Behind the Catwalk, Suspicion and Suits
At a crucial moment some years back when New York's top modeling agencies were considering whether to raise the prices they charged clients, Monique Pillard, an executive at Elite Model Management, dashed off a memo to colleagues. The agencies, she wrote, would be "committing suicide if we don't stick together." Noting that one rival at the Wilhelmina agency had warned her that such talk could give the impression of a price-fixing conspiracy, Ms. Pillard wrote, "Ha! Ha! Ha!" and dismissed the idea with an expletive.
The document is typical of the kind of evidence jurors in Federal District Court in Manhattan will be shown beginning June 1, when a complex class-action suit brought by a group of models against their former modeling agencies goes to trial. Though jurors may show up expecting sexy stuff, they will soon learn that the case has little to do with catwalks, lingerie or lithe beauties and everything to do with the interpretation of documents like the one lawyers now refer to as the "Ha-ha-ha" memo.
Is it evidence that Ms. Pillard knew she was involved in a price-fixing scheme? Or proof that she thought suspicions about such a scheme were way off the mark?
The fate of some of the best-known New York modeling agencies — Elite, Next, Wilhelmina and Ford Models among them — may hang on just such questions. Because the plaintiffs have charged the agencies with fixing the commissions of potentially thousands of models over a period of years and because damages in antitrust lawsuits are tripled, a verdict against the agencies could cost them tens of millions of dollars — much more, the agencies have said, than they have on hand.
Some could face bankruptcy from the legal fees alone, say people with knowledge of the suit. The models have intimated in court papers, and in two related suits in New York State Supreme Court, that if they can't collect from the agencies themselves, they'll go after the personal assets of some of the biggest names in the modeling industry, like Dieter Esch, the head of Wilhelmina; John Casablancas, the founder of Elite; and the Ford family, which started Ford Models.
"It would mean a wholesale Chapter 11 bankruptcy filing for everyone," said Heinz Holba, the president of New York Model Management and one of the few Manhattan agency heads not involved in the litigation. There have already been casualties since the suit was filed in 2002. The New York branch of Elite, the global modeling agency that manages Lauren Bush and Paulina Porizkova, filed for bankruptcy in February, in part, the agency said, because of roughly $1.5 million in legal fees incurred in defending itself against the suit. Ms. Pillard, who said she has filed for personal bankruptcy because of her legal bills in the case, called the lawsuit "idiotic."
"We have never cheated any models out of anything," she said. "It's totally wrong and ridiculous."
Two weeks ago, IMG, the giant entertainment agency known mostly for its representation of athletes, settled with the plaintiffs for more than $11 million, according to a source familiar with the settlement. Linda Dozoretz, a spokeswoman for IMG, confirmed the settlement but declined to comment on the $11 million figure. The settlement may have been motivated by a provision in antitrust cases that makes defendants with money responsible for the damages incurred by co-defendants who have gone broke.
The case is so sprawling — it has involved 10 different modeling agencies, and because it is a class-action suit, potentially thousands of models — that most major figures in the Manhattan modeling industry are in some way connected.
And nearly everyone in the fashion world has an opinion. The agencies' defenders say that for the most part modeling firms are low-margin mom and pop operations that cannot even afford liability insurance, and they paint the small group of models who originally brought the suit as embittered by stalled careers.
Weber, the fashion photographer. "I know some of them. It depresses me so much that there's this bitterness from people who were never really able to do well in this business. That's what this is from."
The models' sympathizers say that the industry is known for its rapacious attitude toward vulnerable young people and that it has long lacked professionalism. Scrutiny of its finances is overdue, they say, and if the private firms are low on cash, it's only because owners have depleted their coffers by paying themselves huge salaries.
"It's an industry that's long escaped financial scrutiny," said Justin Klentner, 41, a model for 15 years for various agencies and a supporter of the suit. "There are a bunch of minors who are being managed by people in their 40's and 50's who will take as much advantage of them as they can for financial gain."
Judge Harold Baer Jr., who is hearing the case, has instructed both sides in the lawsuit to refrain from speaking to the news media, but in court papers and in press accounts, the former models have cast their effort as an attempt to clean up a trade famous for its bad players. The agencies counter that they are too competitive and that their industry is too riven with personal animosities between agency heads — many of whom have sued each other over model poaching — ever to have engaged in collusion.
The lawsuit originated not in New York but in California. It was there that Carolyn Fears, 34, a 5-foot-11 redhead who left Illinois at 19 to join Ford Models in New York, met Brian Rishwain, himself a former Calvin Klein model who now practices entertainment law in Los Angeles. Ms. Fears had been angered to learn that while Ford was taking a 20 percent commission every time she was booked, the agency was also charging her employers — mostly magazines — a 20 percent commission. The modeling agencies were registered as talent managers under New York State law, a classification with no set cap on commissions. But Mr. Rishwain suggested that they were little more than employment agencies, which are limited to commissions of 10 percent. Mr. Rishwain took Ms. Fears's case and joined forces in New York with Boies, Schiller & Flexner, the law firm of David Boies, which successfully brought price-fixing suits against the auction houses Sotheby's and Christie's. With five models from other agencies, Ms. Fears filed a class-action suit in New York seeking to get back commissions she believed she should never have paid.
During the discovery process for the case, the models' lawyers came into a trove of potentially damaging documents, many of them memos and minutes from meetings of the modeling agencies' trade group, the International Model Management Association. Of particular interest to the models were documents showing that shortly after association meetings, the agencies uniformly raised their commission rates, from 10 to 15, and eventually to 20 percent.Some of the minutes gave the impression that the uniform price rises were not mere coincidence. For example, at a 1991 meeting cited in legal papers filed in the case, Mr. Casablancas announced that Elite planned to raise its commission rates to 20 percent, giving his competitors a head's up before his clients knew.
In a deposition, Mr. Casablancas said that at Elite, "we were always favorable to letting everyone know as much as possible about our pricing policies." Mr. Esch, the head of Wilhelmina, admitted in a deposition that sometime between 1996 and 1998, he gave association members advance notice that he was raising some commissions to 25 percent.
The models argue that the association was little more than a front for helping agency heads keep track of each other's pricing policies, a charge scoffed at by Ms. Pillard.
"We always had a disgusting lunch, and it was a waste of time," she said of the trade association meetings. "We talked about nothing and didn't accomplish anything."
For two years, the case quietly made its way through the courts. Though the plaintiffs had hoped to sue on behalf of models who had worked over the last 20 or 30 years, Judge Baer limited the case to those who had worked since June 1998, citing the statute of limitations. The class action could still potentially affect thousands of models. On March 22, the judge dismissed the agencies' motion to have the case thrown out of court, and set a trial date.
No one expects the modeling business to vanish, but an industry reorganization seems likely, no matter what the outcome of the trial, which will leave some firms short of cash. Modeling's old guard stands to lose the most, said Paolo Zampolli, the head of ID Models, who added that the fallout from the case could provide an opening for upstarts.
"It gives room to new agencies to do new things," he said. "It's going to be interesting to see the result."
However tumultuous the lawsuit has been for the New York modeling scene, not every industry veteran thinks it is all bad. Some contend that the suit could deal once and for all with the deep mistrust that has long existed between the largely anonymous group of models who do most of the work in the business and the agencies that represent them.
"A lot of good can come out of this for both sides," said Jan Planit, the president of Planit M, a model management firm, who has worked in the past for many firms named in the suit. "Trust and respect need to be brought back into the business."
