The Beat Goes on in the Pre-1972 Sound Recording Battles

Plaintiffs Arthur Sheridan and Barbara Sheridan, owners of sound recordings made before 1972, brought New Jersey law copyright infringement claims against iHeartMedia for broadcasting those recordings without authorization and without compensating the sound recording owners.  The Copyright Act of 1976 does not apply to pre-1972 sound recordings.  Copyright owners for pre-1972 have brought state law copyright infringement claims in several states, arguing that state statutory and common law governs the rights attached to pre-1972 sound recordings.  iHeartMedia moved to stay the New Jersey proceeding against it, pending the outcomes of similar cases pending in the Second, Ninth and Eleventh Circuits.  The district court granted iHeartMedia’s motion to stay.  I posted on this topic in Flo and Eddie Goes for the Two Coast Punch Against Sirius XM.

The district court recapped the current status of the Flo & Eddie cases.

Courts have reached differing conclusions about Flo & Eddie’s claims under the laws of the various states. The Southern District of New York denied Sirius XM Radio’s motion for summary judgment and found, on an issue of first impression, that New York common law provides Pre-1972 Recording owners with the exclusive rights to reproduce and publicly perform their Recordings. Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 62 F. Supp. 3d 325, 338 (S.D.N.Y. 2014), appeal pending, No. 15-1164 (2d Cir.). The Central District of California granted summary judgment against Sirius XM Radio and denied a motion to dismiss filed by Pandora, finding that a California statute governing Pre-1972 Recordings provides owners with the exclusive right to publicly perform, but not to reproduce, their Recordings. Flo & Eddie, Inc. v. Pandora Media, Inc., 2015 U.S. Dist. LEXIS 70551, at *18-29 (C.D. Cal. Feb. 23, 2015), appeal pending, No. 15-55287 (9th Cir.); Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 2014 U.S. Dist. LEXIS 139053, at *6-27 (C.D. Cal. Sept. 22, 2014). The Southern District of Florida, however, granted summary judgment for Sirius XM Radio. The court held that that Florida common law does not provide Pre-1972 Recording owners with exclusive rights to public performance of their Recordings and that the ‘buffer’ copies of Recordings alleged in the complaint do not constitute unlawful reproductions, and declined to hold whether Florida common law provides Pre-1972 Recording owners with exclusive rights to reproduce their Recordings. Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 2015 U.S. Dist. LEXIS 80535, 2015 WL 3852692, at *5-6 (S.D. Fla. June 22, 2015), appeal pending, No. 15-13100 (11th Cir.). Appeals of these decisions are pending before the Second, Ninth, and Eleventh Circuits, respectively.

(Opinion pdf pages 4 – 5).

The district court in the Sheridan v. iHeartMedia case decided to grant the stay because staying the case would cause minimal harm to the parties, be relatively short, simplify issues and promote judicial economy.

Most importantly, the Court finds that staying this case until the Second, Ninth, and Eleventh Circuits have ruled on related cases will more likely than not simplify the issues presented here and promote judicial economy. While the parties here are not involved in the Flo & Eddie cases, the defendants in the Sheridans’ parallel action in this Court, Sirius XM Radio and Pandora, are.  The Sheridan Plaintiffs and Defendant iHeartMedia are also involved in related actions in the Southern District of New York and the Central District of California that have already been stayed pending resolution of the Flo & Eddie actions. Judicial economy weighs in favor of coordinating the schedules of the two cases pending before this Court with each other, the cases between the parties in other districts, and the Flo & Eddie cases involving the same defendants.

In this case, judicial economy weighs in favor of letting the several Courts of Appeals ‘simplify the issues’ raised here by Plaintiffs.  It appears that the question of whether New Jersey common law grants Plaintiffs exclusive rights over the public performances and the appropriation of profits from Pre-1972 Recordings is one of first impression. Given the lack of New Jersey case law on the issue, it is unsurprising that both parties rely upon the Flo & Eddie district court decisions, including sections interpreting similar state law questions, as persuasive authority in their motion to dismiss briefing. The Second, Ninth, and Eleventh Circuit rulings in the Flo & Eddie cases may reverse the holdings that both parties currently cite. Again, while these decisions would not bind this Court, judicial economy favors granting a stay instead of relying on submissions that advance cases which may be overruled.

(Opinion pdf pages 8 – 10).

This case is Sheridan v. iHeartMedia, Inc., Civ. No. 15-cv-7574 (WHW)(CLW), U.S. District Court, District of New Jersey.

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