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Without a license from BMI or ASCAP, a little dinner music could lead to a lawsuit
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Just off Route 1 in Harford County, amid the big-box stores and retail strips, sits Freddies Bel Air, a maritime-themed bar and restaurant that takes pride in its local appeal.
“There’s a big difference between the BIG CHAIN and the Independent Restaurants,” says the sign on the front window. “Come on in and we’ll prove it to you!”
Sure enough, on Wednesday evening, there’s a friendly buzz about the place. Patrons call the bartenders by name, waitresses bring a candled birthday treat to one table, and just after 8:00, a man standing on a stage in the corner starts strumming his amplified acoustic guitar and sings about a dozen popular cover tunes to occasional applause.
But unbeknownst to the diners enjoying a little night music with their 40-cent wings, performances like that have put Freddies in the crosshairs of a federal copyright infringement lawsuit.
According to court documents, Stephen J. Carullo Jr., who also owns Dead Freddies in Parkville, has not paid performance-rights organization Broadcast Music Inc. for an annual music license, and BMI has upped its efforts to collect the bill.
“It’s always a last resort,” said Jerry W. Bailey, a BMI spokesman. “We would rather not sue anyone. We would rather license the businesses, but some of them simply refuse to pay the songwriters.”
The American Society of Composers, Authors and Publishers (ASCAP) has three similar suits pending in the U.S. District Court in Maryland, targeting Armadillo’s of Annapolis, Meiklejohn’s Pub of Eldersburg, and Golden Bar & Grill of Ellicott City.
From leads to laptops
Before filings in federal court, though, is a process — similar at both nonprofits — that can last up to two years.
First, ASCAP and BMI must learn that an establishment likely to play music of some sort (copyright law covers many different forms of public performance, from karaoke to music on television) has opened — “a lead” in ASCAP Senior Vice President and Director of Licensing Vincent Candilora’s lingo.
They might discover a new spot through browsing state business records or liquor licenses, local newspaper reviews or tourist handouts at hotels, or even the establishment’s Web site, according to Candilora and Bailey.
The next step is to send an inquiry letter with brochures to the business owner, explaining that, as the representative organizations of millions of songwriters, ASCAP and BMI sell licenses that compensate their members for the use of their intellectual property. Licenses are priced based on the capacity of the establishment and the manner in which music is broadcast.
If a proprietor does not pony up at the urging of written correspondence, phone calls follow. BMI has a 125-person phone bank in Nashville and “Call of the Month” awards for the best job conveying the relevant information while weathering hostility coming from the other end of the line, Bailey said.
“After that, if we get no response, we’ll send in another member of the team” with a “little laptop with their Verizon card in the side,” said Candilora. “They’ll go into the business and say, ‘I’m your ASCAP guy. We’ve been writing; we’ve been calling; is there anything you don’t understand?’”
Some bar owners may view this is as harassment; ASCAP and BMI, though, contend they’re simply standing up for their members, ensuring that a rash of infringing behavior does not become accepted deviance and spread.
Candilora notes that songwriters — such as Don Schlitz, who penned “The Gambler” made famous by Kenny Rogers — cannot continue to cash in on their work like performers can.
“Don can’t go on tour,” he said. “No one’s going to pay to hear him. How’s he going to put his kids through college?”
Don’t call them spies
Once a lead has been established, the two groups assume their music is being played; according to Bailey, ASCAP and BMI together license 97 percent of the music performed nationwide. To take it to court, though, they’ll require proof. That means sending someone to hear what’s going on.
“If a business is playing random music, there’s a 50 percent chance that it’s BMI music. But until we send a researcher in … we don’t know with certainty,” said Bailey. “It’s as if somebody is standing on a corner flipping a coin all night. You can’t be absolutely sure unless you stand there and see how that coin lands.”
Bailey objects to the term “spy.” Candilora prefers “investigator.” By any name, the organizations say they’re music experts of various stripes — musicologists, former music journalists or band members, or just genre junkies — and they aim to just blend in at the establishments they visit.
Bailey said BMI’s researchers are part-time employees “of high character who know song titles in a certain genre” who, as needed, travel their home region to make unannounced, anonymous visits. They write down, on a minute-by-minute basis, what music is being played, aided by micro-recorders in their pockets.
“They’ll take notes on what they see in the establishment, who’s performing the music, how it’s performed,” Bailey said, adding researchers’ reports often include diagrams. “They pick up receipts. They’re basically picking up evidence that will be used in court.”
For their efforts, Bailey said, they’re paid an hourly wage — “way above minimum wage but it’s not a lot of money” — plus expenses, and receive no commission for a successful sting. If recognized, thus compromising the mission, the researcher bails and returns another day or BMI sends someone else, he said.
“For the most part, we don’t have any problems,” said ASCAP’s Candilora. “There are isolated incidents where our people have been threatened, our people have been physically injured. And then when something like that occurs, we bring that establishment up to the top of the list to file a suit against. I don’t think that type of action holds very well when the judge hears it.”
If the owner still refuses to pay, that’s when the lawyers get called in, and the lawsuits — boilerplate in nature — get filed. The suits come with a partial infringing playlist, including the infringement date and the copyright details, and a request for statutory damages — $750 to $30,000 per infringement — attorneys’ fees and costs.
That’s where the case against Freddies stands now.
Cash and Stones
Starting in January 2006 and continuing until early this year, BMI has sent Freddies 22 letters and placed 42 calls, Bailey said. A researcher visited the restaurant in both May and August 2007, all to no effect.
Max S. Stadfeld of Offit Kurman P.A., local counsel for BMI, filed suit on April 1, with an attached seven-song “schedule,” including “Folsom Prison” by Johnny Cash and “Paint It Black,” written by Mick Jagger and Keith Richard of The Rolling Stones.
In his April 22 answer to the suit, Wayne S. Goddard, attorney for Carullo and his business, rejected BMI’s claims.
“[Carullo Steele Inc.] denies the truthfulness of the allegations set forth…stating further that it does not perform any musical compositions, nor does it cause such compositions to be performed,” wrote Goddard, of Cuomo & Goddard LLP in Towson. “At best CSI, on an extremely limited basis, allows public performances of music compositions by third parties to occur in the Establishment.”
Carullo did not return calls seeking comment. Goddard said his client and BMI are “working to find, maybe, some common ground.”
“We’re at a delicate stage,” he said. Bailey, the BMI spokesman, said he expected the case to settle before trial.
Meanwhile, at Freddies on Wednesday night, the covers included “Layla” by Eric Clapton, “Norwegian Wood” by the Beatles, “You Can’t Always Get What You Want” by The Rolling Stones, “Champagne Supernova” by Oasis, “Island in the Sun” by Weezer, “What I Got” by Sublime, and “Folsom Prison.”
‘Slam dunk’
Candilora stresses that the “overwhelming” majority of businesses agree to license, and even when litigation is necessary, most settle.
The settlement generally requires the establishment to buy a BMI license, pay damages, attorneys’ fees and costs, Bailey said.
BMI files a “few dozen” lawsuits nationwide each year, said Bailey. ASCAP files 150 to 200, said Richard Reimer, chief legal counsel for ASCAP, usually in clumps of 25 or 30 accompanied by press releases. Those numbers have remained steady or increased slightly in recent years, they said.
In the rare event of a trial, ASCAP and BMI nearly always win, with their investigators’ reports and testimony carrying the day. Bailey said a defendant’s chances are “slim.” Candilora called the cases “slam dunks.”
“We haven’t lost a case in 15 to 20 years, and when we did it was based on a particular provision of the copyright law that actually no longer exists,” said Reimer.
Thus, Bailey and Candilora emphasize, forking over the hundreds of dollars for a license makes more sense than spending thousands in penalties and litigation costs.
Sometimes, the collateral damage can go much higher.
Consider the cautionary tale of Danny E. Justice, an ASCAP holdout.
Justice opened J.J. McCooley’s, a sports bar, in Elkton in 1994. At some point, ASCAP took an interest in his business.
He said the organization wanted him to pay $1,000 for an annual license, but he refused because he couldn’t stomach another bill on top of utilities. He said he received “numerous” letters and that an investigator eventually visited the sports bar.
ASCAP members sued in March 2001.
“What they do is drag you into federal court. And then they want your first born,” said Justice, who did not hire a lawyer. “You have no defense against them.”
U.S. District Judge Marvin J. Garbis entered a default judgment — $12,500 in statutory damages, $4,073 in attorneys’ fees, and $1,068 in court costs — against Justice in September 2001.
When he failed to pay by January 2003, Garbis signed an order directing the U.S. Marshal to arrest him.
Before that could happen, Justice said, he paid up.
But J.J. McCooley’s closed three years later, he said, in part because of the judgment.
“I got tired, and got out of it entirely,” Justice said. “Let somebody else deal with them.”
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