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Flo & Eddie fail to stop Sirius handing over $210 million to the majors

By | Published on Friday 24 July 2015

Flo & Eddie

One time Turtles, Flo & Eddie, have failed in their bid to get the $210 million that Sirius XM has pledged to pay the US major record companies paid into a third party bank account while their own legal action against the satellite broadcaster goes through the motions. Which is a shame. I was going to offer my bank account for the job.

This, ladies and gentlemen, is all to do with the ‘pre-1972 copyright thing’. You know, the one we explain in great detail in this free-to-access CMU trends report. Basically, on account of copyright law silliness in the US, Sirius reckoned that it didn’t have to pay sound recording owners any royalties when it played music that pre-dated 1972. But the record industry did not agree.

Flo & Eddie, on account of their former life in 1960s group Turtles, led on the litigation front to force Sirius to pay. Lawsuits from the Recording Industry Association Of America and the US record industry rights group that licences Sirius, SoundExchange, both followed. But when Flo & Eddie got a landmark judgement in their favour in the Californian courts last year, the RIAA began out-of-court negotiations with the broadcaster, reached a $210 million settlement last month.

But Flo & Eddie – whose case became a class action after their initial win – are still battling away, not least to secure damages from Sirius. And with their case now a class action, any other artists or indies whose pre-1972 tracks have been played by Sirius could get the right to claim back royalties under any damages arrangement.

Lawyers for Flo & Eddie, from the company Gradstein & Marzano, called the RIAA’s litigation a “coattail action” and the subsequent settlement a “brazen attempt to disrupt and interfere with the class action process”. No money should change hands until Flo & Eddie’s case was fully resolved, they argued.

But the RIAA’s legal reps countered that its deal with Sirius only covered recordings owned by the three majors and ABKCO, and that the rights of any other recording owners – who would be in Flo & Eddie’s ‘class’ – were not affected by the deal. It was also implied that G&M was only acting in this way because the firm was annoyed for being frozen out of the RIAA’s settlement negotiations.

And yesterday a US judge in LA basically sided with the record industry trade group, saying that Universal, Sony, Warner and ABKCO settling with Sirius did not impact on Flo & Eddie’s class. And also, given that G&M had tried to get a seat at the negotiating table after hearing about the RIAA/Sirius talks, and had since started their own direct negotiations after Sirius insisted on keeping the two settlements separate, the time to complain about all this had long gone.

Said the judge, according to Reuters: “G&M’s delay in challenging Sirius XM’s communications with the record companies and even the settlement itself suggests to the court that G&M did not care to enjoin the settlement payment or seek to recover a portion of it until G&M learned the size of the settlement. If class counsel took issue with Sirius XM communicating with the record companies post-certification, it should have moved to restrict such communication after the court certified the class”.

So there you go. Of course, had Sirius been paying for pre-1972 catalogue all along via SoundExchange, 50% of the money would have gone straight to the artists. It’s not clear if the same will apply to the $210 million though. But I’m happy to look after half of it in my bank account while that’s all worked out, if you like.