Promoter Wins Attorney Fees for Challenging Truth-In-Music Law

New Jersey will have to pay the legal fees for a music promoter that sued the state to stop it from enforcing its “truth-in-music” law. The U.S. Court of Appeals for the Third Circuit held in Singer Management Consultants Inc. v. Milgram, 09-2238, that the promoter, which accused the state of violating its constitutional and trademark rights, was a prevailing party for fee-shifting purposes.

The fee dispute grew out of the state's attempt in 2007 to enforce the newly enacted New Jersey Deceptive Practices in Musical Performances statute, N.J.S.A. '2A:32B-1 et seq. The law is aimed at impostor groups that perform under a name they have no right to use. It creates a separate offense subject to a $10,000 civil penalty for a first offense, $20,000 for a repeat and treble damages, and makes a violation illegal under the Consumer Fraud Act.

Live Gold Operations Inc. had put together a two-week concert series to start Aug. 18, 2007 at the Hilton Hotel in Atlantic City, featuring two acts, the Platters and the Coasters, whose legacies dated back to the 1950s. Shortly before the first show, the NJ Attorney General notified Live Gold that its use of the bands' names might run afoul of the law. Live Gold provided evidence it owned common-law, unregistered trademarks in the names, but the state insisted that to avoid liability, the concerts should be billed as a “tribute” or “salute.”

The Hilton complied, but the day before the first show, Live Gold sued NJ Attorney General Anne Milgram, seeking a temporary restraining order (TRO) and injunctive relief. That same day, U.S. District Judge Dickinson Debevoise in Newark granted the TRO, finding that Live Gold was likely to succeed on the merits. Debevoise said the state's decision to treat unregistered trademarks differently from registered ones under the law posed a “very serious problem” and might impair “substantial federal rights,” including freedom of speech.

When the parties appeared in court on Sept. 7, 2007 for a preliminary injunction hearing, NJ Deputy Attorney General Lorraine Rak at first continued to assert that unregistered trademarks were not the same for purposes of the truth-in-music law. But during the argument, she switched her position after Debevoise repeatedly rejected it. Debevoise did not issue an injunction but declared the state would be “bound by” its new view of the law.

On March 16, 2009, after getting the state to confirm what it said at the preliminary injunction hearing, Debevoise dismissed the case, saying nothing else needed to be decided because Live Gold had effectively won. But Debevoise later denied Live Gold's request for fees, agreeing with an earlier ruling by Magistrate Judge Esther Salas that Live Gold was not a prevailing party because Debevoise never issued a preliminary injunction or other order on the merits.

The district court had relied on the U.S. Supreme Court's ruling in Buckhannon Bd. & Care Home v. W. Va. Dep't of Health & Human Res., 532 U.S. 598 (2001) (available at www.oyez.org/cases/2000-2009/2000/2000_99_1848), to find that prevailing party fees were not available to a party like Live Gold that acted as the catalyst for a voluntary change in defendants' conduct.

In reversing, Third Circuit Judge Jane Roth, joined by Ruggero Aldisert, stated that Live Gold did prevail because it obtained complete relief based on the state's concession to its view of the law. The appeals court found Buckhannon allowed a fee award even though no judgment on the merits was reached because the state's action in backing off its initial stance was not voluntary, but resulted from the action of the district court. The TRO alone might have been enough to confer prevailing party status, but the court went beyond that at the preliminary injunction hearing, said Roth.

[Editor's Note: Roth wrote: "The District Court issued the TRO after determining that Live Gold had a likelihood of success on its underlying constitutional claims. ' Although Live Gold did not obtain a preliminary injunction, it undeniably 'receive[d] at least some relief on the merits,' Buckhannon, 532 U.S. at 603, when the District Court sustained its interpretation of the Act and 'bound' the State to that interpretation. To conclude otherwise would profoundly elevate form over substance.”]

Judge Thomas Ambro dissented, saying U.S. Supreme Court precedent required a judgment or a court-ordered consent decree for prevailing party fees and the Third Circuit majority erred in creating an exception for voluntary conduct resulting from judicial pressure. Ambro also said District Judge Debevoise had been incorrect in saying New Jersey was bound by its new view of the law because, without an order, the state could revert to its prior view, though judicial estoppel could be argued against it.

Live Gold attorney William Charron says the purpose of awarding fees is “to make sure that our government officials are answerable when they do take positions that are incorrect on the merits and when a court has to come in and get them to change their position, which is exactly what happened here.” Charron, of Pryor Cashman in New York, noted the fees he will seek on remand are substantial because of the many issues raised in the case.

Attorney General spokesman Lee Moore said his office is reviewing the decision but declined further comment.

Jon “Bowzer” Bauman, a former member of Sha Na Na, a 1950s-revival music band, heads the Truth in Music Committee of the Sharon, PA-based Vocal Group Hall of Fame, a proponent of truth-in-music laws across the country. He says 33 states besides New Jersey have them and, though his organization did not agree that unregistered marks are less valid than registered marks, whether the Live Gold groups involved in this case have valid trademarks remains to be adjudicated.

New Jersey will have to pay the legal fees for a music promoter that sued the state to stop it from enforcing its “truth-in-music” law. The U.S. Court of Appeals for the Third Circuit held in Singer Management Consultants Inc. v. Milgram, 09-2238, that the promoter, which accused the state of violating its constitutional and trademark rights, was a prevailing party for fee-shifting purposes.

The fee dispute grew out of the state's attempt in 2007 to enforce the newly enacted New Jersey Deceptive Practices in Musical Performances statute, N.J.S.A. '2A:32B-1 et seq. The law is aimed at impostor groups that perform under a name they have no right to use. It creates a separate offense subject to a $10,000 civil penalty for a first offense, $20,000 for a repeat and treble damages, and makes a violation illegal under the Consumer Fraud Act.

Live Gold Operations Inc. had put together a two-week concert series to start Aug. 18, 2007 at the Hilton Hotel in Atlantic City, featuring two acts, the Platters and the Coasters, whose legacies dated back to the 1950s. Shortly before the first show, the NJ Attorney General notified Live Gold that its use of the bands' names might run afoul of the law. Live Gold provided evidence it owned common-law, unregistered trademarks in the names, but the state insisted that to avoid liability, the concerts should be billed as a “tribute” or “salute.”

The Hilton complied, but the day before the first show, Live Gold sued NJ Attorney General Anne Milgram, seeking a temporary restraining order (TRO) and injunctive relief. That same day, U.S. District Judge Dickinson Debevoise in Newark granted the TRO, finding that Live Gold was likely to succeed on the merits. Debevoise said the state's decision to treat unregistered trademarks differently from registered ones under the law posed a “very serious problem” and might impair “substantial federal rights,” including freedom of speech.

When the parties appeared in court on Sept. 7, 2007 for a preliminary injunction hearing, NJ Deputy Attorney General Lorraine Rak at first continued to assert that unregistered trademarks were not the same for purposes of the truth-in-music law. But during the argument, she switched her position after Debevoise repeatedly rejected it. Debevoise did not issue an injunction but declared the state would be “bound by” its new view of the law.

On March 16, 2009, after getting the state to confirm what it said at the preliminary injunction hearing, Debevoise dismissed the case, saying nothing else needed to be decided because Live Gold had effectively won. But Debevoise later denied Live Gold's request for fees, agreeing with an earlier ruling by Magistrate Judge Esther Salas that Live Gold was not a prevailing party because Debevoise never issued a preliminary injunction or other order on the merits.

The district court had relied on the U.S. Supreme Court's ruling in Buckhannon Bd. & Care Home v. W. Va. Dep't of Health & Human Res. , 532 U.S. 598 (2001) (available at www.oyez.org/cases/2000-2009/2000/2000_99_1848 ), to find that prevailing party fees were not available to a party like Live Gold that acted as the catalyst for a voluntary change in defendants' conduct.

In reversing, Third Circuit Judge Jane Roth, joined by Ruggero Aldisert, stated that Live Gold did prevail because it obtained complete relief based on the state's concession to its view of the law. The appeals court found Buckhannon allowed a fee award even though no judgment on the merits was reached because the state's action in backing off its initial stance was not voluntary, but resulted from the action of the district court. The TRO alone might have been enough to confer prevailing party status, but the court went beyond that at the preliminary injunction hearing, said Roth.

[Editor's Note: Roth wrote: "The District Court issued the TRO after determining that Live Gold had a likelihood of success on its underlying constitutional claims. ' Although Live Gold did not obtain a preliminary injunction, it undeniably 'receive[d] at least some relief on the merits,' Buckhannon, 532 U.S. at 603, when the District Court sustained its interpretation of the Act and 'bound' the State to that interpretation. To conclude otherwise would profoundly elevate form over substance.”]

Judge Thomas Ambro dissented, saying U.S. Supreme Court precedent required a judgment or a court-ordered consent decree for prevailing party fees and the Third Circuit majority erred in creating an exception for voluntary conduct resulting from judicial pressure. Ambro also said District Judge Debevoise had been incorrect in saying New Jersey was bound by its new view of the law because, without an order, the state could revert to its prior view, though judicial estoppel could be argued against it.

Live Gold attorney William Charron says the purpose of awarding fees is “to make sure that our government officials are answerable when they do take positions that are incorrect on the merits and when a court has to come in and get them to change their position, which is exactly what happened here.” Charron, of Pryor Cashman in New York, noted the fees he will seek on remand are substantial because of the many issues raised in the case.

Attorney General spokesman Lee Moore said his office is reviewing the decision but declined further comment.

Jon “Bowzer” Bauman, a former member of Sha Na Na, a 1950s-revival music band, heads the Truth in Music Committee of the Sharon, PA-based Vocal Group Hall of Fame, a proponent of truth-in-music laws across the country. He says 33 states besides New Jersey have them and, though his organization did not agree that unregistered marks are less valid than registered marks, whether the Live Gold groups involved in this case have valid trademarks remains to be adjudicated.