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American Federation of Musicians of United States and Canada v. Paramount Pictures Corp.

United States Court of Appeals, Ninth Circuit

September 10, 2018

American Federation of Musicians of the United States and Canada, Plaintiff-Appellant,
v.
Paramount Pictures Corporation, Defendant-Appellee.

          Argued and Submitted February 8, 2018 San Francisco, California

          Appeal from the United States District Court No. CV 15-4302 DMG for the Central District of California Dolly M. Gee, District Judge, Presiding

          Robert Alexander (argued), Jeffrey R. Freund, Abigail V. Carter, and Adam Bellotti, Bredhoff & Kaiser PLLC, Washington, D.C., for Plaintiff-Appellant.

          Adam Levin (argued), Emma Luevano, and Emily F. Evitt, Mitchell Silberberg & Knupp LLP, Los Angeles, California, for Defendant-Appellee.

          Before: A. Wallace Tashima, Marsha S. Berzon, and Morgan Christen, Circuit Judges.

         SUMMARY[*]

         Labor Law

         The panel reversed the district court's grant of summary judgment in favor of defendant Paramount Pictures Corp. in an action brought under § 301 of the Labor Management Relations Act, alleging breach of a collective bargaining agreement in connection with the motion picture Same Kind of Different As Me, which was scored in Slovakia.

         The American Federation of Musicians of the United States and Canada, a bargaining representative for musicians, alleged breach of Article 3 of the Basic Theatrical Motion Picture Agreement of 2010, which required signatory movie studios to score domestically, with AFM musicians, any motion picture that the studios produced domestically. Paramount contended that Article 3 did not apply because it did not produce SKODAM.

         The panel held that the district court misinterpreted Article 3 to apply only if a signatory producer employed the cast and crew shooting the picture. The panel concluded that the Basic Agreement was a labor agreement involving scoring musicians, and Article 3 functioned as a work preservation provision that dictated when a signatory has to hire those musicians. Therefore, Article 3 applied when a signatory studio produced a motion picture and had authority over the hiring and employment of scoring musicians. Whether a studio also employed the cast and crew was not relevant to Article 3. The panel held that, on the summary judgment record, it was a disputed question of fact whether Paramount produced SKODAM and had sufficient authority over the hiring of scoring musicians such that Article 3 applied.

         The panel rejected Paramount's affirmative defense that Article 3 violated the National Labor Relations Act's "hot cargo" provision, which prohibits an employer from entering into an agreement to cease or refrain from dealing in the products of another employer or to cease doing business with any other person. Paramount asserted that AFM's suit to enforce Article 3 violated the hot cargo provision because AFM's tactical objective was to force SKODAM Films, a neutral employer, to employ AFM musicians. The panel held that the hot cargo provision does not apply to valid work preservation agreements. The panel's conclusion that there was a genuine dispute of material fact whether Paramount had authority over the hiring and employment of scoring musicians prevented summary judgment on the hot cargo defense.

         Reversing two of the district court's evidentiary rulings, the panel held that the district court abused its discretion in excluding an expert report and an internal Paramount email.

         The panel remanded the case for further proceedings.

          OPINION

          TASHIMA, Circuit Judge.

         Since at least 1946, major motion picture studios and the musicians, conductors, and orchestras who score motion pictures have agreed to a series of collective bargaining agreements governing the musicians' hiring, wages, and work conditions when they score a motion picture for a signatory studio. This case concerns whether Paramount Pictures breached a recent vintage of those agreements, the Basic Theatrical Motion Picture Agreement of 2010 ("Basic Agreement"). The musicians' bargaining representative, the American Federation of Musicians of the United States and Canada ("AFM"), sued Paramount - a signatory to the Basic Agreement - after the motion picture Same Kind of Different As Me ("SKODAM") was scored in Slovakia. AFM alleged that Paramount breached its obligation under Article 3 of the Basic Agreement to score domestically, with AFM musicians, any motion picture that it produces domestically. Paramount moved for summary judgment, contending that Article 3 did not apply because Paramount did not produce SKODAM.

         The district court granted the motion. First, the court concluded that a studio produces a motion picture when the studio "makes" or "shoots" the principal photography. Second, the court concluded that under Article 3, a signatory studio that "produces" a motion picture has to score a motion picture domestically only when it employs the cast and crew shooting the picture. Because there was no evidence that Paramount employed anyone shooting the picture, the court concluded that as a matter of law, Paramount did not breach the Basic Agreement.

         We reverse. The district court misinterpreted Article 3 to apply only if a signatory Producer employs the cast and crew shooting the picture. The Basic Agreement is a labor agreement involving scoring musicians, and Article 3 functions as a work preservation provision that dictates when a signatory has to hire those musicians. Therefore, Article 3 applies when a signatory studio produces a motion picture and has authority over the hiring and employment of scoring musicians. Whether a studio also employs the cast and crew is not relevant to Article 3. On the summary judgment record, it is a disputed question of fact whether Paramount produced SKODAM and had sufficient authority over the hiring of scoring musicians such that Article 3 applied. We also reject Paramount's affirmative defense that Article 3 violates the National Labor Relation Act's ("NLRA") "hot cargo" prohibition, and reverse two of the district court's evidentiary rulings.

         Background

         I. Factual Background

         AFM is a labor union that represents approximately 80, 000 professional musicians in the United States and Canada, including those who score motion pictures. The "scoring" of motion pictures refers both to the recording of music sound track for motion pictures and music preparation work, such as copying and orchestration.[1] Scoring musicians are not salaried employees of individual production studios; instead, musicians score motion pictures on a per-picture basis. The studios usually arrange for the employment of scoring musicians indirectly. In a "fee deal" arrangement, the studio hires a music contractor, who hires the musicians. In a "package deal" arrangement, the studio hires the composer and provides him or her a lump sum to hire the musicians, which the composer usually does through a music contractor.

         A. The Basic Agreement

         For decades, AFM has negotiated a series of collective bargaining agreements with major motion picture studios, represented in negotiations by the Alliance of Motion Picture and Television Producers ("AMPTP"). Paramount has been party to the agreements since at least 1964. At the time of SKODAM's production, the collective bargaining agreement at issue in this lawsuit - the Basic Agreement - was in effect.

         The Basic Agreement enumerates wage, benefits, and working conditions requirements for AFM musicians hired to score motion pictures. For example, the Basic Agreement establishes when musicians receive days off, requires the signatory Producers[2] to pay into a musician health plan, and establishes wage scales for various covered employees. Article 1 of the Basic Agreement, titled "Scope of Agreement," provides:

This Agreement shall be applicable to the classifications of employees listed in the "Wage Scales, Hours of Employment and Working Conditions" attached hereto, and also to all conductors, featured instrumental musicians and orchestras, employed by the Producer in the State of California or elsewhere in the United States and Canada and whose services are rendered in connection with the production of theatrical motion pictures.

         Article 3 of the Basic Agreement - the provision central to this case - provides: "All theatrical motion pictures produced by the Producer in the United States or Canada, if scored, shall be scored in the United States or Canada." Article 3 has been in the Basic Agreement for at least 50 years and has been a point of contention in negotiations.

         B. Same Kind of Different As Me

         The instant dispute arises from the making of the motion picture Same Kind of Different As Me. Ron Hall, who had authored a book of the same title, developed the SKODAM screenplay along with Alex Foard and Michael Carney, who would become the picture's director. In 2014, the screenwriters and Darren Moorman formed SKODAM Films, LLC, in order to produce SKODAM. Moorman raised money and reached out to potential partners, including Disruption Entertainment ("Disruption"), which was run by individual producer Mary Parent. Parent showed interest in SKODAM and told Moorman that she would ask Paramount for its response to the project.

         1. Paramount and Disruption Memorandum of Agreement

         At the time that SKODAM Films approached Disruption, Paramount and Disruption had a Memorandum of Agreement ("MOA") related to Parent's producing services. The MOA was a "first look" agreement that required Parent to share with Paramount any motion picture projects under her control or that she was considering acquiring, so that Paramount could determine whether to produce the motion picture. The MOA provided, "It is the essence of this Agreement that during the Term, [Disruption's] producing services in connection with theatrical motion pictures shall be exclusive to [Paramount]." If Paramount passed on a project, Parent could shop that project to other motion picture studios. In exchange, Paramount paid Disruption an overhead contribution toward expenses and staff salaries and paid Parent a per-picture producing fee. Disruption employees also kept office space at Paramount and had Paramount email addresses. During the term of the MOA, Parent worked on several motion pictures with Paramount and several with other studios.

         After Parent's conversation with Moorman, Disruption contacted Paramount in the summer 2014. Paramount executives commented on two versions of the SKODAM script and projected the motion picture's potential revenue. Paramount also ...


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