Appeals Court Revives Lawsuit Over Coachella's Restrictions on Musicians

The Ninth Circuit concludes that the promoter of a Portland music festival should be able to attempt to vindicate an alleged right to enter into contracts with artists free from AEG’s interference.
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2019 Coachella Valley Music And Arts Festival

When it comes to personal space, the live music industry has problems that go beyond the COVID-19 pandemic. In a lawsuit filed two years ago, AEG was accused of anti-competitive behavior because the concert giant insisted in contracts that artists who sign up for AEG's Coachella Valley Music and Arts Festival couldn't play other big events on the West Coast. On Tuesday, the Ninth Circuit Court of Appeals reversed a federal judge's dismissal of this case.

The suit was brought by Soul'd Out Productions, the promoter of a music festival in Portland, Oregon, who objected to so-called "radius clauses." The case challenged a common feature of the live music business — territorial exclusivity — but got rejected because the district court ruled Soul'd Out had no standing to assert claims since the plaintiff was not a party to those objectionable Coachella contracts.

In a memorandum Tuesday, a three-judge appellate panel concludes that Soul'd Out should be able to move forward on its tortious interference and unlawful competition claims.

"To the extent the district court dismissed those claims for lack of standing, we think the court erred," states the opinion. "Soul’d Out’s allegations satisfy the Article III requirements for standing: Soul’d Out alleged a concrete and particularized injury, namely the loss of lucrative performance contracts with artists under contract with AEG; Soul’d Out also alleged that AEG’s wrongful conduct caused that injury; and a judgment in Soul’d Out’s favor could, either through damages or injunctive relief, redress the harm. Although Soul’d Out is not a party to the artists’ contracts with AEG, we have previously determined that an injured party may assert tort claims predicated on a contract’s alleged invalidity, despite not being a party to the contract."

The appeals court adds that Soul'd Out "is seeking to vindicate its own rights — namely its alleged right to enter into contracts with artists free from AEG’s wrongful interference. No plaintiff is better suited to assert the tort claims alleged here, and there is therefore no prudential reason to deny Soul’d Out standing."

Here's the full opinion.