DGA and Plaintiff's Counsel Announce Settlement in Foreign Levies Litigation

DGA Foreign Levies

April 14, 2008

LOS ANGELES - The Directors Guild of America, Inc. (DGA) and the law firms of Johnson & Johnson and Rishwain & Associates announced today they have settled a lawsuit challenging the collection and distribution of foreign levies to non-DGA member Directors (William Webb v. Directors Guild of America, Inc.). 

During the 1980s, various European countries began to adopt laws imposing levies on blank cassettes (and later DVDs), and recording equipment designed to provide compensation to rights holders, including "authors," of the motion pictures and television programs that were exhibited within each country and that were subject to home recording and other uses. Some countries also imposed levies on cable retransmissions and video rentals. Under copyright regimes and related laws in these same countries, film and television directors are considered to be "authors" of motion pictures. Private collecting societies are authorized to collect, allocate and distribute the levies to the affected rights holders.

A dispute arose between the DGA and the Writers Guild of America, west, Inc. (WGA), on the one hand, and the member companies of the Motion Picture Association and the Alliance of Motion Picture and Television Producers, on the other hand, regarding the distribution to U.S. authors of levies collected by the foreign societies. The Companies asserted that under their collective bargaining agreements with the Guilds, U.S. copyright law, and the work for hire and assignment clauses in individual employment contracts with directors and writers, they were the sole "authors" of the films and television programs they produced. The Companies thus asserted they were entitled to receive 100% of the levies. The Guilds, however, claimed that under the relevant European laws, the individual directors and writers of the films and television programs were the "authors" entitled to receive the authors' portion of the levies.

The DGA spent, and continues to spend, considerable time and resources fighting for the directors' share of these foreign levies. Ultimately, on June 1, 1990, the Guilds and the Companies entered into a Foreign Levy Agreement ("FLA") that governed the allocation of foreign levies among directors, writers, and the Companies. The FLA specified that a certain percentage of the "author's share" of the foreign levies collected on films and television programs would be distributed to DGA andWGA, on behalf of the individual directors and writers whom they represented. In general, all claims to the "author's share" are filed, in the first instance, by the Companies (or their representatives) on their own behalf, and on behalf of the Guilds pursuant to the FLA. The Guilds and the Companies also agreed, based upon a condition initially imposed by the German patent office, that the Guilds would distribute levies collected for all U.S. directors and writers regardless ofwhetherthey wereGuild membersand regardless of whether the film or television program was covered by a collective bargaining agreement. Following the resolution of the dispute between the Guilds and the Companies, the Guilds entered into comparable agreements with representatives of independent producers and distributors. The portion of the combined author's share the DGA has obtained has steadily and significantly increased over time from 15% to 50%.

The DGA has also spent considerable time and effort in negotiating representation agreements with the foreign collecting societies. At the present time, DGA has concluded agreements with societies in fourteen European countries. Negotiations are also in progress in additional countries where foreign levies are collected. Furthermore, DGA monitors the collection and distribution of foreign levies by all these societies to insure that the payments to DGA members and non-member directors are consistent with the obligations of the societies to U.S. "authors" under the terms of the representation agreements.

To date, the foreign levies program has resulted in the distribution of approximately $48 million in levies attributable to DGA members, and more than $4.9 million paid to over 2,000 directors who are not DGA members. Under the terms of the agreement settling the lawsuit, the DGA has agreed to have an outside accounting firm conduct an independent review of its foreign levies program, will provide a registration function on its website (www.dga.org), and will also make information regarding unpaid levies available on its website.

"The DGA is proud of its efforts to obtain and ensure each director's right to a share of foreign levies, and that we have distributed tens of millions of dollars of levies to so many directors in our industry," said DGA Assistant Executive Director - Communications Morgan Rumpf. "Although we dispute the fundamental premise of the litigation, and stand by our efforts and results in distributing foreign levies to members and non-members alike, we are pleased to have resolved this dispute amicably in its early stages and to be moving forward."

"This settlement brings accountability and transparency to the DGA's foreign levies program, and assures that non-members will have full disclosure of the DGA's distribution of foreign levies," said Neville Johnson, attorney for Plaintiff William Webb.

DGA Communications Department (310) 289-5333