Second Circuit Rules for Pandora in ASCAP Appeal of U.S. District Court Rulings
The U.S. Court of Appeals for the 2nd Circuit affirmed two of U.S. District Court Judge Denise Cote’s decisions related to Pandora’s license for American Society of Composers, Authors and Publishers (ASCAP) works for 2011-2015. Cote had issued a summary judgment in New York in September 2013 that Pandora had the right to perform all compositions in the ASCAP repertoire (see report in the Sept. 19, 2013, issue). Cote subsequently set a “headline rate” in March 2014 of 1.85 percent of revenue for Pandora’s license for ASCAP works (see report in the March 17, 2014, issue).
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"Having reviewed the record and the court’s detailed examination thereof, we conclude that the district court did not commit clear error in its evaluation of the evidence or in its ultimate determination that a 1.85 percent rate was reasonable for the duration of the Pandora-ASCAP license,” said Judges Christopher Droney, Pierre Leval and Chester Straub in their ruling Wednesday. The 1.85 percent rate expires Dec. 31. The Second Circuit also said Cote’s determinations about partial withdrawals of digital performance rights under the consent decree “were sound.”
Pandora is “pleased that the Second Circuit has affirmed Judge Cote’s ruling, which highlights the anti-competitive harms that can result from a lack of transparency into music ownership,” a spokesman said in a statement.
ASCAP CEO Elizabeth Matthews criticized the Second Circuit decision, saying in a statement that “powerful corporate interests, like Pandora, are determined to stand in the way of meaningful music licensing reform so that they may continue to shortchange songwriters.” The Second Circuit ruling is “a wake up call for creators to stand together, get involved and fight for their right to be paid a fair market rate for the use of their works,” Matthews said.