Frances Fisher v. Screen Actors Guild American Federation of Television and Radio Artists

Case 2:21-cv-05215-CAS-JEM Document 63 Filed 07/27/22 Page1of29 Page ID #:1020

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

Present: The Honorable CHRISTINA A. SNYDER

Catherine Jeang Not Present N/A

Deputy Clerk Court Reporter / Recorder Tape No.

Attorneys Present for Plaintiffs: Attorneys Present for Defendants:

Not Present Not Present

Proceedings: (IN CHAMBERS) - MOTION TO DISMISS SECOND AMENDED

COMPLAINT FILED BY DEFENDANT SAG-AFTRA (Dkt. 51,

filed on April 22, 2022)

MOTION TO DISMISS SECOND AMENDED COMPLAINT

FILED BY DEFENDANTS GABRIELLE CARTERIS, DAVID P.

WHITE, DUNCAN CRABTREE-IRELAND, RAY RODRIGUEZ,

JOHN T. MCGUIRE, JOHN CARTER BROWN, LINDA

POWELL, MICHAEL PNIEWSKI, AND DAVID HARTLEY-

MARGOLIN (Dkt. 52, filed on April 25, 2022)

I. INTRODUCTION

On June 25, 2021, plaintiff Francis Fisher filed a verified application, pursuant to

29 U.S.C. § 501(b), to file a proposed complaint against defendants Screen Actors Guild

— American Federation of Television and Radio Artists (“SAG-AFTRA”), Gabrielle

Carteris, David P. White, Duncan Crabtree-Ireland, Ray Rodriguez, Michael Pniewski,

David Hartley-Margolin, John T. McGuire, John Carter Brown, and Linda Powell. Dkt.

1. Fisher’s proposed complaint asserted two claims: (1) breach of the duty of fair

representation, in violation of 29 U.S.C. § 159(a), against defendants White, Rodriguez,

McGuire, Hartley-Margolin, Pniewski, Brown, and Powell; and (2) breach of fiduciary

duty, in violation of 29 U.S.C. § 501(a), against defendants Carteris, White, Rodriguez,

Crabtree-Ireland, McGuire, Brown, and Powell. Dkt. 1-1.

With respect to the Section 501(a) claim, pursuant to 29 U.S.C. § 501(b), a

member of a labor organization may bring suit against “any officer, agent, shop steward,

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

or representative” of the labor organization for violation of Section 501(a), having first

made a pre-suit demand upon the labor organization or its governing board and “upon

leave of the court obtained upon verified application and for good cause shown, which

application may be made ex parte.” 29 U.S.C_A. § 501.

On July 28, 2021, the Court denied Fisher’s verified application to file the

proposed complaint, without prejudice to her filing a complaint setting forth her Section

159(a) claim, alongside a verified application for leave to add a claim pursuant to Section

501(a). Dkt. 18.

On August 3, 2021, Fisher filed a complaint setting forth her Section 159(a) claim.

Dkt. 20. On August 4, 2021, Fisher filed a verified application for leave to add a claim

pursuant to Section 501(a). Dkt. 23. With her application, Fisher filed her proposed first

amended class action complaint. Dkt. 23-1 (“FAC”).

On October 6, 2021, SAG-AFTRA, Pniewski, and Hartley-Margolin moved to

dismiss Fisher’s Section 159(a) claim pursuant to Rule 12(b)(1) for lack of subject matter

jurisdiction, and Rule 12(b)(6) for failure to state a claim upon which relief can be

granted. Dkt. 28. On October 6, 2021, pursuant to Rule 12(b)(6), White, Rodriguez,

McGuire, Brown, Powell, Carteris, and Crabtree-Ireland moved to dismiss Fisher’s

Section 501(a) claim, as well as her Section 159(a) claim. Dkt. 26-1.

On January 24, 2022, the Court granted Fisher leave to file her Section 501(a)

claim, but dismissed Fisher’s Section 159(a) claim and Section 501(a) claim with leave to

amend. Dkt. 38 (“MTD Ord.”). The Court found that Fisher’s Section 159(a) duty of fair

representation claim was time barred, was improperly brought against individual union

officials, lacked standing, and failed to state a plausible claim. Id. at 12-19. Likewise,

the Court found that Fisher’s FAC failed to state a Section 501 claim, inter alia, because

it improperly sought to “recover for harm to a subset of Union members, rather than for

any harm to the Union.” Id. at 24.

On February 23, 2022, plaintiffs field a second amended complaint. Dkt. 42

(“SAC”). The SAC adds David Andrews, Belinda Balaski, Stephen Hart, Raymond

Harry Johnson, Anne Lockhart and Toby Stone-Mandelberg as plaintiffs. Id. 3. The

SAC adds additional substantive allegations, and brings the same two claims: (1) breach

of the duty of fair representation, in violation of 29 U.S.C. § 159(a), against defendant

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

SAG-AFTRA: and (2) breach of fiduciary duty, in violation of 29 U.S.C. § 501(a),

against defendants Carteris, White, Rodriguez, Crabtree-Ireland, McGuire, Brown,

Powell, Pniewski, and Hartley-Margolin. Id. §] 137-152.

On April 22, 2022, SAG-AFTRA (the “Union’’) filed a motion to dismiss

plaintiffs’ Section 159(a) claim pursuant to Rule 12(b)(6) for failure to state a claim upon

which relief can be granted. Dkt. 51 (“SAG MTD”). On April 25, 2021, pursuant to

Rule 12(b)(6), Carteris, White, Crabtree-Ireland, Rodriguez, McGuire, Brown, Powell,

Pniewski, and Hartley-Margolin (collectively, the “501 Defendants”) moved to dismiss

plaintiffs’ Section 501(a) clam. Dkt. 52-1 (“501 MTD”).

On May 27, 2022, plaintiffs submitted their opposition to the SAG MTD (Dkt. 54

(“SAG Opp.”)), and their opposition to the 501 MTD (Dkt. 53 (“501 Opp.”)). Plaintiffs

also filed a request for judicial notice. Dkt. 56 (“RJN”). On June 27, 2022, SAG-

AFTRA submitted its reply (Dkt. 58 (“SAG Reply”)), and the 501 Defendants submitted

their reply (Dkt. 35 (“501 Reply’”)).

The Court held a hearing on July 11, 2022. Having carefully considered the

parties’ arguments and submissions, the Court finds and concludes as follows.

II. BACKGROUND

The relevant allegations are drawn from the SAC.

A. The Parties

Plaintiff Frances Fisher is a member of SAG-AFTRA. SAC § 22. She has served

as First Vice President of the SAG-AFTRA Los Angeles Local and as a member of the

SAG-AFTRA National Board since 2012. Id. Fisher was a member of both SAG and

AFTRA from 1976 until the 2012 merger of the two unions. Id. Fisher is and has been a

participant in the Health Plan. Id. At the time of the 2019 and 2020 Union collective

bargaining activities for the Commercials, Netflix and TV/Theatrical collective

bargaining agreements (“CBAs”), Fisher was receiving her Union pension for which

persons age sixty-five and older were eligible. Id. Under the Health Plan benefit

structure changes announced in August 2020, Fisher’s residuals earnings were no longer

credited toward her Union health benefit eligibility. Id. The SAC alleges that Fisher

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

filed the instant action to ensure that future union leaders and staff can never again breach

the fiduciary duties owed to the Union and the membership. Id.

Plaintiff Belinda Balaski has been member of SAG, and then SAG-AFTRA, for

over twenty years. Id. 24. Balaski receives her Union pension. Id. Balaski lost her

Senior Performer lifetime secondary coverage under the Health Plan as a result of the

Benefit Amendments. Id.

Plaintiffs David Andrews, Anne Lockhart, Stephen Hart, Raymond Harry Johnson,

and Toby Stone-Mandelberg have been members of SAG, and then SAG-AFTRA, for

over twenty years. Id. §[ 23, 25-28. They receive a Union pension. Id. They lost Health

Plan coverage as a result of the Health Plan’s decision to exclude residual earnings for

members age sixty-five or older and taking a pension. Id.

Defendant SAG-AFTRA is a labor organization as defined under 29 U.S.C. § 402.

Id. § 29. SAG-AFTRA resulted from the 2012 merger of the SAG and AFTRA unions.

Id. § 40. SAG-AFTRA is governed by its Constitution (the “Union Constitution”). Id. {J

46-52. The Union’s objectives, as set forth in the Union Constitution, include protecting

the rights of entertainment and media artists in all respects consistent with the overall

objectives of the Union and doing all other things necessary and proper to advance and

promote their welfare and interests. Id. 46. SAG-AFTRA is authorized to appoint and

at any time remove and replace the Union trustees of the Health Plan. Id. ] 29. The

Union Constitution empowers the SAG-AFTRA National Board to appoint and remove

the trustees of the Union trustees of the Health Plan. Id.

At all times relevant to this dispute, Carteris served as President of SAG-AFTRA,

as a SAG-AFTRA National Board member, and as a SAG-AFTRA Executive Committee

member: White served as SAG-AFTRA’s National Executive Director and chief

negotiator and as a Union-appointed SAG-AFTRA Health Plan Trustee until June 2021;

Crabtree-Ireland served as Chief Operating Officer and General Counsel of SAG-

AFTRA; Rodriguez served as SAG-AFTRA’s Chief Contracts Officer and Union-

appointed SAG-AFTRA Health Plan Trustee; McGuire served as SAG-AFTRA’s

National Senior Advisor and a Union-appointed SAG-AFTRA Health Plan Trustee;

Hartley-Margolin served as a Union-appointed SAG-AFTRA Health Plan Trustee;

Pniewski served as a Union-appointed SAG-AFTRA Health Plan Trustee; Powell served

as a member of the SAG-AFTRA National Board and as a Union-appointed Health Plan

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

Trustee; and Brown served as a Union-appointed Health Plan Trustee and as a member of

the SAG-AFTRA National Board. Id. 4] 30-38. The SAC alleges that the individual

defendants at all times relevant hereto served as either officers, agents, shop stewards, or

other representatives of SAG-AFTRA as defined under 29 U.S.C. § 402. Id. 4 39.

B. The SAG-AFTRA Merger and the Health Plans Merger

In January 2012, the governing boards of the Screen Actors Guild (“SAG”) and the

American Federation of Television and Radio Artists (“AFTRA”) agreed to merge the

two unions to become SAG-AFTRA. SAC 4 40. Prior to the merger, pension and health

benefits were provided to the respective members of SAG and AFTRA by separate

pension and welfare (health) plans, which were collectively bargained trusts subject to

ERISA. Id.

In early June 2016, the respective trustees of the SAG and AFTRA health plans

agreed to merge the plans. Id. §]41. The benefits provided under the merged plan (the

“Health Plan’) continued Senior Performer Coverage for SAG and AFTRA members

who qualified. Id. Senior Performer Coverage provided the Union health benefit to

all Union members (and their qualified dependents and surviving spouses) who were

receiving a pension from either the SAG-Producers Pension Plan or the AFTRA

Retirement Fund (if eligible for a pension from both, members only needed a pension

from SAG to qualify), and had a certain number of Union “Retiree Health Credits” from

years of qualifying for active coverage under the health plans. Id. Senior Performer

Coverage was secondary to Medicare unless the member regained coverage through

“Earned Eligibility,” which could be achieved by meeting the “Covered Earnings”

threshold based on the member’s total compensation for work covered by the operative

CBAs, as long as the member’s earnings included at least $1 in sessional earnings. Id. §

44. This previous method of obtaining “Earned Eligibility” considered both sessional

and residual earnings! toward qualifying for Health Plan primary coverage, with

Medicare as the secondary coverage provider. Id.

1 Residual earnings are compensation paid to member performers for use of a theatrical

motion picture or television program beyond the use covered by initial compensation.

SAC at 3 n. 1.

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

At the time of the health plans merger, Carteris stated that the merger would

position the new health plan “to be financially sustainable for all members for years to

come.” Id. 441. Ina letter to SAG-AFTRA members in the summer of 2016, White

stated that the Health Plans Merger “is tremendous news for our membership on many

fronts. Fully 65,000 souls who depend on these plans will become beneficiaries of a

single, financially strengthened plan that offers automatic family coverage for all

participants.” Id. § 42.

C. The Health Benefit Amendments

On August 12, 2020, the SAG-AFTRA Health Plan announced modifications (the

“Benefit Amendments’’) to its benefit structure. SAC. § 8. The Benefit Amendments

increased the SAG-AFTRA Health Plan’s eligibility requirements for many Union

members and disqualified residuals earnings toward earnings-based eligibility for Union

members age sixty-five and older taking a Union pension. Id. 49. The Benefit

Amendments also eliminated Senior Performer Coverage and Age and Service Eligibility

(for members forty and older with ten years vested and $13,000 in earnings) and

negatively affected those members who previously earned coverage under the lower Plan

II $18,040 earnings threshold. Id. 10. Additionally, the Benefit Amendments modified

the earnings period for all Union members age sixty-five and older to run from October 1

to September 30, cutting short the time available to these members to obtain the sessional

earnings necessary to meet the increased eligibility requirements and retroactively

eliminating coverage for which some members had already qualified. Id. 4 11.

Plaintiffs allege that the Benefit Amendments eliminated the Union health benefits

for thousands of Union members and their families who are or would be unable to qualify

based on earnings if residual earnings are no longer credited toward Health Plan

eligibility. Id. § 12. Plaintiffs add that many members face, and will continue to face, the

dramatically increased hurdles for eligibility under the Health Plan in the future. Id.

Additionally, plaintiffs allege that while employer contributions to the Health Plan

for members under the 2019 and 2020 CBAs are based on a percentage of all earnings of

each member and will continue to fund the Health Plan, pursuant to the Benefit

Amendments, the residuals earnings of members age sixty-five and older receiving a

Union pension will not count as earnings for eligibility under the Health Plan. Id.

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

Plaintiffs further allege that shortly after the announcement of the Benefit

Amendments, Health Plan trustee Richard Masur revealed during a Health Plan webinar

that the Health Plan trustees had known of the “dire and worsening condition” of the

Health Plan for two years, and that Health Plan trustee Barry Gordon stated that the

Health Plan trustees had worked “nearly every day for those two years” to figure out how

they could preserve the Health Plan’s benefits. Id. § 58.

D. Collective Bargaining Agreements

Funding to the SAG-AFTRA Health Plan is largely provided by employer

contributions set by the terms of the Union’s operative CBAs. SAC 4 54. In the two

years leading up to the Benefit Amendments, the 2019 Commercials, 2019 Netflix and

2020 TV/Theatrical CBAs were negotiated and approved by the Union.

The collective bargaining agreements between the Union and the employers

determine the elements of compensation and value provided to Union members for their

work as performers, including, among other things the amount of new money, and the

amount of contributions by employers to the benefit plans (including the Health Plan)

based on members’ earnings. Id. § 54.

With respect to the 2019 Commercials and the 2020 TV/Theatrical CBAs, the

Union National Board appointed a Wages and Working Conditions Committee to

formulate and value the Union’s proposal package. Id. | 60. Thereafter, the Negotiation

Committee, which was appointed by the National Board, represented the Union and

membership in presenting the proposal package to the employers and bargaining the

terms that determined Union members’ wages, working conditions, and Health Plan

funding. Id. The CBAs were then approved by the National Board and were submitted

to Union members for ratification. Id.

The 2019 Commercials CBA was ratified by members on May 8, 2019. Id. § 62.

The 2019 Netflix CBA was approved by the National Board on July 20, 2019, and went

into effect on August 1, 2019.* Id. § 63. Finally, the 2020 TV/Theatrical CBA was

ratified by members on July 22, 2020. Id. § 64.

? The 2019 Netflix CBA was negotiated entirely by Union staff, and was submitted to the

TV/Theatrical Negotiating Committee as a take-it-or-leave-it proposition. SAC § 61.

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

White, Rodriguez and McGuire represented the Union and membership in the

negotiations for all three CBAs, with White and Rodriguez serving as lead negotiators.

Id. § 65. Hartley-Margolin represented the Union and membership in the negotiations

concerning the 2019 Commercials CBA. Id. Powell and Pniewski represented the Union

and membership in the negotiation of the 2020 TV/Theatrical CBA. Id. Powell and

Brown represented the Union and membership in voting as National Board members to

approve the 2019 Commercials, 2019 Netflix and 2020 TV/Theatrical CBAs. Id.

Plaintiffs allege that White, Rodriguez, Pniewski, Hartley-Margolin, McGuire,

Brown and Powell knew when they accepted positions to act as representatives of the

Union and membership in the three 2019 and 2020 CBA negotiations and approvals,

through their service as Health Plan trustees, that the Health Plan’s funding condition was

dire and worsening. Id. 757. Plaintiffs further allege that these defendants knew the

plan’s income was insufficient to support the Union health benefit structure, the plan’s

reserves were diminishing and the Health Plan trustees were planning massive cuts

targeting Senior members to balance plan income and costs. Id. However, plaintiffs

allege that in representing the Union and membership, these defendants knew but hid

from the other representatives and the membership vitally material information, including

the funding needed to sustain the Health Plan’s benefit structure, the inadequacy of the

proposal packages and the ultimately negotiated CBA terms to sustain this benefit

structure, and the fundamental drastic changes to the benefit structure all Union members

would soon face under the terms of the proposal packages and ultimately negotiated

terms, which would result in the discriminatory elimination of the Health Plan’s benefits

for thousands of Union members and their families. Id. § 66.

Plaintiffs further allege that had the hidden information regarding the Health Plan

funding needs and acute financial condition been disclosed in the three CBA negotiations

and approvals in 2019 and 2020 by the Individual Defendants to the other Union

representatives, the Union negotiators would have had to make greater funding to the

Health Plan an essential objective in the CBAs by one or more of the available means.

Id. 72. These available means included greater employer contributions to the Health

Plan based on members’ earnings, increased contribution caps (that have not been raised

Moreover, it was approved by the National Board but was not submitted to the

membership for ratification. Id.

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

in forty years), a greater allocation to the Health Plan versus the pension plans, wage

increase diversions to the Health Plan or a direct funding by employers to cover or reduce

the Health Plan deficit. Id. In sum, plaintiffs allege that had the membership known the

CBAs would doom the Union health coverage for thousands of members and their

families prior to the membership ratification voting, the ballot process and debate would

undoubtedly have been materially different? Id. § 15.

E. _‘Post-Benefit Amendments Activity

Plaintiffs allege that Carteris, White, and Crabtree-Ireland breached their Section

501(a) fiduciary duties by abusing their leadership positions and Union assets to advance

their personal interests. SAC 82-99. At the time of the Benefit Amendments in

August 2020, Carteris was Union President; White was Union Executive Director; and

Crabtree-Ireland was Union General Counsel. Id. § 82.

Following the Benefit Amendments, Fisher and other Union members formed the

“SOS Health Plan” team and launched SOSHealthPlan.com as a means of providing

clarity to Union members affected by the Benefit Amendments by, among other things:

offering comprehensive information on the Benefit Amendments, educating participants

on secondary health insurance options apart from Via Benefits (Health Plan’s promoted

provider), providing Union members with periodic email updates, and fostering member

communication by way of a platform for rank-and-file and high-profile Union members

alike to speak out about the Benefit Amendments via videos and testimonials. Id. § 83.

On December 1, 2020, participants in the Health Plan brought the Asner et al v.

The SAG-AFTRA Health Fund et al, Case No. 2:20-cv-10914, action in this Court,

asserting breaches of fiduciary duty against the Health Plan trustees relating to the 2017

Health Plan Merger that ultimately led to the August 12, 2020 Benefit Amendments. Id.

| 85. White, Rodriguez, Pniewski, Hartley-Margolin, McGuire, Brown and Powell are

defendants in Asner. Id. Plaintiff alleges that Carteris, White and Crabtree-Ireland

> Plaintiffs note that, as of the date of the SAC, the Commercials CBA was being

renegotiated. SAC § 74. In the SAC, plaintiffs allege that the previously hidden

condition of the Health Plan is likely driving the Union’s negotiating objectives. Id.

Likewise, in its oppositions, plaintiffs claim that “greater funding to sustain the benefit

was obtained” in the 2022 Commercials CBA. SAG Opp. at 15.

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

deployed the Union’s resources and machinery to attempt to stifle and intimidate the

“righteously panicked and outraged” members. Id. { 86.

On December 4, 2020, three days after the filing of Asner, the Union disseminated

an email to its membership, in which it stated that the Union members were being

“misled” by a “deliberate public and social media campaign spreading misinformation

and fear.” Id. On December 14, 2020, at the direction of Carteris and White, a special

meeting of the National Board was called to pass a “RESOLUTION RE: ACCURACY

OF INFORMATION ABOUT HEALTH PLAN CHANGES.” Id. § 88. The resolution

“resolved” to “take all appropriate action to ensure members are not deceived by

misrepresentations” and ““condemn|ed] those who seek to use the financial challenges of

the Health Plan and the related [benefit] changes to generate fear or anger in furtherance

of personal agendas.” Id. Additionally, plaintiffs allege that defendants Carteris and

White directed Union staff to disseminate a press release concerning the resolution. Id. §

89. The press release quoted Carteris as stating that “[{]]ike many scams that target the

elderly, the misinformation being spread is endangering our most vulnerable members.”

Id. Finally, also on December 14, 2020, the SAG-AFTRA Communications Department

released a video of SAG-AFTRA member Adam Arkin “discussing Five Facts about the

Health Plan change” with links to the December 4, 2020 Union message and the Union’s

December 14, 2020 press release. Id. § 90.

On December 18, 2020, Fisher demanded pursuant to The Labor-Management

Reporting and Disclosure Act of 1959 that the Union and National Board sue to recover

damages for breaches of fiduciary duty and the duty of fair representation against: (1) the

members of Union leadership who are SAG-AFTRA Health Plan Trustees; (2) the

members of Union leadership who participated in the CBA negotiations and approvals

with knowledge of the ongoing activity by the SAG-AFTRA Health Plan Trustees to

change the benefit structure; and (3) the members of Union leadership who approved the

Benefit Amendments or who have used their Union positions and the Union to support

the Benefit Amendments and oppose the claims by Union members challenging the

Benefit Amendments. Id. 92. Plaintiffs allege that, in response to Fisher’s demand (the

“Demand”), Carteris, White and Crabtree-Ireland further disloyally abused their fiduciary

positions and the assets and machinery of the Union to protect themselves and obstruct

efforts to hold Union representatives, including themselves, accountable. Id. 4 93.

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

The Demand was on the agenda for the Union’s February 6, 2021 National Board

meeting. Id. On February 5, 2021, Susan Davis of Cohen, Weiss & Simon LLP*

(“CWS”), retained by the Union to address the Demand, informed Fisher that, at the

meeting, Fisher would be requested to present the Demand and would then be directed to

recuse herself during Davis’s presentation to the National Board. Id. § 94. Fisher is a

member of the National Board. Id. Fisher requested that Davis provide the basis and

authority supporting recusal, but Davis did not respond. Id.

At the February 6, 2021 National Board meeting, Fisher followed CWS’s

instruction and involuntarily recused herself from the discussion, reserving all rights. Id.

§|95. CWS recommended the National Board vote against proceeding with the claims

against the members of Union leadership for the alleged misconduct, even though the

National Board did not receive any materials relating to the Demand, any materials

relating to the roles of members of Union leadership in the CBA negotiations, or any

information reflecting CWS’s pre-meeting work on the Demand leading to its

recommendation to reject the Demand. Id. Plaintiff allege that the engagement of CWS

to address the Demand and advise the National Board, and the use of Union assets to do

so, constituted a breach by Carteris, White and Crabtree-Ireland of their Section 501

fiduciary duties given CWS’s role in actively defending White, Rodriguez, Pniewsk1,

Hartley-Margolin, McGuire, Brown, Crabtree-Ireland and Powell in Asner for conduct

Fisher challenged in the Demand. Id. § 96.

During the February 6, 2021 SAG-AFTRA National Board meeting, Fisher stated

she believed the Demand did not impair her capacity or duty impartially to evaluate and

consider the Demand and related information as a SAG-AFTRA National Board member

and therefore she would comply with the recusal directive but only on an involuntary

basis reserving all rights. Id. { 97. Following a presentation by CWS and related

discussions, during which Fisher was recused, the National Board voted to reject the

Demand. Id.

* CWS is representing Crabtree-Ireland, White, Rodriguez, Pniewski, Hartley-Margolin,

McGuire, Brown, Powell, and others in the Asner action. SAC § 94.

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES — GENERAL ‘QO’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

F. Allegations Against SAG-AFTRA

Plaintiffs allege that the Union, by the actions and omissions of the Individual

Defendants as its designated agents and representatives, breached the duty of fair

representation in connection with the the Union CBA processes and deprived plaintiffs of

the benefits and rights of a fully informed collective bargaining process in accordance

with the Union Constitution. Id. § 100. Plaintiffs add that although the Union’s

Constitution requires rational determinations relating to the fundamental rights of

members, the Union’s actions were arbitrary or in bad faith because it 1s not rational for

the Union to negotiate and approve members’ rights under the CBAs without an informed

understanding of the value of certain rights, such as the health benefit, to members. Id.

102. Moreover, plaintiffs argue that the individual defendants’ actions in accepting and

approving CBA terms they knew were insufficient to sustain the health benefit misled

members of the Union, who based on those actions believed that the health benefit was

secure. Id. In sum, plaintiffs contend that the fact that none of the Individual Defendants

disclosed this information to the other Union negotiators or National Board members

supports an inference of bad faith in a conspiracy of silence and acceptance. Id.

Finally, plaintiffs contend that their allegations support a plausible claim that

although the Benefit Amendments were announced in August 2020, the limitations period

was tolled by the Union’s “affirmative denial and obfuscation of misconduct and injury”

and the “conflicted sham review” of Fisher’s Demand for the National Board to address

the misconduct, until February 6, 2021, when Fisher’s Demand was rejected. Id. § 104.

Ill. REQUEST FOR JUDICIAL NOTICE

Federal Rule of Evidence 201 empowers a court to take judicial notice of facts that

are either “(1) generally known within the territorial jurisdiction of the trial court; or (2)

capable of accurate and ready determination by resort to sources whose accuracy cannot

reasonably be questioned.” Fed. R. Evid. 201(b); see also Mullis v. U. S. Bankr. Court

for Dist. of Nevada, 828 F.2d 1385, 1388 n.9 (9th Cir. 1987).

Here, plaintiffs request that the Court consider (1) A corrected copy of Plaintiffs’

Prayer for Relief for the Second Amended Complaint; (2) The SAG-AFTRA

Constitution, effective October 11, 2019: (3) The SAG-AFTRA Health Plan Trust

Agreement, effective January 1, 2017: and (4) The 2022 Commercials Contract

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

Memorandum of Agreement between SAG-AFTRA and The Joint Policy Committee,

LLC, effective April 1, 2022. See RJN at 2.

The Court finds and concludes that plaintiffs’ request for judicial notice, which

SAG-AFTRA and the 501 Defendants do not oppose, is appropriate. The SAG-AFTRA

Constitution, the Trust Agreement of the SAG-AFTRA Health Plan, and the 2022

Commercials Contract Memorandum of Agreement are not reasonably subject to dispute.

See Fed. R. Evid. 201(b): see also Hendrix v. KTLA, LLC, No. CV 20-3520 DMG

(PJWx), 2021 WL 3051979, at *4 (C.D. Cal. Jan. 3, 2021) (“Courts have routinely taken

judicial notice of collective bargaining agreements when ruling on a motion to dismiss.”’).

Moreover, defendants do not dispute the authenticity of these documents. Accordingly,

the Court GRANTS plaintiffs’ request for judicial notice as to these documents.

Additionally, the Court will consider plaintiffs’ corrected Prayer for Relief for the Second

Amended Complaint in evaluating the instant motions to dismiss. While the Court takes

judicial notice of plaintiffs’ exhibits, it does not accept them for the truth of the matters

asserted therein. See Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001).

IV. LEGAL STANDARD

A. Rule 12(b)(6)

A motion pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal

sufficiency of the claims asserted in a complaint. Under 12(b)(6), a district court should

dismiss a claim if “there is a ‘lack of cognizable legal theory or the absence of sufficient

facts alleged under a cognizable legal theory.”” Conservation Force v. Salazar, 646 F.3d

1240, 1242 (9th Cir. 2011) (quoting Balisteri v. Pacifica Police Dep’t, 901 F.2d 696, 699

(9th Cir. 1988)). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does

not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds’ of

his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic

recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v.

Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted). “Factual allegations

must be enough to raise a right to relief above the speculative level.” Id. (internal

citations omitted).

In considering a 12(b)(6) motion, a court must accept as true all material

allegations in the complaint, and all reasonable inferences to be drawn from them. Pareto

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

v. FDIC, 139 F.3d 696, 699 (9th Cir. 1988). A court must read the complaint in the light

most favorable to the non-movant. Sprewell v. Golden State Warriors, 266 F.3d 979, 988

(9th Cir. 2001). However, “a court considering a motion to dismiss can choose to begin

by identifying pleadings that, because they are no more than conclusions, are not entitled

to the assumption of truth. While legal conclusions can provide the framework of a

complaint, they must be supported by factual allegations.” Ashcroft v. Iqbal, 556 U.S.

662, 679 (2009): see Moss v. United States Secret Service, 572 F.3d 962, 969 (9th Cir.

2009) (“[F]or a complaint to survive a motion to dismiss, the non-conclusory ‘factual

content,’ and reasonable inferences from that content, must be plausibly suggestive of a

claim entitling the plaintiff to relief.”). Ultimately, “[d]etermining whether a complaint

states a plausible claim for relief will . . . be a context-specific task that requires the

reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at

679.

Unless a court converts a 12(b)(6) motion into a motion for summary judgment,

the court cannot consider material outside of the complaint, such as facts presented in

briefs, affidavits, or discovery materials. In re American Cont’l Corp./Lincoln Sav. &

Loan Sec. Litig., 102 F.3d 1524, 1537 (9th Cir. 1996), rev’d on other grounds sub nom

Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998). However,

a court may consider exhibits submitted with or alleged in the complaint and matters that

may be judicially noticed pursuant to Federal Rule of Evidence 201. In re Silicon

Graphics Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999): Lee v. City of Los Angeles,

250 F.3d 668, 689 (9th Cir. 2001).

As a general rule, leave to amend a complaint which has been dismissed should be

granted freely. Fed. R. Civ. P. 15(a). However, the court may deny leave to amend when

it “determines that the allegation of other facts consistent with the challenged pleading

could not possibly cure the deficiency.” Schreiber Distrib. Co. v. Serv-Well Furniture

Co., 806 F.2d 1393, 1401 (9th Cir. 1986); see Lopez v. Smith, 203 F.3d 1122, 1127 (9th

Cir. 2000).

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

V. DISCUSSION

A. Plaintiffs’ Section 159(a) Claim

Plaintiffs’ second amended complaint asserts a claim for breach of the duty of fair

representation (“DFR”), in violation of 29 U.S.C. § 159(a), against defendant SAG-

AFTRA. SAC 9 137-144. SAG-AFTRA moves to dismiss plaintiffs’ DFR claim on the

grounds that (1) it is time-barred, and (2) that plaintiffs’ SAC fails to state a DFR claim.

See SAG MTD. SAG-AFTRA also argues that plaintiffs’ DFR claim should be

dismissed with prejudice.

1. Statute of Limitations

DFR claims are subject to a six-month statute of limitations. DelCostello v. Int’]

Bhd. of Teamsters, 462 U.S. 151, 172 (1983). The cause of action accrues “when the

plaintiff knew, or should have known, of the defendant’s wrongdoing and can

successfully maintain a suit in the district court.” Allen v. United Food & Commercial

Workers Int’] Union, 43 F.3d 424, 427 (9th Cir. 1994).

SAG-AFTRA notes that, in the order dismissing the FAC, the Court found that “at

the latest, plaintiff's [DFR] cause of action accrued on August 19, 2020, when the Union

admitted the Benefit [Amendments] had been in the works for two years.”. MTD Ord. at

13; see also SAG MTD at 16. Inits previous MTD order, the Court also rejected Fisher’s

argument that her Section 501 demand letter tolled her DFR claim. MTD Ord. at 13.

SAG-AFTRA contends that the SAC’s “new allegations do not alter the conclusion that

the DFR claim accrued at the latest in August 2020, nor do they establish any basis for

tolling.” SAG MTD at 16.

In particular, SAG-AFTRA argues that the SAC’s “new assertions that the Union’s

response to Fisher’s Section 501 Demand amounted to misconduct that should toll the

limitations period” do not provide any basis for equitable tolling because equitable tolling

“focuses on whether there was excusable delay by the plaintiff.” Id. at 19 (quoting

Johnson v. Henderson, 314 F.3d 409, 414 (9th Cir. 2002)). Additionally, SAG-AFTRA

argues that the discovery rule does not apply because plaintiffs ““kn[ew] or should [have

known| of the alleged breach of duty’” as soon as the Benefit Amendments were publicly

announced. SAG MTD at 20 (quoting Allen v. United Food & Commercial Workers

Int’] Union, 43 F.3d 424, 427 (9th Cir. 1994)). To the extent that plaintiffs argue that

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

SAG-AFTRA engaged in “obfuscation of misconduct and injury” that tolled the SOL,

SAC 4 43, SAG-AFTRA notes that the SAC acknowledges that “‘[s|hortly after the

announcement of the Benefit [Amendments], members were informed that the Health

Plan trustees had known of the Plan’s financial issues and the likelihood that benefits

would need to be cut for two years.” SAG MTD at 21 (quoting SAC 4] 58).

In opposition, plaintiffs argue that Fisher’s “pursuit of an intra-union remedy is

[ relevant to tolling the statute of limitations” on plaintiffs’ DFR claim because “[a] legal

requirement to seek an intra-union remedy is not required for tolling.” SAG Opp. at 9.

Plaintiffs emphasize that while Fisher’s Section 501 demand “did not expressly refer to a

DFR claim,” it “requested the Union and National Board . . . investigate and seek

accountability for the misconduct by Union representatives that is a basis for the DFR

claim.” Id. at 9-10. In sum, plaintiffs contend that the “Demand constituted a good faith

effort to address Plaintiff|s’| allegations of misconduct by Union representatives, which

substantially overlap with the basis for the Section 501 Claim, and therefore should|,] as

a matter of equity|.] toll the statute of limitations until February 5, 2021, when Plaintiff[s]

learned the attempt to resolve the matter within the Union was futile.” Id. at 11 (citing

SAC 4 104).

In reply, SAG-AFTRA reiterates that plaintiffs have not alleged any basis to toll

the statute of limitations. SAG Reply at 7-8. In particular, SAG-AFTRA contends that

tolling 1s not appropriate because a Section 501 demand is not a prerequisite to filing a

DER suit, and because a Section 501 demand could not have resulted in the relief that

plaintiffs seek on the DFR claim. Id. at 8-14. In sum, SAG-AFTRA argues that

“Plaintiffs still have not identified any decision holding that a union member’s demand

for their union to take action under Section 501 can toll the SOL for a DFR claim against

the union,” and that plaintiffs have not distinguished “the numerous Ninth Circuit cases

rejecting tolling arguments based on the alleged pursuit of “intraunion remedies’ that

were not a prerequisite for filing the DFR claim.” Id. at 14.

The Court again concludes that plaintiffs’ DFR claim is barred by the six-month

statute of limitations. At the latest, plaintiffs’ DFR cause of action accrued in August

2020, with the “sudden revelation of the dramatic changes to Union health coverage and

that certain Union representatives knew for years but hid from the membership the dire

and deteriorating funding condition of the Health Plan.” SAC 4 18. Accordingly, based

on the allegations in plaintiffs’ SAC, the statute of limitations on plaintiffs claim expired

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

at the end of February 2021. However, plaintiffs did not file the DFR claim until August

3, 2021.

Likewise, the Court again concludes that Fisher’s Section 501 demand does not

provide a basis for tolling the statute of limitations as to plaintiffs’ DFR claim. While

Fisher’s Demand was a statutory prerequisite to plaintiffs’ Section 501 claim, it fails to

toll the statute of limitations on plaintiffs’ DFR claim. This is because plaintiffs’ Section

501 claim is brought against individual Union officials, and seeks relief for harm to the

Union. Conversely, plaintiffs’ DFR claim is brought against the Union, for harm to the

members of the Union. Fisher’s Section 501 Demand cannot toll the statute of

limitations on plaintiffs’ DFR claim, because the Demand “could not result in the relief”

that plaintiffs seek on their DFR claim. Maurer v. Int’] Bhd. of Elec. Workers, Loc. 569,

AFL-CIO, 200 F. Supp. 3d 1052, 1061 (S.D. Cal. 2016). Moreover, equitable tolling of

DFR claims is “‘most appropriate when the plaintiff 1s required to avail himself of an

alternate course of action as a precondition to filing suit.’” Harris v. Alumax Mill Prod..

Inc., 897 F.2d 400, 404 (9th Cir. 1990)) (italics in Harris) (quoting Conley v. Int’] Bhd. of

Elec. Workers, Loc. 639, 810 F.2d 913, 915-16 (9th Cir. 1987)). No such requirement

was present here. See Galindo v. Stoody Co., 793 F.2d 1502, 1510 n.5. (9th Cir. 1986)

(“[R]esort to the grievance process should toll the limitations period only if the grievance

is related to the alleged breach of duty of fair representation” and “could result in the

relief sought be the employee.”).

Plaintiffs also argue that “[e|ven if the Court were to find that the announcement of

the Benefit [Amendments] provided a basis for the DFR claim, Plaintiffs’ allegations in

the [] SAC concerning the Union’s sham handling of the Demand provide a further basis

for the DFR claim and were not known to [] Fisher until February 5, 2021.” SAG Opp. at

11-12. However, despite this argument, plaintiffs acknowledge that they “do not assert a

separate DFR claim based on the Union’s sham handling of the allegations in the

Demand.” Id. at 12. Thus, plaintiffs acknowledge that the SAC provides no basis to

extend the accrual date on plaintiffs’ DFR claim beyond August 2020. Moreover, the

Court has already found that Fisher’s Section 501 Demand did not toll the statute of

limitations as to plaintiffs’ DFR claim.

In sum, plaintiffs cite no authority supporting the proposition that a Section 501

demand on a union tolls a DFR claim. Accordingly, pursuant to the allegations set forth

by plaintiffs in the SAC, plaintiffs’ DFR claim is time-barred.

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

2. Whether Plaintiff's Allegations State a DFR Claim

A union’s duty of fair representation, which “applies to all union activity,

including contract|] negotiation,” is breached where the union’s actions “are either

arbitrary, discriminatory, or in bad faith.” Air Line Pilots Ass’n, Int’] v. O’Neill, 499

U.S. 65, 67 (1991) (internal quotations omitted). “A union’s conduct can be classified as

arbitrary only when it is irrational, when it is without a rational basis or explanation.”

Marquez v. Screen Actors Guild, Inc., 525 U.S. 33, 46 (1998). “[A] union’s conduct

generally is not arbitrary when the union exercises its judgment. . . . If the challenged

conduct involves the union’s judgment, then the plaintiff] ] may prevail only if the union’s

conduct was discriminatory or in bad faith.” Demetris v. Transp. Workers Union of Am.,

AFL-CIO, 862 F.3d 799, 805 (9th Cir. 2017) (internal citations and quotation marks

omitted). To state a claim “that the union’s exercise of judgment was discriminatory,” a

plaintiff must allege “discrimination that is intentional, severe, and unrelated to legitimate

union objectives.” Beck v. United Food & Com. Workers Union, Loc. 99, 506 F.3d 874,

880 (9th Cir. 2007) (internal citation and quotation marks omitted). Finally, to state a

claim that “the union’s exercise of judgment was in bad faith,” the plaintiff must allege

“fraud, deceitful action or dishonest conduct.” Id, (internal citation and quotation marks

omitted). “Unions owe their members ‘complete good faith and honesty.’” Demetris,

862 F.3d at 808 (quoting United Bhd. of Carpenters and Joiners of Am. v. Metal Trades

Dep’t, AFL-CIO, 770 F.3d 846, 848 (9th Cir. 2014)). “Even so, mere negligence and

erroneous judgment calls cannot, by themselves, support an inference of bad faith.”

Demetris, 862 F.3d at 808.

To state a DFR claim “in a misrepresentation case—and thus in a nondisclosure

case—plaintiffs must demonstrate ‘a causal relationship between the alleged

misrepresentations and their injury.”” Ackley v. W. Conf. of Teamsters, 958 F.2d 1463,

1472 (9th Cir. 1992) (quoting Acri v. Int’] Ass’n of Machinists & Aerospace Workers,

781 F.2d 1393, 1397 (9th Cir. 1986)). “They must show that (1) absent the

misrepresentations, the outcome of the ratification vote would have been different; and

that (2) had it been different, the company would have acceded to the union’s demands.”

Ackley, 958 F.2d at 1472. The Ninth Circuit has stated that “|t]he Acri test for causality,

and particularly the second prong, is difficult to satisfy, and rightly so. Generally, the

union’s internal election and rulemaking processes are the proper vehicle, at least

initially, for addressing members’ complaints regarding the adequacy of union

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

representation during the bargaining process.” Id. (citing Acri, 781 F.2d at 1399-1400

(Reinhardt, J., concurring)).

In its prior order dismissing the DFR claim, the Court found that plaintiff had

failed to state a plausible DFR claim because plaintiff had not alleged facts demonstrating

that the Union’s challenged conduct was arbitrary, discriminatory, or in bad faith. MTD

Ord. at 16-17. The Court also found that plaintiff failed to meet the causation standard.

Id. at 17.

In its motion to dismiss, SAG-AFTRA argues that “Plaintiffs have not alleged any

new facts that should change or otherwise undermine the Court’s prior analysis.” SAG

MTD at 22. SAG-AFTRA contends that a Union “acts lawfully so long as its decisions

can rationally be found to promote the aggregate welfare of the unit,” and that “Plaintiffs’

conclusory assertions that the Union’s actions were irrational do not make it so, nor are

they sufficient under federal pleading standards.” Id. at 23-24. SAG-AFTRA also argues

that the SAC fails to adequately plead causation because “there are no allegations that the

Union’s membership would not have ratified the negotiated agreements absent the

alleged non-disclosures or that there were specific alternative proposals the Union could

have made that would have increased Health Plan funding sufficiently to avoid the need

for eligibility changes or benefit cuts.” See SAG MTD at 25-29. Moreover, SAG-

AFTRA claims the SAC does not adequately plead causation because the SAC fails to

allege that “the employers’ representatives would have agreed to |] an alternative

proposal, or that [| an alternative would not have required substantial concessions in

wages and other benefits that would [not] have been rejected by the majority of the Union

membership [that does] not participate in the Health Plan.” Id.

In opposition, plaintiffs argue that they have plausibly alleged a DFR claim in

connection with the “arbitrary” and “bad faith” prongs. See SAG Opp. at 13-16. With

respect to the arbitrary prong, plaintiffs contend that “the Union acted irrationally, or

without rational basis, in negotiating and approving members’ rights under the CBAs

without vitally material information concerning the health plan funding crisis.” Id. at 13.

Plaintiffs also argue that the cases cited by SAG-AFTRA under the arbitrary prong are

primarily summary judgment cases, and that “discovery is necessary before the Court can

assess Plaintiffs’ DFR claim, which is based on the concealment of material information

that undermined the Union’s decisions.” Id. at 13-14. With respect to bad faith,

plaintiffs contend that the SAC alleges that the Union “conspired to conceal vitally

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

material information concerning [the] Health Plan funding crisis while representing the

Union in three major CBA processes to obtain Health Plan funding,” and that the SAC

also alleges that “had the concealed information been disclosed during the CBA

processes, the health plan’s funding would have been an essential objective in the CBA

processes and greater Health Plan funding would have been achieved.” Id. at 14-15.

In reply, SAG-AFTRA argues that “the new allegations in the SAC related to the

substance of the DFR claim are conclusory, and do not allege any specific union conduct

to support the claim beyond what was alleged in the initial Complaint.” SAG Reply at

15. With respect to the arbitrary prong, SAG-AFTRA contends that “the SAC allegations

establish that the Union ‘exercised its judgment’ in negotiating the CBAs, which

precludes a finding of arbitrary conduct; and (2) the contract terms ultimately negotiated

by the Union, as alleged in the SAC, can rationally be found to promote the ‘aggregate

welfare’ of the entire bargaining unit under the deferential standard that applies to DFR

claims.” Id. (quoting Demetris, 862 F.3d at 805; Addington v. US Airline Pilots Ass’n,

791 F.3d 967, 984 (9th Cir. 2015)). With respect to plaintiffs’ argument that SAG-

AFTRA’s cites primarily to cases decided on summary judgment, SAG-AFTRA responds

that “courts in this Circuit commonly consider cases decided after summary judgment

where those cases establish the legal standard governing a plaintiffs claim that is at issue

in a motion to dismiss.” SAG Reply at 16. Additionally, SAG-AFTRA notes that “one

of the primary cases the Union cited in addressing the issue of arbitrary conduct was

indeed decided on a motion to dismiss.” Id. (citing Demetris, 862 F.3d at 809). With

respect to the bad faith prong, SAG-AFTRA reiterates that plaintiffs must allege that the

“misrepresentations were material, which requires showing that the outcome of the

negotiations would likely have been materially different if the information in question

had been disclosed.” SAG Reply at 19. SAG-AFTRA adds that “Plaintiffs cannot meet

this [causation] standard because they have not alleged facts indicating that the Union

could have negotiated sufficient Plan contribution increases that would have avoided the

health benefit cuts.” Id.

The Court again finds that plaintiffs’ complaint fails to state a plausible DFR

claim. Plaintiffs argue that they have plausibly alleged a DFR claim on the basis of the

“arbitrary” and “bad faith” prongs. See SAG Opp. at 13-16. However, with respect to

the arbitrary prong, “a union’s conduct generally is not arbitrary when the union exercises

its judgment.” Demetris, 862 F.3d at 805. While the Benefit Amendments, and the

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

outcome of the CBAs, may have benefited some at the expense of others, “a winners-and-

losers compromise does not mean that the union has violated its duty of fair

representation,” Addington v. US Airline Pilots Ass’n, 791 F.3d 967, 983 (9th Cir. 2015),

and the plaintiffs’ allegations fail to suggest that the Union’s actions were “wholly

irrational,” Demetris, 862 F.3d at 805.

Plaintiffs also argue that SAG-AFTRA’s concealment of material information was

arbitrary, and undermined the Union’s decision-making processes. See SAG Opp. at 13-

14. However, as noted above, with respect to DFR claims related to misrepresentation

and nondisclosure, a plaintiff must allege that “(1) absent the misrepresentations, the

outcome of the ratification vote would have been different; and that (2) had it been

different, the company would have acceded to the union’s demands.” Ackley, 958 F.2d

at 1472. In the SAC, plaintiffs only allege that “had the membership known the CBAs

would doom the Union health coverage for thousands of members and their families prior

to the membership ratification voting, the ballot process and debate would undoubtedly

have been materially different.” SAC § 77 (emphasis added). Ultimately, plaintiffs’

DFR claim is doomed by plaintiffs’ failure to allege that, absent the nondisclosures, the

outcome of the CBA negotiation processes would have been different. See Acri, 781

F.2d at 1397.

With respect to the “bad faith” prong, plaintiffs argue that “|t]he SAC alleges that

Union representatives conspired to conceal vitally material information concerning

Health Plan funding crisis while representing the Union in three major CBA processes to

obtain Health Plan funding.” SAG Opp. at 14-15. However, once again, plaintiffs

cannot overcome the causation requirement, as the SAC only alleges that “approval

processes would have been different,” SAC § 76, if concerns regarding the Health Plan’s

funding would have been disclosed prior to the CBA negotiation and ratification

processes. In sum, the Court concludes that plaintiffs’ DFR claim fails to plead

allegations that meet the relevant causation standard.

B. Plaintiffs’ Section 501(a) Claim

“Section 501 sets out the fiduciary responsibilities of labor organization officers

and provides a cause of action against officers who breach these obligations.” Cowger v.

Rohrbach, 868 F.2d 1064, 1065-66 (9th Cir. 1989). “Under section 501(a), officers of a

labor organization occupy positions of trust in relation to the organization and its

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

members, and have a duty to hold its money and property solely for the benefit of the

organization.” Id. at 1066. In turn, “Section 501(b) gives individual members of a labor

organization the right to sue any officer who violates these fiduciary duties.” Id.

“Section 501(b) makes it clear that relief granted under Section 501 is for the benefit of

the real party in interest, the union whose officers are charged with dereliction.” O’Hara

v. Teamsters Union Loc. No. 856, 151 F.3d 1152, 1161 (9th Cir. 1998) (internal citations

and quotation marks omitted). “[S]tatutes extending federal jurisdiction, such as Section

501(b), are narrowly construed so as not to reach beyond the limits intended by

Congress.” Phillips v. Osborne, 403 F.2d 826, 828 (9th Cir. 1968).

A Section 501 breach of fiduciary duty claim may be brought “to recover . . . relief

for the benefit of the labor organization.” 29 U.S.C. § 501(b). “The real beneficiaries of

a successful Section 501 action are the union and its entire membership.” Kerr v. Shanks,

466 F.2d 1271, 1277 (9th Cir. 1972). “Often, if a union official’s act has been authorized

by constitution, bylaw, resolution, or by a vote of the membership, liability under

[Section] 501 attaches only if: (1) the officer benefitted personally from the act: or (2) the

act is patently unreasonable or taken in bad faith.” Servs. Emps. Int’] Union v. Nat'l

Union of Healthcare Workers, 718 F.3d 1036, 1049 (9th Cir. 2013).

Plaintiffs’ Section 501 claim appears to be premised upon the 501 Defendants’

failure to disclose the SAG-AFTRA Health Fund’s financial status during the negotiation

and ratification of the relevant CBAs, and their failure to negotiate CBAs that would have

provided sufficient funding to the Health Fund to avoid the Benefit Amendments. SAC §

147. Plaintiffs allege that “had the hidden information been disclosed to the other

representatives and the membership, additional Health Plan funding would have been an

essential objective through [the] many means available, and the National Board and

membership approval processes would have been different materially.” Id. Additionally,

plaintiffs’ Section 501 claim challenges the Carteris, White and Crabtree-Ireland’s use of

their positions to support and defend the Benefit Amendments, and in doing so, to

allegedly advance their personal interests. Id. § 151.

In dismissing the FAC, the Court found that the FAC failed to state a Section 501

claim because the claim arising from the alleged nondisclosures sought “to recover for

harm to a subset of Union members, rather than for any harm to the Union” as a whole.

MTD Ord. at 24. The Court also found that the FAC failed to allege that “any provisions

of the Union constitution were violated by the CBA negotiation processes, by the

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

outcome of the CBAs, or by the failure to disclose the coming Benefit Amendments.” Id.

at 24-25.

In their motion, the 501 Defendants argue that while “Section 501(b) authorizes

suits “to recover . . . relief for the benefit of the labor organization,’” 29 U.S.C. § 501(b),

plaintiffs’ Section 501 claim still does not allege harm to the Union, and seeks to recover

for alleged harm to a subset of Union members. 501 MTD at 12. The 501 Defendants

point out that Health Plan participants make up only 20% of the members represented by

the Union. Id. at 13-14 (citing SAC § 9-11, 71, 112). Additionally, the 501 Defendants

argue that plaintiffs still have not alleged that any nghts provided under the Union

Constitution were violated. 501 MTD at 17. With respect to the challenged Union

communications allegedly made by Carteris, White, and Crabtree-Ireland, the 501

Defendants contend the SAC fails to state a Section 501 claim based on these

communications because “union officials are lawfully permitted to benefit indirectly from

expenditures of union funds, so long as the expenditures were authorized by and for the

benefit of the union,” and because “even direct benefits to union officials are permissible

unless the expenditures are ‘manifestly unreasonable.’” Id. at 23 (quoting Carpenters

Loc. Union 721 v. Limon, No. CV 18-8470 DSF (MRWx), 2020 WL 3124222, at *7

(C.D. Cal. Apr. 23, 2020). Additionally, the 501 Defendants argue that, despite

plaintiffs’ allegations in the SAC related to CWS, Section 501 permits dual

representation of the Union and its officers. 501 MTD at 25.

In opposition, plaintiffs argue that they do not seek to recover for harm to a subset

of Union members because “[t]he Union health benefit is available to all members,

[because] the CBAs fund the Health Plan with employer contributions on behalf of all

members,” and because “[t]he Health Plan funding provisions are enforceable monetary

interests of the Union.” 501 Opp. at 18-19. Accordingly, plaintiffs argue that “the SAC

alleges harm to the significant monetary interest of the Union.” Id. at 19. Moreover,

plaintiffs argue that the SAC’s allegations go above and beyond those in the FAC in that

“the SAC alleges that the results of the CBA processes would have been different and

obtained greater funding through one or more available means had the concealed

information regarding a crisis facing an important Union benefit been disclosed.” Id. at

21. Plaintiffs add that “[t|he lost opportunity to address the funding crisis harmed the

Union and membership as a whole.” Id, at 22 (emphasis added).

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

Plaintiffs also argue that “[b]Jad faith conduct violates Section 501,” and that

defendant White, in an April 2020 communication to members, “continued the dishonest

conspiracy of silence to conceal the funding crisis and imminent benefit changes in bad

faith against the interest of the members.” Id. at 18, 23 (citing SEIU v. Nat’] Union of

Healthcare Workers, 711 F.3d 970, 983 (9th Cir. 2013)). Additionally, plaintiffs contend

that Carteris, White and Crabtree-Ireland are subject to Section 501 liability because they

“used their Union leadership positions and Union assets to benefit themselves and against

the interest of the Union.” 501 Opp. at 25.° Plaintiffs do not argue that these activities

were manifestly unreasonable. Id. at 26. Rather, they claim that they are not required to

allege manifest unreasonableness given that “Plaintiffs allege the actions which cost the

Union were for the very purpose of benefiting Defendants personally and were against

the Union’s interest.” Id. (citing Teamsters Joint Council No. 42 v. Int’] Bhd. of

Teamsters, AFL-CIO, 82 F.3d 303, 306 (9th Cir. 1996)). Defendants also argue that the

fact that courts have permitted dual representation at the pleading stage “does not address

much less support dismissal of Plaintiffs’ Section 501 Claim concerning the Defendants’

engagement of CWS to represent and advise the Union and National Board on the Fisher

Demand” because “[t]he SAC alleges the engagement of disabled counsel to advise the

Union and National Board was intentional to protect and advance Defendants’ personal

interests against the interest of the Union.” 501 Opp. at 27-29.

In reply, the 501 Defendants reiterate that “[e]ven as amended, Plaintiffs’ Section

501 claim based on nondisclosures during collective bargaining still fails to allege any

harm to the Union . . . [and still] fail[s] to identify any violation of a right guaranteed by

the Union constitution.” 501 Reply at 6. The 501 Defendants add that “Plaintiffs’ SAC

still fails to allege that the bargaining outcomes would have been different if the Health

Fund information had been disclosed.” Id. With respect to plaintiffs’ argument that the

Health Plan is a significant monetary interest of the Union, the 501 Defendants assert that

“the law is crystal clear that employer contributions to a separate benefits fund are not

union property, and thus not a basis for a Section 501 claim,” and that “the SAG-AFTRA

° With respect to Carteris, plaintiffs argue that her personal interest was “in defending her

boasts of leadership and achievement in the CBAs.” 501 Opp. at 26 (citing SAC 4 91,

99, 104). With respect to White and Crabtree-Ireland, according to plaintiffs, their

personal interest was that they “had been sued for personal liability as [] Health Plan

Trustee[s] in Asner.” 501 Opp. at 26

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

Health Fund’s governing statute and document confirm that employer contributions made

pursuant to a CBA are held by the independently-governed Health Fund (not the Union)

in trust for the benefit of Health Plan participants (not the Union).” Id. at 14-15 (citing

Hearn v. McKay, 603 F.3d 897, 902 (11th Cir. 2010)). With respect to the nondisclosure

claim against White, the 501 Defendants argue that plaintiffs fail to allege that White’s

nondisclosures harmed the Union. 501 Reply at 21. With respect to plaintiffs’ claim

against Carteris, White, and Crabtree-Ireland, the 501 Defendants contend that “the SAC

still fails to identify any personal benefit to the three Union officials at issue,” and that

“the SAC does not even attempt to remedy the defect identified by the Court that

Plaintiffs failed to show the expenses were ‘manifestly unreasonable.’” Id. at 7 (citing

MTD Ord. at 25-26). Finally, the 501 Defendants reiterate their argument that Section

501 permits dual representation of the Union and its officers through the pleadings stage.

501 Reply at 27-29.

The Court finds that plaintiffs’ SAC fails to state a Section 501 claim based on

defendants’ nondisclosures because plaintiffs’ nondisclosure claim seeks to recover for

harm to a subset of Union members, rather than for any harm to the Union. See Phillips,

403 F.2d at 832 (“In requesting direct relief for certain union members only and not ‘for

the benefit of the labor organization,’ Phillips disqualified himself from proceeding under

Section 501.”): see also Nellis v. Air Line Pilots Ass’n, 815 F.Supp.1522, 1542 (E.D. Va.

1993) (“[S]ection 501 requires a showing that the union itself suffered harm. As long as

a union leadership remains in compliance with the union’s internal policies, then the

union itself suffers no harm, even if subgroups within the union are disadvantaged.”).

Although plaintiffs argue that, unlike the FAC, the SAC “alleges that

Defendants|’| . . . bad faith conduct harmed a significant monetary interest of the Union

in Health Plan funding under the CBAs,” 501 Opp. at 21, the Health Plan is a “distinct

legal entity separate from the union,” and is “controlled exclusively by the trustees for the

benefit of the plan participants and beneficiaries.” Hearn, 603 F.3d at 902; see also Dkt.

27 at Ex. 2 (SAG-AFTRA Health Fund Trust Agreement).

Additionally, while plaintiffs allege that they were deprived of “a fully informed

collective bargaining process in accordance with the Constitution,” SAC § 100, plaintiffs

fail to allege that any specific provisions of the Union Constitution were violated by the

relevant CBA negotiation processes, by the outcome of the CBAs, or by the failure to

disclose the coming Benefit Amendments. See Ackley, 958 F.2d at 1476 (“[I|t is the

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

breach of the union’s internal rules that must serve as the basis for any complaint that

insufficient information was provided to the membership prior to or at the time of

ratification of a contract.) (addressing LMRDA Section 101(a) claim); see also Stelling

v. International Brotherhood of Electrical Workers Loc. Union No. 1547, 587 F.2d 1379,

1387 (9th Cir. 1978) (“The allegation that appellees have denied the membership of the

union the constitutionally guaranteed right to vote is a sufficient assertion of a breach of

trust on the part of the appellees to invoke the jurisdiction of [Section] 501.”) (emphasis

added). In sum, the Court finds that dismissal of plaintiffs’ Section 501 nondisclosure

claim is appropriate.

With respect to plaintiffs’ argument that Carteris, White, and Crabtree-Ireland

breached their fiduciary duties under Section 501 because they “used their Union

leadership positions and Union assets to benefit themselves and against the interest of the

Union,” 501 Opp. at 25, as noted previously, “if a union official’s act has been authorized

by constitution, bylaw, resolution, or by a vote of the membership, liability under § 501

attaches only if: (1) the officer benefitted personally from the act; or (2) the act is patently

unreasonable or taken in bad faith.” Servs. Emps. Int’] Union, 718 F.3d at 1049.

Moreover, “|b]ad faith can be found on evidence that union officials acted contrary to the

[Union’s] best interest, out of self-interest, or in an unconscionable or outrageous way.”

Teamsters Joint Council No. 42 v. Int’] Bhd. of Teamsters, AFL-CIO, 82 F.3d 303, 306

(9th Cir. 1996).

Plaintiffs’ argument that Carteris, White, and Crabtree-Ireland are subject to

Section 501 liability is premised on the SAC’s allegations that Carteris, White and

Crabtree-Ireland personally benefitted from certain communications made in support of

the Benefit Amendments after they were enacted, and allegations that they personally

benefitted from the hiring of CWS to advise the Union regarding Fisher’s Section 501

demand given that “CWS was already defending the Health Plan trustees including White

and Crabtree-Ireland in Asner.” SAC § 151.

In its order dismissing the FAC, the Court found that plaintiffs’ claim relating to

the alleged use by Carteris, White, and Crabtree-Ireland of their Union positions to

benefit themselves “fail[ed] to identify how Carteris, White, and Crabtree-Ireland

personally benefitted.” MTD Ord. at 25. In the SAC, plaintiffs allege, inter alia, that

“Carteris, White and Crabtree-Ireland had material special personal interests in defending

the CBAs and actions of the Health Plan trustees in representing the Union and

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

membership in the CBAs and having hidden vitally crucial information for years while

plotting an ambush with the draconian Benefit [Amendments].” SAC 491. Additionally,

plaintiffs’ opposition brief explains that Carteris’ personal interest was “defending her

boasts of leadership and achievement in the CBAs,” and that White and Crabtree-

Ireland’s personal interest was that they “had been sued for personal liability as a Health

Plan Trustee in Asner.” 501 Opp. at 26.

Despite plaintiffs’ additional allegations and arguments on the SAC, the Court

finds that the purported personal benefits that accrued to Carteris, White, and Crabtree-

Ireland as a result of the challenged communications and the engagement of CWS are

insufficient to state a Section 501 claim premised on bad faith.° Plaintiffs do not allege

that Carteris, White, or Crabtree-Ireland received any personal financial benefit from the

Union communications or the engagement of CWS, and are unable to point to a case that

finding personal benefits of the type alleged in the SAC (which plaintiffs also refer to as

actions against the Union’s interest) are sufficient to state a Section 501 claim. With

respect to the challenged communications, the SAC makes clear that those

communications were approved by the Union’s National Board. See SAC § 88. Any

benefit that accrued to Carteris, White, and Crabtree-Ireland as a result of those

communications was indirect and incidental. Moreover, as the Court has previously

noted with respect to the engagement of CWS, “dual representation of the union and

union officials [is] permissible at the early stages of [] litigation.” Doe #1 v. Am. Fed’n

of Gov’t Emps., No. CV 20-1558 (JDB), 2021 WL 3550996, at *4 (D.D.C. Aug. 11,

2021) (stating that “the Court is not aware of |] any case involving breach-of-fiduciary-

duty claims where dual representation of a union and the union’s officials was prohibited

before or at the motion-to-dismiss stage”’).

Even if plaintiffs’ allegations stated a personal benefit that was cognizable in the

context of a Section 501 claim, “[a]uthorized conduct may violate section 501 if (a) the

officer personally benefitted from the expenditure and (b) the expenditure was manifestly

unreasonable.” Carpenters Loc. Union 721 v. Limon, No. CV 18-8470 DSF (MRWx),

2020 WL 3124222, at *7 (C.D. Cal. Apr. 23, 2020). However, neither the dissemination

° Tn the context of a duty of fair representation claim against a union, the Ninth Circuit

has stated that bad faith requires “fraud, deceitful action or dishonest conduct.” Beck v.

United Food & Com. Workers Union, Loc. 99, 506 F.3d 874, 880 (9th Cir. 2007).

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

of approved communications for the stated purpose of “ensur[ing] that members are not

deceived by misrepresentations,” SAC § 88, nor the engagement of CWS to address

Fisher’s Demand represent “manifestly unreasonable” expenditures.

For the aforementioned reasons, the Court concludes that plaintiffs’ SAC fails to

state a Section 501 claim against the 501 Defendants.

C. Leave to Amend

“Generally, the Ninth Circuit has a liberal policy favoring amendments, and thus,

leave to amend should be freely granted.” Winebarger v. Pennsylvania Higher Educ.

Assistance Agency, 411 F. Supp. 3d 1070, 1082 (C.D. Cal. 2019): see also Fed. R. Civ.

P. 15(a). However, leave to amend may be denied when “the court determines that the

allegation of other facts consistent with the challenged pleading could not possibly cure

the deficiency.” Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401

(9th Cir. 1986). Additionally, leave to amend is properly denied where “amendment

would be futile.” Carrico v. City & Cty. of San Francisco, 656 F.3d 1002, 1008 (9th Cir.

2011).

With respect to plaintiffs’ DFR claim, SAG-AFTRA argues that amendment is

futile because plaintiffs have failed to meet the applicable standards for DFR claims

“over three complaints,” and because the SAC’s allegations “once again show that the

[DFR] claim is unquestionably time barred.” SAG MTD at 29-30. With respect to

plaintiffs’ Section 501 claim, the 501 Defendants argue that “leave to amend would be

futile” because plaintiffs’ SAC “failed to remedy the defects in their Section 501 claim

identified in the Court’s order dismissing the FAC, and they are plainly unable to allege

facts that would do so.” 501 MTD at 28.

Plaintiffs did not submit any argument regarding leave to amend in their

oppositions.

With respect to plaintiffs’ DFR claim, the Court finds that amendment would be

futile, as plaintiffs’ have been unable in successive complaints to allege facts that meet

the causation standard or overcome the six-month statute of limitations. Likewise,

plaintiffs have been unable to state a cognizable Section 501 claim in successive

complaints, and plaintiffs—in their briefing and in oral argument—did not proffer any

further allegations that they could plead that would suggest, for example, that the 501

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘0’ JS-6

Case No. 2:21-cv-05215-CAS-JEMx Date July 27, 2022

Title FRANCES FISHER V. SCREEN ACTORS GUILD AMERICAN

FEDERATION OF TELEVISION AND RADIO ARTISTS ET AL.

Defendants’ nondisclosures harmed the Union as a whole, or that Carteris, White, or

Crabtree-Ireland received any personal benefits as a result of their challenged actions that

could sustain a Section 501 claim.

VI. CONCLUSION

In accordance with the foregoing, the Court DISMISSES plaintiffs’ second

amended complaint WITH PREJUDICE.

IT IS SO ORDERED.

00 : 00

Initials of Preparer CMJ

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