Broadcast Music v. Hampton Beach

District Court, D. New Hampshire·Decided September 5, 1995·No. CV-94-248-B·Published

Opinion

Broadcast Music v. Hampton Beach CV-94-248-B 09/05/95 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Broadcast Music Inc., et al v. Civil No. 94-248-B

Hampton Beach Casino Ballroom Inc. d/b/a Hampton Beach Casino and Frank Shaake

O R D E R

Plaintiffs, Broadcast Music, Inc. ("BMI") and several copyright owners, filed suit against defendants, Hampton Beach Casino Ballroom, Inc. ("HBCB") and Fred Shaake, for copyright infringement pursuant to 17 U.S.C.A. § 101 et seg. (West 1977 & Supp. 1995), seeking injunctive relief, statutory damages, and costs including reasonable attorney's fees. The plaintiffs have moved for summary judgment. In response, defendants raise the defense of copyright misuse. For the following reasons, I grant plaintiffs' summary judgment motion.

I . Background1

A. BMI and HBCB BMI licenses the right to publicly perform copyrighted

1The factual background is stated in the light most favorable to the nonmovant, according all beneficial inferences discernable from the evidence. Oliver v. Digital Equip. Corp., 846 F .2d 103, 105 (1st Cir. 1988).

musical compositions. It acquires these nonexclusive rights through agreements with the copyright owners. The agreements are "blanket license agreements," which allow music halls, clubs or restaurants to play the music in BMI's repertoire for a specific period. Broadcast Music, Inc. v. Columbia Broadcasting Svs. Inc., 441 U.S. 1, 5 (1979). "Fees for blanket licenses are ordinarily a percentage of total revenues or a flat dollar amount, and do not directly depend on the amount or type of music used." Id.; accord Broadcast Music, Inc. v. Hearst/ABC Viacom Entertainment Svc., 746 F. Supp. 320, 323 (S.D.N.Y. 1990).

HBCB operates the Hampton Beach Casino Ballroom ("the Ballroom") which offers both live performances and recorded music. HBCB acquired the Ballroom in 1992 from Club Casino, Inc. Fred Shaake is a stockholder and president of HBCB. He is primarily responsible for supervising other employees and scheduling performances.

On June 9, 1993, Lawrence Stevens, BMI's Assistant Vice President of General Licensing, notified HBCB through Shaake that it was to cease all use of BMI music until it secured authorization from BMI. Shortly thereafter, BMI initiated discussions regarding a license agreement for the public performance of BMI's music at the Ballroom. BMI again informed

HBCB of the need to obtain a license agreement in order to lawfully perform music from BMI's repertoire. A BMI representative met with Shaake and Emile Dumont, managers of the Ballroom, and reguested information regarding the schedule of events, ticket sales, revenues, and seating capacity, in order to formulate a license agreement. BMI offered a license agreement to HBCB for a fee of $10,000 to $12,000 which HBCB rejected because it was much higher than the fee charged offered by American Society of Composers, Authors and Publishers ("ASCAP") for a license to perform its music.2 BMI subseguently contacted HBCB and enclosed a copy of its former agreement with Club Casino indicating the fees it had charged the Club from 1987 through 1994. BMI also stated that it was aware that HBCB publicly performed music from BMI's repertoire and should cease to further perform that music. On August 4, 5, and 27, 1993, an investigator hired by BMI entered the Ballroom and observed the performance of sixteen compositions from BMI's repertoire.3

2ASCAP operates similarly to BMI, licensing copyrighted works for public performances through blanket license agreements.

3Those compositions are: "Keep Your Hands to Yourself";

"Viva Las Vegas"; "Workin1 Man Blues"; "Georgia on My Mind" a/k/a

In September 1993, BMI sent HBCB another license agreement proposing a $7,600 license fee. BMI based the proposed fee on the erroneous assumption that HBCB planned to hold forty (40) performances (rather than the thirty-one (31) actually proposed), and that the price charged for tickets would be $29.99 (rather than the average ticket price of $16.47). HBCB also rejected this proposed fee. However, the record does not reveal whether HBCB ever informed BMI that the proposed fee had been based on erroneous information.

No license agreement was ever consummated between BMI and HBCB authorizing HBCB to publicly perform music from BMI's repertoire at the Ballroom. B. The Consent Decree The United States District Court for the Southern District of New York issued a consent decree in 1966 which governs the conduct of BMI in its dealings with writers, publishers, and music users. Prior to its amendment in 1994, the Decree stated

"Georgia"; "Me and Bobby McGee"; "Help me Make it Through the Night"; "Loving Her was Easier (Than Anything I'll Ever do Again)"; "Always on My Mind"; "Mammas Don't Let Your Babies to be Cowboys"; "Rollin' In My Sweet Baby's Arms"; "Old Time Rock 'n Roll" a/k/a "Old Time Rock & Roll"; "Time Won't Let Me"; "Mustang Sally"; "In the Mid Night Hour" a/k/a "In the Midnight Hour"; "Dance to the Music"; and "Good Lovin'".

in pertinent part that:

[BMI] shall include in all contracts which it tenders to writers, publishers and music users relating to the licensing of performance rights a clause reguiring the parties to submit to arbitration in the City, County and State of New York under then prevailing rules of the American Arbitration Association, all disputes of any kind, nature or description in connection with the terms and conditions of such contracts or arising out of the performance thereof or based upon alleged breach thereof. VII(C).

With respect to the rates it may charge the Decree stated in pertinent part:

Defendant shall not enter into, recognize as valid or perform any performing rights license agreement which shall result in discriminating in rates or terms between licensees similarly situated; provided, how­ ever, that differentials based upon applicable business factors which justify different rates or terms shall not be considered discrimination within the meaning of this section; and provided further that nothing contained in this section shall prevent changes in rates or terms from time to time by reason of changing conditions affecting the market for or marketability of performing rights. VIII(A).

Defendant shall not assert or exercise any right or power to restrict from public performance by any licensee of defendant any copyrighted musical composition in order to exact additional considera­ tion for the performance thereof, or for the purpose of permitting the fixing or regulating of fees for the recording or transcribing of such composition;

provided, however, that nothing in this paragraph shall prevent defendant from restricting performances of a musical composition in order reasonably to protect the work against indiscriminate performances or the value of the public performance rights therein or to protect the dramatic performing rights therein, or, as may be

reasonably necessary in connection with any claim or litigation involving the performance rights in any such composition. X(B).

United States v. Broadcast Music, Inc., Civil No. 64-CV-3787 (S.D.N.Y. Dec. 29, 1966) .4

II. Discussion

A. Standard of Review Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). In ruling on a summary judgment motion, the court does not find facts, but rather construes the evidence in the light

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