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Contracts Keyed to Fuller
Arbitron, Inc. v. Tralyn Broadcasting, Inc.
Citation:
400 F.3d 130 (2005)Facts
In 1997, Arbitron entered into a five-year Station License Agreement with Tralyn Broadcasting for Tralyn’s single radio station (WLNF-FM) to use Arbitron’s listener data reports at a monthly rate of $1,729.57. The agreement contained an escalation clause stating that if Tralyn acquired additional stations or was purchased by an entity controlling other stations in the same or adjacent market, Arbitron could “redetermine its Gross Annual Rate” for the licensed data. In October 1999, JMD purchased Tralyn. At the time, JMD controlled at least four other stations in the Gulfport market. Neither JMD nor Tralyn obtained Arbitron’s consent for the assignment of the License Agreement or notified Arbitron of the change in ownership as required by the agreement. JMD continued paying only the original single-station fee. When Arbitron discovered the acquisition in June 2000, it exercised its right under the escalation clause to increase the monthly fee to $5,784.93, reflecting the five JMD stations that could now share Arbitron’s data (with a volume discount applied). JMD refused to pay the increased amount and subsequently stopped paying any fees at all, leading Arbitron to cease providing its data reports and file suit for breach of contract.
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