Claims Over 'Steve Harvey Show' Theme Song Trimmed

We 3 Kings v. The Steve Harvey Show, No. 2:14-cv-08816-DSF-AS Document 213 (C.D. Cal. Filed 06/23/17).

California District Judge, Dale Fischer granted partial summary judgment in favor of “The Steve
Harvey Show” , in regard to all copyrights except those filed prior to We 3 Kings Inc.’s
first amended complaint. In 2014, We 3 Kings Inc., brought suit against the Steve Harvey Show, its production company, and 27 satellite broadcasting and cable companies for using its music for its second season after their license for the first season had expired. We 3 Kings Inc. is seeking $700 for each time the music was used in the show’s second season, multiplied by each of the television stations that distributed it. The damages amount to $42.3 million.

Judge Fischer stated that a copyright suit cannot be maintained if a copyright application had not been submitted to the Copyright Office prior to the filing of the complaint. Only one of the copyrights at issue were submitted prior to the filing of the first amended complaint.

The Steve Harvey Show argued that the company had an express license from We 3 Kings, Inc.
for season one of the show, and an implied license for any episodes thereafter. We 3 Kings, Inc.
refuted The Steve Harvey Show’s argument, stating that the contract was approved by We 3
Kings Inc.’s ousted president and is unenforceable. Judge Fischer stated that there are still
significant questions of material fact remaining in regards to both parties’ arguments. However,
Judge Fischer did agree with The Steve Harvey Show’s argument that the broadcasting
companies are protected from copyright liability by a statute that grants them a blanket license to air the episodes at issue because they had no input in the content of the work.

SESAC Antitrust Settlement Submitted For Approval In Class Action

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

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

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

Monopolization Claim Against SESAC Not Subject To Dismissal

Radio Music License Committee, Inc. v. SESAC, Inc. , No. 2:12-cv-5807 (E.D. Pa. June 26, 2014).

Plaintiff sued the public performance rights organization SESAC, seeking declaratory and injunctive relief on behalf of its member radio stations under §1 and §2 of the Sherman Antitrust Act (15 U.S.C. §§1 & 2) and §16 of the Clayton Act (15 U.S.C. §26).  Plaintiff alleged three counts: horizontal price fixing, group boycott/refusal to deal, and monopolization.  The Court granted SESAC's motion to dismiss the price fixing and refusal to deal claims, but denied the motion as to plaintiff's monopolization claim.  With respect to monopolization, the Court found: "The hallmark of anticompetitive conduct is harm to competition, but the danger of anticompetitive conduct is harm to the consumer.  The most common characteristics of unlawful monopolies are price increases, output decreases, and a deterioration in quality and service, all of which the antitrust laws seek to minimize.  That is precisely what plaintiff has alleged here. SESAC’s anticompetitive conduct has driven up the price of copyright licenses and deteriorated the quality of service insofar as customers only have the option of purchasing a blanket license. The court believes that plaintiff has alleged a plausible claim for which relief can be granted under §2 of the Sherman Act."

SESAC Can't Escape Antitrust Claims

Meredith Corp. v. SESAC LLC, No. 09 Civ. 9177 (PAE)., 2014 BL 57263 (S.D.N.Y. Mar. 03, 2014).

The issue in this putative class action is whether SESAC's licensing practices since 2008 have violated federal antitrust law. Plaintiffs are groups of local television stations.  They sue SESAC aand allege that, in practice, they must obtain licenses for some music in SESAC's repertory. That is because SESAC's repertory is large and includes works so ubiquitous that some are inevitably embedded in shows that the stations acquire and wish to air.  Plaintiffs contend that, since 2008, SESAC, with its affiliates' assent, has taken steps to make illusory any alternative to the blanket license it sells, which conveys the right to play the music of all SESAC affiliates.  Having insulated this product from competition and forced local television stations to acquire it, plaintiffs allege, SESAC has set an exorbitant price for that "all or nothing" license, even though stations have no interest in buying the rights to the entirety of SESAC's repertory. Plaintiffs assert that SESAC and its affiliates have thereby violated § 1 of the Sherman Act, 15 U.S.C. § 1, by combining to unlawfully restrain trade; and § 2 of the same Act, 15 U.S.C. § 2, by conspiring to monopolize the market for the performance rights to the musical works within SESAC's repertory.  Plaintiffs also assert a monopolization claim against SESAC under § 2.

SESAC moved for summary judgment. The Court denied the motion as to all three counts, except that on the § 1 claim, the Court granted summary judgment to defendants in two ways that narrowed that claim. Specifically, the Court rejected plaintiffs' (1) per se theory of liability; and (2) claim of an agreement to restrain trade among all 20,000-plus SESAC affiliates, as opposed to among only the far smaller subset (under 1%) of affiliates who were party to a supplemental affiliation agreement with SESAC.

The Court first reviewed the history of antitrust litigation involving the PROs' licensing practices. The Court then considered the § 1 claim, assessing whether (1) the conduct plaintiffs assail is amenable to per se condemnation; (2) there is adequate evidence of concerted action among SESAC's affiliates to restrain trade; and (3) the evidence would support a conclusion that the anti-competitive effects of SESAC's conduct outweighed its pro-competitive tendencies, i.e., whether a jury could find harm to competition. The Court then considered the § 2 claims, addressing first the monopolization claim and then the claim of a conspiracy to monopolize.

Example Of "Public Performance" Complaint Against Radio Station

MPCA King Of Spades, et al. v. T.E.C. 2 Broadcasting, Inc. et al., Index No. 1:11-cv-0080-JPJ-PMS (W.D. Va. filed Oct. 24, 2011).

Plaintiffs are affiliates of SESAC, a performing rights society, and seek injunctive relief and damages for defendants' allegedly unauthorized public performances of plaintiffs' copyrighted musical compositions on defendants' owned and operated commercial radio station.