The Fustercluck of Foreign Levies

... as regards the Animation Guild and its members.

Years and years ago, when I was moist behind the ears and Brian Walton was the executive director of the Writer Guild of America (west), I got into a kerfluffle with him regarding foreign levies. "Foreign levies" are royalty-type monies that foreign collection agencies vacuum up from various sources on behalf of film and TV writers and directors, and then turn over to the writers and directors' guilds in the U.S. for pay out to credited writers and directors. For example, the European Union collects a tax on blank videocassettes that goes towards payments to writers and directors.

I objected to Walton that his organization was collecting money for persons the WGA did not represent, under a system in which TAG had no input. (This was in the early nineties, when the WGA repped zero animation writers.)

I was told to buzz off.

And here we are, years later. And whether TAG likes it or not, the Directors Guild and Writers Guild are the collectors of foreign levies for animation people. And the amount of foreign levies flowing into their coffers is considerable.

Unfortunately, the way those two organizations go about handing out the money is, as far as we can see, considerably different ...

Over the course of the time levies have been paid out, the DGA has contacted us on a regular basis to help track down animation directors for which it has no contact information. TAG has been happy to assist the Directors Guild on locating the recipients of the money. As a result, quite a few of our director members have gotten checks in the mail they probably wouldn't otherwise have received.

But while the DGA has been diligent in working to locate animation directors to whom money is owed, the WGA has been the opposite. In the two decades that payments have gone out, the Writers Guild has contacted us exactly once for a list of addresses of animation writers. The WGA now represents some animation writers and hosts the Animation Writers Caucus, but its database for writers of cartoons is far from complete. Why the Writers Guild doesn't check in with the other organization that has lots of names and addresses that would be useful to it is a mystery. Perhaps WGAw has its reasons, but its performance seems lackadaisical to us.

Unsurprisingly, in 2005 various writers sued the WGA over its slothfulness in paying out foreign levies. Now, some little while later, a settlement is in the offing, but a few writers object to the terms:

... [T]he proposed Settlement Agreements ... is a settlement in name only. It makes no provision for the actual payment of Foreign Levies to class members and fails to address the central thrust of the Complaint: that WGA converted, misappropriated or otherwise refused to disgorge Foreign Levy money belonging to writers who identities and locations are already known. ... The Settlement does not materially benefit the plaintiff class, and indeed confers no greater benefit on participating class members than on class members who opt out. The Settlement was negotiated by class representatives who shared on interest with writers of non-union work, yet who also shared no commonality with the typical covered writer who is a member in good standing of WGA ...

Here [are] some of the key problems with the Settlement, (resolutions in italics):

1) WGA is under a fiduciary duty to pay union and non-union writers their Foreign Levies but is not doing so. (No change under the Settlement.)

2) The WGA is not doing anything to actually locate and/or distribute funds to individuals, and in particular, non-covered writers who may not be known to it. (WGA pledges to do a better job, but does not pledge to work with the myriad stakeholders who are entitled to Foreign Levies, including ... IATSE Local 839 ...)

3) There has never been a comprehensive accounting of which writers have not been paid their Foreign Levy royalties. (There will not be a comprehensive accounting ...)

4) WGA does not have a viable system to collect and distribute Foreign Levy royalties. (Consultants will prepare a secret report for WGA -- and plaintiffs' attorneys' eyes only -- recommending improvements ...)

5) WGA has authorized signatory production companies to take 50% of earnings of writers of non-union works even though those companies have nothing to do with non-union productions. (Settlement permits this apparent conversion to continue, and requires writers of non-union works to release WGA ... from all claims.)

6) WGA retains undistributed Foreign Levies indefinitely, circumventing California escheat law, and retaining all interest. (Nothing changes.)

7) Writers have the right to assert claims for Foreign Levy royalties against foreign collecting societies. (Writers are obligated to release foreign collecting societies from all claims ...)

8) WGA takes a 5% administrative fee from Foreign Levy disbursements. (The administrative fee charged to writers will increase to 10% of disbursements ...)

9) WGA fails to pay writers any interest on money owed ... (No change ...)

10) WGA lacks any authorization from non-members to even collect foreign levy moneys on their behalf. (The Court made no ruling on this subject, but the FAQs on WGA's website assert that the Court has "affirmed WGA's right to do this.")

11) Writers are entitled to Foreign Levy royalties from Latin American countries. (The release requires writers to relinquish claims for these royalties.)

12) Writers retain the right to allege claims against production companies for misappropriating their foreign levy royalties. (Ambiguity in in the release may be construed by production companies as requiring writers to relinquish claims ...)

TAG's position in this tangled mess is straight-forward. We have a problem with being cut out of the process and have said so repeatedly, we have a problem with the (seemingly) lackadaisical payouts of levy money by the WGA to our members, and we want to see a) more transparency and b) more responsiveness than the WGA has so far been willing to offer.