U.S. Ninth Circuit judges reject managers’ attack on California law but disputes keep surfacing over representation, commissions

Saunter down the street in Des Moines or Poughkeepsie and ask the first passer-by about who engages in the “procuring” business and be glad not to get a punch in the nose for asking about something that sounds like it’s part of the world’s oldest profession. But at least in Hollywood, and for especially for those in the entertainment industry, this practice—part art and part commerce—is so common that it should be legally plain and it is clearly understood, the U.S. Court of Appeals for the Ninth Circuit has declared.

The judges in the appellate court for the stars have upheld the dismissal of a suit by the National Conference of Personal Managers, a group aggravated by still controversial state statute(s) that they argue keeps clients from showing them the money—the California talent agencies act. The appellate judges concurred with a lower court ruling rejecting the managers’ claims, and finding that the act does not violate due process, equal protection, or free speech of talent managers in the entertainment industry.

The law says that only state-licensed agents may procure work for clients—the legions in Los Angeles of actors, directors, writers, and, yes, wannabes. The problem with the half-century old talent sections of the state labor code is that they also bar non-agents, including managers, attorneys, and the unlicensed from obtaining work for clients. This can and has created ned in the Biz, sparking significant protests before. The personal managers’ complaint provides a timely reminder that the griping about the act not only isn’t going away, it provides a recurring reason to keep re-examining the historic but also changing representation of talent in the Golden State.

Tussles over commissions

Look at the litigation it has spawned since state lawmakers passed the talent act in 1978, and one continual beef trails it through the years: Performers have persisted in relying on it as a way to stiff managers and lawyers for fees, critics say.

The act, optimally, sees Hollywood as a business in which actors, writers, and directors are served by a team that steers their lives, gets work for them, and negotiates their deals. In this system, managers deal with  clients’ business and personal lives, keeping schedules and ensuring projects don’t conflict. Agents, in theory, have higher-level duties, getting talent into play, such as by arranging meetings between a writer and a studio executive who admires a given client’s work. As for entertainment attorneys, their role is to draft contracts, negotiate legal terms of any agreements, and ensure clients are legally protected. State law says none of these three roles should overlap; these individuals should all work for clients in a separate capacity.

But in a town where relationships are like platinum, who knows who, who gets who to meet whom, and who seals a deal—these roles blur. And in story as old as love breaking out in the Hollywood Hills, legal quarrels erupt when promising but struggling creatives appeal sufficiently to agents or managers, who then take a chance on them and bring them onto their client rosters. But once the talents see success, they fire their reps, moving around on Hollywood’s food chain—from manager to agent, agent to attorney, and attorney to manager. Clients then balk at paying their previous reps the commissions they say they earned.

The industry has watched the court battles of Rian Johnson, director of Star Wars: The Last Jedi, the latest episode in a blockbuster franchise. He recently fired Brian Dreyfuss, his longtime agent, who has sued over his claimed commissions on various projects, including a potentially hefty paycheck for Johnson’s Star Wars work. Johnson worked with Dreyfuss since 2002, when the director fired him asserting his rep “waved off” Lucasfilm’s interest in him for a project. Immediately after Dreyfuss was out, Johnson took the high-paying Star Wars gig. He argues that Dreyfuss is not a licensed agent, and, therefore, cannot collect a commission. Johnson also asserts that he improperly would be hit with commissions for his movie deal, with claims from the director’s guild, his agency, and Dreyfuss.

As the court sorts out Dreyfuss’ issues, this case and many others may leave more open than the appellate judges asserted in their personal managers’ ruling: Is procuring really so clear cut a legal matter in the entertainment business?