NY Court Examines Pre-1972 Performance Right Question in Flo & Eddie Case
The New York Court of Appeals split between voicing support and expressing skepticism Tuesday for Flo & Eddie’s claim that New York common law allows a performance royalty right for sound recordings made before 1972. Flo & Eddie, owners of The Turtles' “Happy Together” and the rest of the band's music, were arguing in favor of a pre-1972 performance right as part of their lawsuit against SiriusXM seeking compensation for performances of the Turtles' pre-1972 recordings. The 2nd Circuit Court of Appeals paused its review in April of SiriusXM's appeal of a 2015 U.S. District Court ruling in New York in the Flo & Eddie suit there that found state common law allowed for a pre-1972 performance right. The New York Court of Appeals agreed in May to hear the case (see 1604130063 and 1605030055). Only six members of the state court heard oral argument in the Flo & Eddie case. Chief Judge Janet DiFiore recused herself.
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Flo & Eddie attorney Caitlin Halligan of Gibson Dunn said the New York Court of Appeals’ 2005 ruling in Capitol Records v. Naxos of America allowed pre-1972 sound recordings to have a performance right under state common law. Although Naxos didn’t specifically involve performance rights, the case “gives very substantial guidance” in favor of such a right, Halligan told the court. Flo & Eddie argued in its brief that SiriusXM “concedes that New York’s common law applies to pre-1972 sound recordings, but inexplicably relies on the federal treatment of post-1972 sound recordings in trying to circumscribe the scope of that right.” Congress “expressly left the scope of copyright protection for pre-1972 recordings to be resolved by state common law … and New York has filled that gap in a line of seminal cases that ensure robust common law copyright protection for pre-1972 sound recordings,” Flo & Eddie said.
SiriusXM attorney Jonathan Hacker of O’Melveny & Myers said Flo & Eddie was asking the New York Court of Appeals to “create or recognize” a pre-1972 performance right under state law that “would be unprecedented” and has the potential to have “profound economic consequences” for the recording industry and broadcasters. The power to create a pre-1972 performance right should be left to Congress and state legislatures, he said. SiriusXM argued in its initial brief to the New York state court that state common law never granted a recording's owners a post-sale performance right and that no state court ever recognized such a right as existing in state law (see 1608050059).
Judge Eugene Fahey indicated he wondered whether the court should consider granting some form of performance right on services like those offered by SiriusXM in which users are essentially “renting music.” Such services appear to be distinct from the publication of music in other formats already covered by federal law, including terrestrial broadcasters and internet radio, Fahey said. “I can pick up my phone and put my little speaker on the desk and play ‘Happy Together’ 45 times in a row … and in essence I own that as long as I pay the rental service every month.”
Judge Michael Garcia said he wasn’t sure the court of should supersede legislators in creating a pre-1972 performance right. State common law could be viewed as “too expansive” to allow for a performance right, since it took federal legislators “years to come up with a scheme” to deal with rights on digital performances of music, as it did in the 1995 Digital Performance Right in Sound Recordings Act. The New York court would be able to paint only “with a pretty broad brush” in creating a performance right, Garcia said. The state court “doesn’t have the tools before it that are necessary to do all of the work one would have to do to recognize create, enforce, implement and administer” such a right, Hacker said.
Judge Leslie Stein asked why the court should find a pre-1972 performance right in state common law if no other parties asserted it “if anyone actually thought it existed.” Judge Jenny Rivera said that other parties hadn’t sought to assert the performance right previously “doesn’t mean it doesn’t exist.” Rivera suggested state law isn’t “so narrow that it wouldn’t let us say there is at least some seed” for a pre-1972 performance right in the Supreme Court of New York’s 1950 ruling in Metropolitan Opera Association v. Wagner-Nichols Recorder Corp. Halligan said other parties hadn’t previously sought to assert a pre-1972 performance right in state law because “there was not a significant economic incentive to do so,” but the music market changed significantly in recent years.