Judge: Daniel S. Murphy, Case: 24STCV18257, Date: 2025-02-03 Tentative Ruling

Case Number: 24STCV18257    Hearing Date: February 3, 2025    Dept: 32

BACKGROUND

            On July 24, 2024, Plaintiff Samual Maydew filed this action against Kenneth McBride for (1) breach of oral contract, (2) common count, and (3) unjust enrichment.

According to the complaint, Plaintiff is a Hollywood talent manager who used to represent Defendant, an actor. (Compl. ¶ 6.) Because Defendant had bad credit and could not obtain a credit card in his own name, Plaintiff allowed Defendant to use Plaintiff’s American Express account on the condition that Defendant pay the monthly bill. (Id., ¶ 7.) Defendant stopped making payments after several years, causing Plaintiff to pay $102,936.75 to cover expenses incurred by Defendant. (Id., ¶¶ 7-8.)

On December 31, 2024, Defendant filed the instant motion to stay or dismiss the action pending an action before the Labor Commissioner. Plaintiff filed his opposition on January 21, 2025. Defendant filed his reply on January 27, 2025.

LEGAL STANDARD

            The Talent Agencies Act (TAA) regulates the activities of a “talent agency,” defined as “a person or corporation who engages in the occupation of procuring, offering, promising, or attempting to procure employment or engagements for an artist or artists.” (Lab. Code, § 1700.4; Styne v. Stevens (2001) 26 Cal.4th 42, 50.) In matters arising under the TAA, “the parties involved shall refer the matters in dispute to the Labor Commissioner.” (Lab. Code, § 1700.44(a).) “The Labor Commissioner is empowered to hear and determine disputes under it, including the validity of the artists’ manager-artist contract and the liability, if any, of the parties thereunder.” (Buchwald v. Superior Court of San Francisco (1967) 254 Cal.App.2d 347, 357.)

“The reference of disputes involving the act to the Commissioner is mandatory.” (REO Broad. Consultants v. Martin (1999) 69 Cal.App.4th 489, 494-95.) “Disputes must be heard by the Commissioner, and all remedies before the Commissioner must be exhausted before the parties can proceed to the superior court.” (Id. at p. 495.) If a party “prematurely files a civil lawsuit prior to filing with the commissioner, the superior court proceedings are stayed until the remedies before the commissioner are exhausted.” (Blanks v. Seyfarth Shaw LLP (2009) 171 Cal.App.4th 336, 360.)   

DISCUSSION

            Relying on the Labor Commissioner’s exclusive jurisdiction as granted by the TAA, Defendant argues that this case should be stayed or dismissed because he has filed a TAA claim against Plaintiff with the Labor Commissioner.

            “[C]ontroversies colorably arising under the Talent Agencies Act are within the exclusive original jurisdiction of the Commissioner.” (Styne, supra, 26 Cal.4th at p. 59.) Thus, the issue is “whether such a colorable basis arises here.” (Id. at p. 60.) “Colorable” is used “in its broadest sense.” (Blanks, supra, 171 Cal.App.4th at p. 363.) If a dispute “plausibly pertains” to the TAA, it “should be submitted to the Commissioner for first resolution of both jurisdictional and merits issues, as appropriate.” (Ibid.) However, “the superior court need not refer to the Commissioner a case which, despite a party’s contrary claim, clearly has nothing to do with the Act.” (Ibid.)

            Defendant’s petition to the Labor Commissioner alleges that the purported oral agreements pertaining to Plaintiff’s AmEx account were improper financial arrangements made in the course of the parties’ management relationship. Specifically, the agreements allegedly “lacked full disclosure of terms, a formal written agreement, failed to disclose direct conflicts of interest, and independent legal advice.” (Def.’s RJN, Ex. A, § 4.3.5.3.) The arrangements were allegedly “tainted by conflicts of interest and Respondent's fiduciary duty to prioritize Petitioner's financial well-being.” (Id., § 4.3.5.4.) The petition alleges that this renders the agreements void. (Id., § 4.3.5.5.)

            This is a colorable claim that “plausibly pertains” to the TAA. (See Blanks, supra, 171 Cal.App.4th at p. 363.) Even if there is a dispute over whether the claim implicates the TAA, that question itself falls under the Labor Commissioner’s exclusive jurisdiction. (See Styne, supra, 26 Cal.4th at p. 55, fn. 6 [“The Commissioner's exclusive jurisdiction to determine his jurisdiction over issues colorably arising under the Talent Agencies Act thus empowers him alone to decide, in the first instance, whether the facts do bring the case within the Act”].) “The only possible way to satisfy the broad jurisdictional boundaries of the TAA is to require that this issue first be examined by the commissioner.” (Blanks, supra, 171 Cal.App.4th at pp. 365-66.)

            Plaintiff argues that the statute of limitations under the TAA is one year, and Defendant’s petition to the Labor Commissioner does not allege any contracts formed within the last year. (See Lab. Code, § 1700.44(c); Def.’s RJN, Ex. A, § 4.1.) However, statutes of limitations “act as shields, not swords.” (Styne, supra, 26 Cal.4th at p. 52.) “[N]either the limitation of the statute nor the doctrine of laches will operate to bar the defense of the invalidity of the agreement.” (Ibid.) A defendant is entitled to “abide his time” and only raise the defense “when enforcement is sought against him.” (Ibid.) Thus, “the one-year limitations period of section 1700.44, subdivision (c) does not apply to pure defenses arising under the Talent Agencies Act.” (Id. at p. 53.) Here, Defendant is entitled to assert the invalidity of the alleged loan agreements as a defense to Plaintiff’s claims regardless of the statute of limitations. Because the defense “plausibly pertains” to the TAA, the Labor Commissioner has first jurisdiction over the dispute. 

CONCLUSION

            Defendant’s motion to stay is GRANTED.