Advanced Alternative Media, Inc. v. Frasure

Background

Advanced Alternative Media, Inc. (AAM), which the opinion identifies as a New York corporation providing management services in the music industry, entered into a management agreement with Jesse Frasure in April 2014. The agreement required Frasure to pay AAM commissions on specified income, including income from certain contracts, musical works, and entertainment-related rights. It stated that AAM’s entitlement to commissions received after the agreement’s term would continue after termination, and it provided declining rates for certain products created after the term under term contracts.

The agreement required disputes to be resolved through binding arbitration in New York City. It also provided that the parties consented to courts in New York City for proceedings to compel arbitration or confirm an arbitration award.

AAM began arbitration in 2019, claiming that Frasure had not paid commissions due under the agreement. Frasure argued that the agreement was invalid for several reasons and asserted three counterclaims. Two counterclaims were voluntarily dismissed as moot after the arbitrator ruled that New York law applied. The arbitrator dismissed the remaining counterclaim, which alleged that AAM had failed to provide required services.

Arbitration Award

On January 20, 2021, the arbitrator issued a final award in AAM’s favor. The award required Frasure to pay $1,275,744.43, consisting of $523,323.62 in damages plus prejudgment interest, post-judgment interest, attorneys’ fees and costs, and part of the arbitration fees and expenses. Frasure paid the award in February 2021.

The arbitrator determined which income categories were subject to commissions. The award required continuing commissions on specified revenue from term contracts and on compositions written or newly exploited during the term under a term contract. It found no works created entirely after the term under a term contract, so it did not require commissions on that post-term product. The award also declared that the management agreement was enforceable and that Frasure had to pay commissions under Section 4 as determined by the award.

District Court Ruling

AAM petitioned under the Federal Arbitration Act, the federal statute governing enforcement of arbitration agreements and awards, to confirm the award. Frasure did not oppose confirmation of the actual award, but he objected that AAM’s petition omitted the phrase limiting his commission obligations to those determined by the final award. He sought to ensure that confirmation would not require him to pay commissions the arbitrator had excluded.

Judge P. Castel granted AAM’s petition. The court explained that confirmation ordinarily is a summary proceeding that turns an arbitration award into a court judgment, and that judicial review of an arbitration award is very limited. The court stated that the final award itself controlled and “speaks for itself.” The Clerk was directed to enter judgment for AAM.