MLC Seeks ‘Bundling Question’ Appeal in Spotify Lawsuit

Photo Credit: Distingué CiDDiQi

18 months later, the Mechanical Licensing Collective v. Spotify showdown is still playing out – with procedural questions taking center stage as the MLC plots a bundling-focused appeal.

The MLC outlined its appeal plans in a letter to the court earlier this month, and Spotify just recently fired back in a letter of its own. As many know, in exploring involved royalty-rate calculation formulas and more, the courtroom confrontation has proven complex from the outset.

And unsurprisingly, one dismissal and amended complaint later, that remains the case. As we previously covered, the presiding judge gave the green light to overhauled post-dismissal arguments from the MLC.

In brief, the entity shifted its attention from whether Spotify Premium, by including music and audiobooks access, actually constitutes a bundle.

Instead, the MLC zeroed in on alleged issues with Spotify’s compositional royalty calculations under the bundling framework. The amended suit’s discovery is in full swing; towards November’s beginning, the court set a March 13th fact discovery cutoff.

All that said, amended suit or not, the early 2025 dismissal decision in favor of Spotify – and, in turn, the support for the DSP’s bundling position – isn’t sitting right with the MLC.

Enter the non-profit’s November 17th pre-motion letter to Judge Analisa Torres, who the plaintiff believes should certify the dismissal order “for interlocutory appeal, or, in the alternative,” enter “a partial final judgment.”

The way the MLC sees things, interlocutory review is warranted in the interest of “judicial economy” and because of “the substantial differences of opinion regarding that controlling [Premium bundling] question.”

Without interlocutory appeal, however the amended suit unfolds at the district court level, an appellate court’s disagreement about the bundling question would take the litigation back to square one, the MLC maintained in more words.

“[The] original claims would be reinstated,” the plaintiff wrote of this possible outcome, “requiring re-litigation of the case with additional discovery, additional motion practice, and a second trial. Granting interlocutory review would allow for the full and final resolution of all of the MLC’s claims together, without duplicative proceedings.”

Driving home its point, the MLC underscored plans to appeal the bundling order even with a victory in the amended suit.

“Given the MLC’s statutory obligation to enforce the rights of songwriters and music publishers under the Section 115 blanket license, which led the MLC to bring this litigation in the first instance, the MLC intends to appeal the Order regardless of the outcome of the claims presented in its First Amended Complaint,” it spelled out.

As mentioned, Team Spotify is on the exact opposite page, indicating in its letter that “permitting MLC to reverse course at this stage is prejudicial and unwarranted.”

“MLC falls well short of pointing to the kind of extraordinary circumstances warranting such an appeal,” Spotify counsel weighed in. “To the contrary, the fact that MLC waited ten months to pursue an appeal from this Court’s original decision vitiates any claim that the circumstances here are extraordinary.”

What, then, is the best way to proceed? Well, per Spotify, “[t]he far better course is to permit MLC to file an appeal in the normal course, which would encompass both the order dismissing its original Bundle claim and any other issues that arise out of the ongoing litigation.”

Looking ahead to the new year, separate from the interlocutory review sub-dispute, the above-highlighted scheduling order also teed up a case management conference for January 14th.