RMLCV GMR

Case 2:16-cv-06076-CDJ Document 100 Filed 11/29/17 Page 1 of 42
IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA
RADIO MUSIC LICENSE : CIVIL ACTION

COMMITTEE, INC., :
Plaintiff, :
:
v. : NO. 16-6076
:
GLOBAL MUSIC RIGHTS, LLC. :
Defendant. :
REPORT AND RECOMMENDATION
LYNNE A. SITARSKI November 29, 2017

U. S. MAGISTRATE JUDGE
Plaintiff Radio Music License Committee (RMLC) sues Defendant Global Music
Rights, LLC (GMR) under the antitrust laws, Section 2 of the Sherman Act, 15 U.S.C. 2;
Section 16 of the Clayton Act, 15 U.S.C. 26; First Amended Complaint (FAC) (ECF 52).
Jurisdiction is federal question, 28 U.S.C. 1331, and the instant motions have been referred to
me for a Report and Recommendation pursuant to 28 U.S.C. 636(b)(1)(B). Order, dated
August 1, 2017 (ECF 88); Order, dated November 28, 2017 (ECF 99).
GMR moves under Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3) to dismiss the
action for lack of personal jurisdiction and improper venue. GMR Mot., Br., & Reply (ECF 57,
57-1, 69-3). Alternatively, GMR requests, pursuant to 28 U.S.C. 1404(a), that this action be
transferred to the Central District of California, where GMR is located and conducts its
business. 1 Id. RMLC opposes the motion. RMLC Resp. (ECF 62). Judge Jones has referred
this motion to me for a Report and Recommendation. (ECF 88). RMLC also filed a motion to
1
On December 6, 2016, GMR sued RMLC in the Central District of California under
Section 1 of the Sherman Act, 15 U.S.C. 1; Sections 4 and 16 of the Clayton Act, 15 U.S.C.
15, 26; Californias Cartwright Act, Cal. Bus. & Prof. Code 16720; and Californias Unfair
Competition Law, Cal. Bus. & Prof. Code 17200 et seq. Compl., Global Music Rights, LLC
v. Radio Music License Comm., Inc., et al., No. 2:16-cv-09051BROAS (C.D. Cal.) (ECF 1).
supplement the record with new facts, which -- in RMLCs view -- establish jurisdiction over
GMR and venue in Pennsylvania. RMLC Suppl. Mot. & Br. (ECF 90, 90-1). GMR opposes
supplementation, asserting that the proffer is an effort to manufacture personal jurisdiction
where none exists. GMR Suppl. Resp. at 1 (ECF 92). This motion has also been referred to me
for a Report and Recommendation. (ECF 99).
RMLC is a trade association that represents its members in negotiations for licenses to
publicly perform copyrighted musical compositions. FAC 18, 49, 113-114. RMLC
negotiates on behalf of its members with performing rights organizations (PROs) 2 for mutually
acceptable license terms, rates, and fees, as well as alternative forms of licensure to suit the
needs of particular members. William Velez Decl., dated July 21, 2017, 8-9 (ECF 90-22).
RMLCs membership comprises about 3,000 owners of 10,000 commercial terrestrial radio
stations across the United States. 3 Id. 4-5; Randy Grimmett Decl., dated Mar. 3, 2017, 13,
15, 16 (ECF 57-2). RMLCs members generate over 90% of the billions of dollars of annual
revenue generated by the terrestrial radio industry in the United States. Id. 15.
GMRs sole business is licensing rights to publicly perform musical compositions that are
owned by its affiliated songwriters and publishers. It is the smallest PRO in business today. 4
2
The Copyright Act defines a PRO as follows: A performing rights society is an
association, corporation, or other entity that licenses the public performance of nondramatic
musical works on behalf of copyright owners of such works, such as the American Society of
Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and SESAC, Inc.
17 U.S.C. 101.
3
The record is not fully developed as to the constituency of RMLCs membership. See
FAC 63, 113-114. For purposes of this motion only, owners and other representatives of
radio stations as well as radio station companies will be treated as members of RMLC.
4
BMI represents about 750,000 affiliates with a repertory of 12 million songs. ASCAP
represents about 585,000 affiliates with a repertory of 10 million songs. SESAC represents
about 30,000 affiliates with a repertory of about 400,000 songs. Radio Music License Comm.,
2
GMR Reply at 1; FAC 2, 27. GMRs share of radio performances, based on a weighted
percentage of total plays, is between 5% and 7%. Id. 52. GMRs CEO Randy Grimmett
attests: GMRs repertory encompasses roughly 30,000 compositions written by 74
songwriters, which amounts to less than 0.1% of all songwriters and fewer than 0.01% of the
compositions available for performance by radio, television, satellite, and other broadcasters.
Grimmett Decl., dated Mar. 3, 2017, 1, 6, 12; RMLC Suppl. Br. at 5; FAC 44.
Plaintiff alleges in the Amended Complaint that GMRs repertory of copyrighted musical
compositions occupies its own product market in which GMR is an unlawful monopolist. See
e.g., FAC 1, 67, 71, 76-77 (citing 15 U.S.C. 2). Plaintiff avers that GMR exercises its
monopoly power by demanding supra-competitive prices for licenses to perform the musical
compositions in its repertory. Id. 16(d)-(g), 63. GMR allegedly made those demands to
RMLCs officers and representatives, and to some of RMLCs members that own or represent
radio stations broadcasting in various states across the nation. Id. RMLC asserts that its
members lack any meaningful choice for substitute copyrighted musical works, and therefore,
they are forced to accept the terms and prices unilaterally demanded by GMR. Id. & 1, 4, 42,
44, 76. RMLC contends that GMR exercises its monopoly power by offering and selling
anticompetitive license, and that GMRs conduct in this regard is an intentional antitrust
violation. Id. 101-102, 120-125, 128-132. Plaintiff seeks to enjoin GMR from the alleged
anticompetitive conduct; Plaintiff further seeks to institute judicial regulation of the terms, rates,
and prices for which GMR can offer or sell licenses, and further requests that any rate disputes
Inc. v. SESAC, Inc., No. 12-5807, 2013 WL 12114098, at *3 (E.D. Pa. Dec. 23, 2011) (Sitarski,
M.J.), adopted as modified, No. 12-5807, 2014 WL 12617437 (E.D. Pa. Feb. 20, 2014) (Jones,
J.).
3
be decided by a neutral arbitrator in binding arbitration. Id. 13,126, 133 & Relief Sought
(citing 15 U.S.C. 26).
GMRs position is that the record establishes no monopoly power, no antitrust injury, and
no antitrust violationand in other words, GMR has not committed any intentional tort. In
GMRs view, RMLC simply labels GMR a monopolist because GMR has negotiated prices for
its licenses that RMLC considers too high. GMR Suppl. Br. at 6-7; see also GMR Rule 12(b)(6)
Mot. (ECF 58) (requesting dismissal of the antitrust claims). GMR maintains that RMLC sues
solely to avoid innovation, and innovation actually promotes competition.
In their Amended Complaint, RMLC alleges jurisdiction over GMR in Pennsylvania and
venue in this judicial district. RMLC contends that GMR offered anticompetitive license terms,
rates, and prices to RMLCs representatives and officers, and GMR offered or sold
anticompetitive licenses to some of RMLCs members that own, represent, or operate radio
stations broadcasting in Pennsylvania. FAC 15, 16(a)-(g), 17. In addition, RMLC asserts a
separate basis for jurisdiction: an interim license that was agreed upon by the parties to
implement a settlement of the motion for preliminary injunction filed by RMLC concurrently
with the original complaint. See, e.g., FAC 16(h)-(j); RMLC Mot. Prelim. Inj. (ECF 3).
Pursuant to this interim agreement, GMR offered the interim license to RMLCs members, some
of whom happen to operate some stations broadcasting in Pennsylvania. Some of RMLCs
members purchased the interim license. Setting aside the interim licenses for separate discussion
below, the Amended Complaint asserts that GMR offered and sold licenses to two of RMLCs
membersiHeartMedia, Inc. and Townsquare Media, Inc.that together own or operate about
1,100 radio stations in more than one state. Id. 16(e), 16(g), 63. RMLC alleges that
4
jurisdiction exists because, inter alia, at least 30 of iHearts and three of Townsquares stations
operate in Pennsylvania. Id. 16(g), 63.
RMLCs position is that GMR used RMLC as a conduit to impose anticompetitive
licensing requirements nationwide on RMLCs members, and in doing so, specifically targeted
numerous radio stations located in Pennsylvania and in this District. FAC 16(a)-(c); RMLC
Resp. at 1, 3-5, 11-12, 15. RMLC alleges that GMR intended that RMLC convey to its
member stations the alleged anticompetitive threats [of copyright infringement claims] and
demands. Id. at 16(a). RMLC further alleged that GMR has known that many of those
stations are located in Pennsylvania, and GMR has been knowingly and intentionally imposing
a tortious anticompetitive scheme on hundreds of radio stations in Pennsylvania. Id.
16(b),(c).
RMLC frames GMRs conduct on a nationwide basis, arguing that GMR is waging a
nationwide anticompetitive campaign against U.S. commercial radio stations, some of which
broadcast in Pennsylvania; therefore, GMR is subject to personal jurisdiction in each and every
one of the 50 states, including Pennsylvania. See, e.g., RMLC Resp. at 1-2, 16-19. In RMLCs
view, GMR purposefully targeted Pennsylvania through the RMLC by us[ing] RMLC to try
to impose supracompetitive license terms on all RMLC stations, including hundreds of member
stations in Pennsylvania. Id. at 16 (emphasis in original).
GMR responds that Pennsylvania has no meaningful connection to this case. GMR Br.
at 1-2, 10. GMR contends that the record presents no factual basis whatsoever for this
Pennsylvania federal court to exercise personal jurisdiction over GMR. Id. at 10-18. In addition,
GMR maintains that RMLCs theory of nationwide jurisdiction and venue is flawed, because a
sovereign states exercise of personal jurisdiction over a domestic limited liability company,
5
such as GMR, may not be based on nationwide contacts, as proposed by RMLC. GMR asserts
that, because there is no personal jurisdiction over GMR in Pennsylvania, venue in this district is
improper as well.
Considering the present record, GMRs position must prevail. Due process does not
contemplate that a state may make binding a judgment in personam against an individual . . .
with which the state has no contacts, ties, or relations. International Shoe Co. v. Washington,
326 U.S. 310, 319 (1945). There is no basis in fact or law to assert personal jurisdiction over
GMR in Pennsylvania and therefore, venue in this judicial district is improper. Furthermore, as
explained below, I conclude that the motion to supplement the record should be denied. The
proffered supplementary materials should not be considered as relevant, material, or competent
evidence for purposes of establishing personal jurisdiction and venue.
Accordingly, I respectfully recommend that GMRs Motion to Dismiss be granted, and
that RMLCs motion to supplement the record be denied.
I. PROCEDURAL HISTORY
From 2014 through 2016, RMLC and GMR attempted to negotiate mutually acceptable
licensing terms, rates, and prices. Eugene D. Levin Decl., dated July 21, 2017, 5-11 (ECF 90-
24). In early November of 2016, RMLC proposed to GMR that, pending resolution of their
negotiations, each radio station should have the option to pay for a license based on its weighted
spin share, rather than the higher price asked by GMR, and have a neutral arbitrator set final
rates. Id. 11. GMR declined the offered terms.
On November 18, 2016, RMLC commenced this action. Compl. (ECF 1). The same
day, RMLC moved for a preliminary injunction enjoining GMR from imposing unilateral and
6
monopolistic licensing terms on RMLCs members. RMLC Mot. Prelim. Inj. at 1 (ECF 3).
RMLC requested that GMR be compelled to offer all commercial terrestrial radio stations in the
United States a blanket license to publicly perform the musical compositions in GMRs repertory
at rates corresponding to those the radio station had been paying to the two largest PROs
operating in the United Statesthe American Society of Composers, Authors and Publishers
(ASCAP) and Broadcast Music, Inc. (BMI). 5 Id. at 4. In addition, RMLC requested that
GMR be enjoined from suing any station for copyright infringement of the works contained in its
repertory during the pendency of this action, unless a station first had a fair opportunity to
purchase a blanket license offered by GMR at rates comparable to BMIs and ASCAPs, but then
rejected the offer. Id.; RMLC Br. Prelim. Inj. at 2-3 (ECF 3).
On November 30, 2016, GMR proposed to RMLC an interim blanket license, pursuant to
which GMR would license its repertory to RMLCs members for a specified price during a
temporary interval, while the parties continued negotiations for a long-term license. David
Marroso Decl., dated Aug. 28, 2017, 4 & Ex. 1 (ECF 92-1, 92-2). GMR conditioned this offer
of a proposed interim license on RMLCs agreement to withdraw the motion for preliminary
injunction without prejudice. Id. RMLC declined GMRs offer. Id., 5 & Ex. 2 (ECF 92-3).
RMLC countered, offering the interim relief requested by the motion for preliminary injunction.
Id. RMLC proposed that a neutral arbitrator should determine a reasonable pricethat is, a
rate proportional to the annual rates that each station pays to ASCAP and BMI. Id. In
5
Since the 1940s, ASCAP and BMI have been subject to judicially monitored consent
decrees, which impose rate regulations among other requirements for licensing rights to perform
the copyrighted musical compositions of their members or affiliates. See Broad. Music, Inc. v.
Columbia Broad. Sys., Inc., 441 U.S. 1, 10-16 (1979); Meredith Corp. v. SESAC LLC, 1 F.
Supp. 3d 180, 185 (S.D.N.Y. 2014); FAC 29-31. SESACs licensing of the performance
rights of its affiliates is subject to a settlement agreement with RMLC that governs rates among
other license terms through 2037. William Velez Decl., dated July 21, 2017, 14 & Ex. 3,
Settlement Agreement, dated July 23, 2015 (ECF 90-22 & 90-22 at 60-93).
7
addition, RMLC proposed that GMR agree not to sue any radio station for copyright
infringement of the works contained in its repertory during this action, unless a station first had a
fair opportunity to consider a blanket license offered by GMR for the rates proposed by RMLC,
but then rejected the offer. Id. GMR declined RMLCs counter-offer, finding that the proposed
compulsory licensure, regulation of license rates and prices, and binding arbitration of disputed
rates and prices by a neutral arbitrator were not acceptable. FAC 57-58.
The Honorable C. Darnell Jones, II referred the motion for preliminary injunction to the
undersigned. Order, issued Nov. 23, 2016 (ECF 9). On December 8, 2016, during the first
telephone conference convened by the undersigned, RMLC contended that absent a decision on
the motion for preliminary injunction by December 31, 2016, RMLCs members could be sued
by GMR for copyright infringement as of January 1, 2017. 6 Hrg Tr., dated Dec. 8, 2016, 6:3-9
(ECF 35). In RMLCs view, there was an imminent threat of copyright infringement litigation.
Id., 6:8. GMRs counsel described the threat as simply fictitious, noting that RMLCs
members had been infringing musical works in GMRs repertory since 2015, GMR had not filed
an infringement suit against any of RMLCs members, and GMR had never sent the RMLC or its
member radio stations a cease and desist letter. Id., 6:8, 10:6-15. GMR repeatedly expressed its
intention to file a motion to dismiss the action for lack of personal jurisdiction and improper
venue. Id., 7:14-22, 14:20-22, 19:6-13. GMR proposed that the dismissal motion be decided
before the motion for preliminary injunction was decided. Id., 7:25-8.2. The undersigned urged
the parties to come up with an interim solution, and asked them to discuss whether the injunction
6
GMR emphasized January 1, 2017, as the deadline for obtaining a license because, as
of that date, the stations license-in-effect with ASCAP and BMI would cease to cover songs
that had moved to GMRs repertory. FAC 50-51.
8
proceedings could be avoided by an interim licensing agreement, thereby permitting the
dismissal motion to be appropriately briefed and decided. Id., 19:6-13.
During subsequent telephone conferences, the undersigned monitored the parties efforts
to reach an interim licensing agreement, which would preserve GMRs defenses to jurisdiction,
protect the copyrighted materials in GMRs repertory, and ensure that RMLCs members would
not be sued for copyright infringement for the duration of this action. Hrg Trs., dated Dec. 9,
2016; Dec. 16, 2016; & Dec. 21, 2016 (ECF 36-37, 41). On December 21, 2017, the parties
informed the undersigned that were actually very close to having everything ironed out, and
well be able to conclude this interim agreement, which would then involve the dismissal
without prejudice of the motion for preliminary injunction. Hrg Tr., dated Dec. 21, 2017, 3:16-
18, 5:11-19. See also Marroso Decl., dated Aug. 28, 2017, 10.
On December 23, 2016, counsel for RMLC and GMR exchanged a draft term sheet for
the interim license. Marroso Decl., dated Aug. 28, 2017, 11 & Ex. 7 (ECF 92-8). The same
day, RMLCs counsel acknowledged: As for the term sheet, were in agreement, I think. Id.
On December 24, 2016, the agreed interim license was memorialized by the GMR and The
RMLC Term Sheet. Term Sheet (ECF 92-9). On January 4, 2017, RMLC withdrew the motion
for preliminary injunction without prejudice. Withdrawal (ECF 38).
The terms of the agreed interim license state, in pertinent part, that from December 24,
2016, until January 31, 2017, GMR will offer to any RMLC member station that does not
already have a license to perform publicly the copyrighted compositions within GMRs
repertory, the opportunity to enter into a[ ] license to perform those works on the terms set forth
below. Term Sheet 1(a). A total interim license fee is specified; however, the parties reserve
their respective rights to seek a retroactive fee adjustment in future licenses or as a result of the
9
current litigation. Id. 2(a), (c). The interim license will have a term beginning on January 1,
2017 and concluding on September 30, 2017 . . . . Id. 3. RMLC members shall have until
January 31, 2017 to enter an interim license, and GMR will not initiate copyright infringement
suits against any RMLC station before January 31, 2017. Id. 4, 6(a). Furthermore:
RMLC agrees it will not commence proceedings for injunctive relief prior to
August 1, 2017 based on [a] circumstances as they exist as of the date of GMR
agreement to offer the interim license or [b] any contention that GMR threatens to
commence or actually commences an infringement lawsuit against radio stations
who have performed or continue to perform GMR works without a written license
from GMR. RMLC agrees that it will not assert the level of industry acceptance
of the interim license, or the failure of any station(s) to accept the license as the
basis for seeking preliminary injunctive relief.
Id. 6(b) (emphasis and brackets in original).
Importantly, both sides promised that neither could use the interim licensing discussions,
an offer or sale of an interim license, or the license itself in any wayincluding to argue for
or against personal jurisdiction or venue:
(a) GMR and RMLC agree that this agreement and the negotiations that led to
this agreement are compromise negotiations protected pursuant to Federal
Rule of Evidence 408.
(c) GMR and RMLC agree not to use the negotiation of or existence of any
interim license with any RMLC member in any way, including to argue
for or against personal jurisdiction or venue.
Term Sheet 7(a), (c). See also Marroso Decl., dated Aug. 28, 2017, 7-8, 11-12 & Ex. 4,
Dec. 8, 2016, emails between counsel for RMLC and GMR (ECF 92-5).
On January 5, 2017, the undersigned recommended that the motion for preliminary
injunction be denied as moot. R&R. (ECF 39). On January 9, 2017, Judge Jones approved and
adopted the Report and Recommendation, denying the motion for preliminary injunction as
moot. Order, dated Jan. 9, 2017 (ECF 46). GMR made the interim license available to all of
RMLCs members nationwide.
10
On January 20, 2017, GMR moved to dismiss the complaint for lack of personal
jurisdiction and improper venue, and failure to state an antitrust claim upon which relief can be
granted. First Mot. Dismiss (ECF 51) (citing Fed. R. Civ. P. 12(b)(2), (b)(3), (b)(6)). In the
alternative, GMR requested transfer of the action to the Central District of California. Id. (citing
28 U.S.C. 1404(a)). On February 10, 2017, in lieu of a response to the dismissal motion,
RMLC amended its pleading. FAC (ECF 52).
The Amended Complaint added allegations regarding the interim licensing activity and
the interim licenses themselves. As to essential elements of the antitrust claims, RMLC alleges
that GMR is a monopolist, and GMR unlawfully exercised its monopoly power by demanding
supra-competitive prices for the interim licenses. FAC 60-62, 86. RMLC alleges that its
members lacked any meaningful choice for substitute copyrighted musical compositions;
therefore, they were forced to accept the interim license terms unilaterally dictated by GMR.
Id. Many RMLC member radio stations purchased the interim license. Id. In RMLCs view, the
interim license is the product of GMRs unlawful exercise of its monopoly power and proves
an intentional antitrust violation. Id. In addition, RMLC alleges in the Amended Complaint that
jurisdiction exists over GMR in Pennsylvania, and venue is proper in this judicial district,
because GMR offered and sold interim licenses to companies whose radio stations broadcast in
Pennsylvania. Id. 15, 16(h)-(j), 17, 59, 60, 61, 62; see also GMR Reply, App. A (ECF 56-2)
(highlighting allegations that are based on the interim licenses).
On March 3, 2017, GMR responded to the Amended Complaint by filing a motion to
strike specific allegations regarding the interim licenses (ECF 56); a motion to dismiss for failure
to state an antitrust claim upon which relief can be granted (ECF 58); and the present motion to
11
dismiss for lack of personal jurisdiction and improper venue (ECF 57). 7 On March 24, 2017,
RMLC separately responded to each motion. RMLC Resp. (ECF 62, 63, 66).
RMLC responded to GMRs motion to strike, asserting that GMR materially breached
the interim licensing agreement, which permits RMLC to use GMRs offers and sales of interim
licenses to support personal jurisdiction over GMR in Pennsylvania and venue in this judicial
district. 8 RMLC Resp. Mot. Strike at 1-2, 5-6, 11-12 (ECF 63). GMR replied that RMLC
breached the interim licensing agreement by using the negotiations for the interim license and the
license itself in the Amended Complaint, RMLCs responses to each of GMRs three motions to
dismiss, and the California litigation. GMR Reply Mot. Strike at 1 (ECF 70-3). In addition,
GMR replied: GMR breached nothing. Not in any way and certainly not in any material
waythat would justify jettisoning the GMRRMLC Term Sheet. Id. at 2, 5-9.
RMLC responds to the present motion to dismiss by asserting that GMR materially
breached the interim licensing agreement; RMLC thus contends that it may use GMRs offers
and sales of interim licenses to support personal jurisdiction over GMR in Pennsylvania and
venue in this judicial district. RMLC Resp. Mot. Dismiss at 11, 25-28. For example, RMLC
contends that GMRs actions in negotiating and entering into anticompetitive interim licenses
with numerous radio stations located in Pennsylvania . . . further confirms that jurisdiction is
7
Of these various motions, only the motion to dismiss for lack of personal jurisdiction
and improper venue has been referred to me for a Report and Recommendation.
8
RMLC asserts that GMR breached the interim licensing agreement by not offering
licenses to some of RMLCs members: RMLC member stations contacted GMR before
January 31 in an effort to purchase the interim license, but GMR did not respond to them before
January 31. RMLC Resp. Mot. Strike at 4-6, 10-13 (ECF 63). In addition, RMLC asserts that
GMR refused to offer interim licenses to some owners of station groups on an individual-station
basis, as required by the interim licensing agreement. Id. at 5-6, 11 (citing Term Sheet 1(a)).
And because GMR is in unrepentant breach of the RMLC-GMR agreement that contains the use
restriction, RMLC is now well within its rights to use the interim license to establish jurisdiction,
venue, or liability. Id. at 1-2, 5, 8, 10, 12.
12
proper here. Id. at 11. The same material breaches that are described in RMLCs response to
GMRs motion to strike are asserted here. Id. at 26.
In early May of 2017, RMLC proposed that GMR extend the interim license, which
would terminate on September 30, 2017, likely before the resolution of this action. Velez Decl.,
dated July 21, 2017, 43. GMR responded by letter dated May 20, 2017, declining to negotiate
with RMLC the terms for an extension, preferring instead to continue discussions directly with
RMLCs members who were interested in additional interim and long-term licenses. Id. 43
& Ex. 16 (ECF 90-32 at 70-72). On May 29, 2017, GMR announced on its website: Due to
pending litigation with the RMLC, . . . we cannot negotiate or enter licenses with stations owned
by companies headquartered or based in Pennsylvania. Marroso Decl., dated Aug. 28, 2017,
24 & Ex. 16, GMRs Radio License page of GMRs website (ECF 92-17).
During June and July of 2017, the parties communicated extensively, discussing GMRs
position as to interim licensure of Pennsylvania radio station companies. As a condition to doing
any business in Pennsylvania, GMR insisted upon a written commitment by RMLC and
companies operating in Pennsylvania that neither the discussions for interim license extensions,
nor the extended licenses themselves, could be used in any litigation in any way. Marroso Decl.,
dated Aug. 28, 2017, 24-27 & Exs. 18 (ECF 92-19), 19 (ECF 92-20), 20 (ECF 92-21). See
also RMLC Suppl. Br., App. A (ECF 90-2 at 22-24) (summary of communications). By letter
dated July 20, 2017, GMR proposed negotiating with Pennsylvania-based companies for the
extension of interim licenses, subject to specified conditions, one of which stated:
RMLC will agree that it cannot use any discussions, any negotiations, or the
existence of any interim license with any RMLC member in any way in any
litigation. By way of example only, the RMLC will not use any discussions, any
negotiations, or the existence of any interim license with any Pennsylvania-based
company to argue in favor of personal jurisdiction or venue in any litigation,
including the pending litigation in Pennsylvania. Likewise, the RMLC will not
13
seek to introduce as evidence any discussions, any negotiations, or the existence

of any interim license or argue that any discussions, negotiations, or the existence
of any interim license constitutes evidence of GMRs alleged monopoly power or
any other substantive element of the RMLCs antitrust claims.
Id. 29, Ex. 21 (ECF 92-22). RMLC did not respond to the letter.
The next day, July 21, 2017, RMLC again moved for a preliminary injunction. Second
Mot. Prelim. Inj. (ECF 85). This time, RMLC asserted that GMR was constructively
boycotting or refusing to deal with Pennsylvania radio stations by conditioning an extension of
the original interim licenses on RMLCs and each radio stations assurance that the extension
would not be used against GMR in any way. In RMLCs view, GMRs conditions were an
exercise of unlawful monopoly power, amounting to a separate and independent violation of
the antitrust laws, and an effort to frustrate the litigation and intimidate potential witnesses. Id.
at 1-2; RMLC Br. Second Mot. Prelim. Inj. at 1-3, 31-32 (ECF 85-1). RMLC also asserted that
GMRs conditional refusal to deal, which targeted radio stations operating in Pennsylvania,
is tortious conduct giving rise to personal jurisdiction in Pennsylvania. Id. at 20-21.
During a conference with Judge Jones on August 1, 2017, the parties agreed to postpone
the second motion for preliminary injunction by employing the same solution that resolved the
first motion for preliminary injunction: GMR would offer to RMLCs members an extended
interim license on the same terms as the original interim license, except for the termination date.
Just like the original interim license, the extended interim license would prohibit use of the
licensing discussions, an offer or sale of a license, or the license itself in any wayincluding
to argue for or against jurisdiction over GMR and venue in Pennsylvania. RMLC Suppl. Br. at
7; GMR Suppl. Resp. at 12-13; Jennifer L. Giordano Decl., dated Aug. 4, 2017, 15 & Ex. 17
(ECF 90-3, 90-20). Judge Jones determined that the second motion for preliminary injunction
would be held in abeyance, until the motion to dismiss for lack of personal jurisdiction and
14
improper venue was decided. Id. With the parties agreement, Judge Jones referred the
jurisdictional dismissal motion to the undersigned for a Report and Recommendation. Order,
dated Aug. 1, 2017 (ECF 88).
Beginning on August 7, 2017, GMR sent about 3,000 emails to RMLCs members,
including those radio stations operating in Pennsylvania, offering an extended license on the
same terms as the original interim license. Marroso Decl., dated Aug. 28, 2017, 32-33. On
August 11, 2017, GMR updated its website to inform the industry that offers of extended interim
licenses had been sent to all of RMLCs members, including those member radio stations
operating in Pennsylvania. Id. 34. The extension offered was an additional six-month period,
from October 1, 2017, to March 31, 2018. Id., 22 & Exs. 22-31 (ECF 92-23 through 92-32).
On August 14, 2017, RMLC moved to supplement the record in opposition to the motion
to dismiss for lack of personal jurisdiction over GMR in Pennsylvania and improper venue in
this judicial district. RMLC Suppl. Mot. (ECF 90). The motion to supplement reasserts that
GMR constructively boycotted or refused to deal with Pennsylvania radio stations by
conditioning an extension of the interim licenses on RMLCs and each radio stations assurance
that the extension would not be used against GMR in any way. RMLC Suppl. Br. at 9-10 (ECF
90-2). The motion reasserts that GMRs constructive refusal to deal targeted radio stations
operating in Pennsylvania, which proves an intentional tortthat is, an antitrust violation. Id. at
10-11. The proffered evidence largely comprises the parties communications during May
through July of 2017, regarding the extended interim licenses. However, the motion does not
mention that by August 11, 2017, GMR had already offered an extended license to all of
RMLCs members, including those member radio stations operating in Pennsylvania.
15
Based on the proffered supplementary materials, RMLC proposes a new theory for
personal jurisdiction over GMR: The purpose of GMRs boycott scheme is to punish and
retaliate against those Pennsylvania-based entities that have already stepped forward as third
party witnesses to assist RMLC in this litigation, and to intimidate other witnesses from doing
the same in the future. RMLC Mot. for Leave to File at 2-3 (ECF 90-1); RMLC Suppl. Br. at 2-
3, 10-11. Furthermore, RMLC asserts:
GMR has never notified RMLC, stations or the Court that it has abandoned its
intention to boycott Pennsylvania-based entities after the [extended] interim
licenses expire [on March 31, 2018]. . . . It is this refusal-to-deal intimidation
scheme, ongoing since May 29, 2017 (and not any extended interim license
agreements), that cements jurisdiction and venue in this Court.
Id. at 8. In other words, RMLCs position is that GMRs intentionally tortious, anticompetitive
conduct the alleged boycott and refusal-to-deal intimidation schemecreates personal
jurisdiction over GMR in Pennsylvania and venue in this judicial district.
GMR opposes supplementation for many reasons. GMR Suppl. Resp. (ECF 92).
Principally, GMR maintains that given the history of this litigation and applicable legal
standards, the conditions for extending the interim licenses were necessary to protect GMRs
jurisdictional arguments. GMR vehemently denies that its insistence upon the conditions was an
effort to intimidate witnesses. See id. at 2-4. As to RMLCs assertion that the purpose of
GMRs boycott scheme is to punish and retaliate against potential witnesses, GMR responds:
That accusation is untrue, unwarranted, and unprofessional, being without any support in the
record. Id. at 4. GMR also responds that the record establishes: There is no Pennsylvania
boycott and there was no Pennsylvania boycott. Period. Full stop. Id. at 3, 5.
16
II. FACTUAL BACKGROUND
RMLC is organized as a nonprofit corporation under Tennessee law with headquarters in
Brentwood (near Nashville), Tennessee. Velez Decl., dated July 21, 2017, 1, 5. RMLC acts a
common agent for its members with the authority to negotiate licensing terms, rates, and fees
with PROs. Id. 9. However, RMLC disavows authority to bind any of its individual members
to a licensing agreement:
[A]lthough RMLC can make available to its members the proposed terms that
PROs have indicated they will offer, RMLC cannot force any radio station to
accept and pay for a license from any PRO at all, much less on specific terms.
With every PRO, each radio station decides for itself whether it wishes to
purchase a license. And the PROs (not RMLC) bill and collect from individual
radio stations that elect to purchase a license under the negotiated terms.
Id. RMLC does not buy licenses for the public performance of musical compositions. Id. 5.
RMLC itself is not a radio station; it does not broadcast music and does not need a performing
rights license. RMLC Resp. at 18. RMLC negotiates licensing rates with PROS that its
members can then accept or decline directly from the PROs themselves. Id.
GMR is organized as a limited liability company under Delaware law. Grimmett Decl.,
dated Mar. 3, 2017, 5. GMR is headquartered at its sole office in Los Angeles, California. Id.
GMR has seventeen full-time employees; fifteen are in Los Angeles, and two work from their
homes in New Jersey. Id. 7. No GMR employee resides or works in Pennsylvania. Id. GMR
is owned by Azoff MSG Entertainment LLC, a Delaware limited liability company with its
headquarters and sole place of business in Los Angeles; Randy Grimmett, a Los Angeles
resident; and a few of GMRs founding songwriters, none of whom is based or has a primary
residence in Pennsylvania. Id. 8; Randy Grimmett Decl., dated Mar. 1, 2017, 11 (ECF 64-2).
Beginning in 2014, and at times thereafter until this action was filed on November 18,
2016, RMLCs and GMRs representatives met in person, spoke on the phone, and exchanged
17
emails and written proposals for a license to perform the musical compositions that are owned by
GMRs affiliated songwriters and publishers. GMRs CEO Randy Grimmett attests: Prior to
the initiation of this lawsuit, all discussions with the RMLC were with members of the executive
Committee of RMLC in their capacity as members. Randy Grimmett Decl., dated Apr. 7, 2017,
38 (ECF 69-5).
GMRs CEO Grimmett and some of GMRs Los Angeles employees met with RMLCs
representatives and members to discuss licensing GMRs repertory. Grimmett Decl., dated Mar.
1, 2017, 45. No meetings between RMLC and GMR occurred in Pennsylvania. Id. The
discussions took place in various cities, including Washington, D.C.; New York City; Detroit,
Michigan; Austin, Texas; Nashville, Tennessee; and Los Angeles. Grimmett Decl., dated Mar.
3, 2017, 18-19.
On August 24, 2015, GMRs CEO Grimmett and his colleague, Susan Genco, met with
RMLCs Chairman, Ed Christian, and Executive Director, William Velez, in Detroit. Grimmett
Decl., dated Mar. 3, 2017, 19. RMLC officers Eugene D. Levin and John VerStandig dialed
into that meeting by telephone conference. Id. 20; Grimmett Decl., dated Mar. 1, 2017, 46;
Eugene D. Levine Decl., dated Mar. 23, 2017, 8 (ECF 62-6); John VerStandig Decl., dated
Mar. 23, 2017, 5.b. (ECF 62-1); Velez Decl., dated July 21, 2017, 28. Levin called into the
meeting from his office in Bala Cynwyd, Pennsylvania, at the headquarters of Entercom
Communications Corp. Levin Decl., dated Mar. 23, 2017, 1, 8. Grimmett attests that
throughout the entirety of GMRs discussions with RMLC, Levin participated telephonically in
this one meeting only. Grimmett Decl., dated Mar. 3, 2017, 20; Grimmett Decl., dated Mar. 1,
2017, 46. VerStandig, in addition to the meeting in Detroit, participated in other discussions
18
among representatives of GMR and RMLC. All of the in-person meetings occurred outside of
Pennsylvania.
Levin is the Vice President, Treasurer, and Controller of Entercom Communications
Corp. Levin Decl., dated July 21, 2017, 1. Entercom operates approximately 125 radio
stations in 28 radio markets across the country, some of which are located in Pennsylvania. Id.
Entercom is currently the fourth largest radio group in the country. Levin Decl., dated Mar.
23, 2017, 1. Entercom is a member of RMLC. Levin Decl., dated July 21, 2017, 2. Levin is
a member of RMLCs Board of Directors and Executive Committee. Id. Entercom did not
purchase a long-term license from GMR. Instead, Entercom purchased an interim license in
January 2017. Id. 12, 19; Randy Grimmett Decl. dated Apr. 7, 2017, 40 (Prior to RMLC
suing GMR, GMR never conveyed a license offer to Entercom or offered to negotiate an
individual license directly with Entercom.).
John VerStandig is the President and CEO of HJV Corporation, the general partner of
HJV Limited Partnership, which trades as VerStandig Broadcasting from its headquarters in
Greencastle, Pennsylvania. John VerStandig Decl., 1, dated July 19, 2017 (ECF 90-21).
VerStandig Broadcasting owns four radio stations, three of which operate in Pennsylvania. Id.
VerStandig Broadcasting is a member of RMLC, and John VerStandig is a member of RMLCs
Board of Directors and Co-Chairman of its Executive Committee. Id. 2. VerStandig attests
that during each of his meetings with GMR, he was acting as an executive member of RMLC
not as an individual member seeking a license from GMR for VerStandig Broadcasting.
VerStandig Decl. dated Mar. 23, 2017, 5-6.
John VerStandig avers that on October 8, 2014, he met with GMRs CEO Grimmett in
New York City. VerStandig Decl., dated Mar. 23, 2017, 5.a. RMLCs Chairman Christian and
19
its Executive Director Velez were also present. Id. VerStandig describes Grimmetts statements
at the meeting: Grimmett emphasized GMRs desire to sell a license to all commercial radio
stations in the United States. Id. 6.
VerStandig further states that on October 26, 2016, he met with Grimmett and other
representatives of GMR, RMLC, and the radio industry at GMRs office in Los Angeles.
VerStandig Decl., dated Mar. 23, 2017, 5.c. VerStandig contends: At the October [8,] 2014
meeting and again at the October 26, 2016 meeting, Grimmett made clear that . . . virtually all
commercial radio stations in the United States could not avoid playing at least some songs in
GMRs repertory, and thus had no choice but to purchase GMRs license. Id. 7. VerStandig
states that during the meeting on October 26, 2016, Grimmett said that two of VerStandig
Broadcastings stations [in Pennsylvania92.1 WNUZFM and 101.5 WBHB] in particular
absolutely need these artists. Id. According to VerStandig, Grimmett said that WNUZ could
not compete without Bruno Mars, a GMR affiliate, and WBHBFM absolutely needed to be
able to play several GMR artists. Id. VerStandig opines, Grimmett made these statements in
an attempt to compel these Pennsylvania stations to enter into direct licenses with GMR. Id.
See also VerStandig Decl., dated July 19, 2017, 6 (same).
VerStandig further states that during the meetings on August 24, 2015, and October 26,
2016, GMR demanded that unlicensed commercial radio stations across the United States
accept its licensing terms. VerStandig Decl., dated Mar. 23, 2017, 8. VerStandig contends
that after the meeting ended on October 26, 2016, I told Grimmett . . . VerStandig Broadcasting
would like to discuss a direct license, and Grimmett agreed to do so. Id. 10, 13.
However, VerStandig Broadcasting did not purchase a long-term license from GMR.
Instead, during January of 2017, VerStandig Broadcasting purchased an interim license. Id.
20
14, 15; VerStandig Decl., dated July 19, 2017, 7 (same); Grimmett Decl., dated Apr. 7, 2017,
41 (Prior to RMLC suing GMR, GMR never conveyed a license offer or offered to discuss an
individual license offer directly with VerStandig Broadcasting.). Grimmett asserts: [P]rior to
the filing of RMLCs lawsuit, neither I nor any representative of GMR had discussions of any
kind with Mr. VerStandig except in his role as a member of the RMLC Executive Committee.
Id. 43. In addition, Grimmett attests: I am not aware of any representative of GMR offering a
performance license directly to Mr. VerStandig or his companies or negotiating the terms of any
such license with Mr. VerStandig. Id.; see also id. 44 & GMR Ex. V, Grimmett & VerStandig
email exchange, dated Dec. 30, 2016Jan. 4, 2017, regarding the interim license (ECF 72-3 at
52-54, filed under seal at ECF 73).
Before GMR offered and sold the interim licenses, GMR offered and sold licenses to
only two of RMLCs membersone to iHeartMedia, Inc. and the other to Townsquare Media,
Inc. Grimmett Decl., dated Mar. 1, 2017, 41, 43, 69; Grimmett Decl., dated Mar. 3, 2017,
13, 21. Neither is a Pennsylvania-based company. Id. All of the meetings and negotiations for
the licenses sold to iHeart and Townsquare took place outside of Pennsylvania. Grimmett Decl.,
dated Mar. 1, 2017, 42; Grimmett Decl., dated Mar. 3, 2017, 21.
In March, 2016, GMR entered into the license agreement with iHeartMedia, Inc., a
Delaware Corporation with headquarters in San Antonio, Texas. Grimmett Decl., dated Mar. 3,
2017, 13, 21; Grimmett Decl., dated Mar. 1, 2017, 41.a; GMR Reply at 5 & App. A, Form
10-K for fiscal year Dec. 31, 2016, for IHeart Communications, Inc. (ECF69-6). 9 iHeart is a
member of RMLC, but GMR negotiated and concluded the license agreement directly with
iHeart. Grimmett Decl., dated Mar. 1, 2017, 41. According to Grimmett, iHeart owns
9
The record is not fully developed as to iHeartMedia, Inc.s corporate structure, but
RMLC does not dispute that iHearts headquarters are located in San Antonio, Texas.
21
approximately 840 radio stations in the United States. Id. 41(a). iHeart is the largest radio
broadcaster in the U.S., with over 850 radio stations and representing an estimated 20-25% of
radio industry revenues. Levin Decl., dated July 21, 2007, 10. It is undisputed that some of
iHearts radio stations operate in Pennsylvania.
In late November, 2016, GMR entered into the license agreement with Townsquare
Media, Inc., a Delaware corporation with headquarters in Greenwich, Connecticut. Grimmett
Decl., dated Mar. 3, 2017, 13, 21 Grimmett Decl., dated Mar. 1, 2017, 41.b. Townsquare is
a member of RMLC, but GMR negotiated and concluded the license agreement directly with
Townsquare. Id. 41. According to Grimmett, Townsquare owns approximately 300 radio
stations in the United States. Id. 41(b). It is undisputed that some of Townsquares radio
stations operate in Pennsylvania.
GMRs CEO Grimmett states: From the time GMR was founded in 2013 until March
2016, no RMLC member entered into a direct license agreement with GMR. Grimmett Decl.,
dated Mar. 1, 2017, 68 (emphasis in original); see also id. 40-41, 43, 69. Before GMR
offered and sold the interim licenses, GMR did not enter into licensing agreements with any of
RMLCs members that had headquarters or substantial business centers in Pennsylvania.
Grimmett Decl., dated Mar. 3, 2017, 22, 27. Furthermore, before GMR offered and sold the
interim licenses, GMR did not enter into a license with any terrestrial radio company based in
Pennsylvania. Grimmett Decl., dated Apr. 7, 2017, 39; see also GMR Reply at 1, 3 (GMR
never entered into any license with any terrestrial radio company headquartered or based in
Pennsylvania.) (emphasis in original). Moreover, before GMR offered and sold the interim
licenses, GMR did not direct any communications into Pennsylvania promoting or otherwise
offering its licenses for sale to Pennsylvania radio stations or Pennsylvania residents. Grimmett
22
Decl., dated Mar. 3, 2017, 26. GMR has not directed communications into Pennsylvania
informing radio stations of the risk of infringing works in its repertory or otherwise implicitly
threatening suit for infringement, and the record is devoid of any evidence suggesting
otherwise. Id. 28.
III. MOTION TO SUPPLEMENT THE RECORD
The motion to supplement the record requests consideration of materials regarding
GMRs offer and sale of the interim licenses beginning in January of 2017, and the parties
discussions during May through July of 2017 regarding extensions of the interim licenses. The
submissions are voluminous. In RMLCs view, GMR materially breached the parties interim
licensing agreement and violated the antitrust laws in regard to the interim license extensions,
and these alleged infractions justify using the supplementary materials to establish jurisdiction
over GMR in Pennsylvania. GMRs position is that RMLC breached the interim licensing
agreement in the first instance, by using the interim licensing activity to support RMLCs
litigation position on jurisdiction, and there has been no antitrust violation by GMR whatsoever.
In GMRs view, use of the parties negotiations for, or the existence of, any interim license or
extended interim license, would be improper for any purpose.
Each side disputes the adequacy of the others performance of their interim licensing
obligations. But the record shows that GMR cooperated with RMLC in a ferociously
contentious adversarial setting, and GMR met its interim licensing obligations. RMLC never
applied to the Court for assistance or an order to compel better performance by GMR. In fact, as
agreed upon, GMR issued interim and extended interim licenses to RMLCs member radio
stations, including radio stations operating in Pennsylvania. GMR did so before RMLC moved
23
to supplement. The record suggests that interim and extended licenses were issued to all of
RMLCs members that chose to purchase licenses. RMLCs stated fear that GMR intends to
boycott radio stations operating in Pennsylvania after expiration of the extended licenses on
March 31, 2018, is pure speculation. The record is also devoid of any evidence supporting
RMLCs assertions that GMR intimidated, punished, or retaliated against potential witnesses.
Importantly, nothing contained in the proffered supplementary materials, and none of the
cited flaws as to each sides discharge of their respective obligations, warrants departure from
the promise they made to each other not to use the negotiation of or existence of any interim
license with any RMLC member in any way, including to argue for or against personal
jurisdiction or venue. Term Sheet 7(c). The interim licensing agreement implemented a
settlement of RMLCs first motion for preliminary injunctionan interim solution that aimed
to protect RMLCs members from copyright infringement litigation, preserve GMRs defenses to
personal jurisdiction, and place GMRs dismissal motion first in line for decision.
Instead of serving the principal goals of the interim solution, consideration of the
proffered supplementary argument and materials would defeat not only the parties contractual
obligations to one another, but their responsibilities to the Court under agreed case-management
procedures. Accordingly, after review of the record in its entirety, I respectfully recommend that
the proffered supplementary argument and materials not be considered for purposes of
determining whether there is personal jurisdiction over GMR in Pennsylvania, or venue in this
judicial district.
24
IV. PERSONAL JURISDICTION AND VENUE
A. Questions Presented for Decision
The requirement that a court have personal jurisdiction flows . . . from the Due Process
Clause. Id. The Due Process Clause protects an individuals liberty interest in not being
subject to the binding judgments of a forum in which he has established no meaningful contacts,
ties or relations. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (quoting
International Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)). Personal jurisdiction
represents a restriction on judicial power . . . as a matter of individual liberty. Ins. Corp. of
Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 & n.10 (1982).
Because RMLC sues under the federal antitrust laws, 15 U.S.C. 2, 26, and questions
arising under federal law are presented, the jurisdictional principles of the Due Process Clause of
the Fifth Amendment guide the jurisdictional analysis. 28 U.S.C. 1331; Max Daetwyler Corp.
v. Meyer, 762 F.2d 290, 293 (3d Cir.), cert. denied, 474 U.S. 980 (1985). The Fifth Amendment
impose[s] a general fairness test that incorporates the standards of due process established by
International Shoe under the Fourteenth Amendment. Id. International Shoe requires that
certain minimum contacts exist between the non-resident defendant and the forum such that
maintenance of the suit does not offend traditional notions of fair play and substantial justice.
326 U.S. at 316 (quoting Milliken v. Myer, 311 U.S. 457, 463 (1940)). We must first consider
whether GMR has the requisite minimum contacts to establish personal jurisdiction in
Pennsylvania.
RMLC asserts that GMRs national contacts should determine jurisdiction, rather than
GMRs specific contacts with the forum. See FAC 15; RMLC Resp. at 1-2 (asserting an
anticompetitive campaign to extort the U.S. commercial radio industry and a uniform course
25
of conduct that GMR has undertaken on a nationwide basis). In RMLCs view, Section 12 of
the Clayton Act, 15 U.S.C. 22, authorizes suit anywhere a defendant directs its
anticompetitive activity. RMLC Resp. at 24.
Under a national contacts theory, the proper inquiry in determining personal jurisdiction
in a case involving federal rights is one directed to the totality of a defendants contacts
throughout the United States. Max Daetwyler, 762 F.2d at 293; Fed. R. Civ. P. 4(k)(2). Section
12 of the Clayton Act permits venue of any suit under the antitrust laws against a corporation
. . . not only in the judicial district whereof it is an inhabitant, but also in any district wherein it
may be found or transacts business. 15 U.S.C. 22. In addition, Section 12 authorizes
nationwide, indeed worldwide, service of process on a defendant corporation in federal antitrust
litigation. In re Auto. Refinishing Paint Antitrust Litig., 358 F.3d 288, 293 (3d Cir. 2004).
Regarding two defendant foreign-country corporations, Automotive Refinishing concluded:
personal jurisdiction in federal antitrust litigation is assessed on the basis of a defendants
aggregate contacts with the United States as a whole. Id. at 298.
However, the Third Circuit has never applied a national contacts test for establishing
personal jurisdiction over a domestic antitrust defendant. Howard Hess Dental Labs, Inc. v.
Dentsply Intl, Inc., 516 F. Supp. 2d 324, 336-38 (D. Del. 2007), affd, 602 F.3d 237 (3d Cir.
2010). And the Third Circuit has not extended the holding of Automotive Refinishing in a
manner that would counterindicate traditional long-arm jurisprudence. Id. Although Section 12
is not without its ambiguities, it is clear that the provision is directed only to corporations and
that it does not apply to other entities that simply share common attributes with corporations.
World Skating Fedn v. Intl Skating Union, 357 F. Supp. 2d 661, 664 (S.D.N.Y. 2005)
(footnotes omitted).
26
The jurisdictional clause of Section 12 of the Clayton Act simply does not apply here.
GMR is neither a foreign-country defendant nor a corporationit is a domestic limited liability
company. Accordingly, GMRs contacts with states other than Pennsylvania cannot be
aggregated in order to obtain personal jurisdiction over GMR in this forum.
In the absence of a federal statute authorizing nationwide service of process, the statutes
and rules of the state in which a district court sits determine the minimum contacts sufficient to
satisfy due process and provide amenability to suit: When a federal question case arises under a
federal statute that is silent as to service of process, Federal Rule of Civil Procedure 4(e)
adopts an incorporative approach requiring that both the assertion of jurisdiction and the service
of process be gauged by state amenability standards. Max Daetwyler, 762 F.2d at 295, 297.
Rule 4(e)(1) authorizes personal jurisdiction over non-resident defendants to the extent
permissible under the laws of the state where the district court sits. Fed. R. Civ. P. 4(e)(1);
Eurofins Pharma US Holdings v. BioAlliance Pharma SA, 623 F.3d 147, 155 (3d Cir. 2010).
Pennsylvanias long-arm statute permits courts to exercise personal jurisdiction over non-
resident defendants to the constitutional limits of the Due Process Clause of the Fourteenth
Amendment. 42 Pa. C.S.A. 5322(b). A district courts exercise of personal jurisdiction
pursuant to Pennsylvanias long-arm statute is therefore valid as long as it is constitutional.
Pennzoil Prods. Co. v. Colelli & Assocs., Inc., 149 F.3d 197, 200 (3d Cir. 1998). Accordingly,
the principal question presented is whether exercising personal jurisdiction over GMR comports
with federal due process. In this case, the short answer to that question is no.
The short answer to the question whether venue is properly laid in this judicial district is
also no, for several reasons. Under Section 2 of the Sherman Act and Section 16 of the
Clayton Act, 15 U.S.C. 2, 26, RMLC sues to enjoin the pled anticompetitive monopolistic
27
conduct by GMR. Section 16 permits an association to sue for injunctive relief in any court
of the United States having jurisdiction over the parties, against threatened loss or damage by a
violation of the antitrust laws . . . . Id. 26. Again, personal jurisdiction may not be exercised
over GMR in Pennsylvania or in this judicial district, and therefore, Section 16 does not apply
here.
RMLC maintains that under the general venue statute, 28 U.S.C. 1391, venue is proper
in the Eastern District of Pennsylvania. RMLC Resp. at 28-30. The general venue statute
permits an action not based on diversity of citizenship to be brought either in the judicial district
where all defendants reside, or in the district in which the claim arose. Myers v. Am. Dental
Assn, 695 F.2d 716, 722 (3d Cir. 1982). RMLC argues that personal jurisdiction may be
asserted over GMR in Pennsylvania and therefore, for purposes of the general venue statute,
GMR resides in this judicial district. Id. at 29 (citing 28 U.S.C. 1391(b)(2), 1391(c)(2)).
RMLC also argues that the claims pled in the Amended Complaint arose from GMRs conduct
with this District, that is, the licensing of Pennsylvania radio stations, which it is also asserted,
makes venue proper in this judicial district. Id. at 30.
For the reasons set forth below, I conclude that Pennsylvania does not have personal
jurisdiction over GMR. For purposes of the general venue statute, GMR does not reside in this
judicial district. See 1391(b)(1), 1391(c). In addition, the record establishes that none of the
events or omissions giving rise to the antitrust claims pled in the Amended Complaint
occurred in this judicial district. See 1391 (b)(2). GMRs and RMLCs negotiations for a
licensing agreement, and GMRs offers and sales of its licenses, took place outside of
Pennsylvania. The general venue statute does not lay venue at the place of the plaintiffs
residence. Leroy v. Great W. United Corp., 443 U.S. 173, 183-85 (1979). It would be error to
28
rule that an antitrust claim, in essence a form of business tort alleging business injury, can be
brought under section 1391(b) where the injury occurs, i.e. at the plaintiffs residence. Myers,
695 F.2d at 723 (citing Caribe Trailer Sys., Inc. v. Puerto Rico Maritime Shipping Auth., 475 F.
Supp. 711, 719 (D.D.C. 1979) (To hold that a cause of action necessarily arose in the district in
which the plaintiff was injured is a simplistic rationale to which antitrust actions are not
susceptible.)).
Personal jurisdiction may be either general or specific. Helicopteros Nacionales de
Colombia, S.A. v. Hall, 466 U.S. 408, 414-16 & n.9 (1984). A court may assert general
jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims
against them when their affiliations with the State are so continuous and systematic as to render
them essentially at home in the forum state. Goodyear Dunlop Tires Operations, S.A. v.
Brown, 564 U.S. 915, 919 (2011) (quoting Intl Shoe, 326 U.S. at 317); accord Daimler AG v.
Bauman, 134 S. Ct. 746, 757 (U.S. 2014); Perkins v. Benguet Consol. Mining Co., 342 U.S. 437,
445-46 (1952). On the other hand, specific jurisdiction depends upon the relationship among
the defendant, the forum and the litigation. Walden v. Fiore, 134 S. Ct. 1115, 1121 (U.S.
2014) (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775 (1984) (quoting Shaffer v.
Heitner, 433 U.S. 186, 204 (1977))).
RMLC does not argue that general jurisdiction may be exercised over GMR. Indeed, the
record is devoid of any evidence suggesting that GMR has any continuous and systematic
contacts with the forum state, Pennsylvania. The paradigm forum for exercising general
jurisdiction over a corporation is one in which the corporation is fairly regarded as at home.
Goodyear Dunlop, 564 U.S. at 924. Here, GMR is a Delaware limited liability company. Before
offering and selling the interim licenses, GMR did not transact any business in Pennsylvania.
29
The record shows that GMR is at home in California at its headquarters and sole office in Los
Angeles. Thus, we next consider whether specific personal jurisdiction exists here.
B. Legal Standards for Determining Specific Jurisdiction
Once a defendant raises a jurisdictional defense, the plaintiff bears the burden of
establishing personal jurisdiction. OConnor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 316
(3d Cir. 2007) (citing Gen. Elec. Co. v. Deutz, AG, 270 F.3d 144, 150 (3d Cir. 2001)). The
plaintiff must prove by affidavits or other competent evidence that jurisdiction is proper.
Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir. 2009); Dayhoff Inc. v. H.J.
Heinz Co., 86 F.3d 1287, 1302 (3d Cir. 1996). Where a district court does not hold an
evidentiary hearing, which is the situation here, the plaintiff need only establish a prima facie
case of personal jurisdiction. OConnor, 496 F.3d at 316; Miller Yacht Sales, Inc. v. Smith, 384
F.3d 93, 97 (3d Cir. 2004). The well-pled factual allegations of the complaint must be accepted
as true, and all disputed facts must be construed in the plaintiffs favor. OConnor, 496 F.3d at
316; Toys R Us, Inc. v. Step Two, S.A., 318 F.3d 446, 457 (3d Cir. 2003); Carteret Sav. Bank,
FA v. Shushan, 954 F.2d 141, 142 n.1 (3d Cir. 1992).
Specific jurisdiction is evaluated under three requirements. First, the defendant must
have purposefully directed [its] activities at the forum. OConnor, 496 F.3d at 317 (quoting
Burger King, 471 U.S. at 472) (quotation marks omitted). Second, the litigation must arise out
of or relate to at least one of those activities. Id. (citing Helicopteros, 466 U.S. at 414). And
third, if the prior two requirements are met, a court may consider whether the exercise of
jurisdiction otherwise comports with fair play and substantial justice Id. (quoting Burger King,
471 U.S. at 476) (quoting Intl Shoe, 326 U.S. at 320) (internal quotation marks omitted).
30
C. Specific Jurisdiction May Not Be Exercised Over GMR
At the threshold, specific jurisdiction requires that the relationship among the defendant,
the forum, and the litigation arise out of contacts that the defendant himself creates with the
forum State. Walden, 134 S. Ct. at 1122 (quoting Burger King, 471 U.S. at 475) (emphasis in
original). A defendant must have purposefully directed [its] activities at the forum.
OConnor, 496 F.3d at 317 (quoting Burger King, 471 U.S. at 472) (quotation marks omitted).
Alternatively, the defendant must have purposefully availed itself of the privilege of
conducting activities with the forum. Id. (quoting Hanson v. Denckla, 357 U.S. 235, 253
(1958)). Physical entrance is not required. Id. (citing Burger King, 471 U.S. at 476; Grand
Entmt Grp., Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 482 (3d Cir. 1993)). But importantly,
what is necessary is a deliberate targeting of the forum. Id.
In determining whether a defendant has sufficient contacts with the forum state to justify
an assertion of jurisdiction, the unilateral activity of another party or a third person is not an
appropriate consideration. Walden, 134 S. Ct. at 1122; OConnor, 496 F.3d at 317 (unilateral
activity of those who claim some relationship with a nonresident defendant is insufficient)
(citing Hanson, 357 U.S. at 253). Furthermore, contacts with a states citizens that take place
outside the state are not purposeful contacts with the state itself. Id. (citing Gehling v. St.
Georges Sch. of Med. Ltd., 773 F.2d 539, 542-43 (3d Cir. 1985)).
RMLCs principal theory of specific jurisdiction over GMR is that GMR used RMLC as
a conduit to impose licensing requirements on RMLCs members and in doing so, specifically
targeted radio stations nationwide, including radio stations in Pennsylvania. RMLC argues that
GMR intended for RMLC to convey to its member stations the anticompetitive demands for
supra-competitive license fees, as well as implicit threats of copyright infringement claims.
31
RMLC further argues that GMR knew that many of those stations were located in Pennsylvania;
thus, GMR knowingly and intentionally imposed a tortious anticompetitive scheme on hundreds
of radio stations in Pennsylvania.
[T]he critical finding that the defendant purposefully availed itself of the privilege of
conducting activities within the forum requires contacts that amount to a deliberate reaching into
the forum state to target its citizens. DJamoos v. Pilatus Aircraft Ltd., 566 F.3d 94, 104 (3d
Cir. 2009) (citing Burger King, 471 U.S. at 475-76; OConnor, 496 F.3d at 317-18). See also
IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 265-66 (3d Cir. 1998) (Simply asserting that the
defendant knew that the plaintiffs principal place of business was located in the forum would be
insufficient in itself to meet the requirement [of deliberate targeting of the forum].).
RMLCs theory that GMR used RMLC as a conduit masks the fact that GMR never
affirmatively did or said anything targeted to citizens or residents of Pennsylvania. RMLC is a
Tennessee trade association. GMR negotiated and interacted with RMLCs representatives only
in their capacity as executives and officers of RMLC. Indeed, RMLC emphasizes that it does not
purchase licenses, and disavows any authority to bind its members to negotiated license terms,
rates, forms, or fees. At most, the record shows that GMR aggressively pitched the benefits of
its license to RMLC, hoping that RMLC would favorably present the GMR license to its
members, who might (or might not) operate radio stations in Pennsylvania, and who might (or
might not) decide to purchase GMRs license.
GMR directly offered and sold licenses to only two of RMLCs membersone to iHeart
and the other to Townsquare. All of the meetings and negotiations for the licenses sold to these
companies took place outside of Pennsylvania. Copies of the licensing agreements are not part
of the record currently before the Court, but nothing suggests that the contracts were formed
32
under or are governed by Pennsylvania law. Both iHeart and Townsquare were organized under
the laws of states other than Pennsylvania. Both maintained headquarters in states other than
Pennsylvania. Importantly, the record shows that representatives of iHeart and Townsquare
selected the radio stations that would be licensed to publicly perform the musical works in
GMRs repertory. The record is devoid of any evidence that GMR had anything to do with
where the companies representatives decided to use a license. In other words, representatives of
iHeart and Townsquare unilaterally chose to purchase GMRs licenses, and to use them for their
radio stations broadcasting in Pennsylvania.
GMR is not subject to personal jurisdiction wherever one of its licensees unilaterally and
fortuitously chooses to do business. See Walden, 134 S. Ct. at 1124 (ruling that personal
jurisdiction could not be exercised over defendants who never traveled to, conducted activities
within, contacted anyone in, or sent anything or anyone to the forum state); Kehm Oil Co. v.
Texaco, Inc., 537 F.3d 290, 301 (3d Cir. 2008) (whereas use of the trademark at issue was
geographically tied to the physical location of the gas stations in Pennsylvania, defendants cease
and desist letters to the gas stations did not create personal jurisdiction) (citing Red Wing Shoe
Co., Inc. v. HockersonHalberstadt, Inc., 148 F.3d 1355, 1361 (Fed. Cir. 1998) (holding that a
patentee [does] not subject itself to personal jurisdiction in a forum solely by informing a party
who happens to be located there of suspected infringement, because [g]rounding personal
jurisdiction on such contacts alone would not comport with principles of fairness)).
Furthermore, an offer to license is more closely akin to an offer for settlement of a
disputed claim than an arms-length negotiation in anticipation of a long-term continuing business
relationship. Red Wing, 148 F.3d at 1361 (citing Burger King, 471 U.S. at 479) (distinguishing
between negotiations that culminate in a contract creating continuing obligations and those that
33
do not). A license is a covenant not to sue. Id. at 1362. Here, the current record does not
suggest that GMR created any continuing obligations between itself and the forum,
Pennsylvania. GMR, through agreements with its affiliated songwriters and publishers, acquires
exclusive rights to grant licenses to publicly perform copyrighted musical compositions owned
by its affiliates. 10 GMRs rights are exclusive in nature because GMRs affiliates do not retain
the right to separately grant permission to a particular music user for the public performance of
their works. In contrast, GMR licenses or grants owners or operators of radio stations non-
exclusive rights to publicly perform or broadcast the works in GMRs repertory. In other words,
GMR retains the right to grant permission to publicly perform the works in its repertory to other
licensees. The record is devoid of any evidence that either GMR or its licensees have any
continuing obligations other than some licensees obligation pay the license fee on a monthly or
annual basis. RMLC does not argue that GMRs licensees have any continuing obligations that
are significant for purposes of asserting personal jurisdiction over GMR.
In sum, the record establishes: Neither GMR nor RMLC is a citizen of or resides in
Pennsylvania. Neither maintains a business office in Pennsylvania. Neither employs a person
who is a citizen of, or resides in, Pennsylvania. None of the songwriters and publishers affiliated
with GMR is based, or has a primary residence, in Pennsylvania. GMR does not own property in
Pennsylvania. GMRs and RMLCs representatives did not conduct any meetings in
Pennsylvania. GMR conducted every phone conference of record with RMLC from GMRs
headquarters in Los Angeles. Before GMR offered and sold the interim licenses, GMR did not
conduct any business in Pennsylvania. GMR did not offer or sell a license to any RMLC
10
The Copyright Act gives the owner of a copyright the exclusive right to publicly
perform, or authorize others to perform, the copyrighted work. 17 U.S.C. 106(4). Any person
who violates this exclusive right is an infringer. Id. 501(a).
34
member or radio station that had a substantial place of business in Pennsylvania, or that was
formed under the laws of Pennsylvania. The record is devoid of any evidence that GMRs
representatives travelled to, visited, or physically entered Pennsylvania at any time). GMR did
not send any communications to Pennsylvania companies, citizens, or residents. GMR has not
sent any cease and desist letters to Pennsylvania companies, citizens, or residents. GMR has not
filed a lawsuit for copyright infringement in Pennsylvaniaor any other cause of action or
proceeding of record.
GMR has no jurisdictionally significant contacts, ties, or relations with Pennsylvania.
The Amended Complaint does not allege -- and the record does not contain any evidence of -- a
single affirmative act through which GMR purposefully directed any of its activities at the forum
state, or purposefully availed itself of the privilege of conducting activities within the forum
state. GMR has not invoked the benefits and protections of Pennsylvanias laws. Accordingly,
there is no need to consider the other two factors for evaluating specific personal jurisdiction
whether RMLCs claims arise out of or relate to at least one of GMRs activities in the forum
and whether an exercise of jurisdiction over GMR would otherwise comport with fair play and
substantial justice.
D. The Calder Effects Test Is Not Applicable
RMLC maintains that the requirement for minimum contacts with the forum state is met
under the effects test set forth in Calder v. Jones, 465 U.S. 783 (1984). RMLC Resp. at 1, 20-
23. Calder held that in some circumstances, personal jurisdiction can be asserted over a non-
resident defendant that committed an intentional tort outside the forum state, the unique effects
of which caused damage or injury to the plaintiff within the forum. Calder applies only if the
record contains sufficient facts to support an affirmative finding as to each of three requirements:
35
First, the defendant must have committed an intentional tort. Second, the plaintiff
must have felt the brunt of the harm caused by that tort in the forum such that the
forum can be said to the focal point of the harm suffered by the plaintiff as a
result of the tort. Third, the defendant must have expressly aimed his tortious
conduct at the forum, such that the forum can be said to be the focal point of the
tortious activity.
IMO Indus., 155 F.3d at 256, 261, 265-66 (citing Calder, 465 U.S. at 788-90). Antitrust
violations can be intentional torts under the test. See, e.g., In re Fasteners Antitrust Litig., No.
08-md-1912, 2011 WL 3563989, at *12 (E.D. Pa. Aug. 12, 2011); In re Bulk (Extruded)
Graphite Prods. Antitrust Litig., No. 02-6030, 2007 WL 2212713, at *5 (D.N.J. July 30, 2007).
RMLC posits that GMRs monopolistic scheme satisfies all three elements. RMLC
Resp. at 20. However, RMLCs analysis focuses primarily on Calders second requirement.
RMLC contends that jurisdiction in Pennsylvania and venue in this judicial district follow from
the antitrust injuries that GMR has intentionally imposed on radio station companies operating in
Pennsylvania. Id.
On the other hand, GMR primarily focuses on Calders third requirement. GMR
maintains that the test does not apply here because [t]here was no action that was expressly
aimed at Pennsylvania, and there is no showing that Pennsylvania has a unique relationship
with the radio industry or with GMRs alleged conduct. GMR Suppl. Br. at 21-22; GMR Reply
at 3-4.
The Calder test is a specialized form of specific jurisdiction that applies to intentional tort
claims. However, the same due process principles that constrain a states authority to bind a
non-resident defendant to a judgment of its courts apply when intentional torts are involved.
Walden, 134 S. Ct. at 1123. The assertion of jurisdiction must be based on intentional conduct
by the defendant that creates the necessary contacts with the forum. Id.; see also IMO Indus.,
36
155 F.3d at 265 (Calder did not carve out a special intentional torts exception to the traditional
specific jurisdiction analysis.).
Applying the test to the present facts, GMRs negotiations, interactions, and transactions
with RMLC, iHeart, and Townsquare show GMRs business strategy to sell its licenses in a
national marketplace. It is not disputed that RMLC, iHeart, and Townsquare each conducted
some business in Pennsylvania, and that GMR likely knew that these entities conducted business
in Pennsylvania. Whether GMRs conduct rises to the level of the pled antitrust violations is not
decided here. Nonetheless, the Calder test does not apply here as follows.
RMLC repeatedly asserts that radio stations operating in Pennsylvania were injured
because of GMRs intentional and anticompetitive conduct. This is not enough to establish
GMRs contact with the forum state, Pennsylvania:
Calder made clear that mere injury to a forum resident is not a sufficient
connection to the forum. Regardless of where a plaintiff lives or works, an injury
is jurisdictionally relevant only insofar as its shows that the defendant formed a
contact with the forum State. The proper question is not where the plaintiff
experienced a particular injury or effect but whether the defendants conduct
connects him to the forum in a meaningful way.
Walden, 134 S. Ct. at 1125. Calder requires more than a finding that the harm caused by the
defendants intentional tort is primarily felt within the forum. IMO Indus., 155 F.3d at 265.
It will be accepted as true (for purposes of the present dismissal motion only) that RMLC
has pled and shown an intentional violation of the antitrust laws by GMR. It will also be
accepted as true (for purposes of the present dismissal motion only) that RMLC has pled and
shown that radio station companies operating in Pennsylvania felt the brunt of the harm caused
by the alleged monopoly. Even assuming those facts, personal jurisdiction cannot be asserted
over GMR in Pennsylvania. This is so because RMLC has not met Calders third requirement
that is, RMLC has not demonstrated that GMR expressly aimed the pled tortious conduct at
37
Pennsylvania. Only if this requirement is satisfied need we consider whether the brunt of the
harm was actually suffered by [RMLCs members] in the forum. IMO Indus., 155 F.3d at 266.
In addition, it will be accepted as true for present purposes that RMLC has pled and
shown that GMR intended that RMLC convey to its member stations the alleged anticompetitive
demands for supra-competitive license fees, as well as implicit threats of copyright infringement
claims. Nonetheless, [s]imply asserting that the defendant knew that plaintiffs principal place
of business was located in the forum would be insufficient in itself to meet this requirement.
IMO Indus., 155 F.3d at 265 & n.8, 260 n.3. Again, a defendants relationship with a plaintiff
or third party, standing alone, is an insufficient basis for jurisdiction. Walden, 134 S. Ct. at
1123. Due process requires that a defendant be haled into court in a forum State based on his
own affiliation with the State, not based on the random, fortuitous, or attenuated contacts he
makes by interacting with other persons affiliated with the State. Id. (quoting Burger King,
471 U.S. at 475) (quotation marks omitted). See also Jamoos, 566 F.3d at 104 (ruling that the
defendants efforts to exploit a national market necessarily included Pennsylvania as a target,
but those efforts simply do not constitute the type of deliberate contacts within Pennsylvania that
could amount to purposeful availment of the privilege of conducting activities in that state);
Remick v. Manfredy, 238 F.3d 248, 259 (3d Cir. 2001) (declining to assert personal jurisdiction
where there was no showing that Pennsylvania had a unique relationship with the boxing
industry).
Because RMLC has not shown any specific conduct or activity by GMR even suggesting,
let alone establishing, that GMR expressly aimed the alleged tortious conduct at Pennsylvania,
the Calder test does not apply here. IMO Indus., 155 F.3d at 265-66. There is no need to
38
consider whether in fact there was an antitrust violation, or whether the brunt of the antitrust
harm was actually suffered by radio stations operating in Pennsylvania. Id. at 266.
E. Transfer Under Section 1404(a)
For the convenience of the parties and witnesses, in the interest of justice, a district court
may transfer any civil action to any other district or division where it might have been brought or
to any district or division to which all parties have consented. 28 U.S.C. 1404(a); see also id.
1406(a) (permitting transfer of a case laying venue in the wrong district or division). The
general purpose of the procedural remedy of transfer is removing whatever obstacles may
impede an expeditious and orderly adjudication of cases and controversies on their merits.
Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466-67 (1962). Jurisdiction over the person of the
defendant is not a prerequisite to the power of a district court to transfer the case. Id.; United
States v. Berkowitz, 328 F.2d 358, 361 (3d Cir. 1964); Cumberland Truck Equip. Co. v. Detroit
Diesel Corp., 401 F. Supp. 2d 415, 419-20 (E.D. Pa. 2005) (citing Goldlawr and Berkowitz).
Here, personal jurisdiction cannot be asserted over GMR in Pennsylvania and venue is
improperly laid in the Eastern District of Pennsylvania. The action cannot be further prosecuted
in the Eastern District of Pennsylvania because the Court does not have personal jurisdiction
over GMR. But this Court need not transfer this action in order to serve the interests of justice.
RMLC has not requested transfer to the Central District of California, or any other
district court. Instead, RMLC exclusively argues that its choice of forum in the Eastern District
of Pennsylvania should be preserved. Since RMLC has not requested a transfer, RMLC has not
cited any hardship or prejudice that it might suffer in the absence of a transfer. See RMLC Resp.
at 31-36.
39
The recommended dismissal without prejudice does not effectively terminate this dispute.
As previously noted, on December 6, 2016, GMR commenced an action in the United States
District Court for the Central District of California, Global Music Rights, LLC v. Radio Music
License Comm., Inc., et al., No. 2:16-cv-09051BROAS (C.D. Cal.). GMR asserted claims
against RMLC under Section 1 of the Sherman Act, 15 U.S.C. 1; Sections 4 and 16 of the
Clayton Act, 15 U.S.C. 15, 26; and Californias unfair competition laws. On January 6, 2017,
GMR filed an amended complaint (ECF 23). On January 27, 2017, RMLC filed a motion to
dismiss the amended complaint (ECF 34). On April 27, 2017, the California district court found
that the California action and this Pennsylvania action are substantially similar as both address
the same facts, namely, whether Plaintiff and Defendant have each violated the antitrust laws
while attempting and failing to negotiate a licensing agreement for Plaintiffs repertory. Order,
dated Apr. 7, 2017 (ECF 40 at 10, 9-11). Though each action may focus on the conduct and
business practices of one party more than the other, ultimately both actions involve the same
facts, the same set of negotiations, and overlapping evidence. Id. at 10. The California action
was stayed pending the outcome GMRs dismissal motions filed here. Id. Neither party has
identified any impediment to RMLCs assertion of a counterclaim in the California action. Once
the California District Court judge lifts the stay of the California action, RMLC may seek to
assert a counterclaim, if it so chooses. RMLC has not argued, and nothing in the present record
suggests, that a dismissal without prejudice of this action would result in RMLC losing a
substantial part of its cause of action under the applicable rules and statutes of limitations.
40
V. CONCLUSION
Having reviewed the parties submissions and the record evidence, I find that the
assertions of Plaintiff RMLC, even if viewed as true, do not establish personal jurisdiction over
GMR in the forum state, Pennsylvania or venue in this judicial district. Because dismissal of the
Amended Complaint without prejudice is recommended, there is no need to consider GMRs
alternative request under 28 U.S.C. 1404(a), that the venue of this action be transferred to the
Central District of California.
41
RECOMMENDATION
AND NOW, this 29th day of November, 2017, it is RESPECTFULLY
RECOMMENDED that Plaintiff RMLCs motion to supplement the record be DENIED, that
Defendant GMRs motion to dismiss for lack of personal jurisdiction and improper venue be
GRANTED, and that the First Amended Complaint be DISMISSED, without prejudice.
BY THE COURT:
/s/ Lynne A. Sitarski .

LYNNE A. SITARSKI
UNITED STATES MAGISTRATE JUDGE
42

RMLCV GMR

Uploaded by

Copyright:

Available Formats

RMLCV GMR

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

RMLCV GMR

Uploaded by

Copyright:

Available Formats

Case 2:16-cv-06076-CDJ Document 100 Filed 11/29/17 Page 1 of 42

IN THE UNITED STATES DISTRICT COURT

RADIO MUSIC LICENSE : CIVIL ACTION

REPORT AND RECOMMENDATION

LYNNE A. SITARSKI November 29, 2017

me for a Report and Recommendation pursuant to 28 U.S.C. 636(b)(1)(B). Order, dated

supplementation, asserting that the proffer is an effort to manufacture personal jurisdiction

for a Report and Recommendation. (ECF 99).

attests: GMRs repertory encompasses roughly 30,000 compositions written by 74

(citing 15 U.S.C. 26).

solely to avoid innovation, and innovation actually promotes competition.

of whom happen to operate some stations broadcasting in Pennsylvania. Some of RMLCs

operate in Pennsylvania. Id. 16(g), 63.

RMLCs position is that GMR used RMLC as a conduit to impose anticompetitive

a tortious anticompetitive scheme on hundreds of radio stations in Pennsylvania. Id.

stations in Pennsylvania. Id. at 16 (emphasis in original).

proffered supplementary materials should not be considered as relevant, material, or competent

evidence for purposes of establishing personal jurisdiction and venue.

Accordingly, I respectfully recommend that GMRs Motion to Dismiss be granted, and

that RMLCs motion to supplement the record be denied.

rates. Id. 11. GMR declined the offered terms.

proceedings could be avoided by an interim licensing agreement, thereby permitting the

dismissal motion to be appropriately briefed and decided. Id., 19:6-13.

for preliminary injunction without prejudice. Withdrawal (ECF 38).

Id. 6(b) (emphasis and brackets in original).

or against personal jurisdiction or venue:

RMLCs members nationwide.

RMLC amended its pleading. FAC (ECF 52).

(highlighting allegations that are based on the interim licenses).

On March 3, 2017, GMR responded to the Amended Complaint by filing a motion to

GMRs motion to strike are asserted here. Id. at 26.

position as to interim licensure of Pennsylvania radio station companies. As a condition to doing

extension of interim licenses, subject to specified conditions, one of which stated:

seek to introduce as evidence any discussions, any negotiations, or the existence

boycotting or refusing to deal with Pennsylvania radio stations by conditioning an extension of

exercise of unlawful monopoly power, amounting to a separate and independent violation of

is tortious conduct giving rise to personal jurisdiction in Pennsylvania. Id. at 20-21.

dated Aug. 1, 2017 (ECF 88).

GMR constructively boycotted or refused to deal with Pennsylvania radio stations by

RMLCs members, including those member radio stations operating in Pennsylvania.

3, 10-11. Furthermore, RMLC asserts:

conduct the alleged boycott and refusal-to-deal intimidation schemecreates personal

jurisdiction over GMR in Pennsylvania and venue in this judicial district.

II. FACTUAL BACKGROUND

RMLC is organized as a nonprofit corporation under Tennessee law with headquarters in

Levin is the Vice President, Treasurer, and Controller of Entercom Communications

individual license directly with Entercom.).

VerStandig Broadcasting is a member of RMLC, and John VerStandig is a member of RMLCs

VerStandig Decl. dated Mar. 23, 2017, 5-6.

stations in the United States. Id. 6.

Broadcastings stations [in Pennsylvania92.1 WNUZFM and 101.5 WBHB] in particular

See also VerStandig Decl., dated July 19, 2017, 6 (same).

52-54, filed under seal at ECF 73).

iHearts radio stations operate in Pennsylvania.

Media, Inc., a Delaware corporation with headquarters in Greenwich, Connecticut. Grimmett

stations operate in Pennsylvania.

RMLCs members that had headquarters or substantial business centers in Pennsylvania.

otherwise. Id. 28.