On November 14, 2014, the Judge hearing the New York version of the Flo and Eddie lawsuit, issued an order denying Sirius XM’s Motion for Summary Judgment. 1 What was unusual is, not only did the Judge deny the motion, but stated that she was prepared to rule in favor of Flo and Eddie unless Sirius XM could “show cause” by December 5, 2014 why she should not grant summary judgment on the issue of liability.
Having lost twice in the State of California, and now in the State of New York, Sirius responded by firing their lawyers, 2 and moving for reconsideration of the prior ruling. 3 In this filing, they argued that a 70 year old Second Circuit opinion supported their position that there is no New York common law protection for sound recordings. 4 Since that filing, I have waited to write about the Judge’s initial opinion, to see what the result of the Motion for Reconsideration might be.
I am well aware of the case cited by Sirius, RCA Mfg. Co. v. Whiteman. 5 It is regularly cited when the discussions about common law sound recording rights come up, and I was curious as to why it was only now, on a Motion for Reconsideration, being brought up. I have read the case several times, and even though written by the famous Judge Learned Hand, it is not exactly the model of clarity.
A Motion for Reconsideration is simply that, calling attention to some aspect of the case which according to the Court “the movant must demonstrate an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.” 6 It is not supposed be a time to raise new arguments you should have made the first time or simply rehashing arguments that have been already rejected. But that is exactly what the new lawyers did. Needless to say, the tactic did not go over well with the Judge.
As a Second Circuit opinion, the case, even though old, would be a binding precedent on the Judge and she would be obligated to follow the ruling. But as it turns out, the RCA v. Whiteman case had been explicitly over-ruled by a subsequent Second Circuit case. This, of course, would explain why it was not mentioned before. In the case of Capitol Records v. Mercury Records Corp., 7 the Second Circuit concluded, 15 years after the first case, that “the quoted statement from the RCA case is not the law of the State of New York,” citing the decision by a New York State Court in Metro. Opera Ass’n v. Wagner-Nichols Recorder Corp. 8 This decision was re-affirmed by the New York Court of Appeals in Capitol Records, Inc. v. Naxos of America, Inc. 9 in 2005. The Court there stated “The musical recordings at issue in this case, created before February 15, 1972, are therefore entitled to copyright protection under New York common law until the effective date of federal preemption—February 15, 2067. Even assuming, however, that common-law copyright protection ceases upon “first publication” without regard to the existence of an applicable statute covering the type of literary or artistic work at issue, our common law would continue to protect sound recordings made before 1972.” 10 How the lawyers for Sirius can even claim with a straight face that this decision did not expressly repudiate the holding in Whiteman is beyond belief.
The Judge is not amused and does not mince words:
“The only clear error in this case is [by the new Sirius attorneys’]. Sirius’s former counsel had two perfectly good reasons not to argue the lack of any public performance right on the basis of Whiteman: (1) Whiteman does not hold that New York does not recognize a public performance right as part of the common law copyright in sound recordings; and (2) its actual holding – which is that the sale of sound recordings to the public constituted “publication,” which divested a creation of any common law copyright whatsoever – is no longer good law, and has not been for 60 years.”
Ouch.
So now we are back to Sirius having to come up with a good reason for the Judge not to grant summary judgment in favor of Flo and Eddie. I do not see this as happening. The next step is to request permission to file an interlocutory appeal to the Second Circuit, which the Judge has indicated she looks favorably upon. The Second Circuit, in turn, may punt the issues to the New York Court of Appeals, who have already ruled twice that New York common law does protect sound recordings.
So, Flo and Eddie have won in California, the RIAA’s suit in California has been won, and now Flo and Eddie have emerged victorious in New York as well. All that remains is for the Court in Florida to rule.
A settlement could happen, but faces many barriers. First as a class action, it would have to involve numerous parties who hold the rights to some of the most valuable sound recordings ever made. Remember, every album ever recorded by the Beatles, The Doors, Jimi Hendrix, Janis Joplin, Glen Miller and Tommy Dorsey are included in this group.
But now that Sirius XM has totally pissed off the Judge, it might make sense.
Notes:
- Flo & Eddie, Inc v. Sirius XM Radio, Inc ↩
- Sirius XM Ousts Weil, Taps O’Melveny in Copyright Cases ↩
- Flo & Eddie, Inc v. Sirius XM Radio, Inc ↩
- RCA Mrg. Co. v. Whiteman, 114 F.2d 86 (2d Cir. 1940) ↩
- 114 F.2d 86, 87-88 (2d Cir. 1940) ↩
- Flo & Eddie, Inc v. Sirius XM Radio, Inc ↩
- 221 F.2d 657, 663 (2d Cir. 1955) ↩
- 101 N.Y.S.2d483 (Sup. Ct. 1950) affd, 107N.Y.S.2d 795 (App.Div. 1951 ) ↩
- 797 N.Y.S.2d 352, N.Y. ↩
- Id at 365-366 ↩