It was around this time last year that one of the most closely watched fights in music licensing history – if not copyright generally – went to the next level as the Radio Music License Committee (RMLC) sued Global Music Rights (GMR). The RMLC lawsuit alleges that Irving Azoff-founded newest Performing Rights Organization (PRO), was engaged in anticompetitive behavior in not agreeing to a license that would permit RMLC-represented (mainly mainstream commercial) radio stations around the country to perform musical works owned by GMR members over the air and via the Internet. This includes songs performed by, among others, Bruce Springsteen, The Beatles, Pharrell, Blake Shelton, Bruno Mars, and Taylor Swift.
The RMLC lawsuit was filed in the United States District Court for the Eastern District of Pennsylvania and assigned to The Honorable Darnell Jones. We highlighted this fact in our original post on the RMLC-GMR litigation because Judge Jones, as we wrote, is:
the same federal judge who presided over the RMLC’s litigation against SESAC that settled on favorable terms for the RMLC last year. If that litigation is any indication, radio stations may soon see some of the same competitive restraints that limit other PROs’ ability to demand supracompetitive license fees imposed on GMR as well.
GMR certainly recognized the importance of this venue as it filed its own lawsuit in its home state of California back in December 2016 alleging anti-competitive behavior on the part of the RMLC, a move that seemed as much tactical – to force the litigation west – as substantive. We noted in a post earlier this year that it seemed more likely that the California litigation would be moved to Pennsylvania than the other way around, as the United States District Court for the Central District of California stayed its proceedings in the GMR-initiated lawsuit pending the outcome of a GMR motion in Pennsylvania to move that case to the left coast. As we wrote:
the California court stated that the RMLC case had been filed first and that under the so-called “first-to-file” rule, GMR’s later lawsuit, which involved the same parties and substantially similar issues, should be decided in Pennsylvania if that suit remained active. Rather than transferring GMR’s case immediately, the court stayed the case until the Eastern District of Pennsylvania court had the opportunity to rule on GMR’s own motion to move that case to California.
The court had a different view.
On Nov. 29, 2017, United States Magistrate Judge Lynne Sitarski of the Eastern District of Pennsylvania recommended that Judge Jones dismiss the RMLC’s Pennsylvania-based lawsuit against GMR and encouraged the RMLC to refile its case in California. Judge Sitarski based her ruling on the fact that Pennsylvania courts have no jurisdiction over the case because GMR does not have a sufficient presence in that state:
[n]either GMR nor RMLC is a citizen of or resides in Pennsylvania. Neither maintains a business office in Pennsylvania. Neither employs a person who is a citizen of, or resides in, Pennsylvania. None of the songwriters and publishers affiliated with GMR is based, or has a primary residence, in Pennsylvania. GMR does not own property in Pennsylvania. GMR’s and RMLC’s representatives did not conduct any meetings in Pennsylvania. GMR conducted every phone conference of record with RMLC from GMR’s headquarters in Los Angeles. Before GMR offered and sold the interim licenses, GMR did not conduct any business in Pennsylvania. GMR did not offer or sell a license to any RMLC member or radio station that had a substantial place of business in Pennsylvania, or that was formed under the laws of Pennsylvania. The record is devoid of any evidence that GMR’s representatives traveled to, visited, or physically entered Pennsylvania at any time). GMR did not send any communications to Pennsylvania companies, citizens, or residents. GMR has not sent any cease and desist letters to Pennsylvania companies, citizens, or residents. GMR has not filed a lawsuit for copyright infringement in Pennsylvania—or any other cause of action or proceeding of record.
This move is a setback for the RMLC and the stations it represents, but the overall impact is unclear. Yes, Pennsylvania clearly seems to be the favorable venue – and Judge Jones a favorable jurist – for the RMLC given the SESAC case. But the Magistrate’s ruling is preliminary in nature; the RMLC has already said it will appeal that preliminary recommendation and, in any event, will take the fight to California if necessary. Further, there is no indication that the United States District Court for the Central District of California is a clearly unfavorable venue for the RMLC.
This was surprising to us and certainly not favorable to the RMLC but it is far from the last word in this case – in fact, neither the Pennsylvania nor the California court has really gotten into the merits of each side’s argument. In the meantime, stations currently operating under the interim license that was first agreed to in December 2016 and then extended in August 2017 are probably more focused on the status of that interim license as we get closer to its current expiration date of March 31, 2018. Check back here for more updates on that interim license and this litigation.