Sony BMG Denied Stay of Download Royalties Suit

In its bid to have The Youngblood's New York action stayed while the California case is litigated, BMG argued that “resolving the merits of rescission before delving [in the New York litigation] into the intricacies of contractual interpretation, the custom and practice of the recording industry, and class certification would spare the parties and the Court from researching, briefing, and deciding complex issues that may be rendered entirely unnecessary by a simple ruling on rescission.”

But U.S. Magistrate Judge Kevin N. Fox noted: “In light of the fact that the two related actions [i.e., The Youngbloods New York suit and a pending parallel New York class action involving Sony label artists, Allman v. Sony BMG Music Entertainment Inc., 06 Civ. 3252(GBD)(KNF)] contain identical claims against the defendant for breach of contract concerning royalties for digital downloads leased to music download service providers and mobile phone ringtone and ringback providers, the outcome of the California action is irrelevant to the Court's obligations to manage its cases and use judicial resources efficiently.” However, Magistrate Fox did grant Sony BMG's motion to amend its answer in The Youngbloods New York case to raise rescission of the 1995 agreement as an affirmative defense.