U.S. Court of Appeals for the Ninth Circuit Reverses and Remands Lawsuit Against Anschutz Entertainment Group, Inc. Concerning Radius Clauses

On Tuesday, May 12, 2020, the United States Court of Appeals for the Ninth Circuit reversed and remanded the United States District Court for the District of Oregon’s decision in Soul’d Out Productions, LLC v. Anschutz Entertainment Group, Inc. (Case No. 19-35301). The district court previously dismissed Soul’d Out Productions, LLC’s (“Soul’d Out”) claims of tortious interference and unlawful competition against Anschutz Entertainment Group, Inc. (“AEG”) for lack of standing. The three-judge panel for the Ninth Circuit found that “[n]o plaintiff is better suited to assert the tort claims alleged here, and there is therefore no prudential reason to deny Soul’d Out standing.”

Soul’d Out’s claims in the district court are based on AEG’s radius clauses. The radius clauses are, in essence, territorial exclusivity clauses wherein artists who sign up for AEG’s music festivals are prohibited from playing other music festivals or events in the same territory. In this case, Soul’d Out challenged AEG’s radius clauses for Coachella Valley Music and Arts Festival, which prevented music acts signed up to play the Coachella Valley Music and Arts Festival from performing at one of Soul’d Out’s music festivals in Portland, Oregon.

The Ninth Circuit panel found that Soul’d out satisfied the Article III requirements for standing since (1) Soul’d Out alleged a concrete and particularized injury, (2) Soul’d Out alleged that AEG’s wrongful conduct caused said injury, and (3) judgment in favor of Soul’d Out could redress the harm inflicted. Although AEG attempted to defend the district court’s dismissal of the case, the Ninth Circuit panel found that Soul’d Out was “seeking to vindicate its own rights – namely its alleged right to enter into contracts with artists free from AEG’s wrongful interference.” The Ninth Circuit previously held that “an injured party may assert tort claims predicated on a contract’s alleged invalidity, despite not being a party to the contract.” (citing Ixchel Pharma, LLC v. Viogen, Inc., 930 F.3d 1031, 1035 n.5 (9th Cir. 2019)).

Additional Reading

Appeals Court Revives Lawsuit Over Coachella’s Restrictions on Musicians, The Hollywood Reporter (May 12, 2020)

Soul’d Out Productions, LLC v. Anschutz Entertainment Group (No. 19-35301 (9th Cir. 2020))