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Coachella “radius clause” lawsuit: ruling reversed

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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Re-file date granted for Coachella antitrust suit

The anti-competition lawsuit filed against AEG and Coachella by Oregon promoter Soul’d Out has been partially dismissed by US federal judge Michael Mosman, who granted AEG’s motion to dismiss the antitrust claims – but declined to rule on other elements of the suit.

In an interview with Billboard, Soul’d Out’s lawyer, Nika Aldrich, who filed the suit against Coachella, revealed that several artists, including Bangas, SZA and Daniel Caesar, approached to perform at Soul’d Out Festival in Portland, Oregon, were unable to do so owing to Coachella’s ‘radius clause’ – an alleged 1,300-mile restriction on artists playing other festivals for five months around their Coachella show.

According to Aldrich, Soul’d Out has also been given the option of re-filing the antitrust suit should the plaintiff revise its definition of “relevant markets”.

“Establishing the correct product market is something the courts require with a degree of particularity [when assessing an antitrust dispute],” he explains.

Soul’d Out has been given a deadline of 25 October to re-file.

 


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AEG moves to dismiss suit by ‘free rider’ Soul’d Out

AEG has asked the US district court for Oregon to toss a competition lawsuit by Soul’d Out Productions, saying the Oregon promoter seeks to piggyback on the success of its Coachella festival by disputing the latter’s controversial ‘radius clause’.

Soul’d Out, which organises Portland’s Soul’d Out Music Festival, sued AEG in April on competition grounds, arguing Coachella’s radius clause – a contractual restriction that prevents acts on the festival’s bill from playing at “any other festival or themed event within a distance that extends over 1,300 miles” – amounts to anti-competitive behaviour on the part of organisers, and unfairly targets other, smaller festivals.

At the time, AEG suggested the lawsuit was frivolous, arguing that radius clauses are “an industry standard used by festival, concert and tour promoters designed to protect the integrity and exclusivity of their events”.

In its motion to dismiss, filed on Friday, AEG argued that Soul’d Out’s complaint alleges that Coachella intentionally interfered with its business by strong-arming its acts into accepting the clause – something that cannot be the case because, of the three acts Soul’d Out claims to have lost, two of the three had already agreed to play Coachella by the time they were approached by Soul’d Out.

Additionally, AEG argues, as the radius clause applies to almost every act playing Coachella, Soul’d Out cannot claim it was specifically targeted by the clause.

“Soul’d Out’s true gripe with the radius clause is that it prevents plaintiff from free riding on the popularity of Coachella

Soul’d Out 2018 (15,000-cap.) was headlined by De La Soul, Wyclef Jean and Erykah Badu. It is unclear which three acts were ‘lost’ to Coachella.

As spotted by Amplify, the documents also reveal that, contrary to the previously reported 1,300-mile figure, the radius clause actually extends to any festival in North America from 15 December to 1 May. (Coachella takes place in mid-April.) Coachella artists are also not permitted play any ‘hard ticket concerts’ in southern California – nor announce other festival appearances in California, Nevada, Oregon, Washington or Arizona (the 1,300-mile radius) – during that period.

Additionally, clause-bound acts are forbidden announce festival appearances in any of the other 45 US states until after the Coachella line-up is announced in January (with the exception of South by Southwest, EDM event Ultra Miami and AEG’s New Orleans Jazzfest).

Imploring judge Michael Mosman to dismiss, AEG’s lawyers, Justin Bernick of Hogan Lovells and Casey Nokes of Cable Huston, argue: “[Soul’d Out]’s true gripe with the radius clause is that it prevents plaintiff from free riding on the popularity of Coachella and the investment AEG has made in developing its artist line-up and ensuring those artists play at Coachella.

“It is more than reasonable for AEG to take steps to prevent this type of free riding from taking place.”

 


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