CAA filed suit against rival talent agency UTA as well as defected agents Greg Cavic and Gregory McKnight in Los Angeles Superior Court on Thursday for “a lawless, midnight raid” that resulted in unnamed damages to the talent agency.
CAA hired prominent employment attorney Anthony Oncidi and Keith Goodwin of Proskauer Rose to represent the agency.
Cavic and McKnight left CAA on Tuesday to become partners at UTA along with Jason Heyman, Martin Lesak and Nick Nuciforo. In recent days, the group brought along top clients Chris Pratt, Will Ferrell and Melissa McCarthy with them from CAA, which likely lost tens of millions in future commissions.
Nuciforo was under contract until Oct. 17, 2015, while Heyman and Lesak were under contract until June 23, 2016. Each of their contracts had arbitration provisions. CAA is expected to initiate arbitration proceedings for breach of contract against those three former agents.
CAA’s complaint for damages and injunctive relief alleges intentional interference with contractual relations, intentional interference with prospective economic advantage, breach of fiduciary duty, conspiracy to breach fiduciary duty, breach of duty of loyalty, conspiracy to breach duty of loyalty and violations of business.
While CAA alleges there is no adequate remedy at law to compensate the agency for the damage caused by the defendants, the agency is seeking compensatory and general damages, special damages, consequential damages, punitive and exemplary damages, attorneys’ fees and a temporary restraining order prohibiting the defendants from soliciting or providing services to clients represented by Heyman, Lesak and Nuciforo while they were employed by CAA.
CAA believes Cavic and McKnight and UTA began talks with Heyman, Lesak and Nuciforo back in January and tried to get CAA clients to sign agreements with UTA during the Sundance Film Festival.
This is CAA’s first wave of litigation against non-contracted parties. The agency’s attorneys are filing with the intent of litigating the case, though similar situations in the past have been resolved via private settlements.
The defendants are likely to argue their case using California’s strict “seven-year rule” for personal services contracts, which is also known as the “de Havilland law,” named after Olivia de Havilland’s 1940s lawsuit against Warner Bros. for repeatedly extending her contract.
In 1944, the California Court of Appeal rules that anyone providing personal services in the entertainment industry couldn’t be subject to a contract beyond seven years from the start of the deal.
Ed Limato cited the “seven-year rule” while arguing the legality of his defection from ICM to William Morris in 2007, when he took Denzel Washington, Steve Martin and other clients to ICM’s rival agency. Limato prevailed in that case.
From the complaint:
“This case is about a lawless, midnight raid that UTA and its co-conspirators launched against CAA in a desperate attempt to steal clients and employees. Months in the making, this illegal and unethical conspiracy has resulted in a number of agents who were under contract to CAA to brazenly and abruptly breath their contractual obligations to CAA and to intentionally and deliberately interfere with CAA’s existing and prospective economic relationships with its clients. In the process, UTA and its co-conspirators have tortiously inflicted economic damage upon CAA.
Acting in concert with one another and with full awareness of the indisputable illegality of their conduct, Cavic and McKnight, while still on CAA’s payroll and while still accepting generous compensation and benefits from CAA, worked clandestinely with each other and UTA to induct a number of CAA employees to abruptly terminate their employment with CAA and to join UTA. At least three of the employees whom UTA, Cavic and McKnight induced to leave CAA had entered into enforceable, ongoing contracts with CAA.
CAA also is informed and believed that Cavic and McKnight, in direct violation of their duties to CAA, solicited existing and prospective CAA clients on behalf of UTA while still employed by CAA; delayed meetings and deals with existing and potential CAA clients in order to make it more likely that they would complete such deals after leaving CAA and becoming partners at UTA with the intent to divert as much of CAA’s business to UTA as possible; encouraged existing and prospective CAA clients to avoid exclusive relationships with CAA and/or to alter their existing relationships with the agency; and solicited and encouraged other CAA employees to do same so that significant economic opportunities could more easily be diverted to UTA.”
A representative for UTA had no comment regarding the lawsuit.