October 14, 2013 3:02pm PT by Eriq Gardner
SiriusXM Attacks The Turtles for Playing 'Lawsuit Lottery'
Imagine for a moment never hearing another Beatles song at a bar, rarely ever seeing The Rolling Stones perform their early work again on television and witnessing digital services like Pandora barred from streaming any sound recording made prior to 1972 without explicit permission from rights-holders.
If those sound like outlandish possibilities, consider a $100 million lawsuit brought in California two months ago by Flo & Eddie of The Turtles against SiriusXM. The proposed class action contends that Sirius has "reproduced, performed, distributed, or otherwise exploited" pre-1972 recordings without license. After the lawsuit was filed, major labels Sony, Universal and Warner filed their own lawsuit against Sirius on pretty much the same grounds.
Now, the satellite radio giant is speaking up for the first time about the dispute brought by Flo & Eddie.
In a motion filed late last week to transfer the lawsuit from California to New York, Sirius says it has operated for some 12 years without ever paying license fees to the plaintiffs. The company asserts that no state law requires them to do so. And as for federal law, there's a gap there too since sound recordings didn't begin falling under federal copyright protection until 1972.
And so, in just one paragraph, Sirius highlights the far-reaching implications of this battle:
"Plaintiff apparently has become aggrieved by the distinction drawn by Congress in withholding copyright protection from its Pre-1972 Recordings; thus now, after decades of inaction while a wide variety of music users, including radio and television broadcasters, bars, restaurants and website operators, exploited those Pre-1972 Recordings countless millions of times without paying fees, it asserts a purported right under the law of various states to be compensated by SiriusXM for comparable unlicensed uses."
It's true that Flo & Eddie (as well as Sony, Universal and Warner) are attempting to hold Sirius liable under state laws of misappropriation, unfair competition and conversion. In fact, Flo & Eddie have not only filed a lawsuit in California. They've filed one in New York too. And they've filed a third in Florida.
All of these lawsuits make the same point: Sirius hasn't been paying royalties on songs like "Happy Together," "It Ain't Me Babe" and "She'd Rather Be With Me." Sirius does pay hundreds of millions of dollars for music created after 1972, thanks to statutory licenses set up under federal copyright law. But Sirius doesn't pay for music created before 1972, as a lawsuit by SoundExchange made clear, and Sirius' own legal papers appear to now confirm.
The question thus is whether state misappropriation claims (often referred to as common law copyrights) cover performance in addition to the physical or digital distribution of sound recordings. If so, that would seemingly implicate all those who broadcast music including television and radio stations, bars and restaurants and many popular digital music services.
In asking the judge to move the California lawsuit in the name of its convenience, Sirius foreshadows how it's going to defend the lawsuit, hinting at how the company intends to point to others using pre-'72 music without substantial fuss.
"As will be shown at a later stage of these proceedings, there is no state law that requires SiriusXM (or any of the hundreds of thousands of other U.S. businesses that publicly perform music) to pay license fees for Pre-1972 Recordings," says Sirius. "Plaintiff’s multiple court filings constitute a form of lawsuit lottery in search of an elusive new state-law right that would radically overturn decades of settled practice."