The judgement is in; the lawsuit, as Actors’ Equity Association (AEA) requested, has been dismissed. It’s a bit of a surprise to me, but not too much.
I disagree with the overall ruling, and there are parts of it I do not understand. At the same time there are parts I do understand and agree with. (But again, I am not a lawyer.) My central confusion is about how much of their case the plaintiffs need to make in their original complaint, how many facts do they have to include – how many might be “sufficient” in support of their arguments, even before the case goes to trial, in order to ensure that it will avoid a dismissal?
Let me go over it a bit more specifically.
The Judge divided the complaint – pretty much following the plaintiffs’ own brief – into four parts and found insufficient evidence in each part to justify the lawsuit.
First he wrote his own historical summary, which was accurate, except perhaps for one statement. On line 8 of page 3, the Judge wrote that “On April 21, 2015, the Council adopted the proposed changes to the 99-Seat Theater Plan” (italics mine). This is a surprising statement inasmuch as the changes the Council adopted were in fact different from the changes that were originally proposed. Everyone acknowledges this fact, including Equity; changes were made to the proposal after the referendum and after the meetings with the Review Committee, so I do not understand how the Judge’s statement can in fact be accepted as accurate.
I can imagine only three distant possibilities:
1. Council in Executive Session adopted the proposed changes exactly as written – thus eliminating the Review Committee and the 1989 Settlement Agreement (SA) – then voted again to alter them, now that – in its view – the Review Committee no longer existed and the requirement to report proposed changes was no longer in effect. (I call this the Byzantine solution.) Or,
2. The changes made were not considered substantial by the Judge. However, in that case, even unsubstantial changes to the Plan needed to be reported to the Review Committee 45 days before they could be acted on—at least in my reading of the document (SA 5). Or,
3. The substantial change made to the membership carve-out, because it was an internal ruling, was somehow not part of the “changes to the Plan” and therefore not subject to the restrictions of the Settlement Agreement. However, the internal rules were part of the “proposed changes to the Plan package” that Equity offered and submitted to the referendum, so I’m not sure how they could be part of the changes when Equity wanted them to be and not part of the changes when Equity didn’t.
Well, actually there’s a fourth possibility – and I will expand on that later—and that is:
4. The plaintiffs never bothered to make the case persuasively that Equity did, in their view, illegally change the proposal after the referendum. (The judge, after all, is not required to make the case for the plaintiffs—that’s their job.) This fact—that what the Council voted on was clearly different from what was originally proposed–has always been the cornerstone of my arguments against the legality of the Council’s modifications, however reasonable and well-intentioned they felt they were. But I’m not sure it was central to the plaintiffs’ statement of their grievance.
The judge’s history was followed by a “DISCUSSION.” This section effectively laid down the ground rules that guided him in making the dismissal. The plaintiffs, in stating their claim, are required to provide a “cognizable legal theory” supporting their complaint and either “sufficient facts alleged to support” such a theory, or “sufficient factual matter to state a facially plausible claim to relief.” In other words, there must be a legal theory behind the plaintiffs’ claim, and there must be included in the complaint facts sufficient to support that theory or at least sufficient to establish the likelihood that the claim has merit.
Now, as to the four parts of the complaint:
1. Breach of Contract. The Judge found only one element of contract law applicable: the defendant’s alleged breach (4.12-13). The judge ruled that “the Complaint does not sufficiently allege a breach because Equity’s actions, as alleged in the Complaint, are not inconsistent with the Agreement (4.14-15). (Notice he only states that the actions as alleged in the complaint are not inconsistent with the Agreement. It is up to the plaintiffs to identify the specific actions which in their opinion clearly violate the contract, and to include enough of them in the complaint, along with the reasoning behind their claim of violation.)
The Judge actually states that Council is obliged to “act on” only the exact same changes which it proposed 45 days earlier (4.23-26). Given that the Council ultimately enacted changes that were different from the changes it proposed, I am once again unclear why that is not a breach. I can only assume that the Judge felt that “act on” is different from “enact,” and that the power to “act on” the proposed changes includes the right to change those proposed changes. If that is so, I do not see how the whole purpose of the Settlement Agreement is not thereby vitiated. If Equity can “propose” changes, and then 45 days later change those changes and enact them without further advance notice, what is the purpose of the notification requirement in the first place? This seems to be not only a violation of the spirit of the agreement, but of the letter.
However, I suspect that the plaintiffs failed to make that argument in the original complaint with the necessary vehemence, and with supporting facts and reasoning, to convince the judge.
Instead, the plaintiffs’ identification of the “breaches” of Article 4 of the Settlement Agreement are:
a) Refusal by Equity to “consider proposals and modifications offered by the Plaintiffs’ side of the Review Committee” (original filing of the lawsuit, p. 21 lines 22-23); here the complaint quoted Executive Director McColl as saying that “Equity-side members had no obligation to consider or make any changes to Equity’s proposal” (p. 21, line 28-p.22, line 1). The Settlement Agreement, however, clearly states that for even minor changes, the “Council… will consider comments and recommendations from the Review Committee” (SA 5); and that for substantial changes, AEA representatives must meet with “members of the Review Committee for the purpose of receiving the recommendations and opinions of the Review Committee about the proposed changes” (SA 4.a.2). Therefore, while Equity was under no obligation to make any changes based on the Review Committee’s recommendations, it was still required by the terms of the SA to “consider and/or receive” those recommendations. If the Executive Director ran the meetings but denied any obligation to “consider” or receive the opinions of the Review Committee, then it seems to me she was in direct violation of the Settlement Agreement. I wish the complaint had made that point more vigorously, because I think it’s a good one.
b) As to the matter of the legality of changes made after the referendum, I suggest the plaintiffs made their case there rather tepidly, if at all. First they stated, incorrectly, that “Equity’s National Council formally adopted the Plan of its own making, which it had previously proposed, endorsed, and supported.” This is simply not true: what Council adopted on April 21, 2015, was different from what it had previously proposed, endorsed, supported and campaigned for. Next, the plaintiffs commented casually that some of the changes “deviated somewhat from the proposal placed before Union members in the referendum” (p. 24, lines 18-19). But there was really no follow up. Instead, the complaint then goes on to identify only one possible deviation from the original proposal, the new Showcase Code, which in fact is an added Code, has nothing to do with either the “waiver” or the 99-Seat Agreement, and is, in my view, perfectly within Equity’s jurisdiction to promulgate.
Other alleged breaches appear in the CLAIM FOR RELIEF section:
c) That the union did not hold a reasonable number of meetings with the Review Committee. The Judge noted that the union did meet with the Committee three times; and, for him I guess, that met the standard of reasonability, absent any strong argument from the plaintiffs that the timing, spacing, and management of the meetings failed to meet the test of reasonability. (Again, the judge need not make the plaintiffs’ case, and the plaintiffs must supply convincing evidence and arguments for its position, especially since, in the judge’s view, this kind of motion requires the judge not only to “take all allegations of material facts as true,” but also to “construe them in the light most favorable to the non-moving party [the defendants]” (p.3, line 28- p.4, line 1).
d) That the union “acted on” the proposal from the very beginning, instead of waiting till after the 45-day notification period. This alleged breach depends on the meaning of “act on,” which the plaintiffs wished to interpret to mean “do anything, especially anything in favor of the proposal.” The judge found this interpretation “absurd” (p. 5, lines 4-5). I did, too. Waste of time. (At the same time, the judge’s interpretation of “act on” seemed wider than “enact” and broad enough to include “change.”)
e) That the Council improperly held the referendum without waiting for a request for a member. This, too, was, for the judge, non-factual, and a silly argument. I agree.
At this point, the plaintiffs’ case for Breach of Contract ended and was dismissed. (To my mind, at this point, the lawsuit was doomed.) Only three possible claims remained:
2. Breach of the Implied Covenant of Good Faith and Fair Dealing
3. Breach of the Duty of Fair Representation
4. Labor Management Reporting and Disclosure Act (LMRDA) Claim
These three decisions are all based on labor law and the implications of contractual law, where I have no expertise; so I tend to feel the judge may have ruled the only way he possibly could, given the arguments and the facts – or absence thereof – in the complaint. (I suspect the plaintiffs’ best case would have been to stick to the letter of the Settlement Agreement and not wander off into the thicket of labor law and the ambiguities and difficulties of interpreting contractual law. Any arguments about bad faith, I think, could have been made there, with regards to the union’s specific responsibility to hold a “reasonable number of meetings,” to “consider” the Review Committee’s recommendations, and to assure that the referendum was “conducted fairly.” Instead, the labor law the plaintiffs cited, in this layman’s opinion, only made their case harder to prove.)
As to the Good Faith and Fair Dealing, the judge ruled that the plaintiffs simply did not “identify any facts – and the Court finds none – to demonstrate” the plausibility of the complaint.
As to Fair Representation, Equity countered successfully, in the judge’s opinion, that its decision was neither discriminatory, arbitrary, or in bad faith. There must be, said the judge, quoting labor law precedent, “substantial evidence of fraud, deceitful action or dishonest conduct” (p. 7, lines 1-2); and even if Equity’s alleged actions could be characterized as “not cooperative, inconvenient, or partisan,” that does not rise to the level of dishonesty required. And even if certain statements were “probative of deceit and dishonesty” – which the Court does not affirm – they still would not provide “substantial evidence” of bad faith.
As to the LMRDA Claim – that the way Equity ran the advisory referendum violated a specific section of labor law – the judge ruled, correctly I have to assume, that the section cited does not apply to advisory votes. Therefore, whether “there were irregularities in the… voting has no bearing on the validity” of Council’s decision.
So, in summary, I tend to agree with – or at least understand – most of the judge’s rulings, given the nature of the plaintiffs’ expressed complaint and the existing laws and precedents.
I disagree strongly, however, with his presentation of the history of Council’s actions which overlooked the changes made to the proposal after the referendum, and with his subsequent interpretation of the specific terms of the Settlement Agreement with regard to the ability of Council to make additional changes to its proposal without the kind of notification that the Settlement Agreement seems to require.
Still, a judge can only render a judgement on the basis of the facts as they are put before him. All things being equal, attorneys know that verdicts are not determinations about objective reality but rather which side presented its case better.
And, finally, the lawsuit was dismissed “without prejudice,” meaning that the plaintiffs could refile an amended complaint that deals more specifically with the judge’s concerns over the inadequacies of the original complaint.
If they so choose.