IP Law Daily, COPYRIGHT—9th Cir.: Longtime ASCAP adversary and infamous radio station owner can’t shake off federal court receiver, (Sep 1, 2022)
By Matthew Hersh, J.D.
The embattled owner of three radio stations, who refused to pay ASCAP fees for years, still owes money to a wide range of creditors.
The embattled owner of three top-40 radio stations that refused to pay royalties to songwriters—or to the music publishers and performing rights organizations who represent them—will have to wait a while longer before his stations come out of federal receivership, the U.S. Court of Appeals for the Ninth Circuit has held. The court’s ruling, which affirms the ruling of a Los Angeles-area federal district court, is the latest chapter in a more than 40-year battle between the performing rights organization and the notorious radio personality (WB Music Corp. v. Royce International Broadcasting Corp., August 31, 2022, Friedland, M.).
The lawsuit involves three radio stations owned by Ed Stolz, a figure widely known in the music and broadcasting worlds for his generations-long battles with the American Society of Composers, Authors and Performers, or ASCAP. Stolz has been on the receiving end of multiple lawsuits over unpaid royalties by ASCAP—some of which, according to one trade publication, date back to 1981. Stolz is also well-known in the radio world for battling with CBS Radio over the decision to name one of his stations “K-Rock”—allegedly a bid to capitalize on the brand recognition of legendary LA alternative rock station KROQ—and his nearly 25-year battle to reverse the sale of another radio station to Entercom Communications.
In the latest chapter of “The saga of Ed Stolz,” as another trade publication labeled it a group of songwriters and music publishers sued the radio station owner once again over the failure of his three stations—two in California and one in Nevada—to pay songwriter royalties. The court, finding that the stations had not paid royalties since 2010, enjoined him from further infringements of ASCAP works in 2018, and eventually entered judgment in the amount of $1.3 million. (That judgment was affirmed by the Ninth Circuit, in an unpublished opinion, in 2021.) The court then ordered the three radio stations into receivership until the judgment to the songwriters was paid. But when the station owner tendered that money, the court nonetheless refused to lift the receivership, citing the owner’s continued debt to a number of third parties, as well as to the receiver himself.
The station owner appealed, leading to this opinion.
Receivership. The court of appeals affirmed the judgment below.
The court of appeals first found that, as a matter of law, the court below had the discretionary power to extend the receivership beyond its original purpose. To be sure, the court noted, the receivership was originally put in place to ensure that the songwriters and music publishers were paid the amount owing under the judgment. And the California statute at issue expressly authorized a receiver, the court observed, only “to obtain the fair and orderly satisfaction of the judgment.” But that law would have to be interpreted, the court found, in light of a longstanding tradition—recognized by leading treatises and other federal circuits alike—that a receiver’s power extends to protecting “the interests of the creditors of the defendant and other third persons.” Moreover, the court reasoned, district courts were also empowered “to ensure that "a receivership is terminated in an orderly fashion”—which, among other things, meant that the receiver himself must be assured of payment.
The court of appeals also easily found that the trial court did not abuse its discretion in this case. Given the history of nonpayment in the case, the court of appeals found, “the court understandably declined to trust Defendant Ed Stolz’s representations that he will satisfy amounts due in the future.” Thus, the judgment would be affirmed.
The case is No. 21-55264.
Attorneys: Sharon Douglass Mayo (Arnold & Porter Kaye Scholer LLP) for ?WB Music Corp. G. Scott Sobel (Law Office of G. Scott Sobel) for Royce International Broadcasting Corp.
Companies: ?WB Music Corp.; Royce International Broadcasting Corp.
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