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SiriusXM’s $210 million settlement with the record companies over pre-1972 music won’t stop for the Turtles.
Flo & Eddie of the Turtles — who filed the breakthrough class action questioning if SiriusXM could play music recorded before 1972 (when federal copyright laws were changed to cover sound recordings) without authorization or royalties — filed earlier this month to stop the settlement and instead have SiriusXM pay the money into an account under the court’s control and direction.
They wanted the record companies’ settlement to wait on their case, in which they received a landmark summary judgment ruling in their favor in September 2014. Months later, in May 2015, they received certification of their proposed class of musicians who recorded songs prior to 1972, in another huge win.
SiriusXM appealed the certification, and the court stayed the case pending the ruling. The Ninth Circuit hasn’t yet ruled.
In the meantime, the record companies reached their settlement with the satellite radio giant, which followed their own win similar to the band’s. The Turtles’ attorney claimed in his opposition to the settlement they requested inclusion in the record companies’ settlement talks, but SiriusXM refused.
In the motion, the band’s attorney Henry Gradstein claimed the settlement effectively hedges in on what the Turtles and their proposed class could win in their separate action. “Sirius XM and the Major Labels purported to settle claims for the use of pre-1972 recordings owned by other Class members, and by doing so usurped the role of the Court and Class Counsel,” he wrote, asserting the settlement intended to “fractur[e] the Class, destroying the leverage of the absent Class members to obtain a settlement on similar terms, and preventing Class Counsel from receiving a fee.”
Judge Philip Gutierrez disagreed in a ruling Wednesday.
The California federal judge found lifting the stay on the Turtles’ case to stop SiriusXM’s settlement unwarranted partly because of the timing of the band’s motion, which “suggests to the Court that G&M did not care to enjoin the settlement payment or seek to recover a portion of it until G&M learned the size of the settlement,” he writes.
The settlement was reached June 17, but the amount not disclosed until June 26, and the Turtles filed July 9. “If class counsel took issue with Sirius XM communicating with the Record Companies post-certification, it should have moved to restrict such communication after the Court certified the class on May 27,” writes the judge.
Otherwise, Gutierrez disputes the argument the court should create a “common fund” for the settlement for Gradstein’s firm to claim a portion. (The Gradstein & Marzano attorney wrote in his motion the record companies had benefited from his work, likely in reference to the record companies’ favorable ruling following the band’s, in which the judge stated she found the Turtles’ ruling “persuasive.”)
“The Second Circuit has reasoned that distribution of a common fund constitutes irreparable harm when the beneficiaries are so numerous that recovering from them directly would be highly impractical,” writes the judge. “Under the circumstances of this case, distribution of the alleged common fund, the Capitol Records Settlement amount, would not irreparably harm G&M because G&M could later recover its fees directly from the five entities comprising the Record Companies.”
Said Gradstein in a statement to The Hollywood Reporter, “The Court did not rule on the merits of the common fund and substantial benefit claims, only that there was no basis for emergency relief to enjoin the distribution of the common fund because we could later go after the Major Labels directly, which we will do.”
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