RADIO MUSIC LICENSE COMMITTEE, INC. v. GLOBAL MUSIC RIGHTS, LLC

RESPONSE in Opposition re MOTION For Leave to Supplement the Jurisdictional Record with Additional Facts

E.D. Pa.January 29, 2019

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA RADIO MUSIC LICENSE COMMITTEE, INC., Plaintiff, v. GLOBAL MUSIC RIGHTS, LLC, Defendant. Civil Action No. 2:16-cv-6076-CDJ Judge C. Darnell Jones, II DEFENDANT GLOBAL MUSIC RIGHTS, LLC’S OPPOSITION TO PLAINTIFF RADIO MUSIC LICENSE COMMITTEE, INC.’S MOTION FOR LEAVE TO SUPPLEMENT THE JURISDICTIONAL RECORD Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 1 of 20 TABLE OF CONTENTS Page i I. INTRODUCTION ............................................................................................................. 1 II. BACKGROUND ............................................................................................................... 3 A. Procedural History ................................................................................................. 3 B. Genesis of the Present Dispute .............................................................................. 4 III. ARGUMENT ..................................................................................................................... 5 A. There Is No Basis For Supplementing the Record ................................................. 5 B. GMR’s Refusal to Grant Entercom An Entirely New License Does Not Affect the Personal Jurisdiction Analysis .............................................................. 7 1. GMR Had a Lawful Right to Decline Entercom’s Demand For An Entirely New License ................................................................................. 7 2. Declining to Sell Entercom An Entirely New License Cannot Subject GMR to Personal Jurisdiction in Pennsylvania ............................ 9 C. RMLC Cannot Satisfy the Calder “Effects” Test ................................................ 11 IV. CONCLUSION ................................................................................................................ 14 Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 2 of 20 TABLE OF AUTHORITIES Page(s) ii Cases Bergen Drug Co. v. Parke, Davis & Co., 307 F.2d 725 (3d Cir. 1962) ..................................................................................................... 11 BP Chems. Ltd. v. Formosa Chem. & Fibre Corp., 229 F.3d 254 (3d Cir. 2000) ................................................................................................. 2, 10 Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) .................................................................................................................... 2 Cernuto, Inc. v. United Cabinet Corp., 595 F.2d 164 (3d Cir. 1979) ....................................................................................................... 8 Cohen & Co. v. N. River Ins. Co., No. CIV. A. 93-1860, 1994 WL 30294 (E.D. Pa. Jan. 31, 1994) ............................................... 7 D’Jamoos ex rel. Estate of Weingeroff v. Pilatus Aircraft Ltd., 566 F.3d 94 (3d Cir. 2009) ....................................................................................................... 11 Dealer Computer Servs. Inc. v. Ford Motor Co., No. Civ. A. H-06-175, 2006 WL 801033 (S.D. Tex. Mar. 28, 2006) ........................................ 8 Dunn & Mavis, Inc. v. Nu-Car Driveway, Inc., 691 F.2d 241 (6th Cir. 1982) ................................................................................................ 8, 11 Eatoni Ergonomics, Inc. v. Research in Motion Corp., 826 F. Supp. 2d 705 (S.D.N.Y. 2011), aff’d, 486 F. App’x 186 (2d Cir. 2012) ..................................................................................... 12 Facebook, Inc. v. Teachbook.com, LLC, No. CV 10-03654 RMW, 2011 WL 1672464 (N.D. Cal. May 3, 2011) .................................. 14 Feesers, Inc. v. Michael Foods, Inc., No. 1:04-cv-0576, 2009 WL 1475270 (M.D. Pa. May 26, 2009), injunction vacated, 591 F.3d 191 (3d Cir. 2010) ...................................................................... 12 Fleer Corp. v. Topps Chewing Gum, Inc., 658 F.2d 139 (3d Cir. 1981) ....................................................................................................... 9 Fox Television Stations, Inc. v. Aereokiller, LLC, 851 F.3d 1002 (9th Cir. 2017) .................................................................................................... 9 Haggerty Enters., Inc. v. Lipan Indus. Co., No. 00 C 766, 2001 WL 968592 (N.D. Ill. Aug. 23, 2001) ........................................................ 6 Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 3 of 20 TABLE OF AUTHORITIES (continued) Page(s) iii IMO Indus., Inc. v. Kiekart AG, 155 F.3d 254 (3d Cir. 1998) ............................................................................................... 11, 14 James v. York Cty. Police Dept., Civ. No. 1:01-CV-1015, 2005 WL 1154500 (M.D. Pa. May 6, 2005) ..................................... 11 Johnson v. Burken, 930 F.2d 1202 (7th Cir. 1991) .................................................................................................... 6 Johnson v. Woodcock, 444 F.3d 953 (8th Cir. 2006) ...................................................................................................... 6 Jones v. Pittsburgh Nat’l Corp., 899 F.2d 1350 (3d Cir. 1990) ................................................................................................... 13 Kehm Oil Co. v. Texaco, Inc., 537 F.3d 290 (3d Cir. 2008) ................................................................................................. 9, 10 Kehm Oil Co. v. Texaco, Inc., No. 2:06-cv-785, 2007 WL 626140 (W.D. Pa. Feb. 26, 2007) ................................................ 10 Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207 (1959) .................................................................................................................... 7 Mellon Bank (East) PSFS, Nat’l Ass’n v. Farino, 960 F.2d 1217 (3d Cir. 1992) ..................................................................................................... 6 Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560 (2d Cir. 1996) ......................................................................................................... 6 Mon Aimee Chocolat, Inc. v. Tushiya, LLC, Civ. No. 14-1568, 2015 WL 2232270 (W.D. Pa. May 12, 2015) ............................................... 9 Noonan v. Winston Co., 135 F.3d 85 (1st Cir. 1998) ......................................................................................................... 6 NR Media, Inc. v. Too Much Media, Civ. No. 06-3988 (JAP), 2008 WL 544670 (D.N.J. Feb. 26, 2008) ......................................... 12 Reilly v. Ceridian Corp., 664 F.3d 38 (3d Cir. 2011) ....................................................................................................... 12 Rochester Drug Co-Operative, Inc. v. Braintree Labs., 796 F. Supp. 2d 560 (D. Del. 2011) .......................................................................................... 12 Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 4 of 20 TABLE OF AUTHORITIES (continued) Page(s) iv Rocke v. Pebble Beach Co., 541 F. App’x 208 (3d Cir. 2013) ............................................................................................ 2, 6 Scottsdale Capital Advisors Corp. v. Deal, LLC, No. 16-CV-545-JL, 2017 WL 3981243 (D.N.H. Sept. 8, 2017), aff’d, 887 F.3d 17 (1st Cir. 2018) ............................................................................................. 12 Silicon Econs., Inc. v. Fin. Accounting Found., No. 10-CV-01939-LHK, 2010 WL 4942468 (N.D. Cal. Nov. 24, 2010) ................................. 14 Sproqit Techs., Inc. v. Visto, No. 04-CV-891 JMRFLN, 2004 WL 2453054 (D. Minn. Apr. 2, 2014) ................................. 13 Toys “R” Us, Inc. v. Step Two, S.A., 318 F.3d 446 (3d Cir. 2003) ................................................................................................... 2, 9 Triple Up Ltd. v. Youku Tudou Inc., 235 F. Supp. 3d 15 (D.D.C. 2017) ............................................................................................ 14 United States v. Colgate & Co., 250 U.S. 300 (1919) .................................................................................................................... 8 Verizon Commc’ns, Inc. v. Law Offices of Curtis V. Trinko, LLC, 540 U.S. 398 (2004) ................................................................................................................ 8, 9 Walden v. Fiore, 571 U.S. 277 (2014) .................................................................................................................. 13 Wolstenholme v. Bartels, 511 F. App’x 215 (3d Cir. 2013) .............................................................................................. 14 Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997) ............................................................................................ 9 Treatises 16 Moore’s Federal Practice—Civil § 108.42 (3d ed. 2010) ...................................................... 2, 6 Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 5 of 20 1 I. INTRODUCTION The Radio Music License Committee, Inc. (“RMLC”) should not have sued Global Music Rights, LLC (“GMR”) in Pennsylvania in the first place. GMR has no office or employees in the State, no meetings between the parties occurred there, no GMR representatives traveled there, all relevant documents exist elsewhere, and, prior to the filing of the Complaint in this action, GMR had entered into no music performance licenses with any radio companies based or headquartered there. Magistrate Sitarski agreed, and issued a report recommending that RMLC’s lawsuit be dismissed for want of personal jurisdiction over GMR. As the Report and Recommendation concludes, “GMR has no jurisdictionally significant contacts, ties, or relations with Pennsylvania.” (Dkt. 100 (“R&R”) at 35.) Now, two years after filing its complaint and one year after Magistrate Sitarski recommended dismissal, RMLC comes to this Court asking to “supplement the jurisdictional record” with “evidence” that it claims is relevant to the jurisdictional analysis.1 The so-called “evidence” is GMR’s decision in December 2018 to not enter into a license with a “non- interactive streaming service” owned and operated by an RMLC member that is headquartered in Pennsylvania. In other words, RMLC argues that the Court should exercise jurisdiction because, more than two years after the complaint was filed, GMR declined to do business in Pennsylvania. That argument is wrong in every respect. It is no surprise RMLC brazenly ignored this Court’s directive to confer with opposing counsel before filing its motion.2 First, under Third Circuit precedent, “the proper focus in the specific jurisdiction analysis 1 Dkt. 114-1 (the “Motion” or “Mot.”). 2 Cf. Hon. C. Darnell Jones, II, Policies and Procedures ¶ I (“In general, Judge Jones expects counsel to bring matters, including those that arise during trial, to his attention only after they have been discussed with opposing counsel.”). Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 6 of 20 2 is on those contacts leading up to and surrounding the accrual of the cause of action. Later events are not considered.”3 Here, RMLC seeks to “supplement” the jurisdictional record with events that occurred more than two years after the complaint was filed. Second, specific jurisdiction requires proof that GMR “purposefully avail[ed]” itself of this forum and that RMLC’s claims “arise out of or relate[] to” those forum-related activities.4 By RMLC’s own admission, GMR did the opposite of purposeful availment—it declined to enter into a license with a non-interactive streaming serviced owned and operated by an RMLC member that is headquartered in Pennsylvania. Under Third Circuit law, GMR may avoid jurisdiction in a State by choosing not sell to Pennsylvania radio stations.5 Third, RMLC’s argument that GMR is “bullying” and “intimidating” Pennsylvania-based RMLC members lacks evidentiary support and was rejected by Magistrate Sitarski. When RMLC previously tried to “supplement” the record with evidence that GMR declined other licenses, Magistrate Sitarski refused, stating pointedly that “[t]he record is . . . devoid of any evidence supporting RMLC’s assertions that GMR intimidated, punished, or retaliated against potential witnesses.” (R&R at 24.) The same remains true today. GMR respectfully urges the Court to deny RMLC’s Motion to Supplement the Jurisdictional Record. 3 Rocke v. Pebble Beach Co., 541 F. App’x 208, 212 (3d Cir. 2013) (quoting 16 Moore’s Federal Practice—Civil § 108.42 (3d ed. 2010) (emphasis added)). 4 BP Chems. Ltd. v. Formosa Chem. & Fibre Corp., 229 F.3d 254, 259 (3d Cir. 2000) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 474 (1985)). 5 Toys “R” Us, Inc. v. Step Two, S.A., 318 F.3d 446, 452 (3d Cir. 2003). Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 7 of 20 3 II. BACKGROUND A. Procedural History. The Court is no doubt familiar with how the parties reached this point.6 In November 2016, RMLC filed this lawsuit, together with a motion for preliminary injunction, in a forum in which neither party is based and that bears no connection to any of the alleged events underlying RMLC’s claims. Under the Court’s direction, the parties negotiated an “interim solution” to obviate preliminary injunction proceedings: GMR would offer a nine-month interim license to RMLC members at a specified price. RMLC agreed that it would not use the interim licenses “in any way” in litigation, including to assert personal jurisdiction over GMR in Pennsylvania. (Dkt. 92 at 8.) RMLC promptly and repeatedly violated that agreement, including by filing an amended complaint in which it alleged that GMR was subject to jurisdiction in Pennsylvania by virtue of interim licenses GMR had granted to Pennsylvania radio stations. (Id. at 9–10.) When RMLC approached GMR in May 2017 to request an extension of the interim licenses, GMR indicated that it would negotiate any extensions directly with radio stations. (Id. at 10–11.) Because of RMLC’s misconduct, GMR explained that it would not enter into licenses with Pennsylvania-based radio stations unless they and RMLC committed in writing to not use any licenses or negotiations to assert jurisdiction over GMR. (Id. at 11–12.) Ultimately, in early August 2017—before the initial nine-month interim licenses terminated on October 1, 2017— GMR offered interim license extensions to all RMLC members, including those in Pennsylvania. 6 For a more detailed recounting of the history of this action, GMR respectfully refers the Court to its Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue (Dkt. 57-1 at 4– 10), its Motion to Strike Specified Improper Allegations From First Amended Complaint (Dkt. 56-1 at 1–5), its Opposition to RMLC’s Motion for Leave to File Supplemental Memorandum (Dkt. 92 at 5–13), and its Response to Plaintiff’s Objections to Report and Recommendation on Defendant’s Motion to Dismiss for Lack of Personal Jurisdiction and Venue (Dkt. 103 at 6–9). Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 8 of 20 4 (Id. at 12–13.) Since then, GMR has offered two more six-month interim license extensions to all RMLC members. (See Levin Decl. ¶ 6.) Within days of the August 2017 interim license extension, RMLC sought leave to file a supplemental brief in opposition to GMR’s Motion to Dismiss for Lack of Personal Jurisdiction and Venue. (Dkt. 90.) RMLC alleged that GMR was engaging in an “ongoing anticompetitive boycott directed specifically at Pennsylvania-based entities” in an “effort to punish and intimidate them.” (Dkt. 90-1 at 3.) As GMR demonstrated in its response to that motion, RMLC’s “boycott” allegations were completely false. (Dkt. 92 at 1–5.) On November 29, 2017, Magistrate Judge Sitarski issued a 42-page Report and Recommendation in which she recommended (i) granting GMR’s Motion to Dismiss for Lack of Personal Jurisdiction and Venue, and (ii) denying RMLC’s request for leave to file its supplemental brief. (R&R at 42.) Judge Sitarski rightly found that “[t]he record is devoid of any evidence supporting RMLC’s assertions that GMR intimidated, punished, or retaliated against potential witnesses.” (Id. at 24.) She further held that consideration of RMLC’s supplemental brief and materials would violate “the parties’ contractual obligations to one another” as well as “their responsibilities to the Court.” (Id.) RMLC lodged objections to Judge Sitarski’s R&R in December 2017. (Dkt. 101.) On January 4, 2019, this Court indicated that it is currently reviewing those objections and that “a decision with respect thereto will be issued in short order.” (Dkt. 113.) B. Genesis of the Present Dispute. Entercom is no stranger to this litigation. Eugene Levin, an Entercom executive who also belongs to RMLC’s Executive Committee, has submitted four declarations in support of RMLC, all of which make and perpetuate false allegations against GMR. (Dkts. 3-1, 62-6, 85-6, and 114-2.) And lest there be any misconception, Entercom is not a mom-and-pop outfit. It is “one Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 9 of 20 5 of the country’s two largest radio broadcasters,”7 is publicly traded on the New York Stock Exchange,8 and has over $1 billion in annual net revenues.9 Entercom is headquartered in Bala Cynwyd, Pennsylvania. (Dkt. 114-2 (“Levin Decl.”), ¶ 1.) Prior to this litigation, GMR had no relationship with Entercom. Entercom had never sought or purchased a GMR license of any sort. (See Dkt. 57-2 (Decl. of R. Grimmett), ¶ 13.) Even now, GMR and Entercom have no business relationship outside of the interim licenses GMR has offered in connection with this case. (Id.; Levin Decl. ¶ 8.) Entercom has taken advantage of each interim license extension through the present. (Levin Decl. ¶ 6.) In December 2018, Entercom contacted GMR to request a license to perform GMR’s works on an unreleased non-interactive streaming platform. Responding through counsel, GMR declined Entercom’s request. (Levin Decl., Ex. 2.) As GMR explained, in light of the present litigation against RMLC and positions RMLC and Entercom have advanced therein,10 GMR was not in a position to enter into a brand new license agreement with Entercom. (Id.) On January 18, 2019, RMLC filed a Motion for Leave to Supplement the Jurisdictional Record. RMLC did not confer—or even attempt to confer—with GMR before filing. III. ARGUMENT A. There Is No Basis For Supplementing the Record. The Third Circuit has unambiguously held that “the proper focus in the specific 7 About Us, https://entercom.com/about/ (accessed Jan. 21, 2019). 8 Investor Information and Resources, https://entercom.com/investors/ (accessed Jan. 21, 2019). 9 Entercom Commc’ns Corp., Quarterly Report at 17 (Form 10-Q) (Nov. 8, 2018). 10 For example, Mr. Levin submitted a declaration supporting RMLC’s unfounded allegation that GMR had attempted to “intimidate” Pennsylvania radio stations. (See Dkt. 85-6.) RMLC relied on Mr. Levin’s declaration in arguing that this alleged conduct subjected GMR to personal jurisdiction in Pennsylvania. (E.g., Dkt. 90-2 at 7; see Dkt. 90-24.) Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 10 of 20 6 jurisdiction analysis is on those contacts leading up to and surrounding the accrual of the cause of action. Later events are not considered.” Rocke, 541 F. App’x at 212 (quoting 16 Moore’s Federal Practice—Civil § 108.42 (3d ed. 2010)).11 Here, at the time that RMLC filed its complaint, Entercom had no business dealings with GMR. Entercom only requested a license after GMR filed its motion to dismiss RMLC’s suit for lack of personal jurisdiction. And Entercom’s request for a license for non-interactive streaming rights was not made until December 2018, more than two years after RMLC’s complaint was filed. (Levin Decl. ¶ 10.) This post-complaint interaction is irrelevant to the jurisdiction analysis.12 There are sound reasons for assessing jurisdiction as of the filing of the complaint. Consideration of post-filing events is an “‘invitation to strategic behavior’” whereby parties may attempt to “defeat or create jurisdiction.” Haggerty Enters., Inc. v. Lipan Indus. Co., No. 00 C 766, 2001 WL 968592, at *4 (N.D. Ill. Aug. 23, 2001) (quoting Johnson v. Burken, 930 F.2d 1202, 1205 (7th Cir. 1991)). That appears to be exactly what happened here. A Pennsylvania- based radio company posed a request to GMR out of the blue, and when GMR declined, RMLC rushed into court shouting “jurisdiction!” Had GMR acceded to Entercom’s request, RMLC no doubt would have sought to use that new license to establish jurisdiction. 11 Other circuits agree. E.g., Johnson v. Woodcock, 444 F.3d 953, 955 (8th Cir. 2006); Noonan v. Winston Co., 135 F.3d 85, 95 (1st Cir. 1998); Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 569 (2d Cir. 1996). 12 RMLC cites four cases in support of the notion that the Court may consider post-complaint contacts, but each of those cases predates Rocke, and one of them does not even stand for the proposition RMLC cites it for. See Mellon Bank (East) PSFS, Nat’l Ass’n v. Farino, 960 F.2d 1217, 1224 (3d Cir. 1992) (refusing to limit analysis to conduct occurring prior to the start of the parties’ contractual relationship, which formed basis for the suit). And as GMR explained in a previous brief, in each of RMLC’s remaining cases the defendants expanded their business operations in the forum state subsequent to the commencement of litigation, thereby belying any purported lack of contact with the forum. (See Dkt. 95 at 19–20.) Here, GMR has done the exact opposite—deliberately avoided contact with Pennsylvania-based radio companies. Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 11 of 20 7 Allowing RMLC to supplement the record at this late date will only cause undue delay. See Cohen & Co. v. N. River Ins. Co., No. CIV. A. 93-1860, 1994 WL 30294, at *3 (E.D. Pa. Jan. 31, 1994) (denying leave to file supplemental brief, as it would cause “[a]dditional delay in adjudication of [the] Defendants’ motion”). GMR first challenged jurisdiction over two years ago. (Dkt. 51.) GMR’s California action against RMLC has been stayed since April 2017 pending resolution of jurisdiction in this action.13 This Court has indicated that a ruling on jurisdiction “will be issued in short order.” (Dkt. 113.) Any further delay is unwarranted. The Court should reject RMLC’s last-minute attempt to squeeze in more irrelevant evidence. B. GMR’s Refusal to Grant Entercom An Entirely New License Does Not Affect the Personal Jurisdiction Analysis. 1. GMR Had a Lawful Right to Decline Entercom’s Demand For An Entirely New License. The Court should also deny RMLC’s Motion because the proffered “evidence” is plainly immaterial to personal jurisdiction. RMLC’s Motion is premised on a renewed allegation of a Pennsylvania “boycott” (Mot. at 2; Levin Decl. ¶ 5), but that accusation remains as baseless today as it was when Judge Sitarski issued her R&R. (See R&R at 24.) GMR has offered interim license extensions to all RMLC members, including those in Pennsylvania, three times. (Cf. Levin Decl. ¶ 6.) Entercom has taken advantage of each extension. (Id.) RMLC now takes the remarkable position that a single company (GMR) declining to sell a product to a single customer (Entercom) is a “boycott.” (Mot. at 2.) That argument renders the very idea of a “boycott” meaningless, and is wrong as a matter of law. See Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207, 212–13 (1959) (distinguishing a boycott from the 13 See Global Music Rights, LLC v. Radio Music License Committee, Inc. et al., No. 16-cv-9051- TJH (ASx) (C.D. Cal.) , Dkt. 40. Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 12 of 20 8 “case of a single trader refusing to deal with another”). RMLC cites Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLC, 540 U.S. 398 (2004), but glides right over the Supreme Court’s reaffirmance of the “long recognized right” of a competitor “freely to exercise [its] own independent discretion as to parties with whom [it] will deal.” Id. at 408 (quoting United States v. Colgate & Co., 250 U.S. 300, 307 (1919)). The Trinko Court made clear that a firm’s “willingness to forsake short-term profits” is not an antitrust concern unless the firm is a monopolist that chooses to terminate an existing and profitable “course of dealing” for anticompetitive purposes. See id. at 409. Here there was no such “course of dealing,” to say nothing of monopoly power or anticompetitive intent. GMR and Entercom have no business relationship outside of the interim licenses. Entercom was demanding that GMR supply it with a new and “separate agreement with its own terms,” distinct from “Entercom’s existing interim license.” (Levin Decl., Ex. 2.)14 RMLC points to no authority that would obligate GMR to enter into a new contractual relationship with Entercom by granting a new kind of license that Entercom had never previously requested or purchased. In reality, the cases say the exact opposite. See Dunn & Mavis, Inc. v. Nu-Car Driveway, Inc., 691 F.2d 241, 243 (6th Cir. 1982) (“A manufacturer has a right to select its customers and to refuse to sell its goods to anyone, for reasons sufficient to itself.”); Cernuto, Inc. v. United Cabinet Corp., 595 F.2d 164, 167 (3d Cir. 1979) (“a 14 See Mot. at 3 (acknowledging that Entercom’s “current radio broadcast license” with GMR “do[es] not cover public performances on its new non-interactive streaming platform”). To be clear, the fact that Entercom has purchased a series of explicitly short-term interim licenses does not give rise to a “course of dealing,” even with respect to terrestrial radio broadcast licenses. See Dealer Computer Servs. Inc. v. Ford Motor Co., No. Civ. A. H-06-175, 2006 WL 801033, at *4–5 (S.D. Tex. Mar. 28, 2006) (defendant’s refusal to enter into a new license agreement after expiration of an existing 10-year license was lawful; because “the license agreement between [the parties] had an expiration date,” it was not a “‘course of dealing’”). Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 13 of 20 9 manufacturer may sell its product to whomever it wishes”). At base, RMLC and Entercom are asking for “[e]nforced sharing” of GMR’s performance rights. Trinko, 540 U.S. at 408. Neither the Sherman Act, the Copyright Act, nor any other law provides for compulsory licensing of non-interactive streaming rights to GMR’s repertory. See Fleer Corp. v. Topps Chewing Gum, Inc., 658 F.2d 139, 153 (3d Cir. 1981) (licensor of intellectual property is “free to grant licenses . . . or none at all”) (emphasis added); see also Fox Television Stations, Inc. v. Aereokiller, LLC, 851 F.3d 1002, 1011 (9th Cir. 2017) (“[C]ourts should not expand the scope of the compulsory license provision beyond what Congress intended[.]”) (quotation omitted). 2. Declining to Sell Entercom An Entirely New License Cannot Subject GMR to Personal Jurisdiction in Pennsylvania. As GMR has previously explained, declining to enter into a license with a Pennsylvania resident cannot subject GMR to jurisdiction in this forum. (Dkt. 92 at 15, 20–23.) It is entirely proper for a defendant to decide “not to sell its services to Pennsylvania residents” in order to avoid jurisdiction in this State. Toys “R” Us, 318 F.3d at 452 (quoting Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1126–27 (W.D. Pa. 1997)); see also Mon Aimee Chocolat, Inc. v. Tushiya, LLC, Civ. No. 14-1568, 2015 WL 2232270, at *6 (W.D. Pa. May 12, 2015) (defendant who “consciously chose not to conduct business in Pennsylvania” did not thereby subject itself to jurisdiction in that forum). RMLC provides no justification for ignoring this binding, common-sense rule. The Third Circuit’s decision in Kehm Oil Co. v. Texaco, Inc., 537 F.3d 290 (3d Cir. 2008), forecloses RMLC’s arguments here. In that case, Kehm sued Texaco and Chevron for terminating the parties’ franchise agreement. Id. at 291. Kehm contended that the Pennsylvania court had jurisdiction over Chevron because, inter alia, a Chevron employee had sent a letter to Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 14 of 20 10 Kehm instructing it to cease and desist from using defendants’ trademarks. Id. at 300. The district court granted Chevron’s motion to dismiss for lack of jurisdiction, noting that “the gravamen of Plaintiffs’ complaint [was] that Defendants [were] refusing to do business in the forum state.” Kehm Oil Co. v. Texaco, Inc., No. 2:06-cv-785, 2007 WL 626140, at *3 n.3 (W.D. Pa. Feb. 26, 2007) (emphasis added). The Third Circuit agreed, holding that the cease-and-desist letter did not rise to the level of purposeful availment, but rather “expresse[d] the goal not to do business in Pennsylvania.” Kehm Oil, 537 F.3d at 301. As in Kehm, the “gravamen” of RMLC’s current argument is that GMR availed itself of Pennsylvania law by unlawfully refusing to allow a forum resident to use its intellectual property. Setting aside the fact that GMR’s conduct was plainly lawful, its refusal to license Entercom evinces a “goal not to do business in Pennsylvania,” which cannot support jurisdiction. Id. In fact, RMLC’s claims are weaker than Kehm’s. Whereas Kehm had been licensed to use the defendants’ intellectual property for 44 years, id. at 291, Entercom has never been licensed to perform GMR’s compositions on a non-interactive streaming platform. RMLC’s latest “boycott” argument is even more attenuated than the one Judge Sitarski previously deemed baseless. Specific jurisdiction does not attach unless the plaintiff’s claims arise from or relate to the specific acts by which the defendant availed itself of the forum. BP Chems., 229 F.3d at 259. RMLC’s lawsuit is premised on the theory that GMR forced stations to purchase licenses for terrestrial radio.15 RMLC now asks the Court to exercise jurisdiction on the irrelevant ground that GMR has refused to sell Entercom a license for non-interactive Internet streaming. Because GMR’s interaction with Entercom has nothing to do with RMLC’s cause of action, it cannot support jurisdiction. See D’Jamoos ex rel. Estate of Weingeroff v. 15 See First Am. Compl. ¶¶ 79–80, Dkt. 52. Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 15 of 20 11 Pilatus Aircraft Ltd., 566 F.3d 94, 104 (3d Cir. 2009) (no jurisdiction where plaintiffs’ claims did not “‘arise out of or relate to’ [defendants’] direct contacts within Pennsylvania”). C. RMLC Cannot Satisfy the Calder “Effects” Test. RMLC once again invokes the Calder “effects” test as though it is a panacea for jurisdictional woes. It is not. (See R&R at 35–38 (holding that Calder is inapplicable).) Under the Third Circuit’s “conservative reading of Calder,” the plaintiff must prove that (1) the defendant committed an intentional tort, (2) the plaintiff felt the “brunt of the harm” in the forum, and (3) the defendant “expressly aimed [its] tortious conduct at the forum.” IMO Indus., Inc. v. Kiekart AG, 155 F.3d 254, 265–66 (3d Cir. 1998). RMLC has not met any of Calder’s requirements, much less all of them. No intentional tort: RMLC’s strained attempts to portray GMR’s refusal to accede to Entercom’s demands as tortious cannot distract from the fact that GMR was exercising a lawful right. The notion that an industry giant like Entercom would feel “intimidated” by a small upstart PRO is dubious,16 but regardless of what Mr. Levin “believes” about GMR’s intentions (see Levin Decl. ¶ 15), GMR was entitled to “refuse to sell its goods to [Entercom], for reasons sufficient to itself.” Dunn & Mavis, 691 F.2d at 243 (emphasis added). Lawful conduct cannot satisfy Calder’s intentional tort prong. See James v. York Cty. Police Dept., Civ. No. 1:01-CV- 1015, 2005 WL 1154500, at *4 (M.D. Pa. May 6, 2005) (defendant’s “lawful” conduct could not support jurisdiction under Calder). None of RMLC’s cases is to the contrary.17 16 Mr. Levin does not establish that he has any foundation to testify about what “Entercom” as a whole purportedly “believes.” (See Levin Decl. ¶ 15.) 17 Three of the four cases in question (Bergen, Rochester Drug, and Feesers) are not even personal jurisdiction decisions. More importantly, each of these cases involved defendants who terminated preexisting business relationships with the plaintiffs (or, in one case, with a witness) after litigation began. See Bergen Drug Co. v. Parke, Davis & Co., 307 F.2d 725, 726 (3d Cir. 1962) ; Rochester Drug Co-Operative, Inc. v. Braintree Labs., 796 F. Supp. 2d 560, 563–64 (D. Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 16 of 20 12 No harm: Entercom has not felt the “brunt” of any “harm” in Pennsylvania because there has been no harm. GMR’s decision to not grant an entirely new license to Entercom did not cause any change in Entercom’s circumstances; it preserved the status quo. Entercom was not deprived of any benefit it previously received, nor has it been denied anything to which it is entitled. It was not injured in any sense. See Reilly v. Ceridian Corp., 664 F.3d 38, 45 (3d Cir. 2011) (where there has been “no change in the status quo,” there is “no injury”); Scottsdale Capital Advisors Corp. v. Deal, LLC, No. 16-CV-545-JL, 2017 WL 3981243, at *6 (D.N.H. Sept. 8, 2017) (effects test not satisfied where allegedly defamatory statements had no impact), aff’d, 887 F.3d 17 (1st Cir. 2018). RMLC and Mr. Levin attempt to concoct an injury by saying that Entercom cannot launch its non-interactive streaming service without a GMR license. (Mot. at 2; Levin Decl. ¶ 14.) But GMR is not required to help Entercom get a new product off the ground. See Eatoni Ergonomics, Inc. v. Research in Motion Corp., 826 F. Supp. 2d 705, 709–10 (S.D.N.Y. 2011) (defendant’s alleged refusal to collaborate with plaintiff on “new product” was entirely lawful), aff’d, 486 F. App’x 186 (2d Cir. 2012). And Entercom’s claim that it cannot launch its new service without a GMR license is preposterous. GMR’s repertory accounts for roughly 0.1% of all songs licensed by U.S. PROs. (See Dkt. 57-2 (Decl. of R. Grimmett), ¶ 12.) With licenses from the three larger PROs, Entercom can perform the remaining 99.9% of available compositions on its streaming service. Those 22 million-plus songs should be more than sufficient to compete with the likes of Pandora. Del. 2011); Feesers, Inc. v. Michael Foods, Inc., No. 1:04-cv-0576, 2009 WL 1475270, at *1–3 (M.D. Pa. May 26, 2009), injunction vacated, 591 F.3d 191 (3d Cir. 2010) ; NR Media, Inc. v. Too Much Media, Civ. No. 06-3988 (JAP), 2008 WL 544670, at *1 (D.N.J. Feb. 26, 2008). As already shown, GMR had no preexisting business relationship with Entercom and has never granted Entercom a license for non-interactive streaming rights. Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 17 of 20 13 Mr. Levin baselessly asserts that it would be “impractica[l]” for Entercom to remove GMR songs from its as yet unlaunched streaming service. (Levin Decl. ¶ 8.) The Court need not consider this unadorned ipse dixit, Jones v. Pittsburgh Nat’l Corp., 899 F.2d 1350, 1356 (3d Cir. 1990), especially since it is belied by record facts. In truth, radio stations can and do program around GMR’s repertory. (Dkt. 68 (Suppl. Decl. of R. Grimmett), ¶ 35.) GMR’s entire repertory (complete with ownership shares) is available and searchable on GMR’s website,18 and GMR provides electronic copies of its repertory (with songs identified by title, author, and ownership share) upon request.19 The fact that GMR represents fewer than 100 songwriters further undermines the notion that it would be “impractical” for Entercom to determine whose songs it can and cannot perform. Entercom may think it inconvenient to remove several dozen artists’ songs from its playlists, but that is not a cognizable “harm.” See Sproqit Techs., Inc. v. Visto, No. 04-CV-891 JMRFLN, 2004 WL 2453054, at *2–5 (D. Minn. Apr. 2, 2014) (“inconvenience” to nonparty forum resident insufficient to support jurisdiction). In any event, “mere injury to a forum resident is not a sufficient connection to the forum.” Walden v. Fiore, 571 U.S. 277, 290 (2014). If “a defendant’s relationship with a . . . third party” is an “insufficient basis for jurisdiction,” id. at 286, then GMR’s decision not to enter into a relationship with a third party cannot create jurisdiction. No express aiming: Declining a contact with the forum state does not constitute “express aiming.” Under Calder, a defendant’s alleged tortious conduct cannot give rise to jurisdiction unless it “enhance[s] defendant’s contacts with the forum.” Wolstenholme v. 18 See Catalog, https://globalmusicrights.com/catalog/ (accessed Jan. 23, 2019); Search Catalog, https://globalmusicrights.com/search/ (accessed Jan. 23, 2019). 19 Dkt. 68 (Suppl. Decl. of R. Grimmett), ¶¶ 26, 35; Corr. Decl. of R. Grimmett ¶¶ 21–23, Global Music Rights, LLC v. Radio Music License Comm., Inc. et al., No. 16-cv-9051-TJH (ASx) (C.D. Cal.), Dkt. 36-1. Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 18 of 20 14 Bartels, 511 F. App’x 215, 219 (3d Cir. 2013) (quoting IMO Indus., 155 F.3d at 265) (emphasis added). Far from enhancing its contacts with Pennsylvania, GMR’s refusal to license Entercom avoided a new contact with the State. A defendant does not “expressly aim” any “conduct” at a forum by declining a forum resident’s request for action. See Silicon Econs., Inc. v. Fin. Accounting Found., No. 10-CV-01939-LHK, 2010 WL 4942468, at *6 (N.D. Cal. Nov. 24, 2010) (“refusal to concede to [plaintiff’s] demands to withdraw the Website Terms or to execute a release” was not “express aiming”); Facebook, Inc. v. Teachbook.com, LLC, No. CV 10-03654 RMW, 2011 WL 1672464, at *3–4 (N.D. Cal. May 3, 2011) (taking “purposeful steps to avoid the California market” was not “express aiming”); see also Triple Up Ltd. v. Youku Tudou Inc., 235 F. Supp. 3d 15, 25 (D.D.C. 2017) (“The Court is unaware of any authority suggesting that a failure to act might constitute purposeful availment.”). RMLC’s argument that GMR subjected itself to jurisdiction in Pennsylvania by refusing to accede to a third party’s demand is nothing short of specious. RMLC’s supplemental “evidence” is not in any way probative of personal jurisdiction. IV. CONCLUSION RMLC’s Motion for Leave to Supplement the Jurisdictional Record is an unnecessary and wasteful sideshow. The Court should summarily deny the Motion. Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 19 of 20 15 Dated: January 29, 2019 Respectfully submitted, By: /s/ Daniel M. Petrocelli Daniel M. Petrocelli (pro hac vice) dpetrocelli@omm.com David Marroso (pro hac vice) dmarroso@omm.com O’MELVENY & MYERS LLP 1999 Avenue of the Stars Los Angeles, California 90067 Telephone: (310) 553-6700 Facsimile: (310) 246-6779 Neill C. Kling nkling@harkinscunningham.com HARKINS CUNNINGHAM LLP 4000 Two Commerce Square 2001 Market Street Philadelphia, Pennsylvania 19103 Telephone: (215) 851-6700 Facsimile: (215) 851-6710 Attorneys for Defendant Global Music Rights, LLC Case 2:16-cv-06076-CDJ Document 115 Filed 01/29/19 Page 20 of 20