Case 4:21-cv-00022-RM Document 10 Filed 03/25/21 Page 1 of 68 1 G. Scott Sobel, Esq., SBN 124818 Law Office of G. Scott Sobel 2 1180 S. Beverly Drive, Suite 610 3 Los Angeles, CA 90035-1158 Tel: (310) 422-7067; Fax: (888) 863-5630 4 [email protected] 5 Attorney for Plaintiffs and proposed Classes 6 UNITED STATES DISTRICT COURT 7 DISTRICT OF ARIZONA 8 Case No. 4:21-cv-00022-RM 9 Alexander C. Baker; CLASS ACTION All other similarly situated Songwriters; 10 VERIFIED FIRST AMENDED Adam Bravery LLC; COMPLAINT (Class Claims 1-6): 11 All other similarly situated Royalty 1. DECLARATORY JUDGMENT 12 Assignees; ASCAP & BMI Mandatory Arbitration Clause is Void and 13 Plaintiffs, Unenforceable for Economic Duress v. 14 2. DECLARATORY JUDGMENT American Society of Composers, Authors 15 ASCAP & BMI and Their Officials And Publishers, aka ASCAP; are State Actors 16 Broadcast Music, Inc., aka BMI; 3. DECLARATORY JUDGMENT 17 Mike O’Neil; ASCAP & BMI Arbitration Clause Erika Stallings; Violates First and Seventh 18 Amendment without Due Process and 19 4. DECLARATORY JUDGMENT Does 1-10, Performance Royalties are a Federally 20 Defendants. Protected Right ` 21 5. DECLARATORY JUDGMENT ASCAP & BMI Owe Songwriters a 22 Fiduciary Duty 23 6. BREACH OF FIDUCIARY DUTY For Underpayment - Failing To Obey 24 the Royalty Calculation Formula 25 7-15. NON-CLASS TORT CLAIMS 26 DEMAND FOR JURY TRIAL 27 28 Case 4:21-cv-00022-RM Document 10 Filed 03/25/21 Page 2 of 68 1 Plaintiff Alexander C. Baker, by and through his attorney, brings this action on behalf 2 of himself and all other similarly-situated Songwriters (“Songwriter Class Members" or 3 simply “Songwriters”). Plaintiff Adam Bravery LLC, by and through its attorney, brings 4 this action on behalf of itself and all other similarly-situated Royalty Assignees of 5 Songwriters. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i FIRST AMENDED COMPLAINT Case 4:21-cv-00022-RM Document 10 Filed 03/25/21 Page 3 of 68 1 T ABLE OF C ONTENTS 2 3 I. SHORT PLAIN STATEMENT OF THE CLASS ACTION CASE ........ 1 4 A. ASCAP & BMI Owe a Fiduciary Duty to Songwriters And Must Be Held 5 Accountable ................................................................................................ 1 6 B. Songwriters’ Constitutional Rights Must Be Restored ............................... 1 7 C. ASCAP & BMI Should Be Declared State Actors ..................................... 2 8 D. Collecting Performance Royalties Should Be Declared A Federally- 9 Protected Right ........................................................................................... 2 10 E. BMI’s Mandatory Arbitration Agreement Is Unconstitutional and Is Void For Economic Duress .................................................................................. 2 11 F. Alexander C. Baker and his Assignee Adam Bravery, LLC are Viable 12 Class Representatives ................................................................................. 3 13 G. The Court Should Bifurcate the Declaratory Judgments and Try Them 14 Purely As A Matter of Law ......................................................................... 4 15 H. Class Injury Can Only Be Remedied By Class-Wide Relief ...................... 4 16 II. SHORT PLAIN STATEMENT OF THE UNDERLYING CASE ........... 5 17 III. SUBJECT MATTER JURISDICTION ..................................................... 5 18 A. Federal Question Jurisdiction ..................................................................... 5 19 B. Alexander Baker and Adam Bravery LLC Assert Diversity Jurisdiction .. 6 20 C. Supplemental Jurisdiction ........................................................................... 6 21 IV. PERSONAL JURISDICTION .................................................................... 6 22 23 V. VENUE .......................................................................................................... 8 24 VI. PARTIES ....................................................................................................... 8 25 A. Plaintiffs ...................................................................................................... 8 26 B. Defendants .................................................................................................. 9 27 C. Doe Defendants ........................................................................................... 9 28 VII. STANDING ............................................................................................... 9 ii FIRST AMENDED COMPLAINT Case 4:21-cv-00022-RM Document 10 Filed 03/25/21 Page 4 of 68 1 A. Individual Standing for Plaintiff Alexander C. Baker ................................ 9 2 B. Organizational Standing for Adam Bravery LLC ..................................... 10 3 VIII. FACTS RELEVANT TO CLASS ACTION CLAIMS ..................... 12 4 A. Background on ASCAP & BMI ............................................................... 12 5 B. Facts Regarding Copyrights In Recorded Music ...................................... 12 6 C. Facts Regarding Songwriters’ Assignment of Public Performance Rights 7 To ASCAP & BMI ................................................................................... 13 8 D. Facts Regarding ASCAP & BMI Granting “Blanket” Licenses .............. 13 9 E. Facts Distinguishing Performance Royalties from Artist Royalties ......... 13 10 F. Facts Distinguishing Performance Royalties From Royalties Paid On 11 Third Party License Deals ......................................................................... 14 12 G. Facts Regarding The Co-Mingling of All Performance Royalty Money . 15 13 H. Facts Regarding The Mysterious Nature of the Performance Royalty Formula ..................................................................................................... 15 14 I. Facts Regarding The Consent Decrees ..................................................... 16 15 J. ASCAP & BMI Standard Writer “Agreement” ........................................ 17 16 K. Background on Class Representative Alexander Baker ........................... 20 17 IX. CAUSES OF ACTION IN CLASS ACTION CASE ............................... 21 18 FIRST CAUSE OF ACTION .............................................................................. 21 19 SECOND CAUSE OF ACTION ......................................................................... 23 20 THIRD CAUSE OF ACTION ............................................................................. 25 21 FOURTH CAUSE OF ACTION ......................................................................... 28 22 FIFTH CAUSE OF ACTION .............................................................................. 31 23 SIXTH CAUSE OF ACTION ............................................................................. 33 24 X. PRAYER FOR RELIEF ON CLASS ACTION CLAIMS ..................... 33 25 A. Declaratory Relief ..................................................................................... 33 26 B. Accounting ................................................................................................ 34 27 C. Damages .................................................................................................... 34 28 iii FIRST AMENDED COMPLAINT Case 4:21-cv-00022-RM Document 10 Filed 03/25/21 Page 5 of 68 1 D. Injunctive Relief ....................................................................................... 34 2 E. Costs and Fees .......................................................................................... 34 3 XI. DEMAND FOR COURT TRIAL AND JURY TRIAL ON CLASS 4 ACTION CLAIMS ..................................................................................... 35 5 XII. FACTS RELEVANT TO THE UNDERLYING CASE AGAINST 6 BMI .............................................................................................................. 35 7 A. The Baker-Marlo Divorce, Stipulation and Royalty Order ...................... 35 8 B. Baker’s Assignment of BMI Royalties to the LLC .................................. 36 9 C. BMI and Erika Stallings Fabricate a False “Dispute” and Repeatedly 10 Threaten to Stop Paying Royalties ............................................................ 37 11 D. Marlo Files Meritless Contempt Action Which is Dismissed .................. 41 12 E. BMI Officially Imposes Dispute Hold, But Then Pays Again Anyway ... 42 13 F. BMI Stops Paying Royalties ..................................................................... 43 14 XIII. CAUSES OF ACTION IN UNDERLYING CASE ............................ 43 15 SEVENTH CAUSE OF ACTION ....................................................................... 43 16 EIGHTH CAUSE OF ACTION .......................................................................... 45 17 NINTH CAUSE OF ACTION ............................................................................. 46 18 TENTH CAUSE OF ACTION ............................................................................ 48 19 ELEVENTH CAUSE OF ACTION .................................................................... 51 TWELVTH CAUSE OF ACTION ...................................................................... 55 20 THIRTEENTH CAUSE OF ACTION ................................................................ 58 21 FOURTEENTH CAUSE OF ACTION ............................................................... 59 22 FIFTEENTH CAUSE OF ACTION .................................................................... 60 23 XIV. PRAYER FOR RELIEF ON UNDERLYING CLAIMS .................. 60 24 A. Damages ...................................................................................................