RMLC 375

The Radio Music License Committee is hitting back against a federal court magistrate judge’s recommendation that its antitrust face-off with Global Music Rights be heard in a California court rather than in Philadelphia where the trade group filed its case. Magistrate Judge Lynne Sitarski recommended last month that the Los Angeles case brought by GMR be allowed to move forward. “There is no basis in fact or law to assert personal jurisdiction over GMR in Pennsylvania and therefore, venue in this judicial district is improper,” Sitarski wrote in the 42-page recommendation to U.S. District Court Judge Darnell Jones. He must now decide whether to accept the magistrate’s recommendation—or allow the RMLC’s suit to press on in court in Pennsylvania.

In making its case to keep the Philadelphia proceeding alive, RMLC said Sitarski failed to consider a “boycott” that GMR imposed on Pennsylvania stations between May and August when it refused to sign any licensing agreements with broadcasters in the state as part of the back-and-forth between the performance rights organization and the radio industry. “That Pennsylvania-specific boycott, by itself, would be sufficient to find personal jurisdiction and venue in this court under well-established law,” the RMLC said in a filing. It believes Sitarski “simply misunderstood the relevant facts” of the boycott, adding, “She did not hold a hearing at which RMLC could have corrected her misunderstandings.”

RMLC said her recommendation to close the Philly case was also premature. It pointed out that the radio group never had an opportunity to do a legal discovery that it believes would have helped prove why the case against the Irving Azoff-led performance rights organization should be heard there. It’s asking Jones to allow that process to move forward before he makes any final determination as to which case should be advanced.

If Jones agrees to follow the recommendation of his appointed magistrate—which several attorneys say is the most likely outcome—the RMLC is asking that he not toss its lawsuit out for good. Instead, it’s requested he simply put the Philadelphia case on hold while the L.A. suit goes forward.

GMR was buoyed by the decision to move the case to federal court in California where some attorneys think an airing in a city that’s home to plenty of musicians and entertainment executives will play to an advantage. GMR also noted Sitarski agreed with its argument that the Philadelphia filing was a tactical move by the RMLC. “The magistrate’s recommendation is a vindication of what we have said all along—the RMLC had no business filing a lawsuit in Pennsylvania, a state that has nothing to do with this dispute,” Azoff said in a statement.

The RMLC filed an antitrust lawsuit in federal court in Philadelphia in Nov. 2016 alleging GMR violated federal law when it allegedly created an “artificial monopoly” to squeeze higher rates from stations as it demanded radio stations begin paying the performance rights organization for music in its repertoire in Jan. 2017 or pull the songs off the air. Two weeks later GMR replied with an antitrust lawsuit of its own which contended the RMLC is essentially an “illegal cartel.” The California case has been on hold while a final outcome is made in the Philadelphia case.

The delay in reaching any sort of a resolution to the competing lawsuits has meant broadcasters have been required to sign interim deals with GMR to license music in its 75-songwriter repertoire through March 31, 2018. No specifics about how much radio groups are paying have been made public, but Urban One offered a clue when it told investors during a recent quarterly conference call that it is paying about $1 million a year to GMR under its interim agreement. It also remains unclear how many stations have signed an interim license agreement with GMR but it’s believed to be in the thousands with all of the major broadcast groups consenting to the terms, along with a growing number of mid-sized and smaller owners following suit. So far two companies—iHeartMedia and Townsquare Media—have voluntarily signed rights agreements with GMR.