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Hardly a day goes by without a class action lawsuit against a big record label alleging that recording artists and producers have been undercompensated on the digital royalties front. The latest to file a big action is Martha Davis of the 1980s new wave band The Motels, who on behalf of herself and others similarly situated is suing EMI Group for not paying out an appropriate share on digital downloads and ringtones. The new lawsuit comes as the breakthrough case in this genre of litigation is about to be heard before a jury.
Davis filed her lawsuit in California federal court and asserts that by treating digital transmissions as “sales,” EMI gets away with handing over a much lower royalty rate to musicians than if EMI treated these as “licenses.” Davis also alleges that EMI underreports digital downloads, and when consumers buy music on a digital outlet like iTunes, EMI deducts container and packaging costs from the royalty share.
All of the major labels have been sued on similar grounds by musicians who have been in the business for decades, and EMI is no exception. The company’s subsidiary, Capitol Records, was hit with a class action led by Kenny Rogers over digital downloads in February. Less than two weeks after that, Latin pop singer Graciela Beltran also filed a class action alleging breach of contract over digital royalties compensation.
EMI said it had no comment about the latest lawsuit.
If there’s one thing most of these cases have in common, the complaints refer back to a 9th Circuit Court of Appeals decision in a case brought by F.B.T. Productions, the outfit that produced many Eminem hits, against Aftermath Records, a division of Universal Music Group. In 2010, the appellate circuit suggested that royalties for digital downloads should be treated as “licenses” (with about a 50 percent royalty share) instead of “sales” (about 15 percent), The 9th Circuit then remanded the case back to a district court.
With so many lawsuits being filed, it’s easy to lose sight that the F.B.T. case is still live, and with millions of dollars at stake, headed for a trial that is set to begin on April 24.
The case is much more advanced than many of the just-filed disputes, and on the precipice of a courtroom showdown, the parties are now discussing subjects like how foreign receipts get factored into the revenue share controversy.
The parties are also preparing to go through voir dire to find suitable jury members who can hear a dispute that is sure to attract lots of lawyers (since quite a few members of the California Bar are representing other musicians with pending claims).
What kind of questions will prospective jurors get in advance of this trial?
Daniel Asimow, the attorney for F.B.T, the producing team of Mark and Jeff Bass, will ask all the usual queries about whether prospective jurors have been involved in lawsuits or had experience with contract disputes. But interestingly, Asimow also plans to ask the potential jury whether they believe music should be free on the Internet, their experience with iTunes, if there’s any blame to be apportioned for what it costs to buy a digital album or ringtone, and whether anyone finds Eminem’s lyrics offensive.
As for Aftermath, represented by the law firm of Munger Tolles, & Olsen, it plans to ask prospective jurors their views on record companies, how they pay recording artists, as well as the general sentiment about large corporations with businesses around the world.
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