A federal court judge has dismissed a lawsuit against DreamWorks Animation SKG Inc., Walt Disney Co. and several other media companies over allegations they broke antitrust laws by conspiring to not hire each other’s animators and visual effects artists in order to keep salaries down.
U.S. District Judge Lucy H. Koh in San Francisco concluded, in a 32-page decision on Friday, that the statute of limitations had run out to make the allegations and that the plaintiffs made inadequate claims the media companies had actively hid the conspiracy.
“It may be the case that Defendants engaged in a secret conspiracy, but that allegation alone does not show that Defendants affirmatively and fraudulently concealed the existence of Plaintiffs’ claims,” the decision read.
Koh did give attorneys for the three plaintiffs 30 days to file an amended complaint or otherwise have the case dismissed “with prejudice,” meaning it cannot be refiled. There were potentially millions of dollars in back pay that were at stake if the defendants were able to have their suit designated as a class action.
In addition to local studios DreamWorks and Disney, and its Lucasfilm Ltd. and Pixar subsidiaries, among the other defendants are ImageMovers Digital, in Burbank, and Sony Pictures Animation Inc., in Culver City.
The case stems from three former workers who filed lawsuits separately late last year that were consolidated into a single case in December.
The litigation alleges the collusion goes back to 1986 when Lucasfilm in San Francisco sold its computer graphics division to Apple Inc. co-founder Steve Jobs. He established the division as a separate animation studio named Pixar with himself as chief executive until Pixar was sold to Disney in 2006. Prior to the acquisition, Lucasfilm and Pixar had entered into agreements to eliminate competition between them for skilled workers, the lawsuit alleges. In 2012, Disney also acquired Lucasfilm.
The lawsuit contends that the studios would notify each other when an employee applied for an open position at their company and would limit counteroffers in such situations. Additionally, permission was needed from one company before another company in the conspiracy could hire one of their employees. Executives from the companies, including those in human resources, met to discuss hiring practices, the lawsuit said. The collusion allegedly went on until late last decade.
In her decision, Koh relied on past cases before the U.S. Supreme Court and the 9th Circuit Court of Appeals to conclude that the statute of limitations as applied in antitrust cases began when the three plaintiffs were harmed by the alleged conspiracy and not when they later found out about it.
The clock began ticking on their claims as early as 2004 when one defendant worked for Disney and another for Sony, and not later than 2007, she concluded. Therefore, her decision found that the four-year statute of ran out at the latest in 2011.
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