District Court Judge Sides With Coachella, Dismisses Radius Clause Lawsuit

Amy Harris/Invision/AP
Atmosphere at the 2018 Coachella Music & Arts Festival at the Empire Polo Club on April 21, 2018 in Indio, Calif. 

A United States judge has dismissed a lawsuit brought by Oregon promoters against Goldenvoice, ending the year-long battle over the California festival's radius clause that prevented artists performing at the 125,000-person, two-weekend event from playing other festivals for months at a time.

After hearing oral arguments in his Oregon courtroom, U.S. District Court Judge Michael Mosman sided with Goldenvoice's attorneys and dismissed the year-old lawsuit with prejudice, preventing Soul’d Out Music Festival founders Nicholas Harris and Haytham Abdulhadi from refiling their suit.

"We are pleased with the court’s decision today to dismiss the lawsuit challenging the agreements between Coachella and artists," Shawn Trell, general counsel and chief operating officer for Goldenvoice and AEG Presents told Billboard. "Coachella is focused on providing an incredible festival experience for both fans and artists, and looks forward to another special event next month."

In a ruling from the bench, Mosman found there was no anti-trust injury to Harris and Abdulhadi, who said their event was hurt by Coachella's radius clause, which restricts artists playing Coachella from playing any festival in North America from Dec. 15 to May 1, as well as any hard ticket concerts in Southern California during that same time period. Last year, Harris and Abdulhadi had approached SZA to play their Portland, Oregon festival, but were turned down because of the terms of Goldenvoice's radius clause. The men also claimed that five-piece funk/soul group Tank and the Bangas had confirmed for Soul'D Out in 2018, only to later cancel after the radius clause complications became an issue.

Seeking to challenge the legality of radius clauses as unlawful restraints on trade, Harris and Abdulhadi's lawyer, Nika Aldrich, accused Goldenvoice in an April 2018 civil complaint of operating "an illegal monopoly in the market for live music festival performances" by "unreasonably restricting price and cost of competition among live concert venues" and "limiting entry or expansion of competitors."

In October, Mosman dismissed the lawsuit, but allowed Harris and Abdulhadi to refile the suit if they amended their definition of relevant markets, one of the key factors in evaluating an antitrust case. After the pair refiled their complaint later that month, AEG once again filed a motion to dismiss the case, and after hearing oral arguments from both sides Tuesday (March 11), Mosman told the court he disagreed with the plaintiffs' definition for relevant markets and permanently dismissed the suit. Aldrich declined to comment on the ruling, or say whether the Oregon promoters planned to appeal. 

While the Oregon indie promoters did not prevail in their lawsuit, they did succeed in bringing attention to Coachella's restrictive radius clause requirements, leading to the publication of previously-unreleased provisions of the agreement. Besides avoiding other North American festivals and headline concerts in five states, artists playing Coachella couldn't publicize their appearance at West Coast festivals until weeks after Coachella had wrapped and couldn't announce plans to play other events until after the Coachella lineup was released in January.

Lawyers for Coachella defended the policy, explaining in a court filing, "The entire purpose of the radius clause is to protect AEG from competitors unfairly free-riding on its creative choices in selecting its artist lineup," adding, "As more festivals proliferate, maintaining a unique festival lineup is crucial for Coachella to remain competitive."

AEG's lawyers also wrote that they opposed the release of the radius clause letter, saying it was given to lawyers for Soul'd Out as part of a confidential effort to negotiate a compromise between the two sides.

"AEG's counsel made clear in providing the text of the radius clause to Plaintiff's counsel that it was for settlement purposes only," AEG attorney Casey Nokes wrote, saying lawyers for the Oregon promoters "made the unilateral decision to include this information in a public filing as the basis for its claims against AEG. This is improper and reflects bad faith."

Besides dismissing the the antitrust claims, Mosman also noted that he planned to dismiss claims of unlawful restraint of trade, unfair competition and tortious interference. Harris and Abdulhadi have 30 days to appeal the ruling.