Former recording artists Flo & Eddie’s three-and-a-half-year battle against Sirius XM Radio, Inc., for recognition of a public performance right under New York law for pre-1972 sound recordings has come to an end. On Feb. 16, 2017, the Second Circuit Court of Appeal issued an order directing the district court to grant Sirius XM Radio’s motion for summary judgment on the ground that no such state law right of public performance exists, and to dismiss the case with prejudice. The Second Circuit based its dismissal on the response it received following certification of this state law issue for determination by the state’s highest court. On Dec. 20, 2016, the New York Court of Appeals ruled that New York state copyright protection had never extended as far as recognizing a public performance right for sound recording copyright owners. 2016 N.Y. Slip. Op. 08480, 2016 WL 7349183.
Given the New York court’s determination, it was unsurprising that the Second Circuit dismissed Flo & Eddie’s state copyright claim with prejudice. However, the completeness of Sirius XM Radio’s victory may have surprised plaintiffs’ counsel, as the Second Circuit dismissed all of Flo & Eddie’s state law claims. Indeed, the court’s across-the-board dismissal with prejudice of all of Flo & Eddie’s state law claims represented the one area where the two courts disagreed.
In its decision denying the existence of a state law right of public performance, the New York Court of Appeals expressly noted that “sound recording copyright holders may have other causes of action, such as unfair competition, which are not directly tied to copyright law” and therefore, “even in the absence of a common-law right of public performance, plaintiff has other potential avenues of recovery.” Id. at p. 12. One suspects the New York court made these comments in recognition of the fact that Flo & Eddie had included a separate claim for unfair competition in their complaint, and the court did not want its decision to be interpreted as foreclosing relief on this separate ground. Additionally, as Flo & Eddie argued to the Second Circuit, the district court had separately found that Sirius XM Radio’s business practice of copying pre-1972 recordings and publicly performing those copies for profit constituted unfair competition under state law. The Second Circuit rejected all these arguments. In its view, the viability of the copyright and unfair competition claims hinged on whether state law recognized a public performance right, and therefore, the absence of such a right was fatal to both claims.
The Second Circuit’s blanket dismissal of Flo & Eddie’s state law claims arguably sends a broader message – which is that federal courts should not get involved in adjudicating novel state law copyright issues that were never addressed by state courts. The New York Court of Appeals found the absence of any state court decisions addressing public performance rights to be a key factor in its conclusion that no such right existed: “[I]t would be illogical to conclude that [a state law] right of public performance would have existed for decades without the courts recognizing such a right as a matter of state common law, and in the absence of any artist or record company attempting to enforce that right in this state until now.” Id. at p. 9.
It will be interesting to see what impact, if any, the decisions of the New York Court of Appeals and the Second Circuit will have on two other cases the plaintiffs have pending in the federal courts in California and Florida. In both instances, the question of whether state law recognizes a public performance right has been certified to the states’ highest courts for determination. Will these state courts follow the lead of the New York Court of Appeals and reject a public performance right, or will they chart their own paths? Stay tuned.