Mechanical Licensing Collective v. Spotify USA Inc.
- Analisa Torres
- 1:24-cv-03809
- U.S. District Court · Southern District of New York
- 6
In Mechanical Licensing Collective v. Spotify, Judge Analisa Torres denied in part and granted in part MLC’s reconsideration motion, vacated judgment, and reopened the case.
Mechanical Licensing Collective may seek permission to amend its complaint on two theories, while Spotify remains the defendant in the reopened case. The Court did not reconsider the dismissal order.
What happened
Mechanical Licensing Collective v. Spotify USA Inc. concerns MLC’s request to revisit the dismissal of its complaint against Spotify. MLC argued that the Court had overlooked allegations about Spotify’s royalty reporting and treatment of its Premium and Audiobooks Access plans.
The Court rejected MLC’s requests to reconsider the dismissal order. It found that some allegations were conclusory, that one theory had not been properly raised, and that the other arguments had already been considered. But the Court found that two proposed theories were not clearly futile and allowed MLC to seek permission to add them to an amended complaint.
Judge Analisa Torres therefore denied in part and granted in part MLC’s motion. She vacated the judgment, reopened the case, and ordered MLC to file its motion for leave to amend within 21 days; the dismissal order itself was not reconsidered.
The detailed version
- Mechanical Licensing Collective v. Spotify USA Inc. · No. 1:24-cv-03809
- Analisa Torres
- Mar. 11, 2025
Background
The Court had previously dismissed with prejudice MLC’s complaint against Spotify, and the Clerk entered judgment and closed the case. MLC then moved under Rules 59(e) and 60(b) of the Federal Rules of Civil Procedure. Those rules provide limited procedures for asking a court to change or relieve a party from a judgment. MLC asked the Court to vacate the judgment, reconsider the dismissal order, and deny Spotify’s motion to dismiss. Alternatively, MLC asked to vacate the judgment so it could seek permission to file an amended complaint.
MLC’s Four Arguments
First, MLC argued that the Court had not considered its allegation that Spotify failed to properly account for and pay royalties connected to the Audiobooks Access plan. The Court found that the complaint’s allegation was conclusory and lacked supporting facts, especially facts about Spotify’s reporting and royalty payments for that plan. The Court also said MLC likely forfeited the argument by failing to raise it in its opposition to Spotify’s motion to dismiss. The Court denied reconsideration of this issue but allowed MLC to seek leave to plead it in an amended complaint because the theory was not demonstrably futile.
Second, MLC argued that Spotify improperly used the Audiobooks Access price as the standalone retail price of the non-music portion of Premium when calculating royalties under the Bundle formula. The Court found that the complaint did not contain enough facts to support that theory. It denied reconsideration but allowed MLC to seek leave to add the theory to an amended complaint because it was not demonstrably futile.
Third, MLC argued that Spotify’s earlier certifications that its reporting of Premium was accurate showed that Premium was a standalone subscription rather than a Bundle. The Court said it had considered and rejected those allegations in the dismissal order. Spotify’s earlier reporting and possible overpayment of royalties did not determine whether Premium legally qualified as a Bundle. The Court denied reconsideration on this issue.
Fourth, MLC argued that the Court improperly resolved facts when it held that the complaint did not plausibly allege that 15 hours of monthly audiobook listening had no more than “token value” under 37 C.F.R. § 385.2. The Court said it had considered and rejected that argument. It found that the complaint did not allege that 15 hours of audiobook access had merely minimal, symbolic, or insubstantial value, and MLC did not indicate that it could make those allegations. The Court denied reconsideration on this issue as well.
Ruling and Effect
The Court denied MLC’s request to reconsider the dismissal order under Rules 59(e) and 60(b). It nevertheless granted relief in part by vacating the judgment so MLC could seek leave to file an amended complaint addressing the Audiobooks Access royalty-payment theory and the theory concerning use of the Audiobooks Access price in calculating Premium royalties. The Clerk was directed to terminate the motion, vacate the judgment, and reopen the case. MLC was ordered to file its motion for leave to amend within 21 days of March 11, 2025. MLC did not need to file a pre-motion letter before filing that motion.
Judge Analisa Torres signed the order on March 11, 2025.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.