1
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. 16-6076
Judge: Hon. C. Darnell Jones II
DEFENDANT GLOBAL MUSIC RIGHTS, LLC’S MOTION TO DISMISS FOR LACK
OF PERSONAL JURISDICTION AND IMPROPER VENUE OR TO TRANSFER
VENUE
Pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3) Defendant Global
Music Rights, LLC (“GMR”) hereby moves the Court for an order dismissing the First Amended
Complaint of Plaintiff Radio Music License Committee, Inc. (“RMLC”) for lack of personal
jurisdiction and for improper venue. In the alternative, pursuant to 28 U.S.C. § 1404(a), GMR
moves to transfer this lawsuit to the Central District of California.
In support of this motion, GMR submits the accompanying Memorandum of Law, the
March 3, 2017 Declarations of Randy Grimmett and David Marroso, and Proposed Order.
Case 2:16-cv-06076-CDJ Document 57 Filed 03/03/17 Page 1 of 2
2
Dated: March 3, 2017
Respectfully submitted,
By: /s/ Daniel M. Petrocelli
Daniel M. Petrocelli
dpetrocelli@omm.com
David Marroso
dmarroso@omm.com
O’MELVENY & MYERS LLP
1999 Avenue of the Stars
Los Angeles, California 90067
Telephone: (310) 553-6700
Facsimile: (310) 246-6779
Richard G. Parker
rparker@omm.com
Edward D. Hassi
ehassi@omm.com
O’MELVENY & MYERS LLP
1625 Eye Street, NW
Washington, DC 20006
Telephone: (202) 383-5300
Facsimile: (202) 383-5414
Neill C. Kling
nkling@harkinscunningham.com
HARKINS CUNNINGHAM LLP
4000 Two Commerce Square
2001 Market Street
Philadelphia, PA 19103
Telephone: (215) 851-6700
Attorneys for Global Music Rights, LLC
Case 2:16-cv-06076-CDJ Document 57 Filed 03/03/17 Page 2 of 2
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. 16-6076
DEFENDANT GLOBAL MUSIC RIGHTS, LLC’S
MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS
FOR LACK OF PERSONAL JURISDICTION AND IMPROPER VENUE
OR TO TRANSFER VENUE
Case 2:16-cv-06076-CDJ Document 57-1 Filed 03/03/17 Page 1 of 41
TABLE OF CONTENTS
Page
i
I. INTRODUCTION ............................................................................................................. 1
II. FACTUAL BACKGROUND ............................................................................................ 4
A. Three PROs Dominate the Music Rights Industry ................................................ 4
B. Global Music Rights Shakes Up the PRO Industry ............................................... 5
C. RMLC Abandons Negotiations with GMR ........................................................... 6
III. EXECUTIVE SUMMARY ............................................................................................. 10
IV. PENNSYLVANIA LACKS PERSONAL JURISDICTION OVER GMR ..................... 10
A. No General Personal Jurisdiction: GMR Does Not Have the Required
Minimum Contacts with Pennsylvania ................................................................ 10
B. No Specific Personal Jurisdiction: GMR Does Not Have the Required
Minimum Contacts with Pennsylvania ................................................................ 11
C. The Clayton Act Does Not Confer Personal Jurisdiction over a Domestic
Non-Corporate Entity........................................................................................... 22
V. VENUE IS NOT PROPER IN THIS DISTRICT ............................................................ 23
A. Venue Is Improper Because No Event Giving Rise to RMLC’s Claims
Occurred in This District and GMR Is Not Subject to This Court’s
Personal Jurisdiction ............................................................................................ 23
B. Venue Is Improper Because GMR Is Neither a “Corporation” Nor a
Foreign Entity ...................................................................................................... 24
VI. AT A MINIMUM, THIS CASE SHOULD BE TRANSFERRED TO A MORE
CONVENIENT FORUM................................................................................................. 25
A. Venue Would Be Proper in the Central District of California ............................. 26
B. Transfer to the Central District of California Would Be More Convenient
and Would Best Serve the Interest of Justice....................................................... 26
VII. CONCLUSION ................................................................................................................ 32
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TABLE OF AUTHORITIES
Page
ii
Cases
Affiliated Mfrs., Inc. v. Aluminum Co. of America¸
56 F.3d 521 (3d Cir. 1995) ....................................................................................................... 21
Agnew v. Aydin Corp.,
Civ. A. No. 88-3436, 1988 WL 92872 (E.D. Pa. Sept. 6, 1988) .............................................. 21
Ashcroft v. Iqbal,
556 U.S. 662 (2009) .................................................................................................................. 24
Black v. JP Morgan Chase & Co.,
Civ. A. No. 10-848, 2011 WL 4102802 (W.D. Pa. Aug. 10, 2011) ......................................... 14
Broadcast Music, Inc. v. CBS, Inc.,
441 U.S. 1 (1979) .................................................................................................................... 4, 5
Burger King Corp. v. Rudzewicz,
471 U.S. 462 (1985) ............................................................................................................ 14, 17
Cameli v. WNEP-16 The News Station,
134 F. Supp. 2d 403 (E.D. Pa. 2001) .................................................................................. 30, 31
Colmen Fin. Servs. v. Charter Equipment Leasing Corp.,
708 F.Supp. 664 (E.D. Pa. 1989) .............................................................................................. 16
Connors v. R & S Parts & Servs., Inc.,
248 F. Supp. 2d 394 (E.D. Pa. 2003) ........................................................................................ 28
Digi-Tel Holdings, Inc. v. Proteq Telecommunications (PTE), LTD.,
89 F.3d 519 (8th Cir. 1996) ...................................................................................................... 20
Donohue v. Team Rensi Motorsports, LLC,
No. CIV.A. 01-5564, 2002 WL 32341953 (E.D. Pa. Oct. 10, 2002) ....................................... 16
E’Cal Corp. v. Office Max, Inc.,
No. Civ. A. 01-3281, 2001 WL 1167534 (E.D. Pa. Sept. 7, 2001) .......................................... 31
EVCO Tech. & Dev. Co. v. Precision Shooting Equip., Inc.,
379 F. Supp. 2d 728 (E.D. Pa. 2005) ........................................................................................ 27
Farina v. Nokia,
578 F. Supp. 2d 740 (E.D. Pa. 2008); aff'd, 625 F.3d 97 (3d Cir. 2010) .............................. 2, 14
Case 2:16-cv-06076-CDJ Document 57-1 Filed 03/03/17 Page 3 of 41
TABLE OF AUTHORITIES
(continued)
Page
iii
Farmers Ins. Exchange v. Portage La Prairie Mut. Ins. Co.,
907 F.2d 911 (9th Cir. 1990) .................................................................................................... 20
Gehling v. St. George’s Sch. of Med., Ltd.,
773 F.2d 539 (3d Cir. 1985) ..................................................................................................... 16
Global Music Rights, LLC v. Radio Music License Comm., Inc. et al.,
Case No. 2:16-cv-09051-BRO-AS (filed Dec. 6, 2016) (C.D. Cal.) .................................. 29, 32
Goldlawr, Inc. v. Heiman,
369 U.S. 463 (1962) .................................................................................................................. 17
Goodyear Dunlop Tires Operations, S.A. v. Brown,
564 U.S. 915 (2011) .................................................................................................................. 10
Grant St. Grp., Inc. v. D & T Ventures, LLC,
No. CIV.A. 10-1095, 2012 WL 13694 (W.D. Pa. Jan. 4, 2012) ......................................... 13, 17
Gurglepot, Inc. v. New Schreve, Crump & Low LLC,
No. C13-6029-RBL, 2014 WL 2744283 (W.D. Wash. June 17, 2014) ................................... 15
Head USA, Inc. v. Sorensen,
No. 3:06-cv-983 (MRK), 2006 WL 3703646 (D. Conn. Dec. 13, 2006) ................................. 15
Helicopteros Nacionales de Colombia, S.A. v. Hall,
466 U.S. 408 (1984) .................................................................................................................. 13
Highmark Inc. v. Allcare Health Mgmt. Sys., Inc.,
304 F. Supp. 2d 663 (W.D. Pa. 2003) ................................................................................. 19, 20
Howard Hess Dental Labs. Inc. v. Dentsply Int’l, Inc.,
516 F. Supp. 2d 324 (D. Del. 2007), aff’d, 602 F.3d 237 (3d Cir. 2010) ................. 2, 17, 23, 24
IMO Indus., Inc. v. Kiekert AG,
155 F.3d 254 (3d Cir. 1998) ..................................................................................................... 15
In re Application of the Cromwell Group, Inc.,
No. 1:10-cv-5210-DLC (MHDx) (S.D.N.Y.) ............................................................................. 7
In re Auto. Refinishing Paint Antitrust Litig.,
358 F.3d 288 (3d Cir. 2004) ............................................................................................... 22, 23
In re Stoney Creek Technologies, LLC,
364 B.R. 882 (Bankr. E.D. Pa. 2007) ......................................................................................... 7
Case 2:16-cv-06076-CDJ Document 57-1 Filed 03/03/17 Page 4 of 41
TABLE OF AUTHORITIES
(continued)
Page
iv
Jacobs v. Bayha,
Civ. A. No. 07-237, 2011 WL 1044638 (W.D. Pa. Mar. 18, 2011) ........................................... 7
Johnson v. SmithKline Beecham Corp.,
724 F.3d 337 (3d Cir. 2013) ..................................................................................................... 22
Jumara v. State Farm Ins. Co.,
55 F.3d 873 (3d Cir. 1995) ..................................................................................... 25, 26, 28, 31
Lake Assocs., LLC v. DNZ Prods. LLC,
886 F. Supp. 2d 1203 (D. Or. 2012) ......................................................................................... 15
Lannett Co. v. Asherman,
Civ. A. No. 13-2006, 2014 WL 716699 (E.D. Pa. Feb. 24, 2014) ........................................... 28
Liggett Grp., Inc. v. R.J. Reynolds Tobacco Co.,
102 F. Supp. 2d 518 (D.N.J. 2000) ........................................................................................... 32
LogoPaint A/S v. 3D Sport Signs SI,
163 F. Supp. 3d 260 (E.D. Pa. 2016) .................................................................................. 25, 26
Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass’n,
846 F. Supp. 374 (E.D. Pa. 1994) ............................................................................................. 22
McManus v. Tato,
184 F. Supp. 958 (S.D.N.Y. 1959) ........................................................................................... 22
McTernan v. City of York,
577 F.3d 521 (3d Cir. 2009) ....................................................................................................... 7
Mellon Bank (East) PSFS, N.A. v. DiVeronica Bros.,
983 F.2d 551 (3d Cir. 1993) ..................................................................................................... 16
Meyers & Sons Corp. v. Clipps, Inc.,
No. 00 CIV. 7191(HB), 2001 WL 125586 (S.D.N.Y. Feb. 13, 2001) ...................................... 15
Nova Design Tech., Ltd. v. Walters,
2011 WL 5084566 (E.D. Pa. 2011) ............................................................................................ 2
O’Connor v. Sandy Lane Hotel Co.,
496 F.3d 312 (3d Cir. 2007) ..................................................................................................... 12
Ontel Prods Corp. v. Mindscope Prods.,
Civ. A. 16-1540, 2016 WL 7177604 (D.N.J. Dec. 8, 2016) ..................................................... 19
Case 2:16-cv-06076-CDJ Document 57-1 Filed 03/03/17 Page 5 of 41
TABLE OF AUTHORITIES
(continued)
Page
v
Orange Theatre Corp. v. Rayherstz Amusement Corp.,
139 F.2d 871 (3d Cir. 1944) ..................................................................................................... 22
Ostella v. IRBSearch, LLC,
Civ. A. No. 12-7002, 2014 WL 3843880 (E.D. Pa. Aug. 5, 2014) .......................................... 26
Paramount Pictures Corp. v. Nissim Corp.,
No. 2:14-cv-04624-ODW(ASx), 2014 WL 5528455 (C.D. Cal. Nov. 3, 2014) ...................... 15
Patterson v. FBI,
893 F.2d 595 (3d Cir. 1990) ....................................................................................................... 5
Penda Corp. v. STK, LLC,
Nos. Civ. A. 03-5578, 03-6240, 2004 WL 2004439 (E.D. Pa. Sept. 7, 2004) ......................... 30
Pennebacker v. Wayfarer Ketch Corp.,
777 F. Supp. 1217 (E.D. Pa. 1991) ........................................................................................... 16
Plotnick v. Computer Scis. Corp. Deferred Comp. Plan for Key Execs.,
Civ. No. 14-cv-303 (KM), 2015 WL 4716116 (D.N.J. Aug. 7, 2015) ..................................... 29
Radio Music License Comm., Inc. v. SESAC, Inc.,
Civ. A. No. 12-cv-5807, 2013 WL 12114098 (E.D. Pa. Dec. 23, 2013) .......................... 4, 7, 32
Ramsey v. Devereux Found.,
Civ. A. No. 16-299, 2016 WL 3959075 (E.D. Pa. July 22, 2016) .............................................. 3
Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc.,
148 F.3d 1356 (Fed. Cir. 1998) ......................................................................................... passim
Remick v. Manfredy,
238 F.3d 248 (3d Cir. 2001) ..................................................................................................... 10
Ricoh Co. v. Honeywell, Inc.,
817 F. Supp. 473 (D.N.J. 1993) ................................................................................................ 27
Rossman v. State Farm Mut. Auto Ins. Co.,
832 F.2d 282 (4th Cir. 1987) .............................................................................................. 19, 20
Schoonmaker v. Highmark Blue Cross Blue Shield,
Civ. A. No. 09-cv-703, 2009 WL 3540785 (E.D. Pa. Oct. 30, 2009) ...................................... 27
Smith v. HireRight Solutions, Inc.,
Civ. A. No. 09-6007, 2010 WL 2270541 (E.D. Pa. June 7, 2010) ........................................... 27
Case 2:16-cv-06076-CDJ Document 57-1 Filed 03/03/17 Page 6 of 41
TABLE OF AUTHORITIES
(continued)
Page
vi
Synthes, Inc. v. Knapp,
978 F. Supp. 2d 450 (E.D. Pa. 2013) ........................................................................................ 28
Taylor & Francis Grp., PLC v. McCue,
145 F. Supp. 2d 627 (E.D. Pa. 2001) ........................................................................................ 25
United States ex rel. Hollander v. MTD Prods., Inc.,
Civ. A. No. 09-5507, 2011 WL 3501749 (E.D. Pa. Aug. 9, 2011) .......................................... 30
Vetrotex Certainteed Corp. v. Consol. Fiber Glass Prods. Co.,
75 F.3d 147 (3d Cir. 1996) ................................................................................................. 11, 16
Vt. Juvenile Furniture Mfg., Inc. v. Factory Direct Wholesale, Inc.,
317 F.R.D. 16 (E.D. Pa. 2016) ............................................................................................ 27, 29
Walden v. Fiore,
134 S. Ct. 1115 (2014) ............................................................................................ 13, 14, 16, 18
Weber v. Basic Comfort,
155 F. Supp. 2d 283 (E.D. Pa. 2001) ............................................................................ 25, 26, 32
World Skating Fed. v. Int’l Skating Union,
357 F. Supp. 2d 661 (S.D.N.Y. 2005) ...................................................................................... 22
World–Wide Volkswagen Corp. v. Woodson,
444 U.S. 286 (1980) ................................................................................................ 17, 18, 19, 21
Statutes
15 U.S.C. § 12 ............................................................................................................................... 22
15 U.S.C. § 22 ............................................................................................................................... 22
17 U.S.C. § 101 ............................................................................................................................... 5
28 U.S.C. § 1391(b) ...................................................................................................................... 23
28 U.S.C. § 1391(b)(1) ................................................................................................................. 26
28 U.S.C. § 1391(c)(2) ............................................................................................................ 23, 26
Other Authorities
17 Moore et al., Moore’s Federal Practice § 111.13(1)(i) (3d ed. 1997) .................................... 31
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TABLE OF AUTHORITIES
(continued)
Page
vii
2 Nimmer on Copyright, § 8.19 (2016) ........................................................................................... 5
Comments to Fed. R. Evid. 408 .................................................................................................... 20
Stasha Loeza, Out of Tune: How Public Performance Rights Are Failing to Hit
the Right Notes, 31 Berkeley Tech. L.J. 725 (2016) ................................................................... 5
Rules
Fed. R. Civ. P. 32(a)(4) ................................................................................................................. 28
Fed. R. Civ. P. 45(b)(2)................................................................................................................. 28
Fed. R. Civ. P. 45(c)(1) ................................................................................................................. 28
Case 2:16-cv-06076-CDJ Document 57-1 Filed 03/03/17 Page 8 of 41
1
I. INTRODUCTION
The State of Pennsylvania has no meaningful connection to this case. The plaintiff,
Radio Music Licensing Committee (“RMLC”), is a Tennessee corporation with its headquarters
in Nashville. The defendant, Global Music Rights (“GMR”), is a Delaware corporation with its
headquarters in Los Angeles. Neither has an office or any employee in Pennsylvania. No
meetings occurred in this State. No key witnesses reside here, and all relevant documents exist
elsewhere. Despite all that, purely for perceived tactical advantage, RMLC filed its complaint in
the Eastern District of Pennsylvania, a forum across the country from GMR’s headquarters, 800
miles from RMLC’s own center of operations, and that has no nexus whatsoever to GMR or the
dispute in this case.
Pennsylvania lacks jurisdiction over GMR. GMR does not have the substantial,
systematic, and continuous contacts with Pennsylvania that are necessary to approximate
physical presence and create general jurisdiction here. Nor is there any conceivable basis for
concluding that GMR “purposely availed” itself of doing business in Pennsylvania.
• Neither party is a resident of Pennsylvania or has any offices in this State.
• Neither party has any employee who resides in Pennsylvania.
• GMR does not own any property in Pennsylvania and does not conduct business
in this State.
• No meetings between GMR and RMLC occurred in Pennsylvania.
• None of GMR’s writers or publishers has a primary residence in Pennsylvania.
• No key fact witnesses reside in Pennsylvania.
• No document or other evidence is located in Pennsylvania.
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2
Because there is no connection between GMR and Pennsylvania, and because no facts
giving rise to RMLC’s claims occurred in Pennsylvania, the Court should dismiss this case for
lack of personal jurisdiction and for improper venue.
RMLC knows this too, which is why, in its First Amended Complaint, it seeks to
establish jurisdiction and proper venue in this State through allegations concerning the interim
license GMR negotiated with RMLC as part of the court-suggested interim settlement to avoid
the preliminary injunction originally sought by RMLC. But, as explained in GMR’s Motion to
Strike, the interim license was a settlement compromise under Federal Rule of Evidence 408 that
cannot be used by RMLC to establish jurisdiction. The parties left nothing to chance, expressly
agreeing that neither side could use the interim license “in any way, including to argue for or
against personal jurisdiction or venue.” (See Motion to Strike, filed concurrently herewith.)
Without a cognizable connection to Pennsylvania, RMLC cites Title 15 U.S.C. section
22, which confers nationwide venue and service to non-domestic corporations who operate in the
United States. Howard Hess Dental Labs. Inc. v. Dentsply Int’l, Inc., 516 F. Supp. 2d 324, 337–
38 (D. Del. 2007), aff’d, 602 F.3d 237 (3d Cir. 2010). But that statute has no application here
because GMR is neither foreign nor a corporation. It is a limited liability company authorized
pursuant to the laws of Delaware. This distinction is dispositive. Courts, including in this
District, routinely reject plaintiffs’ efforts to apply 15 U.S.C. § 22 to domestic LLCs. Farina v.
Nokia, 578 F. Supp. 2d 740, 751 (E.D. Pa. 2008); aff'd, 625 F.3d 97 (3d Cir. 2010); Nova
Design Tech., Ltd. v. Walters, No. 10-7618, 2011 WL 5084566, at *6 (E.D. Pa. Oct. 25, 2011);
Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1356 (Fed. Cir. 1998). Because
this district is an improper venue, the complaint must be dismissed pursuant to Rule 12(b)(3).
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3
Although nothing more is needed, there is yet another reason why this case may not
proceed here: an alternative venue, the Central District of California, is a much more convenient
forum to adjudicate this case:
• GMR is headquartered in Los Angeles, California, and there is no question that
California has personal jurisdiction over GMR.
• GMR conducted virtually every phone conference with RMLC from California.
• The only substantive meeting between GMR and RMLC where proposals were
exchanged occurred at GMR’s headquarters in Los Angeles, California.
• GMR’s employees are located in California.
• GMR’s documents and other evidence are located in California.
• Key fact witnesses, including music writers, publishers, and industry experts,
reside in California.
• RMLC has more than twice the number of member radio stations in California
than in Pennsylvania.
• Litigation in California requires travel by only one of the parties, and therefore
would be less expensive.
Because GMR is located in California and many of the facts giving rise to this action
occurred in California, all of the public and private factors relevant to the determination of venue
favor transfer. Plaintiff’s choice of forum—the factor that most regularly militates against
transfer—is given no weight here because RMLC is not a resident of Pennsylvania. As this
Court has emphatically stated, “deference is not given to Plaintiff’s choice of forum” where “the
Eastern District of Pennsylvania is neither Plaintiff’s home district nor the district in which the
operative facts of the action occurred.” Ramsey v. Devereux Found., Civ. A. No. 16-299, 2016
WL 3959075, at *5 (E.D. Pa. July 22, 2016) (Jones II, J.) (emphasis added). Such is the case
here. Pennsylvania thus has no “local interest” in adjudicating this dispute, and a lawsuit
involving these two parties is already pending in the Central District of California. Certainly this
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4
court and the court in California are both equipped to decide federal antitrust concerns. The
California court, however, is better positioned to address the California state law causes of action
pending between the parties there as well.
For these reasons, GMR respectfully requests that this Court dismiss RMLC’s First
Amended Complaint without prejudice to it being refiled in a proper jurisdiction and venue or, in
the alternative, transfer the case to the Central District of California.
II. FACTUAL BACKGROUND1
A. Three PROs Dominate the Music Rights Industry
For more than seventy-five years, only three PROs operated in the United States:
ASCAP, BMI, and SESAC. ASCAP and BMI, by far the largest, are responsible for licensing an
overwhelming majority of musical works played on the radio. (See First Am. Compl. (“FAC”)
¶¶ 2, 27.) ASCAP represents nearly 600,000 affiliates and lists over 10 million songs in its
repertory. (Id. ¶ 27.) BMI represents approximately 750,000 affiliates and boasts a repertory of
12 million songs. (Id.) A third PRO, SESAC, represents 30,000 affiliates with a repertory of
roughly 400,000 songs. See Radio Music License Comm., Inc. v. SESAC, Inc., Civ. A. No. 12-
cv-5807, 2013 WL 12114098, at *3 (E.D. Pa. Dec. 23, 2013).
Decades ago, when ASCAP and BMI first entered the marketplace, they collectively
controlled virtually every copyrighted composition in the United States, making them the de
facto gatekeepers for all copyrighted music. See Broadcast Music, Inc. v. CBS, Inc., 441 U.S. 1,
5-6 (1979). The Department of Justice (“DOJ”) alleged that ASCAP and BMI violated the
Sherman Act, pointing to their extraordinary market shares and a history of extreme price
1 In this Section II, GMR sets forth all facts relevant to both the instant Motion to Dismiss for
Lack of Personal Jurisdiction and Improper Venue, or to Transfer Venue, as well as GMR’s
concurrently filed Motion to Dismiss for Failure to State a Claim, in an effort to avoid burdening
the Court with two partially repetitive factual background sections. GMR’s Motion to Dismiss
for Failure to State a Claim incorporates by reference this factual background section.
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5
increases—in the case of ASCAP, over a 400% increase between 1931 and 1939. (FAC. ¶ 30);
see Stasha Loeza, Out of Tune: How Public Performance Rights Are Failing to Hit the Right
Notes, 31 Berkeley Tech. L.J. 725, 733 (2016). The resulting consent decrees—which ASCAP
and BMI voluntarily entered into—imposed restrictions that were designed to neutralize the
effects that such gigantic PROs could have on competition. Among other things, the decrees
require ASCAP and BMI to offer non-blanket licenses, refrain from exclusively contracting with
writers, and submit to a “rate court” procedure for settling rate disputes with broadcasters. (FAC
¶ 31); CBS, 441 U.S. at 11-12. The decrees do not mandate any particular rates, nor do they
speak to whether any particular rates are competitive. At no point has the DOJ sought to extend
the consent decrees’ terms to any PRO other than ASCAP and BMI.2 (See FAC ¶ 31.)
SESAC is not subject to a consent decree but it has agreed to certain restrictions in its
negotiations with terrestrial radio via a private settlement with RMLC. (FAC ¶ 37.) Of course,
this settlement does not govern the conduct of any PRO besides SESAC.
B. Global Music Rights Shakes Up the PRO Industry
The first new entrant to the PRO industry in more than seven decades, GMR is a limited
liability company organized under the laws of Delaware with its sole office in Los Angeles,
California. (March 3, 2017 Declaration of Randy Grimmett (“Grimmett Decl.”), attached hereto
2 Indeed, decades ago, the Supreme Court recognized that PROs—including the blanket licenses
they offer—have pro-competitive benefits. See CBS, 441 U.S. at 22-23. The Copyright Act
itself “provides explicit recognition to these organizations by including the following definition”
of PROs: “A ‘performing rights society’ is an association, corporation, or other entity that
licenses the public performance of nondramatic musical works on behalf of copyright owners of
such works, such as the American Society of Composers, Authors and Publishers (ASCAP),
Broadcast Music, Inc. (BMI), and SESAC, Inc.” 2 Nimmer on Copyright, § 8.19 (2016) (citing
17 U.S.C. § 101).
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6
as Exhibit A, ¶ 5.)3 GMR represents a small number of music rights holders in the licensing of
their public performance rights under copyright laws. (Id. ¶ 6.) GMR was founded in 2013, and
today has seventeen employees, fifteen of whom work out of GMR’s Los Angeles headquarters.
(Id. ¶¶ 6-7) GMR is owned by (i) Azoff MSG Entertainment LLC, a Delaware LLC with its sole
place of business in Los Angeles; (ii) Randy Grimmett, a resident of Los Angeles; and (iii) a few
of GMR’s founding songwriters, none of whom has a primary residence in Pennsylvania. (Id. ¶
8.)
GMR is unlike any other PRO. It maintains a repertory of fewer than 75 writers and
roughly 30,000 songs. (FAC ¶ 44.) Standing in the shadow of the more than 22 million songs in
the collective repertories of the other three PROs, GMR represents a small fraction of the
performing rights in musical works. GMR licenses rights to songs reflecting roughly 5% to
7.5% of radio airplay, as RMLC admits. (Id. ¶ 52.) Still, GMR’s repertory includes premium
content that consumers, and hence radio stations, find highly desirable. GMR has attracted many
talented songwriters formerly affiliated with ASCAP or BMI by offering them very attractive
economic and non-economic terms not previously available. (Id. ¶¶ 4, 51.) Nonetheless, the
vast majority of writers have remained with their longstanding PROs, and three years after its
inception, GMR is still tiny compared to its counterparts. (See id. ¶ 44.)
C. RMLC Abandons Negotiations with GMR
RMLC describes itself as a trade association that “represents the interests of the
commercial radio industry.” (Id. ¶ 49.) That is an understatement. RMLC is the designated
negotiating arm for virtually all of terrestrial radio, acting for and on behalf of over 10,000
3 The scope of the Court’s review on a motion to dismiss for lack of personal jurisdiction is not
limited to the face of the complaint, but may include affidavits or other competent evidence
submitted by the parties. Patterson v. FBI, 893 F.2d 595, 603-04 (3d Cir. 1990).
Case 2:16-cv-06076-CDJ Document 57-1 Filed 03/03/17 Page 14 of 41
7
commercial radio stations. (Id.) RMLC’s stated purpose is to use aggregated market power to
achieve artificially lower rates. Our “overwhelming objective,” RMLC has testified, “is to keep
license fees for the commercial radio industry as low as [it] can possibly keep them.” Radio
Music License Comm., Inc. v. SESAC, Inc., No. 2:12-cv-05807-CDJ(LASx) (E.D. Pa.) Dkt. 53
(Dec. 9, 2013 Tr. of Hearing on RMLC’s Motion for Preliminary Injunction), at 24:9-11.4 In
addition to using its massive group buying power to extract lower rates, RMLC files lawsuits—
supposedly on behalf of its members—to extract further discounts and favorable terms. For
example, RMLC has periodically coordinated “rate court” litigation against ASCAP and BMI
under the consent decrees. See, e.g., In re Application of the Cromwell Group, Inc., No. 1:10-
cv-5210-DLC (MHDx) (S.D.N.Y.). Likewise, when radio stations were dissatisfied with the
progress of their license fee negotiations with SESAC, RMLC organized and sued SESAC in this
Court. See Radio Music License Comm., Inc. v. SESAC, Inc., No. 2:12-cv-5807-CDJ-LAS (E.D.
Pa.).
Soon after its founding, GMR reached out to RMLC as the negotiating arm for the
terrestrial radio industry. (Grimmett Decl. ¶ 18.) GMR never met with representatives of RMLC
in Pennsylvania. (Grimmett Decl. ¶¶ 19-20.) They met elsewhere, like California and Michigan,
4 The transcript of this Court’s prior evidentiary hearing regarding RMLC’s motion for a
preliminary injunction in RMLC v. SESAC, No. 2:12-cv-05807-CDJ(LASx) (E.D. Pa.) is a proper
subject of judicial notice. Courts in this circuit routinely take judicial notice of transcripts of
judicial hearings. See, e.g., Jacobs v. Bayha, Civ. A. No. 07-237, 2011 WL 1044638, at *6
(W.D. Pa. Mar. 18, 2011) (taking judicial notice of transcripts of plaintiff’s prior trial and noting,
“[e]ven when adjudicating a motion to dismiss for failure to state a claim, courts are permitted to
take judicial notice of matters of public record, prior judicial opinions, and official court
records.”) (citing McTernan v. City of York, 577 F.3d 521, 526 (3d Cir. 2009)); In re Stoney
Creek Technologies, LLC, 364 B.R. 882, 883 n.2 (Bankr. E.D. Pa. 2007) (taking judicial notice
of the record of a hearing in a prior matter in which parties “actively participated” “for purposes
of understanding the background of the matter before [the court]”).
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8
but the lone substantive meeting where license proposals were exchanged occurred in Los
Angeles at GMR’s headquarters. (Id. ¶ 19.)
RMLC insisted that any license include terms such as a compulsory license and rate-
setting arbitration. (Id. ¶ 21.) This was not and is not acceptable to GMR. GMR then had no
choice but to negotiate directly with individual RMLC members. (Id.) But almost no members
of RMLC would have a conversation with GMR, insisting instead that GMR deal the
“committee.” Indeed, GMR has successfully concluded long-term license agreements with only
two of several thousand RMLC members, iHeartMedia, Inc. (“iHeart”) and Townsquare Media,
Inc. (“Townsquare”). Neither iHeart nor Townsquare is a Pennsylvania company or has a
principal place of business in Pennsylvania. (Id. ¶ 13.) As RMLC acknowledges, both
agreements require that GMR allow the companies to take advantage of any rates that RMLC
later negotiates with GMR if iHeart or Townsquare finds those rates more attractive. (FAC ¶
63.)
Unable to break through with RMLC members directly, GMR tried again to negotiate
with RMLC itself—all while RMLC members continued to perform compositions in GMR’s
repertory without authorization. RMLC continued to demand from GMR a compulsory license
and rate arbitration scheme. When GMR refused to capitulate to RMLC’s terms, RMLC
abandoned the negotiations and filed this action, along with a 200-page Motion for Preliminary
Injunction, just before Thanksgiving 2016. (Grimmett Decl. ¶ 23.) The preliminary injunction
motion sought to enjoin GMR from suing any RMLC members or member stations for copyright
infringement for the duration of this antitrust litigation. (Dkt. 3, Mot. for Preliminary Injunction
¶ 4.)
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9
This Court referred RMLC’s preliminary injunction motion to Magistrate Judge Sitarski.
(Dkt. 9.) At a telephonic conference, Judge Sitarski suggested RMLC had a choice: RMLC
could either continue to pursue its desired preliminary injunction or negotiate an interim
agreement with GMR that would obviate the need for immediate injunctive relief. (See, e.g.,
Dec. 8, 2016 Hrg. Tr. 18:21-25, 19:7-8.) The goal of either option was to permit the parties to
focus on the instant antitrust dispute by temporarily alleviating RMLC’s concerns that GMR
would sue RMLC members based on their ongoing infringement of GMR artists’ works. (See
Dec. 21, 2016 Hrg. Tr. 3:16-4:6.) RMLC chose the latter path: It negotiated, co-drafted, agreed
upon, and ultimately communicated to its members a set of interim license terms the parties
agreed GMR would offer to RMLC members (“the Interim License Agreement”).5 As part of
the agreement, RMLC withdrew its preliminary injunction motion. (Dkt. 39, Jan. 5, 2017 Report
and Recommendation at 2.)6 As a condition of this arrangement, both parties explicitly agreed
not to use any aspect of the Interim License Agreement or the discussions surrounding it to
support or defend against claims in this lawsuit. (Interim License Agmt. §7(c) (“GMR and
RMLC agree not to use the negotiation of or existence of any interim license with any RMLC
5 See Dec. 24, 2016 Interim License Term Sheet, attached as Exhibit A to the concurrently filed
March 3, 2017 Declaration of David Marroso (“Interim License Agmt.”) § 7(a) (referring to “the
negotiations that led to this agreement”); see also., Dec. 21, 2016 Hrg. Tr. 3:16-4:17 (RMLC
counsel reporting on negotiations and informing Judge Sitarski the two parties were very close to
an agreement, which would include RMLC communicating terms to its members); id. 4:13-17
(RMLC counsel describing the parties as “work[ing] out” terms for the agreement, and noting
“there’s a strong incentive on both sides to make that happen as quickly as possible”); id. 5:15-
19 (RMLC counsel noting the parties were “close to a deal”).
6 “During the [telephonic hearings before Judge Sitarski], the parties reported that they were
involved in discussions that could potentially obviate the need for injunctive relief (at least for
the time being). The discussions apparently were successful, and on Jan. 4, 2017, Plaintiff filed
a ‘Notice of Withdrawal of Its Preliminary Injunction Motion Without Prejudice.’ (ECF No.
38).”. (Dkt. 39, Jan. 5, 2017 Report and Recommendation at 2; see also Dec. 21, 2016 Hrg. Tr.
5:15-19 (RMLC counsel at telephonic hearing informing Judge Sitarski that “we share the belief
that we’re close to a deal that would just eliminate the need for the preliminary injunction and we
would be willing to withdraw it without prejudice.”).)
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10
member in any way, including to argue for or against personal jurisdiction or venue.”).) The
parties also agreed that the Interim License Agreement would be subject to Federal Rule of
Evidence 408 protection. (Id. §7(a) (“GMR and RMLC agree that this agreement and the
negotiations that led to this agreement are compromise negotiations protected pursuant to Federal
Rule of Evidence 408.”).)
GMR filed a motion to dismiss RMLC’s original complaint on January 20, 2017 (Dkt.
51). On February 10, RMLC filed an amended complaint, (Dkt. 52), adding numerous
allegations regarding the Interim License Agreement, the negotiations leading up to it, and
“many” radio stations’ subsequent acceptance of the interim license terms in various interim
licenses (“the GMR Interim Licenses”). (See FAC ¶¶16(i)-(j), 60-63.)
III. EXECUTIVE SUMMARY
There is no meaningful or legally cognizable connection with the State of Pennsylvania.
There is no general jurisdiction and no specific jurisdiction. And, contrary to RMLC’s broad
sweeping legal contention, the Clayton Act does not confer nationwide jurisdiction over or venue
of a domestic LLC.
IV. PENNSYLVANIA LACKS PERSONAL JURISDICTION OVER GMR
A. No General Personal Jurisdiction: GMR Does Not Have the Required
Minimum Contacts with Pennsylvania
General personal jurisdiction requires “‘continuous and systematic’ contacts with the
forum.” Remick v. Manfredy, 238 F.3d 248, 255 (3d Cir. 2001). General jurisdiction over a
corporation is appropriate only where it is incorporated or where its principal place of business is
located, i.e., where “the corporation is fairly regarded as at home.” Goodyear Dunlop Tires
Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011).
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RMLC alleges no facts that would constitute such “continuous and systematic contact.”
Nor could it. GMR is a Delaware LLC, whose principal place of business is in California.
(Grimmett Decl. ¶ 5.) GMR has no employees who reside or work in Pennsylvania, and it does
not conduct business in Pennsylvania. (Id. ¶¶ 7, 13.) Thus, GMR cannot be “fairly regarded as
at home” in Pennsylvania, and Pennsylvania does not have general jurisdiction over GMR.
B. No Specific Personal Jurisdiction: GMR Does Not Have the Required
Minimum Contacts with Pennsylvania
In support of its claim that GMR is subject to specific personal jurisdiction in this State,
RMLC cites to conduct that occurred before the initial Complaint in this action was filed, and
conduct related to the Interim License Agreement after this litigation commenced. For the
reasons explained in GMR’s concurrently filed Motion to Strike, RMLC’s attempt to establish
jurisdiction and venue in this Court based on any conduct related to the Interim License
Agreement or GMR Interim Licenses is expressly prohibited by the Interim License Agreement
itself, Federal Rule of Evidence 408, and equitable estoppel. Accordingly, this Court should
consider those allegations in the First Amended Complaint that do not relate to or rely on the
Interim Licenses. We address those allegations in Section IV.B.1., below.
Even if the Court were to consider the allegations that relate to and rely on the Interim
Licenses, this State still lacks jurisdiction over GMR. We address the Interim License
allegations and why they do not confer jurisdiction in Section IV.B.2. below. The Court need
only consider IV.B.2. below if it denies GMR’s concurrently filed Motion to Strike.
1. GMR’s Pre-Complaint Conduct Does Not Give Rise to Personal
Jurisdiction
Specific personal jurisdiction is appropriate only if the plaintiff’s “cause of action arises
from the defendant’s forum related activities, such that the defendant should reasonably
anticipate being haled into court there.” Vetrotex Certainteed Corp. v. Consol. Fiber Glass
Case 2:16-cv-06076-CDJ Document 57-1 Filed 03/03/17 Page 19 of 41
12
Prods. Co., 75 F.3d 147, 151 (3d Cir. 1996) (citations omitted). Specific jurisdiction is
established where: (1) the defendant has purposely directed his activities at the forum state;
(2) the plaintiff’s claim arises out of and relates to at least one of those specific activities; and
(3) the exercise of jurisdiction comports with fair play and substantial justice. O’Connor v.
Sandy Lane Hotel Co., 496 F.3d 312, 317 (3d Cir. 2007). None of these three necessary
elements is met in this case.
a. GMR Has Not “Purposefully Directed” Its Activities to
Pennsylvania
RMLC’s claim is based on GMR’s negotiation with RMLC, a Tennessee corporation
with its principal place of business in Tennessee. (See FAC ¶¶ 15, 18.) Neither these
negotiations, nor any other specific conduct RMLC alleges, occurred in Pennsylvania.
(Grimmett Decl. ¶¶ 18-20.) RMLC’s only jurisdictional allegation is that GMR interacts with
third parties who are not Pennsylvania residents but who themselves conduct business in this
State. Such indirect and attenuated “contacts” do not subject GMR to jurisdiction here. RMLC
alleges no facts to support its conclusory statement that “GMR engaged in activities with RMLC
and with RMLC members with the intent and purpose of invoking the benefits and protections of
Pennsylvania’s laws.” (See FAC ¶ 16.) Prior to RMLC’s lawsuit, GMR did not actually license
its works to any radio company based on Pennsylvania. And of course, there is no jurisdiction in
this State based on GMR’s negotiations with the Tennessee-based RMLC, (id. ¶ 16(a)-(c)), or
GMR’s supposed communications with Pennsylvania stations that did not result in a license, (Id.
¶ 16(d)-(f)). Furthermore, the fact that GMR entered licenses with two non-Pennsylvania
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13
companies—iHeart and Townsquare—that have stations in several states does not subject GMR
to jurisdiction in every one of those States. (Id. ¶¶ 16(g), 63).7 We address these points below.
(1) GMR’s Negotiations With RMLC Or Licenses With
RMLC Members Outside Pennsylvania Cannot
Support Personal Jurisdiction Over GMR
GMR negotiated with RMLC, a Tennessee corporation with its principal place of
business in Tennessee. (See FAC ¶¶ 15, 18.) None of the negotiations with RMLC occurred in
Pennsylvania, and RMLC does not allege otherwise. (See id. ¶ 16.) That RMLC represents
radio stations located nationwide, including some in Pennsylvania, does not, as RMLC suggests,
transform these negotiations into contacts directed to Pennsylvania. (Id. ¶ 16(c); see also id.
¶ 16(a), (b), (f).) That simply is not the law. “[A] plaintiff cannot orchestrate personal
jurisdiction over a defendant through its own activity.” Grant St. Grp., Inc. v. D & T Ventures,
LLC, No. CIV.A. 10-1095, 2012 WL 13694, at *4 (W.D. Pa. Jan. 4, 2012). Yet, that is precisely
what RMLC attempts here. The most RMLC alleges is that GMR entered into a license or
negotiated for a license with a non-Pennsylvania company that, itself, does business with radio
stations in Pennsylvania. (FAC ¶ 16(g) (alleging GMR entered into a license agreement with
iHeart, which owns radio stations in Pennsylvania); id. ¶ 16(f) (alleging GMR communicated
with RMLC officers, in their capacity as RMLC officers, who also own or work for companies
that have Pennsylvania connections).) Such attenuated contacts are insufficient to create
personal jurisdiction. In fact, the Supreme Court has “consistently rejected attempts to satisfy
the defendant-focused ‘minimum contacts’ inquiry by demonstrating contacts between the
plaintiff (or third parties) and the forum State.” Walden v. Fiore, 134 S. Ct. 1115, 1122 (2014).
7 GMR in fact entered into its agreement with Townsquare the day after this litigation was filed.
(Grimmett Decl. ¶ 13.) However, neither the long-term license with Townsquare nor the long-
term license with iHeart do anything to establish the contacts with Pennsylvania necessary to
support personal jurisdiction, so both are addressed together. See infra Section IV.C.1.a.(1).
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14
The “unilateral activity of another party or a third person”—such as the activities of RMLC or
iHeart in Pennsylvania— “is not an appropriate consideration when determining whether a
defendant has sufficient contacts with a forum State to justify an assertion of jurisdiction.”
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 417 (1984). This is because
“due process requires that a defendant be haled into court in a forum State based on his own
affiliation with the State, not based on the ‘random, fortuitous, or attenuated’ contacts he makes
by interacting with other persons affiliated with the State.” Walden, 134 S. Ct. at 1123
(emphasis added) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)).
Applying this principle, courts uniformly hold that the act of licensing intellectual
property rights to a company that conducts business in a forum state is insufficient to establish
personal jurisdiction over the licensor. See Red Wing Shoe, 148 F.3d, at 1362; see, e.g., Black v.
JP Morgan Chase & Co., Civ. A. No. 10-848, 2011 WL 4102802, at *49 & n.55 (W.D. Pa. Aug.
10, 2011) (no personal jurisdiction where defendant’s “only ‘product’ was its intellectual
property,” which it licensed to other companies that operated in a forum state). That rule is
especially appropriate where, as here, the company to which the defendant licensed the right is
not a resident of the forum state. Red Wing Shoe, 148 F.3d at 1361. For example, in Farina v.
Nokia, 578 F. Supp. 2d 740 (E.D. Pa. 2008), aff’d, 625 F.3d 97 (3d Cir. 2010), a court in this
district granted Cellular One Group’s (“COG”) motion to dismiss for lack of jurisdiction. Id. at
751-52. COG was a Delaware general partnership in the business of licensing “Cellular One”
and related trademarks to others. Plaintiffs in Farina filed a class action lawsuit alleging various
cellphone manufacturers, wireless service providers, and COG conspired to market cell phones
while suppressing knowledge of adverse biological effects resulting from their use. Id. at 745.
Trying to manufacture personal jurisdiction in Pennsylvania against COG, Plaintiffs argued that
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15
twenty-nine “Cellular One” retail locations were using COG’s trademark in Pennsylvania. The
Court rejected this argument and dismissed the case against COG, explaining that “[a] licensor of
a mark cannot be subject to personal jurisdiction in a state solely because its licensee is located
in that state.” Id. at 751. Similarly, in Nova Design Techs., Ltd. v. Walters, this Court granted
codefendant RIC’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(2), because
RIC’s decision to license its trademark to another company that operated in Pennsylvania
“c[ould] not of itself give rise to a finding of minimum contacts.” Civ. A. 10-7618, 2011 WL
5084566, at *7 (E.D Pa. Oct. 25, 2011).8 As in Farina and Nova Design, licensing negotiations
and licenses with RMLC or its members are insufficient to support personal jurisdiction.
(2) GMR’s Pre-Litigation Communications Regarding
Potential Licenses Cannot Support Jurisdiction
RMLC alleges that GMR “specifically directed a written anticompetitive demand at
RMLC member stations in this district” and that “GMR made anticompetitive demands directly
to the owners of radio stations located in Pennsylvania, and in this district.” (FAC at ¶ 16(d)-(e);
see also id. ¶ 16(f).) But as the Third Circuit has held, an intellectual property holder does not
“conduct business” in a given forum or avail itself of that forum’s laws simply by notifying a
8 Courts outside the Third Circuit have also found that licensing intellectual property to a
licensee in the forum state does not create personal jurisdiction over the licensor. See, e.g.,
Paramount Pictures Corp. v. Nissim Corp., No. 2:14-cv-04624-ODW(ASx), 2014 WL 5528455,
at *6-7 (C.D. Cal. Nov. 3, 2014) (defendant’s non-exclusive patent licenses to companies in the
forum state were inadequate to establish personal jurisdiction); Gurglepot, Inc. v. New Schreve,
Crump & Low LLC, No. C13-6029-RBL, 2014 WL 2744283, at *5 (W.D. Wash. June 17, 2014)
(no personal jurisdiction because defendant’s trademark license to an in-state licensee was non-
exclusive); Lake Assocs., LLC v. DNZ Prods. LLC, 886 F. Supp. 2d 1203, 1209 (D. Or. 2012)
(“contracts between an out-of-state defendant and third-parties located or doing business in the
forum state do not confer personal jurisdiction”); Head USA, Inc. v. Sorensen, No. 3:06-cv-983
(MRK), 2006 WL 3703646, at *4-5 (D. Conn. Dec. 13, 2006) (no personal jurisdiction, because
defendant’s non-exclusive patent license to a licensee in the forum state granted defendant no
control over the licensee’s sale or marketing activities, and contemplated no ongoing relationship
beyond royalty payments); Meyers & Sons Corp. v. Clipps, Inc., No. 00 CIV. 7191(HB), 2001
WL 125586, at *2 (S.D.N.Y. Feb. 13, 2001) (same).
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business in that forum that the business is infringing on the holder’s intellectual property rights.
See, e.g., IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 260 n.3 (3d Cir. 1998) (holding that
letters were insufficient to create personal jurisdiction even where defendant knew letters would
enter into the forum); Gehling v. St. George’s Sch. of Med., Ltd., 773 F.2d 539, 544 (3d Cir.
1985) (same).9
Moreover, prior to RMLC filing its initial complaint,10 GMR had not directed any
communications to RMLC members or member stations in Pennsylvania. (Grimmett Decl.
¶¶ 25-28.) GMR’s licensing negotiations and communications were primarily with RMLC and
its executive committee; they did not involve any individual owners in Pennsylvania. (Id. ¶¶ 18-
20, 25-27.) For example, the alleged licensing discussions between GMR and RMLC officers
did not occur in Pennsylvania. Nor does RMLC allege these discussions in any way concerned
the radio stations those RMLC officers or their employers own that may have a connection with
9 District courts in this Circuit have repeatedly reached the same conclusion. See Donohue v.
Team Rensi Motorsports, LLC, No. CIV.A. 01-5564, 2002 WL 32341953, at *5–6 (E.D. Pa. Oct.
10, 2002) (defendant’s telephone calls with Pennsylvania-resident plaintiff for negotiating
contract and sending a proposed contract to plaintiff in Pennsylvania is insufficient to establish
personal jurisdiction); Vetrotex, 75 F.3d at 152 (defendant’s several informational telephone calls
and letters to Pennsylvania do not support assertion of personal jurisdiction); Mellon Bank (East)
PSFS, N.A. v. DiVeronica Bros., 983 F.2d 551, 556 (3d Cir. 1993) (defendant’s telephone calls to
plaintiff’s Pennsylvania office do not show purposeful availment of Pennsylvania’s protection);
Pennebacker v. Wayfarer Ketch Corp., 777 F. Supp. 1217, 1221 (E.D. Pa. 1991) (numerous
telephone calls into Pennsylvania by defendant that led to the hiring and firing of a Pennsylvania
resident do not justify assertion of specific jurisdiction); Colmen Fin. Servs. v. Charter
Equipment Leasing Corp., 708 F.Supp. 664 (E.D. Pa. 1989) (placing forty telephone calls into
Pennsylvania by out-of-state defendant as part of contract negotiations does not justify assertion
of specific jurisdiction).
10 As discussed in more detail in Section IV.C.2, GMR’s contacts with RMLC member stations
in Pennsylvania after RMLC initiated this litigation were for the sole purpose of effectuating
interim licenses the parties agreed GMR would offer in exchange for RMLC withdrawing its
motion for a preliminary injunction. (See supra Section II.C.; Grimmett Decl. ¶ 14.) Even if—
contrary to fact—RMLC had not separately agreed to refrain from using the Interim License
Agreement as a basis for jurisdiction, such settlement-related communications cannot serve as
the basis for asserting jurisdiction under applicable law. (See infra, Section IV.C.2.)
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17
Pennsylvania. (See FAC ¶ 16(f).) As discussed above, such “random, fortuitous, or attenuated
contacts” GMR makes “by interacting with other persons affiliated with the State” are
insufficient to support personal jurisdiction over GMR. Walden, 134 S. Ct. at 1123.
b. RMLC’s Claims Neither Arise Out of Nor Relate to Any GMR
Contact with Pennsylvania
Unable to establish a meaningful connection between GMR and this State, RMLC
invents a sweeping new standard for personal jurisdiction: nationwide jurisdiction whenever a
defendant allegedly “engages in a campaign of unlawful monopolization that has affected and
will continue to affect businesses in” the United States including in Pennsylvania. (FAC ¶ 15.)
That is not the law. The Third Circuit has never permitted personal jurisdiction based on
anticompetitive conduct directed at the nation as a whole. See Howard Hess, 516 F. Supp. 2d at
337-38.11
c. Exercising Jurisdiction Would Be Unfair and Result in
Substantial Injustice
GMR could not have “reasonably anticipate[d] being haled into” a court in Pennsylvania
when it negotiated a licensing agreement outside Pennsylvania with a Tennessee corporation.
World-Wide Volkswagen v. Woodson, 444 U.S. 286, 297 (1980). RMLC would argue that
because RMLC represents radio stations nationwide, including some stations in Pennsylvania,
and because GMR negotiated with RMLC, Pennsylvania can exercise personal jurisdiction over
GMR. Such a “flawed theory would subject a defendant to nationwide personal jurisdiction if it
decides to do business with a company that does business nationwide.” Red Wing Shoe, 148
F.3d at 1361 (quoting Burger King, 471 U.S. at 475); Grant St. Grp., Inc. v. D & T Ventures,
11 See also Goldlawr, Inc. v. Heiman, 369 U.S. 463 (1962) (noting that, in an antitrust action
under the Sherman Act and the Clayton Act, the Eastern District of Pennsylvania lacked personal
jurisdiction—i.e., personal jurisdiction was not available on a nationwide basis); Mass. Sch. of
Law at Andover, Inc. v. Am. Bar Ass’n, 846 F. Supp. 374 (E.D. Pa. 1994) (dismissing an antitrust
case involving national accreditation of law schools for lack of personal jurisdiction).
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LLC, No. CIV.A. 10-1095, 2012 WL 13694, at *4 (W.D. Pa. Jan. 4, 2012). Where, as here,
defendant has had no “clear notice that it is subject to suit” in the forum and thus no opportunity
to “alleviate the risk of burdensome litigation” in the forum state, exercise of personal
jurisdiction is inappropriate. World-Wide Volkswagen, 444 U.S. at 298.
Any argument suggesting GMR should have reasonably foreseen that negotiating an
agreement with RMLC would impact Pennsylvania radio stations is irrelevant.
“‘[F]oreseeability’ alone has never been a sufficient benchmark for personal jurisdiction under
the Due Process Clause.” Id. at 295. In addition, because any foreseeable effect on
Pennsylvania stems from RMLC’s—not GMR’s—contact with Pennsylvania, exercise of
jurisdiction on this basis would violate due process and result in substantial injustice to GMR.
Walden, 134 S. Ct at 1122.
2. GMR’s Interim Licensing Activity Does Not Give Rise to Personal
Jurisdiction12
RMLC’s repeated allegations relying on the GMR’s interim licensing activity to establish
personal jurisdiction (see, e.g., FAC ¶ 16(h)-(i)) should be stricken from the Complaint for
reasons explained in GMR’s concurrently filed Motion to Strike. But even if the Court does not
strike those allegations, they do not support general jurisdiction or jurisdiction under the Clayton
Act for the reasons discussed in Sections IV.A and IV.B above, which apply with equal force to
GMR’s interim licensing activities.
In addition, the GMR Interim Licenses cannot, as a matter of law, constitute contacts
supporting specific personal jurisdiction, because the terms of those licenses were negotiated as
part of a compromise resolving RMLC’s motion for preliminary injunction. See Red Wing Shoe,
12 As noted supra, the Court need only consider this section if it denies GMR’s concurrently filed
motion to strike, as the section discusses argument relevant solely to GMR’s post-Complaint
interim licensing conduct.
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148 F.3d at 1361 (considering letters offering compromise in personal jurisdiction analysis
would “be contrary to fair play and substantial justice by providing disincentives for the
initiation of settlement negotiations”); Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 304 F.
Supp. 2d 663, 666 (W.D. Pa. 2003) (contacts made in connection with a compromise of
differences or settlement of a dispute do not open a defendant up to personal jurisdiction); Ontel
Prods Corp. v. Mindscope Prods., Civ. A. 16-1540, 2016 WL 7177604, at *5 (D.N.J. Dec. 8,
2016) (finding email and phone calls “[discussing] settlement…which occurred after Ontel filed
this action, do not establish specific jurisdiction over Mindscope”). Particularly in the context of
personal jurisdiction, courts have refused to consider settlement agreements and related
communications as evidence of contacts with the forum state. For example, in Red Wing Shoe,
the defendant in a patent infringement suit sent several letters to the plaintiff in the forum state
requesting that the plaintiff cease and desist infringing defendant’s patents and offering to license
its patents to plaintiff. The Federal Circuit determined that these letters were, in effect,
settlement offers and, pursuant to Federal Rule of Evidence 408, should not be considered in
assessing the existence of personal jurisdiction. “Although the Rules [of Evidence] do not
explicitly make evidence of [settlement] negotiations inadmissible to establish personal
jurisdiction, the policy underlying the Rules supports an approach that fosters settlement of
infringement claims. Indeed, this policy squarely invokes one of the considerations enumerated
by the Supreme Court . . . namely, ‘the interstate judicial system’s interest in obtaining the most
efficient resolution of controversies.’” 148 F.3d at 1361 (quoting World–Wide Volkswagen, 444
U.S. at 292).
Likewise, in Rossman v. State Farm Mut. Auto Ins. Co., 832 F.2d 282 (4th Cir. 1987),
following a car accident in the forum state, the defendant, State Farm, sent insurance agents into
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20
the forum state to conduct an investigation of the accident and sent an employee to seek a
settlement with the plaintiffs. In evaluating whether personal jurisdiction existed over State
Farm, the Fourth Circuit refused to consider these activities: “We do not base our holding on the
fact that [defendant] expanded its connection with Virginia after the accident . . . We do not
think that a party’s investigation of possible legal liability after an accident creates in personam
jurisdiction that would not otherwise exist. If it did, insurers would be discouraged from
legitimate investigation and insureds would be deprived of [their] benefits.” Id. at 284 n.2; see
also Highmark, 304 F. Supp. 2d at 666 (finding that consideration of “offer to compromise” in
evaluating personal jurisdiction would “be contrary to fair play and substantial justice by
providing disincentives for the initiation of settlement negotiations.”) (citing Red Wing Shoe, 148
F.3d at 1361).
The logic applied by these and other courts of appeal,13 as well as district courts in this
Circuit, demands the GMR Interim Licenses cannot provide a basis for establishing personal
jurisdiction—as, indeed, the parties agreed they would not. (See Interim License Agmt. §7(c).)
If such compromise-related communications and actions can be used as contacts to establish
personal jurisdiction, litigants will be reluctant to enter into any settlement negotiations for fear
of creating personal jurisdiction over themselves. Red Wing Shoe, 148 F.3d at 1361. Such a
13 See Digi-Tel Holdings, Inc. v. Proteq Telecommunications (PTE), LTD., 89 F.3d 519, 525 (8th
Cir. 1996) (“Giving jurisdictional significance to [settlement discussion] may work against
public policy by hindering the settlement of claims.”); Farmers Ins. Exchange v. Portage La
Prairie Mut. Ins. Co., 907 F.2d 911, 913 (9th Cir. 1990) (“Significant consideration of . . .
settlement contacts would deter good faith attempts . . . to settle”).
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21
result would be contrary to the judicial system’s larger interest in obtaining the most efficient
resolution of controversies.14
Finally, RMLC can hardly argue that GMR should have foreseen the Interim License
Agreement could provide a basis for personal jurisdiction, when both parties agreed in writing it
would not be. (See Interim License Agmt. §7(c).) But even if RMLC could make such an
argument, as discussed in supra Section IV.C.1.c, foreseeability is not a sufficient basis for
establishing personal jurisdiction. World-Wide Volkswagen, 444 U.S. at 295.15
***
The FAC does not and could not allege facts sufficient to support the requisite minimum
contacts between GMR and Pennsylvania. The Clayton Act does not create nationwide personal
jurisdiction over domestic non-corporations like GMR. Thus, this action should be dismissed for
lack of personal jurisdiction.
14 This is the policy underlying Federal Rule of Evidence 408, which the parties incorporated
into their Interim License Agreement. See comments to Fed. R. Evid. 408 (noting that the reason
for exclusion under Rule 408 is “promotion of the public policy favoring the compromise and
settlement of disputes” and “[t]he purpose of this rule is to encourage settlements which would
be discouraged if such evidence were admissible.”). The Rule encourages open and frank
communications with respect to compromise, by assuring litigants that their settlement
communications will not subsequently be used against them by their opponents. See Affiliated
Mfrs., Inc. v. Aluminum Co. of America, 56 F.3d 521, 526 (3d Cir. 1995) (“The policy behind
Rule 408 is to encourage freedom of discussion with regard to compromise.”); Agnew v. Aydin
Corp., Civ. A. No. 88-3436, 1988 WL 92872, at *4 (E.D. Pa. Sept. 6, 1988) (noting that if
evidence of settlement communications were potentially admissible, “a chilling effect on the
openness of discussions at future compromise meetings might result”).
15 RMLC appears to argue that GMR’s decision to offer an interim license to the Pennsylvania-
based broadcaster named Entercom subjects GMR to jurisdiction in this State. (FAC ¶ 16(j).)
This is not a good-faith argument. In addition to RMLC’s own agreement not to argue for
jurisdiction on account of any interim license GMR might offer, Entercom itself promised in
writing that it would not use the negotiation of or existence of any interim license … in any way,
including to argue for or against personal jurisdiction or venue. See March 3, 2017 Declaration
of David Marroso (“Marroso Decl.”), Ex. C.
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22
C. The Clayton Act Does Not Confer Personal Jurisdiction over a Domestic
Non-Corporate Entity
The Third Circuit has held that 15 U.S.C. § 22 does confer nationwide personal
jurisdiction over one class of entity—foreign (non-U.S.) “corporations”—based on their contacts
with the United States as a whole. In re Auto. Refinishing Paint Antitrust Litig., 358 F.3d 288,
296 (3d Cir. 2004). But that rationale—and, in turn, 15 U.S.C. § 22—does not apply here:
GMR is neither a corporation nor a foreign company.
As RMLC itself alleges GMR is a limited liability company. (FAC ¶ 17; see also
Marroso Decl., Ex. D.) As court after court has held, 15 U.S.C. § 22 does not apply to actions
against non-corporations like GMR. See Orange Theatre Corp. v. Rayherstz Amusement Corp.,
139 F.2d 871, 875 (3d Cir. 1944) (15 U.S.C. § 22, “which also authorizes [nationwide] service
applies only to suits against corporations”); Mass. Sch. of Law, 846 F. Supp. at 380 n.8 (15
U.S.C. § 22 “applies only to corporate, not individual, antitrust defendants”); World Skating Fed.
v. Int’l Skating Union, 357 F. Supp. 2d 661, 664 (S.D.N.Y. 2005) (“it is clear that [15 U.S.C.
§ 22] is directed only to corporations and that it does not apply to other entities that simply share
common attributes with corporations”).
Other sections of the Clayton Act make clear that Congress specifically intended the
service and venue provisions to apply only to “corporations.” For example, the Clayton Act
defines “persons” to include “corporations and associations.” 15 U.S.C. § 12 (emphasis added).
Because LLCs are considered “associations,” Johnson v. SmithKline Beecham Corp., 724 F.3d
337, 350 (3d Cir. 2013), Congress could have easily extended the reach of 15 U.S.C. § 22 to
encompass other forms of business associations, such as LLCs, by using the broader term
“persons” instead of “corporations.” Yet section 22 specifically refers to “corporations.” 15
U.S.C. § 22. This difference indicates that Congress intentionally limited the venue and service
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23
provisions of the Clayton Act to corporations. See McManus v. Tato, 184 F. Supp. 958, 959
(S.D.N.Y. 1959) (noting that 15 U.S.C. § 22’s specific language “necessarily excludes
individuals and voluntary associations from those amenable to extraterritorial service”).
Not only is 15 U.S.C. § 22’s reach limited to corporations, but it creates nationwide
jurisdiction only for foreign corporations, not domestic ones. See Howard Hess, 516 F. Supp. 2d
at 337-38. Neither Automotive Refinishing nor any of the authorities on which the Third Circuit
relied in that case held that personal jurisdiction under 15 U.S.C. § 22 could attach to domestic
defendants. See id. (citing Auto. Refinishing, 358 F.3d at 298-99). Indeed, finding personal
jurisdiction over a U.S. defendant based on nationwide contact with the United States as a whole
would nullify the traditional minimum contacts requirement under due process, and would run
counter to the holding of Automotive Refinishing itself. See Auto. Refinishing, 358 F.3d at 299
(“[P]ersonal jurisdiction under Section 12 of the Clayton Act is as broad as the limits of due
process under the Fifth Amendment.”) (citations omitted); Howard Hess, 516 F. Supp. 2d at 337-
38 (“Insofar as the Third Circuit has never applied a ‘national contacts’ test for establishing
personal jurisdiction over a domestic antitrust defendant, the court declines to extend the holding
of Automotive Refinishing in a manner that would counter-indicate traditional long-arm
jurisprudence with respect to such defendants.”).
V. VENUE IS NOT PROPER IN THIS DISTRICT
A. Venue Is Improper Because No Event Giving Rise to RMLC’s Claims
Occurred in This District and GMR Is Not Subject to This Court’s Personal
Jurisdiction
A civil action may be brought in “(1) a judicial district in which any defendant resides, if
all defendants are residents of the State in which the district is located; (2) a judicial district in
which a substantial part of the events or omissions giving rise to the claim occurred . . . ; or
(3) . . . any judicial district in which any defendant is subject to the court’s personal jurisdiction
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24
with respect to such action.” 28 U.S.C. § 1391(b). For purposes of venue, an “entity . . . shall be
deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the
court’s personal jurisdiction . . . .” Id. § 1391(c)(2).
RMLC does not allege any facts supporting its conclusory assertion that “GMR resides in
this district.” (FAC ¶ 17.) In fact, GMR does not reside here. Thus, 28 U.S.C. § 1391(b)(1) and
28 U.S.C. § 1391(b)(3) do not apply in this case. And no events—let alone a “substantial part of
the events”—giving rise to RMLC’s claims occurred in this District. RMLC also does not allege
that anything material happened in Pennsylvania. Rather, it provides “threadbare recitals of the
elements,” Ashcroft v. Iqbal, 556 U.S. 662, 668 (2009) (internal quotation marks omitted), by
alleging that “GMR transacted business in this district” and that “a substantial part of the events
or omissions giving rise to this claim occurred in this district.” (See FAC ¶ 17.) “[T]he Federal
Rules do not require courts to credit a complaint’s conclusory statements without reference to its
factual context.” Iqbal, 556 U.S. at 686. Thus, 28 U.S.C § 1391(b)(2) also does not apply, and
venue is improper in this District under 28 U.S.C. § 1391(b).
B. Venue Is Improper Because GMR Is Neither a “Corporation” Nor a Foreign
Entity
Title 15, U.S.C. § 22 states, in relevant part: “Any suit, action, or proceeding under the
antitrust laws against a corporation may be brought not only in the judicial district whereof it is
an inhabitant, but also in any district wherein it may be found or transacts business . . . .” As
discussed above, 15 U.S.C. § 22 is not applicable to non-corporations. And even if it did apply
to limited liability companies, the statute does not create nationwide venue for domestic
companies. See Howard Hess, 516 F. Supp. 2d at 337-38. Rather, 15 U.S.C. § 22 creates venue
in any judicial district in which a corporation is an inhabitant or any district in which “it may be
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25
found or transacts business.” GMR—a Delaware LLC with an office in California and no
employees in Pennsylvania—is not “found” and does not “transact business” in Pennsylvania.
Because venue is not proper in this District, the Court should dismiss the FAC pursuant
to Rule 12(b)(3). See Taylor & Francis Grp., PLC v. McCue, 145 F. Supp. 2d 627, 629-31 (E.D.
Pa. 2001) (dismissing complaint for improper venue).
VI. AT A MINIMUM, THIS CASE SHOULD BE TRANSFERRED TO A MORE
CONVENIENT FORUM
In view of RMLC’s jurisdictional and pleading deficiencies, the Complaint should be
dismissed outright. Should the Court decline to grant GMR’s motion to dismiss, however, the
action should at least be transferred to the Central District of California, where GMR is located
and conducts its business.
Under 28 U.S.C. § 1404(a), the Court can “transfer the venue of any civil action for the
convenience of parties and witnesses or in the interests of justice, to any other district where it
might have been brought.” Weber v. Basic Comfort, 155 F. Supp. 2d 283, 284 (E.D. Pa. 2001).
In evaluating motions to transfer venue, courts must first “determine whether venue would be
proper in the transferee district.” Id. If the first prong is satisfied, the court next evaluates
“whether a transfer would be in the interests of justice.” Id. (citing Jumara v. State Farm Ins.
Co., 55 F.3d 873, 879 (3d Cir. 1995)). To decide this second prong, courts weigh the following
factors: (1) the convenience and preference of the parties; (2) the convenience of witnesses;
(3) access to sources of proof; (4) practical considerations that make litigation easy, expeditious,
or inexpensive; (5) the relative calendar congestion of the two competing districts; (6) where the
events at issue took place and the interest of the respective courts in deciding local controversies;
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26
(7) the enforceability of any judgment; and (8) the familiarity of the trial judge with the
applicable law. Weber, 155 F. Supp. 2d at 285 (citing Jumara, 55 F.3d at 879-80).16
Here, the Central District of California easily qualifies as a proper venue, and the factors
for weighing a transfer strongly support litigating the case in GMR’s home state.
A. Venue Would Be Proper in the Central District of California
Venue is proper in any “judicial district in which any defendant resides, if all defendants
are residents of the State in which the district is located.” 28 U.S.C. § 1391(b)(1). Where the
defendant is an entity, it is “deemed to reside . . . in any judicial district in which such defendant
is subject to the court’s personal jurisdiction.” Id. § 1391(c)(2). Since GMR’s principal place of
business is in Los Angeles, it is subject to personal jurisdiction in the Central District of
California. (FAC ¶ 19; Grimmett Decl. ¶ 5.) GMR therefore “resides” in the Central District of
California, and venue is proper there. See 28 U.S.C. §§ 1391(b)(1), (c)(2).
B. Transfer to the Central District of California Would Be More Convenient
and Would Best Serve the Interest of Justice
Every one of the public and private factors that courts consider under Section 1404(a)
either favors transfer to the Central District of California or is neutral.
Preferences of the Parties. RMLC does not allege that it has an office or any other
physical presence in this District.17 A plaintiff’s preference of forum is entitled to less deference
where the plaintiff does not reside in, or has only minimal connections to, the district in which it
16 The convenience and preferences of the parties, the convenience of the witnesses, where the
claims arose, and access to sources of proof, are collectively referred to as the “private factors.”
LogoPaint A/S v. 3D Sport Signs SI, 163 F. Supp. 3d 260, 265 (E.D. Pa. 2016). Relative court
congestion, practical considerations bearing on litigation, the interests of the respective courts in
deciding local disputes, enforceability of judgments, and each court’s familiarity with applicable
law are referred to as the “public” factors. Id.; see also Jumara, 55 F.3d at 879-80.
17 RMLC’s seven Executive Committee members and eighteen Committee members are located
across the country, from Oregon to New York; only one of them resides in this District.
(Marroso Decl., Ex. E.)
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sues. See e.g., Ostella v. IRBSearch, LLC, Civ. A. No. 12-7002, 2014 WL 3843880, at *4 (E.D.
Pa. Aug. 5, 2014); Weber, 155 F. Supp. 2d at 285. By contrast, GMR resides in and has a
substantial connection to its preferred forum. The Court should give weight to GMR’s
preference to litigate in its home district.
Convenience of the Parties. Since neither party is based anywhere near Pennsylvania,
litigating in this District would entail considerable inconvenience and expense. See Vt. Juvenile
Furniture Mfg., Inc. v. Factory Direct Wholesale, Inc., 317 F.R.D. 16, 21 (E.D. Pa. 2016)
(granting transfer where “[n]either party is located in, or even particularly near, the Eastern
District of Pennsylvania”). By contrast, GMR’s sole office is in the Central District of
California. See Smith v. HireRight Solutions, Inc., Civ. A. No. 09-6007, 2010 WL 2270541, at
*5 (E.D. Pa. June 7, 2010) (transferring to district in which defendant “maintain[ed] its principal
place of business,” where “[d]efendant ha[d] no offices or employees in Pennsylvania”).
RMLC’s Executive Director resides in Tennessee, and RMLC’s Committee and
Executive Committee members are scattered across the country.18 RMLC’s officers and likely
witnesses would thus have to “travel by plane to either district.” EVCO Tech. & Dev. Co. v.
Precision Shooting Equip., Inc., 379 F. Supp. 2d 728, 731 (E.D. Pa. 2005) (transferring to
defendant’s home district). Transfer to California would improve overall convenience and
reduce overall costs by ensuring that only one party—rather than both—has to travel. See
Schoonmaker v. Highmark Blue Cross Blue Shield, Civ. A. No. 09-cv-703, 2009 WL 3540785, at
*3 (E.D. Pa. Oct. 30, 2009) (transferring case where plaintiffs “would incur the costs of travel”
in either district, but “defendants w[ould] benefit from a transfer of venue”); Ricoh Co. v.
Honeywell, Inc., 817 F. Supp. 473, 485 (D.N.J. 1993) (transferring case where trial in
18 (See Marroso Decl., Ex. E; Ex. F.)
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defendants’ home forum “would require only one, rather than both, parties to [the] litigation to
be inconvenienced”).
The parties’ relative financial resources further underscore the disproportionate burden
GMR would face by litigating in this District. RMLC has tremendous financial resources at its
disposal, since it can—and does—“assess” its members to raise “the amounts required to conduct
effective . . . court litigations.”19 Because “the financial resources of [RMLC] far surpass those
of [GMR],” transfer to GMR’s home district is appropriate. Lannett Co. v. Asherman, Civ. A.
No. 13-2006, 2014 WL 716699, at *8 (E.D. Pa. Feb. 24, 2014).
Convenience of the Witnesses. The convenience of the witnesses is relevant “only to the
extent that the witnesses may actually be unavailable for trial in one of the fora.” Jumara, 55
F.3d at 879. This factor thus asks whether nonparty witnesses are within the subpoena power of
this Court. Synthes, Inc. v. Knapp, 978 F. Supp. 2d 450, 462 (E.D. Pa. 2013). To the extent
witnesses’ live testimony would be necessary,20 there are no witnesses with any meaningful
relevant information who reside in Pennsylvania. Though RMLC alludes in passing to “RMLC
member stations [that reside] in this district” (FAC ¶ 16(d)), there is no indication that these
radio stations bear any relevance to, or have any particular knowledge of, the allegations at issue.
In any event, there are more than double the number of radio stations in California than
there are in Pennsylvania. (Grimmett Decl. ¶ 15.) And there are numerous important nonparty
19 (Marroso Decl., Ex. G.)
20 While a witness cannot be compelled to travel more than 100 miles, Fed. R. Civ. P. 45(b)(2)
now allows nationwide issue of subpoenas. See Fed. R. Civ. P. 45(b)(2) and (c)(1). Thus, to the
extent any nonparty witnesses reside within 100 mile of this Court but outside the 100-mile of
the transferee court, those witnesses may still be deposed under the transferee court’s subpoena
power, and their testimony can be used at trial in lieu of live testimony. Fed. R. Civ. P. 32(a)(4);
see Connors v. R & S Parts & Servs., Inc., 248 F. Supp. 2d 394, 396 (E.D. Pa. 2003)
(convenience of witnesses factor did not weigh against transfer where some non-party witnesses
would be outside the subpoena power of the transferee court because “the use of a . . . videotaped
deposition at trial is well-accepted and widespread.”).
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29
witnesses who reside in California, including: (i) numerous writers who are clients of GMR; (ii)
key publishing companies; and (iii) witnesses who have knowledge of the music industry and
percipient information about RMLC’s conduct. (Id. ¶ 10.)
Convenient Access to Sources of Proof. The Central District of California provides
more convenient “access to sources of proof.” As noted, nearly all of GMR’s employees are
based in Los Angeles. (Id. ¶ 7.) So are nearly all GMR documents, both physical and digital.
(Id. ¶ 9.) GMR offsite data is stored in San Francisco. (Id.) This access strongly weighs in
favor of transfer to California. See Vt. Juvenile Furniture, 317 F.R.D. at 21 (“access to
evidence” factor weighed “heavily in favor of transfer” where “most of the evidence and
witnesses the plaintiff seeks access to are most likely found in the [state defendant was
located]”).
There is no reason to believe that the Eastern District of Pennsylvania would afford
comparable—much less superior—access to sources of proof. As RMLC admits, approximately
99% of its members are located outside of this District. (FAC ¶ 16(c).)
Practical Considerations. Each of the factors already discussed—travel, financial
burdens, and the locations of party and nonparty witnesses and evidence—constitutes a
“practical consideration” that would make litigation significantly easier, more efficient, and less
expensive in California than in Pennsylvania. See, e.g., Plotnick v. Computer Scis. Corp.
Deferred Comp. Plan for Key Execs., Civ. No. 14-cv-303 (KM), 2015 WL 4716116, at *3
(D.N.J. Aug. 7, 2015) (practical considerations “weigh[] heavily in favor of transfer, given that
the Defendants’ operations are concentrated in proximity to the Eastern District of Virginia.”).
In addition, the Central District of California is already the venue for another litigation
between GMR and RMLC. On December 6, 2016, GMR filed a complaint against RMLC there
Case 2:16-cv-06076-CDJ Document 57-1 Filed 03/03/17 Page 37 of 41
30
for violation of Section 1 of the Sherman Act and California Cartwright Act.21 That lawsuit is
separate but does involve the same parties, and GMR would not oppose consolidation of the two
matters in California.22 Unlike this case (which raises only federal claims), the California
litigation raises claims under California state law (the Cartwright Act and Unfair Competition
Law), and thus should be resolved in California because that court will be more familiar with
issues involving state-law claims. And if the California litigation is to be resolved by the Central
District of California, judicial economy dictates that this case also be resolved by the same court.
Court Congestion. Although the two districts’ relative calendar congestion is “not a
factor worthy of great weight,” Penda Corp. v. STK, LLC, Nos. Civ. A. 03-5578, 03-6240, 2004
WL 2004439, at *3 (E.D. Pa. Sept. 7, 2004), it remains relevant to the transfer analysis. The
appropriate metric for congestion is not the total number of cases pending in each district, but
rather “the average time from filing to disposition of cases and the average time from filing to
trial.” United States ex rel. Hollander v. MTD Prods., Inc., Civ. A. No. 09-5507, 2011 WL
3501749, at *3 (E.D. Pa. Aug. 9, 2011). The Central District of California and the Eastern
District of Pennsylvania are nearly identical in this regard,23 rendering this factor neutral.
Local Interest. RMLC’s lawsuit is in no sense a “local controversy.” RMLC can point
to no concrete connection between its purported claims and this District, and alleges no concrete
21 Global Music Rights, LLC v. Radio Music License Comm., Inc. et al., No. 2:16-cv-09051-
BRO-AS (filed Dec. 6, 2016) (C.D. Cal.).
22 RMLC may argue that the case in the Central District of California should have been filed as a
compulsory counterclaim in this case. Not so. The California litigation involves RMLC and its
member stations cartel behavior driving down license prices, which does not arise from the same
transaction or occurrence giving rise to this case, namely GMR’s behavior and lack of market
power in the music licensing marketplace. The resolution of RMLC’s claims against GMR does
not resolve GMR’s claims against RMLC—i.e., determining whether GMR has engaged in
monopolistic activity requires a separate and independent inquiry from determining whether
RMLC has engaged in monopolistic activity.
23 (Marroso Decl., Ex. H.)
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31
factual basis that supports its conclusory allegation that GMR “[directed] illegal monopolistic
activity” or “transacted business” here. (FAC ¶¶ 16-17.) The same was true in Cameli v.
WNEP-16 The News Station, 134 F. Supp. 2d 403 (E.D. Pa. 2001), where neither party resided
within the Eastern District of Pennsylvania, and all of the alleged conduct took place in another
district. See id. at 405-07. The court noted that “Philadelphia’s connection to this matter [was]
at best tenuous,” since there was “no indication that any party, witness, or other implicated
person ha[d] any connection whatsoever with Philadelphia, other than perhaps working for a
corporation that generally ‘conducts business’ here.” Id. at 407.
RMLC’s halfhearted attempt to create the appearance of a local interest in this case only
further demonstrates the propriety of transfer to California. First, RMLC alleges that
Philadelphia is “the ninth largest radio market in the United States” (FAC ¶ 16(c)), but neglects
to mention that Los Angeles is the second biggest.24 Second, RMLC claims that “approximately
50 of those [RMLC member stations are] located within this district.” (FAC ¶ 16(c).) Even more
RMLC members reside in California. (Grimmett Decl. ¶ 15.) Finally, RMLC alleges that “the
fourth largest radio broadcasting company in the United States,” Entercom Communications
Corp., “is headquartered in Bala Cynwyd, Pennsylvania.” (FAC ¶ 16(f).) But RMLC does not
allege that Entercom—a nonparty to this litigation—has any special involvement or interest in
this dispute.
Enforceability of Judgment. Because there is “little significant difference in enforcing a
judgment in one federal forum than in another,” the enforceability factor is neutral. E’Cal Corp.
v. Office Max, Inc., No. Civ. A. 01-3281, 2001 WL 1167534, at *4 (E.D. Pa. Sept. 7, 2001)
(citing 17 Moore et al., Moore’s Federal Practice § 111.13(1)(i) (3d ed. 1997)).
24 (Marroso Decl., Ex. I.)
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32
Familiarity with Federal Antitrust Law. As the Third Circuit explains, the trial judge’s
familiarity with applicable law comes into play only when the court is called on to interpret “the
applicable state law in diversity cases.” Jumara, 55 F.3d at 879-80. In this case, RMLC asserts
claims only under the federal antitrust laws. (FAC ¶¶ 119-33.) “[A]ll District Courts are
presumed ‘familiar with the applicable’ Federal antitrust laws.” Liggett Grp., Inc. v. R.J.
Reynolds Tobacco Co., 102 F. Supp. 2d 518, 537 (D.N.J. 2000). Because “the federal judge in
either forum will be qualified to adjudicate this case,” Weber, 155 F. Supp. 2d at 286-87, this
factor is neutral.
RMLC will likely point out that this Court is familiar with applicable law due to its
oversight of RMLC’s prior suit against SESAC.25 (FAC at ¶ 2, 33-37.) But there is nothing
about this case that requires specialized knowledge on the part of the adjudicating court.26 This
case, like the earlier SESAC case, simply involves an application of well-settled federal antitrust
laws to the specific facts of the Complaint.
VII. CONCLUSION
This action should be dismissed for lack of personal jurisdiction over GMR and for
improper venue. Even if this Court finds personal jurisdiction and venue exist in this District,
the convenience of the parties and witnesses and the interests of justice would be best served by
transferring this action to the Central District of California.
25 See Radio Music License Comm., Inc. v. SESAC, Inc., et al., No. 2:12-cv-05807-CDJ(LASx)
(E.D. Pa.). That case ended in settlement, not a final judgment on the merits.
26 The same cannot be said of the case between the parties in the Central District of California.
That case, Global Music Rights, LLC v. Radio Music License Committee, Inc. et al., No. 2:16-cv-
09051-BRO-AS (C.D. Cal.), involves claims under California state laws as well as federal
claims, and the Central District of California would be more familiar with applicable state laws.
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33
Dated: March 3, 2017
O’MELVENY & MYERS LLP
By: /s/ Daniel M. Petrocelli
Daniel 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
Richard G. Parker (pro hac vice)
rparker@omm.com
Edward D. Hassi (pro hac vice)
ehassi@omm.com
O’MELVENY & MYERS LLP
1625 Eye Street, NW
Washington, DC 20006
Telephone: (202) 383-5300
Facsimile: (202) 383-5414
Neill C. Kling
nkling@harkinscunningham.com
HARKINS CUNNINGHAM LLP
4000 Two Commerce Square
2001 Market Street
Philadelphia, PA 19103
Telephone: (215) 851-6700
Attorneys for Global Music Rights, LLC
Case 2:16-cv-06076-CDJ Document 57-1 Filed 03/03/17 Page 41 of 41
EXHIBIT A
Case 2:16-cv-06076-CDJ Document 57-2 Filed 03/03/17 Page 1 of 8
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. 16-6076
Judge: Hon. C. Darnell Jones II
DECLARATION OF RANDY GRIMMETT IN SUPPORT OF DEFENDANT’S MOTION
TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND IMPROPER VENUE
OR TO TRANSFER VENUE
I, Randy Grimmett, declare as follows:
1. I am the Chief Executive Officer and a co-founder of Global Music Rights, LLC
(“GMR”).
2. I have served as the Chief Executive Officer of GMR since its inception in 2013.
I have extensive personal knowledge regarding GMR and a detailed understanding of its
business model. This includes, among other things, knowledge regarding the manner in which
GMR seeks to license musical compositions for public performance to terrestrial radio stations
and other media service providers, and GMR’s efforts to attract and retain songwriters and music
publishers.
3. I personally participated in GMR’s communications with the Radio Music
License Committee (“RMLC”), and am therefore knowledgeable about GMR’s relationship and
communications with RMLC.
4. I have personal knowledge of the matters set forth in this declaration.
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GRIMMETT DECL. ISO DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
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Global Music Rights
5. GMR is a limited liability company organized under the laws of Delaware.
GMR’s headquarters and sole office is located at 1100 Glendon Avenue, Suite 2000, Los
Angeles, California 90024.
6. GMR was founded in 2013. GMR is a performance rights organization, or PRO.
As a PRO, GMR represents owners of musical copyrights in the licensing of their public
performance rights.
7. Today, GMR employs a total of seventeen full-time employees. Fifteen of those
employees work out of GMR’s office in Los Angeles, CA. The remaining two work remotely
from their homes in New Jersey. No GMR employee resides or works in Pennsylvania.
8. GMR is owned by [1] Azoff MSG Entertainment LLC, a Delaware limited
liability company whose sole place of business is in Los Angeles, CA, [2] me, a resident of Los
Angeles, and [3] a few of GMR’s founding songwriters, none of whom has a primary residence
in Pennsylvania. The founding songwriters’ shares are non-voting.
9. Virtually all GMR documents are stored either physically or digitally on servers
in its office in Los Angeles, CA. Limited data is stored remotely using Salesforce, which is
headquartered in San Francisco, CA.
10. Numerous writers who are clients of GMR, as well as key publishing companies
and individuals with expertise on the music industry, reside in California.
11. In addition to GMR, there are three other PROs that operate in the United States:
the American Society of Composers, Authors and Publishers (“ASCAP”); Broadcast Music, Inc.
(“BMI”); and SESAC, Inc. (“SESAC”).
12. GMR is by far the smallest of the PROs. GMR’s repertory encompasses roughly
30,000 compositions written by 74 songwriters, which I understand to be approximately 0.005%
of total composers represented by a PRO in the United States and 0.12% of total compositions
represented by a PRO in the United States.
13. Prior to the initiation of this lawsuit, GMR had entered into a direct license
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GRIMMETT DECL. ISO DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
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agreement with only one of RMLC’s approximately 3,000 owner-members: iHeartMedia, Inc.
(“iHeart”). Shortly after RMLC filed suit, GMR entered into a direct license agreement with one
additional RMLC member: Townsquare Media, Inc. (“Townsquare”). Based on my discussions
with iHeart and Townsquare and publicly-available information, my understanding is that neither
is a Pennsylvania-based company.
14. Since the initiation of this lawsuit, GMR has entered into direct interim license
agreements with additional RMLC member stations on terms negotiated between GMR and
RMLC in connection with RMLC withdrawing its preliminary injunction motion in this action.
The Radio Music License Committee
15. RMLC is a corporation based in Nashville, TN that represents the interests of
approximately 10,000 commercial radio stations. The owners of these stations—also known as
“RMLC members”—represent over 90% of the billions of dollars of annual revenue generated
by the terrestrial radio industry in the United States. It is my understanding there are 477 RMLC
member stations in California, but only 220 member stations in Pennsylvania.
16. RMLC publicly and privately purports to negotiate with PROs on behalf of its
10,000 member stations. For example, RMLC has negotiated license agreements with the two
largest PROs, ASCAP and BMI, on behalf of its members. RMLC has also sued SESAC on
behalf of its members.
17. RMLC’s Committee and Executive Committee members conduct license
negotiations on behalf of RMLC’s members.
GMR’s Negotiations with RMLC
18. In 2014, soon after its founding, GMR approached RMLC to make RMLC aware
of GMR’s entrance into the marketplace. Over the next year, representatives of GMR—
principally myself and one or two other Los Angeles-based employees—met with
representatives of RMLC to discuss GMR and its repertory.
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19. The discussions took place in-person in various cities:
• On June 4, 2014, I met with William Velez, executive director of RMLC, in
Washington, D.C.
• On October 8, 2014, I met with Mr. Velez, Ed Christian, the Chairman of RMLC,
and John VerStandig, the Vice Chairman of RMLC, at the New York City offices
of RMLC’s attorneys, Weil, Gotshal & Manges LLP.
• On August 24, 2015, my colleague Susan Genco and I met with Messrs. Christian
and Velez, in Detroit, MI.
• On September 23, 2015, October 21, 2015, and February 26, 2016, I met with Mr.
Velez in Nashville, TN.
• On March 19, 2016, it is my understanding that Ms. Genco met with Kenneth
Steinthal, RMLC’s attorney at the time, in Austin, TX. I joined this meeting by
phone from my office in Los Angeles, CA.
• On July 15, 2016, Ms. Genco and I met with Mr. Steinthal in Los Angeles, CA.
• On September 15, 2016, my colleague Sean O’Malley, Ms. Genco, and I met with
Mr. Steinthal in New York City, NY.
• On October 4, 2016 I met with Mr. Velez in Nashville, TN.
• On October 26, 2016, Ms. Genco, another colleague, Frank Huang, and I met with
Mr. VerStandig, Mr. Steinthal and Joseph Wetzel, another attorney representing
RMLC, and Susanna Lowy, a representative for CBS Radio, at the GMR office in
Los Angeles, CA. This was the only meeting where proposals were exchanged
and the final in-person meeting before RMLC filed suit against GMR.
No meetings occurred in Pennsylvania.
20. To my knowledge, Eugene Levin, the treasurer of RMLC who is based in
Pennsylvania, only participated in one meeting throughout the entirety of GMR’s discussions
with RMLC. He and Mr. VerStandig dialed into the August 24, 2015 meeting in Detroit, MI via
phone.
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21. RMLC informed GMR that it would not agree to any license deal that did not
include certain terms. For example, RMLC insisted that GMR agree to license all the works in
its repertory to every RMLC member, and to submit to binding rate arbitration. Because these
terms are not acceptable to GMR, GMR attempted to negotiate directly with several of RMLC’s
member stations. As noted, prior to this litigation GMR has entered into a license agreement
with iHeart, a Delaware corporation with headquarters in San Antonio, TX. Shortly after RMLC
filed suit, GMR entered into a license agreement with Townsquare, a Delaware corporation with
headquarters in Greenwich, CT. None of the negotiations for these agreements took place in
Pennsylvania.
22. Prior to the initiation of this litigation, GMR had not entered into a direct license
with any members of RMLC who have headquarters or substantial business centers in
Pennsylvania.
23. On November 18, 2016, just before Thanksgiving, RMLC filed the instant
Complaint against GMR along with a 200-page Motion for Preliminary Injunction. RMLC
personally served GMR’s agents in California and Delaware with papers on November 30, 2016.
24. On November 30, 2016, GMR proposed an interim license agreement to RMLC.
On December 2, 2016, RMLC rejected this offer.
25. On December 24, 2016, GMR and RMLC reached an interim license agreement
as a settlement of RMLC’s pending preliminary injunction motion in this action.
GMR’s Alleged Directed Contacts and Communications into Pennsylvania
26. Before the filing of RMLC’s complaint, GMR had not directed any
communications into Pennsylvania promoting or otherwise offering its licenses for sale to
Pennsylvania radio stations. GMR has since communicated the terms of its interim license offer
to RMLC member stations, including some in Pennsylvania, via email on January 7, 2017.
27. Before the filing of RMLC’s complaint, GMR had not entered into a direct license
with any members of RMLC who have headquarters or substantial business centers in
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GRIMMETT DECL. ISO DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
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Pennsylvania. GMR has since entered into interim licenses with a fraction of RMLC’s member
stations, including some in Pennsylvania.
28. GMR has not directed communications into Pennsylvania informing radio stations
of the risk of infringing works in its repertory or otherwise implicitly threatening suit for
infringement.
Case 2:16-cv-06076-CDJ Document 57-2 Filed 03/03/17 Page 7 of 8
I declare under penalty of perjury under the laws of the United States that the foregoing is
true and correct. Executed on the third day of March, 2017, in Los Angeles, CA.
Dated: March 3, 2017 By:~~ Randy Griett
Case 2:16-cv-06076-CDJ Document 57-2 Filed 03/03/17 Page 8 of 8
1
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. 16-6076
Judge: Hon. C. Darnell Jones II
ORDER
AND NOW, this ____ day of __________________, 2017, upon consideration of the
Defendant Global Music Rights’ (“GMR’s”) Motion to Dismiss for Lack of Personal Jurisdiction
and Improper Venue or to Transfer Venue, and any response thereto, it is hereby ORDERED that
GMR’s Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue is GRANTED.
Civil Action No. 2:16-CV-6076-CDJ shall be dismissed. GMR’s Motion to Transfer Venue and
Motion to Dismiss for Failure to State a Claim are DENIED as moot.
__________________________________________
C. Darnell Jones, II
United States District Judge
Case 2:16-cv-06076-CDJ Document 57-3 Filed 03/03/17 Page 1 of 2
2
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. 16-6076
Judge: Hon. C. Darnell Jones II
[ALTERNATIVE] ORDER
AND NOW, this ____ day of __________________, 2017, upon consideration of the
Defendant Global Music Rights’ (“GMR’s”) Motion to Dismiss or to Transfer Venue, and any
response thereto, it is hereby ORDERED that GMR’s Motion to Transfer Venue is GRANTED.
GMR’s Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue and Motion to
Dismiss for Failure to State a Claim are DENIED as moot.
__________________________________________
C. Darnell Jones, II
United States District Judge
Case 2:16-cv-06076-CDJ Document 57-3 Filed 03/03/17 Page 2 of 2
1
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. 16-6076
Judge: Hon. C. Darnell Jones II
CERTIFICATE OF SERVICE
The undersigned certifies that, on March 3, 2017, a true and correct copy of the foregoing
Motion To Dismiss For Lack Of Personal Jurisdiction And Improper Venue Or To Transfer
Venue, as well as true and correct copies of the Memorandum Of Law In Support of Defendant’s
Motion To Dismiss For Lack Of Personal Jurisdiction And Improper Venue Or To Transfer
Venue, Declaration Of Randy Grimmett In Support Of Defendant’s Motion To Dismiss For Lack
Of Personal Jurisdiction And Improper Venue Or To Transfer Venue, and Proposed Order, were
served on all counsel of record by the Court’s electronic filing system (CM/ECF).
/s/ Daniel M. Petrocelli
Daniel M. Petrocelli (pro hac vice)
Case 2:16-cv-06076-CDJ Document 57-4 Filed 03/03/17 Page 1 of 1