Uncertain Expectations Ahead of DOJ Brief on Appeal of ASCAP/BMI Consent Decrees Ruling
Music licensing stakeholder expectations for DOJ’s opening brief in its appeal to the 2nd Circuit Court of Appeals of the Broadcast Music Inc. legal challenge against a portion of the department's review of the BMI and American Society of Composers, Authors and Publishers consent decrees is fluid, said executives, lawyers and lobbyists in interviews. DOJ has until Thursday to file an opening brief on its appeal, which stems from a September U.S. District Court ruling in New York against a portion of Justice’s concluding statement in its review of the performing rights organizations’ consent decrees (see 1611140065). Judge Louis Stanton ruled the Antitrust Division erred in its concluding statement that the department continues to believe existing decrees mandate 100 percent licensing (see 1609190062).
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There's a lack of permanent DOJ appointees responsible for formulating the department’s policy on the consent decrees, most notably the division’s head, officials said. Makan Delrahim awaits approval by both the Senate Judiciary Committee and the full Senate before he can take charge. Senate Judiciary held its confirmation hearing last week (see 1705100024). Acting Assistant Attorney General Andrew Finch is temporarily leading Antitrust. DOJ didn’t comment.
It’s “hard to know” what DOJ will do in the near term about its appeal of the BMI case given the timeline on Delrahim’s confirmation process, said Wilkinson Barker broadcast attorney David Oxenford. Slow formation of DOJ’s antitrust leadership team meant music industry groups like Nashville Songwriters Association International have had little contact with the department since its leadership turned over after President Donald Trump's inauguration, said NSAI Executive Director Bart Herbison. NSAI and other music licensing interests had extensive communications with DOJ and the Antitrust Division during its review of the PROs’ consent decrees, Herbison said.
DOJ may have been moved by uncertainty over Delrahim’s confirmation process in its unsuccessful bid last month to extend the deadline for filing its opening brief to July 17, a music industry lobbyist said. Finch is recused from working on DOJ’s appeal of the BMI case “due to a conflict,” DOJ said in its request (in Pacer). The 2nd Circuit's Judge Ralph Winter denied it in late April. DOJ successfully delayed the deadline to file its brief in February based (in Pacer) on a need to give Attorney General Jeff Sessions and other “new leadership” at the department “adequate time to familiarize themselves with the issues and review the brief before it is filed.”
Executives and lobbyists are preparing for the possibility that DOJ will decide to pursue its appeal at the 2nd Circuit at least in the short term. DOJ apparently drafted its opening brief in January, before Trump’s inauguration, and nothing in its requests for deadline extensions indicates it's prepared to “change course” now from the original rationale for appeal, a tech lobbyist said. “I would be surprised if DOJ doesn’t challenge it,” a music industry executive said. “They could be motivated more by the belief that DOJ should retain the power to set policy on the consent decrees than they are by the Trump administration’s prevailing position on antitrust issues.”
Herbison and others hope the changeover to the Trump administration results in a behind-the-scenes policy. “We’ve done a good job on Capitol Hill of making everyone aware of how overregulated we think we are as an industry,” Herbison said: “I would hope” that Sessions and others at DOJ “have had time” to review the ecosystem the PRO consent decrees operate in and that “common sense prevails.”
There's a question why the agency wouldn't "just drop the appeal” under new leadership, said music industry attorney Chris Castle. He draws hope from DOJ’s filings in the Songwriters of North America’s ongoing challenge to the consent decrees decision (see 1609140027 and 1702090058) in the U.S. District Court in Washington, D.C. The department said in a motion to dismiss the SONA case (in Pacer), filed soon after it filed a notice of appeal with the 2nd Circuit in the BMI case, that it was “considering whether to appeal” that case. “It’s not a foregone conclusion” that DOJ will move forward with an appeal, Castle said.
BMI believes Stanton's "decision is correct and look[s] forward to defending our position" at the 2nd Circuit, a spokeswoman said.