Pre-1972 Recordings Case Against Sirius In GA Hits Spotlight

This case came before the state high court in the form of a question from the U.S. District Court of the Middle District of Georgia, where Arthur and Barbara Sheridan sued iHeartMedia Inc. for failing to pay for the use of sound recordings that predate federal law protecting recordings created since 1972. Sheridan v. iHeartMedia Inc., 1:2015cv00160.

The Sheridans are an Illinois couple who owned several doo-wop, jazz and R&B recording companies in the 1950s and 1960s. They have filed suits over their pre-1972 sound recordings in several other states, including California, Illinois, New Jersey and New York. In two suits filed in the U.S. District Court for the District of New Jersey — one against iHeartMedia, the other against both Sirius XM and Pandora — that are similar to Flo & Eddie's New York case, the Sheridans sought damages under New Jersey state law. Sheridan v. iHeartMedia Inc., 15-cv-7574; Sheridan v. Sirius XM Radio Inc., 15-cv-7576.

Both New Jersey suits, which were stayed pending the outcome of the New York Flo & Eddie litigation, alleged the defendants “profit handsomely by advertising and offering these sounds to the public,” but failed to obtain permission to use pre-1972 recordings or to pay royalties on them.

The Sheridans said in these complaints that they brought the suits on behalf of what they call the “misappropriations class,” composed of “all owners of reproduction and public performance rights in pre-1972 recordings that have been publicly performed, copied or otherwise exploited” by the defendants “without a license or other authorization, in the marketing, sale and provision of Internet and terrestrial radio services.” According to the New Jersey complaints, the District of New Jersey gained personal jurisdiction over the defendants because they “mass-solicit New Jersey customers” through their websites and on-air advertising. These suits each allege common-law copyright infringement, unfair competition and unjust enrichment.

The question before the Georgia Supreme Court is whether iHeart's Internet radio services qualify as “radio broadcast transmission” or “related uses” under Georgia law — that would exempt them from a requirement to have the owners' permission to play their recordings. iHeartMedia v. Sheridan, S17Q0345.

“What about the vast majority of radio stations that also live-stream their programming?” Peterson asked. “Are they felons also?”

The short version of Galin's long answer seemed to be “yes.” “It's still the master owners harmed by not being compensated,” he said.

“Why wouldn't that be a related use?” Justice Britt Grant asked.

“The word broadcast means to cast broadly,” said Presiding Justice Harold Melton. “Does it matter if it's by satellite or airwaves?”

As if fielding the justices' many questions wasn't tough enough, Galin had to go up against an opponent whose last job was arguing regularly before the U.S. Supreme Court. Gregory Garre of Latham & Watkins in Washington, DC, who defended iHeartMedia, was the U.S. solicitor general during President George W. Bush's era.

“Startling” was Garre's description of the accusation that his client — one of the nation's largest Internet radio services — is a criminal enterprise engaged in piracy. That would turn every iPhone that has streamed music into “contraband seizable by authorities,” he said.

Garre argued that iHeart is not making copies to sell but merely temporarily transmitting digital packets of music that cannot be replayed — or even chosen by song. “You can pick the Rolling Stones, but you can't choose whether you hear 'Sympathy for the Devil' or '(I Can't Get No) Satisfaction,'” Garre said.

Garre saved five of his 20 minutes for rebuttal, and came back after Galin was done to have the last word. “No state, no court, no one before this case had ever suggested Internet radio was piracy,” Garre concluded. “I would ask this court to rule that Internet radio service is not radio piracy.”

*****
Katheryn Hayes Tucker is a Business Reporter for ALM. Zack Needles is the Managing Editor of The Legal Intelligencer, an ALM sibling of Entertainment Law & Finance.

The February 16 ruling by the U.S. Court of Appeals for the Second Circuit ordering the dismissal of Flo & Eddie's closely watched class-action lawsuit against Sirius XM Radio over the use by the satellite provider of pre-1972 sound recordings lately has received the lion's share of attention on this hotly litigated issue. (The Second Circuit shot down the claims by the original members of the 1960s hit-makers The Turtles who alleged common-law copyright infringement and unfair competition. Flo & Eddie Inc. v. Sirius XM Radio Inc., 15-1164.)

But a few days before the Second Circuit published its decision, the Georgia Supreme Court heard arguments in a class action case against iHeartMedia over its use of pre-1972 sound recordings. Attorney Matthew Galin of the Foster firm in Chicago flew down to Atlanta to tell the Georgia Supreme Court that iHeartRadio is a bootlegger and a pirate playing his clients' songs without paying for them. At an oral argument field trip for the state supreme court justices to Emory University School of Law in Atlanta, they seemed a bit skeptical of Galin's suggestion that broadcasting songs on the radio is legal and even good for the music industry, but streaming them on the Internet is a violation of Georgia's criminal record piracy statute, Ga. Code §16-8-60, that hurts the owners of the master copies by depriving them of record sales (and thus allegedly makes iHeartMedia run afoul of Georgia's Racketeer Influenced and Corrupt Organizations Act).

But “[i]t's the same broadcast,” Justice Nels Peterson said.

This case came before the state high court in the form of a question from the U.S. District Court of the Middle District of Georgia, where Arthur and Barbara Sheridan sued iHeartMedia Inc. for failing to pay for the use of sound recordings that predate federal law protecting recordings created since 1972. Sheridan v. iHeartMedia Inc., 1:2015cv00160.

The Sheridans are an Illinois couple who owned several doo-wop, jazz and R&B recording companies in the 1950s and 1960s. They have filed suits over their pre-1972 sound recordings in several other states, including California, Illinois, New Jersey and New York. In two suits filed in the U.S. District Court for the District of New Jersey — one against iHeartMedia, the other against both Sirius XM and Pandora — that are similar to Flo & Eddie's New York case, the Sheridans sought damages under New Jersey state law. Sheridan v. iHeartMedia Inc., 15-cv-7574; Sheridan v. Sirius XM Radio Inc., 15-cv-7576.

Both New Jersey suits, which were stayed pending the outcome of the New York Flo & Eddie litigation, alleged the defendants “profit handsomely by advertising and offering these sounds to the public,” but failed to obtain permission to use pre-1972 recordings or to pay royalties on them.

The Sheridans said in these complaints that they brought the suits on behalf of what they call the “misappropriations class,” composed of “all owners of reproduction and public performance rights in pre-1972 recordings that have been publicly performed, copied or otherwise exploited” by the defendants “without a license or other authorization, in the marketing, sale and provision of Internet and terrestrial radio services.” According to the New Jersey complaints, the District of New Jersey gained personal jurisdiction over the defendants because they “mass-solicit New Jersey customers” through their websites and on-air advertising. These suits each allege common-law copyright infringement, unfair competition and unjust enrichment.

The question before the Georgia Supreme Court is whether iHeart's Internet radio services qualify as “radio broadcast transmission” or “related uses” under Georgia law — that would exempt them from a requirement to have the owners' permission to play their recordings. iHeartMedia v. Sheridan, S17Q0345.

“What about the vast majority of radio stations that also live-stream their programming?” Peterson asked. “Are they felons also?”

The short version of Galin's long answer seemed to be “yes.” “It's still the master owners harmed by not being compensated,” he said.

“Why wouldn't that be a related use?” Justice Britt Grant asked.

“The word broadcast means to cast broadly,” said Presiding Justice Harold Melton. “Does it matter if it's by satellite or airwaves?”

As if fielding the justices' many questions wasn't tough enough, Galin had to go up against an opponent whose last job was arguing regularly before the U.S. Supreme Court. Gregory Garre of Latham & Watkins in Washington, DC, who defended iHeartMedia, was the U.S. solicitor general during President George W. Bush's era.

“Startling” was Garre's description of the accusation that his client — one of the nation's largest Internet radio services — is a criminal enterprise engaged in piracy. That would turn every iPhone that has streamed music into “contraband seizable by authorities,” he said.

Garre argued that iHeart is not making copies to sell but merely temporarily transmitting digital packets of music that cannot be replayed — or even chosen by song. “You can pick the Rolling Stones, but you can't choose whether you hear 'Sympathy for the Devil' or '(I Can't Get No) Satisfaction,'” Garre said.

Garre saved five of his 20 minutes for rebuttal, and came back after Galin was done to have the last word. “No state, no court, no one before this case had ever suggested Internet radio was piracy,” Garre concluded. “I would ask this court to rule that Internet radio service is not radio piracy.”

*****
Katheryn Hayes Tucker is a Business Reporter for ALM. Zack Needles is the Managing Editor of The Legal Intelligencer, an ALM sibling of Entertainment Law & Finance.