And in Non-Gibson Music Industry Legal News...

[Anderton]

Class Action Lawyers Face Setback In Guitar Price Fixing Suit

 

IN A DECISION HANDED DOWN on August 22, 2011, a Federal Judge dealt a serious blow to the class action suit filed against NAMM, Guitar Center, Fender, Gibson, Hoshino, Roland, Peavey, and C.F. Martin, alleging a conspiracy to fix prices. Although Judge Larry Alan Burns did not dismiss the suit, he said that the allegations were not supported by "adequate detail" to be actionable, adding that the complaint does not specify "who is alleged to have conspired with whom, what exactly they agreed to, and how the conspiracy was organized and carried out. In essence, it merely alleges some kind of agreement, and the charging of higher prices as a result." He then gave the plaintiffs 21 days to provide more substantive evidence of wrongdoing or face an immediate dismissal of all charges.

 

Judge Burns faulted the plaintiffs for failing "to meet the pleading standard" for both "specificity and plausibility." He noted that the suit did not identify the specific types of instruments involved in the price fixing efforts, but referred only to what he called the "vague and poorly defined" fretted instrument market. "Grouping various musical instruments and amplifiers together results in an unidentifiable and overly broad market," he wrote. "The markets are blurred and the end products sold could not plausibly be part of a single price fixing conspiracy. Plaintiffs have market data and should be able to identify and allege the products and markets targeted by the alleged price fixing conspiracy instead of making generalized claims."

 

Judge Burns told the plaintiffs that to proceed with their claim, they would need to amend their complaint by including precise data on the types of products involved in the conspiracy as well as the details of any meetings. He said that plaintiffs would need to show "who attended or participated in the alleged meetings, and what was said and agreed to there. The meetings at issue would all be private meetings at trade shows, not speeches or other open events."

 

All of the participants in the suit declined to comment on Judge Burns' decision. However, one said off the record, "We don't want to get overly excited, but this is the first good news we've had on this case in two years."

[Zooey]

I have mixed feelings about this. The issue first arose when NAMM organized some presentations on the topic of minimum advertised pricing policies and other dealer agreement terms and conditions. I don't believe the intent was to fix prices at all, but to expose smaller manufacturers without in-house legal staff to basic principals of contract and antitrust law. Some of the finer points are complicated and widely misunderstood, and it's a huge help to a small company to see how the leaders in the industry are structuring their agreements. The FTC caught wind of one particular presentation on MAP and started an investigation (see link below). This private lawsuit is most likely just seeking to capitalize on that FTC investigation. It makes me feel a little better to see that they're concentrating on private meetings--not the member presentations.

 

http://www.namm.org/news/articles/ftc-approves-final-consent-order-namm

[philbo]

I wonder who the plaintiff is? Lionel Hutz again?