Related: Anti SAG-AFTRA Merger Plaintiffs On Court Decision: “Only Time Will Tell”
U.S. District Court Judge James Otero rejected the anti SAG-AFTRA merger efforts by Martin Sheen, Ed Harris, Diane Ladd, and others to render the vote void before it is conducted. So now the SAG-AFTRA merger referendum results will be known after 1 PM Friday. But the judge noted that while he would not dismiss the anti-merger forces’ claims that the SAG board breached fiduciary duties in the proposed merger, especially its effects on SAG member’s pension and health plans, “If the merger is approved by the Membership, and the Members eventually see a decrease in benefits, it will be the result of their informed decision to vote for merger without the benefit of an actuarial study. The democratic process does not always yield the most desirable results for all.” The judge also rejected SAG’s attempt to dismiss the suit outright and allowed the anti-merger forces’ breach of contract claim to continue. Today’s decision comes just over a week after the judge cancelled a March 26 hearing on the matter and chose instead to issue an order.
Here’s partial reaction from the antimerger force that brought the lawsuit:
Unfortunately, only time will tell whether or not the concerns brought to light by this litigation were heeded. Our greatest concern is that a year from now, members who voted for the merger will find out that, as this lawsuit predicts, their pension and health benefits will be diminished and the split earnings issue will effectively continue. Members will still be unable to qualify for benefits because their combined earnings will likely have to exceed an increased earnings threshold. Plaintiffs continue to believe that the decision of the union not to conduct a professional, actuarial study, was done intentionally to hide those findings from a membership that needed to know the truth. The Court made no finding to the contrary.
Here’s the SAG announcement:
Los Angeles, Calif.– Federal Judge James Otero today denied the plaintiffs’ motion for preliminary injunction in Sheen v SAG clearing the way for Screen Actors Guild’s merger referendum ballot counting to go forward as scheduled on Friday, March 30.
The Judge’s ruling read in part, “Voting in favor of merger may or may not be in the best interest of the majority of Union Members. But the decision, for better or worse, belongs to the Members – not to Plaintiffs, and certainly not to the Court.” He also stated that, “[I]t appears that SAG’s democratic process is functioning properly.”
As to the question of Pension and Health benefits, the Court ruled, “Although diminution of health and pension benefits is a serious matter, Plaintiffs have failed to demonstrate that such harm is likely to occur upon merger.”
Judge Otero also dismissed one of the four remaining causes of action. He decided not to dismiss the other three claims based on the legal presumption in favor of plaintiffs on a motion to dismiss, but found in his ruling on the injunction that the plaintiffs are unlikely to prevail on those claims.
SAG Deputy National Executive Director and General Counsel Duncan Crabtree-Ireland said, “We are pleased with the court’s action denying the requested injunction and dismissing one of the plaintiff’s major claims in this matter. We are are also gratified that the court has indicated that the plaintiffs are unlikely to prevail on their other claims. It has been our position all along that these complaints were completely without merit and that the members will ultimately decide the future of their unions.”


“Voting in favor of merger may or may not be in the best interest of the majority of Union Members. But the decision, for better or worse, belongs to the Members – not to Plaintiffs, and certainly not to the Court.”
In other words, if your elected leaders are misleading you, or worse, lying to you, tough shit and you have no legal recourse. (Oh, and they’ll be hiding out in Delaware if you have a problem with that.)
And Duncan, the judge said the opposite of “…these complaints were completely without merit…” More lawyer-spin of the facts.
Yes…The judge has made clear that the plaintiffs won the breach of fiduciary. No clue what Duncan is talking about.
Did he get an AFTRA tv show too?
“I don’t think those viewing this as a defeat for the plaintiffs have it right. Surviving a motion to dismiss on the fiduciary duty claims is significant. It gives the plaintiffs the ability to move forward on those claims. This means they have the right to subpoena and depose witnesses and engage in document discovery of SAG records. Alternatively it hands them a bargaining chip to use with SAG in exchange for dropping the law suit.” Stephen Diamond
Now we know whose pocket the Judge is in…
As Rita Hayworth said of herself – they go to bed with Rita Hayworth, but wake up with me.”
The ability of judge Otero to interfere with an ongoing referendum, was predictably, something he felt was beyond his purview. However, the ruling essentially says “hey, if you’re dumb enought to march lock-step off this cliff without making sure your own leadership did a pre-merger actuarial impact study as recommended in your own constitution? Well, good luck with that.” The wisdom of this merger if it passes and is not overturned by another lawsuit, will become clear soon enough: it will not stop. Split earnings for years, we have absolutely no idea what will happen to SAG P&H since they didn’t do the study, and here comes Craig Simmons lawsuit and boy is THAT going to make not doing a study first look like the dumbest move in the history of SAG. Well, we all find out if we’re officially fucked or not come Friday. If current pension holders see a benefit drop – SAG-AFTRA will spend its first five years in court.
94% OF THE AFTRA BOARD ARE IN FAVOR OF MERGER. 87% OF THE SAG BOARD, ARE IN FAVOR. YOU NOW HAVE SHEEN, AND THE OTHER CRY BABIES, GOING TO COURT, TO TRY TO STOP THE MERGER VOTE, BY THE MEMBERSHIP. I VOTED YES TWICE, AND ABOUT 75% OF THE MEMBERS I KNOW, WHO HAVE BEEN MEMBERS FOR LONGER THAN A MONTH, HAVE VOTED YES.
I bares mentioning SAG Leadership’s response to the current merger lawsuit notes everyone and and anyone who trusted the Board majority and the Board majority’s “Feasibility Report” was duped.
It is also significant the court filing and its information which could have aided membership in evaluating the merger issue was withheld and was not furnished to the court by SAG Leadership until March 26 after most members had cast their vote –and a mere 24 hours before voting was closed.
While the Feasibility Report was presented to the membership as if it contained “unequivocal” facts, SAG Leadership was forced by the lawsuit to confess it was merely propaganda devoid of any useful factual information.
SAG Leadership, in their response to the US District Court, assert they do not believe they have a duty to “present completely accurate factual assessments” but instead are “political” in their motivation and so instead of facts offered the membership “OPINIONS.”
From SAG Leadership’s submission the US District Court, March 26, 2012:
“It must be kept in mind that unlike ERISA fiduciaries, whose duty is to present completely accurate factual assessments regarding the financial condition of pension or health benefit trusts, union officers are elected as part of a political process, and members understand that officers express their opinions about union issues, such as mergers.”
I vote “yes”. Let’s just be done with this already, and give both Boards hell if shit hits the fan afterwards. The Brits in entertainment in the U.K. are all under one union umbrella. Why in the hell can’t we get it right here in this country after “discussing” this merger issue for at least the past 10 years? Let’s get it crackin’ so we can all get to more workin’.
Hey Actor in LA,
Have you bothered to read the merger referendum that you voted yes for ?
If it passes you will have very little chance to
“give the boards hell if the shit hits the fan afterwards”.
They are eliminating the membership from the governance equation.
All the Brits who are under one umbrella
don’t enjoy the benefits that we have enjoyed as SAG members.
And they have the National Health there.
It’s an entirely different landscape.
Good luck to you.
You’re going to need it.
Interesting how clear and specific the comments are from those who’ve actually read the documents. Bravo, Alan. It’s sad how few most likely have.
Judge Otero Ruling
SAG members (the “PLANTIFFS”) vs. SAG (the “DEFENDANTS”)
There is not one thing, one issue, one ruling.
There are several things, several issues, several rulings.
Both the SAG members (the “PLANTIFFS”) and SAG (the “DEFENDANTS”) had rulings go in favor of them and not in favor.
SAG members (the “PLANTIFFS”) won some of the rulings.
SAG (the “DEFENDANTS”) won some of the rulings.
Judge Otero Summary of Rulings:
“III. RULING
For the foregoing reasons, the Court GRANTS IN PART AND DENIES IN PART Defendants’ Motion to Dismiss, DENIES Individual Defendants’ Motion to Strike, and DENIES Plaintiffs’ Motion for Preliminary Injunction.
IT IS SO ORDERED.”
Huh??? What does that mean? Reading the judge Otero rulings you discovered he ruling on 6 things.
He ruled in favor of SAG members (the “PLANTIFFS”) on FOUR rulings.
He ruled in favor of SAG (the “DEFENDANTS”) on only TWO rulings.