Legal fights have been common between musical artists and companies such as Pandora Media Inc. and SiriusXM Radio Inc. that broadcast their works, so it wasn’t surprising when Neil Portnow, the president of the Recording Academy, took the podium at this year’s Grammy Awards and implored, “The Recording Academy, together with America’s music makers, call on the President and Congress to help keep the music playing by updating music laws.”
It’s a call-to-arms that certainly speaks to the plight of the Sixties band, the Turtles, which has resorted to challenging the use of its works in courts in California, New York and Florida because federal copyright protection for works before 1972 is severely lacking.
Congress enacted the Sounds Recording Act of 1971, effectively protecting recordings made on or subsequent to Feb. 15, 1972. The use of any recordings made before that are effectively fair game.
But the Turtles, best known for their hit, “Happy Together,” haven’t found any mirth in that 1972 law and have been busy in federal and state courts to get past and future royalties for their work.
The group’s founders, Mark Volman and Howard Kaylan, through their music publishing company, Flo & Eddie Inc. (Volman is Flo, Kaylan Is Eddie), have filed class-action suits on behalf of itself and other artists against Sirius XM Radio in federal courts in California, New York and Florida. In addition, Flo & Eddie filed lawsuits in state courts in California and New York.
When it comes to all that litigation, the next big date may be May 8. That’s when a final hearing will be held in the Superior Court of Los Angeles County on a settlement worth as much as $99.2 million that Sirius would pay. Judge Mary Strobel has already granted preliminary approval for the settlement, opining that “California law must be interpreted to recognize exclusive ownership rights as encompassing public performance rights in pre-1972 recordings.”
But Flo & Eddie Inc. hasn’t fared as well in New York and Florida. While New York doesn’t have a defined law like California has, it does have a deep well of common-law copyright cases a plaintiff could draw from. Florida has neither a law like California nor a common-law history like New York, according to court papers.
In New York, the federal case reached the Second Circuit Court of Appeals which, on Feb. 16, ruled 5-2 that New York common law doesn’t protect pre-1972 recordings. In state court, Judge Leslie Stein of the New York Court of Appeals upheld a 1940s-vintage opinion by Judge Learned Hand of the Second Circuit Court of Appeals, who held that there were no public performance rights subsequent to the sale of a recording—a view that has long since been the consensus across the country and has met minimal debate.
Meanwhile, the federal class-action suit brought in Florida is still on appeal to the Eleventh Circuit Court of Appeals after a district court declined to create a new property right for what Flo & Eddie Inc. was seeking.
The differing outcomes between East and West, however, is “further evidence that we need to federalize these copyrights,” says Savur.
Stringent requirements for entering a class-action suit vary by state and also hurt the music industry’s smaller players, despite Flo & Eddie Inc.’s intention to make its litigation more inclusive for other artists.
“Class members have to identify themselves under very specific conditions and if they don’t they lose their right to claim, [whereas]under the federal statute, this is not the case,” says Richard James Burgess, the president of the American Association of Independent Music.
While Flo & Eddie Inc.’s success thus far in the California state court is encouraging to other musicians who may decide to bring suit involving pre-1972 recordings, the differences between New York and California law argue for federal copyright law to be amended given a need for uniformity. For example, where California law allows for settlements in such matters, New York law doesn’t.
“The Internet crosses state lines. Satellite radio crosses state lines. The idea that we can look to state law to answer any of these questions is just absurd.”
Moreover, not everyone in the music business is a fan of the Turtles’ settlement in California and the forward royalty rates it sets. Under the deal, Sirius will pay $45.5 million to $59.2 million for future royalties under a 10-year license, or a 5.5% royalty per year. But Sirius can reduce that rate by two percentage points in each jurisdiction that they legally prevail in, so in New York, the rate is now down to 3.5%.
“While we applaud the valiant attempt by the Turtles to rectify an egregious wrong, we object to this settlement because of its overreach in terms of the of ‘going forward’ rate,” asserts AAIM’s Burgess. “The objective was for Sirius to honor the value of legacy recordings so that the artists who are now in their late sixties and seventies can be compensated for the exploitation of their creative works. What this settlement does is fix a rate for the future that is far below market rate.”