Supreme Court Decision May Help Radio Halt Pending ASCAP–BMI Rate-Setting Appeal

 

Story by Inside RadioWritten by Kevin Dietsch

• Facebook
• Twitter
• Linkedin
• Email
• Print
• Save

The U.S. Supreme Court has just given the radio industry a new argument in its effort to stop the rate-setting proceedings for ASCAP and BMI from moving forward while an appeals court decides whether fees for the two performance rights organizations should be set at the same time. The Radio Music Licensing Committee has asked a district court to hold off on moving forward with the rate-setting process until its appeal of a lower court decision that said the two should be separated is heard. But ASCAP and BMI are pressing a New York judge to kickstart the process, saying the effort has already been slowed by a year’s worth of delays.

What has the RMLC seeing an opening is the Supreme Court decision released Friday. In Coinbase v. Bielski, the Supreme Court said that a district court must stay its proceeding while an appeal is ongoing. Writing for the majority in the 5-4 decision, Justice Brett Kavanaugh called such a move “common sense” that most courts already practice.

The specifics of the RMLC case may be different from the one the Supreme Court just decided. But the committee says the basic legal process is “very similar” with regard to whether the radio royalty rate-setting process should be decided in one or two separate courtrooms.

“The Court’s decision, therefore, provides additional support for the RMLC’s position – that it makes no sense for trial to go forward while the court of appeals cogitates on whether there should be one,” the RMLC said in a letter filed with the court.

The trade group says the same issues of “judicial efficiency and resources” are at play as in the Coinbase decision, with the Supreme Court reasoning that “allowing a case to proceed simultaneously in the district court and the court of appeals creates the possibility that the district court will waste scarce judicial resources—which could be devoted to other pressing criminal or civil matters.”

The RMLC says the Supreme Court decision is so cut and dry that no hearings are even needed, although it said it is “ready and willing” to participate in oral arguments if District Court Judge John Cronan says they are needed.

BMI has called requests to delay the rate-setting “unreasonable” and argues that no time should be wasted splitting its case from that of rival ASCAP. While it has not yet responded to the RMLC’s latest argument, the radio group looks to head off any attempt by the music organizations to suggest the Supreme Court decision should be narrowly applied only to cases where a federal law authorizes an appeal.

Broadcasters filed a notice of appeal earlier this month with the U.S. Court of Appeals for the Second Circuit seeking to overturn a district court ruling that said, under federal law, the two rate-setting proceedings must go forward separately. The RMLC had been asking a judge to consolidate the rate-setting for ASCAP and BMI. In doing so, it invoked the Music Modernization Act. The RMLC said the 2018 law changed how the federal judges that oversee the rate-setting cases are reviewed, arguing the new law ended the historical requirement for one designated judge to hear all ASCAP-related claims and a different judge to hear all BMI-related claims.

The move is not just a way to cut down on the radio industry’s legal expenses. The RMLC says it would allow the court to determine “reasonable” license fees to be paid to songwriters.

But the two performance rights organizations see an ulterior motive at work, arguing that by pitting them against one another it will limit the size of any rate increase they are able to extract from radio stations in the new deal that will cover the license period Jan. 1, 2022, through Dec. 31, 2026. ASCAP and BMI say the radio industry’s use of the Music Modernization Act to tie them together is a “gross mischaracterization” of the law and accused broadcasters of trying to create a loophole that does not exist.

While the radio industry’s appeal is pending in the Second Circuit and the rate-setting proceeding goes forward, the RMLC has interim deals with both ASCAP and BMI. They kept the previous rates in effect. That could mean stations will be due a refund if a lower rate is set or owe ASCAP or BMI additional money if rates go up.