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It looks like BMI sent an agent after trying to persuade the sports bar to do the right thing. The agent watched a band and a karaoke performance that included their artists.
http://blog.inmusic.ca/inmusic/2009/11/taylor-swift-suing-sports-bar.html#more
http://www.rfcexpress.com/lawsuit.asp?id=50331
http://www.boiseweekly.com/Cobweb/archives/2009/11/20/taylor-swift-bmi-sue-idaho-bar
http://blog.inmusic.ca/inmusic/2009/11/taylor-swift-suing-sports-bar.html#more
http://www.rfcexpress.com/lawsuit.asp?id=50331
http://www.boiseweekly.com/Cobweb/archives/2009/11/20/taylor-swift-bmi-sue-idaho-bar