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Weil Secures Favorable Summary Judgment Ruling for Plaintiffs in Performance Rights Antitrust Class Action

On March 3, 2014, Weil secured a substantial victory on behalf of a group of Hoak, Meredith, and Scripps local television stations ensuring that they will get to present their antitrust claims to a jury challenging the licensing practices of SESAC, one of three performance rights organizations (PROs) in the United States. The other two PROs, ASCAP and BMI, are subject to consent decrees with the Antitrust Division of the U.S. Department of Justice. This private antitrust lawsuit, funded by the industry’s Television Music License Committee on behalf of a putative class of nearly all local television stations nationwide, alleges that SESAC, the only PRO unconstrained by any of the protections built into the ASCAP and BMI consent decrees, has wielded its monopoly power over the copyrighted works it licenses to extract supra-competitive fees, and to deny television licensees any meaningful option to an all-or-nothing blanket license. This foreclosure of competition and anticompetitive conduct by SESAC and certain of its affiliates in the licensing of SESAC music were challenged as violations of Sections 1 and 2 of the Sherman Antitrust Act, prohibiting, respectively, unreasonable restraints of trade, monopolization, and a conspiracy to monopolize.

SESAC first attempted to have the case dismissed in 2010, but the district court agreed with plaintiffs that it had alleged plausible antitrust claims that were worthy of discovery. After over four years of litigation and the completion of fact and expert discovery, SESAC’s effort to prevent a trial was unsuccessful. In a 69-page Opinion & Order, Judge Paul A. Engelmayer of the U.S. District Court for the Southern District of New York denied, with limited exception, SESAC’s motion for summary judgment. The Court’s favorable ruling ensures that each antitrust claim goes forward and SESAC will have to defend its conduct at a trial in circumstances where the Court has stated, “on all three claims, that the record evidence is sufficient to support a verdict in plaintiff’s favor.” Plaintiffs are seeking treble damages for licensee fee overcharges since 2008, structural injunctive relief to prevent the continuation of SESAC’s ongoing antitrust violations, and attorneys’ fees and costs.

The Weil team on this matter includes partners Steven Reiss, Bruce Rich, Benjamin Marks, and Eric Hochstadt in New York and partner Carrie Anderson in Washington, D.C., as well as associates Meaghan Thomas-Kennedy, Kristen Echemendia, Cheri Bessellieu, Erick Flores, Kaj Rozga, Wendy Fu, and Josh Bachrach.