Ultra Music Festival Disputes Result in Decisions Within Days of Each Other

YMD's lawsuit alleged conspiracy to restrain trade in violation of §1 and conspiracy to monopolize in violation of §2 of the federal Sherman Act, tortious interference, and violation of Florida's Deceptive and Unfair Trade Practices Act.

South Florida District Judge Ursula Ungaro noted: "It appears (although the [] complaint is far from clear) that the City and [Virginia Key Beach] Trust conspired to block Rapture's festival because Ultra agreed to pay them a $2 million license fee. As further evidence that the City and Trust were conspiring to replace Rapture's festival, Rapture alleges that the Ultra festival was disruptive, dirty, and bad for the 'delicate environment' of Virginia Key. The decision to allow the Ultra festival at the 'environmentally friendly' beach park, therefore, was 'ridiculous[]' and 'a signal of an antitrust violation and unfair competition.'"

But District Judge Ungaro criticized Rapture's lawsuit as lacking sufficient focus, instead being "a shotgun pleading. Every factual allegation is incorporated by reference into every count." The district judge further wrote in her decision dismissing the case from federal court that YMD's lawsuit "is little more than a list of reasons why Rapture thinks the Ultra music festival is no good. But the legal claims attached to that list are incidental; like a rickety soapbox, they serve no purpose other than to hoist Rapture's list of grievances into court and, from there, into the public's view."

"The Sherman Act claims, in particular, are not proper claims for the facts alleged," Judge Ungaro found. "They are, simply put, baseless. And the Court will not clutter its busy docket with a case that relies on the Sherman Act for federal jurisdiction when the facts, as stated and if proven, would clearly not amount to a restraint of trade, illegal monopolization, or a conspiracy within the meaning of the antitrust laws."

In contrast to the local festival-approval-process dispute, the other Ultra Music case grew out of a license to produce an Ultra Music Festival in Croatia and other European territories. Adria MM Productions Ltd. v. Worldwide Entertainment Group Inc., 17-21603.

The Adria litigation resulted from a failed effort to renegotiate a five-year agreement for Adria to use the "Ultra Music" name. In 2018, a South Florida federal jury found that Worldwide Entertainment, Ultra Music's licensing entity, breached the agreement by failing to registering the "Ultra Music" trademark in Europe and had tortiously interfered with Adria's business relationships with third parties. But the jury ruled for Worldwide on a counterclaim for breach of contract against Adria over payment of the licensing fee for 2017.

After the verdict, Worldwide moved for judgment in its favor as a matter of law or for a new trial. However, South Florida District Judge Federico A. Moreno recently denied the motions.

Upholding the jury's tortious interference verdict, District Judge Moreno noted: [T]he jury certainly could have inferred, that although Adria Productions received a certain amount of revenue from ticket sales, Worldwide Entertainment's default letter [that Worldwide informed Adria's third-party vendors of that day] interfered with [Adria] having received the remainder and ultimately with being able to pay additional outstanding debts thereby supporting an award of [$866,000 in] damages."

The district judge added that, though the Worldwide/Adria agreement required Adria to sequester its ticket sales income, the "industry standard called for use of the ticketing funds to pay vendors for the event, meaning that compliance with the clause rendered performance under the agreement impossible."

Worldwide then argued it should win on Adria's breach of contract claim because the jury hadn't awarded any damages to Aria on that. But Judge Moreno pointed out, "That the jury found $0 in damages does not imply that Adria failed to present evidence of damages, only that the jury chose not to award them."

The district court noted in particular: "Adria Productions sufficiently presented evidence as to damages on its claim for breach of contract. More specifically, [Adria director Nikola] Busljeta testified as to the amount of money expended in promotion of the festival and Worldwide Entertainment introduced Exhibit 90, which documents all of the payments made and owed by Adria to Worldwide since 2012. This evidence is sufficient to allow a reasonable jury to find — at the very least consider — damages on Adria's breach of contract claim."

Judge Moreno's bad news for Worldwide didn't end there. He went on to deny a new trial to Worldwide on its counterclaims against Adria that included trade secrets misappropriation, trademark infringement and unfair competition.

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Stan Soocher is Editor-in-Chief of Entertainment Law & Finance and Professor of Music & Entertainment Studies at the University of Colorado's Denver Campus. He is also an entertainment attorney, as well as author of the books Baby You're a Rich Man: Suing the Beatles for Fun & Profit and They Fought the Law: Rock Music Goes to Court, the latter which is available in an updated, expanded edition in Amazon's Kindle Store. For more information: www.stansoocher.com.