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ARBITRON, INC. v. TRALYN BROADCASTING

June 5, 2003

ARBITRON, INC., PLAINTIFF, AGAINST TRALYN BROADCASTING, INC., JMD, INC., D/B/A WLNF-FM/WROA-AM/WZKX-FM/WGCM-AM-FM, DEFENDANTS.


The opinion of the court was delivered by: Robert W. Sweet, Senior District Judge

OPINION

Defendant JMD, Inc., d/b/a WLNF-FM/WROA-AM/WZKY-FM/WGCM-AM-FM ("JMD") has moved for summary judgment pursuant to Rule 56, Fed.R.Civ.P., and for monetary judgment against plaintiff Arbitron, Inc. ("Arbitron"). Arbitron has moved to compel JMD to respond to document requests and interrogatories, pursuant to Rules 33(b)(3), 34(b), and 37(a) of the Fed.R.Civ.P. JMD's motion for summary judgment is granted, but monetary judgment is denied for the reasons set forth below. Arbitron's motion to compel is denied as moot.

Prior Proceedings

This action was commenced on November 1, 2001. The instant motion was marked fully submitted on May 21, 2003.

The Facts

The facts are set forth based upon the Local Rule 56.1 statements of the parties and supporting declarations.

In 1997, Arbitron entered into a Station License Agreement to Receive and Use Arbitron Radio Listening Estimates (the "Agreement") with Tralyn Broadcasting, Inc. ("Tralyn"). The Agreement permitted Tralyn to use Arbitron listening data reports in operating radio station WLUN-FM in the Gulfport, Mississippi area. WLUN's call letters were subsequently changed to WLNF.

On or about October 31, 1999, JMD entered into an Asset Purchase Agreement with Tralyn, which included radio station WLNF. At the time, JMD owned or controlled at least four other stations in the Gulfport, Mississippi market.

The Asset Purchase agreement assigned the Arbitron Agreement to JMD, and JMD assumed responsibility for paying Arbitron. Neither JMD nor Tralyn obtained Arbitron's prior written consent to the assignment of the agreement, and they did not provide Arbitron with notice of a change in ownership of WLNF. JMD reimbursed Tralyn for money it paid to Arbitron or paid money directly to Arbitron in the amount of $1,729.57 each month through June of 2000. In total, JMD paid $19,575.27 for Arbitron's services.

During the months JMD was responsible for paying fees under the Agreement, Arbitron provided a copy of the Fall 1999 Ratings Book and Research Data (the "Fall Book") when published in February 2000.

In a June 28, 2000 letter, Arbitron wrote JMD that "[i]t has come to Arbitron's attention that on or about October 31, 1999, October 31, 1999, JMD, Inc. acquired the assets of broadcast station WLNF-FM . . ." Arbitron then notified JMD that it was exercising its right to increase the fees payable by JMD under ¶ 11 of the Agreement. Paragraph 11 of the Agreement provides:

In the event that Arbitron consents to the assignment of this Agreement, Arbitron reserves the right to redetermine the rate to be charged to the assigned. . . . Station agrees that . . . if it is or was purchased or controlled by an entity owning or otherwise controlling other radio stations in this Market or an adjacent Market, . . . Station . . . will report the change and the effective date thereof to Arbitron within 30 days of such change. In the event of such occurrence, station further agrees that Arbitron may redetermine its Gross Annual Rate for the Data, Reports and Services licensed hereunder, as well as any Supplementary Services, effective the first month following the date of the occurrence. Notwithstanding Station's failure to notify Arbitron, pursuant to provisions of this paragraph, Arbitron may redetermine the Station's Gross Annual Rate for all Data, Reports and Services, as well as any Supplementary Services, based on the foregoing, effective the first month following the date of the occurrence.
Arbitron redetermined JMD's annual license fees to reflect a five station license resulting in a revised monthly installment due of $5,784.93.

On July 3, 2000, Arbitron sent an invoice to JMD for $22,2391.00, which it claimed was the amount due to license the four additional JMD stations in the market for the Spring 2000 Ratings Book and Research Data (the "Spring Book"). JMD never paid and subsequently refused to pay these additional license fees for the Spring Book. JMD also stopped paying the original monthly amount of $1,779.57 under the Agreement. Arbitron thus suspended delivery of its Reports in accordance with ¶ 5 of the Agreement.

The Agreement is set for five years commencing on October 1, 1997 and running through September 30, 2002. On April 5, 2001, Arbitron sent a demand letter to JMD advising that the amount owed to Arbitron was $62,711.99, ...


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