‘Flo & Eddie’ Foiled, Sirius XM Scores In Royalty Rumble


By Adam R Jacobson

Flo & Eddie may certainly be “happy together,” but they may be California Dreamin’ after being iced in Albany by the Court of Appeals for the State of New York.

In a major ruling regarding the airplay of pre-1972 recordings on Sirius XM, the state’s highest appeals court handed down a 4-2 decision Tuesday (12/20) that found the satellite radio broadcaster is not liable for payment of royalties from songs released in prior years.

Songs recorded up to Feb. 15, 1972 are not protected by Federal copyright laws in the same manner as songs that saw their release from Feb. 16, 1972.  As a result, a team of plaintiffs led by Mark Volman and Howard Kaylan — founding members of 1960s rock act The Turtles who go by their stage names “Flo & Eddie” — have been going to state courts in the venues where they may have the best chance at a victorious ruling.

This worked in California just one month ago, where a settlement was reached just 24 hours before a trial was to commence to consider Sirius’ payout. Now, the matter may get a bit murkier as the New York court ruling is a much different one than that from the Golden State.

In a 35-page “uncorrected” opinion distributed by a Chief Judge and six Associate Judges serving on the Empire State’s highest appellate court, the following question was addressed and became the crux of the court’s ruling: “Is there a right of public performance for creators of sound recordings under New York law and, if so, what is the nature and scope of that right?”

The judges ruled, with explanation, that New York common-law copyright does not recognize a right of public performance for creators of sound recordings.

Flo & Eddie and the other plaintiffs commenced a federal putative class action, on behalf of recording artists of pre-1972 sound recordings — or the owners of their rights, who are mostly record companies –alleging common-law copyright infringement and unfair competition.

In its response, Sirius XM moved for summary judgment dismissing the complaint, using the reasoning that the Court of Appeals for New York State ultimately elected.

“New York affords a common-law right of public performance to protect copyright holders of pre-1972 sound recordings,” the court ruled.  A question regarding fair use and copies of recorded works was deferred until after the Court of Appeals addressed this first question on copyrights.

A history of copyright law as it pertains to music was provided by the court in its ruling. Sound recordings were first included under Federal copyright protection with the passage of the Sound Recording Amendment of 1971. This set Feb. 16, 1972 as the inaugural day for new protections for artists and the record companies associated with releases from these artists.

“The federal statutes then provided exclusive rights to the owner of a copyright to reproduce the work in copies or phonograph records, prepare derivative works, and distribute copies of the work to the public by sale or lease,” the court says of the SRA.

But, as upheld in the 2009 Arista Records v. Launch Media case, “Congress expressly stated that this performance right did not extend to sound recordings, providing that the exclusive rights of owners of sound recordings were limited and did not include any right of performance.”

The distinction of composers vs. artists was also noted, with Bonneville International Corp. v. Peters cited by the Court of Appeals as part of its ruling determination.

The Court of Appeals then moves on to “DPRA,” the 1995 Digital Performance Right in Sound Recordings Act enacted by Congress as the rise of audio streaming and digital distribution of recorded works began in earnest.

This accorded sound recording owners a right to control or authorize the public performance of the copyrighted work, but only for performances “by means of a digital audio transmission.” Still, Congress made some exemptions — most notably, “transmissions in non-subscription broadcasts, as well as the playing of music within a business establishment and its surrounding vicinity.”

Thus, the Court of Appeals believes, “The right to control performance is now limited to digital radio services, and does not apply to AM/FM radio stations, nor to bars, restaurants or stores that play music in their establishments.”

But what about pre-1972 recordings?

“Congress expressly stated that any rights or remedies under state statutes or common law (that do not conflict with the federal statutes) may be applied until February 15, 2067,” the Court of Appeals explained. “While Congress permitted the states to regulate unaddressed areas of copyright law until 2067, it neither indicated that such rights existed, nor required states to recognize or create new or additional rights.”

Using relevant New York state cases, most notably Palmer v. De Witt, the Court of Appeals upheld the “right of first publication” as a common-law copyright and that “once the work was published and dedicated to the public, it became the property of the world.” The case was ruled in 1872 — a full century before the SRA was enacted by Congress.

In a highly important precedent-setting case for radio, this doctrine was upheld in 1940 in RCA v. Whiteman. In this matter, famed Big Band leader Paul Whiteman and the label he was signed with, RCA Records, did not have their copyrights violated when songs from Whiteman’s record albums aired on the radio. RCA and Whiteman argued, in a losing battle, that such airplay deterred record sales.

“The court concluded that the broadcaster did not invade that right, because it never copied the performances; the broadcaster ‘merely used those copies which [Whiteman and RCA] made and distributed,’ in the way that the performances were intended to be used — namely, by playing them,” the Court of Appeals explained.

This rationale was also applied to its Flo & Eddie ruling, even after a subsequent case involving Mercury Records invalidated much of it but left this underlying premise intact.

But what about royalty payments, and rights?

The DPRA is the key to this whole matter, in the view of the New York Court of Appeals judges. Thus, Sirius XM execs and their legal team — led by O’Melveny & Myers Los Angeles-partner Daniel Petrocelli — may wish to have a celebratory dinner at Jack’s Oyster House while in downtown Albany.

“At the end of the day, the question before us is not whether recognizing a right of public performance in sound recordings is a good idea, or whether the absence of such a right enures to the detriment of any particular individual or group,” the court said. “Rather, the question is whether that determination should be made by this court or whether it should be left to the legislature; in our view, the answer is decidedly the latter. We hold that New York common law does not recognize a right of public performance for creators of pre-1972 sound recordings.  Accordingly, the certified question should be answered in the negative.”

Siding with Sirius XM with amici curae (friend of the court) briefs were, among others, the RIAA, NAB, iHeartMedia, CBS Radio, Pandora Media, and the New York State Broadcasters Association.

The respondents, shown as “Flo & Eddie Inc.,” were defended by New York City-based Caitlin Joan Halligan, of Gibson, Dunn & Crutcher. Prior to joining Gibson Dunn in 2014, Halligan served as General Counsel to the New York County District Attorney’s Office. From 2001 to 2007, Ms. Halligan served as Solicitor General for the State of New York, where she represented the state in federal and state appellate courts and supervised a team of 45 lawyers.

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Adam R Jacobson is a veteran radio industry journalist and advertising industry analyst with general, multicultural and Hispanic market expertise. From 1996 to 2006 he served as an editor at Radio & Records.