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IP Law Daily, COPYRIGHT—C.D. Cal.: Unhappy union: SAG-AFTRA loses DMCA claim against AT&T, (Mar 1, 2023)

Law Firms Mentioned:Bush Gottlieb ALC | Loeb And Loeb LLP
Organizations Mentioned:AT&T | AT&T/DIRECTV | LABC Productions, LLC | Loeb & Loeb, LLP | SAG-AFTRA | Screen Actors Guild - American Federation of Television and Radio Artists

By Matthew Hersh, J.D.

The union fails to adequately allege that the multimedia giant was bound by a collective bargaining agreement.

The principal labor union representing television and theatrical actors failed to state a claim against AT&T under a little-known provision ...

By Matthew Hersh, J.D.

The union fails to adequately allege that the multimedia giant was bound by a collective bargaining agreement.

The principal labor union representing television and theatrical actors failed to state a claim against AT&T under a little-known provision of the DMCA because it failed to adequately allege that the multimedia giant was aware of the existence of a collective bargaining agreement when it picked up the rights to a short-lived television show, the federal court for Los Angeles has held. But the court, in turning back the claim, reaffirmed that neither the DMCA nor analogous provisions of labor law necessarily required the union to be in direct contractual privity with AT&T in order to enforce the agreement (Screen Actors Guild-American Federation of Television and Radio Artists v. LABC Productions, LLC, February 24, 2023, Olguin, F.).

The lawsuit involves Section 406 of the Digital Millennium Copyright Act, or DMCA, a provision that protects the beneficiaries of labor agreements under certain circumstances. The little-known provision, added late in the legislative process over the DMCA and now codified as 28 U.S.C. § 4001, provides that anyone who acquires the copyright ownership of a motion picture is bound by law under any collective bargaining agreement—assuming it knew of the existence of that agreement—applicable to that motion picture. IP Law Daily’s research shows that in the nearly quarter century since the DMCA was enacted, the provision has apparently been the subject of only three published court decisions, none officially reported. (For those curious, they are Screen Actors Guild, Inc. v. Smoke Tree Productions, LLC, CV 09-1472 CBM (JCX), 2011 WL 13272696 (C.D. Cal. Jan. 6, 2011); Distribuidora De Discos Karen C. Por A. v. Guerra Seijas, 13CIV. 5200 NRB, 2015 WL 4496066 (S.D.N.Y. Mar. 26, 2015); and Am. Fed'n of Musicians of the United States & Canada v. Rural Media Group, Inc., 3:20-CV-00318, 2021 WL 848699 (M.D. Tenn. Mar. 5, 2021).

The lawsuit in question arises out of Mr. Mercedes, the TV adaptation of a Stephen King novel that, according to its IMDB page, “tells the story of a psychopathic killer who drives a stolen Mercedes into a crowd and a recently retired detective who tries to bring him down.” The David Kelley-produced drama was originally developed by the production company Sonar Entertainment and aired on Audience, an AT&T-owned cable television channel that was exclusively available for DirecTV customers. The show was discontinued after the Audience network ceased operating in 2020, although episodes from its three-season run are now available on the Peacock streaming network.

The showrunners raised the ire of the Screen Actors Guild-American Federation of Television and Radio Artists, the representative of certain of the performers in the show. The union, known ubiquitously as SAG-AFTRA, claimed that it had negotiated a collective bargaining agreement with Sonar, the original production company, and that Sonar had violated the terms of that agreement. Moreover, the union alleged, its rights under that agreement were now enforceable against AT&T—the alleged acquirer, from the production company, of the copyright ownership rights to the show.

SAG-AFTRA sued AT&T (along with DirecTV and certain other affiliates) in the Los Angeles federal court, seeking to enforce the arbitration provision of the CBA under, among other things, the DMCA. AT&T moved to dismiss in turn, arguing that the complaint had adequately shown a linkage between it and the CBA (and also alleging, for good measure, that the union had already reached a settlement with the original production company and now was trying to better that outcome by pursuing AT&T). The motion to dismiss led to this opinion.

Application of DMCA. The court, in a short opinion, easily found that enforcement of the CBA was not warranted under the collective bargaining provision of the DMCA. Unlike the sole other case addressing this provision within the Central District—the Smoke Tree decision cited above—the union had not, according to the court, sufficiently alleged that AT&T was actually a transferee of the interest in copyright, nor that it “had actual or constructive knowledge” that the television series was produced subject to the CBA. Thus, the claim would fail, although the union would be given leave to plead the claim a new.

In issuing this brief opinion, however, the court took pains to emphasize that the claim failed only because of the DMCA issue, and not under the additional arguments made by AT&T. Most importantly, the court rejected AT&T’s argument that the union’s claims must be dismissed simply because there were no written agreements between AT&T and the union. That argument “misses the mark,” the court noted, because the DMCA (and for that matter, the venerable Labor Management Relations Act) did not require such privity in order for a CBA to be enforceable.

The Case is No. 2:21-cv-09879-FMO-MAA.

Attorneys: David E. Ahdoot (Bush Gottlieb ALC) for Screen Actors Guild - American Federation of Television and Radio Artists. John Michael Gatti (Loeb And Loeb LLP) for LABC Productions, LLC.

Companies: Screen Actors Guild - American Federation of Television and Radio Artists; LABC Productions, LLC

Cases: Copyright TechnologyInternet CaliforniaNews