Cumulus Must Wait To Learn Cost For Nielsen Ratings.

The latest courtroom fight between Cumulus Media and Nielsen has hit a procedural roadblock, with the federal judge overseeing their antitrust case declining to decide whether Nielsen is complying with her preliminary injunction until the Second Circuit clarifies whether the order is currently in effect.

U.S. District Judge Jeannette Vargas said that her court “appears to lack jurisdiction” to act on Cumulus’ pending motion seeking to enforce the injunction. The uncertainty stems from Nielsen’s request that the Second Circuit rehear its recent decision affirming the injunction.

The ruling effectively puts on hold the dispute over whether Nielsen’s newly proposed standalone price for its Nationwide radio ratings product complies with Vargas’ order.

How We Got Here

The Second Circuit affirmed the preliminary injunction last month, handing Cumulus a major victory in its antitrust lawsuit. As part of that judgment, the appeals court also vacated a stay it had imposed in February, which had prevented the injunction from taking effect while Nielsen pursued its appeal.

But Nielsen has since filed a petition seeking both a panel rehearing and rehearing by the full Second Circuit. That means the appeals court has not yet issued its mandate, the formal step that concludes the appeal and returns jurisdiction to the district court.

Vargas says that leaves the status of the injunction unclear.

“The judgment (and the vacatur of the stay order) is therefore not final,” she writes in the one-page order. Rather than decide the issue herself, Vargas is waiting for guidance from the appeals court. “Absent a clarifying order from the Second Circuit with respect to whether the stay of the injunction is currently operative, the Court will refrain from acting on the motion to enforce the preliminary injunction,” Vargas says.

What’s At Stake

The decision represents the latest twist in a dispute that had shifted in recent weeks from whether Nielsen would make Cumulus a standalone Nationwide offer to whether the offer it ultimately made satisfies the court order.

Cumulus returned to Vargas last month after the Second Circuit ruling, accusing Nielsen of delaying compliance with the injunction. The company asked the judge to order Nielsen to provide a binding offer for standalone Nationwide at a commercially reasonable price.

Nielsen subsequently disclosed that it offered standalone Nationwide at a “commercially reasonable rate” and accused Cumulus of trying to “install this Court as referee over every aspect of what should be a commercial negotiation.”

Cumulus responded last week that Nielsen’s proposed price was “untethered to any known commercial price for Nationwide” and did not comply with court guidelines. Cumulus also challenged the proposed contract term, calling it “far from industry standard” and arguing it did not meet Westwood One’s needs as it negotiates longer-term agreements with national advertisers.

That filing also anticipated the jurisdictional question Vargas has now raised. Cumulus argued that the appeals court ruling immediately dissolved the stay and Nielsen’s rehearing petition didn’t stay the injunction.

Vargas hasn’t ruled Cumulus is wrong on that point. Instead, her order says the court “appears” to lack jurisdiction and will wait for the Second Circuit to clarify. That means Vargas will not yet reach the larger question Cumulus put before her over whether Nielsen’s standalone Nationwide proposal actually satisfies the injunction. The underlying order bars Nielsen from enforcing its policy tying access to Nationwide ratings to purchases of local Nielsen ratings and prohibits it from charging a “commercially unreasonable rate” for Nationwide as a complete standalone product.

The Bottom Line

Vargas’ order means, for now, the compliance fight moves back to the appeals court. Until the Second Circuit clarifies the status of its stay — or takes further action on Nielsen’s rehearing request — Vargas says she will refrain from deciding Cumulus’ effort to force Nielsen to comply.

Time is also a factor. Cumulus continues to have access to Nationwide data under its existing contract until Sept. 10.