WRITERS, DIRECTORS, ACTORS IN COURT OCTOBER 3

william richert vs writers guild of America et. al.

part one of court hearing October 3, 2011

THE COURT: GOOD AFTERNOON, LADIES AND GENTLEMEN.

(ALL COUNSEL RESPONDED "GOOD AFTERNOON, YOUR HONOR.")

THE COURT:

IN THE -- WELL, I GUESS WE'VE GOT THE WRITERS GUILD, DIRECTORS GUILD, AND THE SAG CASES ALL ON CALENDAR TODAY. I’VE GONE THROUGH THESE JOINT STATEMENTS

AND I’M GOING TO TAKE THE CASES KIND OF IN ORDER. I'LL TAKE THE FIRST ONE, WEBB FIRST, WHICH SEEMS TO BE THE MOST STRAIGHTFORWARD. I GUESS MY IMPRESSION IS, IN READING THESE STATEMENTS THAT WERE FILED,

I'M NOT CONVINCED THAT THE REVIEWS THAT HAVE BEEN DONE FOR THE LAST THREE YEARS WEREN'T CONDUCTED IN ACCORDANCE

WITH THE REQUIREMENTS OF THE SETTLEMENT. AND I'M A LITTLE CONCERNED THAT IF WE HAD THREE YEARS OF THESE REVIEWS GOING ON AND NOBODY EVER BROUGHT ANY ISSUES TO THE ATTENTION OF THE COURT OR TO THE DEFENDANTS, THAT WE NEED A LITTLE MORE WORK TO FIGURE OUT WHERE WE ARE SO ON THAT ONE, IT SEEMS TO ME THAT TO THE EXTENT THAT CLASS COUNSEL HAS QUESTIONS CONCERNING THE COMPLAINT LOG THAT WAS RECENTLY PROVIDED, THE PARTIES SHOULD ENGAGE IN SOME MEANINGFUL MEET AND CONFER PROCESS AND THEREAFTER EITHER INITIATE -- THE MEDIATION PROCESS IS INCORPORATED IN ALL THREE OF THESE SETTLEMENTS; IS IT NOT?

MR. SCHECTER:

I'D HAVE TO LOOK, YOUR HONOR.

THE COURT:

I WORKED UNDER THE ASSUMPTION THAT IT WAS. I'M NOT SURE, BECAUSE I DIDN'T GO BACK AND LOOK AT EACH ONE OF THESE. BUT TO THE EXTENT IT IS, YOU CAN EITHER INITIATE THAT, OR IF YOU DON'T WANT TO GO BACK TO MR. GROSSMAN, I HAVE NO OBJECTION TO YOUR PRESENTING IT IN A JOINT STATEMENT TO THE COURT, AND I'LL READ IT AND SET A HEARING IF I NEED TO. BUT THIS -- THIS ONE WAS THE FIRST SETTLEMENT. IT'S BEEN GOING ON FOR QUITE A WHILE, AND I DON'T THINK THAT ALL OF THESE ISSUES SHOULD BE BROUGHT UP. I DON'T SEE THE SAME ISSUES IN ALL THREE CASES, QUITE FRANKLY.

ANYBODY WANT TO BE HEARD ON THAT?

MR. JOHNSON:

I'LL SAY THIS. WHEN WE WERE - I'M NEVILLE JOHNSON.

WHEN WE WERE HAVING THE NOTION THAT THERE WAS GOING TO BE REPORTS PREPARED, I DID NOT EXPECT THAT WE WERE GOING TO GET LITERALLY ONE PAGE. IN OTHER WORDS, THIS IS SO SUMMARY AND CONCLUSORY; IT DOESN'T PROVIDE ANY TRANSPARENCY OR ACCOUNTABILITY, WHICH IS WHAT WE'RE SEEKING, FOR THE MEMBERS OF THE CLASS.

IN OTHER WORDS, WE DON'T KNOW HOW MUCH MONEY IS STILL BEING HELD BY DGA GOING BACK 20 YEARS. WE DON'T KNOW WHAT YEARS ARE BEING HELD.

THE COURT:

MY POINT, MR. JOHNSON, IS IF YOU'VE GOT A SINGLE PAGE REPORT TWO AND A HALF YEARS AGO, YOU HAD A PROBLEM WITH IT THEN, YOU SHOULD HAVE RAISED THE ISSUE.

I'M NOT CONVINCED THAT AS TO THE DIRECTOR'S GUILD SITUATION THERE'S BEEN A MEANINGFUL DISCUSSION AS TO ANY COMPLAINTS YOU HAD ABOUT IT.

MR. JOHNSON:

LOOK, I'M HAPPY TO TALK ABOUT IT. I'M JUST SAYING, YOU ARE RIGHT. I SHOULD HAVE BEEN MONITORING IT. BUT ON THE OTHER HAND I'LL SAY THIS: DO YOU THINK ANYBODY EVER CALLED US AND SAID

I THIS IS WHO WE'RE HIRING; SENT US THE REPORT; SAID, WHAT DO YOU THINK OF IT; SAID, WE'D LIKE TO TALK TO YOU OR ENGAGE YOU IN ANY WAY ABOUT ANY PROBLEMS YOU HAVE? THERE'S JUST BEEN --

THE COURT:

YOU ARE CLASS COUNSEL. AND THIS WAS A SELF-EXECUTING PROCESS THAT REQUIRES CERTAIN BENCHMARKS AND THINGS TO BE DONE.

AND IF YOU HAD RESERVATIONS ABOUT THE WAY IT WAS BEING DONE, I DON'T THINK YOU CAN JUST PUT YOUR HEAD IN THE SAND AND SAY, I'M WAITING FOR SOMEBODY TO CALL ME. AND ALL I'M SAYING NOW, YOU -- YOUR OBJECTIONS OR CONCERNS MAY BE VERY VALID, BUT I'M NOT GOING TO BECOME EMBROILED IN THEM WHEN THEY ARE BROUGHT UP AT THE -- THREE YEARS DOWN THE ROAD, AND I'M NOT SATISFIED THAT THERE'S BEEN ANY REAL DISCUSSION.

MR. JOHNSON:

I'LL TELL YOU WHAT'S GOING TO HAPPEN, YOUR HONOR. COUNSEL FOR THE DGA IS GOING TO SAY, THAT'S WHAT'S IN THE AGREEMENT. WE'RE NOT GIVING YOU ANY MORE. WE GET, BASICALLY, HOSTILITY FROM THE DGA AND MR. SCHECTER ABOUT DOING ANYTHING. AND HE'S GOING TO GET UP AND SAY, WE HAVE COMPLIED. TOTALLY.

I'M PERFECTLY WILLING TO DO IT AND WE WILL PUT IT DOWN IN A MORE LOGICAL FASHION WITH OUR ARGUMENTS ON EACH SIDE AS TO WHAT WE WANT, BUT I'M SAYING THIS IS -- AND YOU WILL SEE IT WHEN WE GET TO WGA RIGHT NOW.

THE COURT:

WELL, WE'RE GOING TO GO TO THE OTHER ONES. AND I REALIZE THERE ARE MORE CURRENT PROBLEMS WITH SOME OF THE OTHERS. I'M NOT READY TO ABANDON THESE SETTLEMENTS.

IF WE GO TO MR. RICHERT'S SUGGESTION AND WE JUST ABANDON THE SETTLEMENTS, SAY NO SETTLEMENTS AND START ALL OVER AND GO LITIGATE. I'M NOT READY TO DO THAT. THIS COURT RETAINED JURISDICTION FOR PURPOSES OF ENFORCING THE SETTLEMENTS. I THINK THAT THE SETTLEMENTS HAVE THE POTENTIAL, AND ARE INTENDED TO HAVE A SIGNIFICANT BENEFIT, IN TERMS OF THE MANNER IN WHICH THESE FOREIGN LEVIES OR COLLECTIONS ARE DISTRIBUTED. AND I CONTINUE TO BELIEVE WE OUGHT TO PURSUE THE INTENT AND THE PURPOSE OF THE SETTLEMENT.

THAT SAID, IF THERE'S SOME PROBLEM IN EXECUTING OR IMPLEMENTING THE SETTLEMENT, I EXPECT IT TO BE BROUGHT TO THE COURT. AND IF YOU HAVE HAD THREE YEARS OF REPORTS, AND A PROCESS UNDER WAY FOR THREE YEARS, THEN I WOULD -- IF ALL THREE YEARS HAVE BEEN TERRIBLY FLAWED, THERE'S SOMETHING WRONG WITH THE PROCESS. IT SHOULD COME TO ME SOONER RATHER THAN LATER.

NOW MR. SCHECTER,

DO YOU HAVE ANY COMMENTS? AND WE'RE TALKING NOW JUST DIRECTORS GUILD.

MR. SCHECTER:

YES, YOUR HONOR.

AS MUCH AS I'D LIKE TO PERSONALIZE THIS, I'LL LET THAT LAST COMMENT FROM COUNSEL SLIP.

YOUR HONOR, WE HAVE NOT HEARD A SINGLE WORD FROM MR. JOHNSON ABOUT THE DGA CASE SINCE LATE 2008, THREE YEARS AGO. IF HE HAS ANY LEGITIMATE CONCERNS, HE KNOWS HOW TO REACH US. I WILL DISCUSS THEM WITH HIM, BUT JUST MAKE CLEAR WE WILL DO, AND HAVE DONE, WHAT IS CALLED FOR IN THE AGREEMENT.

WHAT MR. JOHNSON SUGGESTS HE'S ASKING FOR FALLS OUTSIDE THE AGREEMENT. FOR EXAMPLE, HE WANTS HIS -- THESE CONSULTANTS WHO WE'LL TALK A LOT ABOUT IN A MOMENT, TO COME IN AND DO A REVIEW. THERE IS NO PROVISION FOR THAT. AND JUST TO REMIND EVERYONE, IT'S BEEN A LONG TIME -- THREE CASES. WE LIVE THEM MORE THAN YOU, AND THEY BLEND TOGETHER FOR US. I CAN ONLY IMAGINE HOW IT IS TO COME AT THEM FROM THE OUTSIDE EVERY SIX MONTHS.

IN THE DGA CASE THERE WAS A PRE-SETTLEMENT REVIEW DONE BY AN INDEPENDENT AUDITOR, APPROVED BY CLASS COUNSEL. THIS WAS A DIFFERENT FORMAT THAN WE HAD IN THE OTHER CASES. SO THE NOTION THAT THERE'S BEEN NO VISIBILITY, THERE'S BEEN NO TRANSPARENCY, IS FLAT WRONG. THERE WAS A CONSULTATION ABOUT THE SELECTION THAT PRE-REVIEW AUDIT. THE SETTLEMENT WAS CONDITIONED -- OR REVIEW, I SHOULD

SAY -- THE SETTLEMENT EFFECTIVENESS WAS CONDITIONED ON CLASS COUNSEL BEING SATISFIED WITH THE OUTCOME OF THAT. THIS WAS ALL DONE UNDER THE SUPERVISION OF MR. GROSSMAN AS THE MEDIATOR. AND THEN, AS YOU KNOW, COUNSEL HAS RECEIVED FOR THREE YEARS THESE REVIEWS, THESE REPORTS.

I WILL NOT TRY TO STAND IN THE WAY OF ANY MEANINGFUL MEET AND CONFER, AND WE'RE AVAILABLE.

I WILL NOTE THOUGH, YOUR HONOR, THAT -­ AND WE'LL TALK ABOUT THIS WHEN WE GET TO THE SAG CASE, OUR EFFORTS TO HAVE SUCH A MEET AND CONFER, WHERE THERE CLEARLY ARE ISSUES, HAVE MET WITH INTRANSITIVES.

BUT IF, BASED ON YOUR DIRECTION,

MR. JOHNSON WANTS TO CALL ME AND DISCUSS THESE ISSUES WE ARE HERE. WE WILL DISCUSS THEM. BUT HE IS CORRECT, WE'RE GOING TO, ESPECIALLY, FOUR YEARS AFTER WE SIGNED THE DEAL; THREE YEARS AFTER IT WAS APPROVED; AFTER IT WAS MAILED TO THOUSANDS OF PEOPLE; AFTER WE'VE GONE THROUGH THREE CYCLES OF HIS REVIEWS, AND CONTINUE TO, WE ARE GOING TO HOLD TO THE TERMS.

AND I BELIEVE, YOUR HONOR, WE'RE NOT PARSING, WE ARE COMPLYING WITH THE LETTER AND THE SPIRIT, BUT I WILL AWAIT MR. JOHNSON'S CALL AND --

THE COURT:

WE HAVE A JUDGMENT IN THE DIRECTOR'S GUILD CASE. AND THAT JUDGMENT PROVIDES WHAT NEEDS TO BE DONE. IT WAS CONSISTENT WITH THE TERMS OF THE SETTLEMENT. THE COURT APPROVED, AND I EXPECT PEOPLE TO COMPLY WITH IT.NOW, WE'RE NOT GOING TO REWRITE IT, BUT IF IT'S NOT BEING COMPLIED WITH, OR THERE'S NOTENOUGH -- I THINK YOU REFER TO TRANSPARENCY AS BEING ONE OF THE GOALS OF THIS PROCESS, THEN WE'LL LOOK INTO IT. AND WE'LL GO FURTHER.

MR. JOHNSON:

IF I MAY, YOUR HONOR, I'LL JUST SAY -- I'LL TELL YOU ONE BIG EXAMPLE OF WHERE THEY ABSOLUTELY HAVE NOT COMPLIED. PARAGRAPH N OF THE SETTLEMENT AGREEMENT, OR THE ORDER, SAYS THEY WERE TO PROVIDE --

THE COURT:

WHICH PARAGRAPH IS IT?

MR. JOHNSON:

PARAGRAPH N ON PAGE 9 SAID THEY WERE TO PROVIDE --

            I            THE COURT,

 -- OF WHAT DOCUMENT, SIR?

MR. JOHNSON:

I'M ABOUT TO READ IT. A COPY OF THE ORDER AND JUDGMENT GRANTING JOINT APPLICATION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT, WHICH YOU SIGNED.

THE DGA WAS TO PROVIDE US, ON AN ANNUAL BASIS, A COpy OF THE COMPLAINT LOG AND THE REVIEW. THEY NEVER DID IT. SO THAT'S WHY -- PERHAPS WHY WE WEREN'T MORE ON TOP OF IT THAN WE SHOULD HAVE BEEN.

AND I WILL JUST SAY, OVER ALL, MAYBE IT'S A FAULT OF CLASS COUNSEL IN THE FACT THAT WHEN WE WERE PUTTING THIS TOGETHER, WE WEREN'T AS DETAILED AND DIDN'T HAVE THE CONSULTANTS IN PLACE AS WE DID IN WGA AND SAG, AND WE WEREN'T QUITE AWARE THAT WE WERE GOING TO HAVE THESE PROBLEMS. THAT'S WHY WE'RE HERE NOW TALKING ABOUT IT AT THE END OF THE DAY WITH YOU.

AS I JUST HAD SUGGESTED WHAT

MR. SCHECTER WAS GOING TO SAY, HE WAS GOING TO SAY, "WE'VE COMPLIED WITH EVERYTHING AND THAT'S IT." AND WE DON'T WANT TO REVISIT IT.

AND I'M SAYING, YOU ARE THE JUDGE NOW.

YOU STILL HAVE CONTROL OVER THIS. YOU NEED TO KNOW WHAT'S GOING ON. AND WE'RE RAISING QUESTIONS, THAT'S ALL.

 THE COURT:

 AND I THINK, QUITE FRANKLY, THREE YEARS LATE. IF YOU HAD A REPORT DUE ON AN ANNUAL BASIS AND YOU DIDN'T GET IT, YOU GOT IT SEPTEMBER 26TH, OR SOMETHING, I UNDERSTAND THAT. I WANT YOU TO LOOK AT IT; REVIEW IT, IF IT'S NOT ADEQUATE -- BUT IT'S A -- WHAT GOES AROUND COMES AROUND HERE. AND SOMETIMES YOU GET WHAT YOU GIVE, AND SOMETIMES YOU DON'T.

BOTH SIDES HAVE AN OBLIGATION TO BE VIGILANT AND DO WHAT THEY ARE SUPPOSED TO DO. AND I JUST LOOKED AT THE DIRECTOR'S GUILD THING AS ONE

THAT -- AND FOR WHATEVER REASON SLIPPED THROUGH THE CRACKS ON CLASS COUNSEL'S SIDE; HAD NOT REALLY BEEN FOLLOWED UP, AND ALL I'M ASKING IS THAT YOU FOLLOW UP AND GIVE ME WHATEVER THERE IS THAT NEEDS TO BE DONE.

I'M NOT SAYING MR. SCHECTER IS RIGHT.

THERE MAY BE SOME ISSUES -- I HAVE SOME DISAGREEMENTS WITH SOME OF THE DEFENDANTS' VIEWS ON WHAT IS AND IS NOT WITHIN THE PURVIEW OF THESE REVIEWS AND EXAMINATIONS; WE'LL GO THROUGH THOSE.

BUT ON THIS ONE, HOW MUCH TIME DO YOU WANT TO HAVE A MEANINGFUL DISCUSSION ON A CORDIAL BASIS AND PROFESSIONAL BASIS AND THEN GET BACK TO ME?

MR. JOHNSON:

WOULD YOU SAY 30 DAYS?

MR. SCHECTER:

THAT'S FINE.

THE COURT:

ALL RIGHT. I'LL EXPECT A JOINT STATEMENT ON OR BEFORE NOVEMBER 4TH.

ALL RIGHT. ON THE RICHERT VERSUS WRITERS GUILD CASE, I HAVE SOME QUESTIONS AND THEN WE'LL KIND OF GO THROUGH -- LET ME JUST RUN THROUGH MY NOTES. AND I DID NOT POST ALL THESE THINGS AS I USUALLY DO BECAUSE SOME OF IT JUST NEEDS TO BE DISCUSSED AND WE NEED TO GET IT ON THE TABLE.

I'M GOING TO RUN THROUGH A LIST OF QUESTIONS, AND THEN SOME COMMENTS REGARDING THE SCOPE OF CLASS COUNSEL'S WORK; THE CONSULTANT'S FEES ISSUES; MR. RICHERT'S OBJECTIONS, OR FILINGS; AND THE AUSTRALIAN WRITERS GUILD'S FILINGS, AND THEN WE'LL GO BACK AND TAKE THEM UP IN THAT ORDER.

MR. JOHNSON:

YOUR HONOR, MAY I JUST DO ONE THING?

THE COURT:

YES.

MR. JOHNSON:

TO MENTION THAT DANIEL GERVAIS, WHO IS A PROFESSOR AT VANDERBILT, IS GOING TO ASSIST US ON THE COURT CALL, AND THIS IS MR. JASKO, WHO'S THE OTHER CONSULTANT.

THE COURT:

OKAY. MR. GERVAIS IS IN TENNESSEE; IS THAT

RIGHT?

MR. GERVAIS:

THAT'S RIGHT I AM, YOUR HONOR. THE COURT: AND MR. JASKO, YOU ARE LOCAL?

 MR. JASKO:

YES.

THE COURT:

LET ME ASK YOU THIS -- AND THIS GOES TO MR. GERVAIS AND MR. JASKO. DID YOU CONSULT WITH THE KPMG PROJECT MANAGERS PRIOR TO THE KPMG RETENTION?

MR. JASKO:

I MET FOR ABOUT -- FOR A PERIOD OF TIME, A SHORT PERIOD OF TIME, PROBABLY HALF AN HOUR, WITH ONE OF THE SUPERVISORS IN THE KPMG AUDIT IN THE EARLY STAGE OF THE AUDIT. SO WE HAVE NOT PARTICIPATED IN THE AUDIT SINCE THEN.

THE COURT:

ALL RIGHT. BUT MY UNDERSTANDING WAS -- AND I'M READING THESE PAPERS. AND I TAKE IT FACE VALUE WHAT PEOPLE TELL ME. I GENERALLY BELIEVE THEY TELL ME THE TRUTH. THEY SAY THAT MR. GERVAIS AND MR. JASKO, OR THE CONSULTANTS GENERICALLY, RETAINED BY THE CLASS, MET WITH THE KPMG PROJECT MANAGERS -- AND THERE WAS A NAME OF AN INDIVIDUAL WHO CAME UP A COUPLE OF TIMES I DON'T REMEMBER -- PRIOR TO KPMG'S RETENTION; IS THAT TRUE? DID YOU TALK WITH THEM ABOUT WHAT THEY WERE GOING TO DO?

 MR. JASKO:

WE HAD ONE PHONE CONVERSATION WITH THE KPMG MANAGERS, PROBABLY IN MARCH, I THINK, BEFORE THEIR RETENTION.

THE COURT:

MARCH OF?

MR. JASKO:

MARCH OF THIS YEAR -- OF 2011.

THE COURT:

ALL RIGHT. AND IS -- MR. JOHNSON, DID YOU PARTICIPATE IN THE CONFERENCE CALL THAT'S REFERENCED IN THE JOINT STATEMENT ON FEBRUARY 11TH?

 MR. JOHNSON:

THE ONLY CALL I EVER HAD WAS WITH TONY SEGALL, ON ONE OCCASION -- AND I THINK MR. JASKO WAS ON THAT PHONE CALL WITH ME -- TO DISCUSS WHETHER OR NOT KPMG, OR THIS OTHER FIRM, WOULD HAVE BEEN -- COULD HAVE BEEN DELOITTE, AND THAT WAS IT. AND WE DIDN'T COME TO A CONCLUSION ON THAT. BUT I DID SPEAK PROBABLY FOR 20 MINUTES ON A CONVERSATION -­ NEVER SPOKE WITH KPMG.

THE COURT:

NOW, THESE THINGS OCCURRED IN FEBRUARY. NOW WE'RE IN OCTOBER. IF THERE WERE ISSUES I CONCERNING THE RETENTION, OR IF YOU WANTED A COPY OF THE ENGAGEMENT LETTER -- DID YOU EVER ASK FOR IT?

THESE THINGS DON'T HAPPEN BY THEMSELVES.

MR. JOHNSON:

I DON'T THINK I ASKED FOR IT.

WHAT BASICALLY HAPPENED WAS I LEFT IT IN THE HANDS OF MR. JASKO TO NEGOTIATE HIS ENGAGEMENT LETTER WITH WGA. AND WHEN THERE WERE PROBLEMS, THEN I WAS BROUGHT INTO THE SITUATION. LIKEWISE WITH SAG, MR. JASKO ATTEMPTED TO WORK IT OUT WITH MR. SCHECTER AND IT BECAME A BIG PROBLEM, AND THEN I ENTERED INTO THE SITUATION.

THE COURT:

WE'RE GOING TO IRON IT OUT, BUT SOME OF THESE THINGS HAVE JUST BEEN PERCOLATING WITH NOTHING BEEN DONE, AND ALL OF A SUDDEN, YOU KNOW, I THOUGHT IT WAS A GOOD IDEA TO HAVE A CONFERENCE CALL AND TALK TO YOU ABOUT YOUR PROBLEMS. AND THEN THAT MUSHROOMED INTO EVERYBODY HAVING STRONG FEELINGS AND ME GETTING SIX INCHES OF PAPER, AS THEY GO THROUGH AND FIND OUT THAT THERE ARE LOTS OF PROBLEMS. WE'LL SORT THEM OUT.

MR. JOHNSON:

I WOULD JUST SAY, WITH RESPECT TO WGA WE'RE DOWN TO SORT OF ONE FUNDAMENTAL ISSUE, PHILOSOPHICALLY, ABOUT THE SCOPE OF IT. WITH SAG, WE JUST HIT A DEAD END WHERE WE JUST SAID, WE'VE GOT TO COME AND TALK TO YOU.

THE COURT:

ALL RIGHT. MY NEXT QUESTION

WAS -- AND YOU DON'T HAVE TO ANSWER THIS, BUT WHEN YOU FIRST ASKED FOR A COPY OF THE KPMG ENGAGEMENT LETTER, YOU ARE NOT SURE YOU ASKED FOR IT OR NOT, IT DOESN'T MAKE THAT MUCH DIFFERENCE.

REGARDING THE WGAW'S FOREIGN LEVY WEBSITE, MY UNDERSTANDING IS THIS WEBSITE WAS LAUNCHED IN SEPTEMBER OF 2010. HAVE YOU EVER COMMUNICATED ANY CONCERNS OR CLAIMED DEFICIENCIES ABOUT THE WEBSITE TO MR. SCHECTER OR ANYBODY ELSE?

MR. JOHNSON:

NO, NOT TILL NOW.

THE COURT:

OKAY.

MR. JOHNSON:

IT'S ALL COMING TO A HEAD IS WHAT'S HAPPENING.

 THE COURT:

IT'S ALL RIGHT. IT'S ON THE TABLE NOW, AND I'M ONLY ASKING THESE QUESTIONS BECAUSE IT MAKES A DIFFERENCE, IT SEEMS TO ME, AS TO MAYBE THE URGENCY OF WHAT WE NEED TO DO HERE, AND WHETHER THESE THINGS HAVE BEEN VETTED ENOUGH TO PUT THEM ON THE TABLE AND MAKE SOME DECISIONS.

MR. JOHNSON:

WELL, YOUR HONOR, THIS IS WHY REVIEWS ARE GOOD.

THE COURT:

AND THAT'S WHY YOU ARE HERE. MY COMMENT ON THE WEBSITE IS THAT THE PARTIES WILL BE EXPECTED TO FURTHER EVALUATE THE SUFFICIENCY OF THE WEBSITE AND CONSIDER SPECIFIC DEFICIENCIES IDENTIFIED BY CLASS COUNSEL.

THEREAFTER, EITHER INITIATE THE MEDIATION PROCESS, WITHIN THE PROVISIONS OF THE SETTLEMENT AGREEMENT, AGAIN, IF IT'S THERE. I KNOW IT'S IN ONE OF THEM. AND I THOUGHT IT WAS IN ALL THREE, OR FILE A JOINT STATEMENT; BRING IT TO ME, AND WE'LL SOLVE THE ISSUES.

REGARDING THE SCOPE OF CLASS COUNSEL'S DESIGNATED CONSULTANTS' WORK, IT SEEMS TO ME THAT THE CONSULTANTS' REVIEW WILL NECESSARILY REQUIRE CONSIDERATION OF FOREIGN LEVY COLLECTIONS. AND THAT SOME CONSIDERATION OF, AND THE REVIEW OF, ARRANGEMENTS WITH SAG, THAT SAG HAS WITH THE VARIOUS COLLECTING SOCIETIES. SUCH A REVIEW SHOULD NOT INCLUDE A GENERAL REVIEW OF THE COLLECTION PROCESS IN THE ABSTRACT; THAT IS, IT SHOULD NOT CONSIST OF A REVIEW OF THE MANNER IN WHICH SAG ESTABLISHES ITS ARRANGEMENTS WITH COLLECTION SOCIETIES.

IT SEEMS TO ME THAT THAT'S BEYOND THE SCOPE OR THE PURVIEW OF WHAT WAS INVOLVED IN THESE CASES, WHAT THE SETTLEMENT WAS DESIGNED TO ADDRESS, AND I DON'T THINK YOU NEED TO GO THERE.

THE CONSULTANTS' RECOMMENDATIONS ARE NOT INTENDED TO EXTEND BEYOND THE COLLECTIONS MADE BY SAG. THE CONSULTANTS WILL NOT BE EXPECTED TO CRITIQUE OR MAKE RECOMMENDATIONS CONCERNING THE MANNER IN WHICH SAG DETERMINES OR NEGOTIATES ITS ARRANGEMENTS WITH COLLECTION SOCIETIES. THAT SEEMS TO ME TO BE ANOTHER ISSUE.

WHAT WE REALLY ARE FACED HERE WITH WAS THE COLLECTION OF A LOT OF MONEY THAT WASN'T BEING DISTRIBUTED, AND WE WANTED A MEANINGFUL AND APPROPRIATE MEANS TO MONITOR, AUDIT, LOOK AT, THE DISTRIBUTION OF THESE FUNDS. SO THAT'S MY THOUGHT ON THAT. IN MY VIEW --

 MR. JOHNSON:

DO YOU WANT TO COME BACK TO THAT ISSUE?

THE COURT:

I'M JUST GOING TO GIVE YOU ALL THESE COMMENTS, AND THEN I'LL LISTEN TO WHAT YOU HAVE TO SAY.

IN THE COURT'S VIEW, THE REVIEW OF THE PROCESSING AND DISTRIBUTION, AGAIN, NECESSARILY REQUIRES SOME CONSIDERATION OF THE SOURCE OF THE FOREIGN LEVY FUNDS RECEIVED FOR PROCESSING. AND THUS, TO A LIMITED DEGREE, REQUIRE CONSIDERATION OF THE COLLECTION PROCESS.

IN THIS REGARD, I'M NOT SUGGESTING THAT CONSIDERATION OF THE COLLECTION PROCESS MEANS THAT THE CONSULTANTS FOR THE CLASS SHOULD BE PROVIDING RECOMMENDATIONS CONCERNING THOSE COLLECTION PRACTICES. I THINK IT GOES BEYOND THE PURVIEW OF WHAT WE HAD IN MIND. I AM WILLING TO TAKE COMMENTS ON THOSE THINGS AND THEN WE'LL MOVE ON TO THE CONSULTANTS --

MR. JOHNSON:

COULD YOU GIVE US A LITTLE MORE INFORMATION. WHEN YOU ARE TALKING ABOUT THE COLLECTION PRACTICES, I MEAN, WHAT DO YOU HAVE IN MIND THERE? I'M NOT SURE THAT THAT IS DIFFERENT FROM WHAT THEY ARE INTENDING TO DO.

THE COURT:

WELL, THE WRITERS GUILD IS BRINGING IN MONEY IT IS RECEIVING FROM THESE FOREIGN COLLECTION SOCIETIES. YOU NEED TO, AT SOME LEVEL, LOOK AT WHAT'S COMING IN, AND HOW IT COMES IN. AND I THINK THAT'S APPROPRIATE.

BUT THAT DOES NOT MEAN THAT YOU NEED TO LOOK AT WHAT THE WRITERS GUILD DOES, OR FOR THAT MATTER, WHAT SAG DOES, TO GO OUT AND MAKE ARRANGEMENTS WITH THESE COLLECTION SOCIETIES OR HOW THE ARRANGEMENTS CAME ABOUT. THEY ARE IN PLACE. THE MONEY IS COMING IN, AND YOU NEED TO REVIEW THAT, AND YOU HAVE A RIGHT TO REVIEW THAT. MR. KIESEL, DO YOU HAVE SOMETHING ON THAT?

     MR. KIESEL:

I DO. AND I DON'T THINK WE DISAGREE WITH WHAT THE COURT JUST SAID. THE ONLY EXCEPTION I WOULD TAKE ON THAT POINT IS THEY ARE LOOKING, NOT AT HOW THE CONTRACTS WERE CREATED, THE FACT IS IT'S ABOUT DISTRIBUTION ONCE THE MONEY HAS BEEN COLLECTED AND ARRIVES HERE IN THE STATES TO BE DISTRIBUTED.

THERE MIGHT BE A POINT WITH RESPECT TO THE ACTUAL COLLECTION OF THE FUNDS, AND THE WAY IT'S IDENTIFIED BY THE FOREIGN COLLECTION SOCIETY SO THAT THE GUILD HERE IN THE STATES HAS A BETTER WAY OF DEALING WITH DISTRIBUTION BECAUSE THEY CAN IDENTIFY WHO THE ACTUAL SOURCE OF THE FUNDS BELONGS TO.

TO THE EXTENT THE CONSULTANTS CAN WEIGH IN, SAY IT MIGHT BE HELPFUL IF YOU WERE TO HAVE AN AGREEMENT THAT PROVIDED FOR BETTER IDENTIFICATION OF WHO THE ARTS ARE TO WHOM THE FUNDS ARE PAID; THAT'S A RECOMMENDATION THAT I THINK WOULD BE CONSISTENT WITH THE SETTLEMENT ITSELF, YOUR HONOR.

AND THAT DEALS WITH THE COLLECTION, BUT IT'S SORT OF THE METHOD OF THE COLLECTION ITSELF, BUT IT IS ONCE THE MONEY GETS THERE.

THE COURT:

WELL, BUT THEIR AGREEMENT -- I GUESS, THEY CAN MAKE WHATEVER RECOMMENDATIONS THEY WANT. AND THIS IS AN ONGOING PROCESS. WE'RE GOING TO KEEP WORKING AT IT TILL WE GET IT RIGHT. BUT THOSE RECOMMENDATIONS, IT SEEMS TO ME, CAN BE ACCEPTED OR REJECTED OR CONSIDERED BY THE WRITERS GUILD, OR SAG. BUT ULTIMATELY, THEY HAVE THEIR ARRANGEMENTS, WITH THESE GUILDS OR COLLECTION SOCIETIES, I DON'T KNOW WHAT THE CORRECT TERMINOLOGY IS, BUT -- AND THE MONIES ARE COMING IN.

CLEARLY, IF THEY ARE SENDING $300,000 A MONTH, OR A HUNDRED THOUSAND A MONTH IN JUST A BLANK -­ A CHECK WITH NO NAMES OR ANYTHING ELSE, THAT DOESN'T WORK. BUT THAT'S NOT MY UNDERSTANDING OF HOW THIS PROCESS HAS BEEN ONGOING, AND THAT THERE ARE MEANS OF IDENTIFYING THE PEOPLE TO WHOM THE MONEY IS ENTITLED.

IF THEY ARE SENDING IN CHECKS ALLOCATED TO WORKS, PRODUCTIONS, OR IN THIS CASE, SCRIPTS OR MOVIES, OR WHATEVER, THEN THE WRITERS GUILD HAS TO GO BACK AND SAY WHO ARE THE PEOPLE ON OUR LIST FOR THAT PRODUCTION, OR THAT SCRIPT, OR WHATEVER. AND THAT'S DONE ON THIS END. AND YOUR CONSULTANTS MAY SAY, THERE'S GOT TO BE AN EFFECTIVE METHOD OF DOING THAT.

IS THAT WHAT WE'RE TALKING ABOUT?

MR. KIESEL:

I WOULD SAY WE PROBABLY ARE. I WOULD CERTAINLY ASK DAN TO RESPOND TO THAT, YOUR HONOR. I THINK THAT'S ESSENTIALLY WHAT WE'RE TALKING ABOUT.

THE COURT:

MR. SCHECTER?

MR. SCHECTER:

MR. SEGALL SHOULD CHIME IN BECAUSE THE ISSUE IS FOR BOTH SAG AND WGA.

I THINK WHAT YOU'VE ARTICULATED IS CERTAINLY CLOSE TO WHAT WE ENVISIONED. AND THAT IS DIFFERENT FROM WHAT WE UNDERSTOOD PLAINTIFFS' CLASS COUNSEL TO BE ADVOCATING.

YOUR HONOR, MY FRUSTRATION, WHICH I

THINK IS PROBABLY EVIDENT IN THE PAPERS IS THAT I THINK I THAT THIS IMPASSE IS MANUFACTURED AND THAT WE ALL

SHOULD HAVE SAT DOWN WITH THE CONSULTANTS. AND WE SUGGESTED THAT. AND I THINK MAYBE THIS IS THE KIND OF THING THAT WOULD HAVE BEEN HAMMERED OUT.

MR. KIESEL'S POINT THAT THERE ARE SOME MECHANICS INVOLVED IN HOW THE MONEY IS COLLECTED AND PROCESSED. AND I COULD SEE THE ISSUE IF MR. JASKO OR MR. GERVAIS HAVE SUGGESTIONS ABOUT WHAT THE GUILDS COULD DO, IN TERMS OF HAVING THE SOCIETIES IDENTIFY THE FUNDS. HAVING DEALT WITH THESE ISSUES, AND I THINK

MR. SEGALL WILL ECHO THIS. I THINK THIS IS SOMETHING THAT'S BEEN DELIBERATED QUITE EXTENSIVELY BETWEEN THE GUILDS AND THE SOCIETIES. BUT IT'S AN ONGOING PROCESS. IF THERE ARE INCITEFUL IDEAS, WE'RE OPEN TO THEM.

BUT AGAIN, ALL THE MORE REASON, YOUR HONOR, WHY I THINK COUNSEL WAS -- IT WAS INCUMBENT ON US TO SIT DOWN AND WE TRIED TO DO THAT, AND WE WERE TOLD IT WASN'T GOING TO HAPPEN.

THE COURT:

WELL, IT WILL HAPPEN.

MR. SEGALL:

YOUR HONOR?

THE COURT:

MR. SEGALL?

MR. SEGALL:

I THINK THE WRITERS GUILD HAS BEEN VERY FORTHCOMING WITH EXACTLY THE TYPE OF INFORMATION YOU ARE TALKING ABOUT.

WHAT INFORMATION DO WE GET FROM THE 19 FOREIGN COLLECTION SOCIETIES, AND WHAT PROBLEMS DO

THAT -- DOES THE NATURE OF THAT INFORMATION POSE FOR US IN GETTING IT DISTRIBUTED?

WE'VE CERTAINLY -- WE'VE BEEN WORKING WITH MR. JASKO FOR MONTHS NOW. AND HE HAS HAD ACCESS TO BREAKDOWNS OF THE DOLLAR AMOUNTS OF THE COLLECTIONS FROM EACH OF THE 19 COUNTRIES, AND OF THE PARTICULAR NATURE OF THE DISTRIBUTION INFORMATION THAT -- THE DISTRIBUTION SCHEMES THAT TIE THE MONEY TO PARTICULAR TITLES AND PARTICULAR WRITERS.

WHERE WE BROKE DOWN WAS OVER THE NOTION THAT CLASS COUNSEL HAD ANY ROLE, AS YOU'VE PUT IT, IN THE MANNER IN WHICH WE NEGOTIATE THOSE AGREEMENTS. FRANKLY, WE HAVE OTHER CONSULTANTS. WE HAVE MR. HALE, WHO HAS BEEN CONSULTING WITH US FOR MANY YEARS ABOUT THOSE RELATIONSHIPS WITH THE FOREIGN COLLECTION SOCIETIES. WE DO THOSE NEGOTIATIONS TOGETHER WITH THE

DIRECTOR'S GUILD, AND AS PARTNER UNDER AN AGREEMENT WITH VARIOUS PRODUCER ASSOCIATIONS.

SO WHERE I THINK WE HAVE TO DRAW THE LINE IS -- WE ARE PERFECTLY HAPPY AND HAVE SHARED THE INFORMATION ABOUT THE MONEY AND HOW TO DISTRIBUTE THE MONEY ONCE IT GETS TO US -- WHAT WE BELIEVE IS OUTSIDE OF THE SCOPE OF THE SETTLEMENT AGREEMENT. AND FRANKLY, CLEARLY, THEY ARE TRYING TO RENEGOTIATE -- AT ONE POINT IN THE PAPERS --

THE COURT:

THAT SOUNDS SO PEJORATIVE. I DON'T THINK MR. JOHNSON -- HE'S SUCH AN EASY GUY TO GET ALONG WITH. YOU ARE NOT TRYING TO MAKE A NEW DEAL.

MR. SEGALL:

WE SHOULD WE SHOULD REWRITE THE SETTLEMENT AGREEMENT AND INSERT THE WORD "COLLECTION." THERE'S A GOOD REASON WHY THAT WORD DOESN'T APPEAR IN THE SETTLEMENT AGREEMENT. SO I DON'T THINK WE HAVE AN AGREEMENT, IN PRINCIPLE.

AND I THINK WE'VE HAD A PRETTY COOPERATIVE RELATIONSHIP WITH MR. JASKO SO FAR. I WOULD HOPE HE WOULD TELL YOU THAT WE'VE BEEN PRETTY FORTHCOMING WITH INFORMATION. HE'S BEEN ON SITE AT THE GUILD ON A NUMBER OF OCCASIONS. HE MET, IN PERSON, WITH THE KPMG AUDITORS, ONCE THEY STARTED. THERE WAS AN ONSITE PHASE OF THEIR WORK.

SO I DON'T THINK WE'VE BEEN HIDING THE BALL. AND AS MR. SCHECTER SAYS, I DON'T THINK WE'RE AVERSE TO RECEIVING GOOD AND HELPFUL SUGGESTIONS. WE

JUST DON'T BELIEVE THAT THE SCOPE OF THE CONSULTANCY SHOULD BE EXPANDED INTO 19 FOREIGN COUNTRIES.

AND THAT ALSO TIES INTO THE CONCERNS EXPRESSED IN OUR PAPER ABOUT PUTTING SOME OVERALL LIMIT ON THE COST OF THE CONSULTANT'S WORK, WHICH WE THINK IS ONLY FAIR.

THE COURT:

I'M NOT SUGGESTING THAT WE'RE GOING TO REWRITE THE DEAL. BUT I DO THINK THAT ONE OF THE REASONS ALL OF THIS LITIGATION CAME ABOUT WAS THAT FOREIGN MONIES WERE BEING COLLECTED, AND WEREN'T BEING VERY EFFICIENTLY DISTRIBUTED. THEY WERE BEING ACCUMULATED FOR AN EXTENDED PERIOD OF TIME, LARGE AMOUNTS OF MONEY, AND THE GOAL OF THIS LITIGATION, AT LEAST THREE CASES, AS I UNDERSTOOD IT. AND AS I SEE THE SETTLEMENTS, IS TO, YOU KNOW, DEVELOP AN EFFECTIVE AND VERIFIABLE MEANS OF DISTRIBUTION TO GET THIS MONEY OUT TO THE PEOPLE WHO DESERVE IT. AND I THINK WE'VE MADE SOME PROGRESS THERE. SOME MONEY HAS BEEN PAID OUT, AND WE'RE GOING TO MAKE MORE PROGRESS.

THAT DOESN'T SAY THAT -- AND YOU DON'T NEED TO STAND TO TALK TO ME UNLESS YOU FEEL MORE COMFORTABLE STANDING -- THAT DOESN'T MEAN THAT THE PLAINTIFFS ARE GOING TO TELL YOU HOW TO MAKE YOUR CONTRACTS WITH THE GUILDS AND THE SOCIETIES. BUT SOMETHING THAT CAN'T BE AVOIDED IS THE FACT THAT WHATEVER ARRANGEMENTS YOU'VE MADE, AND WHATEVER WONDERFUL RELATIONSHIP YOU HAVE WITH YOUR CONSULTANT MR. HADL.

MR. SEGALL:

HADL.

THE COURT:

IT HASN'T BEEN THE MOST EFFECTIVE PROCESS BECAUSE A LOT OF MONEY WAS COMING IN AND YOU DIDN'T KNOW WHERE TO SEND IT SO YOU DIDN'T GET IT OUT TO PEOPLE. SO MAYBE SOME SUGGESTIONS WOULD BE WORTH LOOKING AT.

AND ALL I'M SAYING IS, KEEP AN OPEN MIND. I'M NOT REWRITING THE AGREEMENT. THEY ARE NOT PUTTING THEIR MITTS ON YOUR DEALS. BUT THOSE DEALS HAVE TO WORK. AND WHATEVER MONEY COMES IN HAS TO BE PROCESSED EFFICIENTLY AND EFFECTIVELY AND GET OUT TO THE PEOPLE WHO DESERVE IT. AND THAT'S WHAT WASN'T HAPPENING AND WHAT THESE SETTLEMENTS WERE DESIGNED TO IMPLEMENT.

MR. SEGALL:

YOUR HONOR, I THINK WE'VE MADE BIG STRIDES TOWARDS THAT GOAL. AND IF YOU SAW AT THE LAST -- ONE OF THE THINGS WE WERE ABLE TO AGREE ON IN THE JOINT STATEMENT IS THE FINAL SECTION ABOUT WHAT WE EXPECT TO DO NEXT. THE WRITERS GUILD IS GOING TO GET SOMETHING VALUABLE OUT OF THIS WHOLE CONSULTANT PROCESS. AND THAT IS, I HOPE TO GET A SET OF RECOMMENDATIONS ABOUT HOW TO RESOLVE THE STATUS OF THESE VERY HARD TO DISTRIBUTE MONIES WHERE WE MAY NOT HAVE ANY INFORMATION, OR WE MAY ONLY HAVE INFORMATION ABOUT NAMES, BUT NO OTHER INFORMATION ABOUT THE IDENTITY OR DISTRIBUTION INFORMATION.

WE NEED A PROTOCOL TO HELP US RESOLVE THE STATUS OF THOSE MONIES. SOME OF IT WILL GO TO THE

CY-PRES CHARITY; SOME OF IT WILL DEFINITELY HAVE TO BE ESCHEATED TO THE STATE OF CALIFORNIA, BUT IT'S A VERY COMPLEX TASK.

AND WE ACTUALLY THINK THE BENEFIT TO US OUT OF THE SETTLEMENT AGREEMENT WILL BE A SET OF RECOMMENDATIONS WHICH HOPEFULLY WE'LL GET YOUR HONOR TO BLESS, WHICH WILL ALLOW US TO RESOLVE THE STATUS OF MONEY THAT WE'VE HELD FOR QUITE A BIT OF TIME BECAUSE WE HAVEN'T KNOWN WHAT TO DO WITH IT.

THE COURT:

WE'RE MOVING IN THE RIGHT DIRECTION. MR. JOHNSON?

MR. JOHNSON:

THIS IS THE POINT. WHAT'S THE WORRY ABOUT COLLECTION AND LOOKING INTO IT IN THE FIRST PLACE? WE'RE TALKING ABOUT TRANSPARENCY OVERALL. AND I REPRESENT A CONSTITUENCY THAT -- AND THE COURT DOES, THAT NOBODY ELSE IS PROTECTING, NAMELY, THE PEOPLE WHO AREN'T MEMBERS OF THESE PARTICULAR UNIONS.

AND WHEN THEY SAY, WE DON'T HAVE TO COLLECT THIS MONEY. AND WE CAN TURN ON A DIME AND JUST SAY FROM NOW ON YOU ARE ON YOUR OWN. IT WOULDN'T HURT TO HAVE A LITTLE KNOWLEDGE TO UNDERSTAND EXACTLY WHAT'S GOING ON.

NOW, WITH RESPECT TO MR. SCHECTER AND HIM SAYING I WANT TO SIT DOWN AND HAVE A MEETING. WHAT HAPPENED WAS AFTER WE WENT BACK AND FORTH, I FINALLY SAID, WE'LL SIGN THE WGA AGREEMENT. HE SAYS, SEND IT OVER. THEN HE SAYS, WE WANT TO HAVE A MEETING

AT THAT POINT -- I'M NOT GOING TO GET INTO ALL THE NUANCES. EVERYBODY ON OUR TEAM SAID, WE'RE DONE. WE'VE GOT TO GO SEE THE COURT AT THIS POINT.

MR. SCHECTER DID SAY THOUGH, HOWEVER, BECAUSE I SAID TO HIM ON THE COLLECTION ISSUE, LOOK, I'M NOT TRYING TO BLOW UP YOUR SYSTEM. I JUST WANT MY GUYS TO BE ABLE TO TALK TO HADL TO FIND OUT WHAT'S GOING ON AND GET A SENSE OF WHAT IS HAPPENING. WHAT THE DYNAMIC IS THAT'S HAPPENING IN THIS WHOLE SITUATION IS THAT IT'S SORT OF A DIPLOMATIC BACK AND FORTH. WE DON'T WANT TO DISRUPT -- NOBODY WANTS TO DISRUPT THE RELATIONSHIPS WITH THE EUROPEAN COLLECTION SOCIETIES. SO WE'RE -- MY CONSULTANTS AND EVERYBODY IS GOING TO HANDLE THIS WITH COMPLETE DISCRETION AND CONFIDENTIALITY AT ALL TIMES, BUT THEY SHOULD HAVE A HEADS UP OVER ALL THAT'S GOING ON.

MR. GERVAIS USED TO RUN THE SOCIETY THAT SUPERVISED ALL OF THESE COLLECTION SOCIETIES. AND HE'S AN ATTORNEY AND ONE OF THE WORLD'S FOREMOST EXPERTS ON THE COLLECTION OF THESE KINDS OF MONIES. THIS GENTLEMAN HERE, MR. JASKO, USED TO RUN ONE OF THE TWO COLLECTION SOCIETIES IN AMERICA, COLLECTING ALL OF THE MONEY AND THEY ARE BOTH LAWYERS. AND I THINK IT WOULD BE HELPFUL TO HEAR FROM BOTH OF THEM. BUT THE BOTTOM LINE IS THAT WE'RE JUST TRYING TO GET A HEADS UP ON WHAT'S GOING ON. ALL WE WANT TO DO IS CONTRIBUTE AND MAKE SUGGESTIONS AS TO HOW

YOU CAN DO THE JOB BETTER, WHICH IS WHY THEY WANT TO KNOW ABOUT IT. WE ARE HERE BECAUSE THEY WEREN'T GETTING PAID.

I'LL TELL YOU A SPECIFIC ISSUE, FOR EXAMPLE, WITH SAG. WE WERE TOLD WHEN WE MADE THE SETTLEMENT THAT SAG WAS ONLY COLLECTING ON BEHALF OF MEMBERS AND THOSE WHO WERE, IN QUOTES, COVERED WORKS. NOW WE UNDERSTAND THAT THEY ARE ALSO GETTING MONEY ON BEHALF OF PEOPLE WHO ARE NOT IN THEIR UNION AND ARE NOT UNDER COVERED WORKS. WE NEED FIND OUT HOW THOSE MONIES ARE COMING TO SAG AND WHAT HAPPENS TO THEM ONCE THEY GET THERE.

THE COURT:

WE HAD THIS ISSUE ON THE COVERED WORKS WITH SAG WITH THE AUSTRALIAN GUILD, AND I HAVE SOME COMMENTS ON THAT.

BUT, YOU KNOW, WE WORK ON KIND OF A CASE OR CONTROVERSY CONCEPT HERE. AND YOU, AS A PLAINTIFF, KNOW YOU FILE YOUR COMPLAINT AND YOU SAY WHAT YOU WANT. AND THEN IF YOU ARE SUCCESSFUL YOU GET WHAT YOU WANT. AND IF YOU NEGOTIATE A DEAL, WE RESOLVE THE CONTROVERSIES AND WE MOVE FORWARD.

YOU ARE, IN SOME RESPECTS, AT LEAST IN MY VIEW, ASKING TO GO BEYOND THAT WHICH WAS ON THE TABLE, IN THE GAME FROM YOUR COMPLAINT, AND FROM YOUR POSITION, ON ALL THREE OF THESE LAWSUITS. AND I'M SAYING, I DON'T THINK YOU OUGHT TO GO THERE.

NOW, I'M CONCEDING THAT YOU HAVE TO HAVE SOME INFORMATION ABOUT THE COLLECTION PROCESS. AND YOU

HAVE TO KNOW THAT. AND YOU HAVE THE RIGHT TO DESIGNATE CONSULTANTS TO REVIEW THIS, AND I'M GOING TO GET YOU THE INFORMATION THAT YOU ARE ASKING FOR, BUT THAT DOESN'T MEAN THAT YOU CAN THEN JUMP OVER THE HURDLE AND SAY, WELL, WE'RE GOING TO CHANGE THE GAME HERE. WE WANT TO BE ABLE TO DICTATE HOW THESE RELATIONSHIPS ARE CREATED, WHAT THE SCOPE OF THE RELATIONSHIPS ARE. THOSE ARE BEYOND WHAT WE HAVE IN THESE LAWSUITS, IN MY VIEW.

MR. JOHNSON:

I'VE TALKED WITH THE CONSULTANTS. I THINK ALL WE'RE LOOKING AT IS ARE YOU COLLECTING THE MONEY FROM THE SOCIETIES THAT YOU HAVE DEALS WITH, AND HOW DO YOU COLLECT IT FROM THESE PEOPLE? THAT'S WHAT WE'RE REALLY TALKING ABOUT.

THE COURT:

WELL, WE'RE GOING TO GET THAT INFORMATION --

MR. JOHNSON:

WE'RE NOT SAYING YOU SHOULD HAVE MADE A DEAL WITH COUNTRY X, WHY DIDN'T YOU? OKAY? THAT'S, I THINK, WHAT --

THE COURT:

IF THAT'S ALL YOU ARE ASKING FOR, I DON'T HEAR MR. SCHECTER OR MR. SEGALL SAYING THAT THEY ARE NOT GOING TO DO THAT.AND MR. JASKO, YOU SPENT TIME AT THE GUILD, ARE THEY GIVING YOU INFORMATION WITH RESPECT TO THE SOURCE OF THE FUNDS THAT ARE COMING IN?

MR. JASKO:

YES, THEY ARE. THE WRITERS' GUILD HAS DONE SO. WE HAVE NOT GOTTEN ANY INFORMATION, SUBSTANTIALLY, IN THAT REGARD FROM SAG YET.

THE COURT:

WE'RE MOVING IN THE RIGHT DIRECTION THOUGH. AND THAT'S WHY -- TENSIONS FLAIR, PEOPLE GET A LITTLE EXCITED, BUT THE IDEA IS TO CALM DOWN AND GET THINGS DONE.

MR. JOHNSON:

WHAT I'M SAYING WITH RESPECT TO KPMG IS THERE ISN'T A SENSE OF INCLUSIVENESS. AND I BELIEVE THE KPMG PEOPLE SHOULD BE CONSULTING WITH OUR CONSULTANTS AND THEY SHOULD BE GOING BACK AND FORTH, TO SEE ARE YOU DOING A GOOD JOB? AND, HERE'S SOME IDEAS ON WHAT ELSE YOU OUGHT TO BE DOING; THAT'S WHAT WE WANT TO SEE HAPPEN THERE.

MR. SEGALL:

YOUR HONOR, THE SETTLEMENT AGREEMENT PROVIDES FOR HIRING A BIG FOUR ACCOUNTING FIRM TO DO A ONE-TIME REVIEW ON THE GENERALLY ACCEPTED ACCOUNTING PRACTICES. AND THAT'S WHAT OUR AGREEMENT WITH THEM SAYS; THAT'S WHAT THEY ARE DOING RIGHT NOW. AUDITORS ARE, BY THEIR NATURE, VERY INDEPENDENT. THEY GO OFF AND WORK AND ASK FOR INFORMATION. AND THEY DON'T LIKE YOU TELLING THEM HOW TO DO THEIR WORK.

AS I SAID AT THE BEGINNING OF THEIR WORK MR. JASKO DID SIT DOWN WITH THEM IN OUR OFFICES. WE ARE NOW TOLD THAT BY THE END OF THIS MONTH, HOPEFULLY, AND THERE'S BEEN SOME DELAY, AND IT'S MAINLY BEEN THEM. BUT AT THE END OF THIS MONTH THEY WILL HAVE A DRAFT REPORT.

AS I UNDERSTAND THEIR PROCEDURE, THEY ARE GOING TO GIVE US A REPORT IN DRAFT; WE WILL SHARE THAT WITH THE CONSULTANTS AND WITH CLASS COUNSEL. AND

THEN THERE MAY BE PROBLEMS ABOUT HOW THEY DID THEIR WORK OR -- AND WE CAN CROSS THAT BRIDGE WHEN WE GET THERE. I THINK WE'RE ABOUT A MONTH AWAY FROM THAT, AND WE'LL FOLLOW THAT PROCEDURE.

WE'RE NOT GOING TO HIDE THAT REPORT FROM THEM. THERE WILL BE A DRAFT. AND ONCE WE SIGN OFF ON THE FINAL REPORT IT WILL GO UP ON THE WEBSITE AS OUR AGREEMENT.

THE COURT:

GET THE DRAFT OUT. MAYBE WE'RE ON THE RIGHT TRACK. WE'RE ON TIME. IF THAT DRAFT IS COMING OUT, AS FAR AS THE WRITERS' GUILD GOES, THAT'S WHAT WE'RE TALKING ABOUT?

MR. SEGALL:

YES.

THE COURT:

GET THAT IN MR. JASKO'S HANDS, MR. JOHNSON'S HANDS, AND WE'LL SEE WHERE WE ARE. I DON'T WANT TO THROW DARTS AT PEOPLE THAT ARE JUST TRYING TO DO THEIR JOB.

AND I'M NOT, AGAIN, TERRIBLY SYMPATHETIC ABOUT YOUR OBJECTION ABOUT THE SELECTION OF KPMG, IF IN FACT, YOU HAD THE OPPORTUNITY AND YOU WERE ENGAGED AND INVOLVED IN AT LEAST TALKING WITH THEM ABOUT THE SELECTION. NOW, MY UNDERSTANDING IS THERE WERE TWO FIRMS CONSIDERED, DELOITTE AND KPMG. THE FACT THEY WENT WITH KPMG, THEY ARE A REPUTABLE FIRM. I DON'T THINK THAT THEY ARE GOING --

MR. JOHNSON:

I'M NOT CRYING SPILT MILK ABOUT KPMG. I'M SAYING I'D LIKE TO BE INCLUDED NOW -- NOW THAT THEY HAVE THEM, CAN WE UND