Reply Brief for Appellants — Gibbs v. Buck

paityeet bategs Lyte I rate

Pas -S.ccome Gaur U. $

rr . e—T>

at

f sayy @ 1939

“SUPREME COURT OF THE [SPPED “SPATPSe

OCTOBER TERM, 1938

.

ss No. 276

GEORGE COUPER GIBBS, InprvipvaLLy anp as ArrTor-

NEY GENERAL OF THE STATE OF FLonipA ET AL,

< Appellants,

2 Us, ‘ can

—GENE-BUCK, -Lyprvipvatiy anb as PRESIDENT OF THE

American ‘Society of Composers, AUTHORS AND PUBLISH-

ERS, ET AL. - ;

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR

THE NORTHERN DISTRICT OF FLORIDA.

_ REPLY BRIEF OF APPELLANTS.

GEORGE COUPER GIBBS,

Attorney General of Florida;

¥ Tyrus A. Norwoop,

Assistant Attorney General of Florida;

‘ ‘Lucien _H. Boges,

, Anprew W. Bennett,

Counsel for Appellants.

SUPREME COURT OF ri UNITED STATES,

. OCTOBER TERM, 1938

, i ae

.

| | PA a * pa ‘ ae A

sf

4

Vey

‘GEORGE COUPER GIBBS, LxpivIDUALLY AND as. ATTOR-

. EY GeneRAL OF THE Stare or FLORIDA ET AL. . |

Pa: . Bs Appellants,

vs.

A : a , :

‘GENE BUCK, InpivipvaLLy anp 4s PRESIDENT OF THE

AMERICAN Society or Composers, AUTHORS AND PvBLIsH-

ERS, ET AL..

>

-

REPLY BRIEF FOR APPELLANTS.

2 eee |

oo

Appaliles Have Failed to Show That the Matter in Contro-

_Versy is in Excess of $3,000.00.

The appellees criticize and attempt to distinguish the

eases of McNutt'v. General Motors Acceptance Corporation,

298 U. S. 178; KVOS, Inc. v. Associated Press, 299 U. S.

269; and Pope v. Blanton, 299 U. S. 521, butqihe same vice

that infected the bills of complaiit in those cases is present _

in the bill now before the Court. Nowhere has it been shown

what it costs the appellees individually or collectively te do

2

&

business in the State of Flor irda, either with or without

the regulations of the statute.

. . Appellges insist that because the court below found the

matter in controversy exceeded three thousand dollars

($3,000.00), éxclusive of interest and costs, this was suff.

cient to show Federal jurisdiction: Yet they failed, and

, the findings of fact (R: 276) failed to point out any facts

. “in the record supporting this conclusion. Although the bill .

alleges that in 1936 the Society collected the sum of $59,

_— 306.81 from licensees for their music in the State of Florida

-(R. 25), nowhere is it alleged how much it cost the Society

to do business in the State in 1936 or any other year. It

-might have cost the appellees two hundred thousand dol-

lurs a year to do business in Florida. “Without this essen.

’ tial allegation the jurisdictional amount is not made to ap-.

pear. The statute prohibits no one from doing business

within the State; it merely regulates the. mode 6f- doing

business. McNutt v. General Motors, supra. |

_ Appellees urge (p. 24) that the cause of action is joint -

by reason of a statute of the State of N ew York. The legis-

lature of a State cannot by its fiat confer upon persons hav-

ing separate rights the power to combine thosp rights. in

order to give a Federal court jurisdiction, any more than

individuals can aggregate their separate claims in order

to establish jurisdiction—a doctrine uriequivocally denied

by this Court in Pope v. Blanton, supra, discussed in appel-

tants’ brief, pp. 22 and 23. However, assuming it to bea

joint action, still no jurisdictional amount has been shown

because nowhere is it alleged what.it cost the members of

the Society jointly to operate in Florida.

In a desperate, but futile, effort to. show jurisdiction, ap-

pellees (brief p, 35) insist that the loss each year. by reason a

of the Florida statute, to the’ three publisher appelees 1s

in excess of $50,000 each; and the loss each year to the -

seven author and composer appellees i is in excess of $5,000

-each,.a total of $185,000.00. And yet, for all of its 45,000

author, composer and publisher members and affiliates (R.

| 24) The Society collected in Florida only $59, 306.81 in 1936.

Xs a matter of fact, appellees’ estimated loss stated in

their brief: i is not based upon receipts from Florida, bit is .

based upon income derived from their activities throughout

the entire world. (R. 32). The record is contpletely’ silent

as to the net income of any of soe OS derived from Flo- -

rida operations.

As a further. illustration of the confusion imto which

appellees’ efforts to establish Federal jurisdiction have

plunged theni, we quote fhe following from page 17 of their

brief: ee a

| ‘*Since appellees do not.do business in the State of

Florida, the Statute would enable the State Courts to

secure jurisdiction over them so as to deprive them of .

their property and subject them to the penalties of the

Statute, without beilig personally present within tbe

State.’’

‘If eine do no business iti Florida, by what stretch

of the imagination can it be asserted that individually or -

collectively, they lose $3,000, or’ any other sum, because of ~

the restrictions of the Florida statute?

a ae

the Society.

Appellees’ brief, instead of denyi ing the price-fixing.activi-

ties of the Society, confesses those activities and seeks to

justify them by a plea of necessity (Appellees’ brief, PP- 3-9,

“inel.).

The unsoundness of this position | is fully demonstrated i in

appellants’ main brief (pp. 47-49 incl.). Defenses that their

Appellees’ Brief Confesses the. Monopolistic Activities of -

‘method is necessary in order to protect copyright owners .

wn 2 be

< “ite | , 4 .

’ against piracy of their property by nsers of copvrighited

music (the remedy is contained in the Copyright Acct itself

by suit for infringement—see United States v. Pattersoa, -

et al., 205 EFed. 292, 295-300; Patterson et al. v. United

States, 222 Fed. 399, 645-647) ; that. the method ‘results in

lower license fees (see United States v. Trenton Potteries ~

Company, et al., 273 U. 8. 392, 397-398) ; that the method is

‘desired by the users of copyrighted music themselves ani.

the contract terms written by them (see Paramo unt Famous

Lasky Corp. et al. v. United States, 282 U. S. 30, 42-44).

that the method of licensing does not suppress all. competi-

+ tion between copyrighted musical compositions or the

owners theréof (see Paramount Famous Lasky, supra, p.

44), and all similar defenses are of no avail. ‘‘The interest -

of the public in the preservation of competition is the pr:

mary consideration.’’ (Paramount Famous Lasky, supra.

p. 44). , |

Much is made by appellees ef the alleged selfish and dis

honest motives of the users*of” copyrightad musi¢ in pro

mating the enactment of the statute (Apptllees’ brief, pp.

5-9, inel.). In their desperate effort to evoke a sympathetic

attitude from the Court, they refer (p. 9) to pages 116-11)

of the Record as demonstrating these improper motives on

the part of the entertainment’ industries. Actually these -

~ pages of the Record refer exclusively to alleged activities

of the aniusement industries in Nebraska.and have no rele-

vance to the Florida legislation. If the whole situation is

dispassionately considered, it is apparent that the “‘objec-

tion of the entertainment industries is not to the payment .

for the-privilege of public performance for profit, but dei

nitely is directed at being deprived, through the concerted

‘action of appellees, of their inalienable right —purchast

their necessary supplies of music ina competitive market,

_ free from price-fixing restraints of a monopoly dominated:

bya self-perpetuating. board of directors.

Sa f3y

' The justice of. this complaint of. the entertainment in-:

‘dustries is well illustrated by the discrimination practiced

by the Society in giving licenses to newspaper-controlled

broadcasting stations upon terms far mere favorable than

those accorded to stations not thus controlled. This fact

~ js admitted by appellees’ brief (p. 50), where attempt is

~ made to gloss over the discrimination by the bald statement

- that— vs See one

These two types of ‘iantirante are the standard forms

of contracts. They are esitirely- different. It cannot be

- said that either one discriminates against the other.”’

_ These discriminations are glaringly apparent upon the face

of the respective agreements (R. 70, and 243; see also affi-

davits, Tison-R: 212, and Mitchell, R. 242).

Appellees endeavor to obtain sympathy by reference to

an investigation of their-activities by the Department of

Justice in 1926, but neglect to state.all thé facts (Appellees’

brief.pp. 5-6). The dismissal by the Department of Justice

in August 1926, of the complaint against the appellee So-

ciety subsequently culminated on August 30, 1934, in the in-

" stitution of an action against appellees charging violations

‘of the United States Anti-trust laws. (R. 222, et seq.).

‘ This action is pending in the United States DistrigtCourt | -

| for the Southern District of New York, > eee Xo. 78-388.

Tl:

ypeteas in Have Feiled to Recpguiee the Fact That the State

Prosecuting Officers are Not Chargeg With e Enforce-_

. Ment of Sections 8.A; 2-B and 6 ef the Florida Statute;

Consequ tly the Validity of These Sections Caunot be

Appellants’ main brief (pp. 56. 62, incl.) demonstrates

that Sections 2-A, 2-B and 6 of the statute are wholly dis:

connected from Section 1 and its dependent sections; that.

I /

7

F | |

; ay ee, a

no dulies are laid upon the State enforcement officers with

respect to. thse three- sections ; that the. validity of thes

sections can be tested only in civil suits between the “ai

of public performance rights and those who are claimed i

be infringing upon those rights. - Consequently, ‘the em

sideration of those sections is moot so far as the instant cas

is concerned. |

_ This all panes distinction i is entir “ disrogardedly

appellees in their bill of complaint, and in their brief. Whe

the statute is thus separated. into its component parts, iti

readily seen that the only portions of the law) with which

this case is concerned are those denouncing 4s unlawful the

priee-fixing activities of the Society practiced in the State:

of Florida. Thus, it is’ clear that, so far as concerns tk

instant. ease, the Legislature of Florida was ‘Acting within

its police powers in forbidding such activities. Allens,

Riley, 203 U.S. 347; Patterson v. Kentucky, a8. S, 501.

Respectfully submitted.

.. Georce Courer Gisss,

Attorney General of Florida;

Tyrus A. Norwoop,

Assistant Attorney General of Florida; .

Lucien H. Boaes; |

Jacksonville, Florida;

Anprew W. BENNETT,

. Washington, D: C.,

Counsel for Appellants.

(9401)