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Turtles’ Copyright Suit vs. Pandora Depends on New Music Law (2)

Oct. 18, 2019, 4:26 PMUpdated: Oct. 18, 2019, 7:25 PM

The Turtles’ five-year music copyright fight with Pandora Media LLC must return to a California district court because of questions raised by a new music reform law, the Ninth Circuit ruled.

The Music Modernization Act became law after Pandora filed an appeal to dismiss a copyright infringement complaint by Flo & Eddie Inc., a company started by two founding members of the 1960s folk band known for the hit “Happy Together.” The district court must now consider new provisions that might bar the state law claims that Flo & Eddie filed, the U.S. Court of Appeals for the Ninth Circuit said Oct. 17.

The case highlights the complications surrounding copyright lawsuits filed before the MMA passed in October 2018. The law granted federal copyright protection to sound recordings made before 1972, which previously were governed by a patchwork of state laws. It also included provisions for determining the status of existing lawsuits.

Flo & Eddie filed state lawsuits against Pandora and Sirius XM for allegedly failing to pay royalties. Pandora argued for dismissal under California law—known as the anti-strategic lawsuit against public participation, or anti-SLAPP law—that protects free expression from expensive litigation.

The U.S. District Court for the Central District of California rejected the bid on the grounds that Flo & Eddie’s copyright claims had a reasonable chance of prevailing. Flo & Eddie filed the suit as a class action on behalf of itself as well as any other copyright owners in a similar position. A class has not been certified.

The Ninth Circuit’s decision means Pandora will “have to justify what public interest it could possibly have in bootlegging the Turtle’s work, according to a statement from Susman Godfrey LLP, which is representing Flo & Eddie.

Long, Winding Appeal

Pandora’s appeal had been briefed and argued in 2017 when the Ninth Circuit asked the California Supreme Court if California law granted sound recording owners exclusive performance rights. The court initially agreed to answer but, after the MMA passed, asked for additional briefing on its effects on the case and then dismissed the questions, returning the case to the Ninth Circuit.

The Ninth Circuit said Pandora’s dismissal bid depended on whether the MMA exerts exclusive control over Flo & Eddie’s state law copyright claims.

The law pre-empts existing state law claims on digital transmissions of pre-1972 sound recordings under certain conditions, it said. If the recordings satisfy certain licensing requirements and the alleged infringer paid all statutory royalties within 270 days of the law’s passage, copyright claims would be barred, it said.

However, the appeals court said it couldn’t determine from the record whether the recordings qualified for statutory licensing, or whether Pandora paid for all use for the three years before the MMA. The Ninth Circuit also can’t be first court to hear a new affirmative defense like the MMA preemption, so the district court must allow the parties to amend their pleadings, according to the opinion.

Pandora claimed a letter it submitted shows it notified Flo & Eddie and paid for use of its music for the preceding three years as required, according to the opinion. But the Ninth Circuit said it couldn’t consider the letter as it was not part of the district court record.

Flo & Eddie secured a $25 million settlement with Sirius that could have risen to $99 million if it won in various state cases. Lawsuits seeking royalties from Sirius under New York and Florida law later failed.

Judges Kim McLane Wardlaw, Richard Paez and Paul L. Friedman sat on the panel that issued the unsigned opinion.

Gradstein & Marzao PC and King, Holmes, Paterno & Soriano, LLP also represent Flo & Eddie.

Latham & Watkins LLP represents Pandora.

The case is Flo & Eddie, Inc. v. Pandora Media, LLC, 2019 BL 397624, 9th Cir., No. 15-55287, 10/17/19

To contact the reporter on this story: Kyle Jahner in Washington at kjahner@bloomberglaw.com

To contact the editors responsible for this story: Rebecca Baker at rbaker@bloomberglaw.com; Keith Perine at kperine@bloomberglaw.com