Arbitron, Inc. v. Tralyn Broadcasting, Inc.

400 F.3d 130 (2nd Cir. 2005)

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Nature of the Case

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Facts

P entered into a license with D to use P's listening data reports. The monthly rate was $1,729.57 for a single station. A clause of the agreement stated that P was given the right to increase the license fee as D purchased additional stations or as entities owning additional stations purchased D. D was purchased by JMD, a Mississippi corporation. JMD also controlled at least four other stations in the Gulf port, Mississippi market. The purchase agreement between JMD and D assigned to JMD the License Agreement. Neither JMD nor D obtained P's prior written consent to the License Agreement's assignment. Nor did they provide P with notice of a change in ownership. From November 1999 until June 2002, JMD simply paid the original single-station monthly license fee ($1,729.57) directly to P. P discovered, through its own diligence, that JMD had purchased D and that the terms of the License Agreement had been breached. P notified JMD by letter that it was exercising its right to increase the monthly licensing fee under the escalation clause of the License Agreement. Arbitron determined JMD's new annual license fee by multiplying the single-station license fee ($1,779.57) by five ($8,897.85) to reflect the five JMD stations that could now share Arbitron's listener data. It then reduced that figure by 35% to reflect the typical volume discount for licenses covering five or more stations. The result was a revised monthly charge of $5,784.93. P sent an invoice for 'incomplete' payments made between October 1999 and June 2000. It also sent an invoice indicating the additional payments that would be due for the next quarter's listening reports. JMD never paid these invoices, and subsequently refused to pay anything - even the $1,779.57 due each month. P stopped sending JMD its listening data reports. P sued D and JMD for breach of contract. P sought $172,394.22, representing all moneys due under the Licensing Agreement to the end of the contract's five-year term. JMD moved for summary judgment in its favor (as well as monetary judgment against P for its decision to cease delivery of its listening reports after JMD refused to pay the increased monthly licensing fee) was now appropriate. The court granted summary judgment to JMD - but not monetary damages. The court concluded that the escalation nor any other section of the Agreement contains any basis for determining the new rate to be paid the escalation clause was unenforceably vague under New York law. Before the power of law can be invoked to enforce a promise, it must be sufficiently certain and specific so that what was promised can be ascertained. P now challenges the district court's decision.