Fisher v. Screen Actors Guild Am. Fed'n of Television & Radio Artists

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FRANCES FISHER v. SCREEN ACTORS GUILD AMERICAN FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

No. 2:21-cv-05215-CAS-JEMx

United States District Court, C.D. California

July 27, 2022

Present: The Honorable CHRISTINA A. SNYDER

CIVIL MINUTES - GENERAL

Proceedings (IN CHAMBERS) - MOTION TO DISMISS SECOND AMENDED COMPLAINT FILED BY DEFENDANT SAG-AFTRA (Dkt. 51, filed on April 22 2022)

MOTION TO DISMISS SECOND AMENDED COMPLAINT FILED BY DEFENDANTS GABRIELLE CARTERIS, DAVID P. WHITE, DUNCAN CRABTREE-IRELAND, RAY RODRIGUEZ, JOHN T. MCGUIRE, JOHN CARTER BROWN, LINDA POWELL, MICHAEL PNIEWSKI, AND DAVID HARTLEY-MARGOLIN (Dkt. 52, filed on April 25, 2022)

I. INTRODUCTION

On June 25, 2021, plaintiff Francis Fisher filed a verified application, pursuant to 29 U.S.C. § 501(b), to file a proposed complaint against defendants Screen Actors Guild - American Federation of Television and Radio Artists (“SAG-AFTRA”), Gabrielle Carteris, David P. White, Duncan Crabtree-Ireland, Ray Rodriguez, Michael Pmewski, David Hartley-Margolin. John T. McGuire, John Carter Brown, and Linda Powell. Dkt. 1. Fisher's proposed complaint asserted two claims: (1) breach of the duty of fair representation, in violation of 29 U.S.C. § 159(a), against defendants White, Rodriguez, McGuire, Hartley-Margolin, Pmewski, Brown, and Powell: and (2) breach of fiduciary duty, in violation of 29 U.S.C. § 501(a), against defendants Carteris, White, Rodriguez, Crabtree-Ireland, McGuire, Brown, and Powell. Dkt. 1-1.

With respect to the Section 501(a) claim, pursuant to 29 U.S.C. § 501(b), a member of a labor organization may bring suit against “any officer, agent, shop steward, or representative” of the labor organization for violation of Section 501(a), having first made a pre-suit demand upon the labor organization or its governing board and “upon leave of the court obtained upon verified application and for good cause shown, which application may be made ex parte.” 29 U.S.C.A. § 501.

On July 28, 2021, the Court denied Fisher's verified application to file the proposed complaint, without prejudice to her filing a complaint setting forth her Section 159(a) claim, alongside a verified application for leave to add a claim pursuant to Section 501(a). Dkt. 18.

On August 3, 2021, Fisher filed a complaint setting forth her Section 159(a) claim. Dkt. 20. On August 4, 2021, Fisher filed a verified application for leave to add a claim pursuant to Section 501(a). Dkt. 23. With her application, Fisher filed her proposed first amended class action complaint. Dkt. 23-1 (“FAC”).

On October 6, 2021, SAG-AFTRA, Pniewski, and Hartley-Margolin moved to dismiss Fisher's Section 159(a) claim pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction, and Rule 12(b)(6) for failure to state a claim upon which relief can be granted. Dkt. 28. On October 6, 2021, pursuant to Rule 12(b)(6), White, Rodriguez, McGuire, Brown, Powell, Carteris, and Crabtree-Ireland moved to dismiss Fisher's Section 501(a) claim, as well as her Section 159(a) claim. Dkt. 26-1.

On January 24, 2022, the Court granted Fisher leave to file her Section 501(a) claim, but dismissed Fisher's Section 159(a) claim and Section 501(a) claim with leave to amend. Dkt. 38 (“MTD Ord.”). The Court found that Fisher's Section 159(a) duty of fair representation claim was time barred, was improperly brought against individual union officials, lacked standing, and failed to state a plausible claim. Id. at 12-19. Likewise, the Court found that Fisher's FAC failed to state a Section 501 claim, inter alia, because it improperly sought to “recover for harm to a subset of Union members, rather than for any harm to the Union.” Id. at 24.

On February 23, 2022, plaintiffs field a second amended complaint. Dkt. 42 (“SAC”). The SAC adds David Andrews, Belinda Balaski, Stephen Hart, Raymond Harry Johnson, Anne Lockhart and Toby Stone-Mandelberg as plaintiffs. Id. ¶ 3. The SAC adds additional substantive allegations, and brings the same two claims: (1) breach of the duty of fair representation, in violation of 29 U.S.C. § 159(a), against defendant SAG-AFTRA; and (2) breach of fiduciary duty, in violation of 29 U.S.C. § 501(a), against defendants Carteris, White, Rodriguez, Crabtree-Ireland, McGuire, Brown, Powell, Pniewski, and Hartley-Margolin. Id. ¶¶ 137-152.

On April 22, 2022, SAG-AFTRA (the “Union”) filed a motion to dismiss plaintiffs' Section 159(a) claim pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted. Dkt. 51 (“SAG MTD”). On April 25, 2021, pursuant to Rule 12(b)(6), Carteris, White, Crabtree-Ireland, Rodriguez, McGuire, Brown, Powell, Pniewski, and Hartley-Margolin (collectively, the “501 Defendants”) moved to dismiss plaintiffs' Section 501(a) claim. Dkt. 52-1 (“501 MTD”).

On May 27, 2022, plaintiffs submitted their opposition to the SAG MTD (Dkt. 54 (“SAG Opp.”)), and their opposition to the 501 MTD (Dkt. 53 (“501 Opp.”)). Plaintiffs also filed a request for judicial notice. Dkt. 56 (“RJN”). On June 27, 2022, SAG-AFTRA submitted its reply (Dkt. 58 (“SAG Reply”)), and the 501 Defendants submitted their reply (Dkt. 35 (“501 Reply”)).

The Court held a hearing on July 11, 2022. Having carefully considered the parties' arguments and submissions, the Court finds and concludes as follows.

II. BACKGROUND

The relevant allegations are drawn from the SAC.

A. The Parties

Plaintiff Frances Fisher is a member of SAG-AFTRA. SAC ¶ 22. She has served as First Vice President of the SAG-AFTRA Los Angeles Local and as a member of the SAG-AFTRA National Board since 2012. Id. Fisher was a member of both SAG and AFTRA from 1976 until the 2012 merger of the two unions. Id. Fisher is and has been a participant in the Health Plan. Id. At the time of the 2019 and 2020 Union collective bargaining activities for the Commercials, Netflix and TV/Theatrical collective bargaining agreements (“CBAs”), Fisher was receiving her Union pension for which persons age sixty-five and older were eligible. Id. Under the Health Plan benefit structure changes announced in August 2020, Fisher's residuals earnings were no longer credited toward her Union health benefit eligibility. Id. The SAC alleges that Fisher filed the instant action to ensure that future union leaders and staff can never again breach the fiduciary duties owed to the Union and the membership. Id.

Plaintiff Belinda Balaski has been member of SAG, and then SAG-AFTRA, for over twenty years. Id. ¶ 24. Balaski receives her Union pension. Id. Balaski lost her Senior Performer lifetime secondary coverage under the Health Plan as a result of the Benefit Amendments. Id.

Plaintiffs David Andrews, Anne Lockhart, Stephen Hart, Raymond Harry Johnson, and Toby Stone-Mandelberg have been members of SAG, and then SAG-AFTRA, for over twenty years. Id. ¶¶ 23, 25-28. They receive a Union pension. Id. They lost Health Plan coverage as a result of the Health Plan's decision to exclude residual earnings for members age sixty-five or older and taking a pension. Id.

Defendant SAG-AFTRA is a labor organization as defined under 29 U.S.C. § 402. Id. ¶ 29. SAG-AFTRA resulted from the 2012 merger of the SAG and AFTRA unions. Id. ¶ 40. SAG-AFTRA is governed by its Constitution (the “Union Constitution”). Id. ¶¶ 46-52. The Union's objectives, as set forth in the Union Constitution, include protecting the rights of entertainment and media artists in all respects consistent with the overall objectives of the Union and doing all other things necessary and proper to advance and promote their welfare and interests. Id. ¶ 46. SAG-AFTRA is authorized to appoint and at any time remove and replace the Union trustees of the Health Plan. Id. ¶ 29. The Union Constitution empowers the SAG-AFTRA National Board to appoint and remove the trustees of the Union trustees of the Health Plan. Id.

At all times relevant to this dispute, Carteris served as President of SAG-AFTRA, as a SAG-AFTRA National Board member, and as a SAG-AFTRA Executive Committee member; White served as SAG-AFTRA's National Executive Director and chief negotiator and as a Union-appointed SAG-AFTRA Health Plan Trustee until June 2021; Crabtree-Ireland served as Chief Operating Officer and General Counsel of SAG-AFTRA; Rodriguez served as SAG-AFTRA's Chief Contracts Officer and Union-appointed SAG-AFTRA Health Plan Trustee; McGuire served as SAG-AFTRA's National Senior Advisor and a Union-appointed SAG-AFTRA Health Plan Trustee; Hartley-Margolin served as a Union-appointed SAG-AFTRA Health Plan Trustee; Pniewski served as a Union-appointed SAG-AFTRA Health Plan Trustee; Powell served as a member of the SAG-AFTRA National Board and as a Union-appointed Health Plan Trustee; and Brown served as a Union-appointed Health Plan Trustee and as a member of the SAG-AFTRA National Board. Id. ¶¶ 30-38. The SAC alleges that the individual defendants at all times relevant hereto served as either officers, agents, shop stewards, or other representatives of SAG-AFTRA as defined under 29 U.S.C. § 402. Id. ¶ 39.

B. The SAG-AFTRA Merger and the Health Plans Merger

In January 2012, the governing boards of the Screen Actors Guild (“SAG”) and the American Federation of Television and Radio Artists (“AFTRA”) agreed to merge the two unions to become SAG-AFTRA. SAC ¶ 40. Prior to the merger, pension and health benefits were provided to the respective members of SAG and AFTRA by separate pension and welfare (health) plans, which were collectively bargained trusts subject to ERISA. Id.

In early June 2016, the respective trustees of the SAG and AFTRA health plans agreed to merge the plans. Id. ¶ 41. The benefits provided under the merged plan (the “Health Plan”) continued Senior Perfonner Coverage for SAG and AFTRA members who...