New York Federal Court Allows Recording Artists’ Copyright Termination Claims in Class Action to Proceed against Universal Music
March 31, 2020 — Today, the U.S. District Court for the Southern District of New York ruled that musicians could proceed with their class action lawsuit alleging Section 203 copyright termination and infringement claims against recording industry giant, UMG Recordings, Inc. (“Universal Music”). The federal district court rejected, among other things, Universal Music’s argument that the musicians’ claims were time-barred based on Universal Music’s insertion of “work made for hire” language in the musicians’ recording contracts. The Court’s ruling allows the plaintiffs and the alleged Class (comprised of hundreds of recording artists) to move forward on their termination and infringement claims seeking actual and/or statutory damages for sound recordings that Universal Music has continued to exploit after the effective date of the termination notices.
In siding with the recording artists and denying Universal’s motion to dismiss, the court explained:
“Defendant’s argument is weakened further by the music industry’s practice of frequently inserting ‘work made for hire’ language into recording contracts. Its position requires that many artists, often early in their careers, would confront a choice when presented with a ‘works made for hire’ provision. They could refuse to sign the contract and jeopardize their chance for the record company to record or distribute the artist’s music. Or the artist could sign the contract and then bring a claim within three years to dispute the effect of the ‘work made for hire’ provision in order to protect the copyright. Either outcome would be inconsistent with Section 203. The first would exemplify the unequal bargaining power Section 203 sought to correct. The second would render Section 203 meaningless, as its very purpose is to provide a mechanism by which artists can reclaim their copyright after the work has had time to become more valuable. Defendant’s argument simply does [not] withstand scrutiny in light of the unequivocal purpose of the termination provision.”
Section 203 of the Copyright Act, enacted in 1976 and commonly known as the “35-year law,” represents a major challenge to the projected revenue streams for recording companies in the music industry. Universal allegedly refused to allow recording artists, who have sent Notices of Termination to those companies, to take back ownership and control of their U.S. copyrights. The court also rejected Universal Music’s argument that the termination notices were invalid, finding that any alleged errors were “harmless.” The court’s ruling clears the way for the case to go to trial, which is currently scheduled for November 9, 2020.
Plaintiffs are represented by Evan S. Cohen, Maryann R. Marzano, a Los Angeles attorney who recently brought successful class action suits against Sirius XM and Spotify, and by David M. Perry, Roy W. Arnold, Ryan E. Cronin, and Gregory M. Bordo of Blank Rome LLP.
Additional contact information: Evan S. Cohen (esc@cohenmusiclaw.com, 310-556-9800); Maryann R. Marzano (mmarzano@cohenmusiclaw.com); Roy W. Arnold, (rarnold@blankrome.com); Ryan E. Cronin (rcronin@blankrome.com); and David M. Perry (perry@blankrome.com).