Second California Court Rules in Favor of Pre-1972 Public Performance Royalties
The debate over public performance royalties for pre-1972 sound recordings continued to move in favor of performers after a Tuesday ruling in a California state court against SiriusXM (see 1410090092). Like U.S. District Court in Los Angeles Judge Philip Gutierrez last month (see 1409240079), Los Angeles Superior Court Judge Mary Strobel ruled in favor of plaintiffs Flo & Eddie, who own the sound recordings of The Turtles, a 1960’s music group. Public performance royalties are expected to play a key role in music licensing debates on Capitol Hill next year (see 1410090092).
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Strobel said that California civil statute 980 “must be interpreted to recognize exclusive ownership rights as encompassing public performance rights in pre-1972 sound recordings.” Strobel said she was “bound to interpret the statute in that manner even if more detailed legislation regarding implementation would have been preferable,” in an 8-page decision. Strobel couldn’t decide whether SiriusXM’s use of such recordings was “common law misappropriation.” Flo & Eddie didn’t show that SiriusXM had “injured” the company “as a matter of law,” she said.
Flo & Eddie have a similar case pending in New York, which is governed under common law. Capitol Records v. Pandora, another pre-1972 sound recording case, is also pending in New York (see 1404210027). Pandora has expressed confidence in its legal position in the New York case and said it’s open to the full federalization of pre-1972 sound recordings under a technology neutral scheme. Pandora started a political action committee four days after Gutierrez’s ruling against SiriusXM.
SiriusXM CFO David Frear said earlier this month that Strobel’s “tentative ruling” in August contradicted Gutierrez’s ruling on pre-1972 public performance royalties. Strobel’s ruling was a “little unusual in that one could argue that the decision on the jury instruction essentially determines the case,” emailed music industry attorney Chris Castle, who represents artists and musicians and has worked with digital music services. “In interpreting section 980 in its tentative ruling, this court failed to focus on the fact that the legislature had provided an exception to exclusive ownership rights in the statute itself,” said Strobel's decision. “The court's decision is limited to its finding that the requested jury instruction is consistent with law.”
“Two courts have now handed down landmark decisions which confirm what should be obvious -- the pioneers of rock and roll and every other genre before 1972 deserve to be compensated when their music is used by companies like SiriusXM,” said RIAA CEO Cary Sherman in a statement Wednesday. “It’s increasingly clear that SiriusXM, Pandora and other digital music firms who refuse to pay legacy artists and rights holders are on the wrong side of history and the law.” SiriusXM didn’t comment.
“As I predicted, the Turtles case was just the beginning of SiriusXM’s problems on this issue,” emailed Dina LaPolt of LaPolt Law, an IP and entertainment firm. LaPolt said she was “very happy to see the California state court allow the jury to consider the previous federal court ruling” and believes that the court will ultimately rule in “RIAA’s favor and hold SiriusXM liable.” SiriusXM needs to “act FAST if they want to prevent even further litigation by voluntarily paying what they owe and reaching an agreement with rightsholders,” she said.
“One would have to assume that Sirius will appeal in the courts and increase their lobbying in the Congress and will do so right alongside the NAB and Pandora,” said Castle. “They would all apparently pay any price and bear any burden except respecting the rights of the creators of our musical heritage.”