# Appendix — Watson v. Buck

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1941
- **Citation:** 313 U.S. 387

## Text

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841

CLERK

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

5
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.

—

=

\

25
4

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.

g
;

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
copyright owner, by every one of the 44,000 members of the Society and its
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.”

a

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 7 7
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12

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

13
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
en
—

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 $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.

19

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.

n

0

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
.
. .
1

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
C

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

23

“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.

95
:
|

15
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| : 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

16

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

2

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} =
Se ng eas Ph ake

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4

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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.

31

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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32

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.

Be Lat we
r 7 BROOME ee
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C. ˙ AERA FP Ey hI LORI MILIAN ND
pag ss

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.

a PS me IS ete a aay Be =

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4.5

36

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

37

*

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-
— — ——

Provides for service of process on agent of outside c-.

.

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and present
\. filing additional lists and filing

—

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 *

25

7

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

d

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

41

„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
copyright laws protect them from the legislation; defend-

‘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
do

— 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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45

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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46

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

47

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
copyright owners.to sell or license or refuse to sell or
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
copyright. He cannot be made to sell his product unless
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-

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48

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
copyright. For, the end and aim of the prohibition is to
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
Copyright Act [17 U.S. C. A. §1 et seq.] may not enhance
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

oh

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
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\

| | 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

2

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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Nee SRT RS SS RRS er pk AOR 8 es - *

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 ‘ . *
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52

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

et)

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

„ e eee ee ae
the Soeisty. a.

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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

sm

sy

one

55

1
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
r

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58
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

?

59

[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
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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 ;
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Pa
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

62

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?-,

—

—

0
*

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

. — —
>

S

64

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
copyright owner was and to whom to go and could not
‘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.

,

65

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

1

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

67

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-

— .

t
}
*
.

POR. Neos

— . —

—

N

7

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)

71

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386401_0429%3A09. Public record. Not legal advice.