Spotify Vs Lowery

Case 2:15-cv-09929-BRO-RAO Document 55 Filed 04/26/16 Page 1 of 23 Page ID #:1484
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MAYER BROWN LLP

JOHN NADOLENCO (SBN 181128)
jnadolenco@mayerbrown.com
EUGENE VOLOKH (SBN 194464)
evolokh@mayerbrown.com
350 South Grand Avenue, 25th Floor
Los Angeles, California 90071-1503
Telephone: (213) 229-9500
Facsimile: (213) 625-0248
A. JOHN P. MANCINI (admitted pro hac vice)
jmancini@mayerbrown.com
ALLISON LEVINE STILLMAN (admitted pro
hac vice)
astillman@mayerbrown.com
1221 Avenue of the Americas
New York, New York 10020-1001
Telephone: (212) 506-2295
Facsimile: (212) 849-5895
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ARCHIS A. PARASHARAMI (admitted pro

hac vice)
aparasharami@mayerbrown.com
DANIEL E. JONES (admitted pro hac vice)
djones@mayerbrown.com
1999 K Street, N.W.
Washington, D.C. 20006-1101
Telephone: (202) 263-3328
Facsimile: (202) 263-5328
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Attorneys for Defendant SPOTIFY USA INC.
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UNITED STATES DISTRICT COURT
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CENTRAL DISTRICT OF CALIFORNIA
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DAVID LOWERY, VICTOR

KRUMMENACHER, GREG
LISHER, and DAVID
FARAGHER, individually and on
behalf of himself and all others
similarly situated,
Plaintiffs,
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vs.
SPOTIFY USA INC., a Delaware
corporation,
Case No. 2:15-cv-09929-BRO-RAO

DEFENDANT SPOTIFY USA INC.S
CORRECTED MEMORANDUM OF
POINTS AND AUTHORITIES IN
OPPOSITION TO PLAINTIFFS
MOTION FOR CORRECTIVE
ACTION TO PREVENT
MISREPRESENTATIONS TO
PUTATIVE CLASS MEMBERS
Date:
Time:
Judge:
May 16, 2016

1:30 pm
Hon. Beverly Reid OConnell
Defendant.
SPOTIFYS CORRECTED MEMORANDUM IN OPPOSITION TO MOTION FOR CORRECTIVE ACTION;
CASE NO. 2:15-CV-09929-BRO-RAO
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TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES....................................................................................ii
INTRODUCTION .................................................................................................... 1
BACKGROUND ...................................................................................................... 3
ARGUMENT............................................................................................................ 6
I.
Plaintiffs Filed This Motion Despite Spotifys Willingness To
Provide Them With Most Of The Communications In Spotifys
Possession That They Have Requested ............................................... 6
II.
Plaintiffs Improperly Seek Relief Directed At, And Based On
The Alleged Conduct Of, The NMPA, Which Is Not A Party To
This Litigation...................................................................................... 7
III. Plaintiffs Demand To Review And Approve Future
Communications By Spotify Violates The First Amendment........... 10
A.
Plaintiffs Allege No Improper Communications By
Spotify...................................................................................... 12
B.
Spotifys Communications With Publishers Regarding
The NMPA Agreement Have Been Extremely Limited
And Are Not Coercive............................................................. 14
CONCLUSION....................................................................................................... 17
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TABLE OF AUTHORITIES
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Page
Cases
Alcatel-Lucent USA v. Dugdale Commcns,

2009 WL 3346784 (C.D. Cal. Oct. 13, 2009) .................................................. 6, 7
Alemite Mfg. Corp. v. Staff,
42 F.2d 832 (2d Cir. 1930) ................................................................................... 7
Applegate v. Kokor,
2015 WL 7007997 (E.D. Cal. Nov. 12, 2015) ..................................................... 7
Babbitt v. Albertsons Inc.,
1993 WL 128089 (N.D. Cal. Jan. 28, 1993) ...................................................... 11
Bryant v. Gallagher,
2014 WL 1276475 (E.D. Cal. Mar. 27, 2014) ................................................... 10
Burrell v. Crown Cent. Petroleum, Inc.,
176 F.R.D. 239 (E.D. Tex. 1997) ....................................................................... 15
Camp v. Alexander,
300 F.R.D. 617 (N.D. Cal. 2014) ....................................................................... 16
Castaneda v. Burger King,
2009 WL 2382688 (N.D. Cal. July 31, 2009) .................................................... 11
Chase Natl Bank v. City of Norwalk,
291 U.S. 431 (1934) ............................................................................................. 9
Deutsche Intl 1 v. E1 Trade Intl,
2006 WL 6106246 (C.D. Cal. Jan. 4, 2006)......................................................... 7
Gerlach v. Wells Fargo & Co.,
2006 WL 824652 (N.D. Cal. Mar. 28, 2006) ..................................................... 11
Gonzales v. Valenzuela,
2002 WL 34700599 (C.D. Cal Oct. 7, 2002) ....................................................... 7
Gulf Oil Co. v. Bernard,
452 U.S. 89 (1981) ................................................................................... 2, 11, 17
Hansberry v. Lee,
311 U.S. 32 (1940) ............................................................................................... 8
Hernandez v. Best Buy Stores, L.P.,
2015 WL 7176352 (S.D. Cal. Nov. 13, 2015) ................................................... 11
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Jenifer v. Delaware Solid Waste Auth.,

1999 WL 117762 (D. Del. Feb. 25, 1999) ......................................................... 15
Keystone Tobacco Co., Inc. v. U.S. Tobacco Co.,
238 F. Supp. 2d 151 (D.D.C. 2002) ................................................................... 15
Kleiner v. First National Bank,
751 F.2d 1193 (11th Cir. 1985).................................................................... 16, 17
In re McKesson HBOC, Inc. Securities Litigation,
126 F. Supp. 2d 1239 (N.D. Cal. 2000) ............................................................... 9
Microsystems Software, Inc. v. Scandinavia Online AB,
226 F.3d 35 (1st Cir. 2000) .................................................................................. 9
New York v. Operation Rescue Natl,
80 F.3d 64 (2d Cir. 1996) ..................................................................................... 7
Parks v. Eastwood Ins. Servs., Inc.,
235 F. Supp. 2d 1082 (C.D. Cal. 2002).................................................... 2, 11, 13
Quezada v. Schneider Logistics Transloading & Distribution,
2013 WL 1296761 (C.D. Cal. Mar. 25, 2013) ................................................... 16
Singer v. Live Nation Worldwide,
2012 WL 123146 (C.D. Cal. Jan. 13, 2012)......................................................... 7
Talamantes v. PPG Indus., Inc.,
2014 WL 4145405 (N.D. Cal. Aug. 21, 2014)................................................... 11
Talavera v. Leprino Foods Co.,
2016 WL 880550 (E.D. Cal. Mar. 8, 2016) ....................................................... 16
Valdovinos v. County of Los Angeles,
2008 WL 2872648 (C.D. Cal. Jul. 23, 2008) ....................................................... 7
Weight Watchers of Phila., Inc. v. Weight Watchers Intl, Inc.,
455 F.2d 770 (2d Cir. 1972) ............................................................................... 12
Wright v. Adventures Rolling Cross Country, Inc.,
2012 WL 2239797 (N.D. Cal. June 15, 2012) ................................................... 16
Zenith Radio Corp. v. Hazeltine Research, Inc.,
395 U.S. 100 (1969) ............................................................................................. 8
Zepeda v. I.N.S.,
753 F.2d 719 (9th Cir. 1983)................................................................................ 7
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RULES
Fed. R. Civ. P. 23......................................................................................... 11, 12, 13
Fed. R. Civ. P. 23(d) ................................................................................................ 11
Fed. R. Civ. P. 26(d)(1) ........................................................................................... 10
Fed. R. Civ. P. 26(f)................................................................................................. 10
Fed. R. Civ. P. 34(c) ................................................................................................ 10
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Fed. R. Civ. P. 45..................................................................................................... 10

Fed. R. Civ. P. 65(d) .......................................................................................... 7, 8, 9
Local Rule 7-3 ....................................................................................................... 6, 7
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INTRODUCTION
Plaintiffs motion is long on speculation but falls short on the merits. As an
initial matter, Plaintiffs fail to mention that Spotify has agreed to disclose to them
both the agreement it has reached with the National Music Publishers Association
(NMPA) as well as communications with NMPA members1 regarding the
NMPA Agreement that are in Spotifys possessionsubject only to the basic
protections and processes of a protective order. But rather than see that common-
sense proposal through, Plaintiffs rushed to filed this motion.
Although it is hard to understand why Plaintiffs chose to circumvent a
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meaningful negotiation process, their motion for appointment as lead counsel
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filed just hours after this motionoffers some clues. The lead counsel motion
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describes this motion at length, specifically asserting that it bolsters their claim to
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lead counsel status. See, e.g., Dkt. No. 47, at 11-13.
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Any such motivation would be unfortunate, especially given that Spotify had
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already agreed to provide much of the information Plaintiffs sought, rendering the
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motion unnecessary.
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beyond Spotify to target the NMPA. Indeed, Plaintiffs focus largely on alleged
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communications made by the NMPA, not Spotify. E.g., Mot. 7-12. But their
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attempt to obtain discovery from and injunctive relief against the NMPA via this
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motion is improper for the simple reason that the NMPA is not a party to this
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lawsuit. Plaintiffs attempt to bridge that gap by treating Spotify and the NMPA
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interchangeably, but these assertions are contrary to common sense as well as the
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facts. Spotify and the NMPA are independent and separately-represented entities
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who are, after all, counterparties to the NMPA Agreement. What is more, the
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adversarial negotiations culminating in the NMPA Agreement began in June 2015,
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months before this lawsuit was filed. See Decl. of Natalie Margulies 4-6. The
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Perhaps recognizing this fact, Plaintiffs motion sweeps
It is undisputed that only the NMPAs publisher members are eligible to

participate in the NMPA Agreement. See Mot. 8.
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Federal Rules of Civil Procedure foreclose Plaintiffs bait and switch: Rule 65
does not authorize the Court to enjoin communications by nonparty NMPA, and if
Plaintiffs wish to acquire any documents that are in NMPAs possession, their
proper course is to obtain a subpoena under Rule 45.
Finally, although Plaintiffs do not point to a single allegedly improper
communication by Spotifyand Spotifys communications with the NMPAs
members about the NMPA Agreement have been exceedingly limitedthey urge
the Court to impose a broad prior restraint on any future speech by Spotify
concerning the NMPA Agreement or any settlement. The Court should reject that
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request. It is well settled that a defendants communications with putative class
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members prior to class certificationincluding communications about potential
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settlementsare not only permitted, but protected by the First Amendment. See
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Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981). As the Supreme Court made clear in
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Gulf Oil, to withstand First Amendment scrutiny an order limiting
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communications between parties and potential class members must be based on a
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clear record and specific findings reflecting a likelihood of serious abusesand
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any such order must be narrowly drawn to limit[] speech as little as possible. Id.
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at 101-02, 104. Thus, as Judge Taylor put it in denying an application by plaintiffs
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to prevent communications by a defendant, the Supreme Court has held parties or
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their counsel should not be required to obtain prior judicial approval before
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communicating in a pre-certification class action, except as needed to prevent
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serious misconduct. Parks v. Eastwood Ins. Servs., Inc., 235 F. Supp. 2d 1082,
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1084 (C.D. Cal. 2002) (emphasis added) (citing Gulf Oil, 452 U.S. at 94-95, 101-
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02). There has been no misconduct at all by Spotify heremuch less serious
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misconductand Plaintiffs mere speculation and erroneous accusations are no
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substitute for the clear record and specific findings required for judicial
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intervention.
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BACKGROUND
Plaintiffs description of the events leading up to this motion (see Mot. 4-6)
is misleading and incomplete.
because Spotify has not agreed to provide a copy of the agreement [with the
NMPA] or to disclose the terms or representations being made by Spotify
regarding the NMPA Agreement. Mot. 1. That is false: As Plaintiffs own
submissions show, Spotify has agreed to disclose these documents to Plaintiffs on
the unremarkable condition that the parties first enter into a protective order to
provide basic processes and protections for the disclosure of confidential
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information. Rather than take Spotify up on that offer, Plaintiffs moved the goal-
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posts, demanding for the first time shortly before the filing of this motion that
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Spotify produce documents in the NMPAs possession rather than just those in
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Spotifys possession.
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documents in a third-partys possession or control, Plaintiffs then rushed to file,
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now claiming that Spotify . . . refused to cooperate with Plaintiffs in resolving this
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issue. Mot. 3.
According to them, this motion is necessary
When Spotify pointed out that it could not produce
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The actual timeline of events surrounding the NMPA Agreement and the
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parties correspondence thus tells a far different story than the one Plaintiffs tell in
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their motion. Those events begin well before this lawsuit or the related Ferrick
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action were filed: Spotify and the NMPA began arms-length negotiations and
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conversations over an agreement regarding potential royalty payments for
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unmatched works in June 2015; the parties exchanged proposed terms for an
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agreement in November 2015before Lowery indicated that he was considering
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filing a lawsuit. Margulies Decl. 5-6. After several months of negotiation,
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Spotify and the NMPA reached a final, bilateral agreement in March 2016. Id. 4.
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Although the specific terms of the NMPA Agreement are confidential, an overview
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of the Agreement was announced to the public in a press release on March 17,
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2016, jointly issued by the NMPA and Spotify. Id. 4 & Ex. 1.
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On Thursday, March 24, 2016, a week after that press release, Plaintiffs
counsel sent Spotify (through its counsel) a letter seeking a copy of the settlement
agreement between NMPA and Spotify, as well as any notifications that have been
sent to NMPA members (to the extent Spotify possesses them) regarding their
ability to opt-in or opt-out of the settlement. Hanna Decl. Ex. F. The letter
(inaccurately) described the NMPA settlement as an admission of Spotifys
liability for its infringement of numerous works.
presumably recognizing that the NMPA is a separately represented and
independent entity, Plaintiffs counsel sent the NMPA a similar letter requesting
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the NMPA Agreement and any notifications that have been sent to NMPA
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members. Hanna Decl. Ex. G.
Id.
On the same day,
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The NMPA, through separate outside counsel, sent Plaintiffs a letter the next
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day denying their request for documents, pointing out the indisputable facts that
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the NMPA is not a party to this case and that Plaintiffs counsel does not currently
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represent any publishers or songwriters besides the named Plaintiffs. Hanna Decl.
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Ex. H.
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Spotifys counsel responded to Plaintiffs letter on Monday, March 28, 2016,
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correcting Plaintiffs mischaracterization of the NMPA Agreement as an admission
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of liability and seeking more information about Plaintiffs request. Hanna Decl.
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Ex. I. Spotifys counsel offered to make ourselves available for a meet and
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confer and to follow up regarding the confidentiality obligations to third
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parties implicated by your request. Id.
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There was no response on this issue for eleven days. Then, on April 8, 2016,
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Plaintiffs counsel sent an email expressing the inten[t] to bring the issue to the
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Courts attention via a motion, on the apparent belief that Spotify had declined
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[their] request to review the NMPA Agreement and communications referenced
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in their March 24 letter. Hanna Decl. Ex. J, at 128. Spotifys counsel responded to
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that email on the same day, pointing out that Spotify had not declined the request
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but rather wanted more information from Plaintiffs. Id. at 127-28.
After further email exchanges, the parties agreed to a telephonic meet and
confer on April 14 and that the meet and confer would be considered timely for
purposes of filing a motion based on Plaintiffs March 24 request for documents.
See id. at 122-25. During that meet and confer, as memorialized by an email from
Plaintiffs counsel, Plaintiffs counsel changed its request from seeking
notifications to NMPA members to the extent Spotify possesses them to seeking
all documents made by either Spotify and/or NMPA to the NMPA members
regarding the agreement reached. Id. (emphasis added).
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Spotify sent back a detailed response the next day (Friday, April 15, 2016),
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pointing out that Spotify has agreed to produce the[] documents initially
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requested by Plaintiffs in their March 24 letternamely, the NMPA Agreement
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and any notifications that have been sent to NMPA members regarding their ability
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to opt in or opt out of the Agreement to the extent Spotify possesses them
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provided that they are governed by an operative protective order that contains the
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protections required under the Agreement. Id. at 121. As for Plaintiffs new
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request that Spotify produce documents in NMPAs possession, Spotify responded
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that it is not appropriate or even practicable for Spotify to agree to produce a third
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partys documents that are not in its own possession, custody or control, and that
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Plaintiffs were free to seek any documents from the NMPA through the subpoena
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procedure. Id. Spotify agreed not to object to such a subpoena based on Rule
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26(f) requirements, noting that that is the most Spotify can commit to do vis-a-
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vis third party documents that Spotify does not control. Id. Spotify made clear,
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however, that it had not waived any meet and confer requirements under the local
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rules with respect to Plaintiffs new request for third-party documents. Id.
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Plaintiffs spurned Spotifys offer to provide them with the documents that
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they had originally requested. It appears that their counsel was determined to get
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something on file in this Court in order to buttress their motion for appointment of
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lead interim class counsel, which was filed later the same day. See Dkt. No. 47.
Indeed, their motion for appointment of interim class counsel touted the instant
motion as evidence of counsels supposed commitment to protect the putative
class. Id. at 11-13; see also Hanna Decl., Dkt. No. 47-1, 3-7 & Exs. A-D.
ARGUMENT
Plaintiffs Filed This Motion Despite Spotifys Willingness To Provide

Them With Most Of The Communications In Spotifys Possession That
They Have Requested.
This motion is the result of Plaintiffs rush to file in a transparent attempt to
further their bid for lead interim counsel status. As detailed above, Spotify has in
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fact agreed to produce to Plaintiffs everything that they were asking for (subject to
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a commonplace protective order), with the exception of their new request for
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documents in the possession of third-party NMPA. And that new request is legally
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improper. See pp. 7-10, infra. Thus, the present motion boils down to a pointless
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waste of the Courts time on an issue that Spotify was prepared to agree upon.
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Indeed, Spotify is filing the NMPA Agreement under seal along with this
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opposition (Decl. of A John P. Mancini Ex. 1), providing the same access to the
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Agreement, subject to the protections of confidentiality (if the Court agrees), that
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Spotify was willing to provide without any motion practice.
I.
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Avoiding burdening the Court and the parties with this kind of unnecessary
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motion practice is precisely what this districts Local Rules are designed to
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prevent. As Judge Gutierrez has put it, [t]he meet and confer requirements of
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Local Rule 7-3 are in place for a reason; if the parties had meaningfully met and
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conferred, then a motion could have been avoided and the Courts valuable time
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could have been spared. Alcatel-Lucent USA v. Dugdale Commcns, 2009 WL
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3346784, at *4 (C.D. Cal. Oct. 13, 2009).
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Indeed, Plaintiffs have failed to comply not only with the spirit of Local
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Rule 7-3s meet and confer requirement, but also its letter. In particular, Plaintiffs
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made their request that Spotify produce documents in NMPAs possession for the
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first time on April 14, 2016four days before this motion was filed. As to that
new requestnever before madeSpotifys counsel had not waived Local Rule 7-
3s mandate that the parties conference shall take place at least ten (10) days
prior to the filing of the motion. And courts in this district routinely deny motions
when the filing party has not properly met and conferred under Local Rule 7-3.2
This motion should be no exception.
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II.
Plaintiffs Improperly Seek Relief Directed At, And Based On The

Alleged Conduct Of, The NMPA, Which Is Not A Party To This
Litigation.
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Having no genuine basis for a motion against Spotify, Plaintiffs strategy
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instead is to treat Spotify and the NMPA interchangeably, and to seek an order
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nominally directed at Spotify for injunctive relief and discovery that they could not
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obtain with respect to the NMPA.
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Plaintiffs gambit is contrary to the Federal Rules of Civil Procedure and
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common sense. The NMPA, as a nonparty to this litigation, is not subject to any
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injunction issued by this Court. Rule 65(d) of the Federal Rules of Civil Procedure
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codifies the well-established principle that, in exercising its equitable powers, a
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court cannot lawfully enjoin the world at large. New York v. Operation Rescue
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Natl, 80 F.3d 64, 70 (2d Cir. 1996) (quoting Alemite Mfg. Corp. v. Staff, 42 F.2d
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832, 832 (2d Cir. 1930) (Hand, J.)). It is well established that [a] federal court
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may issue an injunction if it has personal jurisdiction over the parties and subject
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matter jurisdiction over the claim; it may not attempt to determine the rights of
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persons not before the court. Zepeda v. I.N.S., 753 F.2d 719, 727 (9th Cir. 1983)
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(emphasis added); see also, e.g., Applegate v. Kokor, 2015 WL 7007997, at *2
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See, e.g., Singer v. Live Nation Worldwide, 2012 WL 123146, at *2 (C.D.

Cal. Jan. 13, 2012); Alcatel-Lucent, 2009 WL 3346784, at *3-4; Valdovinos v.
County of Los Angeles, 2008 WL 2872648, at *2 (C.D. Cal. Jul. 23, 2008);
Gonzales v. Valenzuela, 2002 WL 34700599, at *1 (C.D. Cal Oct. 7, 2002);
Deutsche Intl 1 v. E1 Trade Intl, 2006 WL 6106246, at *1 (C.D. Cal. Jan. 4,
2006).
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(E.D. Cal. Nov. 12, 2015) ([A]bsent a substantial relationship, not present here, a
court may not enter an injunction against persons who are not parties to the case
before it.). That limit makes sense; it is a basic rule of due process that one is
not bound by a judgment in personam in a litigation in which he is not designated
as a party or to which he has not been made a party by service of process.
Hansberry v. Lee, 311 U.S. 32, 40 (1940). Accordingly, Rule 65 mandates that an
injunction can bind only a limited universe of entities: (1) the parties; (2) their
officers, agents, servants, employees, and attorneys; or (3) those in active
concert or participation with them. Fed. R. Civ. P. 65(d)(2); see also Zenith
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Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 112 (1969) ([A] nonparty
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with notice cannot be held in contempt until shown to be in concert or
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participation.).
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Plaintiffs presumably recognize these principles, because their Proposed
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Order parrots the in concert language of Rule 65(d)(2). See Dkt. No. 46-2, 1,
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3. But they have no basis for their repeated assertions that the NMPA is acting in
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concert with Spotify. Mot. 1, 3, 7; see also, e.g., id. at 2 (asserting that the
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NMPA is Spotifys partner); id. at 15 (asserting that the NMPA has made
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communications on behalf of Spotify).
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footnote, without further explanation, that because the NMPA used to own the
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Harry Fox Agency, and because the Harry Fox Agency is currently Spotifys music
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licensing agent, the NMPA agreement could not be the result of a truly
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independent, arms-length negotiation. Id. at 2 n.1. They in fact do not even
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make that flimsy assertion themselves, but rather attribute it to unspecified and
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unsubstantiated vocal public criticism about the NMPA Agreement. Id. And
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they further suggest that the NMPA Agreement could not be the result of an arms-
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length transaction because it was finalized after this lawsuit was filed. Id. at 1.
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Plaintiffs are wrong on all counts.
Rather, they simply speculate in a
As explained above, the NMPA
Agreement was not a response to this litigation, but rather the product of months of
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conversations and negotiations which had begun by June 2015, several months
before this lawsuit was filed. Margulies Decl. 5. Indeed, the negotiations were
substantially underway well before December 10, 2015, which was the date on
which Plaintiffs counsel sent a letter to Spotify regarding the potential filing of
this suit. Id. For example, Spotifys records show that by November 2015, Spotify
and the NMPA had exchanged detailed sets of proposed terms for the Agreement.
Id. Moreover, these negotiations were conducted at arms length. Id. 6. Each
party was represented separately by counsel throughout the negotiations, during
which many issues were contested, and a number of aspects of the negotiation
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were hard-fought and at times contentious. Id.
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Accordingly, Plaintiffs showing falls far short of the narrow active concert
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or participation standard codified by Rule 65(d). As the Supreme Court has long
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held, the relationship between the party and the nonparty must be that of associate
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or confederate. Chase Natl Bank v. City of Norwalk, 291 U.S. 431, 436-37
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(1934); see also Microsystems Software, Inc. v. Scandinavia Online AB, 226 F.3d
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35, 43 (1st Cir. 2000) ([A]ctive concert requires a close alliance with the
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enjoined defendant).3 Spotify and the NMPA are counterparties to the NMPA
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Agreement, not confederates.
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Plaintiffs cite only In re McKesson HBOC, Inc. Securities Litigation, 126 F.

Supp. 2d 1239 (N.D. Cal. 2000) for the proposition that the Court can issue an
order directed at a nonparty like NMPA limiting its communications. Mot. 12-13.
But in McKesson, a massive consolidated securities class action, the law firms that
the court enjoined from soliciting putative class members were firms whose lead
counsel bids had been rejected by the court. 126 F. Supp. 2d at 1241. In response
to that rejection, the firms then initiated a solicitation campaign to recruit
individual McKesson shareholders to assert non-class claims, attempting to poach
plaintiffs from the putative class that they had just lost their bid to represent. Id.
Thus, the law firms already were substantially involved with the litigation, unlike
nonparty NMPA here. Moreover, the court in McKesson pointed to special
concerns under the Private Securities Litigation Reform Act of 1995, such as its
aim of discourag[ing] attorney-driven litigation. Id. at 1243. Finally, the court
indicated that it was particularly disturb[ed] by alleged deceptions made by
lawyers, including that [a]ttorneys have a special obligation not to disguise their
advertisements as official-sounding notices (id. at 1244-45 (citing California
Rules of Professional Conduct and related standards)). None of these concerns
relating to lawyers are present here.
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Finally, because the NMPA is an independent third party, Plaintiffs novel
and impractical demand that Spotify produce documents in NMPAs possession
(see p. 5, supra) necessarily fails as well. The way to obtain discovery from a third
party is through a subpoena under Rule 45. Indeed, courts have made clear that
[a] Rule 45 subpoena is the only discovery method by which information may be
obtained from a third party. Bryant v. Gallagher, 2014 WL 1276475, at *2 (E.D.
Cal. Mar. 27, 2014) (emphasis added) (collecting cases); see also Fed. R. Civ. P.
34(c) (As provided in Rule 45, a nonparty may be compelled to produce
documents and tangible things or to permit an inspection.) (emphasis added).
10
Plaintiffs have not even attempted to serve and enforce a subpoena here, instead
11
choosing to make an impossible demand of Spotify and then using Spotifys
12
(understandable) inability to agree to that demand as a basis for filing this motion.4
13
III.
14
Plaintiffs Demand To Review And Approve Future Communications

By Spotify Violates The First Amendment.
15
The final relief that Plaintiffs request in their motion is an order limiting any
16
future communications by Spotify with putative class members concerning any
17
alleged settlement with Spotify.
18
communications concerning a settlement with Spotify must inform putative class
19
members of: (1) the pendency of this litigation; (2) the nature of the litigation and
20
the claims; and (3) their right to contact class counsel or any attorney of their
21
choosing before making a decision as to whether to opt in to any settlement with
22
Spotify.
23
communication be submitted to Plaintiffs counsel for their review and approval
24
at least fourteen (14) days in advance. Id.

4
Plaintiffs complained that they could not serve a subpoena because there has
not yet been a Rule 26(f) conference. But Spotify agreed to waive any objections
to a subpoena on that basis. See p. 5, supra; Hanna Decl. Ex. J, at 121.
Accordingly, Plaintiffs excuse is baseless: Rule 26 provides that [a] party may
not seek discovery from any source before the parties have conferred as required
by Rule 26(f), except . . . when authorized by these rules, by stipulation, or by
court order. Fed. R. Civ. P. 26(d)(1) (emphases added).
25
26
27
28
Proposed Order 3.
Specifically, they demand that all written
In addition, they demand that any such
10
Plaintiffs request violates Spotifys First Amendment free-speech rights to
engage in pre-certification communications with putative class members, which
include the right to discuss the possibility of settlement.
authorizes district courts to enter appropriate orders governing the conduct of
counsel any parties, the Supreme Court has mandated that any restrictions
imposed on communications with unnamed class members must avoid undue
infringement of the parties right to free speech. Gulf Oil, 452 U.S. at 100.
Specifically, to withstand First Amendment scrutiny, an order limiting parties
communications with putative class members must be based on a clear record and
10
specific findings that reflect a weighing of the need for a limitation and the
11
potential interference with the rights of the parties. Id. at 101; see also id. at 104
12
(recognizing that the mere possibility of abuses does not justify routine adoption
13
of a communication ban). Put another way, [t]o the extent that the district court
14
is empowered . . . to restrict certain communications in order to prevent frustration
15
of the policies of Rule 23, it may not exercise the power without a specific record
16
showing by the moving party of the particular abuses by which it is threatened.
17
Id. at 102 (emphasis added).
While Rule 23(d)
18
Accordingly, federal courts in California have repeatedly held that parties
19
may communicate with putative class members pre-certification in the absence of a
20
specific showing of actual or threatened serious abuses, such as deceptive conduct
21
or coercion. See, e.g., Hernandez v. Best Buy Stores, L.P., 2015 WL 7176352, at
22
*15 (S.D. Cal. Nov. 13, 2015); Talamantes v. PPG Indus., Inc., 2014 WL
23
4145405, at *3-5 (N.D. Cal. Aug. 21, 2014); Castaneda v. Burger King, 2009 WL
24
2382688, at *5-7 (N.D. Cal. July 31, 2009); Gerlach v. Wells Fargo & Co., 2006
25
WL 824652, at *7 (N.D. Cal. Mar. 28, 2006); Parks, 235 F. Supp. 2d at 1085;
26
Babbitt v. Albertsons Inc., 1993 WL 128089, at *4 (N.D. Cal. Jan. 28, 1993). As
27
Judge Friendly put it over four decades ago, we are unable to perceive any legal
28
theory that would endow a plaintiff who has brought what would have been a
11
spurious class action under former Rule 23 with a right to prevent negotiation of
settlements between the defendant and other potential members of the class who
are of a mind to do this. Weight Watchers of Phila., Inc. v. Weight Watchers Intl,
Inc., 455 F.2d 770, 773 (2d Cir. 1972) (Friendly, C.J.). Plaintiffs have not come
close to meeting their heavy burden of showing that the extreme relief they seek is
justified here.
A.
Plaintiffs request for judicial intervention is premised on their assertion that
putative class members have already been provided with distorted information.
10
Mot. 7. Their use of the passive voice is telling; it obscures that all of the
11
statements about which they appear to be complainingputting aside whether they
12
were distorted or notwere made by the NMPA, not Spotify. Id. at 7-12; Hanna
13
Decl. Exs. C-E. As explained above, there is no basis for Plaintiffs intermingling
14
of the two entities, and the Court cannot therefore cannot attribute these
15
communications to Spotify in an effort to restrict Spotifys First Amendment
16
rights.
Plaintiffs Allege No Improper Communications By Spotify.
17
Even assuming arguendo that the NMPAs communications were relevant
18
here, howeverand they are notPlaintiffs present those communications in an
19
inaccurate light, leaving out key pieces that undermine their narrative.
20
instance, Plaintiffs take issue with a March 20, 2016 Q&A between Music
21
Business Worldwide and NMPAs President and CEO, David Israelite. See Hanna
22
Decl. Ex. E. But they leave out the fact that the same website had published a
23
Q&A two days earlier with Plaintiffs counsel about the same Agreement. See id.
24
at 111; see also Mancini Decl. Ex. 2 (http://www.musicbusinessworldwide.com/
25
should-songwriters-sign-up-to-spotifys-agreement-with-the-nmpa/). In that Q&A,
26
Plaintiffs counsel (Michelman & Robinson, LLP) expressed heavy scepticism
27
about the NMPA Agreement, and urged putative class members to contact
28
Plaintiffs Counsel on the Spotify class action lawsuit before opting in to that
12
For

Agreement. Mancini Decl. Ex. 2.5 Plaintiffs position thus appears to be that they
should be free to make public comments disparaging the NMPA Agreement while
simultaneously prohibiting the NMPA (or Spotify) from commenting on the same
Agreement.
Even putting aside the marked inconsistency of that position, Plaintiffs also
fail to mention that Mr. Israelite accurately explained in response to a question
about this lawsuit that Publishers will have a choiceopt in to our settlement, or
potentially be represented by one of the two class action lawsuits that have been
filed, assuming they achieve class status. Hanna Decl. Ex. E at 112. They
10
similarly fail to acknowledge that in another Q&A with Mr. Israelite that they
11
claim was misleading, Mr. Israelite gave the following answer when asked about
12
the Lowery and Ferrick actions:
13
This agreement does not put an end to the class action suits that
have been filed against Spotify, does it?
14
D.I.: Oh no! I mean, anyone who does not opt in to our settlement is
free to pursue their right in any way that they choose, including class
action. Each right owner should make the decision that is the best for
them about their own rights. This settlementand this is very
importantdoes not compromise anyones right who does not opt in.
So if you are a music publisher who does not opt in, your money will
not be given to someone else and you have all of your rights. This
settlement does not affect anyone negatively, and it only affects those
who opt in.
15
16
17
18
19
20
21
Hanna Decl. Ex. D at 108-09.
22
argument that the NMPA has create[d] the erroneous impression that if potential
23
class members choose not to opt into the Spotify Settlement, the royalties that
24
belong to them will instead be paid to those who do opt in. Mot. 8. Moreover,
25
the NMPA telling its members to make the decision that is best for them about
26
27
28
This answer directly contradicts Plaintiffs
Of course Plaintiffs counsel does not represent those unnamed putative

class members, because no class has been certified. See, e.g., Parks, 235 F. Supp.
2d at 1084 (collecting authorities explaining that Rule 23 pre-certification
communication is permissible because no attorney-client relationship yet exists).
13
their own rights (Hanna Decl. Ex. D at 108) is hardly encouraging individuals
not to join the suit. Mot. 9.
3
4
5
B.
Spotifys Communications With Publishers Regarding The

NMPA Agreement Have Been Extremely Limited And Are Not
Coercive.
As Plaintiffs would have discovered had they taken Spotify up on its offer to
produce Spotifys communications with publishers that are NMPA members rather
than charging ahead to file a motion, their concerns about Spotifys
communications with publishers are unfounded and wholly speculative. To begin
10
with, there have been hardly any such communications at all. The only en masse
11
communication regarding the NMPA Agreement that Spotify has made with the
12
NMPA membership was the jointly issued press release announcing the
13
Agreement. Margulies Decl. 4, 7 & Ex. 1. Plaintiffs take no issue with that
14
publicly available document in their motion, nor could they. And, indeed, Spotify
15
does not even have the capability to engage in such en masse communications
16
itself, because it does not possess a list of the NMPAs members or their contact
17
information. Id. 7.
18
To be sure, Spotify employees have at times discussed the NMPA
19
Agreement with individual publishers.
20
partners are members of the NMPA, given the NMPAs position as an industry
21
trade group. Id. 8. Spotify has ongoing dialogs with its business partners about a
22
variety of topics. Id. Accordingly, Spotify employees have discussed the NMPA
23
Agreement with a small handful of publishers (out of the NMPAs hundreds of
24
members or more), primarily with the major publishers in the industry. Id.
Some of Spotifys ongoing business
25
To put it mildly, however, no intervention of the Court or Plaintiffs counsel
26
is needed to protect the rights of major publishers. They are highly sophisticated
27
entities, generally represented by sophisticated counsel of their own. See id. 8. It
28
would strain all credulity for Plaintiffs to contend that these publishers are unaware
14
of the highly publicized Lowery and Ferrick lawsuits or incapable of rationally
assessing the costs and benefits of whether to participate in the NMPA Agreement.
As courts have held, improper coercion occurs in this context when the
[challenged] conduct somehow overpowers the free will or business judgment of
the potential class members. Keystone Tobacco Co., Inc. v. U.S. Tobacco Co.,
238 F. Supp. 2d 151, 158 (D.D.C. 2002) (quoting Jenifer v. Delaware Solid Waste
Auth., 1999 WL 117762, at *5 (D. Del. Feb. 25, 1999)). There is no danger of that
here; these major publishers are sophisticated business people and the
communications relate to a business proposition which potential class members
10
are free to reject if they decide the costs outweigh the benefits. Id. (quoting
11
Jenifer, 1999 WL 117762, at *10).
12
The remaining handful of innocuous communications between a small
13
number of other publishers and Spotifymost of them initiated by the
14
publishersspeak for themselves; they show no sign of coercion and contain no
15
misinformation. See id. 9 & Exs. 2-3. Nor, contrary to Plaintiffs argument
16
(Mot. 11-12), does the ongoing business relationship between Spotify and these
17
publishers establish coercion. As one court has noted, the mere existence of a
18
business relationship between the defendant and absent members of the putative
19
class (here, Spotify and certain publishers) does not itself . . . justify an order
20
preventing a defendants communications with those putative class members.
21
Keystone Tobacco, 238 F. Supp. 2d at 158-59. Rather, there must be a clear
22
record of abuses that would justify precluding settlement discussions with
23
putative class members (id. at 159)a record that is entirely absent in this case.
24
Accord Burrell v. Crown Cent. Petroleum, Inc., 176 F.R.D. 239, 244 (E.D. Tex.
25
1997) (Absent a clear record and specific findings of realized or threatened
26
abuses, an order cannot be justified under the relevant standard).
27
Indeed, the cases on which Plaintiffs rely serve only to highlight the lack of
28
coercion or abuse here. The vast majority of those cases involved an employer
15
discouraging its employees who were putative class members from participating in
a lawsuit and even threatening negative consequences if they did sothus they
involved both a coercive relationship between the defendant and the putative class
members and problematic communications that are absent here.
Talavera v. Leprino Foods Co., 2016 WL 880550, at *4-6 (E.D. Cal. Mar. 8, 2016)
(employers speech to employees at plant-wide meeting about putative class action
included statements about perjury that had the potential to mislead employees
into believing that participation could lead to criminal prosecution); Camp v.
Alexander, 300 F.R.D. 617, 621 (N.D. Cal. 2014) (letter to employees seeking opt
10
outs and making the repeated assertion that if the lawsuit continues because
11
employees participate in it, the business will close and the employees will lose
12
their jobs; also noting that an ongoing employer-employee relationship is
13
particularly sensitive to coercion); Quezada v. Schneider Logistics Transloading
14
& Distribution, 2013 WL 1296761, at *2 (C.D. Cal. Mar. 25, 2013) (employer
15
obtaining sworn declarations from employees by disguising them as interview
16
consent forms which were distributed at meetings employees were ordered to
17
attend); Wright v. Adventures Rolling Cross Country, Inc., 2012 WL 2239797, at
18
*1-5 (N.D. Cal. June 15, 2012) (multiple communications warning employees
19
against participation in the class action, including claiming that the employer
20
would go out of business if the class action were successful and warning plaintiffs
21
that if they participate in the suit, their past transgressions will become very
22
public and they will be left with tattered reputations and substantial legal bills).
See, e.g.,
23
Others, like Kleiner v. First National Bank, 751 F.2d 1193 (11th Cir. 1985),
24
concern relationships involving similarly significant imbalances of power and
25
troubling conduct. The facts in Kleinerwhere, unlike here, a class had already
26
been certifiedare particularly egregious, and thus highly inapposite here. In
27
Kleiner, shortly before the class notice was to be mailed out, and while the judge
28
was away on vacation, the defendant bank seized upon the idea of soliciting class
16
exclusion requests as a means to reduce its potential liability. Id. at 1197. The
banks marketing director instructed a force of 175 loan officers to begin calling
their customers to urge them to opt out by do[ing] the best selling job they had
ever done.
imposed harsh sanctions, including ruling that all opt-out requests would be
voidable at customers request upon the entry of judgment. See id. at 1199. The
district court determined that sanctions were warrantedand the Eleventh Circuit
largely upheld that rulingfor multiple reasons, including that the bank ignored
the district courts prior orders directing counsel for the Bank to refrain from
10
contacting the plaintiff class, and their outside lawyer counselled the Bank to do
11
so. Id. at 1207. None of these extraordinary circumstances are present here.
Id. at 1198.
Upon learning of this campaign, the district court
12
In short, Plaintiffs insinuations that Spotify has made misleading or
13
coercive communications to putative class members or potentially interfered with
14
their rights are baseless. Gulf Oil accordingly precludes them from violating
15
Spotifys free speech rights by obtaining an order that would allow them to
16
monitor and curb all future communications between Spotify and putative class
17
members regarding the NMPA Agreement or the possibility of any settlement.
18
19
20
CONCLUSION
For all of the foregoing reasons, Spotify respectfully requests that the Court
deny Plaintiffs motion.
21
22
Dated: April 25, 2016
MAYER BROWN LLP
27
By: /s/ John Nadolenco____________

John Nadolenco
Eugene Volokh
350 South Grand Avenue
Los Angeles, California 90071
jnadolenco@mayerbrown.com
evolokh@mayerbrown.com
T 213.229.5173
F 213.576.8133
28
A. John P. Mancini (admitted pro hac vice)
23
24
25
26
17
1
2
3
4
5
6
7
8
9
Allison Levine Stillman (admitted pro hac

vice)
1221 Avenue of the Americas
New York, New York 10020
jmancini@mayerbrown.com
astillman@mayerbrown.com
T 212.506.2295
F 212.849.5895
Archis A. Parasharami (admitted pro hac
vice)
Daniel E. Jones (admitted pro hac vice)
1999 K Street, N.W.
Washington, D.C. 20006
aparasharami@mayerbrown.com
djones@mayerbrown.com
T 202.263.3328
F 202.263.5328
10
11
Attorneys for Defendant Spotify USA Inc.
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
18

Spotify Vs Lowery

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Spotify Vs Lowery

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Case 2:15-cv-09929-BRO-RAO Document 55 Filed 04/26/16 Page 1 of 23 Page ID #:1484

MAYER BROWN LLP

ARCHIS A. PARASHARAMI (admitted pro

Attorneys for Defendant SPOTIFY USA INC.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

DAVID LOWERY, VICTOR

Case No. 2:15-cv-09929-BRO-RAO

May 16, 2016

Case 2:15-cv-09929-BRO-RAO Document 55 Filed 04/26/16 Page 2 of 23 Page ID #:1485

Case 2:15-cv-09929-BRO-RAO Document 55 Filed 04/26/16 Page 3 of 23 Page ID #:1486

Alcatel-Lucent USA v. Dugdale Commcns,

Case 2:15-cv-09929-BRO-RAO Document 55 Filed 04/26/16 Page 4 of 23 Page ID #:1487

Jenifer v. Delaware Solid Waste Auth.,

Case 2:15-cv-09929-BRO-RAO Document 55 Filed 04/26/16 Page 5 of 23 Page ID #:1488

Fed. R. Civ. P. 23......................................................................................... 11, 12, 13

Fed. R. Civ. P. 23(d) ................................................................................................ 11

Fed. R. Civ. P. 26(d)(1) ........................................................................................... 10

Fed. R. Civ. P. 26(f)................................................................................................. 10

Fed. R. Civ. P. 34(c) ................................................................................................ 10

Fed. R. Civ. P. 45..................................................................................................... 10

Case 2:15-cv-09929-BRO-RAO Document 55 Filed 04/26/16 Page 6 of 23 Page ID #:1489

Plaintiffs motion is long on speculation but falls short on the merits. As an

(NMPA) as well as communications with NMPA members1 regarding the

NMPA Agreement that are in Spotifys possessionsubject only to the basic

sense proposal through, Plaintiffs rushed to filed this motion.

Although it is hard to understand why Plaintiffs chose to circumvent a

meaningful negotiation process, their motion for appointment as lead counsel

lead counsel status. See, e.g., Dkt. No. 47, at 11-13.

adversarial negotiations culminating in the NMPA Agreement began in June 2015,

Perhaps recognizing this fact, Plaintiffs motion sweeps

It is undisputed that only the NMPAs publisher members are eligible to

Case 2:15-cv-09929-BRO-RAO Document 55 Filed 04/26/16 Page 7 of 23 Page ID #:1490

proper course is to obtain a subpoena under Rule 45.

Finally, although Plaintiffs do not point to a single allegedly improper

communication by Spotifyand Spotifys communications with the NMPAs

request. It is well settled that a defendants communications with putative class

members prior to class certificationincluding communications about potential

Gulf Oil, to withstand First Amendment scrutiny an order limiting

communications between parties and potential class members must be based on a

clear record and specific findings reflecting a likelihood of serious abusesand

at 101-02, 104. Thus, as Judge Taylor put it in denying an application by plaintiffs

to prevent communications by a defendant, the Supreme Court has held parties or

communicating in a pre-certification class action, except as needed to prevent

misconductand Plaintiffs mere speculation and erroneous accusations are no

Case 2:15-cv-09929-BRO-RAO Document 55 Filed 04/26/16 Page 8 of 23 Page ID #:1491

is misleading and incomplete.

NMPA] or to disclose the terms or representations being made by Spotify

regarding the NMPA Agreement. Mot. 1. That is false: As Plaintiffs own

submissions show, Spotify has agreed to disclose these documents to Plaintiffs on

provide basic processes and protections for the disclosure of confidential

documents in a third-partys possession or control, Plaintiffs then rushed to file,

According to them, this motion is necessary

When Spotify pointed out that it could not produce

conversations over an agreement regarding potential royalty payments for

agreement in November 2015before Lowery indicated that he was considering

filing a lawsuit. Margulies Decl. 5-6. After several months of negotiation,

Case 2:15-cv-09929-BRO-RAO Document 55 Filed 04/26/16 Page 9 of 23 Page ID #:1492

(inaccurately) described the NMPA settlement as an admission of Spotifys

liability for its infringement of numerous works.

presumably recognizing that the NMPA is a separately represented and

members. Hanna Decl. Ex. G.

On the same day,