Supreme Court Gives Another Boost to Managers with 'Judge Alex' Decision

Posted by Matthew Heller

In the ongoing struggle between talent managers and the clients who fire them, the U.S. Supreme Court's decision yesterday in a case brought by TV's Judge Alex may be the second court ruling in less than a month to tilt the balance of power toward management.

As reported in today's THR, the Supremes found that Alex Ferrer's contract dispute with manager Arnold Preston should be heard by an arbitrator and not, as Ferrer contended, by California's labor commissioner. Under the state's Talent Agency Act, all disputes are referred to the commission, which tends to be hostile to managers who "procure" employment for clients, as outlawed by the TAA. But the high court said the act was superseded by the arbitration clause in the Ferrer-Preston contract.

"[W]hen parties agree to arbitrate all questions rising under a contract, state laws lodging primary jurisdiction in another forum, whether judicial or administrative, are superseded by the FAA," Justice Ruth Bader Ginsburg wrote for an 8-1 majority.

The decision follows the California Supreme Court's ruling last month in Marathon Entertainment v. Blasi that a single act of illegal procurement by a manager doesn't necessarily void an entire contract with a client. That case was seen as a victory for managers, who previously found their entire management agreements void if a former client could demonstrate even the smallest act of procurement.

"At this point, I think it’s fair to say that we’re all updating our management agreements to include arbitration clauses and ensure that a single, isolated act of procurement won’t void the entire agreement in the future," entertainment litigator Gordon Firemark writes on his blog. "These two recent decisions go a long way to level the playing field for agent/manager relations, though some will argue that they are a blow to the very few protections artists have against unscrupulous managers."

Preston is represented in the case by Joseph Schleimer in Beverly Hills.  Robert Dudnik reps Judge Alex.