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A Federal Judge Refuses to Dismiss a Class Action Lawsuit Against SAG-AFTRA

Posted on November 06, 2017 by Vira
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Despite SAG-AFTRA's Opposition, Federal Judge Won't Dismiss Class Action Lawsuit

Despite suffering a setback in his case, a federal judge has allowed songwriter/producer Kevin Risto’s key claim against SAG-AFTRA to proceed.

Last Monday, SAG-AFTRA filed a motion to dismiss an important class-action lawsuit.

According to the powerful performers union, it has the right to collect a fee from money collected by the Intellectual Property Rights Distribution Fund.

Unfortunately, a federal judge has disagreed.

So, what’s the case all about?

Last June, award-winning songwriter and record producer Kevin Risto filed a class-action lawsuit against SAG-AFTRA, the American Federation of Musicians, and the trustees of the Fund.

Risto claimed that the performers unions had unfairly collected millions from sessions musicians and backup singers.  Trustees of the Fund – employees of the unions – had unfairly tacked on a 3% fee on all royalties collected.  SAG-AFTRA alone collected $1.7 million in service fees from in 2016.  It has also collected similar fees since 2013.  The performers unions apply this questionable fee even to nonmembers, like Risto.

The performers’ unions had set up the Fund 15 years ago to help them identify and pay non-featured musicians.  Yet, prior to 2013, the Fund hadn’t taken any fee.

Risto wrote in June,

All of the obligations conferred on the unions in the service agreement were activities that the unions were already performing as a benefit to its members.  No new consideration was provided by the unions in exchange for the service fee.

According to the motion to dismiss filed last Monday, SAG-AFTRA claimed it ‘needed’ to take this additional amount.  The rise of digital services and platforms requires extra work.  Thus, the performers unions need to be fairly compensated.

US District Court Judge Christina Snyder didn’t buy SAG-AFTRA’s argument.  Yet, she largely dismissed most of Risto’s claims without prejudice.

He can no longer sue on the grounds that the Fund’s trustees had breached their duty of impartiality, along with two other claims.

Snyder wrote,

Plaintiffs allege that the unions already provided those services, that the trustees received no additional benefit from the agreement, and that the agreement was entered into solely for the benefit for the unions.

Risto, however, can pursue the claims SAG-AFTRA had broken its fiduciary duty of breaches of loyalty.  The performers union had benefited from the transactions, Risto’s key claim.

In a statement celebrating Snyder’s ruling, Risto’s attorney, Jordanna Thigpen, said,

We are very pleased with Judge Snyder’s decision as it will allow these claims to proceed so that we may work towards recovery of these funds for artists.  It is very important for claims for breach of fiduciary duty to proceed especially when there is no other method of challenging a given trustee’s conduct, as is the case here.

 


Featured image by SAG-AFTRA.