Parties
5. Plaintiff Amanda Masters is a resident of Los Angeles, California. Ms. Masters worked as a model with Defendants, Wilhelmina Model Agency, Inc., Next Management Corp., Zoli Management Inc., and Click Model Management, Inc. During the class period.
6. Plaintiff Justin Kenner is a resident of Los Angeles, California. Mr. Klentner worked as a model with Defendants Boss Models, Inc., Wilhelmina Model Agency, Inc., Zoli Management Inc., and Ford Models, Inc. During the class period.
7. Plaintiff Carolyn Fears is a resident Of Orange county. California. Ms. Fears worked as a model with Defendant Ford Models, Inc. During the class period.
8. Plaintiff Lorelei Shellist is a resident of San Diego, California. Ms. Shellist worked as a model with Defendants Elite Model Management, Inc. And Ford Models, Inc. During the class period.
9. Plaintiff Barbara A. Cheeseborough is a resident of Arcadia, California. Ms. Cheeseborough worked as a model with defendants Ford Models, Inc. And Zoli Management, Inc. During the class period.
10. Plaintiff Carla Gross, doing business as Sebastian Cardon, is a resident of Los Angeles, California. Ms. Gross worked as a model with Defendant Wilhelmina Model Agency, Inc., Company Model Management and Elite Model Management, Inc. During the class period.
11. Defendant Wilhelmina Model Agency, Inc., also known as Wilhelmina Artist Management LLC ("Wilhelmina"), is a New York corporation with its principal place of business at 300 Park Avenue South, New York, New York, 10010.
12. Defendant Ford Models, Inc. ("Ford") is a Delaware corporation authorized to do business in the State of New York, with its principal place of business located at 142 Greene Street, New York, New York, 10012.
13. Defendant Elite Model Management, Inc. ("Elite") is a corporation duly organized under the laws of the State of New York with its principal place of business at 111 East 22nd Street, 2nd Floor, New York, New York, 10010.
14. Defendant Click Model Management, Inc. ("Click") is reported to be a corporation maintaining its principal place of business at 129 West 27th Street, New York, New York 10001.
15. Defendant Next Management Corp. ("Next") is a corporation duly organized under the laws of the State of New York with its principal place of business at 23 Warts Street, 5th Floor, New York, New York, 10013.
16. Defendant The MFME Model Management Company Ltd. ("Company"), also known as Company Model Management, has its principal place of business at 270 Lafayette Street, #1400, New York, NY 10012.
17. Defendant Boss Models, Inc. ("Boss") is reported to be a corporation established under and pursuant to the laws of the State of New York with its principal place of business located at 1 Gansevoort Street, New York, New York 10014.
18. Defendant Zoli Management, Inc. ("Zoli") is a corporation duly organized under the laws of the State of New York with its principal place of business at 3 West 18th Street, New York, New York 10011.
JURISDICITION AND VENUE
19. The Court has jurisdiction over this action pursuant to Section 4 of the
Clayton Act, 15 V.S.C. 15 (a), 28 V.S.C. 1337, and principles of supplemental jurisdiction.
20. All of the Defendants to this civil action reside in New York and regularly conduct business in this District.
21. Venue is proper in this District pursuant to Sections 4 and 12 of the Clayton Act, 15 V.S.C. 15 and 22, and 28 V.S.C. 1391 (b) and (c).
CLASS ACTION ALLEGATIONS
22. Plaintiffs bring this class action on behalf of themselves and all current and former models who had oral or written contracts with any of the Defendants during the class period defined by the time that two or more Defendants conspired to fix prices and other terms and conditions of their models' contracts. Plaintiffs do not presently know the exact time when the unlawful conspiracy, but are informed and believe - based, in part, on the sworn statements of Defendant Elite's own counsel, submitted as part of a lawsuit against Ford and Wilhelmina - that the unlawful conspiracy began between Defendants Ford and Wilhelmina in the 1970's, and later grew to include each of the other Defendants (including Elite itself, which decided to drop its lawsuit and join the conspiracy).
23. Plaintiffs do not know the exact size of the Class because such information is in the exclusive control of Defendants. Nonetheless, there are thousands of Class members geographically dispersed throughout the United States. And Plaintiffs believe that the Class is so numerous that joinders of all Class members, whether required or permitted, is impracticable.
24. Plaintiffs' claims are typical of the claims of the members of the Class because Plaintiffs, like all Class Members, were models who entered into contracts with Defendants during the class period and have been damaged by Defendants' unlawful conspiracy to fix prices in violation of federal antitrust law. Similarly, Plaintiffs, like all Class Members, have been damaged by Defendants' violations of New York state law during the class period.
25. Plaintiffs will fairly and adequately protect the interests of the Class because Plaintiffs' interests are coincident with, and not antagonistic to, those of the Class. Plaintiffs have retained counsel with substantial experience in the prosecution of antitrust and class action litigations.
26. Questions of law and fact that are common to the members of the Class predominate over questions that affect only individual members. Among the questions of law and fact that are common to the class are:
A. Whether Defendants are engaged in a conspiracy to fix prices relating to fees charged to models and persons who employ models, and whether Defendants conspired to standardize other terms and conditions of the employment of professional models;
B. Whether Defendants are employment agencies, as that term is defined under the New York General Business Law ("GBL ");
C. Whether Defendants have violated GBL 172 by operating as employment agencies without being licensed by the Department of Consumer Affairs;
D. Whether Defendants have charged excessive fees, in violation of GBL 185.,
E. Whether Defendants have violated GBL 187 (8) by operating other businesses from the same locations as their employment agency businesses;
F. Whether Defendants have violated GBL 187 (10) by requiring Plaintiffs to contribute to the cost of advertising materials intended to assist Defendants in procuring employment for Plaintiffs; and
g. Whether Defendants have breached their fiduciary duties to Plaintiffs by failing to deal openly, honestly, and in good faith with Plaintiffs, including by
(i) misrepresenting their services as management services, rather than employment services,
(ii) acting in concert to evade state law regulating employment agencies,
(iii) inducing Plaintiffs to purchase other services offered by Defendants, in violation of state law, and
(iv) falsely representing to Plaintiffs that Plaintiffs were Defendants' clients, when in fact Defendants considered Plaintiffs' employers to be Defendants' real "clients."
27. Class action treatment is superior to the alternatives for the fair and efficient adjudication of the controversy alleged herein. Such treatment will permit a large number of similarly situated persons to prosecute their common claims in a single forum simultaneously, efficiently, and without the duplication of effort and expense that numerous individual actions would entail. No difficulties are likely to be encountered in the management of this case that... Would preclude its maintenance as a class action.
28. Defendants have acted on grounds generally applicable to the entire Class, i thereby making final relief appropriate with respect to the Class as a whole. As discussed in more detail below, Defendants have collectively acted to fix prices, create standardized contracts and preclude new modeling agencies from entering the market. And Defendants continue to coordinate their efforts by communicating through formal trade associations and through other less formal means. Prosecution of separate actions by individual members of the Class would create the risk of inconsistent or varying adjudications with respect to individual members of the Class, which would establish incompatible standards of conduct for Defendants.
FACTUAL BACKGROUND
The Business of Modeling: and the Lone:-Standing: New York Law Regulating: Employment Agencies
29. The modeling agency business is a multi-million dollar a year industry worldwide, and New York is one of the industry's hubs. Though market size and share date are private and within the control of Defendants, Defendants collectively are reported to be the largest modeling agencies in New York and the United States as a whole, and to control well over half of the market, measured by total volume of bookings, for models under contract to New York agencies.
30. The primary service that Defendants provide to the models whom they have under contract is to get the model work. To do this, Defendants employ persons known in the trade as "bookers". As Defendant Wilhelmina admitted in a recent court pleading, "Bookers act as the liaisons between [the modeling agencies] and the models, and often provide the only contact and connection between [an agency] and its models. The bookers and models are the heart and soul of the modeling agency." Wilhelmina Artist Management LLC v. Fernandez, Index No. 01114665 (Aug. 1), Complaint' 6.
31. Wilhelmina's own pleading also admits that it is the booker's job to "negotiate and schedule bookings [or jobs] for models... [and] contact and procure clients who might be interested in hiring [the agencies'] models." Id.
32. Wilhelmina's admissions that (1) the booker's job is to get the model work, and (2) the bookers "often provide the only contact and connection between [an agency] and its models" are facts well known to those in the business, and can also be found in industry publications and textbooks endorsed by other Defendants. For example:
A. One industry publication, endorsed by Defendants Ford and Elite as a reputable guide to the modeling industry, claims that: "A model agent is, commonly referred to as a booker. Your booker/agent will become one of the most important people in your career." Debbie Press & Skip Press, Your Modeling Career: You Don't Have to be a Supermodel to Succeed " ("Your Modeling Career") 87 (Allworth Press 2000);
B. Another publication, written by former Wilhelmina president Natasha Esch as a guide to the modeling industry, states: "Next we have the agents (bookers) the model-agent (booker) relationship is a vital one At the beginning of your career, your agent (or booker) will be your link with your agency and with the entire industry." Natasha Esch, The Wilhelmina Guide to Modeling ("The Wilhelmina Guide") 38-39 (Simon & Schuster 1996); and
C. A leading textbook on the industry, to which Defendants Ford, Click, Wilhelmina and Zoli contributed, states: "A modeling agency employs bookers to act as the link between the clients and the models." Linda A. Balhom, The Professional Model's Handbook A Comprehensive Guide to Modeling and Related Fields ("The Professional Handbook") 186 (Milady Publishing Company 1990).
33. Acting on behalf of the agency, the booker speaks to third parties, such as photographers, casting agents, advertising agencies, magazines and retailers about employment opportunities for models; contacts the model on a regular basis to inform them of possible employment opportunities; schedules or "books" employment engagements and negotiates the model's fees for modeling engagements.in addition, the agencies bill the models' employers for the jobs their models have performed and collect money from the models' employers on the model's behalf.
34. For these services, Defendants regularly charge Plaintiffs a 20% commission on monies Plaintiffs receive for modeling.in fact, the typical modeling contract explicitly requires Plaintiffs to pay 20% of their earnings from any modeling job, even if Plaintiffs obtained the engagement without the agency's help. This is done through the so-called "mother agent" clause in the model's contract, which typically recites that the agency shall act as the "mother agent" at all times, which means that Defendants claim a commission on any modeling job Plaintiff obtains, even if the job was procured by another agency.
35. The Defendants have combined in adopting standard clauses in their contracts, including the "mother agent" clause. As stated in The Modeling Life, a book endorsed by Eileen and Katie Ford (Defendant Ford's founder and current president respectively) and Monique Pillard (Defendant Elite's president) as a reputable guide to the modeling industry: "When models sign with multiple agencies, one agency, usually the one that discovers or signs the model first is designated as the 'mother agent.", Donna Rubenstein, The Modeling Life 244 (penguin Putnam Inc. 1998). And, as stated in The Modeling Handbook (endorsed by Defendant Company's owner, Michael Flutie, as a reputable guide to the modeling industry), "If a model
signs a contract with Elite, New York, she might have ten other agencies she works with in Paris, Milan, Germany and Switzerland. Elite New York will still remain her 'mother' agency." Debbie Press & Skip Press, Your Modeling Career 92 (Allworth Press 2000).
36. On top of their 20% commissions, Defendants also charge Plaintiffs for:
A.incidental "services", such as advertising the models' portfolios to photographers, casting agents, advertising agencies, magazines, and others who might be interested in hiring the models; and
B. Salary advances, charged against the models' anticipated but uncollected fee for a completed modeling job. (Ford claims on its website that "Ford was the first, and remains one of the few, to pay models at the end of every week rather than waiting for client payments." http:/www.fordmodels.com/content. Cfm.) Defendants treat these payments as loans, to be repaid in the event Plaintiffs' employers do not pay.
C. Defendants not only charge Plaintiffs a flat 5% fee for these "salary advances" (for a total fee of25%), but do so regardless of how much time elapses between the time of the advance and the agency's receipt of the model's fee from the model's employer - even if it is just a matter of days.
37. Defendants also earn substantial income from the employers who hire models. Defendants regularly charge the models' employers an additional 20% of the model's fee for a job. This double-dipping means that when a model is "paid" $100 for ajob, the agency collects $20 from the model, plus another $20 from the employer, or $40 total, while the model takes home $80.in effect, on any given job, the agencies pocket one-third of the total amount paid by the employers who hire professional models.
38. These and other of Defendants' practices described herein are exactly the types of "extortionate overcharges" 1 that the New York State Legislature long ago declared unlawful, enacting Article 11 of the New York General Business Law ("GBL "), 170 - 190, which set forth specific and clear rules regulating employment agencies. Among other things, that statute requires employment agencies to be licensed, limits their fees, and prohibiting the operation of other business on the same premises as the employment agency.
39. Specifically, GBL 171 defines an "employment agency" as any individual or company "who, for a fee, procures or attempts to procure employment or engagements
I Society of Models.inc. V. Moss. 53 n.Y.S. 2d 424,425-426, (N.Y. Sup. Ct., 1944). ("Especially laudable is [the Commissioner's] obvious sincere desire to protect models against stratagems and machinations to mulct them of illegal fees for procuring jobs. The elaborate law regulating employment agencies bespeaks the necessity of such protection although there were other evils; the business was subject to the abuse of extortionate overcharges. The legislators regarded this as one of the principal reasons for regulation.") for... Modeling or other entertainments or exhibitions or performances." The statute excludes from the definition of "employment agency" "the business of managing... Where such business only incidentally involves the seeking of employment." This exception to GBL 171 is commonly known as the "incidental booking exception", and has been repeatedly held by the courts to mean exactly what it says - that the seeking of employment must be incidental to the provision of management services.
40.in short, to take advantage of the "incidental booking" exception, Defendants must not only be in the "business of managing", but must also show that their business "only incidentally involves the seeking of employment." As set forth in the following section, Defendants cannot possibly meet that very narrow exception, and yet have banded together to falsely represent to Plaintiffs that they are "managers" exempt from the statute.
41. If a person or entity falls within the definition of "employment agency" in GBL 171, that person or entity:
A. Must be licensed by the Department of Consumer Affairs — GBL 172 requires all employment agencies conducting business in the city of New York to be licensed by the Department of Consumer Affairs;
B. May not charge fees in excess of 10% — GBL 185 (8) provides in relevant part: "For a placement in class "c" employment (which includes the field of modeling) the gross fee shall not exceed, for a single engagement, ten percent of the compensation payable to the applicant";
C. May not conduct any business other than that of an employment agency on its premises — GBL 187 (8) prohibits employment agencies from "engaging in any business on the premises other than the business of operating an employment agency... And
D. May not pass on to the models the incidental costs of advertising the models' portfolios — GBL 187 (10) prohibits employment agencies from "requir[ing] applicants... To contribute to the cost of advertising."
Dave
Orlando, Florida
0 comments