Derek Hay Moves Forward With Appeal of Labor Commission Ruling

LOS ANGELES—Derek Hay, owner of the adult modeling agency Direct Models Inc., also known as LA Direct Models, has filed an appeal from his losses sustained in a Labor Commission hearing which began in September of 2019, presided over by a hearing officer/attorney employed by the California Labor Commissioner, whose ruling was released in mid-June. At that time, Hay declared that the Labor Commissioner had allowed "no pretrial discovery, and it was therefore not possible to mount a meaningful defense, having no idea of the evidence that would be brought forth to support the charges," and promising that his attorney would file for a "trial de novo" (new trial), which he did on June 19, shortly after the ruling was released, in Los Angeles Superior Court. In the appeal, Hay's attorney Richard W. Freeman, Jr., stated that in order to stay any enforcement of the hearing officer's awards to the five actresses and their attorney, Hay and his company would "post an Undertaking. .. in twice the amount of the Award ... within the statutory time limits," which the appeal filing states is $24,206.49 "plus additional fees." The five "Jane Doe" actresses who charged Hay and Direct Models with violations of the California Labor Code were Charlotte Cross, Hadley Viscara, Sofi Ryan, Andi Rye and Shay Evans, represented by First Amendment attorney Allan B. Gelbard, and some of their claims included allegations that Hay/Direct Models had charged them excessive fees and other costs not contracted for and approved by the Commission; that he had sent them to directors and put them in situations that were not on the women's "approved" list and/or in which they felt unsafe; and that Hay had entered into sexual relationships with some of them, in violation of Labor Commission rules. After the Commission's ruling was announced, Hay gave a statement to AVN charging that "much of the evidence brought forth was stand-alone testimony by the Jane Does, unsupported by any relevant documentation or other evidence," and that much of that evidence would be considered hearsay in a court trial. His attorney echoed that, stating his view that "the entire matter will be re-adjudicated after full and complete pre-trial discovery is permitted and conducted." While it is unclear when that discovery will commence, in a Notice of Case Management Conference filed in the case on June 29, by Judge Richard J. Burdge, Jr., that conference was set for December 30, 2020, though it requires that "a completed Case Management Statement ... must be filed at least 15 calendar days prior to the Case Management Conference." It also noted that at the conference, the court may, among other actions, issue Orders "establishing a discovery schedule"; "referring the case to Alternative Dispute Resolution"; "reclassifying the case"; and/or "setting [a] subsequent conference and trial date." The notice also warns the defendants that the conference "does not exempt the Defendant from filing a responsive pleading as required by law." But the attorneys representing the parties in this case are already planning what evidence and interviews they'll be seeking from their opponents. "In the Superior Court, this case will be just like any other lawsuit where two parties have a dispute," Freeman told AVN. "The parties will be able to conduct full and complete civil discovery. We will be able to send interrogatories to each of the Jane Doe claimants, we will be able to request the production of documents from them, we will be able to take their depositions, we will be able to subpoena documents from any other third parties, we will be able to get phone records and bank records and other documents that we did not have access to at the Labor Commissioner hearing. We will be able to take the depositions of other witnesses in the case if we choose to." Gelbard, however, had somewhat of a counter take on the process. "In the last case, I had originally tried to work with Freeman on agreeing on discovery. They dragged it out for quite a while," he charged. "In this case, the discovery will be much more controlled by the courts. If there are disputes, I don't think that the judge will let Mr. Freeman get away with the kind of stuff that he got away with last time, and we are going to be doing some extensive discovery on some of Derek's other business partners to track down some of the statements that he made and some of the other things that they've raised in their appeal, so I think it's gonna go really well for us. "To the extent that significant additional discovery is permitted, it will be a two-way street," Gelbard added. "We will be investigating Mr. Hay’s business dealings, his relationship with ... various other business, and calling additional witnesses including his ex-employees, and both talent and producers with whom he has been involved." Freeman agreed that witnesses who weren't heard during the Labor Commission hearing will likely be called to testify in the Superior Court case. "One of the deficiencies in a hearing before the Labor Commissioner is that you don't have or have very limited rights to pre-hearing discovery, and we did not know exactly what a number of these Jane Does were going to be saying, what claims they were going to be making, what documents they were going to be producing until we got to the hearing," Freeman stated. "Now that we know what they're saying, now that we've seen the documents they chose to produce, we know there is a much bigger body of evidence that relates to their claims, to their testimony, to their documents, and we intend to fully investigate and explore and discover all of that additional material." Neither attorney had any firm idea when a Superior Court trial would commence, though both agreed that it would likely be sometime late in 2021. However, Gelbard noted some developments that could throw a monkey wrench into trial plans. "Remember, the Labor Commission is already moving to revoke [LA Direct's] license, and some of those issues in that revocation proceeding track our case," Gelbard told AVN. "So if, for example, the Labor Commission rules that he used illegal contracts and did all of this other stuff and revokes his license based on that, that is technically a res judicata issue; they don't get to relitigate that again. And there's still the criminal matter, so if he's tried and convicted of pandering or he takes a plea where he's pleading guilty to something, that's going to eliminate some of our burdens of proof." What all that means is that those following this two-plus-year-old case should brace themselves for twists and turns that could arise at nearly any time over the next 18 months—and when they occur, AVN will report them.