Asociacion de Compositores y Editores de Musica LatinoAmericana v. Copyright Royalty Tribunal

851 F.2d 39, 1988 WL 64522
CourtCourt of Appeals for the Second Circuit
DecidedJune 23, 1988
DocketNo. 1114, Docket 88-4005
StatusPublished
Cited by1 cases

This text of 851 F.2d 39 (Asociacion de Compositores y Editores de Musica LatinoAmericana v. Copyright Royalty Tribunal) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Asociacion de Compositores y Editores de Musica LatinoAmericana v. Copyright Royalty Tribunal, 851 F.2d 39, 1988 WL 64522 (2d Cir. 1988).

Opinion

FEINBERG, Chief Judge:

Asociación de Compositores y Editores de Música LatinoAmericana (“ACEMLA”) and Italian Book Corporation (“IBC”) petition for review of a final decision of the United States Copyright Royalty Tribunal (“Tribunal”) distributing jukebox royalties for 1985. Specifically, petitioners argue that the Tribunal incorrectly ruled in 1985 that they were not “performing rights societies,” as defined by 17 U.S.C. § 116. They also claim that even if they were not performing rights societies, the Tribunal’s allocation to them was arbitrary, capricious, and unsupported by substantial evidence. For the reasons stated below, we deny the petition for review.

The statutory background to this case and the unique character of the Tribunal were set out at length in one of our previous cases involving substantially the same issues, ACEMLA v. Copyright Royalty Tribunal, 763 F.2d 101 (2d Cir.1985) {ACEMLA I). Briefly, under the Copyright Act, the Tribunal is directed to set a compulsory license fee that jukebox operators must pay each year to the Copyright Office. 17 U.S.C. § 801(b)(1). In 1985, the fee was $50 per jukebox, 37 C.F.R. § 306.3 (1987), and the royalty fund for the year totalled over $5.5 million. The Tribunal is required to distribute the fund annually in two stages. First, the Tribunal gives “to every copyright owner not affiliated with a performing rights society, the pro rata share of the fees to be distributed to which such copyright owner proves entitlement.” 17 U.S.C. § 116(c)(4)(A). Second, the Tribunal distributes “the remainder of the fees” to “the performing rights societies ... in such pro rata shares as they shall by agreement stipulate among themselves, or, if they fail to agree, the pro rata share to which such performing rights societies prove entitlement.” 17 U.S.C. § 116(c)(4)(B). Thus, if the performing rights societies agree on their respective shares, none of them need prove entitlement, but any claimant who is not a performing rights society must prove entitlement.

A “performing rights society” is “an association or corporation that licenses the public performance of nondramatie musical works on behalf of the copyright owners, such as the American Society of Composers, Authors and Publishers [ASCAP], Broadcast Music, Inc. [BMI], and SESAC, Inc.” 17 U.S.C. § 116(e)(3).

In 1985, ACEMLA and IBC filed a joint claim for between 10 and 13% of the royalty fund. ASCAP, BMI and SESAC (who have intervened jointly in the petition to this court) were the only other claimants; they claimed 100% of the royalty and had stipulated as to the division of the award among themselves. As in previous years, ACEMLA (joined this year by IBC) argued before the Tribunal that it too was a performing rights society and should have its claim considered in the second stage of the Tribunal’s proceeding. See ACEMLA I, 763 F.2d at 108; Asociacion de Compositores y Editores de Musica LatinoAmericana v. Copyright Royalty Tribunal, 809 F.2d 926, 928-29 (D.C.Cir.1987) (per cu-riam) (ACEMLA II) (1982/1983 royalties); Asociacion de Compositores y Editores de Musica LatinoAmericana v. Copyright Royalty Tribunal, 835 F.2d 446 (2d Cir. 1987) (per curiam) {ACEMLA III) (1984 royalties). As in the past, the Tribunal ruled that ACEMLA was not a performing rights society. The Tribunal also held that IBC was not a performing rights society. The Tribunal then considered petitioners’ claims as copyright owners and awarded them 0.12% (about $6,000) of the total fees. Since under the Tribunal’s ruling only AS-CAP, BMI and SESAC were performing rights societies and since these three claimants had agreed to the division of their share, they received the remainder of about $5.5 million.

I. Performing Rights Society Status

As noted above, a performing rights society is “an association or corporation that [41]*41licenses the public performance of nondramatic musical works.” In its decision regarding the 1984 royalties, the Tribunal interpreted the words “association or corporation” to mean “an organization at least independent enough of copyright owners to have its own organizational papers and structure.” 51 Fed.Reg. 43457 (1986). Applying that definition in this case, the Tribunal held that in 1985 ACEMLA was not sufficiently independent of copyright owners, in part because ACEMLA was indistinguishable from the Latin American Music Company (LAMCO), a music publishing company. ACEMLA challenges the Tribunal’s definition of “corporation” as imper-missibly preventing publishers from being or becoming performing rights societies.

This challenge to the definition of “corporation” is foreclosed by our decision in ACEMLA III. ACEMLA claims that we did not rule on the definition of “corporation” in that case, but in denying review of the Tribunal’s decision we noted that

we find no error in the CRT’s [the Tribunal’s] application of those standards to ACEMLA in this proceeding for 1984. The CRT found that ACEMLA had no system for membership and affiliation and was not a corporation in its own right; it was only an assumed name for LAMCO, a music publishing company. On these facts, supported by substantial evidence in the record, the CRT concluded that ACEMLA did not meet the first standard, because ACEMLA was neither an association nor a corporation.

835 F.2d at 448. We thus impliedly affirmed the Tribunal’s interpretation of the statute.

Even if we had not previously approved the Tribunal’s interpretation, we would do so now under the standard that governs review of administrative actions like this. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984) (“court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency” provided that Congress has not expressed a clear view of the law) (footnote omitted).

ACEMLA argues that the Tribunal’s interpretation is unreasonable for two reasons. First, ACEMLA claims the Tribunal violated the principle of competition underlying the antitrust laws because it limited publishers’ ability to become performing rights societies and to compete with the already existing societies. However, ACEMLA misconstrues the Tribunal’s rule when it argues that the rule prevents publishers from “becoming” performing rights societies.

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851 F.2d 39, 1988 WL 64522, Counsel Stack Legal Research, https://law.counselstack.com/opinion/asociacion-de-compositores-y-editores-de-musica-latinoamericana-v-ca2-1988.