v.
Screen Actors Guild, et
For the Fifth Circuit
No. 95-20344
PASTORINI-BOSBY TALENT, INC.;
ACTORS ETC; MAD HATTER INC.;
SHERRY YOUNG AGENCY INC.,
Plaintiffs-Appellees,
VERSUS
SCREEN ACTORS GUILD INC.,
Defendant-Appellant
and
AFTRA; PEGGY TAYLOR TALENT INC.; NEAL HAMIL
ENTERPRISES INC., doing business as Neal Hamil Agency;
INTERMEDIA CORPORATION INC.; J AND D TALENT INC.;
ROBERT BLACK AGENCY; LEIGHTON AGENCY; ACT GRISSOM;
DANI'S AGENCY; FOSL'S MODELING AND TALENT INC.; KRISTI'S MODELING AND TALENT INC.; SIGNATURE MODEL & TALENT AGENCY (TALENTS); TOR-ANN TALENT & BOOKING AGENCY,
Defendants.
Appeal from the United States District Court
For the Southern District of Texas
(5:93-CV-162-BrN)
February 28, 1996
Before POLITZ, Chief Judge, DeMOSS and DENNIS, Circuit Judges.
PER CURIAM:*
* Pursuant to Local Rule 47.5, the Court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in Local Rule 47.5.4.
This contract dispute arises out of a franchise agreement between the defendant, the Screen Actors Guild, and the plaintiffs, a group of talent agents authorized by that union to represent actors who are members of the Screen Actors Guild. The decisive issue presented for review is whether the parties' agreement requires that this dispute be arbitrated. The district court denied the Screen Actors Guild's motion to stay this action and compel arbitration. 9 U.S.C. §16(a)(1)(A). We affirm.
STRUCTURE OF THE CONTRACT BETWEEN THE PARTIES
In 1939 the Screen Actors Guild (SAG) promulgated a set of regulations governing the representation of SAG-member actors by talent agents. Those regulations, referred to collectively as Rule 16(g), have been amended a number of times over the years and are presently the result of ongoing negotiation between SAG and two large talent agent associations, the Association of Talent Agents (ATA) and the National Association of Talent Representatives (NATR).
SAG, ATA and NATR have also entered into a contract, designated as the "Basic Contract," which governs an agent's right to a SAG franchise. Rule 16(g) and the Basic Contract expressly incorporate each other by reference, such that each is a part of the other.
Individual talent agents may apply to become a SAG-franchised talent agent. An agent must be SAG-franchised to represent SAG members. The basic terms of agreement between SAG and the plaintiff talent agents are embodied in the "Application for Screen Actors Guild, Inc. Talent Agent's Franchise" and the "Supplemental Application." The Application effectively incorporates Rule 16(g), which in turn incorporates the Basic Contract. Therefore, the regulations, the Basic Contract, the Application and the Supplemental Application all combine to provide the terms of agreement between the defendant, SAG, and the plaintiff talent agents.
1990 AMENDMENTS TO RULE 16(g)
Article VII of the Basic Contract furnishes the procedure for amending the Basic Contract and Regulations. Amendment or modification requires the written consent of SAG, ATA and NATR and written notice to SAG-franchised talent agents. Thereafter, amendments are binding on franchised agents unless the agent notifies SAG in writing within 15 days that it refuses to be bound by the amendment.
In 1990 SAG, ATA and NATR executed a "Memorandum of Amendment" purporting to amend Rule 16(g) by specifying, inter alia, (1) that regulations limiting the fees and commissions earned by agents representing SAG-actors apply equally when the agent is representing a non-SAG actor, and (2) that agents cannot collect booking fees from a producer, regardless of whether the producer or the actor employed is a member of SAG.
SAG forwarded a form "Letter Agreement" to all franchised agents for their acceptance. The Letter Agreement informed SAG- franchised agents in bold print that they could avoid the binding effect of the amendments by providing written notice of their refusal to be bound within 15 days. There is no dispute that the plaintiffs timely refused to abide by the proposed amendments to Rule 16(g).
ARBITRATION PROVISIONS IN THE SAG/AGENT CONTRACT
The plaintiff talent agents in this case represent both SAG and non-SAG actors. Plaintiffs admit they sometimes charge non-SAG actors a higher commission for representation than the 10% that SAG-franchised agents may charge SAG members. Plaintiffs also admit they charge some non-SAG producers a "booking fee" for placing an actor with the producer. SAG challenged these practices with an arbitration proceeding, alleging that such practices constitute a willful and intentional violation of Rule 16(g), which is part of the SAG/agent contract. The talent agents filed this federal action challenging SAG's allegedly illegal enforcement of the 1990 amendments against them. SAG filed a motion to stay the action and compel arbitration which was referred to a magistrate judge1 who held that the contract did not require that the dispute be arbitrated and denied such motion. The district court reviewed the case and entered an order denying SAG's motion.
The gravamen of the plaintiffs' first amended complaint is that SAG is attempting to enforce the 1990 amendments against the named talent agents in violation of state and federal law and under circumstances not permitted by the SAG/agent contract. The primary issue, therefore, is whether the 1990 amendments ever became part of the SAG/agent contract such that they can be enforced against the plaintiff talent agents. There is no provision in the SAG/agent contract which commits to arbitration a dispute between SAG and an agent about the content of their agreement. Compare Basic Contract, Article X (disputes between SAG, ATA and NATR about terms of Basic Contract must be arbitrated); Rule 16(g), § VI(A) (all disputes "of every kind and nature" between the agent and the client must be arbitrated).
SAG argues that sections VIII and IX of Rule 16(g) require that the allegations in the talent agents' federal court complaint be arbitrated. Those sections clearly contemplate arbitration of disciplinary actions brought by SAG against franchised agents. SAG's complaint in arbitration alleges a disciplinary violation based on the talent agents' practices of charging non-SAG actors a higher commission and charging non-SAG producers a booking fee. In 1990, SAG attempted to add contract terms that would prohibit these review by the district court cures any defect in the magistrate judge's authority over the matter. See Estate of Conners v. O'Connor, 6 F.3d 656, 659 (9th Cir. 1993), cert. denied, 114 S. Ct. 693 (1994); see also Longmire v. Guste, 921 F.2d 620, 623 (5th Cir. 1991).
challenged practices. Those terms were refused by the talent agents, in accordance with rights granted them by Article VII of the Basic Contract. Thus, in effect, SAG's disciplinary proceeding assumes the separate question to be decided in the federal court action, i.e. whether the 1990 amendments were ever effectively incorporated into the agreement between SAG and the plaintiff talent agents.
We are persuaded that resolution of the threshold issue raised by the plaintiffs' federal court complaint -- what terms formed the parties' agreement -- is separate and distinct from SAG's contention that the talent agents' conduct violated Rule 16(g).
CONCLUSION
The plaintiffs' challenge to SAG's allegedly illegal enforcement of the 1990 amendments to Rule 16(g) is a dispute separate and distinct from SAG's arbitration allegation that the talent agents' practices amounted to a willful and intentional violation of duties specified in Rule 16(g). The SAG/agent contract does not require that the claims alleged in the agents' complaint be arbitrated.
The district court's order denying the Screen Actors Guild's motion to stay and compel arbitration is AFFIRMED.
James L. Dennis, Circuit Judge, dissenting: The first principle is that “arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” Warrior & Gulf, supra, at 582; AT&T Technologies v. CWA, supra at 648.
one employed in this case, which provides for arbitration of “[a]ll disputes and controversies of every kind and nature whatsoever between an agent and his client arising out of or in connection with or under any agency contract between the agent and his client ... as to the existence of such contract, its execution, validity, the right of either party to avoid the same on any grounds, its construction, performance, non-performance, operation, breach, continuance, or termination ...”. In such cases, [“i]n the absence of any express provision excluding a particular grievance from arbitration, we think only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail.” Warrior &Gulf, supra, at 584-585; AT&T Technologies, supra, at 650.
the [contract] in that it creates a substantial incentive for each [firm] to seek placement of non- member clients in preference to such [firm’s union] member clients and it imposes a discriminatory higher fee on non-member clients”; that “each [firm’s] acceptance of compensation from an employer creates a conflict with the agent’s duty of loyalty to the performer client”; and that “each of the [firms] has failed and refused to execute an acceptance of [a] 1990 Memorandum of Amendment and thereby to confirm its acceptance of the agreed interpretation of the talent agent’s duty of loyalty.”
Regulations or the contract. Exhibit F attached to the contract between the parties provides the rules governing arbitration, including a provision that the “SAG shall be an ex officio party to all arbitration proceedings hereunder in which any member of SAG is involved, and SAG may do anything which a party named in such proceedings might do”, and in “arbitrations under Basic Contract Article X the only parties shall be SAG and ATA or NATR.” Article X of the Basic Contract between the Screen Actors Guild, Inc. (SAG) and Association of Talent Agents (ATA) and National Association of Talent Representatives, Inc. (NATR) and other franchised talent agents provides that all “disputes and controversies between the SAG and the ATA or NATR with reference to this Basic Contract and its interpretation, or any breach or alleged breach thereof shall be referred to arbitration in accordance with the procedure and with the effect set forth in the regulations.”