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Callaway Golf Co. v. Screen Actors Guild

March 26, 2008

CALLAWAY GOLF COMPANY AND DAILEY & ASSOCIATES, PLAINTIFF,
v.
SCREEN ACTORS GUILD, INC., SCREEN ACTORS PENSION PLAN SCREEN ACTORS HEALTH PLAN, DEFENDANTS.



The opinion of the court was delivered by: Honorable Larry Alan Burns United States District Judge

JUDGMENT ON THE PLEADINGS; ORDER DENYING MOTION FOR ORDER DENYING LEAVE TO FILE AMENDED COMPLAINT; AND ORDER DENYING EX PARTE APPLICATION TO STAY TRUSTEES OF THE PROCEEDINGS GUILD - PRODUCTIONS AND TRUSTEES OF THE GUILD -- [Docket. Nos. 21, 51, 64] PRODUCERS

Currently pending are three related motions: a motion by certain of the Defendants for judgment on the pleadings ("MJP"), Plaintiffs' motion for leave to file an amended complaint ("Motion to Amend"), and certain Defendants' ex parte application to stay proceedings in light of Trustees of the Screen Actors Guild-Producers Pension and Health Plans v. NYCA, Inc., Case no. 07cv56867, currently pending before the Ninth Circuit ("Motion to Stay").

I. Motion to Stay

Defendants and Counter-Claimants Trustees of the Screen Actors Guild-Producers Pension Plan, and Trustees of the Screen Actors Guild-Producers Health Plan (collectively "Trustees") filed this ex parte application, arguing staying this action will result in judicial economy. Plaintiffs oppose the Motion to Stay. Although staying this action may serve the interests of judicial economy, the Court is also mindful of the need to adjudicate matters in a reasonably timely manner. See Fed. R. Civ. P. 1. Acknowledging the Ninth Circuit's decision might require modification of this Court's decision or obviate the need for further proceedings, the Court is persuaded the better course is to rule on these related motions now in light of existing precedential authority.

In their opposition to the Motion to Stay, Plaintiffs request oral argument on this issue and request sanctions because they believe Trustees' decision to seek ex parte relief was inappropriate. Because of the pending MJP and Motion to Amend, both of which were fully briefed and ready for decision, seeking ex parte relief on the limited issue of a stay rather than filing a noticed motion resulted in a considerable savings of time. Besides, the Motion to Stay is being denied, so Plaintiffs' request for oral argument is moot.

II. Motion for Judgment on the Pleadings

Trustees moved, pursuant to Fed. R. Civ. P. 12(c) for judgment on the pleadings on Plaintiffs' first claim for relief. Defendant Screen Actors Guild, Inc. ("SAG") did not join in this motion. Specifically, Plaintiffs have sought declaratory relief stating they are not liable under the Labor Management Relations Act (LMRA) or Employee Retirement Income Security Act (ERISA) for contributions to the two plans administered by the Trustees (collectively, the "Plans"), because the professional golfers who provide paid endorsements for Plaintiffs are independent contractors. (Compl. at 7:20--9:15.) Trustees argue this issue is moot, because whether the professional golfers are employees or independent contractors does not affect Plaintiffs' responsibility for contributing to the Plans. (MJP at 1:17--2:15.)

A. Factual Background

The facts, except where noted, are taken from the allegations in the Complaint, and Trustees do not contest them for purposes of this motion. Plaintiff Callaway Golf ("Callaway") entered into endorsement contracts (the "Endorsement Agreements") with certain professional golfers (the "Golf Professionals") to endorse Callaway's golf equipment. The Golf Professionals agreed to use Callaway's equipment, to wear Callaway's logo while playing in golf tournaments, to make personal appearances at events, and to promote Callaway's products in both print and broadcast media, including television commercials if requested. The Endorsement Agreements provide that the Golf Professionals are independent contractors. Trustees are not parties to the Endorsement Agreements.

Plaintiff Dailey & Associates ("Dailey") entered into agreements with Callaway for advertising services, and pursuant to these agreements, created television commercials. Dailey also entered into a contract (the "Golf Professionals Agreement") directly with the Golf Professionals to appear in the television commercials. Neither Callaway nor Trustees are parties to the Golf Professionals Agreement.

SAG has entered into a collective bargaining agreement ("Commercials Contract") with certain advertising agencies, including Dailey. Both the Endorsement Agreements and the Commercials Agreement refer to fees at the minimum SAG rate. The Commercials Contract was modified twice from its 1997 version, in 2000 and again in 2003. While Callaway was not a party to the Commercials Contract, Callaway reimbursed Dailey for payments made pursuant to the Commercials Contract, believing it was obligated to do so.

Plaintiffs' first claim, which is the subject of the MJP, is for declaratory relief that the Plaintiffs have no liability for contributions to the Plans because the Golf Professionals are independent contractors, and such contributions are prohibited under the LMRA and not required by ERISA.

B. Legal Standards

"Judgment on the pleadings is proper when the moving party clearly establishes on the face of the pleadings that no material issue of fact remains to be resolved and that it is entitled to judgment as a matter of law." Hal Roach Studios, Inc. v. Richard Feiner and Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1990) (citation omitted). Under Fed. R. Civ. P. 12(c), if matters outside the pleadings are presented and not excluded by the Court, the motion is treated as one for summary judgment under Rule 56. In addition to pleaded facts, the Court may also consider documents attached to the complaint or referred to in the complaint if its authenticity is not questioned, without converting the motion to a Rule 56 motion. Stone v. Writer's Guild of America West, Inc., 101 F.3d 1312, 1313--14 (9th Cir. 1996). Determination of whether the provisions of a contract are "clear and unambiguous,"

and interpretation of provisions deemed "clear and unambiguous," are questions of law, allowing summary judgment. See United Sates v. Sacramento Mun. Util. Dist., 652 F.2d 1341, 1343--44 (9th Cir. 1981). However, if the Court determines that the contractual language is unclear, even summary judgment is inappropriate, because "differing views of the intent of the parties will raise genuine issues of material fact." Id. Not every potential controversy renders contractual language ambiguous, but only genuine ambiguities that could reasonably be interpreted in more than one way. See United States v. Dahan, 369 F. Supp.2d 1187, 1190 (holding that mere disagreement about a contract's meaning does not mean the contract is ambiguous, but that a contract is ...


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