Appeals Court Gives Pandora New Hope for Escaping Class Action Over Pre-1972 Recordings

A lawsuit led by Flo & Eddie of The Turtles is endangered because Congress passed the Music Modernization Act.
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On Thursday, the Ninth Circuit Court of Appeals directed a lower federal court to reconsider Pandora's bid to escape a class action lawsuit over the music service's streaming of pre-1972 sound recordings. The move is largely attributable to Congress' recent enactment of the Music Modernization Act, which for the first time, made these earlier works eligible for digital performance royalties.

Back in 2013, Flo & Eddie of The Turtles attempted to do something about the lack of payment for performance of their hit songs such as "Happy Together." Given that federal law didn't then cover pre-1972 sound recordings, the two couldn't sue for copyright infringement. Instead, they alleged that services like SIriusXM and Pandora were violating various state laws. In 2014, Flo & Eddie scored success by convincing a judge that California did protect public performance. That would eventually lead to a different judge rejecting Pandora's attempt to strike a class action.

Then, the tide began to shift.

After other appellate courts in the nation came to the conclusion that states including New York and Florida didn't protect public performance, the Ninth Circuit certified a question about California's scope of protection to the California Supreme Court.

Before an answer came, however, federal lawmakers passed the MMA with some knowledge about how the controversy over pre-1972 sound recordings had created widespread confusion.

In an order Thursday, the federal appellate court notes that the MMA preempts state-based claims provided that a service like Pandora pays the requisite royalties.

The panel of appellate judges write they can't answer whether the MMA applies to and preempts Flo & Eddie's claims without a factual record about Pandora's compliance. But the Ninth Circuit sees fit to revive Pandora's attempt to strike the lawsuit and sets up the company's potential escape from the class action altogether upon remand.

Here's the order.