Promoters often rely on radius clauses to protect the millions of dollars they pay artists to perform at major festivals and prevent competitors from cannibalizing sales, but Soul’d Out promoters say AEG is interfering with their business by restricting who can play their event, located more than 1,000 miles north of Indio, California, where Coachella takes place each year. In 2018 Harris and Abdulhadi had approached SZA to play their Portland, Oregon festival, but were turned down because of the terms of Coachella'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.
"Although Soul’d Out is not a party to the artists’ contracts with AEG, we have previously determined that an injured party may assert tort claims predicated on a contract’s alleged invalidity, despite not being a party to the contract," a May 20 decision from the appeals court reads. "Soul’d Out is seeking to vindicate its own rights -- namely its alleged right to enter into contracts with artists free from AEG’s wrongful interference. No plaintiff is better suited to assert the tort claims alleged here, and there is therefore no prudential reason to deny Soul’d Out standing."
The case was sent back to Oregon District Court, where Mosman ruled against AEG's outstanding claims seeking to dismiss the case, noting that attorneys for Soul’d Out had insisted that "some of these arguments require further factual development" during a virtual hearing. "Presented with the opportunity for more briefing, on the theory it would help me me better understand the Ninth Circuit's ruling, I agree," Mosmon said.
The case will now move into the discovery phase with lawyers for Soul'd Out expected to subpoena artist contracts for the festival and internal communications. The public first learned the details of Coachella's highly restrictive 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 -- because of the Soul’d Out case.
"We are pleased that the court has agreed that Soul’d Out’s complaint was sufficient and that the case can go forward," Harris and Abdulhadi's lawyer, Nika Aldrich said. "We expect that, after complete discovery, a jury will find that Coachella’s radius clause is unreasonable, and that AEG’s use and abuse of that clause to hurt local music festivals was unlawful.”
A representative for Coachella did not respond to a request for comment for this story.