Litigation
May 10, 2017
Sirius settles with Flo & Eddie for up to $73M
A federal judge granted final approval Monday to a settlement between Sirius XM Radio Inc. and a class of pre-1972 song owners that could entitle the class to as much as $73 million.
Daily Journal Staff Writer
LOS ANGELES — U.S. District Judge Philip S. Gutierrez granted final approval Monday to a settlement between Sirius XM Radio Inc. and a class of pre-1972 song owners that could entitle the class to $73 million.
The settlement guarantees at least $25 million for the class, led by plaintiffs Flo & Eddie Inc., members of the '60s rock band The Turtles. The class claimed in lawsuits filed in California, New York, and Florida that Sirius and others violated state copyright laws by playing their music without compensation.
The protections granted by state law were the central issue, as songs produced pre-1972 predate federal copyright protections granted in the Copyright Act of 1976.
The settlement could have been $99 million but a New York Court of Appeals' decision to dismiss the New York lawsuit reduced the potential award.
The agreement provides Sirius XM with a 10-year licensing agreement for the songs at issue in exchange for cash royalty payments for class members. The New York case's dismissal dropped the potential royalty rate by between 2 percent to 3.5 percent. A Sirius victory in Florida would reduce the rate another 1.5 percent.
The settlement extends to class members in all three cases but allows pending appeals in California and Florida to continue. Flo & Eddie Inc. v. Sirius XM Radio Inc., 13-CV5693 (C.D. Cal., filed Aug. 3 2013).
Legal fees will be decided after all cases are resolved.
Attorneys for Gradstein & Marzano PC, who represented Flo & Eddie, said they are happy with Monday's ruling, as it would allow them to begin paying the song owners after four years of litigation. Under the agreement, song owners will receive $16 per song play.
"It's been hard-fought," said Maryann R. Marzano. "We're pleased with the judge's recognition of how hard we worked as class counsel and recognized the true benefit we've brought the class by way of this settlement agreement."
Daniel Petrocelli, of O'Melveny & Myers LLP and lead counsel for Sirius, could not be reached Monday.
James Sammataro, a partner at Stroock & Stroock & Lavan LLP who was not involved in the case, said the New York defeat for Flo & Eddie could be viewed two ways — the most obvious being the decline in the overall settlement value.
"The flip side however, particularly when viewed in the context of the present setback in Florida, is that plaintiffs' secured a guaranteed $25 million [and] a 10-year license with a decent royalty based on what may ultimately prove to be an outlier decision, which may not withstand the California Supreme Court's scrutiny," Sammataro said.
steven_crighton@dailyjournal.com
Steven Crighton
steven_crighton@dailyjournal.com
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