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Consumers' Digital Music Price-Fixing Suit Ruled No “Class” Act

The U.S. District Court for the Southern District of New York denied class certification in a consumers' suit alleging price-fixing and restraint of trade by record labels in setting the price for digital downloads for music services the labels had formed. In re Digital Music Antitrust Litigation, 06-md-1780. The long-running case, which has been in federal court since 2007, arose out of the major labels' attempts at founding the MusicNet and pressplay download services, with a 70-cent wholesale price, in the pre-Apple iTunes era. Citing the litigation's fourth amended complaint, Senior United States District Judge Loretta A. Preska noted: “All [the label] Defendants signed distribution agreements with MusicNet and pressplay. These joint ventures, along with the Recording Industry Association of America, allowed Defendants to 'maintain[] prices at artificially high levels, eliminate[] competition among the Defendants in the pricing and terms of Internet Music sales, and provide[] one of several forums in which the Defendants could discuss their general desires to restrain trade in Internet Music and come to agreement on the specifics.'” But Senior Judge Preska decided the plaintiffs failed to meet the “typicality” requirement of Rule 23(a) of the Federal Rules of Civil Procedure that “claims or defenses of the representative parties are typical of the claims or defenses of the class.” Judge Preska acknowledged: “The Court is well-aware that Plaintiffs have dedicated years of this litigation to adding and withdrawing Proposed Class Representatives in order to find individuals who can both provide proof of music download purchases during the class period and did not engage in illegal downloading.” The court concluded: “Here, large numbers of the proposed class members engaged in illegal downloading of Digital Music and would therefore be subject to counterclaims on the basis of an unclean hands theory, while the Proposed Class Representatives would not. These counterclaims would likely become the focus of the litigation if the Court were to grant Plaintiffs' motion for class certification.”

Marshall Tucker Band's Former Manager Loses Bid for Attorney Fees After Prevailing in Trademark Action Brought Against It By the Band

The U.S. District Court for the District of South Carolina declined to award attorney fees and costs to the Marshall Tucker Band's former manager M T Industries (MTI) following dismissal of the band's trademark claims against it. Marshall Tucker Band Inc. v. M T Industries Inc. (MTI), 7:16-00420. MTI had filed a trademark application with the U.S. Patent and Trademark Office (USPTO) for the band's name in digital media. MTI made the bare statement in its application that it had used the band name for that purpose “in commerce.” But in its trademark infringement suit, the band failed to provide evidence of “in commerce” use to support its claims. Earlier this year, District Judge Mary Geiger Lewis dismissed the band's trademark infringement and dilution claims. MTI then moved for attorney fees and costs under the Lanham Act, 15 U.S.C. §1117, and under Rule 54 of the Federal Rules of Civil Procedure. District Judge Lewis first recalled: “Here, the Court granted Defendants' motion to dismiss, dismissing Plaintiffs' federal trademark infringement and trademark dilution claims with prejudice. In that those were the only claims establishing independent federal jurisdiction over the action, the Court dismissed without prejudice Plaintiffs' federal trademark cancellation and declaratory judgment claims for lack of subject matter jurisdiction.” Thus, Judge Lewis ruled, MTI was a “prevailing party” because it “unquestionably received at least 'some relief'” when she dismissed the case. But in denying attorney fees and costs for MTI, the district judge decided the Marshall Tucker Band's lawsuit was neither frivolous nor objectively unreasonable. “Although the Court ultimately determined Plaintiffs' federal trademark infringement and trademark dilution claims to be without merit, the Court is unable to hold it was 'so unreasonable that no reasonable litigant could believe' those claims would succeed,” Judge Lewis wrote. “Furthermore, the fact Plaintiffs could have — and perhaps should have — proceeded before the USPTO fails to meet this frivolous or objectively unreasonable standard as well.” Noting “however unwise” it turned out to be for the band to pursue its claims in court, instead of through the USPTO, Judge Lewis concluded that “it was entirely within their discretion to choose this [judicial] venue.”