Thread by @gregmachlin

1) As someone who hopes to be in the WGA some day, I'm following the WGA's fight with agencies over packaging fees with interest.

2) (Required reading: COUNTERPART showrunner @bergopolis' 3+ twitter threads laying out the issues and @AoDespair's blog post. davidsimon.com/but-im-not-a-l…

3) Deadline Hollywood, which has, shall we say, an 'interest' in keeping agencies happy, recently published an anonymous letter from someone claiming to be a WGA writer who's very unhappy with the WGA's stance.

4) You can read the whole thing here. It's *very* useful for educational purposes as they pertain to dishonest, bad-faith arguments. deadline.com/2019/03/writer…

5) Many have rightly dismissed this letter (we have no idea if this person is actually in the WGA), but I haven't seen anyone deconstruct the core arguments. Plus, dishonest, bad-faith arguments really irritate me.

6) What's most interesting to me, as a paralegal, is what Deadline's lengthy letter *doesn't* say. It's got more rambling than a Gish Gallop (Gish Rocket? Gish Large Hadron Collider?) but barely talks about the core issue.

7) As such, it presents us with an opportunity: the core issue with agencies collecting packaging fees is that it violates an agent's--and that agency's--FIDUCIARY DUTY.

8) Excellent definition and breakdown here: christian-attorney.net/fiduciary_cali…
"A fiduciary relationship is ‘‘any relation existing between parties to a transaction wherein one of the parties is in duty bound to act with the utmost good faith for the benefit of the other party.

9) DUTY BOUND TO ACT with the UTMOST GOOD FAITH for the BENEFIT OF THE OTHER PARTY. These aren't just fancy words. This is the *law.*

10) More on Fiduciary Duty: "Every agent owes his principal the duty of undivided loyalty. During the course of his agency, he may *not* undertake or participate in activities adverse to the interests of his principal."

11) That's from Sequoia Vacuum Systems v. Stransky (1964).

12) More: A fiduciary must give "priority to the best interest of the beneficiary."
From Committee on Children's Television, Inc. v. General Foods Corp, 1983.

13) An agency collecting packaging fees creates numerous bad incentives. Packaging fees result in the agency acting with divided loyalty.

14) Packaging fees cause the agency to undertake in activities adverse to the interest of his/her principal (aka the client).

15) VERY IMPORTANT POINT: Let's pause and note that violations of fiduciary duty default to *civil* court, not *criminal.*

16) So when our anonymous friend writes "just because the WGA says it’s illegal doesn’t make it illegal. If it were illegal, the DOJ would frogmarch half of Beverly Drive to the nearest courthouse. It’s not illegal…"

17) The anonymous writer is either flat-out lying or too bone-thunderingly ignorant to be discussing the issue competently. Violations of fiduciary duty are CIVIL violations, not criminal. No one gets frog-marched.

18) There can ALSO be criminal prosecutions as a result of actions that violate fiduciary duty (you've heard of Enron, right?) but yeah, the default is to start with civil court.

19) See? We're gettin' edu-ma-cated already!

20) AHEM. Back to Fiduciary Duty. Here are just a *few* of the ways in which Packaging Fees result in violations of fiduciary duty:

21) Let's say an agency (CAA, WME, one of the big four) is getting a small packaging fee on a show. $3,000/week from the studio producing the show. That's a tiny amount, right? Shouldn't be a problem. WRONG. Our agency has already abandoned its fiduciary duty. Here's why:

22) A. The agency is collecting money without any direct benefit to the client it supposedly represents. This money is much, much easier to get than the 10% commission from clients' salaries.

23) B. Since that $3,000 a week is so easy to get, the agency is naturally going to want more, so it's going to start pursuing packaging fees *instead* of properly acting in its client's best interest by negotiating a higher salary.

24) C. The agency, for the first time, now has a financial incentive to *avoid conflict with the studio.* "Don't make them mad. They'll cut or take away our packaging fee. That's free money!"

25) D. Yeah, but it's literally the agency's JOB to be in conflict with the studio. The agency is supposed to want its client to make the *highest* possible salary. The studio wants the client to make the *lowest* possible salary.

26) The agency's taking money that could go directly to the production and diverting it. That production cannot use that $3,000/week to hire an additional staff writer, or pay for better costumes, or use it for a higher VFX budget.

27) BUT WAIT! I hear agents and managers screaming. There's no evidence the studio will spend the money on the show itself?

28) This is true, and also irrelevant. We don't KNOW the studio will put any of that money into the show.

29) But $3,000 a week is $156,000 a year. Even if the studio keeps ALL the money, that show just got $156,000 cheaper. And yes, that amount can make a difference when considering whether to renew or cancel a show.

30) A reminder: several people are pretending that the WGA has a problem with *packaging.* These people are lying. PACKAGING is fine. PACKAGING--putting together writers, directors, actors who might want to work together--does not violate fiduciary duty.

31) An agency taking packaging FEES violates its fiduciary duty.

32) Questions about the WGA's strategy (which our Deadline friend spends a LOT of time on) are also irrelevant. This shouldn't even be an argument. The WGA should not have to make this fight.

33) This should be the CA Attorney General's fight, and not even that, it should the CA Attorney General's pursuit of massive violations of civil law.

34) Much of the rest of the essay is taken up with several bad-faith assumptions. The Deadline writer blithely assumes that *every single agent* will refuse to sign on to the Code of Conduct.

35) Competition, and capitalism, would suggest otherwise. If Shonda Rhimes and Ryan Murphy are suddenly available as clients, and all I have to do to land them is sign a document that LITERALLY JUST SAYS I'LL OBEY THE LAWS I'M ALREADY SUPPOSED TO BE OBEYING…

36) Well, I strongly suspect there are agents that will sign that document in a heartbeat.

37) (Bizarrely, our Deadline scribe also wonders aloud, after assuming every single agent will quit, "who exactly [will] negotiate… our deals?" I don't know, entertainment lawyers? Who may overlap with, but are different from agents?

38) Our Deadline writer closes not with any further discussion of fiduciary duty (which is literally mentioned once in the entire essay) but by impaling himself in a mini-orgy of martyrdom.

39) Apparently WGA members who are fine with packaging fees will be hung from the rafters. "Dissent is being stifled." People are… "threatening careers and livelihoods."

40) Seriously? Is a single writer in danger of losing his/her job because, for whatever odd reason, they’re okay with agencies violating their fiduciary duties?

41) I'll give the Deadline writer this, though. While he's wrong about the WGA's *efforts* to educate its members, he 100% demonstrates that there is at least one WGA member who utterly fails to understand the core issue here…

42) Because he doesn't know what the fuck he's talking about.

43) The End.
By Jason Mendoza!
(or Greg Machlin).