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Coachella “radius clause” lawsuit: ruling reversed

Oregon judge has reversed his 2019 ruling to dismiss the case filed by Soul’d Out Music Festival founders

By IQ on 20 Aug 2020

Coachella radius clause lawsuit dismissed

AEG and Goldenvoice-organised festival, Coachella, has been hit with a lawsuit


image © image © Jason Persse

A lawsuit regarding Coachella’s restrictive “radius clause” is moving forward after an Oregon judge reversed his 2019 ruling to dismiss the case, according to Billboard.

On Wednesday (19 August) Oregon District Court Judge Michael Mosman ruled that the lawsuit filed by Soul’d Out Music Festival founders Nicholas Harris and Haytham Abdulhadi could now proceed, bringing the dispute closer to a possible trial.

The founders of Soul’d Out Music Festival (1,480-cap.) first filed the lawsuit in April 2018, claiming that the contractual restriction preventing acts on the Coachella bill from playing at any other festival in North America from 15 December to 1 May, amounts to anti-competitive behaviour on the part of organisers.

Harris and Abdulhadi said that the radius clause has damaged their event, Soul’d Out Music Festival.

Mosman granted an AEG motion to dismiss the antitrust claims and partially dismissed the lawsuit in October 2018. The plaintiffs were allowed to re-file their complaint, granted they revised their definition of “relevant markets”. However, the re-filed lawsuit was rejected.

In March 2019, federal judge Mosman dismissed the lawsuit with prejudice (11 March), preventing the Soul’d Out Productions’ founders from re-filing their suit against Coachella Music Festival (125,000-cap.), and organisers AEG and Goldenvoice.

“We expect that, after complete discovery, a jury will find that Coachella’s radius clause is unreasonable”

That decision was overturned 14 months later when a three-judge panel of the Ninth Circuit Court of Appeals found that Soul’d Out Music Festival had been harmed by the radius clause and had a right to challenge the contract’s validity.

Now, the case will now move into the discovery phase with lawyers for Soul’d Out expected to subpoena artist contracts for the festival and internal communications.

“We are pleased that the court has agreed that Soul’d Out’s complaint was sufficient and that the case can go forward,” Harris and Abdulhadi’s lawyer, Nika Aldrichsaid. “We expect that, after complete discovery, a jury will find that Coachella’s radius clause is unreasonable, and that AEG’s use and abuse of that clause to hurt local music festivals was unlawful.”

The Oregon promoters were the first to bring attention to Coachella’s radius clause requirements, publishing previously-unreleased provisions of the agreement.

Coachella attorneys defended the policy, explaining in a court filing accessed by Amplify that “the entire purpose of the radius clause is to protect AEG from competitors unfairly free-riding on its creative choices in selecting its artist lineup.”

The lawyers stated that “maintaining a unique festival lineup is crucial for Coachella to remain competitive.” AEG’s lawyers also protested against the release of the radius clause letter, that was provided “for settlement purposes only”.

 


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