Moore v. American Federation of Television & Radio Artists

216 F.3d 1236, 24 Employee Benefits Cas. (BNA) 2293, 47 Fed. R. Serv. 3d 8, 2000 U.S. App. LEXIS 15329, 2000 WL 865002
CourtCourt of Appeals for the Eleventh Circuit
DecidedJune 29, 2000
Docket98-8895, 98-9263
StatusPublished
Cited by27 cases

This text of 216 F.3d 1236 (Moore v. American Federation of Television & Radio Artists) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Moore v. American Federation of Television & Radio Artists, 216 F.3d 1236, 24 Employee Benefits Cas. (BNA) 2293, 47 Fed. R. Serv. 3d 8, 2000 U.S. App. LEXIS 15329, 2000 WL 865002 (11th Cir. 2000).

Opinion

TJOFLAT, Circuit Judge:

Plaintiffs, eighteen recording artists, brought this suit against their union’s benefit plans, AFTRA Health and Retirement Funds (the “Funds”); the trustees of the Funds (“Funds Trustees”); and eight record companies (the “Record Company Defendants”) who contribute to the Funds on plaintiffs’ behalf. Plaintiffs’ complaint contains eight counts, each purporting to allege a separate cause of action. 1 Albeit under separate theories of recovery, all eight counts allege that the Record Company Defendants, with whom the plaintiffs have recording contracts, improperly interpreted the provision of the union’s collective bargaining agreement with the record companies that determines the amount the companies should contribute to the Funds on the plaintiffs’ behalf, and therefore failed to contribute the amounts due. The eight counts also allege that the Funds Trustees breached their fiduciary duty by failing to collect the delinquencies.

After filing suit, the plaintiffs moved the district court to certify a class of recording artists for the purpose of litigating three breach of fiduciary duty claims against the Funds Trustees and a civil RICO claim against the Record Company Defendants. The district court denied the plaintiffs’ motion. In its order, the court certified a question of law for appeal under 28 U.S.C. § 1292(b) (1994), and we granted the plaintiffs leave to appeal the order, Appeal No. 98-9265. Appeal No. 98-8895, which is from a final judgment entered pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, presents the question whether the district court properly dismissed two claims against the Record Company Defendants: a derivative delinquent contribution claim under the Employee Retirement Income Security Act of 1974 (“ERISA”) section 509(g)(2) (codified at 29 U.S.C. § 1132(g)(2) (1994)); and a claim for equitable relief under ERISA section 509(a)(3) (codified at 29 U.S.C. § 1132(a)(3)). We find no abuse of discretion in the district court’s denial of class certification and no error in the court’s dismissal of these ERISA claims, and accordingly affirm.

I.

A.

Plaintiffs and the class they seek to represent are recording artists; all of them are singers. 2 Through agents, they negotiate and enter into individual contracts with record companies, including the Record Company Defendants, relating to the creation, promotion, and sale of record albums. The plaintiffs are compensated with royalties; the record companies receive the profits from the sale of the albums.

The American Federation of Television and Radio Artists (“AFTRA”), a union, represents the singers (and thus the plaintiffs) and several other categories of entertainers, such as actors and musicians. At all times material to this suit, a collective bargaining agreement for the benefit of the singers has existed between AFTRA *1239 and the record companies (including the Record Company Defendants).' This agreement is called “Phono Code.”

The Phono Code originated in the mid-1950s. In 1959, AFTRA and the record companies (and other entities not pertinent here) entered into an Agreement and Declaration of Trust (“the Trust Agreement”) in order to provide fringe benefits for singers (and other artists AFTRA represents). The agreement created two funds, a health fund and a retirement fund, “the Funds”, and twenty trusteeships; the Funds Trustees. Ten of the trustee positions are held by individuals chosen by the record companies, and ten are held by individuals chosen by AFTRA. 3 Contemporaneously with the enactment' of the Trust Agreement, AFTRA and the record companies amended the Phono Code in order to provide underwriting for the singers’ benefits; the amendment incorporated by reference the Trust Agreement and obligated the record companies to contribute to the Funds five percent of the “gross compensation” the companies paid to the singers. Through amendments, that percentage has become eleven percent.

Under the Trust Agreement, the Funds Trustees have “full authority to determine the form, nature, and amount of benefits” to be paid to the singers, and are “authorized and empowered to ... compromise, settle, arbitrate and release claims or demands in favor or against” the Funds and to “construe the provisions of the Trust Agreement.” Any construction of the agreement the Funds Trustees render “in good faith” is “binding” on AFTRA and the record companies. '

The Phono Code requires a record company to send the Funds and each singer with whom it has contracted a semi-annual statement of the “gross compensation” the company has paid the singer during the previous six months. 4 The central issue in these appeals (and in the counts of the complaint not before us) is the meaning of the term “gross compensation.” 5 In 1959, when the Trust Agreement was created and the Phono Code was amended to incorporate its terms, a singer’s “gross” compensation amounted .to the royalty payments he received from his record company for the albums it sold. Since the parties’ recording contract obligated the company to underwrite all of the costs of producing and selling an album, 6 it deducted nothing from the royalties; hence, there was no such thing as “net” compensation. Over time, however, the record companies shifted the costs of producing and selling albums to the artists, such that by the 1970s the singers had assumed the lion’s share of these costs. 7 foot infrequently, a contract between a record company and a singer called for the company to front certain costs. The singer would reimburse the company from royalties, in which case, the company’s semi-annual statement to the singer and the Funds would reflect as “gross” compensation the “net” compensation actually paid to the singer — after, deducting the *1240 costs the company had fronted. The result of this arrangement was that the term “gross compensation” in the Phono Code became ambiguous. The record companies took the position that the term did not include the expenses it fronted for the singer; the Funds Trustees, once the ambiguity was called to their attention, disagreed; gross compensation included such expenses. Which interpretation of gross compensation is correct would depend on what AFTRA and the record companies intended the phrase to mean when the phrase first appeared in an amendment to the Phono Code. Nothing in the record, however, indicates what AFTRA and the record companies had in their minds and said to one another when they adopted the phrase “gross compensation.”

In any event, as early as the 1970s, the record companies and the Funds Trustees attempted to resolve this problem through negotiations.

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Bluebook (online)
216 F.3d 1236, 24 Employee Benefits Cas. (BNA) 2293, 47 Fed. R. Serv. 3d 8, 2000 U.S. App. LEXIS 15329, 2000 WL 865002, Counsel Stack Legal Research, https://law.counselstack.com/opinion/moore-v-american-federation-of-television-radio-artists-ca11-2000.