Songwriters of North America File Motion to Proceed in DOJ Consent Decree Lawsuit: Exclusive

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The legal fight against the Justice Department’s June 2016 ruling on “100 percent licensing” continues.

No one knows whether the Department of Justice under the Trump administration will alter its approach to the antitrust consent decrees that essentially regulate the collection societies ASCAP and BMI, but the legal fight against the Justice Department’s June 2016 decision on “100 percent licensing” is proceeding.

Late yesterday afternoon, the Songwriters of North America (SONA), a group of about 200 creators, filed a motion to oppose a motion for dismissal of its lawsuit challenging the Justice Department’s current – and, some would say, new – interpretation of the consent decrees. The big issue is the Justice Department’s newly stated policy that those decrees require – and, indeed, have always required – 100 percent licensing, meaning that ASCAP and BMI must offer all rights to any composition they offer some of the rights to. While this seems fairly technical, music publishing executives and songwriters believe it would drive down their royalties by creating a “race to the bottom.” It would also create a recordkeeping nightmare.

The SONA lawsuit was filed before BMI’s rate court judge ruled that fractional licensing is allowed under the organization’s consent decree, when the prospect of 100 percent licensing seemed both more immediate and more frightening. “We thought we were in a hopeless situation,” says Dina LaPolt, a lawyer who advises SONA.

ASCAP, but many see the Trump Administration as friendlier to copyright – so the Justice Department may simply change its policy. “The Republicans are pretty much horrified by the regulation of songwriters in the first place,” LaPolt says. “They see copyright as private property that the government shouldn’t regulate.”

SONA’s case could present a broader challenge to that regulation. (The case is being litigated by Steven Wallach and Gerard Fox at Gerard Fox Law, with help from Sandra Aistars, a respected law professor at George Mason University who previously ran the Copyright Alliance.) Essentially, it claims that Justice Department regulation of collection societies can constitute a “taking,” since it reduces the value of the private property of songwriters.

If it succeeds, it could limit government regulation of the music publishing business. Simply by going to trial, the case could force the Justice Department to share documents about its decision making process – which some music executives believe it would be reluctant to do. If the Justice Department reverses its 100 percent licensing decision, however, the case would simply end.

Whether the SONA case will be heard or dismissed involves legal issues that are complicated even by the standards of copyright, which has famously been called the metaphysics of the law. In its motion to dismiss, the Justice Department cites subject matter jurisdiction and failure to state a claim. In order to prevail, SONA will have to show that songwriters would suffer harm, in the legal sense – presumably in terms of loss of income. “I think we stand a reasonable chance at prevailing,” Fox says. “The law is on our side.”