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Entertainment Lawyers Not Above The Law: An L.A. Daily Journal Editorial by Michael Garfinkel

Entertainment Lawyers Not Above The Law: An L.A. Daily Journal Editorial by Michael Garfinkel

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Published by rick7562
Michael Garfinkel, long associated with the Association of Talent Agents, published this defense of the Labor Commissioner's interpretation of the Act.
Michael Garfinkel, long associated with the Association of Talent Agents, published this defense of the Labor Commissioner's interpretation of the Act.

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Categories:Types, Business/Law
Published by: rick7562 on Oct 25, 2013
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04/15/2015

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10/25/13 12:10 PMDaily JournalPage 1 of 2http://www.dailyjournal.com/prmo/prmomain.cfm?publication=LADJ&eid=931817&pcode=GhY8qi6b
 
Headlines
 Opinions Verdicts
TODAY'S HEADLINES U.S. Court of Appeals for the 9th CircuitPanel: US immune in suit over baby'sdeath
Judges urged Thursday for Congress or theU.S. Supreme Court to bypass a legalroadblock barring relief even though aservicewoman was ordered to perform hardphysical training during pregnancy.
SecuritiesREITs look to private offerings
Some of the heavily regulated companies areopting for cheaper and quicker privateofferings now that they can advertise, thanksto a new SEC rule.
CriminalAttorneys adjust to governmentaggressiveness in insider tradinginvestigations
Regulators' increased use of powerful toolssuch as wiretaps and sophisticated dataanalysis to crack down on insider trading athedge funds are prompting defenseattorneys in California to advise caution.
Litigation
Sonic-Calabasas 
 the hedgehog
The court is poised in
Iskanian 
 to overrule
. Whether the majority can hold ontotheir sole long-term idea of saving anotherruling remains to be seen.
Health Care & Hospital LawCourt limits actions under medicalprivacy act
The opinion should come as a relief tomedical providers, health care plans,pharmaceutical companies and associatedcontractors. By
Michael Maddigan andMichael ReynoldsAlternative Dispute ResolutionHow to avoid impasse in settlementnegotiations
The consequences of impasse in mediationcan be significant and severe. By
Patrick J.MahoneyJudicial ProfileKelvin D. Filer
Superior Court Judge Los Angeles(Compton)
CorporateThousands expected at in-houseconvention in LA
From alternative fee arrangements to cybersecurity threats, the Association of CorporateCounsel is set to explore a wide range ofissues facing in-house counsel during itsannual meeting in Los Angeles next week.
DisciplineDisciplinary Actions
Here are summaries of lawyer disciplinaryactions taken recently by the state Supreme 
OCTOBER 24, 2013
Entertainment lawyers are not above the law 
By Michael GarfinkelThe California labor commissioner recently issued a decision confirming what many entertainment attorneys feared: When it comes to the Talent Agencies Act, attorneys arenot above the law. The act prohibits unlicensed "persons" from engaging in talent agentactivities. Personal managers know all too well that violating the act can invalidate theirclient contracts and require disgorgement of commissions. Entertainment attorneyshave watched from the sidelines, assuming that they were protected by an unwrittenexemption. The labor commissioner has now made clear that they are not. While thedecision has been appealed to Los Angeles County Superior Court, attorneys should takeheed.The Talent Agencies Act's purpose is to protect artists seeking professional employment from abuses. Thelabor commissioner is responsible for enforcing the act and has original jurisdiction over any disputes. Theact establishes detailed requirements for how licensed talent agencies conduct their business, including pre-approval of all forms of client contracts, posting of fee schedules, maintenance of trust accounts, thorough background checks, and posting of a bond. Under the act, only licensed talent agents may procure or attemptto procure employment for artists. It is long-settled that a violation of the act by an unlicensed personrenders his contract with the artist illegal and void.
 Styne v. Stevens
, 26 Cal. 4th 42, 51 (2001).In 1982, in response to complaints primarily from personal managers, the Legislature formed the CaliforniaEntertainment Commission to study the act. The commission was comprised of the labor commissioner,artists, talent agents and personal managers. In 1985, the commission issued its report containingrecommendations for improving the act. The Legislature adopted all of the committee's recommendationsand amended the act to impose a one-year statute of limitations, eliminate criminal sanctions for violationsof the act, and establish a "safe harbor" for managers "to act in conjunction with, and at the request of, alicensed talent agency in the negotiation of an employment contract." Labor Code Section 1700.44. TheLegislature agreed with the commission and rejected alternatives that would have allowed unlicensedpersons to engage in limited procurement activities, concluding that the act's prohibitions on unlicensedprocurement must remain, as they are intended to be, total and without exception. "There can be no'sometimes' talent agent, just as there can be no 'sometimes' professional in any other licensed field of endeavor." Entertainment Commission Report, pp. 11-12.Thereafter, the act was increasingly asserted by artists to defeat commission claims brought by personalmanagers. In a typical scenario, the artist and manager had a falling out, leading the manager to file a lawsuitfor post-termination commissions. In defense, the artist asserted the act, alleging that the personalmanager's procurement of engagements without the involvement of a talent agent constituted prohibitedunlicensed procurement. The artist then filed a petition to determine controversy to be determined by thelabor commissioner, while staying the personal manager's lawsuit.If the labor commissioner found any procurement activities, including sending the artist to an audition for arole he did not get, she deemed the agreement between the artist and personal manager void ab initio, notonly barring the personal manager from recovering any further commissions but also compelling him todisgorge any commissions collected within the one-year statute of limitations. Under the act, suchdeterminations are appealable to the superior court for a de novo review. However, once the artist wasarmed with evidence of illegal procurement, typically the case settled or the superior court reached the sameconclusion. While the outcome may seem a bit harsh or unfair, the result was often justified by the equitiesinvolved and had the intended deterrent effect.Over the years, the act has repeatedly survived constitutional attacks unscathed. However, years of coordinated personal manager attacks finally paid off in part in
 Marathon v. Blasi 
, 42 Cal. 4th 974 (2008). While the state Supreme Court again upheld the constitutionality of the act and its application to unlicensedpersonal managers, it for the first time sanctioned the doctrine of severability as a defense - "For thepersonal manager who truly acts as a personal manager, however, an isolated instance of procurement doesnot automatically bar recovery for services that could lawfully be provided without a license."The doctrine's application addressed the seemingly most unfair situation where the personal manager loseshis commissions on employment lawfully obtained based upon another incidental procurement activity, suchas booking the artist for an unrelated promotional appearance. However, the Supreme Court also made clearthat there are instances where the doctrine cannot be applied, such as where the illegal procurementactivities are inseparable from the managerial services. "The doctrine is equitable and fact specific, and itsapplication is appropriately directed to the sound discretion of the Labor Commissioner and trial courts inthe first instance." 

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