Pandora argues no protections for Flo & Eddie

The rock band The Turtles relinquished its right to performance royalties when it began to sell its records in stores in the 1960s, counsel for Pandora Music Inc. argued Thursday.

The music subscriber service asked a 9th Circuit Court of Appeals panel to overturn an adverse district court opinion in a lawsuit filed by Flo & Eddie Inc., lead vocalists for the Turtles and figureheads in an ongoing multi-state battle over the rights of pre-1972 song authors.

Pandora employed California's anti-SLAPP statute to file a special motion to strike the complaint in December 2014. The company argued that its use of pre-1972 songs was protected activity and that Flo & Eddie's lawsuit would stifle its free speech rights.

Judge Philip Gutierrez denied the motion to dismiss in December 2014, finding that although Pandora's conduct is considered protected activity under the anti-SLAPP statute, "Flo & Eddie has demonstrated its claims are meritorious to withstand the anti-SLAPP motion."

Gutierrez further noted that Flo & Eddie were protected by state legislation passed in 1982, which granted with limited exception exclusive ownership to pre-1972 song authors through 2047. Flo & Eddie Inc. v. Pandora Music Inc., CV14-07648 (C.D. Cal., filed Oct. 2, 2014).

Before a panel consisting of Circuit Judges Stephen Reinhardt and Richard Paez — and D.C. District Judge Paul L. Friedman — Gregory G. Garre, a Washington D.C.-based partner for Latham & Watkins LLP, argued against Gutierrez's interpretation.

Garre reasoned that the district court's ruling failed because state copyright protections have historically only extended to unpublished works. As many of the songs at issue were commercially distributed, either by sale through record stores or by radio broadcast, Garre said their works should not enjoy state copyright protections.

A previous 9th Circuit decision relating to the copyright protections offered to the serialized radio show "The Lone Ranger" held that "any copyright protection that existed for pre-1972 sound recordings is lost when it is commercially distributed," Garre said.

"The court in that case recognized that the very provisions in effect at time, sections 980 and 983, operated so that when broadcasts in that case were commercially distributed, the rights holders lost copyright protections under California law," Garre said. "That interpretation of state law is binding just like an interpretation of federal law would be."

Henry Gradstein, a partner at Gradstein & Marzano PC representing Flo & Eddie, disputed Garre's argument, reasoning that transference of the physical object the songs are recorded on would not transfer the rights to the artistic performance itself.

"The sale of a record does not permit the effective usurpation of ownership and exploitation through public performance for profit," Gradstein said.

James Sammataro, managing partner of Stroock & Stroock & Lavan LLP's Miami office who is not involved in the case, said Pandora's invocation of the Lone Ranger decision presented "an interesting, nuanced argument."

"Many of legal issues raised in the Flo & Eddie cases turn on legislative history and a patchwork of decisions. This is somewhat inevitable when, what is effectively a copyright case is decided not on the United States Copyright Act, but 'dusty' state law," Sammataro said. "Both sides have had to be creative and to resort to a garage bin of legal arguments. While it may not ultimately carry the day, contextually, it's a stronger argument than one would initially perceive."

Flo & Eddie settled a similar case against Sirius XM earlier this month, earning a class of pre-1972 song authors as much as $99 million. Each side retained its right to appeal district court decisions in California, Florida, and New York under the settlement.

Glen Rothstein, a partner at Greenberg Glusker Fields Claman & Machtinger LLP not involved in the case, said that even if the 9th Circuit decides the 1982 legislation doesn't protect commercially distributed works, Flo & Eddie would still likely enjoy common law protections, as was the case with the Lone Ranger.

"Based on the undeniable existence of post-publication rights in sound recordings under California common law, particularly in light of the Sirius case, Flo & Eddie may very well stand to score another victory on appeal," Rothstein said.

steven_crighton@dailyjournal.com