Columbia Broadcasting System, Inc. v. American Society of Composers, Authors & Publishers

483 F. Supp. 616, 210 U.S.P.Q. (BNA) 330, 1980 U.S. Dist. LEXIS 9862
CourtDistrict Court, S.D. New York
DecidedJanuary 18, 1980
DocketNo. 69 Civ. 5740 (MEL)
StatusPublished

This text of 483 F. Supp. 616 (Columbia Broadcasting System, Inc. v. American Society of Composers, Authors & Publishers) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Columbia Broadcasting System, Inc. v. American Society of Composers, Authors & Publishers, 483 F. Supp. 616, 210 U.S.P.Q. (BNA) 330, 1980 U.S. Dist. LEXIS 9862 (S.D.N.Y. 1980).

Opinion

LASKER, District Judge.

Broadcast Music Inc. (“BMI”) moves for a preliminary injunction ordering Columbia Broadcasing System Inc. (“CBS”) to increase the payments made, pendente lite, by CBS to BMI for the use of BMI music on the CBS television network.

I.

On December 31, 1969, CBS commenced this suit against the American Society of Composers, Authors and Publishers (“AS-CAP”) and BMI alleging violations of §§ 1 and 2 of the Sherman Act and misuse of copyright.

Upon filing the action, CBS discontinued payments to BMI, although it continued to use BMI music on its television shows. In June, 1970, BMI moved for an injunction ordering CBS to pay BMI the fair and reasonable value of its repertoire being used by CBS. An injunction was issued December 30, 1970, requiring CBS to pay BMI an annual fee equal to that paid by it in 1969 ($1,607,000.), the fee being subject to adjustment on application of the parties to the court during the course of this litigation. Final determination of the fees payable for the period commencing December 81, 1969 was to be made by the court upon the conclusion of the litigation.

On September 22,1972, BMI and CBS, by stipulation, agreed to a revised interim fee of $1,700,000., which was, by its terms, not subject to adjustment upward or downward prior to the entry of final judgment. The stipulation expressly modified the injunctive order of December 30,1970. It further provided for an adjustment retroactive to January 1, 1970 and an agreement by CBS to withdraw a pending application of the court to reduce the fees it was then paying.

In October, 1975 after a twenty-nine day trial on the issue of liability, CBS’ claims of anti-trust violation and copyright misuse were dismissed. 400 F.Supp. 737 (S.D.N.Y. 1975). Thereafter, BMI moved pursuant to Rule 54(b) of the Federal Rules of Civil Procedure for entry of final judgment as to CBS’ claims against it and for retroactive adjustment of the interim fee. The motion was denied on the grounds that the outcome of the appeal then pending in the Court of Appeals might affect determination of the amount due and that a final judgment was therefore inappropriate at the time. The present application is not for final judgment, but for adjustment of interim relief.

[618]*618On August 8, 1977, the Court of Appeals, finding the offering of blanket licenses to CBS to constitute per se unlawful price fixing and copyright misuse, reversed and remanded. 562 F.2d 130 (2d Cir. 1977). On April 17, 1979, the United States Supreme Court reversed that determination and remanded for further proceedings relating to CBS’ claims that BMI’s licensing practices violate the rule of reason. 441 U.S. 1, 99 S.Ct. 1551, 60 L.Ed.2d 1 (1979). Thereafter defendants moved the Court of Appeals for summary affirmance. of this court’s judgment of dismissal, contending that CBS had failed to preserve on appeal any issue not disposed of by the Supreme Court’s opinion. BMI argued to the Court of Appeals that continuance of the litigation was causing it serious injury because the payments it received from CBS were frozen until the litigation terminated. On July 6, 1979, that Court, in connection with the denial of defendants’ motion for summary affirmance commented that

“if a party should desire to seek relief with respect to the interim arrangement for license fees payable by CBS, application may be made to Judge Lasker. . . ”

Acting on this observation by the Court of Appeals and alleging that it is being unfairly injured because of the unexpected duration of this litigation and the unforeseeable rate of inflation which has occurred since the case was commenced, BMI has brought the present motion.

CBS opposes on three grounds: First, that a court adjustment of fees in favor of BMI would permit BMI to “welsh” on the “deal” embodied in the stipulation of September 22, 1972. Second, that since the Court of Appeals, before whom the appeal on remand from the Supreme Court is now pending, will allegedly decide that appeal promptly, it is inappropriate and unnecessary for this court to use its authority to grant relief; and that, since the Court of Appeals’ decision may definitively dispose of the litigation, a final retroactive adjustment can be made when the Court of Appeals acts. Third, that BMI exaggerates the injurious effect of the pay freeze; that BMI’s business has grown “robustly” in the last ten years and that, in any event, if BMI is entitled to increased payment it will receive that amount upon the termination of the litigation.

II.

The 1970 injunction was granted for the purpose of preserving the status quo ante between the parties; and the terms of relief precisely continued the pattern which had existed between them, making provision, however, for adjustments in the light of changed circumstances (CBS v. ASCAP, 320 F.Supp. 389 at 394). Determination of the motion, accordingly, depends on whether 1) circumstances have changed sufficiently to justify adjustment and if so, whether 2) the stipulated agreement of September 1972 between BMI and CBS should bar such relief. I conclude that circumstances have changed sufficiently to warrant an increase in the fee payable to BMI at this time and that the 1972 stipulation ought not bar granting such relief.

A. Change of Circumstances

At the time of the 1972 stipulation this litigation was less than three years old. It is now more than ten years since the suit was instituted. Such a long passage of time would be expected to produce a change of conditions and has done so.

First: Since 1972 the case has been tried, appealed through the Court of Appeals to the Supreme Court and remanded to the Court of Appeals. This court dismissed all of the plaintiff’s claims; the Court of Appeals while reversing as to some issues adopted this court’s findings of fact; the Supreme Court reversed the Court of Appeals conclusion as to price fixing and remanded to consider whether a violation of the rule of reason exists. Thus, the case is not in the fluid state of September, 1972. Findings of fact have been made, and stand, against the plaintiff, and major legal claims made by it have been decided against it.

[619]*619Second: Since 1972 the rate of inflation has accelerated at an historically unparalleled level with the result that the real value of CBS’ payments to BMI has decreased by more than 40% (Affidavit of Edward M. Cramer, President of BMI, in support of the motion, citing Consumer Price Index for all Urban Consumers prepared by the Bureau of Labor Statistics, United States Department of Labor).

Third: Payments made to BMI by competing networks, NBC and ABC, have increased appreciably since 1972; each is approximately $1,000,000., per annum, higher than the payments made by CBS, (Cramer Affidavit ¶ 16 n.*) a fact which attests, at least prima facie, to the proposition that because of the decline of the value of the dollar, the fair value of music used warrants a higher dollar payment.

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483 F. Supp. 616, 210 U.S.P.Q. (BNA) 330, 1980 U.S. Dist. LEXIS 9862, Counsel Stack Legal Research, https://law.counselstack.com/opinion/columbia-broadcasting-system-inc-v-american-society-of-composers-nysd-1980.