Hollywood Docket: Musicians Guild Sues Major Labels Over Streaming Revenue

Foreign streaming and nonpermanent downloads are the subject of the guild's latest big legal move.
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Atlantic Records' Led Zeppelin

The American Federation of Musicians of the United States and Canada continues on its aggressive legal campaign against what it claims are unfair practices in the recording and film music industries.

Under the leadership of president Ray Hair, the guild has gone lawsuit-happy in the past several months, filing suits including one against Warner Bros., MGM and Paramount (and then another against Paramount individually) over foreign film scoring and one against every major studio over the originality of recent scores.

The defendants are beginning to fight back. On Friday, Warner Bros. filed in California federal court to dismiss with prejudice (meaning if the court grants the dismissal, the claim could not be refiled) AFM's claim the score for the studio and Paramount's Interstellar was recorded in violation of the musicians' collective bargaining agreement with the studios. The agreement requires films produced in the U.S. or Canada to be scored there, according to AFM, and Hans Zimmer's Interstellar score was recorded in Great Britain.

But in the meantime, AFM has opened a new front. The guild filed suit Monday against Sony, Universal Music Group, Warner Music branches Warner Bros. Records and Atlantic, and Disney's Hollywood Records over digital music distribution revenue.

In the complaint (read it here), which includes some interesting history on collective bargaining and copyright law in the digital music era, AFM says the record companies are required under a 2006 agreement to share with musicians small portions of the domestic and foreign revenues for digital streaming, ringback music and nonpermanent downloads. In a 2012 deal, the record labels allegedly agreed the musicians' share from those distribution outlets would go into a pension fund for the artists.

Now AFM claims an audit of the pension fund reveals every label has failed to pay the musicians' share of foreign streaming revenue and refused to pay for foreign ringback revenue, and every label except Sony has failed to pay the musicians' share on foreign nonpermanent downloads. It wants the court to make the labels pay.

Universal, Warner, Sony and Hollywood Records declined to comment.

In other entertainment legal news...

—Disney claims in a Thursday lawsuit the Maryland cufflink company Cuff-Daddy used the studio's intellectual property without permission. The complaint doesn't specify what Cuff-Daddy supposedly infringed, but Lucasfilm is a plaintiff, suggesting Star Wars designs. As if millions of cufflinks suddenly cried out in terror and were suddenly silenced, many of the items featuring Disney iconography now seemingly have been removed from the Cuff-Daddy store (though a Pirates of the Caribbean pair remains). The complaint was filed by J. Andrew Coombs, a regular for unusual and highly specific intellectual property suits, with cases to his name including Disney's complaint over vinyl bracelets made in Florida and Warner Bros.' fight over Batmobile imitations.

An unusual dispute over foreign film distribution and the likelihood of piracy is over. "Osiris Entertainment, LLC and Myriad Pictures, Inc. are pleased to announce that they have resolved their dispute and the litigation concerning the motion picture Electric Slide, starring Academy Award-winner Patricia Arquette in her first film since Boyhood. Although the financial and related terms of the parties’ settlement are confidential, the parties are pleased that their dispute has been amicably resolved so that they may move forward," the parties said in a statement to THR.

Osiris alleged in a February arbitration claim its North American release of Electric Slide, which centers on "gentleman bank robber" Eddie Dodson and co-stars Jim Sturgess, was imperiled by producer Myriad's deals for the film's distribution in countries Osiris called "notorious for piracy" like South Africa and Thailand.

—In other settlement news, Summit's fight with the producer of the Twilight parody movie Twiharder is no more. Between the Lines Productions first failed in a bold $500 million claim Lionsgate and subsidiary Summit engaged in "anticompetitive" and "predatory" conduct in sending cease and desist letters against the distribution of Twiharder. Then Summit brought counterclaims of trademark and copyright infringement, which California Federal Judge Manuel Real trimmed in a March hearing, encouraging the parties to settle. Now they have, on undisclosed terms.

—No Hollywood franchise has ever churned out sequels like producer Tony DeRosa-Grund in his legal war over The Conjuring, New Line's horror hit on which DeRosa-Grund was a producer (and which has a sequel, The Conjuring 2: The Enfield Poltergeist, set to shoot in September). DeRosa-Grund and his Evergreen Media have filed multiple lawsuits from various legal angles (including a memorable racketeering claim) while pursuing an arbitration claim over the scope of rights Warner Bros. and New Line acquired from him to the story of real-life paranormal investigators Ed and Lorraine Warren.

In the latest lawsuit, filed Friday in Texas federal court, DeRosa-Grund says Warner Bros. acquired some life rights from him but not his treatment for The Conjuring, on the basis of which Chad and Carey Hayes (who are defendants) wrote the script. Warners declined to comment. Meanwhile, New Line filed an interpleader action in late July for the California federal court to decide whether a $750,000 payment for the James Wan-directed sequel should go to DeRosa-Grund or to poker company PSG Poker and principal Phil Gordon, who won a lawsuit against DeRosa-Grund and served New Line with a request for the sequel payment to pay the producer's damages.

Craig James reportedly has sued Fox Sports for religious discrimination in his 2013 firing from Fox Sports Southwest, which he says occurred because of anti-gay comments he made while campaigning in the Republican primary for a Texas seat in the U.S. senate. He claims $100,000 in damages. 

A Fox spokesman responds in a statement to THR, "As we have previously stated, the decision not to use Craig James in our college football coverage was based on the perception that he abused a previous on-air position to further a personal agenda, and Mr. James is a polarizing figure in the college sports community because of that perception. The decision not to use Mr. James had nothing to do with his religious beliefs and we did not discriminate against Mr. James in any way. Fox respects every person's right to freedom of religion and prohibits discrimination in any form, including discrimination based on religion. The allegations are baseless and we will vigorously defend ourselves against them."

—Sony is off the hook over Colombian superstar Shakira's "Loca" from her 2010 album, Sale el Sol. Last August, a New York judge concluded that plaintiff Ramon "Arias" Vasquez offered evidence that the song was lifted from his prior work, but now the judge rules that evidence was fraudulent, that Sony offered "competent and substantial proof" that Arias' recording was not made in 1998 as claimed and not subject to a valid copyright. The judge also said he no longer believed the plaintiff's testimony.

—Just how many interns have worked for Mary-Kate and Ashley Olsen? Enough apparently to be the basis of a class-action lawsuit over alleged failure to meet minimum wages.

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