Turtles’ Settlement Muddies Copyright Waters

LOS ANGELES, CA—SiriusXM satellite radio has agreed to pay up to $99 million to settle a class action lawsuit brought by Mark Volman and Howard Kaylan, otherwise known as Flo and Eddie, of 1960s band the Turtles.
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LOS ANGELES, CA—SiriusXM satellite radio has agreed to pay up to $99 million to settle a class action lawsuit brought by Mark Volman and Howard Kaylan, otherwise known as Flo and Eddie, of 1960s band the Turtles. Federal copyright only protects recordings made from 1972 onward, so the pair filed three lawsuits against SiriusXM in 2013, in California, Florida and New York, claiming protection under state copyright laws for pre-1972 songs played by the broadcaster.

Music and lyrics have long been covered by federal copyright laws, but it was only after Congress passed the Sound Recording Act of 1971 that a fixed version—a recording—of a song was also protected by copyright. Any recording made prior to the bill becoming law on February 15, 1972 is subject to the copyright laws of the individual states.

Digital radio services such as SiriusXM and Pandora have resisted paying royalties for recordings made before February 1972 because they do not have federal copyright protection. They have never previously paid to play old songs in the belief that the state laws protecting pre-1972 recordings did not give owners a so-called “right of public performance.” But recent lawsuits brought by various artists and labels have led to courts awarding copyright protection to pre-1972 recordings under individual state laws.

The Turtles, probably best known for their 1967 chart-topper “Happy Together,” won summary judgement in California in 2014 in the suit brought by Volman and Kaylan’s Flo & Eddie Inc., the company that controls the band’s music rights. The judge wrote that California law “must be interpreted to recognize exclusive ownership rights as encompassing public performance rights in pre-1972 sound recordings.” SiriusXM agreed to settle, while denying any wrongdoing, just days before the damages trial in mid-November 2016.

Papers filed by the plaintiffs’ lawyers in federal court in California shortly thereafter revealed the terms of the agreement. SiriusXM will pay the independent artists and labels named in the suit at least $25 million for its unlicensed use of their pre-1972 recordings since August 2009.

Flo & Eddie won their lawsuit against SiriusXM in New York but lost in Florida. Both decisions have been appealed, and the appeals courts have requested guidance from the highest courts in their respective states. Payment of an additional $15 million in the California settlement is dependent on the Turtles prevailing in their pending appeals.

SiriusXM also agreed to license recordings from the suit’s class members for a period of 10 years at a royalty rate of 5.5 percent. The final amount to be paid will depend on the broadcaster’s revenue growth over the next 10 years, but is projected to be at least $45 million and possibly as much as $59 million.

The settlement does not apply to any pre-1972 recordings owned by the major labels, which filed their own separate lawsuits against SiriusXM and Pandora after the Turtles initially prevailed in New York and California. Major record companies controlling approximately 80 percent of all pre-1972 recordings—including music by the Beatles, the Rolling Stones, Bob Dylan and others—settled with SiriusXM in June 2015 for $210 million. The deal covered only five years of past damages and future licensing through December 2017.

Pandora also agreed to settle with the record companies, for $90 million, in October 2015. Flo & Eddie are also pursuing a suit against Pandora.

Attorneys for the Turtles had asked a California federal judge for a $32 million cut of the $210 million settlement between SiriusXM and the major labels for what they described as the “critical role” they played in the deal. The judge denied the request, saying that he had no control over the settlement, which was made in a separate court.

The settlements still leave elements of copyright law unclear, including the question of whether state laws allow the owners of pre-1972 recordings to control the performing rights of those songs. A decision made in U.S. District Court for the Central District of California in May 2016 also muddies the waters. That court ruled that if a pre-1972 recording is remastered, it is entitled to federal copyright protection, enabling digital broadcasters to avoid paying performance royalties. That decision may yet be appealed, and in any case, is not binding in any other district or state court.