Happy Monday, I’m Eriq Gardner.

Welcome back to The Rainmaker, a private email about how those in power are staying on the right side of the law—or calling crafty attorneys when they don’t. (Was this email forwarded to you? Click this link to subscribe.)

In this week’s edition, it’s Hollywood on strike! Again, because there’s nothing showbiz likes more than a sequel. Plus, a Supreme Court justice’s Pirates of the Caribbean prophecy, Barstool Sports’ right to smear, a rapper’s non-delight, and finally, the new wrinkle in Bob Iger’s war with Ron DeSantis.

But first…

• The grudge match between actor Michael Rapaport and Barstool Sports is exploring the line between trash talk and defamation. Back in 2017, Rapaport taped podcasts for Dave Portnoy’s bro media platform, but the relationship quickly deteriorated, with Barstool Nation soon attacking the actor as a racist who beat up his girlfriend and had herpes. Nasty, but after Rapaport sued, a federal judge stressed the context—that observers would understand these opinionated vulgarities weren’t assertions of fact. Now, both sides have filed briefs with the Ninth Circuit Court of Appeals. Rappaport’s lawyer agrees that context does matter—but argues the proper context is understanding Barstool as a bully for profit. Barstool, in turn, contends that Rappaport still can’t get around his own reputation as the M.V.P. of trash talk. (Read both Rapaport’s and Barstool’s briefs).

• A Washington, D.C. jury has found Fugees rapper Pras Michel guilty of acting as an unregistered foreign agent to covertly influence the Obama and Trump administrations. The hip-hop star now faces decades in prison, although this controversy could also become intriguing on appeal. Before trial, Michel was reportedly seeking to finance his criminal defense by pitching a stake in the separate but related $75 million forfeiture proceeding that depended, in part, on the outcome of the case. Now, I wonder whether Michel might attempt to entice foreigners wishing to take a crack at the constitutionality of lobbying prohibitions.

• The lack of a tie-breaking vote on the F.C.C. is becoming a huge problem for the industry it ostensibly oversees. Apparently President Biden is fine with this state of affairs—a couple months ago, Gigi Sohn finally withdrew from consideration as a fifth commissioner, and Biden appears to be in no rush to nominate someone new to an agency that now occupies its time fighting robocalls. Meanwhile, the National Association of Broadcasters has become so frustrated by the lack of action that on April 24 it filed a writ of mandamus to the D.C. Circuit of Appeals over the FCC’s failure to finish up its 2018 quadrennial broadcast ownership review. At stake, among other restrictions, is the future of the Dual Network Rule, which effectively prohibits a merger among CBS, NBC, ABC, and Fox. Is that Shari Redstone calling? I can’t tell as caller ID indicates it might be a scam.

What’s on the table? Basic wage increases, of course, “mini room” working conditions and downstream residuals. But that’s just for starters, with A.I. coming into view, and the directors’ and actors’ guilds soon airing their own grievances. While their contracts are up June 30, the writers’ agreement expires tonight.

On the eve of a possible WGA strike, I spoke to Jonathan Handel, whom I worked alongside for years at The Hollywood Reporter and more recently at Puck, where he occasionally contributes to What I’m Hearing, Matt Belloni’s private email. (Check out his latest dispatch on the strike here.)

Jonathan is the best labor reporter I know, and he’s also an attorney who has worked on these very issues for decades. Previously, he was on the legal staff of the WGA and he has acted as outside counsel to SAG-AFTRA. He now regularly represents producers and others in their dealings with guilds. He’s also the author of Hollywood on Strike! chronicling the WGA’s last walkout. We talked this past weekend about the negotiating showdown, whether some of the debt-laden streamers are insidiously rooting for a strike, and the fraught role of showrunners. Herewith our edited back and forth…

Jonathan: I’m not hearing any notes of progress—on the contrary, I’m told that the WGA is standing pretty firm in its demands, as you’d expect from a union that faced down the major talent agencies just a few years ago and that garnered almost 98 percent support for a strike authorization. A strike, if it happens, could come as early as 12:01 a.m. Tuesday—or the Guild could wait a few days if it thought that to be strategic, which I doubt.

Eriq: I suppose there’s always the possibility that the two sides make enough progress that they give themselves some extra time. But I’d be surprised if there’s no strike. Tell me about the key negotiators and how they are contributing to the dynamics of this situation.

Jonathan: The AMPTP—the alliance of studios and streamers—is headed by its longtime president and chief negotiator, Carol Lombardini, who has to keep a very divergent group of companies corralled and working towards a deal. Meanwhile, the WGA’s chief negotiator, Ellen Stutzman, is a first-timer in that role and, although a 17 year veteran of the guild, has been assistant executive director for just five years. She stepped in when the guild’s fiery executive director, David Young, was sidelined for medical reasons. Stutzman is a calmer presence, but she has a mandate to stand tough and a membership that expects her to do so.

Eriq: I’m curious how the studios are going to react to this work stoppage. Last time, a lot of them famously turned to unscripted fare. What happens this time if there’s a prolonged strike? Do they use A.I. to write new seasons of shows? (Is ChatGPT a scab?) Will we see them going to foreign countries for content? Netflix is already stocking up. What are some of the strategies you’ve heard about as everyone prepares?

Jonathan: I think ChatGPT is still busy trying to break up journalists’ marriages and isn’t ready to settle down in an otherwise empty mini room. Maybe a mini computer room? We’ll definitely see more unscripted content, as we did in the last strike and the 1988 one before that. And it’s helpful to Warner Bros. Discovery that HBO Max and Discovery+ are set to merge and become Max on May 23, just three weeks after a potential strike starts. That’ll be a real test of the interchangeability of some of the most premium content and some of the, well, less premium content. (I’ll hold my tongue because, full disclosure, I have clients with a show on Discovery+.) And, yes, foreign content is something Netflix has prioritized, and I think we’ll see more of it, along with news and sports on both linear and streaming.

Eriq: Yeah, that also touches on an important point. This will be the first writers’ strike during the true streaming era. As a result, the stoppage is really going to feel different. In the old days, the industry was programming to a time and place, and so the absence of a C.S.I., House, or Grey’s Anatomy really hit. Consumers noticed. Will they care as much if the new season of The Night Agent on Netflix is delayed or if Max rearranges its home screen to emphasize Naked and Afraid and Love It or List It? I’m not quite sure.

Jonathan: Yes, a key difference: streamers have library content they can exploit. You never watched Stranger Things or even The Sopranos? Time to binge!

Eriq: You referenced mini rooms, which also seem like a product of this streaming era. It’s the first time that this has come up in bargaining, but it’s also no surprise given how the TV industry has largely moved away from pilot episodes as the primary way that executives decide which shows to greenlight. Now, they have small groups of writers break several episodes to have a better sense before committing to where a series may go. That, of course, creates strain, and the writers feel like they’re being taken advantage of. This seems like a hybrid of a compensation issue and a demand for respect. My cynical side says that the writers ultimately just care about the money. They’ll end up sacrificing dignity if it advances them financially, especially in the short term. And the studios will want to preserve as much flexibility as possible. Am I off here?

Jonathan: Mini rooms are a product of streaming and short seasons. The issue actually came up in 2020, but those negotiations were cut short by the pandemic just as talks were starting. Many of the WGA’s leaders view this year’s negotiations as taking care of unfinished business from three years ago. I think you’re right that respect is an issue, but I’m not sure that sacrificing dignity is the automatic outcome. And there’s another aspect: because mini rooms often close before production, junior writers lose out on the opportunity to do production rewrites, participate in post-production and work directly with actors, directors and editors. Those are essential experiences, essential skills—and essential contacts—for staff writers looking to move up the career ladder.

Eriq: How about actors and directors? For a couple of months at least, until the bargaining agreements for their unions expire in late June, the rest of Hollywood keeps working. But do they? Will it really be status quo in the face of writers’ picket lines and their own deals imminently expiring?

Jonathan: Well, the no-strike clauses in their agreements mean that directors and actors may have to cross picket lines—if there’s any production to cross lines for. By all reports, filming has already slowed to a trickle, and producing anything without a writer on hand for emergency rewrites is a risky approach that most producers avoid.

Eriq: Some writers wear producer hats. Showrunners, after all, are writer-producers. It’s going to be strange for those who are ostensibly on strike to show up at work and do half their job. I know the WGA just put out strike rules. Still, I imagine it’s going to be plenty weird in town for the next couple of months.

Jonathan: They might not show up. That’s my memory of 15 years ago. Many just didn’t do their producing, even though producing is outside the WGA’s purview. Of course, some will, and might work from home. They have the right—and contractual responsibility—to do so, as long as they’re not writing. So it’s awkward.

Eriq: Talk a little bit about the role of showrunners in these negotiations and (probable) strike.

Jonathan: They can be incredibly powerful in WGA dynamics. Showrunners and a small group of screenwriters are the high earners and are the “stars” of the profession. But unlike with SAG-AFTRA, where most stars—“high-pros,” as they call them internally—play little role in guild politics, some of the showrunners do have a part in Writers Guild affairs. I’m not necessarily talking about the mega-showrunners, the Shonda Rhimeses and Greg Berlantis, but perhaps the next level down. Indeed, it was a group of showrunners who finally drove the ending to the 1988 strike, approaching guild leadership and saying it’s time for a deal.

Eriq: Big showrunners often have seven-, eight- and even nine-figure overall deals, and one thing I’m really watching is whether studios and streamers use the strike to get out of the expensive deals they regret. Will they turn to the force majeure provisions?

This is no small thing. There’s a lot of speculation that the studios want the strike so they can clean the books—for some reason, I’m thinking about Zaz and debt right now—and while I don’t quite believe the theory, I do think we’ll see some high-profile projects and relationships canceled. Also, if there’s any subject that will prompt litigation, it’s this.

Then again, I’ve heard that force majeure clauses have evolved somewhat in the past decade or two with transactional attorneys thinking about how to better protect actors, directors, and writers from strikes. Is that so? And how do you think this issue plays out?

Jonathan: Force majeure is definitely going to be in play. If a strike lasts more than a few days or so, the studios and streamers have an incentive to let the work stoppage continue for eight weeks, because that’s typically the timeframe that triggers the company’s right to terminate an overall deal under force majeure. Those provisions allow for suspension and ultimately termination in the event of a massive halt to the industry such as would be caused by a major earthquake, civil unrest or, in this case, a strike. I think we’re likely to see terminations and also renegotiations under threat of termination. And then the companies have a cost-cutting narrative to sell to Wall Street and perhaps even move share prices.

Eriq: I’ve also heard that to protect themselves from being singled out and give studios pause before terminating a relationship, some talent deals now require studios not only to execute force majeure clauses against them, but everyone. So, for example, you can't just fire the writer. You have to fire the director and the actors, too.

Anyway, it’s likely to be a very interesting next couple of months. I bet the Cannes Film Festival is going to be super weird this year. Those strike rules may mean a lot of meetings where people are supposedly not shopping their projects.

Jonathan: Oh, the glamor! The sun, the sea, the yachts, food and wine—and parties without pitches? It’s hard to imagine, but rules are rules, even a continent away.

One thing about Disney’s legal action that has escaped commentary—even though it’s likely to become the center of attention—is how O’Melveny litigation superstar Daniel Petrocelli has managed to file this case in federal court. Disney’s move makes tactical sense. The company, after all, surely wanted to bypass DeSantis-appointed judges, eventually at Florida’s Supreme Court. But can it?

Here’s where the 11th Amendment may come up. This constitutional addendum restricts the ability of citizens to bring suits against states in federal court. This bar, enacted at a time when states had debt problems and sovereignty was a paramount concern, can be puzzling. Four years ago, for instance, the Supreme Court wrestled with the hard-to-fathom yet evidently correct notion that states have immunity for their intellectual property thievery. “One might think that Walt Disney Pictures could sue a state for hosting an unlicensed screening of the studio’s blockbuster film Pirates of the Caribbean (or any of its many sequels),” wrote now retired Supreme Court justice Stephen Breyer, marveling at the unanimous ruling by his colleagues. “Yet the court holds otherwise."

Of course, the 11th Amendment isn’t impenetrable. There are ways around it, and Disney is steering its case towards the most legally famous (and most controversial) path by citing the Ex Parte Young doctrine, which dates back to a 1908 case that held that state officials could be sued in federal court to prevent them from enforcing unconstitutional laws. Notably, Disney isn’t shooting for damages in its power battle with DeSantis. That would be a sure loser under sovereign immunity precedent. Instead, the corporation aims for declaratory and injunctive relief to ensure that local officials honor previously recognized contracts.

DeSantis will probably respond that this stretches the Ex Parte Young doctrine beyond what’s permissible. He’ll likely argue that land use is a local issue—and that despite the fact that the governor now appoints members to the oversight board, he has no real enforcement authority over these contracts. If that’s the DeSantis administration’s initial move to beat a First Amendment claim in federal court (while pushing a parallel suit in state court), it won’t be the first time. In fact, that’s pretty similar to what DeSantis tried in Dream Defenders, a 2021 case that dealt with a DeSantis-era anti-rioting law that came in the wake of Black Lives Matter protests. There, U.S. District Court Judge Mark Walker rejected the governor’s challenge to being hauled into federal court, pointing out that DeSantis has the authority to call the state militia to respond to a “riot” and had actually done so. Walker wrote, “Does Governor DeSantis really contend that no plaintiff in any case could ever have standing to sue him?”

Disney v. DeSantis, of course, has just been assigned to the very same Judge Walker, who also once called the Stop WOKE Act “positively dystopian.” (By filing in Tallahassee, Disney had a 35 percent chance at landing its case with Walker, the same probability of being stuck with Trump appointee Allen Winsor. Some magical fairy dust, I guess.)

Still, don’t shrug off this sovereign immunity issue just because of the judge. Anyone inclined to do so would be well-advised to heed DeSantis’s battle with Andrew Warren, the Tampa-area district attorney whom the governor suspended, ostensibly for pledging not to prosecute certain low-level offenses. Warren went to federal court, claiming, like Disney, that the governor retaliated against him for speaking up on social issues (in his case, on abortion and transgender issues). In January, U.S. District Court Judge Robert Hinkle—a Clinton appointee—agreed that DeSantis was wrong to oust Warren yet nevertheless ruled the 11th Amendment tied his hands. (Incidentally, Warren is scheduled to argue his appeal tomorrow at the 11th Circuit.)

If this situation starts going badly for Disney, the company may lean on its alternative claim that the Takings Clause of the Fifth Amendment prevents citizens from being deprived of property without just compensation. The Supreme Court recently held that a Takings Clause claim can be brought against a local government in federal court so it’s not a surprise to see Disney trot it out as a secondary legal theory in its complaint. Although, on further thought, is Disney really suggesting that DeSantis stole Disney World? Now that’d be some villainy in the Magic Kingdom.