ry
Association of America ("RIAA") to produce certain documents underlying its written direct case.
On October 15, 1996, DMX, Inc. filed notice that it was joining in the motion of DCR and
Muzak. These three parties are collectively referred to in this Order as the "Subscription
Services."
RIAA filed its opposition on October 18, 1996, and the Subscription Services filed their
reply on October 23, 1996.
On October 22, 1996, RIAA filed a motion to strike testimony and exhibits for which the
Subscription Services failed to produce underlying documents. The Subscription Services filed an
opposition on October 28, 1996, and RIAA filed a reply on October 31, 1996.
The motion to suspend this proceeding, the motion to compel document production, and
the motion to strike testimony are considered separately below.
The Subscription Services Motion to Suspend This Proceeding
The Subscription Services assert that this proceeding should be suspended until the
Subscription Services' motion to compel document production is ruled upon or the parties come 2
to an agreement regarding document exchange. Subscription Services Motion at 3-4. The
Subscription Services further submit that they would be caused "undue hardship and prejudice"
if they were required to produce documents in response to RIAA's requests before their motion
was resolved. Id.
RIAA opposes a suspension, noting that because the obligation to pay section 114 royalties
has been in effect since February 1, 1996, "[e]very day that a decision by the CARP is delayed,
the recording companies are denied the use of royalties for the public performances of their
copyrighted works by the [Subscription] Services." RIAA Opposition at 16-17. RIAA argues that
the Subscription Services have halted this proceeding by refusing to produce any documents
responsive to RIAA's requests, and that the Subscription Services do not have any right to ignore
the other discovery procedural deadlines while their motion is pending. Id. at 17.
In reply, the Subscription Services argue that it would be unfair, until their motion is
resolved, to produce documents to the RIAA when the "RIAA produces no more than a token
response to the Subscription Services." Subscription Services Reply at 9. They assert that a
suspension is therefore proper, so that no party gains an unfair advantage. Id.
By refusing to produce documents in response to RIAA's request for documents underlying
the Subscription Services' written direct cases, the Subscription Services have effectively
suspended the precontroversy discovery schedule in this proceeding. Such action by the
Subscription Services contravenes a direct order of the Library and is unacceptable.
In the 1990-1992 cable distribution proceeding, several parties filed motions seeking to
compel document production, but nonetheless continued to comply with the procedural dates for
that proceeding and exchanged documents that were not the subject of the motions. Document 3
production, with respect to noncontroversial documents, was therefore completed by the time the
Library resolved the document production motions. See, Order in Docket No. 94-3 CARP CD-
90-92 (October 30, 1995). The Office ruled on the motions and, where production was
warranted, gave the parties additional time to produce the documents, thereby obviating the need
for a suspension of the entire proceeding. No party was unfairly prejudiced, and the majority of
documents were exchanged in compliance with the scheduled exchanged dates.
The Subscription Services have prevented the same result from happening in this
proceeding by withholding documents that they agreed to produce by a scheduled date. While the
Library recognizes that an unfair advantage may occur when a party refuses to comply with a
discovery request, the party with the alleged harm must seek a remedy from the Library or the
CARP, and not take matters into its own hands. If the Library determines that one party has
gained an unfair advantage over another party, the Library will adjust the schedule to ensure that
the balance is restored.
Because the precontroversy discovery schedule is already in a de facto state of suspension
due to the Subscription Services' refusal to exchange documents, the Library is denying their
motion to suspend and is adopting a new precontroversy discovery schedule as described below.
RIAA Motion to Strike Testimony for Failure to Produce Documents
On October 22, the RIAA filed a motion to strike the testimony and exhibits for which the
Subscription Services had agreed to produce underlying documents. The Subscription Services
refused to produce the agreed upon documents pending the Library ruling on the Subscription
Services motion to compel document production from RIAA. RIAA asserts that such refusal is
not permitted by the rules or the Library's precontroversy discovery Order and should not be
1
Also included in the Subscription Services' opposition is a four-part proposal for the Library to
"consider" in ruling upon the Subscription Services' motion to compel. The proposal offers
recommendations as to actions the Library should take depending upon whether it grants or denies the
motion to compel. This "proposal" relates to the Subscription Services' motion to compel, not RIAA's
motion to strike, and, therefore, will not be considered because it is untimely and improperly filed.
4
countenanced because it frustrates the entire precontroversy discovery schedule and period. RIAA
Motion to Strike at 2-4. RIAA submits that the appropriate remedy for the Subscription Services
action is to strike the testimony for which they agreed to produce underlying documents. Id. at
5.
The Subscription Services oppose RIAA's motion to strike, stating that while they
"generally agreed" to produce documents responsive to RIAA's discovery requests, the RIAA
"responded with a hardball litigation stance" and objected to all but two of the Subscription
Services' requests. Subscription Services Opposition at 1. The Subscription Services continue that
"[h]aving been stiff-armed by the RIAA, and having been rebuffed further in informal efforts to
resolve this discovery dispute, the Services were compelled to respond accordingly" by refusing
to produce any documents to RIAA. Id. at 2. The Subscription Services assert that if they had
produced documents in a timely fashion, the RIAA would have been given an unfair advantage.
Id.
1
In reply, RIAA asserts that it has made efforts to resolve all discovery disputes with counsel
for the Subscription Services, and that the Subscription Services' unilateral halting of the
proceeding should not be condoned. RIAA Reply at 3.
The Library does not condone the Subscription Services' decision to withhold the
underlying documents which they agreed to produce and strongly cautions them against taking any
action which contravenes the CARP regulations or a direct order of the Librarian or the CARP.
2
The Subscription Services note in a footnote that Muzak filed a "supplemental" request for
documents. Subscription Services Motion at 2. The Subscription Services' motion, however, does not
discuss Muzak's request nor specify that production is sought for them, and the Subscription Services have
5
The Library is, however, denying RIAA's motion to strike. Striking testimony related to
these documents is a very severe remedy, and one which the circumstances do not warrant.
Whereas the Subscription Services' actions only created a temporary delay, the Library finds that
granting the motion to strike at this time would unduly prejudice the Subscription Services'
presentation of their cases in this proceeding.
This Order establishes a new precontroversy discovery schedule, and it is expected that all
parties will comply with the procedural dates and not cause further delay. If any party should
frustrate the new schedule in the manner that the Subscription Services have undone the original
schedule, the Library may consider further motions or will designate the matter to the CARP to
determine the consequences.
Subscription Services Motion to Compel Document Production
On October 3, 1996, the Subscription Services served a joint request for production of
documents underlying RIAA's written direct case. The Subscription Services contend that, with
the exception of two requests related to RIAA experts, the RIAA has objected to all of the
Subscription Services' document requests. Subscription Services Motion at 2. The Subscription
Services submit that RIAA's objections are groundless because they are based on a technicality,
namely, that the Subscription Services' requests were not properly styled because they did not
quote from RIAA's written direct case. Id. The Subscription Services have attached their October
3 requests to their motion, and ask that the Library direct the RIAA to comply with the requests
and produce the relevant documents. Id. at 3.
2 not appended a copy or description of the requests to enable the Library to determine what they were.
Consequently, the document requests of Muzak will not be considered.
6
Before the Library addresses each of the Subscription Services' requests, and the
accompanying objections of the RIAA, it is useful to reiterate the principles governing
precontroversy discovery in CARP proceedings. Discovery is intended to produce only the
documents that underlie the witness' factual assertions. 37 C.F.R. 251.45(c)(1). It is not intended
to augment the record with what the witness might have said or put forward, or to range beyond
what the witness said. Any augmentation of the record is the prerogative of the arbitrators, not
the parties. See, Order in Docket 94-3 CARP CD-90-92 (October 30, 1995).
In order to obtain do