September 04, 2013 1:29pm PT by Eriq Gardner
SiriusXM Hit With Fourth $100 Million Lawsuit in Past Month
For a long time, it's been assumed that SiriusXM has the right to distribute and perform pre-1972 recordings.
Then last month, Flo & Eddie of The Turtles brought a proposed $100 million class-action lawsuit against the satellite radio giant, premised on the theory that because sound recordings didn't fall under federal copyright protection until 1972, the SiriusXM couldn't rely on statutory royalty rates for these older tunes.
The initial lawsuit from Flo & Eddie was filed in California, but if state law rather than federal law applies, why stop there? In fact, Flo & Eddie haven't. After filing action in California, the plaintiffs filed another lawsuit in New York. And now, Flo & Eddie have struck a third time, with another proposed class action lawsuit against Sirius in Florida court. The Turtles are crawling across the nation.
Together with a lawsuit filed last week by SoundExchange, which alleges in its own $100 million lawsuit that SiriusXM shouldn't have subtracted pre-'72 recordings from gross revenue calculations, this marks the fourth whopping lawsuit that Sirius has seen in the past month.
Also, this latest action in Florida court isn't really for just $100 million. Try three times that amount.
SiriusXM hasn't responded to the lawsuits yet, except to remove one filed in California state court to California federal court. The company was contacted by The Hollywood Reporter for a response to the litigation, but so far, it has been mum. There likely will come some argument from SiriusXM on why state laws are pre-empted by federal statutes and it has authority to distribute and perform pre-'72 recordings without the express permission of the rights owners.
Until then, there's only the escalating sound from those making the case that SiriusXM has been ignoring any obligation to pay for pre-'72 recordings, which are estimated to make up 10 to 15 percent of its service.
In its own lawsuit, SoundExchange, the digital performance rights organization that collects royalties on behalf of sound recording copyright owners, stated that "SiriusXM has taken the position that the federal statutory license does not cover pre-1972 sound recordings, and on information and belief, SiriusXM is not separately licensing the pre-1972 sound recordings from their owners, even though they are subject to common law copyright or equivalent protection under state law."
Flo & Eddie have been looking to hold Sirius accountable by citing such violations of New York and California law like unfair competition and conversion.
On Tuesday in Florida, the plaintiffs, represented by local counsel Glen Waldman as well as the firm of Gradstein & Marzano, invoked a civil theft statute that could mean damages could be trebled, raising the stakes of a $100 million case threefold to $300 million. The Florida statute provides that one is liable for theft if one "knowingly … uses the property of another with intent to … appropriate the property to his own use."
The plaintiffs have interpreted the standard to mean that it must submit a demand letter to SiriusXM, and if the satellite radio giant hasn't agreed to pay the amounts contained in the demand, the lawsuit can be amended with the civil theft claim added.
What does a $300 million demand look like? Here's a look.