Page 1
Ninth Circuit:
Denying Membership in Private Group Isn’t Anticompetitive
Blackball System Used by Hollywood Foreign Press Association—Which Stages Golden Globe Awards—Does Not Constitute a ‘Group Boycott’ or Otherwise Violate of Antitrust Laws, Panel Declares
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday rejected a bid by two journalists to gain admittance as members of the organization that annually stages the Golden Globe Awards, holding that they failed in their effort to allege antitrust violations.
The lawsuit, filed Aug. 3, 2020, led to a Los Angeles Times investigation that produced disclosures causing many Hollywood stars to boycott last January’s awards ceremony and a decision by NBC not to televise it.
Circuit Judge Eric D. Miller authored yesterday’s opinion affirming a March 23, 2021 order by District Court Judge Stanley Blumenfeld Jr. of the Central District of California dismissing the amended complaint filed by Kjersti Flaa, from Norway, and Rosa Gamazo Robbins, a dual citizen of Spain and the United States. Both applied for membership in the Hollywood Foreign Press Association (“HFPA”) but Flaa was not voted in and Robbins was unable to gain the requisite sponsorship of two members.
Only one person gained membership in 2018 and no applicant was admitted the following year.
|
|
|
|
ROSA GAMO ROBBINS |
KJERSTI FLAA |
journalist
Allegations of Complaint
The amended pleading alleges:
“Owing to the studios’ desire to win Golden Globe awards, HFPA members are now invited to attend press junkets, exclusive press conferences, film festivals, invitation-only retreats with stars, and set visits around the world at no expense to themselves (and are freely allowed to accept the studios’ largesse): coveted interview slots with news making actors, directors, producers, screenwriters, and other industry professionals are reserved for them: and the HFPA members are protected from economic vicissitudes through the receipt of lavish sums of money in exchange for providing nominal or illusory services to the HFPA.”
The complaint goes on to say:
“Owing to the importance U.S. motion picture studios now assign to currying favor with Golden Globe voters and the limitations and restrictions they place on allowing access to talent, membership in the HFPA has become a business necessity for Hollywood reporters who report for publications in the smaller, foreign markets. Owing to that reality, the HFPA has been able to use its group boycott of everyone who might compete with its members to force them into irrelevancy or out of the business of reporting on the news, events, and personalities related to American movies for media outlets outside the United States altogether.”
It asserts that “[t]he HFPA’s refusal to admit potential competitors therefore constitutes a per se violation of Section 1 of the Sherman Act.”
In ordering a dismissal without leave to amend, Blumenfeld observed that the plaintiffs’ “challenge is novel.”
Miller’s Opinion
In his opinion affirming that dismissal, Miller wrote:
“Critically, however, the HFPA does not control access to talent—Hollywood studios do. As the complaint concedes, Hollywood studios provide HFPA members with interview opportunities in order to gain favor with the individuals who organize and vote on the Golden Globe Awards. The complaint does not allege that the HFPA entered into an exclusive agreement with the studios or otherwise ‘persuad[ed] or coerc[ed]’ the studios to deny opportunities to non- HFPA members….
“We do not question that membership in the HFPA provides economic benefits, in part because the ability to vote on the Golden Globe Awards can generate valuable business opportunities. But membership in almost any trade association provides some kind of economic benefit. It does not follow that every trade association must open itself to all comers.”
Market Power
One of Blumenfeld’s bases for dismissal was that the plaintiffs do not “offer non-conclusory allegations that the HFPA or its members have market power,” without which there cannot be an anti-competitive effect.
Miller agreed, pointing out that “the complaint does not plausibly allege that the HFPA—a group of 85 entertainment journalists, only half of whom are ‘active’ journalists—possesses market power in any reasonably defined market.”
The plaintiffs allege that HFPA “allocates foreign markets among its members,” requiring applicants to execute agreements pledging not to offer to write for any publication claimed by a member and not to write for any rival publication.” They maintain that “[o]n the rare occasions when a new member is admitted to the HFPA, membership is conferred only subject to an agreement concerning how and where the new member will sell his or her reporting.”
Their “market-division theory,” Miller commented, “is difficult to reconcile with the statements in the complaint that the HFPA’s members do not participate in the same product market.”
He reasoned that the complaint “describes not one global market for entertainment news, but separate geographic submarkets” and “[i]f the members are unable to compete in the same market, they are unable to agree to divide the market.”
The “right of fair procedure” under California law, pled by Flaa in her initial complaint (before Robbins joined as a plaintiff), is inapplicable because HFPA is not a quasi-public organization, such as a labor union or a medical association to which the doctrine applies, Miller said.
The case is Flaa v. The Hollywood Foreign Press Association, 21-55347.
Flaa’s lawsuit triggered a Los Angeles Times investigation of HFPA, culminating in a Feb. 21, 2021 article that reported:
“Interviews with more than 50 people—including studio publicists, entertainment executives and seven current and former members—as well as court filings and internal financial documents and communications, paint a picture of an embattled organization still struggling to shake its reputation as a group whose awards or nominations can be influenced with expensive junkets and publicity swag.
“The Times’ investigation also found that the nonprofit HFPA regularly issues substantial payments to its own members in ways that some experts say could run afoul of Internal Revenue Service guidelines.”
In a separate article, staff writers Josh Rottenberg and Stacy Perman noted:
“While the HFPA’s ranks include a number of people of color, there are no Black members….”
NBC, which had been televising the Golden Globe Awards since 1996, did not broadcast the ceremony last January. However, the network has announced it will air the Jan. 10, 2023 event, in light of reforms.
HFPA has added 21 members; six of them are Black.
Flaa’s initial complaint (which was dismissed with leave to amend only as to the antitrust claim) set forth under the heading, “The HFPA’s Practices Have Institutionalized a Culture of Corruption,” the allegation that “The HFPA sees no ethical conflict in allowing the very people who vote on awards to accept thousands of dollars in emoluments from the very entities competing for those awards.” HFPA has adopted new bylaws which, among other things, bar gifts.
Copyright 2022, Metropolitan News Company