Cal. Supreme Court Denies Review of Management Case
ri...@marathonent.com
February 15, 2007
By Matthew Belloni
The California Supreme Court has declined to review a lower court
decision granting the state's labor commissioner jurisdiction over
talent management disputes regardless of a standard arbitration
agreement in a contract.
In rejecting review on Wednesday, the 2-1 decision of a state court of
appeals panel will stand, requiring original jurisdiction in the labor
commissioner of cases arising under the Talent Agencies Act. Preston
v. Ferrer, S149190.
The high court gave no reason for the denial. The plaintiff-
appellant's attorney, Joseph Schleimer of Beverly Hills' Schleimer &
Freundlich, said his client plans to appeal.
"We're disappointed because we expected the 2-1 decision would lead to
review," Schleimer said. "Mr. Preston intends to petition the U.S.
Supreme Court for review."
Schleimer said his petition for writ of certiorari will focus on a
2006 case, Buckeye Check Cashing, Inc. v. Cardegna, 126 Sup. Ct. 1204,
which held that in either state or federal court, the validity of a
contract is to be considered by an arbitrator rather than a court
unless the challenge to the contract concerns the arbitration clause
itself.
In its ruling, the California Court of Appeals distinguished that case
on the grounds that the state grants jurisdiction over TAA cases to
the labor commission as an administrative agency, not to a court.
The Preston case is one of two on appeal concerning the scope of the
TAA. The state's high court has granted review in Marathon
Entertainment v. Blasi, S145428, which concerns whether violations of
the TAA are severable or function to void the entirety of a management
contract. That case is scheduled to be argued sometime this spring.
In a letter sent last month urging review of the Preston case,
National Conference of Personal Managers president Clinton Billups
said the appeals court decision "has the practical effect of making
arbitration agreements between personal managers and their
entertainment clients unenforceable, in contrast to our state and
federal rights to agree to arbitration."
Additionally, "allowing the court of appeals decision to stand creates
a clear message that artists from anywhere in the United States can
utilize the (Talent Agencies Act) to engage personal managers in
litigation instead of paying their otherwise-owed commissions in clear
interference with our interstate commerce rights," Billups wrote. "The
appellate court ruling reiterates the unconstitutional application of
TAA on our legal occupation of personal management."
Like most TAA cases, Preston concerns a fee dispute between manager
Arnold Preston and his former client, Alex Ferrer of TV's "Judge
Alex."
Ferrer claims Preston is owed nothing because he overstepped the
bounds as a manager and acted as an unlicensed talent agent, in
violation of the TAA.
Preston pushed for arbitration in the case based on a standard clause
included in his management agreement, but the case was removed to the
labor commissioner. On appeal, Preston argued the dispute should go to
arbitration pursuant to the agreement.
In November, the 2nd District Court of Appeal decided that any dispute
involving the TAA must first be decided by the labor commissioner.
Preston appealed to the state's high court.
Representing Ferrer is Robert Dudnik of Mitchell Silberberg & Knupp in
Los Angeles. Dudnik could not be reached for comment.
The case is Preston v. Ferrer, S149190.