IP Law Daily Pandora’s anti-SLAPP motion denied; streaming music not protected activity; suit not barred by MMA
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Friday, October 30, 2020

Pandora’s anti-SLAPP motion denied; streaming music not protected activity; suit not barred by MMA

By Robert B. Barnett Jr., J.D.

Suit over streaming service’s failure to pay royalties for broadcasting pre-1972 recordings by pop group The Turtles can go forward.

Pandora, the music streaming service, was not entitled to strike a complaint under California’s SLAPP law in a copyright infringement suit involving the failure to pay for playing The Turtles’ pre-1972 music because Pandora’s conduct in playing the music was not a protected activity, the federal district court in Los Angeles has ruled. Even if the conduct were deemed to involve a protected activity, the anti-SLAPP motion still would have been denied because the copyright owners were likely to prevail on the merits; that is, the case was not "nonmeritorious litigation," and the court declined to determine that the action was precluded by the enactment of the Music Modernization Act (Flo & Eddie, Inc. v. Pandora Media, Inc., October 22, 2020, Gutierrez, P.).

Anti-SLAPP law. California Code of Civil Procedure §425.16 permits a special motion to strike a "strategic lawsuit against public participation" (SLAPP). The point of the law is to allow for the early dismissal of nonmeritorious litigation that challenges various types of protected speech.

Copyright dispute. Flo & Eddie, Inc., controlled by two founding members of the music group The Turtles, owns the rights to The Turtles’ music. Back in 2014, Flo & Eddie sued Pandora, asserting violations of several California laws, including copyright law. Pandora filed an anti-SLAPP motion seeking to have the complaint struck, which was denied. Pandora appealed the decision, resulting in the Ninth Circuit asking the California Supreme Court to clarify a couple of issues. While those matters were pending, however, Congress enacted the Music Modernization Act (MMA), which extended federal copyright protection to pre-1972 recordings. The MMA also created an affirmative defense for services like Pandora, which asserted that all common law and state law claims based on transmissions of pre-1972 recordings over the internet were preempted, as long as the service complied with several statutory requirements, including paying money into a joint fund for reimbursement to the music creators. Because the MMA was enacted to cover this area, the California Supreme Court refused to address the questions posed to it by the Ninth Circuit. The Ninth Circuit then vacated the order and remanded the case to the district court, with instructions to consider a renewed anti-SLAPP motion in light of the MMA.

Anti-SLAPP. Evaluation of an anti-SLAPP motion is a two-step process. In step one, the court decides whether the movant has made a threshold showing that the suit arises from a protected activity. If so, the second step is to strike the claim unless the plaintiff establishes a probability that it will prevail on the merits.

Protected activity. The protected activity analysis seeks to determine if the defendant’s acts were in furtherance of its free speech rights in connection with a public issue. If the case that the copyright holders filed had involved, for example, adapted song lyrics, the case might have triggered free speech concerns. The copyright holder, however, did not contest Pandora’s right to play the music. It sued because Pandora failed to pay for the broadcast. Because the claims arose from Pandora’s failure to pay rather than from the expressive conduct itself, Pandora’s actions "did not further the right of free speech." As a result, the anti-SLAPP motion was denied on the basis that the suit did not involve protected activity because it did not implicate free speech concerns.

Turning to the other half of the definition in step one—whether the case involved a public interest—the court concluded that Pandora failed to establish that a public interest was involved because Pandora did not "contribute" to the conversation. Even though Pandora broadcasted the songs publicly, the transmissions did not constitute protected activity because they were made for commercial purposes and Pandora did not create the music. Thus, Pandora failed to satisfy either prong in step one.

Prevailing on the merits. Step two looks at whether the action is nonmeritorious litigation by examining the plaintiff’s likelihood of prevailing on the merits. The first issue in that analysis in this case was whether the MMA preempted the claim. The court concluded that it did not, noting that the MMA said that it applies to digital uses of pre-1972 recordings that occur on or after October 11, 2018. The MMA contained no provisions applying to uses before that date, which it could have done but did not. As a result, the court concluded that the MMA did not apply to the digital uses that were the subject of this lawsuit, and, thus, the MMA did not preempt the claim.

Assuming that the MMA did apply, the next question was whether Pandora qualified for the MMA preemption. The court concluded that Pandora did not qualify because it failed to satisfy the statutory requirements. In particular, the copyright holders have alleged that Pandora failed to pay for all of the transmissions when it made payments into the joint fund and that Pandora made recordings in excess of those allowed under the MMA. Because those questions remained unresolved, the court could not conclude that Pandora was entitled to the exemption, even if the MMA were deemed to apply to this suit.

State copyright law. Pandora also made an argument that California law did not apply to the actions that formed the basis of this suit. The cases that Pandora cited in support of its argument, however, were all from other states, none of which had the copyright protections for pre-1972 recordings that California has. As a result, given that the court has addressed this issue twice already, it refused to address it a third time. The state law claims have the right to exist.

The court, therefore, denied the renewed anti-SLAPP motion to strike.

This case is No. 2:14-cv-07648-PSG-GJS.

Attorneys: Evan Seth Cohen (Cohen & Cohen, LLP) and Henry D. Gradstein (Gradstein and Marzano PC) for Flo & Eddie, Inc. Andrew Michael Gass (Latham and Watkins LLP) for Pandora Media, LLC.

Companies: Flo & Eddie, Inc.; Pandora Media, LLC

MainStory: TopStory Copyright TechnologyInternet GCNNews CaliforniaNews

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