This week, the lawsuit brought by the Radio Music License Committee (RMLC) against new performing rights organization GMR (Global Music Rights) for alleged violations of the antitrust laws was determined by a court in Pennsylvania to have been brought in the wrong place – and transferred to a court in California. This case has been on hold for well over two years while this procedural question was ironed out. Now that the case has been transferred to California, the litigation that has been on hold while the jurisdictional issue was resolved can begin – but don’t expect quick results as these complicated cases can take years to resolve. What is involved in this case?
Back in 2016, when RMLC concluded that it was not likely to reach a negotiated royalty rate for radio’s use of the musical compositions controlled by GMR songwriters and publishers, it brought the Pennsylvania court action. In that action, it argued that the rates that GMR wanted were an abuse of the market power that GMR was able to exercise by banding these songwriters together and offering a license to radio stations on an all-or-nothing basis (see our articles here and here for more on the initial suit). As it had done successfully with SESAC (see our article here), and as has been the case for decades with ASCAP and BMI, RMLC had hoped to have the court declare that GMR’s unrestrained royalty demands were contrary to the antitrust laws, and that some limits should be imposed on those rates. The RMLC suit against GMR was brought in the same Pennsylvania court in which RMLC had sued SESAC, which led to the settlement subjecting SESAC rates to arbitration if the parties could not voluntarily agree on rates (and the arbitration process ultimately resulted in significantly lower rates for commercial radio than SESAC had previously received – see our article here on the results of the arbitration).
GMR countered by suing RMLC in a California court (California being where GMR is headquartered) arguing that RMLC was a buyer’s cartel – using an antitrust argument in defense by arguing that RMLC should not be able to negotiate on behalf of virtually all of the commercial radio industry even though that is what it does with ASCAP, BMI and SESAC (see our article here on the countersuit). GMR also argued in the Pennsylvania court that the court had no jurisdiction over GMR, as GMR had not taken any actions in that state other than to offer music licenses to radio station owners that happened to have stations there. While RMLC contended that that the music licenses (and some other actions taken by GMR) were enough to make it subject to the federal court in Pennsylvania, the court disagreed, sending the case to California.
That does not, by any means, suggest that the case is over for the radio industry. Instead, the issues that had been raised by RMLC can now be heard in the California court, along with the issues that GMR has raised in defense. Antitrust cases can take years to try, so there may not soon been a resolution of these issues. In the interim, we expect that the current interim licenses (see our article here) will be extended while these issues are litigated unless, at some point, a settlement is achieved. Keep watching the developments in this litigation to see what royalties will finally be due to this organization.