Ricky Martin Music Video Case Must Be Arbitrated; 1st Cir.

Cortes-Ramon v. Sony Corp., No. 15-1786 (1st Cir. Sep. 9, 2016).

Claims against Ricky Martin and his record label were properly dismissed in favor of mandatory arbitration, holds the 1st Circuit affirming the lower court.  The dispute concerned an original song and music video that the plaintiff submitted to Sony as part of a songwriting contest sponsored by Sony.  Plaintiff did not win the contest.  Nonetheless, shortly thereafter Martin released a song and music video -- "Vida" –- that, according to the plaintiff, closely resembled his own contest submission.  

Sony filed a motion seeking, among other things, dismissal under Fed. R. Civ. P. 12(b)(6) and, in the alternative, a stay pending arbitration under 9 U.S.C. § 3.  Sony appended the "Contest Official Rules" to its motion to dismiss.  Those rules contained a mandatory arbitration clause, requiring that disputes "arising under, in connection with, touching upon or relating to" the rules be submitted to an arbitrator.  The District Court granted the motion, dismissing the case with prejudice.  The District Court found that the plaintiff "received, signed, notarized, and returned" an affidavit stating he had complied with the Contest Rules, and noted that "a valid agreement to arbitrate is presumed even when the signed document incorporates by reference an arbitration provision that may be found in another document, irrespective of whether the party received a copy of the document containing the clause." 

On appeal, the plaintiff appealed only the motion to dismiss for failure to state a claim -- not the dismissal on the grounds of the arbitration clause.  Accordingly, the First Circuit affirmed.  "Because those rulings provide an independent basis for dismissing his claims, we need not address Cortés's challenge to the District Court's decision to dismiss his complaint on 12(b)(6) factual sufficiency grounds."

SESAC Antitrust Settlement Submitted For Approval In Class Action

Meredith Corp. et al. v. SESAC, 1:09-cv-09177-PAE (S.D.N.Y. filed 10/15/14) [Doc. 174].

Plaintiffs filed an unopposed motion for approval of the parties' settlement of the class action antitrust claims.  In their motion, Plaintiffs summarize the first prong of the settlement as: "under the contemplated settlement, SESAC will be bound through 2035 by some of the same core conduct restrictions that constrain the anti-competitive potential, at least as it relates to their dealings with local stations, of the other two U.S. performance rights organizations ('PROs'), ASCAP and BMI, in their consent decrees with the Antitrust Division of the Department of Justice."  Notably, rather than a "rate court", the settlement provides that disputes should be submitted for binding arbitration.

Plaintiffs further summarize the second prong of the settlement as follows: "the proposed settlement will provide significant monetary relief to local stations.  SESAC has agreed to pay $58.5 million into a settlement fund. Those monies will be used to reimburse local stations for the claimed inflated license fees they have paid since 2008 as a result of the alleged anti-competitive conduct that was the subject of this lawsuit."  In addition, the monies will be used to reimburse for legal fees and costs.

Bowery Presents Avoids Arbitration In Ticket Case

The Bowery Presents LLC v. Pires, No. 653377/2012, NYLJ 1202608931096, at *1 (Sup. Ct., N.Y. Co. decided June 24, 2013) (Bransten, J.S.C.).

Bowery Presents, a concert promoter, moved to stay arbitration that had been filed by the respondent ticket purchaser on the basis that Bowery Presents was not a party to an arbitration agreement with the respondent.  The Court granted the motion and stayed arbitration.

Bowery Presents had entered into a written License Agreement with Live Nation Entertainment, Inc. (d/b/a Ticketmaster) ("Ticketmaster") under which Ticketmaster was to act as Bowery's agent for the sale and distribution of tickets to entertainment events.   Bowery Presents was the promoter for a March 28, 2012 event to which the respondent purchased a ticket through the Ticketmaster website.  In order to purchase her ticket, Respondent was required to agree to the "Terms of Use" on Ticketmaster's website. The Terms of Use contained an arbitration clause: "Live Nation and you [user of ticketmaster.com and its related websites] agree to arbitrate all disputes and claims between us. This agreement to arbitrate is intended to be broadly interpreted." 

In the arbitration, Respondent asserts a claim pursuant to §25.33 of the Arts and Cultural Affairs Law of the State of New York ("ACAL") to recover damages and injunctive relief arising from Bowery's alleged violations of §25.30(c) of the ACAL by employing a paperless ticketing system.  Respondent contended that Bowery violated ACAL §25.30(c) by employing a paperless ticketing system without providing the consumer the option of purchasing the tickets in a transferable form.  Respondent thus filed a demand for arbitration.  The issue was whether Bowery Presents, a nonsignatory to the arbitration agreement, could nonetheless be bound by the arbitration clause.

The Court found that Ticketmaster was Bowery's limited agent and, therefore, Bowery was not bound by the arbitration clause in the Terms of Use.  Moreover, the Court found that even if Ticketmaster did possess sufficient authority to bind Bowery Presents to an arbitration agreement, the plain language of the arbitration clause at issue bound only Ticketmaster and the ticket purchaser to arbitration, not Bowery Presents. 

Labels Participate in Judicial Forum, Waive Arbitration

Lockett v. Tuff City Records, No. 602900/08, NYLJ 9/25/2009 "Decision of Interest" (Sup. Ct., N.Y. Co. Sep. 21, 2009)

Defendants, record labels and their principals, waived right to arbitration by actively participating in judicial forum. Plaintiffs' action sough monies allegedly owed for royalties. Defendants answered, but did not plead arbitration as an affirmative defense. Moreover, the arbitration demand was made nearly eight months into the litigation, after Defendants had made discovery demands. Additionally, defendants failed to establish that plaintiffs' claims were subject to the alleged arbitration clause in a 1986 recording contract because the songs at issue were recorded prior to 1986. Thus, Plaintiffs' motion to permanently stay arbitration granted.

The Court also denied defendants' motion to dismiss for misjoinder of plaintiffs; instead, the court severed the individual plaintiff's claims and ordered them to obtain a no-fee index number and serve their own complaint within 30 days.

Lastly, the Court denied defendants' motion to remove the action to Small Claims court; and denied both plaintiffs' and defendants' motions for sanctions.