The Writers Guild of America (WGA) has amended its suit against the major talent agencies, adding a claim of constructive fraud. As 0riginally reported by The Hollywood Reporter, The WGA’s First Amended Complaint notes that “constructive fraud” does not imply fraudulent intent, but instead is premised on breach of fiduciary duty and/or on an agent’s failure to disclose material facts to a client.
This complaint alleges that WME, CAA, UTA and ICM committed constructive fraud by placing their own interests ahead of their clients’ by proceeding with representation despite conflicts of interest, and by concealing numerous alleged facts about the way packaging and packaging fees work. It also alleges that packaging fees, one of the two key business models undergirding the upper ranks of the agency business, are a breach of fiduciary duty and an illegal kickback under federal and state statutes, including California’s Unfair Competition Law.
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