Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Sony, Blue Sky studios settle non-solicitation conspiracy claims for $19M, (Jul 8, 2016)

By Edward L. Puzzo, J.D.

The federal district court in San Jose, California, has preliminary approved class action settlement agreements with Sony Pictures Animation and Sony Pictures Imageworks, and Blue Sky Studios, arising from claims of a wage suppression conspiracy (Nitsch v. Dreamworks Animation SKG Inc., July 6, 2016, Koh, L.).

Sony Pictures Animation and Sony Pictures Imageworks, Blue Sky Studios, Pixar, Lucasfilm Ltd., DreamWorks Animation SKG, The Walt Disney Company, and Two Pic MC f/k/a ImageMovers Digital are in the business of creating visual effects and animation for motion pictures. Robert A. Nitsch, Georgia Cano, and David Wentworth were artists and engineers previously employed by one or more of the animation studios. In 2014, Nitsch, Cano, and Wentworth filed a series of class action complaints, asserting violations of Section 1 of the Sherman Act, the California Cartwright Act, and the California Unfair Competition Law (UCL). Specifically, the employees alleged that the defendants engaged in a conspiracy to suppress compensation by agreeing not to solicit each other’s employees, to take special procedures when contacted by each other’s employees, and to coordinate compensation policies through direct, collusive communications.

The court preliminarily certified, for the purposes of effectuating these settlements, a settlement class, estimated to include ten thousand individuals, consisting of all animation and visual effects employees with specified jobs employed by defendants in the United States during the following time periods: Pixar (2001-2010), Lucasfilm Ltd., LLC (2001-2010), DreamWorks Animation SKG, Inc. (2003-2010), The Walt Disney Company (2004-2010), Sony Pictures Animation, Inc. and Sony Pictures Imageworks, Inc. (2004-2010), Blue Sky Studios, Inc. (2005-2010) and Two Pic MC LLC f/k/a ImageMovers Digital LLC (2007-2010).

The court found that the agreed-upon consideration of $5.95 million for Blue Sky and $13 million for Sony Pictures, two companies whose share of employee years is approximately 20 percent of the class, was fair and reasonable based on the circumstances. The proposed settlement was found to satisfy the requirements under Federal Rule of Civil Procedure 23 for preliminary approval. The settlement was reached after informed, arm’s-length negotiations and extensive discovery were conducted; there were no obvious deficiencies; and the settlement did not grant preferential treatment to class representatives or segments of the class. A final hearing on the settlements is scheduled for November 10, 2016.

The case is Civil Action No. 5:14-cv-04062-LHK.

Attorneys: Daniel A. Small (Cohen Milstein Sellers & Toll PLLC) for Robert A. Nitsch, Jr. Ashley A. Bede(Hagens Berman Sobol Shapiro LLP) for David Wentworth. Daniel Glen Swanson (Gibson, Dunn & Crutcher LLP) for DreamWorks Animation SKG Inc. Emily Johnson Henn (Covington & Burling LLP) for Lucasfilm Ltd. LLC.

Companies: Sony Pictures Imageworks Inc.; Sony Pictures Animation Inc.; DreamWorks Animation SKG Inc.; Lucasfilm Ltd. LLC

Cases: Antitrust CaliforniaNews