The Mechanical Licensing Collective has rejected Pandora‘s attempt to use a federal appeals court ruling on horse racing regulation to undermine the collective’s authority to sue the streaming service over mechanical royalties.
In a filing on Wednesday (June 24) in the US District Court for the Middle District of Tennessee, the MLC called the cited ruling “inapposite” and said it “does not advance Pandora’s argument.”
The response came one week after Pandora filed a notice of supplemental authority citing a June 11 decision by the US Court of Appeals for the Fifth Circuit, which found that the enforcement provisions of a federal horseracing law violated the private nondelegation doctrine.
That doctrine restricts Congress‘s ability to hand government enforcement powers to private entities without supervision from a federal agency.
Pandora contends that the same reasoning applies to the MLC – a private, government-designated body created under the Music Modernization Act of 2018 – which can investigate licensees and pursue them in court without sign-off from a government agency.
But the MLC argued that Pandora has forfeited its constitutional challenge by raising it too late in the proceedings.
“Pandora forfeited its constitutional arguments when it chose not to assert them at the outset and instead litigated this action for two years through discovery without once raising them,” the MLC said in its filing.
The collective also argued that it operates under sufficient government oversight to satisfy the nondelegation standard, stating that the MLC and “the individual voting members of its board of directors are appointed and removable by a department head (the Librarian of Congress) and are subject 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 noted that the Fifth Circuit‘s decision does not apply a different legal standard from the one articulated by the Sixth Circuit in Oklahoma v. United States – which is the binding authority in the Middle District of Tennessee, where the Pandora case sits.
Second, the Fifth Circuit‘s specific conclusion that the Horseracing Integrity and Safety Act (HISA) enforcement provisions are unconstitutional “directly conflicts” with the Sixth Circuit‘s conclusion to the contrary.
Pandora itself acknowledged this in its filing, conceding that the Fifth Circuit “expressly parted ways with the Sixth Circuit.”
Third, the MLC argued that the horseracing law’s structure is fundamentally different from the Music Modernization Act.
The MLC said the MMA “fully lacks HISA’s ‘clear delineation’” of enforcement functions, and instead “grants The MLC broad authority to engage in activities concerning the Blanket License, including enforcement, and also grants the agency broad oversight that encompasses The MLC and the entire statutory regime.”
“In sum, Black does not provide Pandora with an escape from the liability that is established in the summary judgment papers,” the MLC said.
The case dates to February 2024, when the MLC sued Pandora in the US District Court for the Middle District of Tennessee, alleging that the company underpaid mechanical royalties on its ad-supported Pandora Free tier.
Both parties filed competing motions for summary judgment in February 2026, each asking Judge Eli J. Richardson to rule in its favor.
In opposition briefs filed in March, the MLC called Pandora‘s constitutional argument “desperate and unfounded.”
The underlying question in the case remains whether Pandora Free qualifies as an “interactive service” under the Copyright Act, which would make it subject to mechanical royalties on all of its streams.
The MLC argues that on-demand listening, unlimited skips and replays, and personalized programming each place the service in that category.
A spokesperson for the MLC told MBW in March that the evidence “confirms that Pandora Free is an ‘interactive service’ and that Pandora has improperly underpaid royalties due to copyright owners under the Blanket License.”
Pandora counters that its free tier operates as noninteractive internet radio, and that its Premium Access sessions, 30-minute windows that free users can unlock after watching a video ad, are licensed separately.
Pandora‘s constitutional argument tracks a separate fight involving its own parent company.
In August 2025, Judge Naomi Reice Buchwald of the US District Court for the Southern District of New York dismissed a lawsuit brought by SoundExchange against SiriusXM, Pandora‘s parent, finding that Section 114 of the Copyright Act does not authorize SoundExchange to litigate royalty disputes.
That ruling turned on statutory interpretation rather than the Constitution, and Buchwald noted that the MLC‘s governing statute, Section 115, expressly grants the collective the power to bring a federal court action.
SoundExchange is appealing the decision.
A ruling from Judge Richardson on the summary judgment motions is pending.Music Business Worldwide
The Mechanical Licensing Collective (MLC) has rejected Pandora’s recent effort to undermine its authority regarding mechanical royalties, asserting its rights to sue the streaming service in light of a federal appeals court ruling related to horse racing regulations. In a legal filing made on June 24 in the US District Court for the Middle District of Tennessee, the MLC characterized Pandora’s referenced ruling as “inapposite,” meaning it does not support Pandora’s argument effectively.
This development follows Pandora’s attempt to leverage a June 11 decision from the US Court of Appeals for the Fifth Circuit, which concluded that certain enforcement provisions of a federal horseracing law were unconstitutional due to violations of the private nondelegation doctrine. This doctrine limits Congress’s ability to delegate its enforcement powers to private entities without federal agency oversight. Pandora argued that this reasoning should similarly apply to the MLC, a private entity established under the Music Modernization Act (MMA) of 2018, which has the authority to investigate licensees and pursue legal action without prior government approval.
However, the MLC contended that Pandora has effectively forfeited its constitutional challenge by not raising it earlier in the proceedings. The MLC stated that Pandora chose to engage in litigation for two years without mentioning these constitutional arguments initially. The MLC further asserted that it operates under adequate government oversight to meet the nondelegation standard. According to the MLC, both it and its board members are appointed and can be removed by the Librarian of Congress, who also exercises significant oversight.
The MLC presented three key objections regarding the horseracing ruling. First, it indicated that the Fifth Circuit’s decision does not apply a different legal standard than that established by the Sixth Circuit in the Oklahoma v. United States case, which is binding in the Middle District of Tennessee where the Pandora case is being heard. Second, the MLC pointed out a direct conflict between the Fifth Circuit’s conclusion that the Horseracing Integrity and Safety Act (HISA) enforcement provisions are unconstitutional and the Sixth Circuit’s opposite finding. Pandora conceded this point in its filings, acknowledging the split between the two circuit courts. Third, the MLC highlighted that the structure of the horseracing law is fundamentally different from the MMA, asserting that the MMA does not have the same level of vagueness regarding enforcement functions as HISA, thereby granting the MLC broader authority.
The ongoing legal situation began in February 2024, when the MLC sued Pandora, claiming it had underpaid mechanical royalties for its ad-supported Pandora Free tier. By February 2026, both parties had filed motions for summary judgment, asking Judge Eli J. Richardson to rule in their favor. The MLC characterized Pandora’s constitutional arguments as unfounded and lacking merit.
Central to the case is the determination of whether Pandora Free qualifies as an “interactive service” under the Copyright Act, which would require it to pay mechanical royalties on its streams. The MLC argues that features such as on-demand listening, unlimited skips, and personalized programming categorize Pandora Free as an interactive service. A spokesperson for the MLC asserted that the evidence supports the claim that Pandora Free is indeed an interactive service and that Pandora has underpaid the royalties owed to copyright owners.
In contrast, Pandora maintains that its free tier functions as a noninteractive internet radio service, with its Premium Access sessions—30-minute windows available to free users after viewing an ad—licensed separately.
The legal discourse surrounding Pandora’s constitutional argument also ties into a broader conflict involving its parent company, SiriusXM. In August 2025, a different legal case led by SoundExchange against SiriusXM was dismissed by Judge Naomi Reice Buchwald. This ruling determined that Section 114 of the Copyright Act does not authorize SoundExchange to litigate royalty disputes, focusing on statutory interpretation rather than constitutional grounds. Notably, the MLC’s governing statute, Section 115, explicitly grants the collective the authority to initiate federal court actions, which is a significant distinction. SoundExchange is currently appealing this ruling.
As the case continues to evolve, a ruling from Judge Richardson on the summary judgment motions is anticipated. The outcome of this legal battle could have important implications for both Pandora and the broader landscape of streaming services and copyright law.
