Court Dismisses Claims in Suit Over Managers and Agents
A legal salvo from CAA striking at part of Range Media‘s business model has been advanced by a court, potentially setting up a thorny battle challenging the management firm’s dealings that may encroach upon work typically reserved for agencies.
A California state court judge on Thursday rebuffed Range’s bid to dismiss arguments that the company has an unfair advantage over agencies while narrowing the scope of the lawsuit.
“The ruling confirms what this case is really about: CAA’s attempt to block competition and control the choices of talent,” said Orin Snyder and Ilissa Samplin, lawyers for Range, in a statement.
For years, Hollywood talent managers have grumbled at a California law that puts them in danger of losing their commissions if they’re found to have engaged in activities related to obtaining work for their clients. It relates to the Talent Agencies Act, a licensing scheme that was originally enacted to regulate agents and ensure that they’re acting in their clients’ best interests. The law says that only licensed agents can secure work for talent in the entertainment business and that managers caught doing the same can have their contracts voided and commissions forfeited.
But in 2020, a former CAA employee recognized a quirk in the law that managers could take advantage of. By this thinking, obtaining a license to secure work opportunities for clients wasn’t required if you could tolerate the risk of getting sued and losing the commission.
Irked at the development, CAA sued Range. The thrust of the lawsuit is grounded in Range allegedly stealing confidential information to poach clients, but its scope reaches certain major functions related to some artists at the company related to finding work opportunities for talent. CAA accused Range of essentially functioning as a rival talent agency masquerading as a management firm.
In Thursday’s order, the court sided with CAA that Range’s business could allow it to skirt certain laws and guild agreement that give it an unfair advantage over firms formally recognized as agencies.
The issue was hotly contested. Range argued that the allegation, even if true, belongs before a labor commissioner and not a court since it constitutes a dispute arising from the Talent Agencies Act.
Los Angeles Superior Court judge Mark Young rejected that argument. He found that the commissioner is “only allowed to hear controversies between Artists and Agents, not Agents versus other Agents.” The purpose of the Talent Agencies Act, he said, is to protect artists from unscrupulous agents.
“The TAA does not purport to regulate the relationship between Agents and other businesses (i.e., non-parties) and there is no case law supporting such a broad reading of the TAA,” he wrote. “While the TAA mandates that the Commissioner determine jurisdiction over issues colorably arising from the TAA, those disputes must be between and Agent and an Artist, which is not the case here.”
CAA takes issue with Range structuring deals in ways that agencies cannot, which incentivizes talent to sign with them. One example: the company can offer high-profile clients the ability to avoid paying a commission in favor of giving it a producer fee or credit on their project.
“CAA’s remaining claim under the Talent Agencies Act exposes CAA’s true goal: forcing artists into a system CAA controls,” Snyder and Samplin said. “CAA wants to dictate who talent can work with, even if it means attacking managers, advisors, and those who support talent outside their agency.”
Still, Range prevailed in its bid to dismiss certain parts of the lawsuit, like those asserting claims for tortious interference, stealing trade secrets and illegally accessing confidential information. Although CAA will be allowed to refile allegations over violations to the Trade Secrets Act, it may face an uphill battle under the three-year statute of limitations since the alleged theft occurred between January and October 2020.
Peter Micelli, Dave Bugliari, Mackenzie Condon Roussos, Rich Cook, Michael Cooper, Susie Fox, Sandra Kang, Rachel Kropa, Chelsea McKinnies, Mick Sullivan and Jack Whigham all left top agencies to become founding partners at Range. Some of the ex-CAA employees who left for Range are in arbitration with the agency over canceled equity.
Since its inception five years ago, Range has surfaced as a player in Hollywood’s representation landscape that’s consolidated into three major talent agency players (CAA, WME and UTA) after CAA in 2022 closed its acquisition of ICM Partners. Its emergence coincided with a time in which talent is questioning whether they even want an agent, and some have just kept on managers to navigate a career while depending on attorneys to negotiate deals.
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