NOTICE OF CLASS ACTION AND PROPOSED SETTLEMENT

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Horace McCoy
6 years ago
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1 NOTICE OF CLASS ACTION AND PROPOSED SETTLEMENT TO: All persons who have performed in a motion picture, television program, or certain other audiovisual work that has earned foreign royalties. THIS NOTICE MAY AFFECT YOUR RIGHTS PLEASE READ THE COMPLETE NOTICE CAREFULLY. I. PURPOSE OF THIS NOTICE There is now pending in the Superior Court of the County of Los Angeles a class action lawsuit entitled Ken Osmond v. Screen Actors Guild, Inc., Case No. BC (the Litigation ). This Notice explains the nature of the Litigation, general terms of a proposed settlement, and informs you of your legal rights and obligations. 1 This case arises as a result of the collection and distribution to Performers of Foreign Royalty Funds (also known as Foreign Levy Funds). During the 1980s, various European countries began to adopt laws imposing royalties on home video rentals, blank cassettes, recording equipment, and cable retransmissions. These foreign royalties are taxes imposed by foreign countries in part to compensate performers in motion pictures and television programs for consumer copying of those works onto blank tapes, DVDs, and other media. These royalties were designed to provide compensation to rights holders, including performers in the motion pictures and television programs exhibited within each country, for works that are subject to copying. Laws enacted in various European nations authorized private collecting societies existing in each country to allocate and distribute the royalties to the rights holders of the affected films and programs. American performers receive foreign royalties as a result of extensive efforts by Screen Actors Guild, Inc. ( SAG ), which obtained the agreement of motion picture and television production companies that performers would receive a portion of royalties from the foreign collecting societies. In this Litigation, Plaintiff has questioned the authority of SAG to collect these foreign royalties and has asserted that SAG has failed to properly distribute foreign royalties to Performers. SAG has denied, and continues to deny, each and every claim and contention alleged in the Litigation. Nonetheless, SAG has concluded that further conduct of the Litigation would be protracted, expensive, and would divert resources from important member initiatives, and that therefore it is desirable that the Litigation be fully and finally settled in the manner and upon the terms and conditions set forth in the proposed settlement. Plaintiff Osmond and his Counsel have investigated and evaluated the claims asserted in the Litigation 1 Unless otherwise set forth herein, this Notice incorporates by reference the definitions set forth in the Settlement Agreement. 1

2 and have determined that the proposed settlement is fair, reasonable and adequate. The proposed Settlement provides for various policies and procedures to ensure that to the extent SAG is collecting foreign royalties, the monies are collected and distributed in a fair and reasonable manner. The settlement also requires SAG to publish detailed information about the foreign royalty program on its website. Plaintiff believes that there are many risks to going forward with the Litigation, including the risks of not being able to certify the case as a class action, or of certifying a class but failing to prove liability or damages. Plaintiff acknowledges SAG has been faced with some challenges in distributing foreign royalties, yet has made strides, and has cooperated fully and in good faith with Plaintiff in attempting to amicably and efficiently resolve this lawsuit at minimal cost. The Honorable Judge Carl J. West of the Superior Court of the County of Los Angeles (the Court ) has determined that this Litigation should proceed as a class action for purposes of settlement only, with plaintiff Ken Osmond as the representative of the Class, and has granted preliminary approval of the settlement. II. CLASS MEMBERS The Court has conditionally ruled that the Litigation may be maintained on behalf of any Performer 2 who satisfies both of the following criteria ( Class Members ): (1) Is a Performer (as defined in Paragraph II(E)); AND (2) SAG has received Foreign Royalty Funds attributable to such Performer. Excluded from the Class are SAG and its parents, subsidiaries, affiliates, any entity in which SAG has a controlling interest, and the legal representatives, heirs, successors, and assigns of SAG. III. SETTLEMENT BENEFIT FOR CLASS MEMBERS A. If this settlement is finally approved by the Court, SAG will engage an independent consultant to conduct a one-time review of SAG s foreign royalty program and to make recommendations to improve the processing and distribution of Foreign Royalty Funds to Class Members. The results of the review will be published by SAG in conjunction with its publication of the foreign royalty program, as stated below. SAG will implement the proposals it deems, in good faith and in its sound business judgment, to be appropriate. A more detailed description of the review process can be found in Section V(A) of the Settlement Agreement. 2 The term Performer is defined as set forth in Paragraph II.E of the Settlement Agreement, namely: The term Performer shall include (except as limited by international treaties, European directives, laws or regulations in the source country or by the source collecting society) any individual who satisfies the criteria of either Paragraphs II(E)(1) or II(E)(2) below: (1) An individual who is entitled to residuals under the applicable SAG collective bargaining agreements for a given work, and whose type of performance (a) generally is included in such works as distributed in the source country, and (b) for which [Foreign Royalty Funds] are collected and paid by collecting societies in such source country; or (2) an individual who is entitled to residuals under the applicable SAG collective bargaining agreements for a given work, and claims entitlement to [Foreign Royalty Funds]. The term includes any Performer s heirs, successors, beneficiaries, trustees, and assigns, including, without limitation, any entity to which a Performer as assigned his/her right to receive Foreign Royalty Funds (to the extent assignable). 2

3 B. For fiscal year 2011 and all subsequent fiscal years in which SAG maintains its foreign royalties program, SAG shall, as part of its annual financial review, have a review performed of the foreign royalties program. Said review of the foreign royalties shall be performed by the same accounting firm that SAG selects for its overall annual review. Such reports will be posted on SAG s website. A more detailed description of the review process can be found in Section V(B) of the Settlement Agreement. C. For a period of three (3) years, on an annual basis, SAG will publicize the existence and availability of Foreign Royalty Funds and SAG s foreign royalties program through the Screen Actor Magazine and one other industry publication to be determined. SAG s website will also contain content regarding the foreign royalty program, including: (1) a report, updated on an annual basis, on the status of collection of Foreign Royalty Funds and the operation of the foreign royalties program, including the status of any particular issues that may arise which may impact the payment or collection of Foreign Royalty Funds; (2) a description and explanation of the genesis, nature, and operation of the foreign royalties program, the sources of Foreign Royalty Funds, and the procedure for a Performer to submit a claim to SAG for payment of the Foreign Royalty Funds; and (3) the names of all actors who may be eligible for payment of Foreign Royalty Funds but who have not been paid because SAG cannot locate them. The foregoing information will at all times be published continuously on the SAG website. D. SAG will publish on its website, and update on a bi-monthly basis, a list of Performers for whom at least $10 of Foreign Royalty Funds have been assigned but not yet paid (e.g., the funds have been assigned to a Performer, but SAG has not yet issued its next run of checks). If a user clicks on a Performer s name, the source of the funds will appear (e.g., title and/or source territory), and the user will be provided with an estimated date on which he or she may expect to receive payment. In addition, SAG will publish on its website, and update on a bi-monthly basis, a list of Performers for whom less than $10 of Foreign Royalty Funds have been assigned. If a user clicks on a Performer s name, the source of the funds will appear (e.g., title and/or source territory), and the user will be provided with at telephone number and address to use to contact SAG for further information. If a Performer contacts SAG and requests payment of Foreign Royalty Funds which have been assigned to him or her, but have not accrued to the minimum $10 for check issuance, SAG shall timely pay that Performer, even though $10 have not accrued, provided that the amount is greater than $1. E. SAG will use reasonable efforts to allocate and pay, according to the terms of the Settlement Agreement, ninety percent (90%) of all Foreign Royalty Funds (a) in its possession at the time the settlement becomes effective and (b) for which SAG has received the corresponding information from the collecting society necessary to properly distribute the funds, to the proper recipients within thirty-six (36) months. SAG will 3

4 use reasonable efforts to allocate and pay, according to the terms of the Settlement Agreement, Funds in its possession after the settlement becomes effective to the proper recipients within thirty-six (36) months of the receipt of both the Foreign Royalty Funds and the distribution information from the collecting societies. IV. DISMISSAL OF LITIGATION, ENTRY OF JUDGMENT AND RELEASE OF CLAIMS If the Court approves the proposed settlement, it will enter a judgment that will dismiss the Litigation on the merits and with prejudice as to all Class Members. All Class Members who do not validly and timely request to be excluded from the proposed settlement shall be forever barred from prosecuting their own lawsuits and shall be deemed to have fully, finally and forever irrevocably, on behalf of themselves, their heirs, and their past, present, and future spouses, agents, attorneys, trusts, beneficiaries, devisees, legatees, predecessors- and successors-in-interest, and assigns (all collectively referred to as Releasors ), have released SAG, including each of its predecessor and successor firms, affiliated companies, current and former parents and subsidiaries, and all of their respective shareholders, directors, officers, employees, agents, attorneys, insurers, and assigns (all collectively referred to as Releasees ) of and from any and all Released Claims. Released Claims shall mean any and all known and unknown claims for relief, causes of action, suits, rights of action, or demands, at law or in equity, whether sounding in contract, tort, or equity, including, without limitation, claims for equitable or injunctive relief, damages, indemnity, contribution, or for costs, expenses, and attorneys fees, which Class Members now or at any past or present time have, own or hold against SAG based upon and/or arising out of any of the following: (1) any of the claims, actions, or causes of action which alleged or stated, or could have been alleged or stated, or the facts, matters, transactions or occurrences referred to in this action; (2) any claim or right of payment by a member of the Class to the payment or receipt of Foreign Royalty Funds which were received by SAG pursuant to a Foreign Levy Agreement; and (3) any challenge to SAG s receipt of Foreign Royalty Funds from any collecting society, and SAG s handling, processing, payment, distribution, and allocation of such Foreign Royalty Funds. V. ATTORNEYS FEES AND COSTS From the inception of this lawsuit, Plaintiff s counsel has not received payments for their services. If the Court approves the settlement, Plaintiff s counsel will ask the Court to award, and SAG has agreed not to contest the reasonableness of an award of fees up to and not exceeding $330,000, including costs and any incentive award to the named plaintiff. Class Members will not be personally liable for any attorneys fees, costs or payment to the Plaintiff s counsel. VI. RIGHTS AND OPTIONS OF CLASS MEMBERS A. Remain a Class Member 4

5 1. If you do not request exclusion from the Class, you will remain a Class Member. Your interests in connection with the proposed settlement will be represented by Plaintiff and Plaintiff s counsel. You will not be charged for the services or expenses of Plaintiff s counsel. Plaintiff s and SAG s Counsel include the following attorneys and law firms: Co-Counsel for the Plaintiff Class: Neville Johnson, Esq. Johnson & Johnson LLP 439 N. Canon Drive, Suite 200 Beverly Hills, California Facsimile: (310) Paul R. Kiesel, Esq. Kiesel, Boucher & Larson, LLP 8658 Wilshire Boulevard Beverly Hills, California Facsimile: (310) Counsel for SAG: Daniel Scott Schecter, Esq. Anita P. Wu, Esq. Latham & Watkins LLP 355 South Grand Avenue Los Angeles, California Telephone: (213) Facsimile: (213) If the settlement is not granted final approval or the judgment does not become final, the certification of the Class will be vacated and the Litigation will continue as if no proposed settlement has been reached. 3. As a Class Member, you will be bound by any judgment or other disposition of the Litigation. Furthermore, you and your heirs, executors, administrators, representatives, agents, partners, successors, and assigns will be deemed to have agreed to the terms of the settlement and the release set forth in Section IV above. B. Opt-Out of the Settlement. You have the right to opt-out of the settlement. If you opt-out of the settlement, you will not be bound by or subject to any judgment or settlement of the Litigation. If you wish to opt-out, you must, submit a written, signed request to opt-out, by postage-paid, first class mail, stating (1) your 5

6 name, address, and telephone number; (2) a reference to this Litigation; (3) a statement that you are a Performer and SAG has received Foreign Royalty Funds attributable to you; and (4) a statement that you wish to opt-out of the Class. Requests to opt-out must be sent to both Plaintiff s counsel and SAG s Counsel at the addresses set forth above. Requests to opt-out must be post-marked no later than December 15, If you do not submit a timely optout request that complies with these requirements, your opt-out request will be deemed invalid and you will not be excluded from the Class. C. Intervene In The Litigation And/Or Object to the Settlement. You have the right to intervene in the Litigation and/or object to, or comment on, the proposed settlement, award of attorneys fees, cost or payment to the Plaintiff as set forth in Section VII below. VII. FINAL SETTLEMENT HEARING AND SETTLEMENT OBJECTIONS A. On January 28, 2011 at 9:00 a.m., a public hearing will be held before Judge Carl J. West of the Superior Court of California, County of Los Angeles, located at 600 South Commonwealth Avenue, Los Angeles, California ( Settlement Hearing ). The Settlement Hearing will determine: (1) whether the proposed settlement of the Litigation as set forth in the Settlement Agreement is just, fair, reasonable, and adequate for the Class and should be granted final approval; (2) whether certification of the Class should be made final for purposes of the Settlement; (3) whether the Court should enter the proposed judgment dismissing the Litigation with prejudice; (4) whether the Court should award Plaintiff s counsel attorneys fees and costs in the amount set forth in the Settlement Agreement; and (5) whether the Court should award the Plaintiff an incentive fee for his time and effort in the Litigation. You are not required to attend the Settlement Hearing. B. Objection Procedure and Deadline 1. If you are a Class Member, you have the right to intervene in or object to the settlement. To do so, you must submit a written statement setting forth: (1) your name, address and telephone number, (2) reference to this Litigation; (3) a statement that you are a Performer and SAG has received Foreign Royalty Funds attributable to you; and (4) your objection/intervention, notice of intent to appear, and comments and supporting arguments to: Clerk of the Court Central Civil West Courthouse 600 South Commonwealth Avenue Los Angeles, California Case No. BC

7 You must also send identical copies of your written submission to Plaintiff s counsel and SAG s Counsel at the addresses set forth above. Your written objection or request to intervene must be received by the Court and by Plaintiff s counsel and SAG s Counsel (and not merely postmarked) by December 15, Your submission to the Court must include a certification that you have personally delivered identical copies to Plaintiff s counsel and SAG s Counsel, or that you have mailed such copies by postage prepaid first-class mail to Plaintiff s counsel and SAG s Counsel on or before December 15, You cannot object or request to intervene if you have opted out of the class. Only those that remain in the Class may object to the settlement or request to intervene. You also have a right to hire an attorney at your own expense to assist you or to represent you. 2. You may also attend the Final Settlement Hearing either in person or through an attorney retained by you at your expense. VIII. ADDITIONAL INFORMATION AND IMPORTANT DATES A. Additional Information. The description of the Litigation set forth in this Notice is general and does not cover all of the issues and proceedings thus far. If you have additional questions you can contact Counsel. B. Deadlines and Dates to Remember. December 15, 2010 is the deadline to opt-out of the settlement. December 15, 2010 is the deadline for Intervention/Objection. January 28, 2011 at 9:00 a.m. is the Settlement Hearing. 7

SETTLEMENT AGREEMENT AND RELEASE

SETTLEMENT AGREEMENT AND RELEASE This Settlement Agreement and Release (the Settlement Agreement ) is entered into between each of William Richert, Maude Retchin Feil, and Ann Jamison (individually and