WSJ Report: Entercom Moves For Dismissal Of Spitzer Lawusit
April 13, 2006 at 8:38 AM (PT)
ENTERCOM COMMUNICATIONS has moved for dismissal of NEW YORK Attorney General ELIOT SPITZER's payola lawsuit, reports the WALL STREET JOURNAL. In doing so, ENTERCOM becomes the first radio company to resist SPITZER's attack.
According to the WSJ, ENTERCOM's "motion asserts that the attorney general acted improperly in basing his suit on NEW YORK's consumer-protection laws." SPITZER's suit alleges that ENTERCOM improperly accepted gifts and money from labels for playing certain songs, and "improperly developed companywide programs to maximize compensation from labels."
We'll let the court decide this case on its merits
ENTERCOM's lawyers maintain that, to properly file a suit under the consumer-protection laws, SPITZER must prove that "consumers were harmed as a result of material deception." It's ENTERCOM's assertion that, because radio is free, there can be no harm to consumers. SPITZER's lawsuit, however, maintains that since payola can affect where songs chart, that fact in turn influences consumer buying decisions.
Additionally, ENTERCOM is also citing NEW YORK law stating that "compliance with federal law is a 'complete defense' against the state consumer-protection laws." ENTERCOM maintains that it complied with federal law in disclosing when it accepted payment for airplay.
A spokesman for SPITZER told the WSJ, "We've made our arguments about how consumers are affected by this conduct. We'll let the court decide this case on its merits." A spokesman for ENTERCOM declined to comment.
On another interesting note, the WSJ report adds that sources say SPITZER is looking for a $20 million settlement from ENTERCOM.