Antitrust Law Daily Wrap Up, ANTITRUST NEWS: $5.95M deal would take Blue Sky Studios out of wage-suppression litigation, (Apr 4, 2016)

By Pamela Wolf, J.D.

Under a deal submitted to the federal district court in San Jose, California for preliminary approval, former animation and visual effects employees of Blue Sky Studios would get $5.95 million to resolve their claims that the company was part of a conspiracy to restrain competition for labor and to reduce their compensation. The proposed settlement would give the class members about 25 percent of the $23.1 million that the plaintiffs’ expert concluded were damages attributable to Blue Sky employees. If approved, the settlement would be the first of the massive litigation and would take out the smallest defendant (In re Animation Workers Antitrust Litigation, No. 5:14-cv-04062-LHK).

Conspiracy claims. In September 2014, artists and engineers previously employed in animation studios brought a complaint, alleging that Pixar, Lucasfilm, DreamWorks, Walt Disney, Sony, Blue Sky Studios, and ImageMovers Digital entered into non-solicitation or non-poaching agreements and agreed on salary ranges in violation of the Sherman Act, the California Cartwright Act, and the California Unfair Competition Law (UCL). The action was consolidated with other similar class actions.

The former employees’ antitrust claims were at first dismissed as time-barred. After plaintiffs amended the complaint to included allegations that the defendants concealed the conspiracy, the court denied the studios’ motion to dismiss and permitted the plaintiffs to proceed.

Terms of settlement. Under the proposed settlement, which came after more than a year-and-a-half of discovery and the cataloguing of some 300,000 documents by plaintiffs’ counsel, Blue Sky would make a lump-sum payment of $5,950,000 into the settlement fund. From that amount, attorneys’ fees, expenses, and service awards ordered by the court would be deducted. The plaintiffs are seeking $10,000 in service awards for each of three named plaintiffs.

Although the motion for preliminary approval of the proposed settlement alleged that several thousand animation and visual effects employees worked for the defendants during the defined class period, it does not provide an estimate of the number of those employees who worked for Blue Sky. Accordingly, it’s hard to know how much class members would receive as their portion of the settlement fund.

As part of the deal, Blue Sky would be required to continue to cooperate with the plaintiffs to a limited extent. The company would prepare a declaration on issues of authentication for documents it produced during litigation that appear on the plaintiffs’ trial exhibit list. Blue Star also would use its best efforts to answer reasonable questions about the content or circumstances of those documents.

Under the proposed settlement, Blue Sky would “provide no voluntary cooperation to the other defendants in this litigation, including submitting declarations in opposition to class certification.”

Attorneys: Daniel A. Small (Cohen Milstein Sellers & Toll) for Robert A. Nitsch, Jr.

Companies: Blue Sky Studios, Inc.

News: Antitrust CaliforniaNews