Appendix — Watson v. Buck

Supreme Court brief1941

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Supreme tun uf the Anite: ten: sRorte

OCTOBER TERM, 1940

5 .

GEORGE Cou RR GBS, individually and as Attorney General

of the State of Florida, et al.,

vs.

Appellants,

GENE Buck, individually and as President of the American |

Society of Composers, Authors and Publishers, et al.,

No. 611

- Genz Buck, individually and as President of the ‘American

Society of Composers, Authors and Publishers, et al.,

vs.

GEORGE Couper Gms, individually aa as Attorney 8

of the State of Florida, et al.,

ON ArrEALS From THE District Court or THR Unrrep SrarEs

: FOR THE NORTHERN District or FLORIDA.

Appellants, ;

APPENDIX - a

TO BRIEF OF APPELLEES IN NO. 610, °

AND APPELLANTS IN NO. 611. |

THOMAS G.-Hatcur, |

Frank J. Wwemay,

- Lom D. Fnonrrxcn,

HERMAN FINKELSTEIN,

' Manuey P. Caupwe t,

Counsel for Appellees in No. 610,

' Appellants in No. 611.

IR ST TE EE SE TE k.. —.. LE SEE NEN

APPELLATE LAW PRINTERS, INC., 103 Lafayette Street, N. T.

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AEN. a

ö Table of Contents

Decisions in: ‘e's

y PAGE J

Buck v. Gallagher, 307 U. 4 wee OE

Bibbs v. Buck; 907 U. S, s . 9

Buck v. Gibbs, 34 F. Supp. 510 N. D. Fla. 1940, on

: Bio in Cases Nos. 610 and 611, October Term,

1 lie 36

Buck v. Swanson, 33 F. cia 377 (b. C. Neb. 1939,

ö on appeal in Case No. 312, Oetober Term, 1940) 51

Buck v. Harton, 33 F. Supp. 1014 X. D. Tenn. 1940) 60

Statutes involved in above decisions: (Statutes involve

b e

in bold type):

: Washington Statute (Bick v. Galiagher, supra). . 76

‘ Florida Statute of 1937 (Gibbs v. Buck, supra, Buck

13 v. Gibbs, supra, on appeal in Gibbs v. Buck, a

1 Case No. 610, October Term, 19400) 91

ae „ Florids Statute of 1939 (Buck v. Gibbs, supra and on

sa in Buck v. Gibbs, Case No. 611, October _

erm, EER Fer ere gay ee AL pas Fe can, 104

Nebra Statute (Buck v. Swanson; supra, on apt

in Swanson v. Buck, Case No. 312, October

MPN sia eS ĩͤ lec ae os hae 156

Tennessee Statute (Buck v. Harion, 3 PPS 132

. Other recent decisions n statutes regulating

9 the 3 ee ee

| 8 v. Gallagher, (W "Wash, eareposted, Dec. 5

a eae ee en PENS AI 147

State v v. Lucas, 199 So. 126 (Sup. Ct., La. 1940) ess 154 N

Stele of. Washington v. American Sosiet of Com-

= Authors and Publishers ( uper. Ct.

ot 1936, — oe eee poe

Opinion in 3 .

Buck v. Gallagher, 307 U. 8. 95 (1939).

(Washington Statute printed at p. 76, infra.)

Appeal from a decree of the District Court of three

judges which dismissed, for want of jurisdiction, a bill

do enjoin the enforcement of a statute of the State of

Washington affecting the right of the owners of copyrights

to combine in licensing performances of their musical

compositions,

| Mr. Thomas G. ‘Haight, ‘with whom Messrs. Louis D.

Frohlich and Herman Finkelstein were on the brief, for

appellants. _

Mr. Alfred J. Schweppe, with whom Messrs. 0. W.

Hamilton, Attorney General of Washington, John E.

Belcher, Assistant Attorney General, Edwin C. Ewing,

Ralph E. . and Sam M. Driver were on Oe brief, for

appellees

Mr. Justice Rxnp delivered the opinion of the Court.

This is an appeal, under 5266 of the Judicial Code, from

a decree dismissing appellants’ bill to enjoin the enforce-

ment by the appellees of a statute of the State of Washing-

ton. The purpose of the statute is to render illegal certain

activities carried on by pools of copyright owners in au-

thorizing by ‘blanket licenses the peel. of = 85

musical compositions.

The statute declares it unlawful for two or more 1 o persons .

holding separate copyrighted works to pool their interests

in order to fix prices for their use, to collect fees or to issue

blanket licenses for their sommercial production. Joint

undertakings for this purpose are permitted if the licenses —

are issued at rates assessed on a per piece system of usage. :

—

Back v. Case, 24 F. Supp. $41. Washington Laws 1907, e. 218, p. 1070.

„5

All combinations of owners of separate copyrighted vet

musical works are required to file a complete list of these

works once each year with the secretary of state of the

State of Washington, together with detailed information

as to prices and ownership. There are numerous other

provisions unnecessary to detail. 3

The appellants are- the American Society of Composers,

Authors and Publishers; Gene Buck, suing in his own name

and as the president of the Society; and a number of other

members, corporate publishers and authors, composers

or their next of kin. This suit was. brought by complain-

ants on behalf of themselves and others similarly situated,

members of the Society too numerous to make it practica-

ble to joir them as plaintiffs in a matter of common and

general interest. The bill alleges the organization of the

Society as a voluntary, unincorporated, non-profit associa;

tion under the laws of New York, and sets out that its

purpose is to protect the owners of copyrighted musical

works against piracies, to grant licenses and. to collect

royalties for the public performance for profit of the com-

positions of its members. These are composers, authors

and publishers of musical compositions or their successors.

The royalties and license fees collected by the Society are

distributed from time to time, as ordered by the Board of

Directors, among the members of the Society, after the

payment of expenses of operation and sums due to foreign

affiliated societies and after the deduction of a limited

reserve fund.

In addition to the general allegation that the value of

the matter in dispute is in excess of $3,000, the bill ‘alleges

that the value of each publisher’s copyrights exceeds

$1,000,000. The bill further shows that each individual

‘complainant has rights to royalties and renewals worth in

excess of $100,000. It is shown by the bill that in the State

of Washington there were five hundred twenty gight con-

tracts outstanding in 1936, all entered into in the name of

the Society, from which it received more than $60,000 and

tat similar sums annually will be collected. Other allega-

tions are discussed later. a

_ On the filing of the bill, a motion was made for an inter-

locutory injunction and affidavits were filed in support of

the request. At the time the motion for a temporary in-

junction came on for hearing, the defendant state officers

and certain intervenors filed motions to dismiss which

challenged the bill on various grounds. The district court

considered only one ground: whether the value of the

subject matter ‘in dispute is more than $3,000, exclusive 5

of interest and costs. Upon the hearing, the district court

found that neither the bill nor the record shows the neces-

sary jurisdictional value and dismissed the ball, The basis

for this ruling is treated here.

„Although this statute of Washington, as that of Florida,

is aimed at the power exercised by combinations of copy- : |

right owners over the use of musical compositions for

_ profit, the differences between the enactments and the pro-

cedural situations require additional consideration. The

Florida statute does not permit any combination of copy-

right owners for the purpose of licensing the use of their.

compésitions. The prohibition is complete. In the Wash-

2 statute, on the other hand, such a combination,

federation or pool is not prohibited if it issues licenses on

rates assessed on a per piece system of usage. Even

upon these permitted transactions there are limitations of

? Condidered in Gibbs v. Buck, 307 U. S. 66.

—

price and use, unnecessary to consider here.“ The statute

is directed particularly at the practice of issuing blanket

licenses which authorize the performance of all copyrighted

material belonging to the licensor. Whether a state statute

is regulatory or prohibitory, when a bill is filed against its

enforcement under section 266 of the Judicial Code, the

matter in controversy is the right to carry on business

free of the regulation or prohibition of the statute.“ Where

the statute is regulatory the value of the right to carry on

the business, as was said in McNutt v. General Motors

Acceptance Corporation, may be shown by evidence of the

loss that would foliow the enforcement of the statute.. And

this loss may be something other than the difference be-

tween the net profit free of regulation and the net profit

subject to regulation. The difficulties of determining the.

value of rights by calculating past profits as compared

3 Washington Laws, 1937, sec. 3. c. 218, p. 1071, reads as follows: “It shall

be unlawful for two or more persons holding or claiming separate copyrighted

works under the copyright laws of the United States, either within or without

the state, to band together, or to pool their interest for the purpose of fixing

the prices on the use of said copyrighted works, or to pool their separate in-

terests or to conspire, federate, or join together, for the purpose of collecting

fees in this state, or to issue blanket licenses i. this state, for the right to

commercially use or perform publicly their separate copyrighted works: Pro-

vided, however, Such persons may join together if they issue licenses on rates

assessed on a piece system of usage; Provided, further, This act shall not

apply to any individual author or composer or copyright holder or owner

who may demand any price or fee he or she may choose for the right to use

or publicly perform his or her individual copyrighted work or works: Pro-

vided, further, Such per piece system of licensing must not be in excess of any

per piece system in operation in other states where any group ur persons

affected by this act does business, and all groups and persons affected by this

act, are prohibited from discriminating against the citizens of this state by

charging higher and more inequitable rates per piece for music licenses in this

formance for profit, and has received any consideration therefor, either within

or without the state, then said person or persons shall be deemed to have sold

and parted with the right to further restrict the use of said copyrighted work

or works.” g

4 Prohibitory statutes—Gibbs v. Buck, supra;, regulatory statutes Me Nutt

s Acceptance Corp., 298 U. S. 178, 181; Kroger Grocery Co.

299 U. S. 300, 301.

;

5 8

with possible future profits, influenced by the single factor

of statutory regulation, are obvious. This difference is

not the only test of the value of the right in question. The

value of the matter in controversy may be at least as

accurately shown by proving the additional cost of com-

plying with the regulation. This factor was not offered

in evidence in the McNutt case. 7a

In Packard v. Bunton' the existence of the jurisdictional.

amount was partly determined by consideration of the cost

of providing liability insurance required by a regulatory ©

statute. Where a state railroad commission’ required the

construction and service of an industrial spur which did

not increase earning capacity, the cost was held to measure

the jurisdictional amount.“ The expense of producing the

information required by a challenged order in a utility

investigation was considered sufficient to establish the value

of the matter in controversy.’ The cost of complying with

the ehaſſenged statute as a test of the value of the amount

in controversy has been applied in effect in suits to enjoin

the collection of taxes as unconstitutional interferences

with the right to do business. In such cases ‘‘the sum due

or demanded is the matter in controversy and the amount

of the tax, not its capitalized value, is the measure of the

jurisdictional amount.“ 7258 ~

Buy section four of the Washington statute every com-

bination of two or more copyright owners must file, once

A year, with the secretary of state, a complete list of their

5264 U. S. 140. :

Western & A. R. R. v. Comm'n, 261 U. S. 264, 267.

* Petroleum Exploration, Inc. v. Pub. S. Comm n. 304 U. S. 209, 215.

* Healy v. Ratta, 292 U. S. 263, 271, and cases there cited; Grosjean v. Am.

Press Co., 297 U. S. 233; 241; Henneford v. No. Pacific Ry., 303 U. S. 17, 19.

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copyrighted works, under bath.“ By section three, individ-

uals are forbidden from joining together for the purpose

of collecting fees in this state“ unless their licenses are

on a per piece system of rates. In addition to the general

allegation that the value of the matter in controversy

exceeds $3,000, the bill alleges that the cost of compliance

by the Society, the combination of members, with section

four would exceed 58300, 000.» For the individual members

who now have the benefits of the services performed by the

Society, additional allegations set out the cost imposed

upon them by the statutory regulation as being ‘‘in excess

of $10,000’ to each fur carrying on for themselves the

functions now performed for them by the Society. The

motions to dismiss deny the general allegation of value,

deny that there would be any cost to the Society by com-

pliance with section four as the required list is already

compiled and the expensé, since the Society is non-profit,

would be borne by members, and deny that the individual

complainants would be put to a cost of $10,000 each.

There was no allegation of the loss or cost to the Society

or members occasioned by the requirement that the licenses

from pooled copyrights should be issued at per piece rates.

® The list must state that it “is a complete catalogue of the titles of their

claimed compositions, whether musical or dramatic or of any other classifica-

tion, and in addition to stating the name and title of the copyrighted work it

shall recite therein the date each separate work was copyrighted, and the name

of the author, the date of its assignment, if any, or the date of the assignment

of any interest therein, if any, and the name of the publisher, the name of

the present owner, together with the addresses and residences of all parties

who have at any time had any interest in such copyrighted work.”

10 Specifically the allegation is that “The cost to the Society of attempting

to compile the lists and information ra i to be furnished under the State

Statute would be far in excess of $300,000., which sum would have to be ex-

pended for research work with reference to the past history of each and every

affiliated societies, iawyers’ fees for opinions as to the rights of parties in-

volved with respect to the ownership, grants, licenses and other interests in the

respective copyrights, clerical help and other incidental expenses; even with

such an expenditure, it would be utterly impossible to furnish an accurate or

complete list of all the respective copyrights of the members of the Society

and of its affiliated societies with all of the data required dy the State

Statute.”

On submission of the motion to dismiss for want of the

jurisdictional value, the burden of proof was upon com-

plainants." Although the trial court called specific atten-

tion to the jurisdictional matters three months before it

filed its open denying jurisdiction, by request for addi-

tional brief§, no evidence was offered. After the filing

of the opinion and before the entry of the decree, on com-

plainants’ motion an order was entered to show cause why

witnesses should not be heard on the value of the matter

in controversy. The complainants furnished an uncon-

trovertod affidavit stating that their failure to offer evi-

dence was due to the fact that there was no denial of the

facts pleaded. The offer of proof showed that it was

desired to offer the testimony of expert witnesses con-

cerning the cost of complying with the requirements of

Section 4 of the Act, and concerning the value of the

property rights in question which will be affected by this -

Statute. The court did not reject the evidence as a

matter of discretion because tardily presented. On the

hearing on the rule the court made it quite clear that the

proffered evidence was deemed immaterial because it

showed only cost of compliance, not the value of the right

to do business free of the compulsion of the statute.’* The

application to take further testimony was denied and the

motion to dismiss granted in that this cause is not within

the jurisdiction of this court as a federal court.“ We con-

clude that the retusal to permit additional evidence in these

circumstances was error.

11 McNutt v. General Motors Acceptance Corp., 298 U. S. 178, 189.

12. g., this statement was made by the court: “Perhaps we are somewhat

in the fog with respect to the matter you are trying to present but from our

viewpoint it seems to 38 that you are urging that the value of the thing in

controversy is to be measured by the cost of doing business or complying with

the statute. From our standpoint we think<the cost of business has

nothing to do with the method of doing business. It is true statute may

necessitate a large expenditure-but that would not mean an because by a

large expenditure you might make a much. latger profit. P we don't

each other but I think that is the basis of measuring the value of

the matter in controversy.” ‘

The complainants in this case are the same as those in

Gibbs v. Buck, supra. In the Gibbs case we pointed out

that the members share directly in the earnings of the

Society and have a common and undivided interest in the

right to license in association through the Society free of

the provisions of the state statute. The allegations as to

relationship between the Society and its members show |

the same status in this case. The fact that neither prac-

tice nor rule of the committee concerning the apportioning

among the Society’s members of the pooled license fees

realized is shown,“ does not affect the rights members

have in the apportionment of the royalties from license

fees. These rights are g anted by the articles of associa-

tion which are a part of the bill. KVOS, Inc. v. Associated

Press,“ relied upon. below, is distinguished in the Gibbs

The cause will be remanded to the District Court with

directions to permit the introduction of evidence and for

further proceedings not inconsistent herewith.

—

Reversed.

Mr. J ustice Buack dissents,

pat

Mr. Justice 3 took no te in the considera-

tion or decision of this case.

13 Buck v. Case, 24 F. Supp. 541, 549.

14299 U. S. 269.

“Opinion i in

Gibbs v. Buck, 307 U. S. 66 (1939). x

(Florida 1937 Statute printed at p. 91, infra.)

APPEAL 1 an order of the Distriet Court, of three”

judges, overruling a motion to dismiss fhe bill and granting

an interlocutory injunction, in a suit to restrain enforce-

ment of a Florida statute forbidding combinations of

owners of copyrighted musical compositions.

Messrs. Tyrus A. Norwood, Assistant Attorney Geist

of Florida, and Lucien H. Boggs, with whom Messrs. George.

Couper Gibbs, Attorney General, and Andrew W. Bennett

were on the brief, for appellants.

Mr. Thomas G. Haight, with whom Messrs. Frank J.

Wideman, Louis D. Frohlich, Herman Finkelstein, and

Manley P. Caldwell were on the brief, for appellees.

Mr. Justice Rep delivered the opinion of the Court.

This is an appeal from the order of a three-judge court

refusing to dismiss a bill of complaint on motion for failure

to set out facts sufficient to show Federal or equity juris-

-diction, or to constitute a cause of action, and granting

an interlocutory injunction against the enforcement of a

Florida statute aimed at combinations fixing the price for

the privilege of rendering privately or publicly for profit

copyrighted musical compositions. Sec. 266, Jud. Code.

The appellant, the state Attorney General and various

State Attorneys, are officers of the State of Florida charged

with the enforcement of the act. The appellees, com-

plainants below, are the American Society of Composers,

Authors and Publishers, an vnincorporated association or-

' ganized under the laws-of the State of New York; Gene

Buck as president of the Society; various corporations

publishing musical compositions ; a number of authors and

composers of copyrighted music; and several next of kin

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of deceased composers and authors. This suit was brought 5

by complainants on behalf of themselves and others simi-

larly situated, members of the Society, too numerous to

make it practicable to join them as plaintiffs in a matter

of common and general interest.“

One of the rights given by the Copyright Act is the ex-

elusive right to perform copyrighted musical compositions

in public for profit.“ The bill of complaint alleges that users

of musical compositions had refused to recognize this

statutory right and to pay royalties for public perform-

ances for profit, and that authors, composers and publishers

were unable, individually, to enforce their exclusive right

because of tlie expense of detecting and suing for àufringe-

ment throughout the United States. The Society was

founded in 1914 to license performance of copyrighted

music for profit and otherwise protect the copyrights. The

state, statute was directed at organizations like the Society

and became effective on June 9, 1937. So far as is im-

portant here, the statute makes it unlawful for owners of

copyrighted musical compositions to combine into any cor-

poration, association or other entity to fix license fees for

any use or rendition of copyrighted vocal or instrumental

‘musical compositions for private or public performance for

profit, when the members of the combination constitute

% substantial number of the persons, firms or corpora-.

tions within the United States’’ owning musical copyrights.

It declares the combination an unlawful monopoly, the

price-fixing in restraint of trade, and the collection of

license fees and all contracts by the combination illegal.

The bill attacked the statute as contrary to the Consti-

tution and laws of the United States and the constitution

1 Equity Rule 38. “

ie of March 4, 1909, Sec. Ae), c. 320, 35 Stat. 1058, 17 U. 8 C. See.

Fla. Gen. Laws 1937, Vol. I, c. 17807

— ¢

of Florida. More specifically, it urged that the law im-

- pinged upon rights given by the Copyright Act of 1909,

deprived complainants of rights without due process of

the obligation of contracts already executed, and operated

as an ex post facto law. 5

There was a formal allegation that the matter in contro

versy exceeded $3,000, exclusive of interest and costs. In

addition, the bill alleged that the three publishers owned

copyrights of a value in excess of $1,000,000 while each

of the individual complainants owned copyrights worth in

excess of $100,000; that it would cost each individual more

than $10,000 to create an agency in Florida to protect kim-

self against infringement by unauthorized public perform-

ances for profit, to issue licenses and to check on the accu-

racy of uses reported ; that fees collected in 1936 in Florida

amounted to $59,306.81 and that similar sums were expected

in the future; and that in 1936 each of the three publishers

received more than $50,000 from the Society and each indi-

vidual more than $5,000.

A motion for a temporary injunction was made on Feb-

ruary 7, 1938, the same day the bill was filed. Voluminous

- affidavits were presented in support of the motion. They

tend to substantiate the allegations of the complaint on the

value of the copyrights and the income from the Society.

Each publisher deposed that it had received more than

$50,000 from the Society in 1936, that its contract with the

Society had a value in excess of $200,000, and that to fix

prices on each composition-for each use in Florida would

require an expenditure of more than $25,000. The affidavits

of the individuals showed. annual incomes to them from

the Society of from $3,000 to $9,000; contracts with the

Society which the affiants valued in the thousands of dol-

lars and an expense, in one instance, as high as $5,000 to

iki aia the requirements of the Florida statute.

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On March 3, 1938, the appellants moved to dismiss on

several grounds: (1) absence of jurisdictional amount;

(2) failure to state a cause of action; (3) want of equity

- and other objections not strongly 3 at this time.

The district court granted an interlocutory injunction.

‘and denied the motion to dismiss the bill. It thought that

great damage would result unless the injunction issued and

that there was grave doubt of the constitutionality of the

act. Its findings of fact and conclusions of law were filed

about a month and a half after the per curiam decision.

It found that ‘‘the matter in controversy exceeds $3,000

exclusive of interest and costs.

Federal Jurisdiction—The issue was raised in the lower

court by a motion to dismiss on thé ground that it affirma-

tively appears“ from the allegations of the bill . . . that

the jurisdictional amount of $3,000. 00 is vane in-

volved . . . in that it appears that the suit is brought

for the benefit of the members of the American Society of

Composers, Authors and Publishers . . and it does not

affirmatively appear that the loss of any member of said

society due to the enforcement of [the challenged act]

would amount to the . . . necessary jurisdictional amount.“

Other jurisdictional averments of the motion state that the

Society cannot suffer any loss from the legislation because

it affimmatively appears that the Society divides all its

proceeds from licensing between its-members and affiliates

and ‘‘therefore, the loss, if any, sustained due to the en-

forcement of said Florida laws would fall on the members

of the Society, and not on the Society itself.“ Finally the

motion sets out the lack of jurisdiction because it affirma-

tively appears from the allegations of the bill that the

jurisdictional amount is not involved ‘‘because the plain-

tiffs have not shown the extent of loss or damage they

would suffer by reason of the enforcement of said State

law, as compared with the amount of profit they would

make by the non-enforcement of said law.’ As the ee

of the motion on the jurisdiction admitted the bill's state- —

ments, it was submitted on the allegations without the we

duction of any evidence. :

This method of testing the jurisdiction eee raises

the question. No issue is made as to the standing of the

Society or its members to sue. The basis of the attack is

that there is a lack of the essential allegations as to the

value of the matter in controversy. As there is no statu-

tory direction for procedure upon an issue of jurisdiction,

the mode of its determination is left to the trial court.‘

Both complainants and defendants were content to rest

upon the bill and motion.

The bill alleges that the value of the matter in dispute

exceeds the jurisdictional amount. Such a general allega-

tion when not traversed is sufficient, unless it is qualified

by others which so detract from it that the court must.

dismiss sua sponte or on defendants’ motion.“ In this in-

stance, the allegation is, in effect, traversed by the lan-

guage - of the motion which asserts that no plaintiff has

shown loss from enforcement equai to the jurisdictional

amount. No other aliegations are denied. By this method

of attack the facts set out in the bill are left unchallenged

for the court to accept as true without further proof. The

burden of showing by the admitted facts that the federal

court has jurisdiction rests upon the complainants. If

there were any doubt of the good faith of the allegations,

the court might have called for their justification by evi-

dence.’ In view of the unchallenged facts, federal juris-

diction will be nenen established, if it appears that for

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4 Wetmore v. . 169 U. S. 115, 120, 121; McNutt v. General Motors

—

5KVOS, Inc. v. Associated Press, 299 U. S. 200. 277; McNett v. General

Motors Acceptance Corp., 298 U. S. 178, 189.

* McNutt v. General Motors Acceptance Corp., 298 U. S. 178, tio.

3 <

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14 .

any member, who ig a party, the matter in controversy is

of the value of the jurisdictional amount,’ or, if to the

aggregate of all the members in this representative suit,

the matter in controversy is of that value. !

This Society, an.unincorporated association with a mem-

bership of more than a thousand of the leading- authors,

composers and publishers of music, has received by assign-

ment and possesses, for a five-year period which covers the

time here involved, the exclusive right to publicly per-

form for profit musical compositions owned by its mem-

bers. Licenses are issued by, the Society to users in

Florida ‘‘for the public performance for profit’’ of these

compositions, After payment of expenses and royalties

for similar rights to foreign associates, and retention of

certain reserves, the receipts from licenses are divided

among the members in amounts and by classifications fixed

by the articles of association ang the Board of Directors.

The Society undertakes to protect itself and its members

from piracies of the rights assigned to it. The Society has,

in the absence of the challenged legislation and without

now giving consideration to other objections as to the legal-

ity of its organization, a-right to license which may be

injuriously affected by the Florida statute. Whether this

right to license flows from its limited ownership of the

copyrights or by authority of its members is immaterial

here. We find it unnecessary to decide whether this un-

incorporated association has standing to sue and confine

our decision to thé amount in ‘controversy between the

members of the Society and the defendants. Members, both

corporate copyright owners and individual composers: of

music and lyrics, are plaintiffs. They represent all other

members. As the members owl the copyrights, less the

limited assignment to the Society of the right of public

performance for profit, and share in the earnings through

7 Grosjean v. American Press co, 297 U. S. 233, 241-242, Clark v. Paul

Gray, Inc., 306 U. 8. oS, ©

15 2

mandatory distribution under the articles of association

and not by way of dividends, they are proper parties to

the action.“ These members are real parties in interest.

Because of the intérposition of the statute they cannot in

combination license production and collect fees in Florida.

Unless the relief sought, the invalidation of the statute,

is obtained, the members cannot conduct their business

through the medium of the Society. They have a common

and undivided interest i in the matter in controversy in this

class suit.“ „ :

The essential matter in controversy here is the right of

the members, in association through the Society, to conduct

the business of licensing the public performance for profit

of their copyrights. This method of combining for con-

tracts is interdicted by the Florida statute. It is not a

question of taxation or regulation but prohibition. Under

such cireumstances, the issue on jurisdiction is the value

of this right to conduct the business free of the prohibition

of the statute.” To determine the value of this right the

District Court had the admitted facts that more than three

hundred contracts expiring in 1940 ~~ in existence be-

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§ Article XV, section 1, wt the articles of association, reads as follows:

“Apportionment of Royalties— 5

“Section 1. All royalties and license fees collected by the Society shall

be from ffme to time as ordered by the Board of Directors distributed among

its members, provided, however:

“(a) That all expenses of operation of the Society and sums payable to

foreign affiliated Societies shall be deducted therefrom and duly paid; and

“(b) That the Board of Directors, by two-thirds vote of those present at

any regular meeting may add to the Reserve Fund any portion, ‘not exceeding

10% of the total amount available for distribution; and

„e) That the net amount remaining after such deduction for distribution

shall be apportioned as follows: one-half (%) thereof to be distributed

among the ‘Music Publisher’ members, and one-half (74) among the Com-

poser and Author’ members respectively.“ 5

cli Troy Bank v. Whitehead & Co., 222 U. 8. Be Shields v. Thomas, 17

10 Scott v. Donal, 165 U. S. 107, 114; cf. Hunt v. N. . Cotton Exchange,

205 U. S. 322, 334 Me Neii v. So. Ry. Co., 202 U. S. 543; Bitterman v.

Louisville & N. N. R, N. . 205 ; Packard v. Banton, 264 U. S. 140,

— ee 1

tween the Society and the Florida users; that in 1936 alone

almost sixty thousand dollars was collected from the users,

and that similar sums were expected for the remainder of

the term.“ While the net profits of the business in Florida

is not shown, the business of the Society, as a whole, is

profitable. The three publisher parties receive more than

$150,000 yearly and individuals more than $5,000 per year

each. The cost of compliance with its requirements is evi-

dence also of the value of the right of freedom from the

act." The complainants, other than the Society, allege

without traverse that the cost to each one of providing indi-

vidually in Florida the serviees now provided by the So-

ciety for each member would exceed $10,000. Whether

this is annually, for the length of the agreement or for

some other term is not shown. From these facts, the finding

of the District Court that the matter in controversy—the .

value of the aggregate rights of all members to conduct

their business through the Society—exceeds $3,000 in value

is fully supported. -

McNutt v. General Motors Acceptance Corporation" dif-

fers. There the, State of Indiana had passed an act regu-

lating, not prohibiting, the business of the Acceptance Cor-

poration. The right for which protection was sought was

the right to be free of regulation. It was to be measured

by the loss, if any, following enforcement of regulation.

This was not alleged or proved. In KVOS, Inc. v. Asso- -

ciated Press, relief was sought to enjoin alleged pirating,

by radio, of news furnished by the Associated Press to its

members. The right for which protection was sought was

„the right to conduct those’ enterprises: free of“ ee

ence. On the issue of the value of this right, it was de

11 Packard v. Banton, 264 U. S. 140; Petroleum Exploration, Inc. v. Comm'n,

304 U. S. 209, 215; Healy v. Ratta, 292 U. S. 263; Buck v. Gallagher, 307

U. S. 95.

12298 U. S. 178.

23 299 U. S. 209.

osed

* —

only that the Associated Press received more than $8,000

per month for news in the territory served by the broad-

casting station and was in danger of losing the payments.

The Associated Press was a non-profit corporation, operated

without the purpose of profiting from its services to mem-

bers and equitably dividing the éxpenses among them. The aan

damage in the Associated Press case was to its members bat}.

and this was not shown. Neither was it alleged or proved ane

that any member threatened to withdraw or to reduce its 346

payments. Pee 2

Failure:to State a | Cause of Action.—The motion to dis- na

miss also presents generally the issue whether the bill 1

states facts sufficient to constitute a cause of action. By Ve Be

the submission of the motion this issue was left to the Court - Fel

on the facts alleged in the bill. The elaboration of these 1

facts, contained in the affidavits supporting and objecting ieee

to the motion for temporary injunction, is not available for

consideration, as thes davits are a part of the record

only for the purpose of determining the propriety of a

temporary mjunction."* Whether to grant or refuse a mo-

tion to dismiss before answer, is largely a matter of dis-

cretion for the court below.“ Where the bill makes an

attack upon the constitutionality of a state statute, sup-

e .

* £2;

Te Mighy 8

ported by Tactual allegations sufficiently strong; as here, to

raise grave doubts of the constitutionality of the Act’? in hat

the mind of the trial court, the motion to dismiss for failure

to state a cause of action should be denied. This bill sets

out that the exercise of rights granted by the Federal

for profit is prohibited by the statute; that existing con-

tracts are impaired; property taken without compensation;

recovery on extra state contracts denied and the equal pro-

ress,

et ee

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1 Polk Company v. Glover, 305 U. S. 5, 9.

15 O’Keefe v. New Orleans, 273 F. 570; Wright v. Barnard, 233 F. 329;

Doherty v. McDowell, 276 F. 728; Ralston Steel Car Co. v. National Dump Car

Co., 222 F. 590, 592. Compare Kansas v. Colorado, 185 U. S. 125, 144-145;

2 2 270 U. S. 634. Wilshire Oil Co. v. United States, 295

tection and due process clauses of the 14th Amendment vio-

lated in manners specifically pleaded. Drastic penalties for

violation of the act are provided.!“ The manner in and

extent to which the challenged statute offends or complies

with the applicable provisions of the Constitution will be

clearer after final hearing and findings.“ The findings here

were on the motion for interlocutory injunction and on the

issue of jurisdiction.

Other Assignments.—The other material assignments of

error to the interlocutory order specified on the appeal are

addressed (1) to the lack of equity in the bill, (2) to the

exercise of discretion in ordering a temporary injunction,

(3) to the lack of findings before the order of- temporary

ä injunction and (4) to the failure to strike from the bill

allegations as to certain sections which deal with contract

relations between the Society and users of the musical

compositions because these sections are not enforced by

the state officers. We treat of them briefly : (1) It is clear

that there is equitable jurisdiction to prevent irreparable

injury, if the sections of the state statute outlawing the

Society raise issues of constitutionality. The heavy penal-

ties for violation and the prohibition of the issue of licenses

or collection of fees show the need to protect complainants.”

(2) Upon the conclusion that the motion to dismiss should

be overruled, there was no abuse of discretion in granting

an interlocutory injunction.’ The damage before final judg-

ment from the enforcement of the act as shown by the

affidavits would be irreparabie. The allegations in the bill

of threats of enforcement and the declaration in the affi-

davit of the Attorney General of the State, the officer

16 Fine $50 to > $5,000 and imprisonment one to ten years or either. Section

8, Fla. Gen. Laws, 1937, c. 17807.

17 Borden’s Farm Products Co. v. Baldwin, 293 U. S. 194, 211-213. Polk

Co. v. Glover, 305 U. S. 5.

4 1 Ex parte Voung, 209 U. S. 123, 165; Terrace v. Thompson, 263 U. 4 197.

19 Alabama v. United States, 279 U. 8. 229, 231; Ohio Oil co. v. Conway,

279 U. S. 813.

charged with supervision of enforcement,” of readiness

and willingness ‘‘to prosecute any violations of said act,

sufficiently establish the immediate danger from enforce-

ment.” No objection appears as to the adequacy of the

bond or the other terms of the injunction. These remain

under the control of the lower court. Ordinarily it would

be expected that where a temporary injunction is con-

sidered necessary to protect the rights of complainants

against the allegedly unconstitutional action ot state offi-

cers, under a statute, a final order would follow with all

convenient speed. (3) The order of the trial court was

entered April 5, 1938. .The findings of fact and conclusions

of law were not filed until May 17, 1938, after ‘the first

assignment of errors had pointed out the omission and after

the appeal was allowed. The original assignment of error,

which had relied upon the failure to comply. with Equity

Rule 70%½, was amended to show subsequent compliance but

no assignment of error was made on account of the fact

that the findings were out of. time. The objection was

taken in the statement of points to be relied upon on the

appeal and in app lants’ brief in the specification of

errors to be urged. Better practice dictates the filing of

the finding of facts and conclusions of law before or con-

temporaneously with the order or decree. It would be use-

less, however, to reverse the order granting the temporary

injunction and remand the cause. The temporary injunc-

tion would now be in order. (4) In answer to the fourth

~ objection it may be said that the issue like that of constitu-

tionality can be more een e of upon final

hearing.

Mr. J — Franxrvrter took no part in the 3

tion or decision of this case.

—

20 Sec. 10, Fla. Gen. Laws, 1937, c. 17807.

nu Terrace v. Thompson, 0 U. S. 197, 214-16; Cine v. Frink Dairy Co.,

274 U. S. 445, 451-52.

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Mr. Justice Buack, Dissenting.

I believe the decree enjoining and suspending Florida’s

law prohibiting monopolistic price fixing should be re-

versed because

(1) No showing has been made that casts any doubt

upon a State’s power to prohibit monopolistic price fixing,

(2) Complainants - : (appellees here) failed to sustain

their burden of showing $3,000. 00 in controversy, as re-

quired by statute.

(3) The court below failed to require a bond or other

conditions adequate to protect the people in Florida Who

might be injured by the injunction.

First. Do general allegations of unconstitutionality,'

similarly general affidavits and general findings by the

trial court show that the Florida statute against, monopo-

listic. price fixing is novel, if not unique“ State legisla-

tion, and raise such grave constitutional questions“ that

a Federal court should suspend the statute to permit com-

plainants to continue exacting monopoly tribute from the

public until the court hears -evidence?

The enjoined Attorney Gqeral and prosecuting attor-

neys of Florida do not have, and expressly disclaim any

duty to enforce the statute against appellees unless they

combine to fix monopolistic prices. Therefore, this injunc-

tion cannot rest upon the alleged unconstitutionality of

any provisions of the statute other than those prohibiting

monopolistic price fixing. And allegations of the bill at-

tacking other provisions of the statute raise only moot

questions. If this record can be said to raise any grave“,

1 Cf. Borden’s Co. v. Baldwin, 293 U. S. 194, 203; Aetna Ins. Co. v. Hyde,

275 U. S. 440, 447; Public Service Commission v. Great Northern Utilities

Co., 289 U. S. 130, 136, 137.

2 Borden’s Co. v. Baldwin, supra, 203

5 a

. .

novel“, or unique question at all, that question is

whether-a State has power to prohibit price fixing by

; monopolies in restraint of trade.

If the issue is not narrowed to this single point, ap-

proval is given to the enjoining of State officials from

action which they have no duty to perform and have sol-

emnly disclaimed both here and in the District Court.“

In the absence of an interpretation by the Florida Supreme

Court, to what more authoritative source or evidence may

a Federal court turn for the meaning of the statute, than

to the decision of the highest Stafe official charged with

its enforcement? He has determined that, so far as he

and the prosecutng attorneys under him are concerned,

appellees may license their compositions as they please, 0

may combine to detect and punish infringers and may

operate in Florida at will, provided only that they aban-

don monopolistie price fixing. Even as to the statutory

prohibition against price fixing, all that is beforè us, a

practice more desirable and more in keeping with our

dual form of government, previous decisions,‘ and the

trend of Congressional 3 would be to refrain

from Federal judicial interference until the State courts

are presented with an opportunity to define the statutory

duties of appellants. ‘‘And . . . the presumption is in

all cases that the state courts will do what the Constitution

and laws of the United States require.“ Judicially re-

straining these Florida officials from action which they

declare they cannot and will not take, denies to Florida

3Cf., Carroll v. Greenwich Insurance Co., 199 U. S. 401, 412.

* Gilchrist v. Interborough Co., 279 U. S. 159, 207; Fenner v. Boykin, 271

U. S. 240, 243-4; cf., Waters-Pierce Oil Co. v. Texas, 177 U. S. 28, 43; and

4 Gark, Brandeis, 3). JI. dissenting, Cincinnati v. Cincinnati and H. Traction

528 U. S. C. 41; c. 726, 50 Stat. 738, 48° Stat. 775, 47 Stat. 70, 43 Stat.

938, 36 Stat. 1162, amended 37 Stat. 1013.

Defiance Water Co. v. Defiance, 191 U. S. 184, 194.

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the traditional respect that has been accorded State off-

cials by this Court.“

Even according to the comparatively new judicial for-

mula here applied, the only issue is whether „novel

unique or grave constitutional questions are raised by

the charge that these state officials will perform their sole

duty under the Florida statute of prosecuting appellees

for violations of the prohibitions against monopolistic

price fixing. Paraphrasing this formula, the question here

en becomes : When complainants charge in a Federal

urt of Equity that a State has passed, and its officers

are about to enforce, a law against monopolistic price fix-

ing, is there so much doubt about the power of the State

to prohibit monopolistic price fixing that operation of the

law must be enjoined and effect denied to it until evidence

is heard by the Court? ä . ;

Here, both the*very bill upon which the injunction now

approved was granted and affidavits of record establish

beyond dispute appellees’ flagrant violation of the Florida

law by combining to fix prices. This combination appar-

ently includes practically all (probably 95%) American

and foreign copyright owners controlling rendition of

copyrighted music for profit in the United States. Not

only-does this combination fix prices through a self-per-

‘ petuating board of twenty. four directors, but its power

over the business of musical rendition is so great that it

can refuse to sell rights to single compositions, and can,

‘and does require purchasers to take, at a monopolistically

7 See Spielman Motor Co. v. Dodge, 295 v. S. 89, 96,; Cincinnati v. Cincin-

nati and H. Traction Co., sutra, 454, 455; Virginia v. West Virginia, 231

U. S. 89, 91; cf. Des Moines v. Ciiy Ry. Co., 214 U. S. 179, 184. This injunc-

tion makes strikingly pertinent the question of Justice Harlan, dissenting, in

Ex parte Young, U, S. 123, 179 (1908): “If the Federal court ‘could thus

prohibit the law officer gf the State from representing it in a suit brought in

the state not the bill in the Federal court be so amended that

that court could r all the district attorneys in Minnesota and forbid them

from bringing to the attention of grand juries and the state courts violations,

of the state act. . ?” His apprehensive prophecy has more than come

true in the present case. 2

“fixed annual fee, the entire repertory of all numbers con-

‘trolled by the combination. And these fees are not the

same for like purchasers even in the same locality. Evi-

dence shows that competing radio stations in the same

city, operating on the same power and serving the same

audience, are charged widely variant fees for identical

performance rights, not because of competition, but by the

exercise of monopoly power. Since it appears that music

is an essential part of public eee, e for profit,

radio stations or other businesses arbiträrily compelled to

pay discriminatory fees are faced with price fixing prac-

tices that could destroy them, because the Society has a

monopoly of practically all—if not completely all—avail-

able music. When consideration is also given to the fact

that an arbitrarily fixed lower rate is granted to a favored

station itself controlled by another instrument of public

communication—a newspaper—the ultimate possibilities

for control of the channels of public communication and

information are apparent. f

We have here a price fixing combination that actually

wields the power of life and death over every business in

Florida, and elsewhere, dependent upon copyrighted

musical compositions for existence. Such a monopolistic

combination’s power to fix prices is the power to destroy.

Should a court af equity grant this combination the

privilege of violating a State anti-monopoly law“ Does

a State law prohibiting such a combination present

„grave constitutional questions“!

It is my position that a State law prohibiting monopo-

listie price fixing in restraint of trade is not novel“ and

“‘unique’’ and raises no grave constitutional questions.“

The constitutional right of the States to pass laws against

*Cf., Conti Wall Pape: Co. v. Voight & Sons Co, 212 U. S. 227, 262,

. affirming 1 . ;

M ng 148 Fed. 939; Gibbs » Baltimore Gas Co., 130 U. S. 396, 412.

v. Camors-M’Connell Co., 152. Fed. 321; Pacific Postal Telegraph

Co. v. Western Union Tel. Co., 50 Fed. 493; American Biscuit &

Mig. Co. v. Klotz, 44 Fed. 721; 1 Pom. Equity Juris. (3rd Ed.) § 402.

}

I g

| : 24

‘monopolies should now be beyond possibility of contro.

- versy. That state legislatures have the right . . . to

prevent unlawful combinations to prevent competition and

in restraint of trade, and to prohibit and punish monopo-

lies, is not open to question“, and few have challenged

1 the power of State legislatures to ordain that ‘‘competi- .

' tion not combination, should be the law of trade.’™

15 Surely, there is presently no basis to doubt this power

ii and to assert that its exercise raises ‘‘grave constitutional

5 dauestions. As recently as 1937, this Court held that

a: Porto Rico, with legislative powers not equal to, but

„nearly as extensive as those exercised by any state

4 legislature,’’ could prohibit monopolistic price fixing as

i one of the ‘‘rightful subjects of legislation“ upon which

H legislatures act.“

If the States have somehow lost their historic power to

‘prohibit monopolistic price fixing combinations before

presentation of evidence to a Federal court, at what point

in our history and in what manner did they lose it? The

people have not exercised their exclusive authority, by

Constitutional amendment, to strip the States of their

power over price fixing combinations and thus raise mon-

opoly above the traditional power of legislative. bodies.

It was expressly conceded at the bar that Florida had

ed the Constitutional power to prohibit price fixing combina-.

v4 ° tions umess the copyright laws limited this power. And,

i since argument of the present case, a decision rendered by

us February 13, this year, made clear the principle that

— %Waters-Pierce Oil Co. v. Texas (No. 1), 212 U. S. 86, 107. “There is

nothing in the Constitution of the United States which precludes a State from

14 - adopting and enforcing [statutes which secure competition and preclude com-

‘he binations which tend to defeat it! . To so decide would be st

a backwards.” International Harvester Co. v. Missouri, 234 U. S. 199, 205

a See, Ati. & Pac. Tea Co. v. Grosjean, 301 U. S. 412, 425-6; Nebbia v. Ney

1 York, 291 U. S. 502, 529; Rast v. Van Deman & Lewis, 240 U. S. 342, 366-7.

4 10 National Cotton Oil Co. v. Texas, 197 U. S. 115, 129; Carroll v. Green-

4 _ wich Ins. Co., supra, 411

11 Puerto Rico v. Shell Co., 302 U. S. 253, 260, 261.

the copyright laws .grant no immunity to copyright

owners from statutes prohibiting monopolistic practices

and agreements. We there declared that ‘‘An agreement

illegal [by statute] because it suppresses competition is

not any less so because the competitive article is Aue a

righted.*

Due process has been judicially endowed with piven

elasticity in relation to property rights, but it is incon-

ceivable that it would afford refuge for monopolies deemed

undesirable by the people’s representatives. When a

legislature as a matter of public policy determines to pro-

hibit monopolistic combinations, we cannot, under any

doctrine of ‘‘due process, rightfully review their eco-

nomics or their facts. And, although due process is

invoked, can evidence either add to or take from the- legis-

lative power to permit, regulate or prohibit. monopolies i in

the public interest?

Several of the general allegations in the bill are relied

upon to justify suspension of the Florida statute until

evidence is heard by a court. It is said the court should

hear evidence because the ‘‘bill sets out that the exercise

of rights granted by the Federal Copyright Act<o control

the performance of compositions for profit is prohibited

by the statue. But what evidence can the court

hear that will assist it in comparing the statute with the

port to prohibit the ‘‘performance of compositions for 3

profit, and the enjoined officials have neither threatened.

nor do they intend, to prohibit such performance. It is

said the bill alleges that existing contracts are im-

’paired”’ by the statute. But no. contracts can be affected

unless involving prohibited monopolistic price fixing.

That the Florida law prohibits the continuation and execu-

tion of monopoly practices in pursuance of price fixing

12 Interstate Circuit, Inc. v. United States, 306 U. S. 208, 230.

13 Central Lumber Co. v. South Dakota, 226 U. S. 157, 161. .

« \

publishers i in the nation

oly! is specially experienced in a particular branch of

i business the Constitution embodies no prohibition of laws

confined to the evil, or doctrinaire requirement that they

‘@

agreements made before the law was passed, can be no

basis for constitutisnal objection.“

It is said the pill alleges property taken W com-

, ‘peuention: igh the statute, of itself, takes property, ( and

no charge of unconstitutional application of the statute is

made) is evidence required to show the manner of the

taking? It is said the bill alleges that the statute violates

‘‘equal protection.“ But the sole thing threatened is

prosecution of an admitted price fixing combination com-

prised of practically all fhe musical copyright owners and

. if an evil [of monop-

should be. couched in all embracing terms. It does not

forbid the cautious advance, step by step, and the distrust

of generalities which sometimes have been the weakness,.

but often the strength, of English legislation.’ It is

said a drastic penalty is provided for practicing price fix-

ing. What evidence will serve to enlighten the .Court on

the statutory penalty? That penalty is Set out. clearly in

the statute. If it invalidates the statute, that determina-

tion should be made now. .

The present case illustrates how the recently fashioned

- judicial formula under which state laws must be enjoined

if „ grhve constitutional questions’’ are presented in a

complaint, actually results in an automatic judicial sus-

. pensation of ‘state statutes upon any general complaint to

a federal court. The apparently inevitable operation of

this formula runs counter to the Tenth Amendment in-

tended to preserve the control of the States over their

own local legislation, and opens the door to further eva-

sions of the Eleventh Amendment Sg w the States

1 Watets-Pierce Oil Co. v. Texas (No. 1), supra, 108.

15 Carroll v. Greenwich Ins. Co., supra, 411; Central Lumber co. v. South

Dakota, supra, 160. A legislatare may hit at an abuse which it has found, even

though it has failed to strike at another.” United States v. Carolene Products

Co. * U. S. 144, 181.

e he Rg ee

—

tom suits in federal courts.“ A lower federal court’s ,

refusal in its ‘‘discretion’’ to suspend a State statute was

‘recently reversed because ‘‘grave constitutional ques-

tions’’—requiring evidence—were . deemed raised by

charges that the statute by requiring citrus fruit cans to

be truthfully labeled violated the Constitution.“ And

here, where the District Court enjoined a State law in its

‘“‘diseretion’’, the injunction is sustained by a holding

that evidence should be heard because grave constitu-

tional questions’’ are involved. However the lower court’s

‘‘discretion’”? may be exercised, the formula apparently

\uchieves but, one result—state statutes are suspended.

Careful scrutiny of appellees’ bill for injunction reveals

' no allegations indicating that Florida’s power tq prohibit

monopolistic price fixing would, even under the formula

applied, be altered by proof of any ‘‘narticular economic

facts. . which [are . . properly the ‘subject of

evidence and of findings.“ “18 True, the bill alleges that the

statute of Florida and similar legislation enacted by other

States were sponsored by an organized group . .

for their own selfish aggrandizement . . . without an

adequate hearing berfig afforded to complainants and others

similarly situated,’’ and that ‘‘in truth and in fact, [the

statute]: was enacted hot in the public interesse.

Appellees also allege that ‘‘unless the enforsement of this

State statute is restrained . . . other States, in addi-

tion to Florida, Montana, Washington, Nebraska and

Tennessee, may enact similar statutes . . . all of which

would work undue hardship on complainants and would

violate the spirit of the Constitution. These

are some of the strongest—if not the strongest—of the

16 Cf. Ex parte ie 209 U. S. 123; Harlan, J., dissenting, 168-204: and.

} I McGhee, 172 U. S. 516, 528, 530; In re Ayers, 123, U, 8. 443, 496,

- 497, 505.

17 Polk Co. v. Glover, 305 U. S. 5.

18 Borden’s Co. v. Baldwin, supra, at 210.

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bill's allegations deemed to raise grave constitutional

questions.“ Is the temporary injunction approved so

that the Federal court in Florida may hear evidence

on what constitutes the public interest of Florida? Shall

the court hear evidence to determine whether or wet un-

less the enforcement of this statute is restrain .

: States, ‘‘in addition to Florida’’, may similarly prohibit

appellees’ monopoly?

It is difficult to perceive how in the future—under this

-formula—any state law, directly or indirectly affecting

ings have dragged their weary way through federal

Property, can become effective until injunction proceed-

_ ings have dragged their weary way through Federal

‘courts. All state statutes might hereafter well substitute

for the expression ‘‘to take-effect within’’ a certain period

of time, the words ‘‘to take effect after the Federal courts

have heard evidence to determine’’ their reasonableness

(wisdom). And the formula likewise fits Congressional

enactments. Had the pronouncement of this formula not

been the culmination of gradual judicial advances, it

would have been everywhere recognized as a revolutionary

departure from our constitutional form of government,

under which the wisdom of legislgtion, within the field of

legislative action, was left to 50 judgment of elected

representatives of the people.

Florida can find little comfort in the admonition that

‘‘Ordinarily it would be expected that where a temporary

injunction is considered necessary . . . a final order

would follow with all convenient speed.“ This law has

now already been suspended for a year, and experience

demonstrates that injunctive suspension of state laws and

state action can hang in the courts for many years before

receiving final disposition.“

19 See dissent, McCart v. 3 Water Co., 302 JL. 8. 419, 435, and

note.

—

Second. Jurisdictional Amount.

These eleven appellees alleged in their bill for injunc-

tion that they sued on behalf of themselves and the more

than 1,000 other (American) members of the Society. No

determination is made here ‘‘that for any member, who is

a party, the matter in controversy is of the value of the

jurisdictional amount’’—$3,000. However, while appel-

leés are not aided in establishing the jurisdictional amount

by the ‘‘allegation that [they] . . sued on behalf of

others -sunilarly situated, the Court nevertheless holds

that the jurisdictional amount is in controversy in the

value of the aggregate rights of all members (including

the more than 1,000 who have not appeared in person) to

combine and fix prices in Florida.

8 ‘Assuming that such a case as this will be called a class

action, and. . . could be maintained as such...

yet that it may be properly a class action does not affect

the rule against aggregation [of claims for making up the

jurisdictional amount], because [such aggregation]

is necessarily only applicable to those class actions in

which several claimants to a fund are joined as plaintiffs

asserting common and undivided rights therein.“ Ap-

‘pellees assert no common and undivided rights in any

fund“ or property; the amount payable to each [by the

Society] depends upon his contract alone.“ Neither

does appellees“ bill seek, as would the traditional class or

representative bill in equity, to protect group rights all

claimed under and traceable to a single decree,* or rights

Which . . . [no one plaintiff] can enforce in the absence

20 Lion Bonding Co. v. Karatz, 262 U. S. 77, 86.

21 Eberhard v. Northwestern Mut. Life Ins. Co,, 241 Fed. 353, 356, referred

to with apparent approval in Lion Bonding Co. v. Karatz, ae.

22 Smith v. Swormstedt, 16 How. 288.

23 Beatty v. Kurtz, 2 Pet. 566.

Eberhard case, supra, 356. .

* Shield v. Thomas. 17 How. 3, but see Chapman v. Handley, 151 U. S. 443.

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of the“ others because derived from a single security

instrument.“ In this proceeding, all that members of the

Society have in common is their alleged right. to violate

with impunity the Florida statute against price fixing.

Unless opposition to and violation of the statute can be

their bond of unity, appellees have separate and distinct

demands. . . [united] for convenience and economy in

a single suit, [and] it is essential that the demand of each

be of the requisite jurisdictional amount.“

Permissible joinder of many plaintiffs as a cater of

convenience and economy is not a means of enlarging the

jurisdiction of the District Court. Rule 38, under which

this class. or representative suit was brought, did not, in

. fact could not, extend that inen which depends

solely upon Acts of Congress.“ .

A common desire to-disregard a state ee cannot serve

as a common and undivided interest for purposes of fed-

eral jurisdiction; otherwise, all who oppose such a law

can aggregate the values of their alleged individual rights

so to disregard the law, in order that they may escape the

courts of a State and bring its law before a Federal court.

And the fact that a State law inflicts pecuniary loss upon

members of a non-profit association because of their mem-

_ bership does not permit, aggregation of the members’

pecuniary interests as a basis for attack upon the law in

a federal court by some members on behalf and with

the authority of all.“ Here, the individual members

20 Troy Bank v. Whitehead & Co., 222 U. S. 39, 41.

27 Id. 40. 2

28 Alaska 8 v. 2838 301 U. S. 174, 177; Christopher et al. v.

U. U. S. 500, ; see, KVOS, Inc. v. Associated Press, 299

29 Pope v. Blanton, 10 F. Supp. 15, 18, dismissed per curiam for lack of

requisite jurisdictional amount in controversy, 299 U. S. 521; Gavica v.

Donaugh, 93 Fed. (2d) 173. oe

80 Rogers v. Hennepin County, 239 U. S. 621. The complaint appears in

the original records of this Court, No. 411, Oct. Term 1915. Cf. Robbins v.

Western Auto Ins. Co., 4 Fed. (2d) 249, cert. den., 268 U. S. 698; Woods v.

Thompson, 14 Fed. (24) 9 951, and. Ilinois Bankers’ Life Ass’n v. Farris, 21

Fed. (2d) 1014, cert 276 U. S. 621.

150 made no showing of what they as individuals have at

stake—or of what all the members as a class stand to lose

by virtue of the Florida law.

The enjoined state officials have only the duty to prose-

cute appellees if they continue. to fix prices (i. e., to issue

- licenses) through monopolistic combinations, and. these

officials have expressly disavowed any intention to do

more.“ Appellees are left free to form such combinations

as they please in Florida for the purpose of protecting

against copyright infringements. They are here deprived

by the Florida statute only of the right to combine to fix

prices, and the value of that right must determine the

amount in controversy.“ That right was the object which

appellees’ bill for injunction sought to protect from al-

legedly unconstitutional interference.** Yet, there is no

evidence at all in the récord from which even an inference

can be drawn as to the amount, if any, individual appellees

or other members might lose in Florida by selling or

“licensing their copyrighted articles individually (which

the law permits) instead of fixing prices by monopolistic

combination (which the law prohibits). No showing was

made that appellees ever have made or ever will make any

profit from the operations of the Society in Florida. As

stated by the majority opinion, the record discloses that

the business of the Society in the entire United States: and

sixteen foreign countries is a profitable one. But we can-

not assume from this that its Florida operations are as a

unit profitable. In fact, the record shows only that the

entire Society had sixty thousand dollars worth of con-

tracts in Florida in 1936. We are not told what ratable

share of. this sixty thousand dollars would come to any

individual in the division of sacha entire ( amount 1 the

31 Cf., Carroll. v. Greenwich Ins. Co., supra, 412.

32 Scott v. Donald, 165 U. S. 107, 114, 118.

83 Ct., Glenwood Lt. Co. v. Mutual Lt. Co., 239 U. S. 121, 125, 126; KVOS,:

Inc. v. Associated Press, 299 U. S. 269, 277.

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forty-five thousand odd members affiliated with the So-

‘ciety (in America and abroad). Each individual mem-

ber’s gross income trom Florida might be less than $1.50

per year.

The loss of a right to an annual gross income of $1.50

cannot amount to the loss of a right valued at ten thou-

sand dollars—as appellees allege—on the theory that it

would cost ten thousand dollars to collect the $1.50 in-

come individually. And it is, of course, possible that if

the Society in fact has no net income from Florida but

operates there at a loss, each member’s ratable share of

income from the Society will actually’ be increased when

the unprofitable Florida operations cease because of the

statute. Measuring the amount in controversy on the

above theory, jurisdiction might be obtained by a Federal

court to enforce rights of a value far-less than the juris-

dictional $3,000 required by Congress. For illustration, a

statute might prohibit parking of automobiles on certain

city streets; an automobile owner assailing the law might

be admitted to the jurisdiction of the Federal court by al-

leging that it would cost him more than three thousand

dollars to purchase a parking lot in which to park off the

streets of the prohibited area. He would thus comply“

with the statute and abandon the streets in obedience to

it.“ I do not believe that jurisdiction of a Federal court

can be rested on measurements of the imagined cost of

what a complainant conceivably could, but certainly would

never do as an alternative to action forbidden by statute.

Cost of 12 with an assailed legislative act may be considered

The statutory monetary standard is precise and the an

amount in controversy therefore cannot be conjectural. 7 ve *

It is impossible to foresee into what mazes of speculation q fe

and conjecture we may not be led by a departure from the 1 b

simplicity of the statutory provision. — i

‘* Accordingly this Court has uniformly been strict to aes

-. adhere to and enforce it.

Without proof of the amount each appellee or member

has in issue, how can the aggregate amount“ be fixed at age

. Rigid enforcement of the jurisdictional requirement wi Hee

limit the interference of Federal courts in State legisla- 5 2

tion and will accord with the policy of Congress in nar- ‘oe

rowing the jurisdiction of Federal courts by successive ee

increases in the jurisdictional amount.“ The policy of a

the statute calls for its strict construction.“ Since no

individual complainatit- has established that he has the

statutory jurisdictional amount in controversy, to rest

jurisdiction of a Federal court on no more than the unified

desire of many complainants to violate a State statute

prohibiting monopolistic price fixing, does constitute a

“novel, if not unique, and grave“ judicial departure

from the jurisdictional requirement fixed by Congress.

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Third. The otherwise complete,suspension of Florida’s

law was limited only by the condition that appellees make.

dond of five thousand dollars payable to the Attorney Gen-

eral of Florida and the ‘District Attorneys of the State.

Manifestly, these officials have no individual interest in

the monopoly prohibited by the Florida law. The major

injuries accruing from the suspension of the law will not

be inflicted upon them, but upon the People of Florida who

are required to pay monopoly prices while the law remains

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enjoined. Thus, while the law is suspended, these non-

resident appellees can carry on a monopolistie business in

Florida contrary to its prohibitions, and the people of

Florida who must pay monopoly prices are granted no

protection. We have recently declared the governing

principal that it is the duty of a court of equity granting

injunctive relief to do so upon conditions that will protect

all—ineluding the public—whose, interest the injunction

may affect.“ The injunction here was not granted

upon conditions that would protect the interests of all

who might be affected by it. It neither ordered the mon-

opoly tribute exacted by appellees to be paid into court

during suspension of the Florida statute, 1 nor required a

bond for the benefit of, and adequate to indemnify those

who must pay this tribute until the court perinits the stat-

ute to go into effect. :

Nevertheless, this Court now petines- to correct the

grossly unjust failure to protect those who may suffer

irreparable injury from the suspension of the Florida

law on the ground that No objection appears as to the

adequacy of the bond or the other terms of the injunction.

These remain under the control of the lower court.“ How-

ever, the lower court has already exercised its control re-

sulting in manifestly injurious error apparent on the rec-

ord.“ And as upon this appeal in equity the whole

case is before us, we can render such decree as under all

the circumstances may be proper.“ Litigation is not a

game in which justice can be awarded only to the alert

inland Steel Co. v. United States, 306 U. S. 183, 157. \

ate v. Tennessee &

39 See, Lamb v. Cramer, 285 U. S. 217, 222; United St

Coosa R’d, 176 U. S. 242, 256; Revised Rules of the Supreme Court of the

United States, 27, paragraph 6; cf., Mahler v. Eby, 264 U. S. 32, 45.

40 United States v. Rio Grande Irrigation Co., 184 U. S. 416, 423; Cincinnati

v. Cincinnati & H. Trac. Co., supra, 454; ‘Ridings v. johnson, 128 U. S. 212,

218; cf., Patterson v. Alabama, 294 U. S. 600

. 35 85 ‘

‘and fastidious objector, particularly when—as here—a

court suspends statutory rights of members of the pub-

| lic who, not being in court, have no opportunity to object.

The injustice to the public apparent on this record vio-

lates the rudimentary principles of equity and fair ‘play.

Me should neither condone nor permit it.

They who attack the constitutionality of a law, obtain

its judicial suspension, and then continue to violate its

terms, should not benefit by the suspension, in the event

the law is later held constitutional. Otherwise, a judi-

cially granted period of immunity will reward litigants

who unsuccessfully assail the constitutionality of legisla-

tion. Seemingly, the time has arrived when despite our

constitutional system of government no State law can be-

come effective until a federal court hears evidence on its

constitutionality. The courts—responsible for this funda-

mental change—should at least protect citizens of an en-

acting State from disobedience to à state law permitted by

an erroneous or improvident interlocutory injunction.

The interlocutory injunction should be vacated.

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4.5

Opinion i in

Buck v. Gibbs, 34 F. Supp. 510 (N. D. Fla. 1940). -

(Florida 1937 Statute printed ‘at p. 91, infra.) :

(Florida 1939 Statute printed at p. 104, infra.)

In Equity. Action by Gene Buck, individually and 38

President of the American Society of Composers, Authors

and Publishers, and others against George Couper Gibbs,

individually and as Attorney General of the State of

Florida, and others to enjoin enforcement of Florida stat-

utes relating to copyrighted musical compositions.

Injunction granted against enforcement of one statute

and certain sections of another statute and dénied as to

remainder of the latter statute. _

Frank J. Wideman, of Washington, D. C., and Manley P.

Caldwell, of West Palm Beach, Fla. (Louis D. Frohlich

and Herman Finkelstein, both of New York City, of coun-

sel), for plaintiffs. - ~

George Couper Gibbs, Atty. Gen., of Florida (Thomas J.

Ellis, Asst. Atty. Gen., Lucien H. Boggs, Sp. Asst. Atty.

Gen., and Andrew W. Bennett, of Washington, D. C., of

counsel), for defendants. :

Before HutcHEsoy,. Circuit J * and Lone and. Barker,

District Judges. ne ae

-Hurcueson, Cireuit J lagi.

- Plaintiffs are owners of musical copyrights or rights of

renewal therein, which have been pooled ° with the American

Society of Composers, Authors, and Publishers, hereafter

called ASCAP. Defendants are the state officers charged

with enforcement of the two statutes the suit brings in

question. As originally brouglit, the suit was to enjoin

the enforcement of- Chap. 17807, Laws of Florida, 1937.

There was a temporary injunction, an appeal and an affirm-

ance. After the enactment of Chapter 19653, Florida

Laws, 1939, it was extended by a supplemental. bill to

include that chapter in its scope and to obtain injunctive

relief, temporary and. permanent as to it.

‘The claim of the original and the supplemental bills

in general was: that the statutes were confessedly aimed

at ASCAP and its constituent members and were class

legislation of the most indefensible kind and that in

1. Prohibits combinations of authors, composers, owners

of copyrighted ‘vocal or instrumental musical compositions from forming any

, association, partnership, or other group or entity, when

fee and exempts such purchaser from accountability to the copyright owner

Section 2-C. Declares against purpose to give a purchaser general to

resell Or distribute; or to prevent copyright holders from determining prices

D °f coarigited music controlled by a combination pro-

a Similarly forbids collection by outside station of license fees

ting to gare Counterparts of Section 4-A and 4-B, except re-

— — ——

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and present

\. filing additional lists and filing

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addition to violating the equal protection, liberty of con-

tract and due process clauses of the Fourteenth Amend-

ment, they violated various other constitutional provisions,

Federal‘ and State.“

In particular the claim as to ASCAP was that it mad

been organized not to increage, or obtain unfair, prices

for the performing. rights of copyrighted musical composi-

tions, but to protect authors, owuers and publishers from

the systematic piracy of their performing rights which,

acting alone, they were powerless to prevent. And there

was the further claim as to it that by fair and reasonable

contracts and arrangements, it had at the same time af-

forded full public use of and access to copyrighted musical

compositions at fair and reasonable prices, and secured

to copyright owners, the benefits of the copyright law.

While the claim as to the statutes in W ate was that they

Section 8. Penalty: clause for_violation of Act.

“Conf s. jurisdiction on circuit courts and designates state attor-

neys . orpey General to enforce public Fights and 1. — 3 a

and penalty for failure to 4 same.

Section 12. Severability clause. -

Section 13. Makes act and rights thereunder cumulative to la and

remedies under existing law.

Section 14. Effective date. (Approved and effective June 9, 1937.)

2 Gibbs v. Buck, 307 U. S. 66, 30 8. Ct. 725, 83 L. Ed. 1111.

3 1939 Act, chapter 19653.

Section I. Definitions. Defines blanket license as ‘italian any 4

whereby public performance for profit is authorized of the combined copy-

right of two or more owners. The term blanket royalty or fee includes any

device whereby prices for per forming rights are not based on the public per-

formance of individual copyrights.

Section 2. (Disclosure section.) ires ieee of public performance

rights in copyrighted music to file with ptroller a list showing name and

title of composition, date and number of copyright, names of author, publisher

owner and owner ft performance rights, with’ provision for

of two cents per composition; also for

filing affidavit describing rights intended to be sold and verifying the state-

ments in the listing, or registration, with name, agent, occupation, residence

and authority of affiant. ig

\ -

— 4 *

had bean enacted, not in response to a publie need, to

make effective the general will of the people of Florida,

but at the instigation of an organized group or band of

radio broadcasters and other users of music in order that,

the association stricken down and outlawed in Florida,

they might with complete impunity again pirate the per-

forming rights to copyrighted musical. compositions with-’

ont making payment to the owners therefor. As to the 1937

“statute, the claim in general was that, though put forward

as an anti-monopoly statute, it was really a statute de-

signed and enacted, in the interest and at the behest of

this anti-copyright group, to deprive the members of the

society of the protection, in Florida, of the copyright laws.

In particular it was-that, by at once outlawing ASCAP

‘and providing for the performance, without compensa-

tion e them, of the copyrighted vocal or instrumental

‘Section’. Makes such lists available for public inspection and taking copies

“in order that any user . may be fully advised concerning the per-

forming rights . . and avoid being overreached ... . and avoid com-

mitting innocent infringement.“ Comptroller may publish lists and must give,

certified copies and anyone selling, licensing or otherwise disposing of per-

forming rights, must exhibit them.

Section 4-A. Makes it unlawful “for two dr more owners” of musical or

dramatics musical copyrights to associate or combine together for purposes of

issuing blanket public performance licenses upon a blanket royalty or fee

unless each owner,or such combination shall make available to eth user of

such composition within the state the right to perform each at a price testab-

lished for each separate performance by filing with the Comptroller either as

part of the list under Section 2 or separately a schedule or prices for the per-

forming rights to each separate performance with affidavit that such price

was fixed by the copyright owner alone and not in combination with other

owners—with provision for reasonable classification by uses if without unrea-

sonable discrimination; and for filing new schedules at any time effective

seven days from filing, and for public inspection of publication of schédules.

Section 4-B. vides any person issuing a blanket license shall file veri-

fied copies of blanket performance license with Comptroller within thirty days

after issuance and fixes filing fee. g |

Section 4-C.® Prohibits the sale or license of performing rights to any.

musical composition for a compensation based in whole or in part on any

program not containing any such composition,” anf makes illegal and invalid

any charge for compensation so based. 5

Section 4-0. Makes sale of publie performance rights or collection of

compensation ‘unlawful if composition not listed as provided in Section 2.

Section 5. Performing rights owner must authorize Secretary of State to

accept service of process and copy shall be thailed him by Secreiary.

‘

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musical compositions of its members, the statute under-

took in effect to nullify the copyright laws and to take

plaintiffsf properties in their. copyrighted compositions

—without compensation and without due process.

80 As to the 1939 statute, the claim was that its rigorous

Be provisions for registration, its prohibitions against and

5 restriction on blanket licensing, its prohibitions against

a | collection of compensation when based in whole or in part

| on any program not containing such composition and its

i 7 general provisions for filing fees, taxes, etc., are so in

‘ derogation of the 1 of owners under the copyright

7 8 Section 6. No action to be sociale without prior compliance with Act.

Fi Comptroller to furnish copies of any papers at same fees as clerk of circuit

ö Section 7. Imposes three per cent 1 on gross receipts, provides for annual

; tax return, inspection and audit of books by Comptroller and provides for

«i means of collection.

an Section 8. Makes unlawful public performance of compositions without

if \ ‘ authority of owner if he has complied with the statute.

2 Section 9. Makes violations misdemeanors under general law.

; Section 10. Makes agents of owners subject to the statute.

N b Section 11. Confers on circuit courts jurisdiction of private suits.

89 Section 12. Confers on circuit courts jurisdiction of enforcement of public

5 : rights by state attorneys under Attorney General upon complaint of a person

4 y Section 13. If prosecuting officers fail to act, aggrieved party may bring

such civil action as state officers might have brought.

Section 14. Appropriates taxes above expenses to general revenue fund.

iA 1 N Section 15. Supersedes inconsistent laws with express saving clausé as to

prior lawful contracts and “any of the statutes of the State of Florida per-

a taining to monopoly or restraint of trade”. rye but not limiting the

1 generalities of the foregoing sections 1, 2-C, 3, 4, 5, 7, 8, 9, 10, 11, 12, 13

i 3 and 14, Chap. 17807, Laws of Florida, 1937. Provides for filing copies of

| ae existing contracts within thirty days and for compliance otherwise with Act

I. within thirty dzys.

. Section 16. Severability clause.

4 : Section 17. Effective date. (Filed and effective June 12, 1939.)

a | The Copyright Clause (Art. 1, Sec. 8, “a. 8) and thé Federal Laws

* A

enacted pursuant thereto; the Impairment of Contract Clause (Art. 1, Sec.

10); the " Privileges and ‘Immunities Clause (Art. 4, Sec. 2); ‘a Interstate

He Commerce Clause (Art. 1, Sec. 8, Cl. 3). 5

. 3 The, prvilegevagains self-incrimination (Sec. 12, Declaration of Rights);

me igs and 1 punishment (Sec. 8, Declaration

3 n the tt oR otection and fase of 2 Clauses: (Sec. 2

1 Declaration of

„law, and so onerous, that they amount to an illegal taking

for private use, that is, for the benefit of broadcasters

and other users, of plaintiffs’ rights in and under: their

copyrights.

The defense in general was: a denial that the legislation

was oppressively or partisanly conceived and that it

operated in violation of any constitutional protection, and

an assertion that it aimed at and constitutionally reached,

the evils of a combination, to fix prices and in restraint

of trade. A combination, organized and operating to fix

the prices to be paid for, and to restrain freedom of trade

in, the public performance of individyal copyrighted musi-

cal compositions at a fair price per use, by blanketing

them together under general licenses covering many com-

positions of many owners, authors and composers, and

refusing to license or permit the licensing individually

and per use of particular compositions. In particular the

defense as to the 1937 Act was: that it was an anti-

monopoly Act and that taken as such it was valid; that

sections 2-A and 2-B and 6, which purport to authorize

the performance within the state of copyrighted musical

compositions without payment by the users therefor, have

been repealed by the 1939 Act; and that the remaining sec-

tions are valid and the Act as to them must stand as an

anti-monopoly Act condemning and making illegal, com-

binations like those of ASCAP and the other' plaintiffs.

As to the 1939 Act, the defense was: that it is in general

an Act for disclosure, and as such is valid under Allen v.

Riley, 203 U.S. 347, 27 S.Ct. 95, 51 L.Ed. 216, 8 Ann. Cas.

137; and that its other provisions requiring blanket licenses

by two or more persons and prohibiting sales or licenses

at a price, based other than on a use in a program of the

particular music sold or. licensed, are mere regulatory

I. ~asures to reach and do away with the 2 of blanket

Being! in all its forms.

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With their-contentions thus put forward, plaintiffs and

defendants ring the changes on their respective arguments.

Plaintiffs urge upon us that ASCAP is a beneficial, de-

fendants that it is an evil institution; plaintiffs that the

‘ants that copyright owners may not, any more than others,

form combinations to monopolize or restrain trade. If the

case were as simple in its issues as each contender thinks

it is, if it turned, on the one hand, simply on whether

plaintiffs had rights and, on the other, as simply on

whether these rights were subject to regulation, we could

and would end it quite simply by saying to defendants, |

„The plaintiffs certainly do have rights in their copy

righted musical compositions“, and to plaintiffs, ‘These’

rights are certainly ‘not beyond reasonable state regula -

tion.“

But the — to the questibns the suit raises is not

so simply found. For co g both plaintiffs’ rights

and the State’s power to subject them to reasonable regu-

lation, the difficulty remaing of determining whether the

statutes in question are unreasonable prohibitions masking

under the guise of regulation, or if regulations, whether,

unduly and beyond the legitimate purpose to be served,

they hamper and restrict plaintiffs’ undoubted rights. In

short, the question for decision comes down at last to, and

is to be decided by, not a general statement of principles,

for as to them there is no real dispute,“ but a construction

They are sufficiently stated for our purpose in Buck v. 53 C., *

F. Supp. 377, dealing with a Nebraska statute of the same purport as the Fla.

1937 Act, and we need not restate them here. Other authorities not cited in

Buck’s case, which may be consulted are: For the plaintiffs: Lawton v.

Steele, 152 U. S. 133, 14 S. Ct. 499, 38 L. Ed. 385; Hale v. Bimco Trading,

306 U. S. 375, 59 S. Ct. 526, 83 L. Ed. 771; State ex rel. Fulton v. Ives, 123

Fla. 401, 167 So. 394 ; People’s Petroleum Producers v. Sterling, D. C., 60 F.

2d 1041, at page 1047; McLeaish & Co. v. Binford, B. C., 52 F. 2d 1813.

Wolff Packing Co. v. Court of Industrial Relations, 262 U. S. 522, at page

1 , 67 L. Ed. 1103, 27 A. I., R. 1280; Smith v. St. Louis &

U. S. at page 255, 21 S. Ct. 603, 45 I. Ed. 847; McFarland

5 . 2 1176 N 1 5 8 i

n . * ee pe Ae 2 nd n

N e e 3 e

43 5

and interpretation of the statutes under attack, as to what

they e to do and whether they may ben

— plaintiffs and defendants see plainly enough that

‘this is so and by an analysis both.of the statutes as a

whole and of each section thereof, plaintiffs undertake to

show their invalidity, defendants their validity. Plaintiffs

pointing to the confiscatory provisions of Sections 2-A,

2-B, 4-A, ‘4-B, 5-A, 5-B and 6, by which the 1937 Act under-

takes to permit performance, in Florida, of copyrig’ ‘ed

music without compensation, urge upon us that not only

these sections but the statute as a whole is invalid because,

not a reasonable regulation of, but a repressive prohibition

of, dealmgs in copyrighted music, it breathes and attempts

to make effective throughout the unconstitutional spirit of

repression and reprisal. Outlawing ASCAP and those in

association with it, and expropriating their property for

the use, without compensation, of radio broadcasters and

others, it, they say in violation of every. constitutional

principle, operates as a kind of Bill of Attainder.

Defendants concede the invalidity of Sections 2-A, 2-B

and 6. Indeed at one stage of the proceedings before us

they offered to submit to a permanent injunction as to

v. Américan Sugar Refining Co., 241 U. S. 79, 36 S. Ci. 498, 60 I. Ed. 899:

Herbert v. — 4 242 U. S. 591, 37 S. Ct. 232, 61 L. Ed. 511; Buck v.

Jewell-La Salle Realty Co., 283 U. 8. 191, 51 8. Ct. 410, 75 L. Ed. 971;

Remick & Co. v. American Automobile Accessories Co., 6 Cir., 5 F. 2d 4i1,

40 A.- L. R. 1511.

For the defendants : Allen v. Riley, 203 U. S. 347, 27 S. Ct. 95, 51

216,8 Ann. Cas. 137; Fox Film Corp. v. Doyal, 286 U. S. 2025 52

546, 76 I. Ed. 1010; Carbice Corp. v. Amer. Patents Corp., 283 U. S.

S. Ct. 334, 75 L. Ed. 819; Straus v. American Publishers Ass’n, 231 U. S

. 8. C. 8, $8 . Bd. 192, L. k. 18e. 1099, Ann. Cas. 1915A,

Interstate Circuit v. United States, a U. S. 208, 59 S. L.

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them. They insist, however, that the vice of thgse sections

1 is peculiar and confined to them and does not pervade the

Pp Act, and that because this is so and particularly because

1 the Act contains a separability clause, Sec! 12, and be-

as cause, in the reference in the 1939 Act to sections of the

K 1937 Act as unrepealed, these sections were not included,

ES these invalid sections should, by a kind of judicial surgery,

f be excised from the Act, leaving it to stand in its other

* : provisions as an anti-monopoly statute.

i [1] We do not think so. In complete agreement with

i what was said in Buck’s case as to the invalidity of

‘Bi Sections 2-A and 2-B of the Nebraska law, we find invalid

- Ba the similar sections of the Florida 1937 Law. For the

same reasons, that they unreasonably interfere with and in

: effect deprive the owners of their copyright protection,

by imposing ‘unlawful conditions, in effect a servitude,

in favor of those desiring to use them, upon the performing

rights in their copyrighted musical compositions, and even

under named conditions completely take the copyright,

by permitting use without compensation, we find Sections

3, 4A, +B, 5-A, 5-B and 6, also invalid.

There remain: Sections 1, 2-C and 3, in effect declaring

ASCAP and similar societies illegal associations, outlaw-

i ing its arrangements for license fees, and proscribing and

Em making an offense, attempts to collect them; Section 7-B

‘| making persons, acting for such a combination, agents for

3 it and liable to the penalties of the Act; Section 8 fixing

8 the penalties; Section 9 giving the state courts jurisdiction

to enforce the Act, civilly and criminally; and Sections

10-A, 10-B, 11-A and 11-B, prescribing procedure under it.

2.61] It is, of course, the duty of a Court, if reasonably

ble, consistent with the protection of constitutional

resolve all doubts as to the validity of a statute

in favor of its constitutionality, sustaining it, if it can be

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done as a whole, or if that cannot be done, as to the part |

of it that is constitutional. But legis!ation, even though

containing a separability clause, is not the enactment of

isolated sections, but of a law as a whole. And the func-

tion of the Court, if there are invalid sections in a statute,

is ‘to ;earch out, not isolated valid ones, but the valid

law as a whole. To do this, a Court may, especially

where the Act contains a separability clause, cut and pare

and trim away its diseased parts, if, when this has been

done, the live spirit of the law as enacted still remains,

the living tree still stands. But, law making at last, is a

legislative and not a judicial function and the search of

the Court in the end is not for a law the legislature could

or might have validly enacted but for the valid law it did

enact. When, therefore, the vice of a statute runs through

the whole of it, Courts may not, by lopping and paring

away, create a statute which the structure and context of

the Act as a whole shows the legislature did not intend to,

indeed did not, enact. Williams v. Standard Oil Co., 278

U.S. 235, 241, 49 S.Ct. 115, 73 L.Ed. 287, 60 A.L.R. 596;

Sage v. Baldwin, P. C., 55 F. 2d 968, and cited cases.

Looked at in this light when the whole purpose of the

1937 Act to outlaw AS CAP and its contracts and to permit

users in Florida to perform compositions, dealt with in

them, without pay, is kept in mind, we think it clear that

the Act, in spite of its separability provision, is so far

indivisible that. with all ‘the without pay sections

stricken as invalid, the whole Act must fall. For, it may

not be supposed that the legislature intended to strike

down the contracts and leave both ASCAP’ and its mem-

bers, and the users in Florida who had been dealing with

CAP, up in the air, with contracts already entered

into and a considerable part of the compensation already

paid, with no right in ASCAP or its members to collect

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the balance due, and none in the. Florida users, without

paying again under separate arrangements, to use the

music they had contracted and partly. paid for. We, there-

fore, conclude as the Court did in Buck v. Swanson,

supra, that the whole Act is invalid and must fall. We

are the more inclined to this view because of the incon-

sistent provisions in the 1939 Act, and because, while

specifically providing that nothing in it shall be construed

to repeal any of the statutes of the state of Florida, per-

taining to monopoly or restraint of trade ‘‘including .

Sections 1, 2-C, 3, 4, 5, 7, 8, 9, 10, 11, 12, 13 and 14 ‘of

Chapter 17807, Laws of Florida, 1937 ˙, ‘that Act by group-

ing all of these sections together makes it clear that they

are regarded by the legislature as forming a harmonious

whole and not as isolated and independent separate laws

and as a whole, they must stand or fall together. In this

view it is not necessary for us to determine whether as

plaintiffs claim, Section 1 is invalid, for indefiniteness and

uncertainty in its provision that it shall apply to combina-

tions only where ‘‘a substantial number’’ of owners are

concerned. Nor is it necessary to determine whether de-

fendants are right in their counter to this claim of

plaintiffs, that if the statute might be regarded as in-

definite in its application as to some, it is certainly not

so in its application to plaintiffs, for they admit that

they own or control substantially all of the playable

copyrighted musical compositions and they may complain

of the statute, not as it applies to others but only as it

applies to themselves.

[7] When it comes, however, to the 1939 Act we think

the matter stands differently, for, having a valid purpose

to compel disclosure to protect music users against im-

position in the matter of copyrighted music and, except as

to Sections 4A and 4-C, which are not germane to, Ahat

purpose, having gone about effecting that purpose in a

reasonable way, the Act as a whole is valid and may stand

with those sections stricken from it. These sections con-

stitute clear invasions of plaintiffs’ rights under federal

laws for which no warrant or justification can be found

in the exercise of the state’s police power. They may not

stand. |

[8, 9] As to 4-A, it seriously invades the rights of

license as they please and by its compulsion, opens to the

public the unlimited right to use copyrighted material

upon terms the owner must fix generally in advance, and

under conditions which are not only unreasonable in fact

but are in their nature beyond the power of the state to

impose, A copyright owner has a right to sell or with-

hold from sale the matter of and the rights under the

he wishes to. He can make one price to one user and an

entirely different price to another. The effort of this

section is to compel copyright owners, if they sell to one

by a blanket license, to furnish schedules giving prices

of the compositions so licensed, and to permit anyone

desiring to do so, to perform any piece at the price so fixed.

This is a taking of plaintiffs’ property in its copyright

without due process, and is beyond the power of the state.

The defendants seem to recognize that this would be so

if the condemned provision were not coupled in the statute

with a provision permitting dealing in copyrighted music

under blanket licenses. They seem to think that the per-

mission of the statute for two or more owners to combine

in a blanket license authorizes the state to impose un-

reasonable restrictions upon that joining.

110, 11] This will not at all do. It is not unlawful for

one or more copyright owners merely to pool their com-

positions for one royalty for them as pooled.. Standard

Oil Co. v. United States, 283 U.S. 163, 51 S.Ct. 421, 75

L.Ed. 926. Section 4-A does not concern itself with price

fixing or with combinations for price fixing; it deals only

with the Act of pooling copyrighted pieces to sell them

for one royalty, that is, with the selling of two or more

pieces under one license. There is no conceivable public

policy against such action by two r more owners and

therefore no valid exercise of police power involved in a

statute putting limitations on such trading. So long as

persons do not unlawfully combine to fix prices, and the

section in question does not deal with such unlawful com-

binations, there is no offense in mere pooling. And the

mere fact that the statute permits to be done what without

the statute it was already lawful to do, does not authorize

it to impose unconstitutional restrictions upon that doing.

But a state may not impose any condition which requires

the relinquishment of a right guaranteed by the National

Constitution’’. Sage v. Baldwin, D. C., 55 F. 2d 968, at page

969. The copyright laws guarantee to owners of musical

compositions, protection against the use thereof without

their consent. The state of Florida may not, therefore,

as a condition to their being allowed to sell in Florida, a

right they already have under the Federal constitution

and laws, compel them to throw open to general public’

use the performing rights to their compositions at 3

price fixed in advance, ee ;

[12-15] Section 4-C is for the same reason invalid. It

undertakes to impose unreasonable restrictions on copy-

right owners, restrictions having no reasonable relation to

the public policy the Act is designed to further, that of

disclosure for, the protection of the public against fraud

and imposition. In attempting to prevent individuals from

contracting for the use of their copyrighted music upon any

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price bases they and their customers may select, the Act

goes clearly beyond and is wholly outside the reasonable

exercise of the police power. People’s Petroleum Pro-

ducers v. Sterling, note 6, supra. The prohibition of the

section, against basing the price upon programs in which

a particular piece of music is not performed, is a com-

pletely arbitrary one and 4s such, it could not stand if

the subject of the prohibition were uses unprotected by

limit the right to sell or license copyrighted musical com-

positions to contracts based solely upon performances per

piece of each particular piece of music and to prohibit

contracts arrived at on any other basis, however reasona-

ble and well adapted to the needs of, and acceptable in,

the business generally, of selling and licensing performing

rights in copyrighted musical compositions. If the statute

dealt with contracts for the hiring of the work and labor

or the personal services, of animals or things and by its

prohibition prevented, wages and salaries from being fixed

except on the basis of piece work, the hire of horse, car

or boat from being fixed, except upon the basis of each

particular use, or journey, we think it would be admitted

that such a statute would be invalid as an invasion of the

right and liberty of contract, and not at all a reasonable

exercise of the police power of the state. Certainly the

state is in no better, the owner of a copyright in no worse

position as to rights protected by copyright, ‘‘While the

the right of proprietorship, it certainly does not lessen that

right. As said by the Supreme Court in Caliga v. Inter

Ocean Newspaper Co., supra (215 U.S. 182, 30 S. Ct. [38],

39, 54 L.Ed. 150), ‘The statute created a new property

right, giving to the author, after publication, the exclusive

right to multiply copies for a limited period.’ é

7 50

The right of an ee in his intellectual a is

similar to any other personal property right. It is assign.

able and it may be sold and transferred in its entirety,

or a limited interest therein, less than the whole property,

may be sold and assigned, and the various rights included

in the entire ownership may be split up and assigned to

different persons. Sales may be absolute or conditional

and they may be with or without qualifications, limitations

or restrictions. Atlantic Monthly Co. v. Post Pub. Co,

D. C. Mass., 27 F. 2d 556; American Tobacco Co. v. Werck-

meister, supra [207 U.S. 284, 28 S. Ct. 72, 52 L. Ed. 208, 12

Ann. Cas. 595]’’; Buck v. Swanson, note 6, supra [33 F.

Supp. 387]. N

For the reasons herein stated, the injunction prayed for

will be granted against the enforcement of the 1937 Act and

as to Sections 4A and 4C in the 1939 Act; as to the

. remainder of the 1939 Act, it will be denied. :

—

1 — —

| | Opinion in

Buck v. Swanson, 33 F. Supp. 377 (D. c. Neb. 1939).

‘(Nebraska Statute printed at p. 115, inf ra.)

In Equity. Action by Gene Buck, individually and as

President of the American Society of Composers, Authors

and Publishers against Harry R. Swanson, as Secretary of

the State of Nebraska, and others to enjoin the “ine

ment of a Nebraska statute relating to monopolies in

field of musical compositions. es

Judgment for plaintiff.

Louis D: Frohlich and Herman Finkelstein, both of 13

York City, and L. J: TePoel, of Omaha, Neb., for plaintiffs.

William J. Hotz, Sp. Asst. to the Atty. Gen., of Nebraska, E

John Riddell, Asst. to the Atty. Gen. of Nebraska, Gordon ane :

Diesing, of Omaha, Neb., and Andrew — of Washing- A 3 :

ton, D. C., for defendants. | as ee

Before Garpner, Circuit Judge and Monczr and Don- 185 :

ouvE, District J Wer f

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GARDNER, Circuit J udge.

This is a suit in equity i in which plaintiffs seek to enjoin

the enforcement of Legislative Bill 478 of the State of

Nebraska, Laws, 1937, c. 138, and which by its terms be- 73

came effective May 17, 1937. 1

The American Society of Composers, Authors and Pub- ee ae ye? .

lishers, a voluntary unincorporated association under te / 5

General Associations Law of New York, consisting of a 5

large number of persons, firms and corporations who own n

or control copyrighted vocal or instrumental musical com- .

positions, as authors, composers and publishers, through i |

Gene Buck its president, and certain individuals and cor-

porations interested in copyrighted musical compositions

are the plaintiffs. The secretary of state, the state treas- aay

; a 35 5 ‘ . *

0 . *

urer, the auditor of public accounts, and the attorney gen-

eral, all of the State of Nebraska, as well as the county

attorneys of 1 various counties of Nebraska, are the Defend-

ants. :

The 3 the e of which is sought to be

. enjoined, is too voluminous to be set ouf herein in haec

verba, but it will be found in the subjoined note. [The

| Statute is printed at p. 91, infra.]

There are approximately 1,000 composer-members of the

American Socjety of Composers, Authors and Publishers,

hereinafter referred to as ASCAP, in the United States,

and 123) publisher- members who constitute the principal

publishers of the country. Each member has assigned to

the Society the exclusive right of public performance for

profit of his copyrighted musical compositions for periods

‘of five years at a time, the present contracts between the

Society and its members expiring December 31, 1940. The

Society has issued blanket licenses to the users of its ‘copy:

rights, by which the latter are permitted to perform pub-

liely for profit at any time, all the musical compositions

owned, written or composed by members of the Society

without requiring further consent of the owner of the

particular composition performed. These blanket licenses

include not only the right to perform the works of the

members of the Society, but also grant the right to perform

the works of some 44,000 members of other similar societies

throughout the civilized world, with which societies ASCAP

has contracts authorizing such licenses.

In Nebraska there are some 350 dance pavilions and

ballrooms of a class that are independent of taverns where

dancing is carried on incidentally. There are ten radio sta-

tions operating within the state, of which one is affiliated

with the Columbia Broadcasting Network and one with the

National Broadcasting Network. The other stations initiate

their own vocal and instrumental musical programs. A

53 : SSS

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large number of 8 are users of music. There are

284,000 radio receiving sets in private homes, and about

one- third of the population of the state at some time during

the year attend dances and balls where music is played.

In 1938 approximately $12,000.00 was collected by ASCAP

from the theatres in the state. The largest radio station

in Nebraska pays about $26,000.00 to the Society annually.

Another group of stations paid the Society about $27,000.00

in 1938. There were 391 signed contracts with users of

music in Nebraska introduced in evidence upon which an

aggregate of approximately $20,000. 00 was paid ASCAP

during 1938. The Society is given, by its members, the

exclusive right to make collections, fix prices, and other-

wise carry on the public performance of all the musical

compositions it controls. Some $6,000,000.00 was taken in

for public performance rights by the Society in the United

States during 1938. Fifty per cent of its net commissions —

was divided among the composer members and the other

‘fifty per cent was divided among the publisher members.

These groups are classified, but the classification does not |

seem to have any material bearing upon the issues pre- iy

sented. Of the popular music necessary for the successful 1

operation of radio stations, dance-halls, hotels and theatres, -

the Society has control of about 85% or 90% and also has .

control of from 50% to 75% of the standard or older music 17

that is played occasionally, All of the large and more in-

fluential publishers of music in the United States are mem- ,

bers of the Society. The users of music in Nebraska can- :

not successfully carry on their business except they deal ;

with the plaintiff Society because there is no place where

nor person or agency to whom users of music in Nebraska

may go in order to deal for public performance rights and

negotiate for music in any substantial amount sufficient to

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All the contentions of plaintiffs, as well as those of the

Defendants, go to the constitutional validity of the statute

involved. Whether or not, under the common law of Ne-

braska the contracts between ASCAP and its members, and

between it and the users of music in Nebraska, are valid or

not, we need not consider. That issue is not before us, but

the single question is the constitutional validity of the chal-

lenged statute.

It appears from the evidence ior to the organiza-

tion of the Plaintiff Society, an author or composer who

had obtained.a copyright for his production had no practi-

cal means of enforcing the exclusive right given him by

the Copyright Act. He was not so equipped nor organized

to discover violations of his rights, and it would require

much time and a large amount of money to enforce his

rights by means of litigation. Users of music, on the other

hand, who wished to buy the rights of public performance

for profit, were unable to ascertain who the copyright owner

was and to whom to go. It was for the purpose of pro-

tecting the legal rights of its members in their copyrighted

musical compositions against infringement by public per-

formance for profit that tLe Society was organize.

_ [1-3] The control or prohibition of combinations in re-

straint of trade and the prohibition of monopolistic practices

is recognized as a proper exercise of the police power of the.

state. Nebbia v. New York 291 U. S. 502, 54 S. Ct. 505;

Waters-Pierce Oil Co. v. Texas 112 U. 8. 115, 29 S. Ot. 227;

Bayside Fish Flour Co. v. Gentry 297 U. S. 422, 56 S. Ot.

513; Crescent Cotton Oil Co. v. Mississippi 257 U. S. 129,

42 8. Ot. 42; Central Lumber Co. v. South Dakota 226 U. 8.

157, 33 S. Ct. 66; Paramount Pietures v. Langer 23 Fed.

Supp. 890. While regulation of such public practices as are

deemed to be contrary to the public policy of the state is

a proper exercise of its police power, yet the de,

of such power is subject to the restrictions imposed by the

Federal Constitution, which must of course be recognized

as the supreme law of the land. A state statute, though

one

enaoted in pursuance of the police power, is void if in con-

travention of any express provision of the Federal Con- 145

stitution or of a valid federal statute, or if it constitutes.

an interference with matters that are within the exclusive ae

scope of federal power.

146] The Act of March 4, 1909, Chap. 320, Sec. 1 (e) 35

Stat. 1073, Title 17, U. S. C. A., Secs. 1-63, enacted pursuant

to the grant of power in Article 1, Section 8 of the Consti-

_ tution, was intended to grant valuable enforcible rights to

authors and publishers without burdensome requirements,

in order to afford greater encouragement to the production

of literary works of lasting benefit to the world. Washing-

tonian Pub. Co. v. Pearson 306 U. S. 30, 59 S. Ct. 397. The

policy and purpose of the statute is to grant to the indi-

vidual the right to control the use of the production covered

by the copyright. Of course, the Act gives him no right to

combine with others to insure control of prices and the con-

sequent power of monopoly of an entire field by combination.

Plaintiffs urge necessity as a justification or warrant for

their organization. It is urged that without some such

means of protection, the individual copyright owner is help-

less to protect his rights, but if the statute violates no rights -

guaranteed to the plaintiffs by the Constitution or laws of

the United States, the motive for the organization or acts

of ASCAP, however impelling, is not material. :

__ [7-8] II is contended that the state statute deprives copy-

right owners of the right to control public performances for

profit of their copyrighted musical compositions, apart from

the sale of sheet music. The copyright is distinct from the

material object copyrighted. It is an intangible incorporeal

right in the nature of a privilege or franchise quite inde-

pendent of any material substance such as the manuscript

or the plate used for printing. King Features Syndica

v. Fleischer (CCA2) 299 Fed. 533. The owner of the copy-

right has the right to dispose of it on such terms as he may

see fit, or he may decline to dispose of it on any terms. He

„ 56

has an individual right of exclusive enjoyment 1 to

that of a patentee of an invention. United States v. Dubilier

Condenser Corp. 289 U. S. 178, 53 S. Ct. 554; United States

v. American Bell Telephone Co. 167 U. S. 224, 17 S. Ct. 809;

Burrow-Giles Lithograph Co. v. Sarony 111 U. S. 53, 4 8.

Ot. 279; American Tobacco Co. v. Werckmeister, 207 U. 8.

284, 28.8. Ct. 72; Caliga v. Inter Ocean Newspaper Co. 215

U. S. 182, 30 S. Ct. 38; Rubber Tire Wheel Co. v. Milwaukee

Rubber Works Co. (CCA7) 154 Fed. 358. ere as

an assignee of the rights of each author is a re esentative

of that individual right. There are, too, individual plain-

tiffs before the courts, and they are interested individually

in the public performance rights of particular musical com-

positions.

In American Tobacco Co. v. Werckmeister, supra, it is

. said 1207 U. S. 284]:

55 the law recognized the artistic or literary

Productions of intellect or genius, not only to the

extent which is involved in dominion aver and owner-

ship of the thing created, but also the intangible :

estate in such property which arises from the privi-

lege of popes and selling to others copies of the

thing produc

‘While the Copyright Act may not 1 the right of

proprietorship, it certainly does not lessen that right. As

said by the Supreme Court in Caliga v. Inter Ocean News-

paper Co., supra [215 U. 8. 182], |

ehe statute created a new property right, giving to

the author, after publication, the exclusive right to

multiply copies for a limited period.

[9-10] The right 618 an bee in his intellectual produe-

tion i is similar to any other personal property right. It is

assignable and it may be sold and transferred in its entirety, —

or a oF a limited interest therein, less than the whole property,

57 5 g . =

: may be sold and assigned, pe W rights included in

the entire Ownership may be split up and assigned to differ-

ent persons. Sales may be absolute or conditional and they

may be with or without qualifications, limitations or restric-

tions. Atlantic Monthly Co. v. Post Pub. Co. (D. C. Mass.)

27 Fed. (2D) 556; American Tobacco Co. v. Werckmeister,

Section 2 (A) of. the state statute requires the author,

edmposer or publisher to specify legibly upon the musical

composition, in whatever form it may be: publi the

selling price thereof for private rendition or pn lic rendi-

tion for profit if made available for such public-rendition

so arrived at and determined for all uses and purposes.”

{11] The right of public performance in connection with -

the composition includes separate and distinct rights, among

them being: (1). the right of publication; (2) the motion

picture rights; (3) the stage rights; (4) the recording

rights; and (5) the radio reproduction rights. The copy-

right owner might wish to grant one of these rights to onc

party and another right to a different party. As the exclu-

sive owner, he is entitled to that right. The above statute,

however, interferes with his so doing.

Section 2 (B) of the statute provides that,

In the event any author, composer or publisher, or

any of his heirs, successors or assigns, fails or re-

fuses to affix on the musical composition the selling

price, and collect the same, for private and pablic

performances for profit, at the time and in the man-

ner specified in this Act, then any ‘person, firm or

corporation in this state who may have purchased

8 and paid for such copyrighted musical composition’

may use the same for private and public perform-

ance-for profit within this state without further

license fee or other exaction; and such person, firm

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be free from any. and all liability in any inf ringe

ment or injunction suit, or in any action to collect

insti such copyright proprietor or

owner in any court within the boundaries of this

state.“ 2e

Under this subsection, the copyright owner in effect must

offer the public performance rights of his copyrighted com.

position for sale and use in Nebraska, and if he does not

choose so to do any person purchasing the composition may

use it in the state for public performance without any lia-

bility to the copyright owner. This rong, we think,

clearly deprives the owner of the copyright of rights to

‘which he is entitled under the Copyright Act. As observed,

his rights of ownership entitle him to sell or offer to sell,

or.to withhold from sale, as he may choose. 5

[12-13] The state statute can not be justified as a msthod

of exercising the police power. The police power may not

be extended to the extent of taking private-property for a

public use. Panhandle Eastern Pipe Line Co. v. State

Highway Commission 294 U. S. 613, 55 S. Ct. 563.

[14] While the power reasonably to restrain unlawful

monopolistic trade - restraining combinations from exercis-

ing any rights in the state may be conceded, an act which

compels the owner of a copyright to offer it for sale in a

certain way, and if he fails so to do to take it from him

without compensation, violates the due process and equal

protection clauses of the Constitution, and it is also viola-

tive of the Federal Copyright Act.

The state statute contains a separability provision (See-

tion 12), which provides that, |

If any section, subdivision, sentence or clause in

this Act shall, for any reason, be held void or nom

enforceable, such decision shall in no way affect the

idity or enforceability of any other part or parts

of this Act. Ze: 255

[15] The Supreme Court of Nebraska has held that a

statutory expression of the separability of various sections

or provisions of a statute is an aid merely to judicial inter-

pretation. First Trust Co. v. Smith 134 Neb. 84, 277 N. W.

762; Laverty v. Cochran 132 Neb. 118, 271 N. W. 354; Hub-

ble Bank v. Bryan 124 Neb. 51, 245 N. W. 20. in Laverty

v. Cochran, supra, the court in speaking of a severance

clause contained in a statute said:

„The rule is that, although a statute may be invalid

or unconstitutional in part, the other parts will 4

sustained where they can be separated from the

_ which is void. Muldoon v. Levi, 25 Neb. 457,

N. W. 280: But the parts of the statute which are

valid must be capable of being executed independ- -

ently of the invalid parts in order to be operative.

State v. Ure, 91 Neb. 31, 135 N. W. 224. The statu. -

tory provision expressing legislative intent as to the

separability of the various. parts of a statute is

merely an aid to judicial interpretation.’’

(16) But where the connection between the invalid 8

and the other parts of the statute is such as to warrant the

belief that the legislature would not have passed the act

without the invalid parts, the whole act must be held

inoperative. The provision of the statute which we are

‘here considering is such an essential part of the statute as

not to be separable.

[17] In view of our conclusion on this phase of the case,

it is unnecessary to consider the other contentions that have

been ably argued and elaborately briefed by counsel for the

respective parties.

We conelude that permanent W restraining the

ä enforcement of this statute must be granted. Counsel for

plaintiffs may prepare findings of fact and conclusions of

Sa mie Re Sones is Sree, ae Ae |

opinion, 2

‘ . = eo 7 4 7

1 Kall

17 *

Bir

1 1

1 H

; 44

Back v. Harton, 33 F. Supp. 1014 (1940, M. D. Tenn).

(tennessee Statute printed at p. 132, infra.)-

In Equity. Action by Gene Buck, individually and as

President of the American Society of Composers, Authors

and Publishers, and others against John W. Harton, as

State Treasurer of Tennessee, and others to restrain the

‘defendants from bringing any proceeding for purpose of

enforcing a certain statute of the state of Tennessee

against the complainants and others similarly situated,

their representatives, employees or agents, and for other.

relief.

opinion. . a

Cornelius, McKinney & Gilbert, of Nashville, Tenn,

and Schwartz & Frolich, of New York City (Charles L.

Cornelius and William Neel McKinney, both of Nashville,

poth of Néw York. City, of counsel), for complainants.

Roy H. Beeler, Atty. Gen., for Tennessee, and W. F.

Barry, Jr., Asst. Atty. Gen., for defendants.

Before Hicks, Cireuit Judge, and Davies and Trion,

District Judges. : sie ae 5

This suit having been duly commenced on April 18, 1938

by filing a subpoena and bill of complaint in this Court,

and personal service of copies thereof having been made

on said date upon the defendants originally named in this

Judgment for the complainants in accordance with

Tenn., and Louis D. Frohlich and Herman Finkelstein, —

action, and the defendants John W. Harton, John *

Jewell, Marion S. Boyd and Glenn Woodlee (said last

named defendants having been substituted by stipulation

in place and stead of Grover Keaton, W. B. Knott, W. T.

McLain and A: T. Stewart), and this Court having duly

granted a temporary injunction on December 1, 1938, and

x é ;

i ; 5

7 A 2 8

2 : 2

3 1 61 = ;

* 8 ;

this cause having come on for hearing on the 19th day of

February, 1940 at the Courthouse of the District Court of

the United States, Eastern District of Tennessee, at

Knoxville, Tennessee, and complainants having appared

by Cornelius, McKinney & Gilbert, Esqs. (Che. es L.

Cornelius, William Neel McKinney, Louis D. Frohlich

and Herman Finkelstein, of Counsel), and defendants

having appeared by Honorable Roy H. Beeler, Attorney-

General of the State of Tennessee, and Honorable P. W.

Barry, Assistant Attorney-General, and this cause ee

been submitted upon all the papers and proceedings he

tofore filed and had herein, and counsel for defendants

having cohsented in writing to the entry of a final decree

in favor of complainants upon said papers, and due de-

liberation having been had, the Court hereby makes te

following Findings of Fact and Conclusions of Law.

* Fr Dinos oF Far

1. The State of Tennessee enacted a Statute entitled

Chapter 212 of the Tennessee Laws of 1937 on May 21,

1937 which Statute became effective immediately. Said

Statute is hereinafter referred to as the ‘‘Statute’’.

2. The plaintiff, American Society of Composers,

Authors and Publishers, is à voluntary unincorporated

association organized in 1914 under the General Associa-

tions Law of New York. Its membership consists of a

substantial number of persons, firms and corporations

who own or control copyrighted vocal or instrumental

musical compositions, as authors, composers and pub-

lishers. It brings this suit through Gene Buck, its Presi-

dent, who has been duly authorized to bring this suit on

behalf of the Society and all its members. Other plain-

tiffs are certain individuals and corporations who are

* 2

3 cedar ident ponent

* as = BRET

members of the Society and are interested in copyrighted 3

musical compositions. They are all citizens and residents

of States other than Tennessee. tae? oe LE:

3. The State Treasurer, the Secretary of State and the

Attorney-General all of the State of Tennessee, as well as

the District Attorneys-General of various circuits of

Tennessee, all citizens and residents of Tennessee, are the

defendants. — 8 — ;

4. There are approximately 1,000 composer-members

of the American Society af Composers, Authors and Pub-

Jishers' (hereinafter referred to as ‘‘ASCAP”’), in the.

United States, and 123 publisher-members who constitute

some of cthe principal publishers of the country. Hach

member has assigned to the Society the exclusive right of-

public performance for profit of his copyrighted i

compositions for periods of five years at a time, the pres-

ent contracts between ASCAP ‘and its members expiring —

December 31, 1940. ASC AP has issued blanket licenses

to the users of its copyrights, by which the latter are per-

‘mitted to perform publicly for profit at any time, all the

musical compositions owned, written or composed by mem-

bers of the Sociéty without requiring further consent of

the owner of the particular composition performed. These

-" blanket licenses include not only the right to perform the

works of the members of the Society, but also grant the

right to perform the works of. some 44,000 members of

other similar societies throughout the civilized world, with

Which societies ASCAP has contracts authorizing ASCAP

to grant such licenses. aie me:

5. At the time the Statute was enacted, there were in

existence 217 signed eontraets between ASC AP and estab

lishments in the State of Tennessee, engaged in the busi-

ness of publicly performing copyrighted musical comp?-,

—

5 „

sitions for profit. During the year 1936, these licensees

paid ASCAP $69,073.19 pursuant to such contracts.

Among such licensees of ASCAP were the owners of 166

motion picture theatres, 38 dance halls, hotels and mis-

cellaneous establishments and 13 radio broadeasting sta-

tions. Among the 13 radio stations in Tennessee licensed

by ASCAP, five are affiliated with the Coiumbia Broad-

casting System, four with the National Broadcasting Cor-

poration, three with the Mutual Broadcasting System and

four with the Dixie Network. Part of the programs broad-

east by the affiliated stations emanate from points outside

of the State and the remaining part initiate in the studios

of such Tennessee broadcasters or elsewhere ‘within the

State. There are 459,900 radio receiving sets in private

homes in the State of Tennessee. No license fees are

paid by the owners of these receiving sets inasmuch as

they do not engage in public performance for profit. The

cost of operation of ASCAP is approximately 17 %o of the

gross amount received.

6. ASOAP i is given by its members the incest right

to-make collections, fix prices for blanket licenses, and

otherwise carry-on the licensing of the right of public per-

formance for profit of all the musical cémpositions copy-

righted by ifs members. Fifty percent of such net in-

come was divided among the composer- and author-mem-

bers and the other fifty percent was divided among the

publisher- members in accordance with a method of classi-

fication defined in the Articles of Association of ASCAP.

7. Prior to the organization of ASCAP, authors, com-.

posers and publishers who had obtained copyrights for

their productions had no practical means of enforcing the

exclusive right given them by the Copyright Act. They

were not so equipped nor organized to discover violations

ol their rights, and it would require much time and a large

. — —

amount of money to detect infringement and to enforce

their rights by means of litigation. None of them secured

any revenue from the public performance for profit of

their copyrighted musical compositions. Users of music,

on the other hand, who wished to obtain the rights of public

performance for profit, were unable to ascertain who the

‘economically obtain individual licenses for the separate

performance of the large numbers of works required by

them daily. It was for the purpose of protecting the legal

rights of its members in their copyrighted musical com-

positions against infringement by public performance for

profit and to give users ready access to a substantial reper-

_toire of music for such purposes that ASCAP was organ-

ized.

8. ASCAP and its members, including the other com-

plainants, come within the purview, terms, conditions,

penalties, forfeitures, prohibitions, restrictions and regu-

lative provisions of the Statute, and the members of

ASCAP including complainants are affected in their rights

by the terms and provisions thereof.

0 g ; bs Sa

9. Complainants are jointly interested in the subjeet of.

the action and in obtaining the relief demanded; the ques-

tions raised by the Bill of Complaint are of common and

general interest to all the members of ASCAP who con-;

stitute a class so numerous as to make it impracticable to

bring them before the Court; complainants herein are

_ suing on their own behalf and on behalf of all the members

of ASCAP.

10. The value of the matter in dispute herein between

each of compleinants and defendants is in excess of the

sum of $3,000, exclusive of interest and costs.

II. The copyrights of musical compositions owned by

each of the corporate plaintiffs are worth in excess of

$1,000,000, and the interests in copyrights of the individual

plaintiffs, including the value of their renewal rights, are

in excess of $100,000 as to each of them.

12. The contracts between the individual composer- and

author-members of ASCAP, including the individual plain-

tiffs, and their. respective publishers do not give the pub-

lisher the right to dispose of the right of public perform- -

ance for profit, nor do they have any provision for payment

by the publisher to the writers of any royalties secured

from issuing such licenses. Before ASCAP was formed,

there were no royalties from this source and since the

‘formation of ASCAP, both writers and publishers have

relied upon ASCAP to collect royalties from this field on

behalf of both and to distribute it equitably for the equal

benefit of writers and publishers, 3

13. Users of music, including users in Tennessee, have

uniformly objected to dealing with individual copyright

owners for the licensing of the public performance for

profit of musical compositions. ASCAP’s practice has

been to grant blanket licenses to theatres according to

their seating capacity, to radio broadcasting stations ac-

cording to their income, power and coverage, and to hotels,

cabarets and dance halls according to their respective size,

business done, number and size of orchestras, methods of

performance, income and standing. Many of such users

have for many yeare consistently refused to pay license

fees to ASCAP or its members, until investigations were

made by ASCAP, infringements ascertained and -suits

brought.

14. The radio broadcasting stations in the State of

Tennessee are members of the National Association of

66 .

Broadeasters, which association on bekalf of its members,

for many years last past, has acted and presently acts

collectively in dealing with ASCAP. | .

15. Under the contracts between ASC AP and said for-

eign societies, the latter are not required to, and never

have, filed with ASCAP or with any State Authority,

copies of the respective compositions copyrighted by their

respective members, or lists of such compositions.

16. Many thousands of the copyrigated musical compo-

sitions owned and published by complainants, as well as

others similarly situated, have been recorded under the

compulsory license provision of Section 1(e) of the Copy-

right Act by manufacturers of phonograph records, muzie

rolls and electrical transcriptions. Such manufacturers

have paid to copyright owners not more than two cents

kor each record and said copyright owners have no right

to demand any further sums from such manufacturers;

complainants and others similarly situated have no control

over the sale or disposition of such phonograph’ records,

music rolls or e transcriptions and they cannot |

compel the manufacturers thereof to affix any price upon

them or to collect a price for the public performance for

profit thereof, or if collected, to remit or give to them the

sums so collected respectively for the. public performance

for profit thereof. Such manufacturers have no right. 5 *

or interest in the public performance for profit of such

copyrighted compositions. :

17. Complainants and others similarly situated are not

willing to permit their musical compositions to be per

formed within the State of Tennessee publicly for profit

on any basis wherein the price for such performance would

be fixed upon a so-called per piece basis. Licensing on

such basis would not be feasible and would be tantamount

to depriving complainants of their ggelusive right of public

performance for profit. pegs Cae re :

18. The musical compositions of ASCAP’s members and

complainants have been for many years last past, and are

presently being performed within the State of Tennessee

in hotels, dance halls, taverns, motion picture theatres and

broadcasting stations. | oe

19. If the members of ASCAP including complainants

tried to comply with the Statute they would each have to

ascertain separately the nature of each establishment in

the State of Tennessee, size of each orchestra, fame or

celebrity of each artist, size of each establishment, its

volume of business, its probable profits, elaborateness of

the production, and size of its audience; they. would each

have to employ a corps of clerical assistants for the purpose

of ascertaining the above information, investigators to

detect infringement and competent counsel to obtain redress

for the same; they would have to attempt to fix a separate

price for each such establishment and to file a list with

all the information required by the Statute; this would add

substantially to the cost of the sheet music sold within the

State of Tennessee, and would make it so great as to en-

courage infringement and interfere with, if not destroy,

the sale of copyrighted sheet music in the State of Ten-

20. The Statute cannot possibly be complied with be-

cause: ee : 3

(a) the public performance rights for profit fluctuate in

value over the years; it is impossible for individual mem-

bers of ASCAP, including the complainants, to specify at

the time of publication of their musical compositions in the

State of Tennessee what the price should be for various

publie performances for profit of their respective musical

citions N

y 8 eee

bb) the members of ASCAP, acting singly, do not have —

the financial resources, experience or ability to obtain the

information necessary to enable them to designate a fair

price of the public performance for profit of their musical

compositions in the State of Tennessee, or to detect or

redress infringement of their compositions in that State;

(e) it would be impossible under the Statute to protect

large investments made in motion pictures and dramatioo -

musical productions which contain individual musical com-

positions, the separate and unrestricted public perform.

ance’ of which would. destroy the value of such motion

pictures and dramatico-musical productions; complain-

ants would be compelled by the Statute to refrain from

- copyrighting the compositions embraced. in such motion

. pictures and dramatico-musical productions in order to

protect their investment therein; this would materially

reduce the number of works copyrighted annually;

(d) it would cost complainants approximately $300,000

to attempt to compile and file the list required by the

Statute and $50,000 additional each year to supplement

such list annually. 5

(e) the Statute cannot be complied: with unless all com-

plainants surrender their membership in ASCAP; ‘this

would entail a loss to each of the complainants in excess of

$5,000 annually, representing the amounts which they

normally receive annually from ASCAP; in some cases,

such loss would be in excess of $50,000 annually ; if not for

the revenue received from ASCAP, complainant-pub

lishers would be unable to continue in business.

21. The constant use of music by radio ortened

the life of a song resulting in a diminution ing from

70% to 80% in the income to authors and composer rd

gales of sheet music and books of music, Sales of “hit”

‘aa

songs have fallen from an average in excess of. 1,000,000

copies prior to 1927, to an average of 30,000 to 150,000

today. The income from mechanical — diminished

ninety-seven peroent.

22. A system of blanket licensing is 3 in the

field of public performance of musical N for:

profit because:

(a) Many request numbers are played a8 —

encores in the course of an evening's entertainment in

dance halls, cabarets, hotels and radio. This is possible

only under some form of blanket license, which allows

users to make last minute substitutions made necessary

by operating difficulties, failure of artists to show up,

etc.; except in rare instances, radio broadcasters in the

State of Tennessee and elsewhere have always taken

blanket licenses for the right of public performance for

profit whether such licenses were obtained from ASCAP

or from others; if the Statute were upheld, the broad-

casters in Tennessee would attempt to obtain the benefit

of blanket licenses by purchasing from publishers entire

catalogués ; such users would not and do not propose to

deal with individual copyright owners for com-

positions; users in Tennessee have no incention of dealing

with individual composers or authors.

(b) It is difficult for users to report accurately the

music performed by them. Large establishments with ex-

pert staffs keep no logs or records of such performances;

it is inevitable that small stations would have greater

difficulty” because of lack of facilities and would be re-

quired to spend as much for this purpose as larger. sta-

tions with substantially larger incoine; the clerical ex-

pense alone would be greater than the license feec. now

paid to ASQAP; by the use of the reservoir of available

music, under a blanket license, users are saved expendi-

— .

}

POR. Neos

— . —

—

3 he.

and its licensees to abandon the contracts between them

ok their music in the State of Tennessee without doing

State of Tennessee.

8 . 70

tures that would be entailed if each musical composition

had to be separately applied for, cleared and reported;

(e) Dance halls and taverns utilizing the services of

orchestras habitually permit. their orchestra leaders to

choose the music played; such orchestra leaders buy a |

considerable of their own copies of music although

some of it is Obtained in the form of professional copies;

orchestra leaders cannot tell when they purchase the

music, at what establishments the same will be played or

where the same will be performed, or under what circum-

stances; the purchase.of music is an important item which

must be taken into consideration by them and orchestra

leaders cannot afford to pay any sums in excess of the

‘sums which they now pay for sheet music.

28, Compliance with the Statuts would require ASA

and would also compel each complainant as well as all the

members of ASCAP to rescind their respective contracts

with ASCAP. ‘ |

24. Although complainants will be able to license users

any act in said State, the Statute prohibits complainants

from so doing without incurring the penalties of said

Statute. “ |

25. Said Statute is class legislation; it is aimed only at

proprietors of music copyrights and no other copyrights,

and it exempts the performance of musical works which

are protected only at common law. A great mau forms |

compositions are presently and constantly dealt 1

licensed, sold and. otherwise made available within the

ca)

b of tlie

police power. of the State of Tennessee; it was enacted,

not in the public interest, but rather for the priyate bene-

fit and gain of a group of users of music in an organized

effort to enable such users to have free access to the copy-

righted works of —— - others ee situ-

ated. : ;

2. The eien of licensing 1 for in said 1 {

ute would deprive complainants and others similarly situ- 2 j

ated of their’ exclusive rights under the Copyright Act. i

28. Defendants: have threatened to and will enforce 7

such Statute against these complainants and others simi- if

larly situated in the event that such complainants mi 4

others similarly situated refuse to comply with said Stat-

ute or do any of the acts made unlawful by said: Statute.

5 29. Said Statute is in its terms so drastic, and the pen- 1)

alties attached to the violation of the terms thereof are i

so great, that complainants have no adequate means of |

testing the validity of the Statute by vio the same |

and defending against a criminal or civil p tion in

the Courts of the State of Tennessee; if, complainants

attempt to issue licenses or collect from licensees or at-

tempt to detect infringements of their copyrighted works

in the 65 counties of the State of Tennessee where their —

works are being publicly perf ormed for profit, they will 1

be subjected to a multiplicity of suits and prosecutions; | 5

unless defendants are restrained, complainants will be 1

unable to secure any compensation for the public perform- 1

ance for profit of their respective copyrighted musical iy

compositions within the State e ö .

30. Unless this Court determines the invalidity of the”

Sea compleinante end othere similarly, situated wil

‘ . ; .

— 1 7 7 0

— „ b

be deprived of ‘the ‘stele . granted to them under ;

the United States Lonstitution and the Copyrighi Act,

and will be without any remedy for the enforcement of

such rights within the State of Tennessee, therefore de-

prived of their property and liberty without due process

of law, and denied the equal protection of the laws, in

contravention of Article I, Sections 8, 9 and 10, Article III,

Section 2, Article IV, Section 2, and Article VI, Section

2 of the Constitution ‘oft the United States, and the Four

* teenth Amendment to the Constitution of the United

States, and are deprived of their rights in their respee-

tive copyrights under the core Act of March 4, 1909

as amended.

31. Complainants have no adequate remedy at law and

are relievahje only in this Court of equity. +

a |

Cons lone or Law a j

I. The Statute makes it 1 for 3 to

issue licenses in the State of Tennessee for the public per-

formance for profit of their copyrighted musical compo-

sitions, except at the risk of incurring prohibitive civil

and criminal penalties of said Statute, 755 the confiscation

of their W

II. The Statute W nullifies and repudiates copy-

rights granted by the United States Government to com-

plainants and their ap conipsongiel in interest.

III. The said ‘Statute violates the treaties made be-

tween the United States and foreign countries, under

which the nationals of such foreign countrieXare given

reciprocal rights with American citizens with ‘espect to

American copyright, and in reliance upon the continued

| 8 effectiveness of which ASCAP entered into various con-

tracts with similar societies in said foreign countries, par-

ticularly with eee of the following countries: Argen-

tina, Austria, Belgium, Brazil, Bulgaria, Czecho Slovakia,

Denmark, England, Finland, France, Germany, Hungary,

Italy, Jugoslavia, Norway, Portugal, Rumania, Spain,

Sweden ‘and Switzerland.

IV. The Statute cannot he justified as a method of

exercising the police power. The police power may not

be extended to the extent of taking private property for a

‘public use, as is done by this Statute.

V. Said Statute denies to complainants equal 1

tion of the laws, and denies to the complainants due proe-

ess of law.

‘VL Said Statute impairs obligations of 8 en-

tered into between complainants and 217 users of music

within the State of Tennessee; and contracts between

members of ASCAP and ASCAP; and contracts between

ASCAP and similar societies operating in foreign coun-

tries; and contracts between writers and composers, and

their respective publishers. ?

VII. Said Statute interferes with „ lib-

erty of contract in the State of Tennessee and elsewhere.

VIII. Said Statute deprives complainants of their

right of free access to the Federal Courts to maintain

suits for infringement for the unlawful public perform

Ae for profit of their copyrighted musical compositions.

1 Said Statute is vague, 8 and indefinite and

fails to apprise complainants and others similarly situ-

ated, of What acts they may omit or commit which would—

e a crime under said Statute.

— „ AO ee At BEL. Raia dates?

‘

FRR nig KG Bite Rina

. —

o TO OT NIT rp

Ned :

X. Said Statute subjects . to a multiplicity

of suits by each of the 217 users within the State of Tenn-

essee with whom they have contracts, by each of the Dis-

trict Attorneys-General in the State of Tennessee and by

the Attorney-General of said State.

7 The said Statute violates Article I, Sections 8, 9

and 10, Article III, Section 2, Article IV, Section 2 and

Article VI, Section 2 of the Constitution of the United

States and the Fourteenth Amendment to the Constjtu-

tion of the United States.

XII. Complainants - have no adequate remedy at law

‘and are relievable only in this Court of equity, and if

complainants are not ‘afforded the equitable relief prayed

for in the Bill of Complaint, but are required to resist,

when criminal. prosecutions and other suits or proceed-

ings are instituted under said Statute, it will result in

duch a multiplicity of suits and entail such delay and 80

jeopardize and injure’ complainants in their persons and

Property as to make the remedy at law grossly inade-

' quate; the penalties for violation of the Statute are so- j

drastic that complainants have no adequate means of

testing the validity of the Statute by violating the same

and defending against a criminal or civil prosecution in

the Courts of the State of Tennessee.

XIII. ‘Complainants are entitled to a decree granting

a permanent injunction restraining defendants, and e

of them, from bringing or permitting to be brougtt,

directly or indirectly, any proceedings at law or in equity

for the purpose of enforcing said Statute’ against com-

plainants and others similarly situated, their representa-

tives, employees, agents or any of them; from demanding

that lists of complainants’ musical compositions and other

data be filed; from taking any steps to adjudicate the

ownership of complainants’ copyrights; from attempting

to appoint a receiver; from interfering with existing con-

tracts between complainants and others, including the

Society and citizens and residents of the State of Tenn-

essee; from enforcing or threatening to enforce. against

citizens or residents of the State of Tennessee, the pen-

alties of said Statute iu the event such citizens and resi-

_ dents desire to carry out their contracts with the Society;

from prosecuting criminally the members of thé Society

including complainants and their representatives or

agents, or any of them, for doing any act or thing to de-

tect. infringement and to enforce their respective rights

under the Copyright Act; and generally from doing any

act or thing to carry out or enforce any of the provisions

of said Statute.

XIV. Complainants are jointly interested in the sub-

ject of the action and in obtaining the relief demanded;

the questions raised by the Bill of Complaint are of com-

mon and general interest to all the members of ASCAP

ho constitute a class so numerous as to make it imprac-

5 ‘ticablé to bring them before the Court; complainants

"herein are suing on their own behalf and on behalf of all

the members of ASCAP; Gene Buck, as President of

ASC AP, is authorized to bring. this suit on its behalf.

XV. Said Statute and each and every part and section

thereof is invalid and is hereby declared to be unconstitu-

tional, illegal and void, and a decree may be entered mak-

ing such declaration and granting the relief hereinabove

provided for, and denying : any relief to the defendants, =

~ eee

2 a

= — 4

2 at

7 1

— — . —

* — — Lith —

Ses SoS — 8

The Washington State Statute.

(Considered in Buck v. Gallagher, 307 U. S. 95.)

—

: Chapter 218, Washington Laws, 1937, page 1070, reads

as follows:

‘2 AN ACT in aid of the Federal Copyright Laws, to assist in

- | effectuating their true intent and their enforcement in the

5 State of Washington by removing and declaring illegal

certain monopolistic abuses and activities wrongfully.

practiced under the guise of copyrights within the state

by price fixing combinations, monopolies, and pools; to

15 enforce the Washington constitutional provisions pro-

hibiting price fixing monopolies and combinations in

restraint of commerce and trade; providing penalties for

combining rights granted by the copyright, laws where

the effect of such combination results in the use of copy-

right privileges as instrumentalities of oppression and

extortion within the state in violation of constitutional

— provisions; and encouraging the rendition, creation and

„ production of copyrighted works among the school chil-

dren and citizens of this state; repealing certain acts;

_ ereating a State Anti-Monopoly Board for a particular

function to be exercised only in the event of abuses and

violations hereof; defining its duties, and the jurisdic

tion and duties of courts of record, the duties of the

| si _ | prosecuting attorneys, county auditors, the state treas-

5 urer and the secretary of state; and providing for the

ae appointment of a receiver in certain instances; defining

certain terms; providing for service of process on non-

2 : Bet residents, prohibiting certain acts; and providing pen.

, alties for violation hereof and repealing section 2690 of

Remington’s Revised Statutes.

Be it enacted by n rs of the State of Washing-

ton:

Section 1. Section 2690 of Remington’s Revised Stat-

utes is hereby repealed.

| Section 2. It sball be unlawful for any person who, with-

out the consent of the owner thereof, shall cause to be

publicly performed for profit any dramatic composition, or

dramatic musical composition commonly called an opera,

or other copyrighted works, or any substantial part-there-

_ of, which has been copyrighted under the laws of the United

States, or for any person to knowingly participate in the

performance or representation of any substantial part

thereof, or by knowingly selling a substantial copy of any

substantial part thereof. :

Section 3. It shall be unlawful for two or more ed

holding or claiming separate copyrighted works under the

out the state, to band together, or to pool their interest for

the purpose of fixing the prices on the use of said copy-

_ righted works, or to pool their separate interests or to

conspire, federate, or join together, for the purpose of col-

lecting fees in this state, or.to issue blanket licenses in this

state, for the right to commercially use or perform pub-

licly their separate copyrighted works: Provided, however,

Such persons may join together if they issue licenses on

rates assessed on a per piece system of usage: Provided,

- further, This act shall not apply to any one individual

author or composer or copyright holder or owner who may

demand any price or fee he or she may choose for the right

to use or publicly perform his or her individual copy-

righted work or works: Provided, further, Such per piece

system of licensing must not be in excess of any per piece

system in operation in other states where any group or

persons affected by this act does business, and all groups

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and persons affected by this act, are prohibited from dis.

eriminating against the citizens of this state by charging

higher and more inequitable rates per piece for music l-

_ censes in this state than in other states: Provided, further,

Where the owner, holder, or person having control of any

copyrighted work has sold the right to the single use of

said copyrighted work, where its sole value is in its use for

public performance for profit, and has received any con-

sideration therefor, either within or without the state,

then said person or persons shall he deemed to have sold

and parted with the right to further restrict the use of said

copyrighted work or works. “

Section 4. In the event two or more persons holding

separate copyrighted musical works, or any rights flowing

therefrom, whether by assignment, agency agreements, or

by any form of agreement, pool their interests, or combine,

or conspire, federate, or join together in any way, whether

for a lawful purpose or otherwise, a complete list of their

copyrighted works or compositions shall be filed once each

year in the office of the secretary of state of the State

of Washington, together with a list of the prices charged

or demanded for their various copyrighted works; no pay-

ment or filing fee shall be required by the secretary of

state, and said persons, corporations, or association, for.

eign or domestic, shall state therein under oath, that said

list is a complete catalogue of the titles of their claimed.

compositions, whether musical or dramatic or of any other

classification, and in addition to stating the name and title

of the copyrighted work it shall recite therein the date each

separate work was copyrighted, and the name of the author,

the date of its assignment, if any, or the date of the assigi-

ment of any interest therein, if any, and the name of the

publisher, the name of the present owner, together with the

addresses and residences of all parties who have at any

time had any interest in such copyrighted work. The secre

tary of state shall require two copies of said list, one of

“which he shall mae on file, the other shall be forwarded

to the offices of the state treasurer 15 Olympia. ,

Section 5. The foregoing list of names and titles, pro-

vided for in the preceding section, shall be made available ’

by the secretary of state to all persons for examination, in

order that any user of copyrighted works in this state may

know the rights and the titles to such copyrighted works as

may be claimed by any of said combinations, pools, associa- | ee

tions, or persons as aforesaid; said lists shall be prepared ; oe

so that all persons may avoid using said copyrighted com- 134

positions, if they so desire, and may avoid conflict there-

with, and avoid committing innocent infringements of said

works; and in order to further effectuate the copyright

laws of the United States, the secretary of state shall, if he

deems it necessary to protect the citizens of this state from

committing innocent violations of the copyright laws of the

United States, publish such list once each year in a news-

paper of gen circulation, in order that all citizens of

the state may respect any and all individ

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