal. App. 4th 515, 524-25 (2008). It is impossible for the WGA

11 to make these showings for its non-party members without resort to individualized proof to

12 determine facts such as: (1) the nature, length, and scope of a fiduciary relationship between each

13 WGA member and one or more defendants within the relevant limitations period (see, e.g., FAC

14 ¶¶ 11(a)-(c), (h) (four individual plaintiffs have been represented by two or more defendants));

15 (2) whether those members participated in television programs packaged by the agency

16 representing them; (3) whether those members gave informed consent; 7 and (4) whether those

17 writers were harmed by (or benefitted from) packaging. This last inquiry is especially complex,

18 as it is undisputed that writers participating in a package earn ten percent more than non-

19 participating writers by virtue of the commission waiver, see id. ¶ 61; AMBA § 6(c), Rider W ¶ 5.

20 By the same token, ICM is entitled to present individualized defenses—including waiver, laches,

21 estoppel, and consent—against each unnamed complainant supposedly represented by the WGA.

22 See Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 367 (2011) (representative litigation disallowed

23 “on the premise that [defendant] will not be entitled to litigate its statutory defenses to individual

24 claims”). This too would be impossible without the participation of the individual WGA members.

25 There is simply no way for the Court to determine the veracity of the WGA’s claims

26 without the participation of individual members. The WGA thus lacks standing to sue.
27

28 7
The AMBA consent to packaging’s basic structure is sufficient, but were this Court to hold
otherwise, informed consent would need to be considered on a case-by-case basis.
15
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 1 C. Carr Does Not State A Fiduciary Breach Claim.

2 Plaintiff Carr also fails to plead the elements of her claim for breach of fiduciary duty.

3 While she vaguely asserts that she was harmed “by the payment of packaging fees to Agencies,”

4 she pleads no facts sufficient to establish that ICM breached any fiduciaries owed to her. FAC

5 ¶ 11(a). For example, Carr asserts that she worked on packaged shows 90210, Mixology, Private

6 Practice, and Reba, id., yet she fails to allege that any of those shows were packaged by ICM. To

7 the contrary, Carr specifically alleges that CAA, not ICM, packaged 90210, Private Practice, and

8 Reba. Id. ¶ 33. And she alleges that ICM only represented her from January 2018 to April 2019,

9 years after Mixology ended its run in 2014. Id. ¶ 11(a); see RJN ¶¶ 2-6; Bina Decl. ¶ 3, Exs. B-E

10 (Carr admits that ICM began representing her after all four shows ended). Carr’s claims thus

11 contain no well-pleaded facts against ICM and must be dismissed. See FAC ¶¶ 11(a), 33, 71, 75;

12 Roy Allan Slurry Seal, Inc. v. Am. Asphalt S., Inc., 2 Cal. 5th 505, 512 (2017).8

13 V. THE CONSTRUCTIVE FRAUD CAUSES OF ACTION FAIL

14 A. The Constructive Fraud Claim Fails For The Same Reasons As The Fiduciary

15 Duty Claim.

16 Plaintiffs allege a constructive fraud claim against ICM that is largely duplicative of their

17 claim for breach of fiduciary duty.9 FAC ¶ 83. Their theories, once again, challenge ICM’s

18 practice of packaging and assert that ICM engaged in and failed to disclose the practice in violation

19 of its fiduciary duties. Id. As discussed in section IV.A above, plaintiffs have not sufficiently pled

20 a fiduciary duty claim against ICM—and indeed, they cannot. Without a breach of fiduciary duty,

21 there can be no constructive fraud. See Tindell v. Murphy, 22 Cal. App. 5th 1239, 1249-50 (2018)

22 (constructive fraud fails where defendant did not breach a fiduciary duty); Jones v. Wagner, 90

23 Cal. App. 4th 466, 471-72 (2001) (same). The WGA’s constructive fraud claim also fails because

24

25
8
Carr’s claim further fails because it is barred by the four-year statute of limitations. The shows
Carr worked on ended outside of that period. Cal. Code Civ. P. § 343; Stalberg v. W. Title Ins.
26 Co., 230 Cal. App. 3d 1223, 1230 (1991); RJN ¶¶ 2-5; Bina Decl. ¶ 3, Exs. B-E.
9
To state a cause of action for constructive fraud, a plaintiff must allege: (1) the existence of a
27 fiduciary relationship; (2) the agent acted on the principal’s behalf; (3) the agent knew material
information; (4) the agent misled the principal by failing to disclose the information; (5) had the
28 agent disclosed it, the principal would have behaved differently; (6) causation; and (7) damages.
CACI 4111; Cal. Civ. Code § 1573.
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 1 it lacks standing for the same reasons discussed in section IV.B, supra. The WGA has no

2 constructive fraud claim on its own because it has no fiduciary relationship with ICM. And, just

3 as with fiduciary duty, the WGA lacks standing to sue on behalf of its members because

4 adjudication of the constructive fraud claim would involve the same fact-intensive inquiry that

5 requires participation of writers and individualized proof on issues. See United Farmers Agents,

6 32 Cal. App. 5th at 490-94.

7 B. No Plaintiff Pleads Constructive Fraud With Specificity.

8 The constructive fraud claim further fails as to all plaintiffs because none has pled with the

9 requisite specificity. Each element of constructive fraud must be pled with specificity. Tindell,

10 22 Cal. App. 5th at 1250 (“Like an action for fraud, constructive fraud must be pled with

11 specificity.”); Knox v. Dean, 205 Cal. App. 4th 417, 434 (2012) (same). “This particularity

12 requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what

13 means the representations were tendered.’” Stansfield v. Starkey, 220 Cal. App. 3d 59, 73 (1990)

14 (emphasis in original). Plaintiffs may not support constructive fraud allegations “on information

15 and belief,” but rather must include, at minimum, a particularized statement of the basis for their

16 beliefs. See, e.g., FAC ¶ 83; Woodring v. Basso, 195 Cal. App. 2d 459, 464-65 (1961) (fraud

17 allegations on information and belief subject to dismissal unless accompanied by “a statement of

18 the facts upon which the belief is founded”).

19 No plaintiff comes close to meeting this heightened standard, including the WGA, Carr,

20 and Johannessen.10 Instead, plaintiffs provide a hodgepodge of conclusory assertions in paragraph

21 83 of the FAC about ICM’s supposed general conduct toward “Carr, Johannessen, and other

22 members of the Guilds” regarding “concealing” packaging activities. See FAC ¶ 83. Not a single

23 statement in the FAC shows the “how, when, where, to whom, and by what means [any alleged]

24 representations [or acts of concealment] were tendered.” Stansfield, 220 Cal. App. 3d at 73.

25 For example, plaintiffs allege ICM “[c]onceal[ed] the fact that [it] intentionally failed to

26
27 10
Carr’s constructive claim fails for the additional reasons discussed in Sections IV.C, supra, and
VI.D, infra. She does not allege she ever worked on a show packaged by ICM. Carr’s constructive
28 fraud claims, like her fiduciary claims, are also time-barred. See supra n.8; see also Cal. Code
Civ. P. § 338(d) (three year statute of limitations).
17
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 1 maximize how much each of Carr, Johannessen, and other members of the Guild represented by

2 ICM were or are paid for their work in order to maximize packaging fees for itself.” FAC ¶ 83(c).

3 This allegation fails to specify: (1) when ICM purportedly concealed facts, (2) the projects subject

4 to concealed packaging fees, or (3) how ICM purportedly concealed the fees in question. In fact,

5 plaintiffs do not even identify to which particular plaintiff ICM’s conduct was purportedly aimed

6 and instead vaguely accuse ICM of a series of non-specific acts of fraud whereby ICM somehow

7 hid the entire process of packaging from plaintiffs (despite it being disclosed in the AMBA and

8 advertised on the WGA’s website). Id. ¶ 83. Yet plaintiffs do not offer a single instance when

9 ICM actually hid anything. Instead, the allegations parrot their policy editorial on the purported

10 evils of packaging, and state that, because ICM generally engaged in packaging, it somehow must

11 have concealed some facts from some plaintiffs in some undefined circumstances. Plaintiffs thus

12 fall far short of the rigorous pleading standard required for constructive fraud.

13 VI. THE UCL CAUSES OF ACTION LIKEWISE FAIL

14 Plaintiffs’ UCL claims are equally infirm. Plaintiffs seek relief under Business and

15 Professions Code section 17200 based on two theories: (1) packaging as a practice is “unfair” and

16 “unlawful” because it violates agents’ fiduciary duties and amounts to constructive fraud; and (2)

17 packaging is “unlawful” because it violates section 302 of the Labor Management Relations Act

18 (“LMRA”), 29 U.S.C. section 186(a). Both theories are meritless, as packaging is neither “unfair”

19 nor “unlawful.” See Graham v. Bank of Am., N.A., 226 Cal. App. 4th 594, 610 (2014).

20 A. Plaintiffs Cannot Base Their UCL Claim On Purported Fiduciary Breaches

Or Constructive Fraud.
21

22 Plaintiffs’ theories that packaging constitutes unfair competition because it universally

23 breaches fiduciary duties and amounts to constructive fraud fail for at least two reasons.
24 First, as discussed above, the fiduciary duty and constructive fraud claims fail because the
25 WGA and the individual plaintiffs consented to the concept, structure, and economics of
26 packaging, as exhibited by the AMBA. See Sections IV.A, V.A, supra. Plaintiffs cannot predicate
27 a UCL claim on these same failed theories. See Graham, 226 Cal. App. 4th at 610 (UCL claim
28 fails when no violation of underlying law is shown).

18
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 1 Second, and critically, breach of fiduciary duty and constructive fraud are, as discussed

2 above, necessarily individualized claims. If individuals give informed consent, an action by an

3 agent is not a fiduciary breach or constructive fraud even if it would otherwise constitute a conflict

4 of interest. See, e.g., Rest. 3d Agency § 8.06. A practice that is allegedly unlawful only in

5 individualized circumstances—i.e., in the absence of informed consent—is not the kind of

6 “unlawful” competition the UCL is intended to address. See Kaldenbach v. Mutual of Omaha Life

7 Ins. Co., 178 Cal. App. 4th 830, 849-50 (2009) (practice not UCL violation on class basis where

8 “the determination of what . . . [is] allegedly unfair turns on individual issues”).

9 B. Plaintiffs Cannot Base Their UCL Claim On The LMRA.

10 Plaintiffs’ third theory—that packaging constitutes unlawful competition because it

11 violates LMRA section 302—is wholly meritless. Section 302 is a federal law that makes it a

12 crime for employers to bribe union officials, i.e., union “representatives.” 29 U.S.C. § 186(a)(1).

13 Section 302 does not apply to talent agencies (who are not union officials), nor would it bar them

14 from receiving compensation for the services sanctioned for decades by the WGA.

15 Plaintiffs mislead the Court by selectively citing portions of section 302, while wholly

16 ignoring both its history and the subchapter within which it resides: “Liabilities of and Restrictions

17 on Labor and Management.” As its title suggests, the LMRA governs labor-management

18 relations. See 29 U.S.C. § 141. Consistent with this framework, section 302’s “dominant purpose”

19 is “to prevent employers from tampering with the loyalty of union officials.” Turner v. Local

20 Union No. 302, Int’l Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am., 604 F.2d

21 1219, 1227 (9th Cir. 1979). As the U.S. Supreme Court explained in Arroyo v. United States,

22 section 302 was enacted “to deal with problems peculiar to [union] collective bargaining” as “part

23 of a comprehensive revision of federal labor policy . . . aimed at practices which Congress

24 considered inimical to the integrity of the collective bargaining process.” 359 U.S. 419, 424-25

25 (1959). Section 302 has thus never been applied outside the union-employer context in its 72-year

26 history. Nor should it be.

27 And this is not the case to radically broaden the scope of a heretofore narrow and

28 well-defined federal criminal law. Neither the language nor history of section 302 supports its

19
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 1 application here. Talent agencies are not union “representatives” within the meaning of the statute,

2 nor is applying the law to the practice of packaging by talent agencies consistent with its scope or

3 purpose. To the contrary, criminalizing packaging—which has involved tens of thousands of

4 actors, writers, directors, producers, agencies, and studios for half a century—would violate the

5 longstanding principle that criminal laws must be narrowly construed. Furthermore, even were

6 the statute somehow applicable, plaintiffs’ claims would be preempted by federal labor law.

7 1. Section 302 Does Not Apply To Agents.

8 Plaintiffs’ claims regarding section 302 fail on a plain reading of the statute. Plaintiffs

9 assert that defendants are “representatives” of writer-employees under the LMRA and that, by

10 receiving packaging fees from studios, they are receiving “money” from an “employer” of writers.

11 FAC ¶¶ 8, 99-100 (citing 29 U.S.C. § 186(a)). This is wrong as a matter of law. The term

12 “representative” in section 302 is defined as “any individual or labor organization,” but talent

13 agencies are neither “individuals” nor “labor organizations” within the meaning of the statute. 29

14 U.S.C. § 152(4).11 Looking beyond section 302, the rest of the National Labor Relations Act

15 (“NLRA”) clearly uses the term “representative” to mean a union representative who undertakes

16 collective bargaining activities. See, e.g., 29 U.S.C. §§ 158(a)(3), 159(a). Indeed, the legislative

17 history of the statute makes clear that section 302 was enacted to prevent unions from demanding

18 kickbacks and to prevent employers from bribing union representatives. See 80 Cong. Rec. 582

19 (1947) (“Our big job is to protect the public from union leaders who have misused their power.”);

20 80 Cong. Rec. 677 (1947) (“irresponsible acts of union officers”).

21 ICM has been unable to find a single case where section 302 was applied to a

22 “representative” who was not an individual associated with a labor union. This makes sense

23 because extending the term to cover non-union agents would bring a whole host of innocent

24 persons and activities within the reach of the criminal law. For instance, an employer who pays

25

26 11
An “individual” for purposes of the NLRA means a “natural person.” See, e.g. Rest. Law Ctr.
v. City of N.Y., 360 F. Supp. 3d 192, 235 (S.D.N.Y. 2019). “Labor organization” is an
27 “organization of any kind, or any agency or employee representation committee or plan, in which
employees participate and which exists for the purpose, in whole or in part, of dealing with
28 employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or
conditions of work”—i.e., a union. 29 U.S.C. § 152(5).
20
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 1 an employee’s legal fees under an indemnity arrangement could be illegally giving “money” to a

2 “representative of an employee,” and thus committing a crime. So too an employer who pays an

3 employment agency a finders’ fee for headhunting services, or one who uses a payroll agency.

4 The term “representative” must be construed consistent with the purpose and history of section

5 302, and thus limited to representatives associated with labor unions.

6 Indeed, under the rule of lenity, the Court must construe a criminal statute like section 302

7 narrowly, and not extend it to persons unless clearly covered by its terms. See, e.g., United States

8 v. Millis, 621 F.3d 914, 916-17 (9th Cir. 2010). As such, extending the term “representative” to

9 agents is impermissible. Narrow interpretation is further required, as section 302 has a mens rea

10 element, requiring that the “defendant act with knowledge that the payments are from a person

11 acting in the interest of an employer and are intended to influence the defendant’s duties as a union

12 employee.” United States v. Bloch, 696 F.2d 1213, 1216 (9th Cir. 1982), abrogated on other

13 grounds by United States v. Jimenez Recio, 537 U.S. 270 (2003). That requirement cannot be met

14 here because plaintiffs cannot allege packaging fees were made to influence a union employee.

15 2. The UCL Claims Based On The LMRA Are Preempted.

16 Even were plaintiffs’ section 302 theory somehow viable (it is not), it would nonetheless

17 fail because it is preempted by federal law. A UCL claim may be preempted where it attempts to

18 enforce, via a state law cause of action, a right that is part of a statutory scheme in a “field” that

19 Congress intended to occupy by federal law, i.e., “field preemption.” See, e.g., Cong. of Cal.

20 Seniors v. Catholic Healthcare W., 87 Cal. App. 4th 491, 495, 508-09 (2001).

21 Here, section 302 of the LMRA (i.e., 29 U.S.C. § 186) occupies the field regarding the

22 payment of money to unions (i.e., “financial transactions” with unions). See Arroyo, 359 U.S. at

23 424-25 (section 302 enacted “to deal with problems peculiar to [union] collective bargaining” as

24 “part of a comprehensive revision of federal labor policy”). Accordingly, state laws attempting to

25 regulate union payments in contexts similar to those covered by section 302 are preempted. E.g.,

26 Int’l Ass’n of Machinists Dist. Ten and Local Lodge 873 v. Allen, 904 F.3d 490, 497-503 (7th Cir.
27 2018); United Auto., Aerospace & Agric. Implement Workers of Am. Local 3047 v. Hardin Cty.,

28 Ky., 842 F.3d 407, 421 (6th Cir. 2016) (“Allowing dual regulation under federal and state law” of

21
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 1 activities “subject to regulation under the LMRA . . . would undermine Congress’s purposes and

2 contravene field preemption.”); Ga. State AFL-CIO v. Olens, No. 13-cv-03745-WCO, 2015 WL

3 13260393, at *12-14 (N.D. Ga. July 20, 2015); see also SeaPAK v. Indus., Tech. & Prof. Emps.,

4 Div. of Nat’l Maritime Union, AFL-CIO, 300 F. Supp. 1197, 1200-01 (S.D. Ga. 1969), aff’d by

5 400 U.S. 985 (1971).12

6 Because Congress intended to “occupy the field” of illicit union payments by employers,

7 any UCL claim based on a violation of section 302 fails. Congress set a comprehensive scheme,

8 with defined procedures and penalties in the section itself. See, e.g., 29 U.S.C. § 186. The UCL

9 is not an appropriate appendage to the LMRA. Indeed, “no [California] court ought to venture

10 into such a [regulatory] minefield.” Cong. of Cal. Seniors, 87 Cal. App. 4th at 509.

11 C. Packaging Fees Are Not “Unfair” Under Any Theory.

12 In addition to failing to allege a viable theory by which packaging fees could be “unlawful,”

13 plaintiffs also fail to allege facts sufficient to demonstrate that they are “unfair,” or that ICM

14 engaged in any “unfair” practice with regard to them. Plaintiffs’ claims—which allege packaging

15 “deprive[s] writers of loyal, conflict-free representation; divert compensation away from the

16 writers and other creative talent . . . ; and undermine the market for writers’ creative endeavors,”

17 FAC ¶ 98—cannot satisfy the “unfairness” requirements.13

18 Under the widely used Scripps test,14 plaintiffs are required to allege a public policy

19 “‘tethered’ to specific constitutional, statutory or regulatory provisions.” Scripps Clinic v.

20 Superior Court, 108 Cal. App. 4th 917, 940 (2003). Plaintiffs do not meet this test because, absent

21 the non-viable LMRA extension discussed above, they do not allege that the purportedly unfair

22 conduct is “tethered” to any constitutional, statutory, or regulatory provision. See, e.g., Scripps,

23 12
While these cases deal with union “checkoff agreements” under 29 U.S.C. section 186(c)—i.e.,
where an employee agrees to let her employer pay dues from paychecks—as the cases recognize,
24 these agreements are a small part of the broader statutory scheme.
13
25 Plaintiffs also allege packaging fees are unfair based on their purported unlawfulness, see FAC
¶¶ 96, 99. These allegations fail for the reasons addressed above.
26 14
Under a second test, typically applied in consumer actions, an “act or practice is unfair if the
consumer injury is substantial, is not outweighed by any countervailing benefits to consumers or
27 to competition, and is not an injury the consumers themselves could reasonably have avoided.”
Daugherty v. Am. Honda Motor Co., Inc., 144 Cal. App. 4th 824, 839 (2006). Plaintiffs do not
28 even attempt to make a showing under this test. Nor could they. Packaging involves
individualized claims that, as plaintiffs concede, benefitted individual plaintiffs.
22
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