How Range Is Firing Back At CAA Over Its Blockbuster Lawsuit

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Back in the heat of a five-year-old dispute between the Writers Guild of America (WGA) and talent agencies like Range Media Partners, I was just a gamer on the sidelines watching the drama unfold. The bone of contention was the long-standing practice of packaging fees, where agencies would get ongoing payments from studios for bundling clients in a project and their own production entities taking ownership stakes in content. Agencies defended these practices as beneficial for talent’s financial upside, but the WGA raised concerns about potential conflicts of interest that could discourage agents from securing the best deals for their clients. In the end, CAA conceded to the guild’s rule, which prohibits them from acting as packaging agents or owning significant stakes in production entities.

Initially appearing as a common story, CAA’s lawsuit centers around an age-old issue: Agents leaving the company allegedly took confidential data to lure clients away. However, the case extends beyond this immediate concern and touches upon the core of the firm’s commercial activities. CAA accuses Range of being a talent agency in disguise as a management company, thereby gaining an edge over competitors. This is because it isn’t subject to certain guild agreements, such as those governing the structure of deals. In essence, Range can provide high-profile clients with the option to bypass paying commissions, instead offering producer fees or credits on their projects.

The lawsuit intends to obtain an injunction preventing Range from continuing to breach the Talent Agencies Act. This law mandates that only licensed agents are allowed to secure work for clients within the entertainment industry, and if managers attempt this, their contracts can be nullified and their commissions forfeited. Additionally, it prohibits CAA from representing WGA members without prior approval from the guild. A key issue that might determine the outcome of the case is whether CAA is inappropriately using its California state court lawsuit to assert claims believed to fall under the jurisdiction of the California Labor Commission. Furthermore, there’s a question regarding whether Range’s business model can be targeted in this particular lawsuit by CAA.

According to Range’s argument, as outlined in a document filed on Monday known as a demurrer, the California Arts Agency (CAA) should not be allowed to continue with this case. While the facts presented in their initial complaint may be accurate — and they do not admit this — Range argues that CAA has not made legally sound claims. In essence, Range sees this disagreement as a large corporation trying to punish long-standing employees for leaving. They further portray CAA as having quasi-monopolistic tendencies, using its dominance and market power to manipulate crucial aspects of the entertainment industry.

In a statement, Orin Snyder, representing Range, asserted that CAA is trying to exert its influence to intimidate and overpower Range and its founders. He further noted that for an organization which claims to foster talent, it’s ironic that CAA is now attempting to limit the variety of options available in the industry.

When four ex-employees from the CAA agency departed to join Range, led by Peter Micelli, the former head of CAA’s TV department, it responded by revoking their vested equity, claiming that noncompete clauses in their contracts, which they allege were illegal, still applied. However, Range contends that these employees were meant to work as managers rather than agents and therefore these restrictions should not have applied. In the filing, Range also states that CAA only filed a lawsuit because the arbitration wasn’t favoring them. The firm questions why CAA didn’t file this case earlier if it claims that Range breached confidentiality and competed illegally in 2020, as well as why they didn’t initiate legal action two years ago when they first raised these allegations during arbitration. Snyder, joined by Samplin and Nowicki, argue that CAA’s lawsuit is either inapplicable, filed in the wrong court, or legally flawed because CAA lacks the authority to bring this claim.

The main focus of CAA’s lawsuit is based on accusations that Range exploited a competitive advantage illegally by misusing confidential information, breaching the Talent Agency Agreement (TAA), and failing to enter into a contract with the Writers Guild of America (WGA). In response, Range counters by asserting that the Uniform Trade Secrets Act prevents any claims related to the theft of business secrets. Furthermore, it suggests that CAA should present their case before the California Labor Commission, as this body has jurisdiction over allegations of TAA violations.

The document states, “To be clear, this doesn’t grant CAA the right to seek aid from the Labor Commissioner, nor does it give them the authority to file a TAA claim. The Labor Commissioner’s rules only recognize disputes that occur between artists and their representatives, not disagreements between an agency and its potential competitor.

To this point, no artist has officially lodged a Trade Adjustment Assistance (TAA) complaint against Range, the company maintains. However, it also mentions that Creative Artists Agency (CAA) cannot instigate a legal claim accusing Range of breaking the law on behalf of their talent. In the same vein, Range presents similar arguments when requesting to dismiss allegations related to aiding and abetting, as well as disrupting potential economic benefits.

In a recent statement, Range asserts that the obstacles CAA encounters in court are insurmountable, suggesting that if the court approves their motion, CAA should not be permitted to amend its lawsuit.

For the past four years, Range has emerged as a contender, although relatively small, in an agency talent market that’s been reduced to three dominant players following CAA’s 2022 acquisition of ICM Partners. It’s attracted funding from Steve Cohen’s Point72 Ventures, John Malone’s Liberty Global, David Bonderman’s Wildcat Capital, family entertainment company Playground Productions, and A+E Networks, which collaborates with Range on scripted TV productions.

Besides Range employees, other ex-agents like Theresa Kang and Phil Sun have also transitioned into management roles. In fact, they’ve established their own management companies after departing from WME.

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2025-01-29 02:56