The Mechanical Licensing Collective has rejected Pandora‘s try to make use of a federal appeals court docket ruling on horse racing regulation to undermine the collective’s authority to sue the streaming service over mechanical royalties.
In a submitting on Wednesday (June 24) within the US District Courtroom for the Center District of Tennessee, the MLC referred to as the cited ruling “inapposite” and stated it “doesn’t advance Pandora’s argument.”
The response got here one week after Pandora filed a discover of supplemental authority citing a June 11 determination by the US Courtroom of Appeals for the Fifth Circuit, which discovered that the enforcement provisions of a federal horseracing legislation violated the non-public nondelegation doctrine.
That doctrine restricts Congress‘s potential handy authorities enforcement powers to non-public entities with out supervision from a federal company.
Pandora contends that the identical reasoning applies to the MLC – a personal, government-designated physique created beneath the Music Modernization Act of 2018 – which might examine licensees and pursue them in court docket with out sign-off from a authorities company.
However the MLC argued that Pandora has forfeited its constitutional problem by elevating it too late within the proceedings.
“Pandora forfeited its constitutional arguments when it selected to not assert them on the outset and as a substitute litigated this motion for 2 years via discovery with out as soon as elevating them,” the MLC stated in its submitting.
The collective additionally argued that it operates beneath adequate authorities oversight to fulfill the nondelegation normal, stating that the MLC and “the person voting members of its board of administrators are appointed and detachable by a division head (the Librarian of Congress) and are topic to pervasive oversight by the Librarian and the Register of Copyrights.”
On the substance of the horseracing ruling, the MLC raised three objections.
First, the collective famous that the Fifth Circuit‘s determination doesn’t apply a distinct authorized normal from the one articulated by the Sixth Circuit in Oklahoma v. United States – which is the binding authority within the Center District of Tennessee, the place the Pandora case sits.
Second, the Fifth Circuit‘s particular conclusion that the Horseracing Integrity and Security Act (HISA) enforcement provisions are unconstitutional “instantly conflicts” with the Sixth Circuit‘s conclusion on the contrary.
Pandora itself acknowledged this in its submitting, conceding that the Fifth Circuit “expressly parted methods with the Sixth Circuit.”
Third, the MLC argued that the horseracing legislation’s construction is basically completely different from the Music Modernization Act.
The MLC stated the MMA “absolutely lacks HISA’s ‘clear delineation’” of enforcement capabilities, and as a substitute “grants The MLC broad authority to have interaction in actions in regards to the Blanket License, together with enforcement, and in addition grants the company broad oversight that encompasses The MLC and the complete statutory regime.”
“In sum, Black doesn’t present Pandora with an escape from the legal responsibility that’s established within the abstract judgment papers,” the MLC stated.
The case dates to February 2024, when the MLC sued Pandora within the US District Courtroom for the Center District of Tennessee, alleging that the corporate underpaid mechanical royalties on its ad-supported Pandora Free tier.
Each events filed competing motions for abstract judgment in February 2026, every asking Decide Eli J. Richardson to rule in its favor.
In opposition briefs filed in March, the MLC referred to as Pandora‘s constitutional argument “determined and unfounded.”
The underlying query within the case stays whether or not Pandora Free qualifies as an “interactive service” beneath the Copyright Act, which might make it topic to mechanical royalties on all of its streams.
The MLC argues that on-demand listening, limitless skips and replays, and customized programming every place the service in that class.
A spokesperson for the MLC instructed MBW in March that the proof “confirms that Pandora Free is an ‘interactive service’ and that Pandora has improperly underpaid royalties on account of copyright homeowners beneath the Blanket License.”
Pandora counters that its free tier operates as noninteractive web radio, and that its Premium Entry classes, 30-minute home windows that free customers can unlock after watching a video advert, are licensed individually.
Pandora‘s constitutional argument tracks a separate battle involving its personal guardian firm.
In August 2025, Decide Naomi Reice Buchwald of the US District Courtroom for the Southern District of New York dismissed a lawsuit introduced by SoundExchange towards SiriusXM, Pandora‘s guardian, discovering that Part 114 of the Copyright Act doesn’t authorize SoundExchange to litigate royalty disputes.
That ruling turned on statutory interpretation reasonably than the Structure, and Buchwald famous that the MLC‘s governing statute, Part 115, expressly grants the collective the ability to deliver a federal court docket motion.
SoundExchange is interesting the choice.
A ruling from Decide Richardson on the abstract judgment motions is pending.Music Enterprise Worldwide
