Professional Documents
Culture Documents
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7 NU IMAGE, INC.
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11 corporation,
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Plaintiff,
v.
14 INTERNATIONAL ALLIANCE OF
17 CIO, CLC,
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Defendant.
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PARTIES
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1.
2.
5 Theatrical Stage Employees, Moving Picture Technicians, Artists and Allied Crafts
6 of the United States, Its Territories and Canada, AFL-CIO, CLC (IATSE) is an
7 unincorporated labor organization with its principal place of business in New York,
8 New York.
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3.
This Court has jurisdiction over the subject matter of this action
11 pursuant to Section 301(a) of the Labor Management Relations Act (LMRA) [29
12 U.S.C. 185(a)]. This action arises from IATSEs representations to Nu Image that
13 if Nu Image entered into a collective bargaining agreement (CBA) with IATSE,
14 Nu Image would not be obligated to pay Residual Contributions as provided in the
15 Producer-IATSE and MPTAAC Basic Agreement (Basic Agreement). IATSE
16 made these representations with the intention of inducing Nu Image into entering
17 into a CBA, and Nu Image reasonably relied on those representations. Nevertheless,
18 the Motion Picture Industry Health and Pension Plans (Plans) have claimed, and
19 IATSE now claims, that Nu Image breached the CBA that it entered into in 2006 by
20 failing to pay Residual Contributions, which has caused substantial damage to Nu
21 Image.
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4.
This Court has jurisdiction over IATSE, without regard to the amount
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26 a substantial part of the events or omissions giving rise to the claims asserted herein
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SUMMARY
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6.
7.
11 for years. In April 2006, Nu Image and IATSE entered into negotiations for a CBA
12 that would apply to all Nu Image productions.
8.
18 Contributions to the Plans. Then, in May 2013, the Plans sued Nu Image to collect
19 delinquent Residual Contributions under the CBA. Due to federal labor law,
20 which prohibits an employer from asserting fraud in the inducement as a defense in
21 actions brought by employee welfare or pension benefit plans, Nu Image had limited
22 defenses to the claims brought by the Plans. Accordingly, Nu Image settled with the
23 Plans and is now suing IATSE in this action to recover the amounts it paid to the
24 Plans, as well as for other damages resulting from their misrepresentations, and for
25 declaratory relief.
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GENERAL ALLEGATIONS
Background On IATSE
9.
Generally, when an
5 employer agrees to enter into a CBA with IATSE, the employer agrees to be bound
6 by the terms of the Basic Agreement, which is the standard agreement negotiated by
7 IATSE and major motion picture production studios.
However, independent
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12.
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21 administration of the Plans. If the Directors believe that an employer has failed to
22 make proper contributions, the Directors have authority to file a lawsuit to recover
23 unpaid contributions.
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1
The Residual Contribution provisions in the 2006 Basic Agreement are set
forth in Article XIX (Post 60 Theatrical Motion Pictures) and Article XXVIII
27 (Supplemental Markets).
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Prior to 2006, Nu Image and IATSE had not agreed to an overall CBA
As a result,
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14 Basic Agreement and related Trust Agreements, and accordingly, the Basic
15 Agreements Residual Contribution provisions.
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2 Nu Image made it abundantly clear that it would not agree to an Overall CBA if it
3 were required to remit Residual Contribution payments to the Plans. On at least two
4 occasions, IATSE assured Nu Image that it would not have to make such
5 contributions.
19.
8 Short (CFO) and John Thompson (Head of Production) met with IATSEs Matthew
9 Loeb and Michael Miller, Jr., at Solleys Deli in Sherman Oaks, California. At that
10 time, Loeb was an IATSE Vice President and soon-to-be Director of the Plans, and
11 Miller was an IATSE Vice President and Director of the Plans. Loeb later became
12 IATSEs International President.
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At the April 19, 2006 meeting, Short (Trevor) and Lerner explained
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22.
At the April 19, 2006 meeting, Miller also stated that Nu Image would
2 not be liable for Residual Contributions under the Overall CBA. Nor did Miller
3 object to or contradict Loebs representations at this meeting.
23.
Neither Loeb nor Miller stated that they lacked authority to make these
5 representations on behalf of IATSE and the Plans. Indeed, to the contrary, their
6 presence at the meeting led Nu Image to reasonably believe that Loeb and Miller
7 had authority to make the representations described above.
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Shortly after the Solleys meeting, IATSE and Nu Image met again to
9 discuss the Overall CBA, again in Sherman Oaks, California. At this meeting,
10 Lerner and Short (Trevor) met with IATSEs International President and Director of
11 the Plans, Thomas Short. Short (Thomas) confirmed to Short (Trevor) and Lerner
12 that Nu Image would not be asked to pay Residual Contributions under the Overall
13 CBA. As Loeb had stated at the Solleys Deli meeting, Short (Thomas) referenced
14 the Single-Production CBAs with Nu Image and noted that Nu Image had not paid
15 and did not have to pay Residual Contributions. Short (Thomas) further represented
16 that, like other independent producers, Nu Image would not have to pay Residual
17 Contributions in the future in connection with the Overall CBA.
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21 have to pay Residual Contributions in the future, Nu Image agreed to enter into an
22 Overall CBA, which purports to incorporate the Basic Agreements Residual
23 Contribution provisions.2
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10 and 2009, Nu Image did not pay any Residual Contributions. Further, during that
11 time frame, neither IATSE nor the Plans took the position that Nu Image was
12 obligated to remit Residual Contributions to the Plans.
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Nu Image Is Damaged By
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18 the Plans for breach of the Overall CBA, asserting that, among other things, Nu
19 Image violated ERISA Section 515, 29 U.S.C. 1145, by failing to make Residual
20 Contributions to the Plans. In the lawsuit, the Directors claimed that Nu Image
21 owed the Plans Residual Contributions for the period May 1, 2006 through
22 December 31, 2010.
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24 Directors that Nu Image was not required to pay Residual Contributions under the
25 Overall CBA and that the Plans demand for such payments was erroneous. On
26 October 2, 2013, IATSE denied that any oral representations had been made and
27 refused to correct the Plans misunderstanding of the basis on which Nu Image
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2 described above.
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4 into a confidential settlement agreement regarding the May 13, 2013 lawsuit.
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8 essentially the same claims as those asserted in the first lawsuit but for the time
9 period January 1, 2011 through December 31, 2014.
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14 time of trial, but Nu Image estimates that its damages will total in excess of five
15 million dollars.
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(Intentional Misrepresentation)
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20 Paragraphs 1-34.
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22 represented to Nu Image that: (a) the Residual Contribution provisions of the Basic
23 Agreement are not applied to independent producers; and (b) the Residual
24 Contribution provisions of the Basic Agreement would not apply to Nu Image if Nu
25 Image entered into an Overall CBA with IATSE.
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IATSE either knew its representations were false when they were made
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5 other things, agreeing to the Overall CBA and producing motion pictures under the
6 Overall CBA. If Nu Image had known it would have to pay Residual Contributions,
7 it would not have agreed to the Overall CBA or it would have produced these
8 motion pictures in locations outside the reach of the Overall CBA.
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14 maliciously, unconscionably and with wanton disregard for the rights of Nu Image,
15 and was engaged in for the purpose of benefitting IATSE and injuring Nu Image,
16 which has subjected Nu Image to cruel and unjust hardship, and was performed with
17 such malice so as to justify an award of exemplary or punitive damages in an
18 amount according to proof at trial.
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(Negligent Misrepresentation)
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22 Paragraphs 1-34.
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24 and specifically above in Paragraphs 3 and 1924, were not made intentionally to
25 deceive Nu Image, then IATSE had no reasonable grounds for believing that its
26 representations were true when made.
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2 other things, agreeing to the Overall CBA and producing motion pictures under the
3 Overall CBA. If Nu Image had known it would have to pay Residual Contributions,
4 it would not have agreed to the Overall CBA or it would have produced these
5 motion pictures in locations outside the reach of the Overall CBA.
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(Declaratory Relief)
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13 Paragraphs 1-34.
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15 and IATSE, on the other hand, relating to the intended application of the Residual
16 Contribution provisions of the Basic Agreement and IATSEs obligation to
17 indemnify or otherwise compensate Nu Image for any exposure it has to the Plans
18 arising from the non-payment of Residual Contributions. Specifically, Nu Image
19 contends that the Residual Contribution provisions in the Basic Agreement do not
20 apply to Nu Image and that IATSE is obligated to indemnify or otherwise
21 compensate Nu Image for any liability it incurs in the future to the Plans arising
22 from the non-payment of Residual Contributions and for the cost of defending
23 against any further lawsuit brought by the Plans seeking Residual Contributions.
24 IATSE contends that the Residual Contributions apply to Nu Image and that it has
25 no such obligation.
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27 Images contentions, as set forth above, are correct, and that IATSE is obligated to
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1 indemnify or otherwise compensate Nu Image for any liability it incurs in the future
2 to the Plans arising from the non-payment of Residual Contributions and for the cost
3 of defending against any further lawsuit brought by the Plans seeking Residual
4 Contributions.
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(a)
(b)
(c)
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(a)
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(b)
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(a)
17 in the Basic Agreement do not apply to Nu Image and that IATSE is obligated to
18 indemnify or otherwise compensate Nu Image for any liability it incurs in the future
19 to the Plans arising from the non-payment of Residual Contributions and for the cost
20 of defending against any further lawsuit brought by the Plans seeking Residual
21 Contributions.
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(a)
(b)
For such other and further relief as this Court deems just and proper.
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5 Dated: July 28, 2015
LLP
By
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