Petitioners Brief — Shenandoah Valley Broadcasting, Inc. v. American Society of Composers, Authors & Publishers

ap Office-Supreme Court, U.S

ir ARY FILED

<UPRE*’< COURT. U. &

DEC 30 1963

nes. CLERK

+ . =>

IN THE °

“ ‘ °

Supreme Court of the Hnited Ptates a) Wea

No. 323 .

we .

SHENANDOAH VALLEY BROADCASTING, INC, _ ; 4

et al., ; }-

Petitioners,

against

AMERICAN SOCIETY OF COMPOSERS, AUTHORS

AND PUBLISHERS,

Respondent.

PETITION FOR REHEARING

Raustone R. Irvine

Watrer R. Mansrietp

2 Wall Street

New York, New York | , f

Attorneys for Petitioners

Shenandoah Valley

Broadcasting, Inc., et al.

tS

P PAGE

Petitioners’ Brier Oprostna Responpent’s Petition

FOR REHEAKING 1

CoNCLUSION 9

Appenprx A, MeMoRANDUM OF PLAINTIFF la

Z CITATIONS

é .

Cases: >

,

_ American Export -Lines v. Revel, 262 F. 2d 122 (4th

Cir.) 3,7

Blossom v. Milwaukee & C. Railroad Co., 1 Wall. 655 = 2

Commercial Electrical Supply Co. v. Curtis, 288 Fed.

657 (Sth Cir.), at pp. 659-60, cert. denied, 263 U.S.

709

to

~

Dickey v. Turner, 4@F. 24 998 (6th Cir.), at p. 1001...

Division of Labor Law Enforcement v. Stanley Res-

taurants, Inc., 228 F, 2d 420, at p. 423 (9th Cir.) .. 3,7

_ Drummond vy. United States, 324 U.S. 316 at p. 318... 7

East. v. Crowdus, 302 F. 2d 645, 646-647 (8th

Cir.) «.. . 2, 3, 5, 6, 8

Fishgold vy. Sullivan Drydock & Repair Corp., 328

U.S, 275 at pp. 281-82 4 7

4

Goldlawr, Inc. v. Heiman, 273 F. 2d 729 at p. 731 (2d

Cir. 1959) ‘ 9

Gully v. Interstate Natural Gas Co., 292 U.S. 16 at

p. 19 | s

x

v P

a INDEX f

: PAGE

Hume v. City of New York, 255 Fed. 488 oa fir,

491, cert. denied, 249 U. S. 603 2

Julian v. Central Trust Co.. 193 U. S. 93, ups ——

Langnes v. Green, 282 U.S. 531 1

Minnesota Co. v. St. Paul Co., 2 Wall. 609, 632-33... 2

Oklahoma Gas & Electric Co. Vv. Oklahoma Packing

Co., ee ae Same 8

Phillips v. United States, 312 U. 8-246 at p. 254.8

United States v. American Railway Eupress Co., 265

U. S. 425, 435, —. f , 1

United States v. American Society of Composers,

Authors and Publishers, 3, 4fn

United States for the use of Browne & Bryan Lumber

Co. v. Massachusetts Bonding and Insurance Co.,

29 F. R. D. 162 (E. D. X. Y.) 7

United States v. New York, New Haven and Hart-

ford Railway Co., 276 F. 2d 525, 544-45 (2d Cir.

1960), cert. denied, po S. 961 .. 9

Virginia Land Co. x. Miami Shipbuilding Corp., 201

F. 2d 506 (5th Cir.) 7,8

Walling v. Reut¢ér Co., 321 U.S. 671 at pp. 676-678 8

Statutes : ys

Federal Rules of Civil Procedure, Rule 73(a) wae, ©

Mae S0e | His Sethe 2,5,7

e

4

\

\

‘

IN The

‘Supreme Court of the United States

OCTOBER TERM, 1963

No. 323

SHENANDOAH VALLEY Broapcastino, Inc., et al.,

. . * Petitioners,

agamst F

American Soctety or Composers, AUTHORS AND PUBLISHERS,

Respondent.

a.

7?

PETITIONERS’ BRIEF OPPOSING RESPONDENT'S

_ PETITION FOR REHEARING

Respondent's petition for rehearing should be denied

because it is based on the same contention that respondent

previously advanced in opposing petitioners’ application

for a writ of certiorari. At that time respondent contended,

as an alternative ground for sustaining the Court of

Appeals’ dismissal of petitioners’ appeal to that court,

that ‘petitioners’ notice of appeal was untimely (Respond-

ent’s Brief in Opposition to Petition for Certiorari, p. 8):

‘In reversing the Court of Appeals and directing it to hear

petitioners’ appeal on the merits, this Court of necessity

passed on and rejected this contention (Langnes v. Green,

282 U. S. 531; United States v. American Railway Express

Co., 265 U. S. 425, 435). Respondent’s petition for rehear-

ing is not based’on intervening circumstances of substantial

er controlling effect, or on a point not previonsly presented

e°

2

to this Court, the only grounds for rehearing available

under Rule 58(2) of this Court, but is simply an effort to

-reargue the merits of this Court’s decision.

This, Court’s previous rejection of ‘respondent’s eon-

tention was plainly correct. This Court has described the

proceedings below as ‘‘ancillary’’ to the United States’

action against respondent. Being ancillary, the proceed-

ings on petitioners’ application were a continuation of the

original suit brought by the United States; petitioners

became parties to the original suit for the purpose of

asserting their rights under the decree in that suit, and

jurisdiction, even of the District Court, depended (in this

case necessarily so, since the particular rights asserted by

petitioners were created by the Consent Deeree) upon its

jurisdiction in the original suit. Rlossom v. Milwaukee &

C. Railroad Co., 1 Wall. 655; Minnesota Co. v. St. Paul Co.,

2 Wall. 609 (and see especially pp. 632°33); Julian v.

Central Trust Co., 193 U. S. 93 at pp. 111-13; East v.

Crowdus, 302 F. 2d 645, at pp. 646-647 (8th Cir.): Hume v.

City of New York, 2%) Fed. 488 (2d Cir.), at p. 491, cert.

denied, 249 U. 8. 603; Dickey v. Turner, 49 F. 2d 998 (6th

Cir.), at p. 1001; Commercial Electrical Supply Co. v.

Curtis, 288 Fed. 657 (8th Cir.), at pp. 659-60, cert. denied,

263 U. S. 709.

28 U. S. C. §2107 and Rule 73(a) of the Federal Rules

of Civil Procedure provide that in any action, suit or pro-

ceeding in which the United States, or an officer or agency

thereof, is a party, all the parties have 60 days from the

entry of judgment to file a notice of appeal. Under the

statute ang Rule 73(a), the only requirement for the 60-day

period to become applicable in ancillary proceedings is

that the United States continue to be a party to the original

proceedings before the district court. Hast v. Crowdus,

302 I’. 2d 645, at pp. 646-647 (Sth Cir.); ef. American

Export Lines v. Revel, 262 F. 2d 122 (4th Cir.); ef. also

Division of Labor Law Enforcement vy. Stanley Restau-

rants, Inc., 228 F. 2d 420, at p. 423 (9th Cir.). This precise

question was decided by the Court of Appeals for the

Eighth Cirenit in East v. Crowdus, 302 F. 2d 645, where

the Court concluded that the petitioner, in a proceeding

aucillary to an action brought by the SEC, had 60 days to

appeal from the district court’s dismissal of his petition

(302 F. 2d at pp. 646-647). As long as the United States

continues as a party to the original proceeding it continues

to have an interest and right to be heard in the ancillary

proceeding, and a right to appeal to the Court of Appeals

from a final order entered therein.

The requirement that the United States continue as a

party to the original proceedings is met here. Petitioners

did not preceed against respondent by way of a separate

lawsuit, but upon motion made by petitioners ‘‘at the foot

of the ASCAP final judgment’’ (R. 46a)' in United States

v. American Society of Composers, Authors and Publishers,

Civil Action No. 13-95. The Court of Appeals found that

the proceedings on petitioners’ application were ‘‘all con-

ducted under the title of the original anti-trust suit’? (Ap-

pendix to Petition for Writ of Certiorari, p. B3). The

Court of Appeals further pointed out that ‘‘the judgment

here sought to be appealed from was entered in ‘a civil

' Page references prefixed by the symbol “R.” refer to petitioners’

appendix filed in the Court of Appeals for the second Circuit, which

is Volume 1 of the record hérein.

é +

action brought in [a] District Court of the United States’

under the Sherman Act ‘wherein the United States is com-

plainant’’’ (id., p. BS).

The United States actively participated in the proceed-

ings before the district court on petitioners’ application.

Government counsel appeared before the district court in

the proceedings on petitioners’ application and advised the

court that ‘‘ we are here as the plaintiff in the original suit”’

(R. 147a).* Both orai argument and written briefs** were

submitted on behalf of the United States on the issue of the

district court’s power to grant the type of license requested

by petitioners (K. 153a). In its opinion the district court

pointed out that the United States supported petitioners’

application and then rejected the United States’ view in

favor of the respondents’ (Appendix to Petition for Writ

of Certiorari, p. ©2). The United States also actively par-

ticipated in petitioners’ appeal to the Court of Appeals,

where the United States supported respondent’s position

that the only appeal from the judgment of the district court

was directly to this Court under the Expediting Act, and

submitted both oral argument and a lengthy brief to pe

court. In this case, the issue before the District Court—

namely, whether the Consent Decree was intended to pro-

tect those dealing with ASCAP against future abuses of

Seco mel Wee

’ * To assure that the Government receives adequate notice of all

such proceedings, the decree in United States v. American Society

of Composers, Authors and Publishers specifically provides that

ASCAP shall, upon the filing of an application, “promptly give

notice thereof to the Attorney General” (35a).

** A copy of one of two briefs submitted by the Government,

entitled “Memorandum of Plaintiff,” is annexed to this brief as

Appendix A. ”

or

monopolistic power in respect of all license terms, or solely

in respect of price—was of dee» interest to the United

States. Thus the present case is even stronger than East v.

Crowdus, 302 F. 2d 645, for in that case the SEC took no

active part in the ancillary proceedings, while here the

United States did take an active part in the proceedings

on petitioners’ application.

The fact that an order entered in an ancillary proceed-

ing is not directly appealable under the Expediting Act

does not affect the applicability of 28 U. S. C. §2107, and

of Rule 73(a), to the present case, since the language and

objectives of these statutes differ. An ancillary order is

not appealable under the Expediting Act because the order,

unlike one in the original proceeding, does not necessarily

affect the final judgment. The United States, however, con-

tinues as a party within the meaning of 28 U. S. C. §2107

and Rule 73(a) because it has an interest and right to be

heard in an ancillary proceeding which affects the construc-

tion of the judgment, and since an order construing the

judgment would be res adjudicata as to all the parties to

the judgment, including the United States, the United

States must have a right to appeal therefrom to the tae

of Appeals.

Literally, the Expediting Act provides for a direct ap-

peal to this Court only from the final judemeyy in a suit

under the antitrust laws in which the United States is

the complainant. This carries with it, of course, direct ap-

pellate jurisdiction of appeals from other final orders in the

cause which necessarily and directly affect the final judg-

ment. By its earlier decision in this case, this Court has

determined that since a final order in an ancillary proceed-

ing granting or denying to a beneficiary relief specifically

created by the decree will not necessarily affect the final

judgment but on the contrary will in many cases merely

serve to resolve an essentially private controversy by ap-

plying the provisions of the decree to a particular factual

situation, appeals in such cases should take the normal

appellate route via the Courts of Appeal.

It by no means follows, however, that the United States,

whose decree is in fact involved, was not properly a party

to the proceeding below (in which, as we pointed out earlier,

it took an active role), and there is nothing in the opinion

of the Court in this case to suggest that the Court meant

to rule otherwise.

The contention that respondent makes here rests on the

unstated assumptions, as the Eighth Circuit Court of Ap-

peals pointed out in East v. Crowdus, 302 F. 2d 645, at pp.

646-7, that (i) although the Government actively partici-

pated in the proceedings before the District Court, involv-

ing the proper interpretation of its antitrust consent

decree, it actually had no right to be heard therein, and

(ii) that even after having so participated, the Govern-

ment could not have taken an appeal from the decision of

the district court expressly rejecting the Government’s

proposed construction. Since the Government here actively

participated in the proceedings before the district court,

there can be no serious question but that under well-estab-

lished principles of law the construction of the decree

adopted by the district court became res adjudicata as to

it and, therefore, all other considerations aside, the Gov-

ernment could in this case have taken an appeal if it so

desired, albeit to the Court of Appeals rather than to this

Court.” Fishgold v. Suilivan Drydock & Repair Uorp., 328

U. S. 275 at pp. 281-£2; see, also, Drummond v. United

States, 324 U. S. 316 at p. 318. Accordingly, 28 U. S. C.

§2107 and Rule 73(a) give to the United States, and there-

fore by their express terms and as a matter of common

taifness to all other parties, the longer period of sixty days

in which to determine whether or not an appeal should be

taken.

The facts in Virginia Land Co. v. Miami Shipbuilding

Corp., 201 F. 2d 506 (5th Cir.), relied on by respondent, are

entirely different. In that case the Government’s money

claim had been settled and the Government had no further

interest in any aspect of the suit whatever. Moreover, the

quotation from the court’s opinion relied on by respondent

at page 3 of its brief is dictum, since the court went on to

rule that the appeal should be dismissed for lack of finality

in the order appealed from (201 F. 2d at p. 508). The

suggestion of the court that the applicability of the 60-day

provision turns on the issues presented on the appeal has

eer rejected by all courts that have subsequently consid-

\ered the point. Division of Labor Law Enforcement v.

Stanley Restaurants, Inc., 228 F. 2d 420, at p. 423 (9th

Cir.); American Export Lines v. Revel, 262 F. 2d 122, at

p. 126 (4th Cir.); United States for the use of Browne &

Bryan Lumber Co. v. Massachusetts Bonding and Insur-,

ance Co., 29 F. R. D. 162 (E. D. N. Y.).

In any event, no reason appears for remanding this

ease to the Court of Appeals for further consideration of

this jurisdictional question. If the case of Virginia Land

* See also Petitioners’ Reply To Respondent's Brief Opposing

Certiorari, p. 2.

.\

Co. v. Miami Shipbuilding Corp., 201 F. 2d 506 (Sth Cir.),

relied on by respondent, stands for the proposition for

which respondent cites it (with which we do not agree),

then that case is in conflict with the decisions of the courts

in other circuits, notably the decision of the Eighth Circuit

in East v. Crowdus, 302 F. 2d 645, and such a conflict can

only be resolved by this Court. Respondent claims to find

support for its position in certain language of this Court's

per curiam opinion. Remanding the case to the Court of

Appeals for an interpretation of this Court's opinion

_would be a meaningless gesture. If this Court is not in-

clined to dispose of respondent’s contention without fur-

ther briefs and arguments, we respectfully submit that the

Court set the case down for argument.

In the event that this Conrt should decide that peti-

tioners’ notice of appeal was not timely, we respectfully

suggest that the circumstances here warrant adoption of

the procedure frequently followed by this Court in the

exercise of its general appellate supervisory power, and

on occasion by the Courts of Appeal, where a party has

mistakenly taken an appeal to a court lacking jurisdiction

and where (as here) the question of appellate jurisdiction

was not definitely settled at the time of the appeal, by

directing the entry of a fresh decree in the district court

from which a timely appeal pursuant to the appropriate

appellate procedure may be taken. Walling v. Reuter Co.,

321 U. S. 671 at/pp. 676-678; Gully v. Interstate Natural

Gas Co., 292 U. S. 16 at p. 19; Oklahoma Gas & Electric Co.

v. Oklahoma Packing Co., 292 U. S. 386 at p. 392; Phillips

v. United States, 312 U. S. 246 at p. 254. This result could

be accomplished by this Court, in its mandate, directing the

Court of Appeals to remand the cause to the district court

for proceedings accordingly, or by directing the district

court to enter such a new decree. United States v. New

York, New Haven and Hartford Railway Co., 276 F. 2d

525, 544-45 (2d Cir. 1960), cert. denied, 362 U.S. 961; see

also Goldlawr, Inc. v. Heiman, 273 F.2d 729 at p. 731 (2d

Cir. 1959).

CONCLUSION

The Court of Appeals has already implicitly rejected

respondent’s contention that petitioners’ notice of appeal

was untimely by its determination that the United States

was a party to the proceedings below. This finding was

implicitly confirmed by this Court, which recognized that

the present proceedings were ancillary to the United

States’ action against the respondent. There is no basis,

therefore, for respondent’s contention that this case should

be remanded to the Court of Appeals for further considera.

tion of this question. The only remaining unresolved issne-

are as to the merits of the case.

For the reasons stated, respondent's petition for

rehearing should be denied. >

Respectfully submitted,

Rautstone R. Irvine

Watrer R. Mansrievp

2 Wall Street

New York, New York

Attorneys for Petitioners

Shenandoah Valley

Broadcasting, Inc., et al.

“4

? ~

APPENDIX A

UNITED STATES DISTRICT COURT

Sy Sovtuern District or New York

Civil Action No. 13-95

a.

_—

Unrrep States or AMERiIca,

2 Plaintiff,

against

American Society or Composers, AUTHORS AND PUBLISHERS,

: et al., hace

Defendants.

~ +

i> ee

In the Matter of the Application of

SHeENaNDOAH VaLLey Broapcastine,.Inxc., et al.,

> Petitioners,

For the Determination of Reasonable License Fees.

-

v

Memorandum of Plaintiff

Petitioners have applied under Section IX of the judg-

ment herein of March 14, 1950 for determination of the

reasonableness of fees for those licenses which they have

requested to play any composition in the ASCAP repertory

on all programs originated by each of the petitioner's local

[1a]

2a

Memorandum of Plaintiff

television stations, and all lecally performed filmed or

taped programs produced by others prior to February 28,

1962. ASCAP has not quoted a fee for the particular type

of license requested. These comments are submitted by the

plaintiff as the representative of the public interest in this

proceeding.

At this stage of this proceeding, it appears that the issue

posed by the application involves not only the reasonable-

ness of the fees for the licenses involved, but also the obli-

gation of the defendant,’ASCAP, to issue the type of

' licenses requested. We believe that we do not have any

particular, special competence to advise the Court concern-

ing the reasonableness of the particular license rate pro-

posed by the petitioners. We are, however, concerned with

a possible construction of this judgment which limits the

right of users of compositions of music, who as a practical

matter, must have access to the ASCAP repertory, to a

form of a license dictated by ASCAP. It is as to this latter

point that we would like to make these initial comments.

Petitioners seek non-exclusive, five year licenses cover- ~

ing all the compositions in the ASCAP repertory granting

the right to use such compositions on locally produced pro-

grams or on fiims or tapes produced before February 28,

_ 1962. The request does not include licenses for the right to

perform ASCAP compositions on network originated pro-

grams and on filmed or taped programs which were pro-

duced by others after the specified date (or some other

appropriate date). It appears obvious to the plaintiff that

the petitioners seek to create an economic vacuum which

will force the film and tape producers concerned to obtain

3a

Memorandum of Plaintiff

licenses from either ASCAP members (at the same time

they acquire synchronization rights) or from ASCAP itself

covering performance rights for music contained in the

tapes and films.

; Plaintiff understands that ASCAP contends that the

petitioners do not have a right to such a license under the

judgment; that the judgment. enumerates the types, of

licenses which ASCAP must grant, such as per program

license or licenses to program producers under Section V

(B); and that this is definitive of the licenses which must

be issued. Further, ASCAP seems to claim that the licenses

_in effect protect the right of a broadcaster to obtain clear-

ance at the source and benefit thereby. He may take a per

program license. He need not pay a fee for programs the

- ASCAP music in which is licensed by/an ASCAP member

or which is licensed at the source by/ASCAP under Section

V of the judgment.

Plaintiff believes that the antitrust objectives of the

1950 judgment entered in this cas@ require a construction

which permits a brozJicaster, who of\necessity must have

access to the thousands of compositions’ which ASCAP is

authorized to license, a realistic, reasonable license to per-

form ‘all the compositions in the ASCAP repertory. Stated

another way, we believe that ASCAP should not be per-

mitted, by limiting the types of licenses which it offers, to

frustrate and render null the mandate of Section VI of the

judgment that ASCAP ‘‘erant to any user makirg written

application therefor a non-exclusive license to perform all

of the compositions in the ASCAP repertory,’’ so long as

the applicant is requesting a reasonable type of license.

'

Memorandum of Plaintiff

We know that Section IX of the 1950 judgment speaks

in terms of the Court determining the reasonableness, of

the ‘‘fee’’ for a license, but it also specifies that it is the

‘*fee’’ which ASCAP deems reasonable ‘‘for the license

requested.”’ It is the strong belief of the, plaintiff that

reference in Section LX to determination of the ‘‘fee’’ does

not foreclose this Court from reviewing the terms and con-

ditions of the license requested and, looking at the objec-

tives of the judgment as a whole, determining whether

ASCAP by refusing to advise the petitioners of the fee

which it considers reasonable for the licenses requested is,

in effect, ie to comply with the rdqu'rements_ of

Sections VI and IX. ' |

It ig fundamental to the antitrust considerations in this

ease and these proceedings that while ASCAP is legally

the non-exclusive licensing agency for the performance

rights of compositions of thousands of publishers \and

writers, it is a fact that petitioners must have licenses from

ASCAP to use all of the compositions in the ASCAP

repertory since it is not practical for them to obtain such

licenses from individual owners of the copyrights involved.

Thus,.to say that the order of the 1950 judgment ‘n Section

VI leaves ASCAP free to dictate to an applicant a form of

license covering the performance of ASCAP compositions

on programs, at places or at times not desired by the ap-

plicant, permits ASCAP to exercise’ a power that comes

not from _# single copyright owner but from the amassing

of so many copyrights.

We believe that the effect of the combined terms and

objectives of Sections VI and IX of this Court’s 1950 judg-

5a

Memorandum of Plaintiff .

ment both permits and requires that ASCAP be ordered to

‘advise the petitioners of the fee which it considers reason-

able for the licenses requested, that the petitioners be

entitled to a reasonable heense which gives them the right

to perform all of the compositions in the ASCAP repertory,

all upon terms and conditions which this Court deems rea-

sonable antl in furtherance of the antitrust objectives of

this case. :

Respectfully submitted,

Pa

Joun L. Witson

ro." _ Attorney, Department’ of Justice

January 17, 1962 |

W. D. Kilgore, Jr.

Attorney, Dept. of Justice

a

@ *

ny,