More “Trick” Than “Treat” For Flo And Eddie At Florida Supreme Court

In the latest develop of the ongoing Flo and Eddie Inc. v. Sirius XM, the State of Florida revealed that it did not recognize performance rights in sound recordings made before February 15, 1972. Unfortunately this means the duo will lose out on another $5 million from their settlement with Sirius.

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Guest post by Stephen Carlisle of Nova Southeastern University

On the eve of Halloween, October 26, 2017, to be precise, the Supreme Court of Florida handed down its advisory opinion in the case of Flo and Eddie Inc. v. Sirius XM. ¹ In response to a certified question from the Eleventh Circuit Court of Appeals, it concluded that the State of Florida did not recognize performance rights in sound recordings made prior to February 15, 1972. For Flo and Eddie, this is more “trick” than “treat” because once again, $5 million dollars goes “poof” out of their hard won settlement with Sirius XM. ²

I have blogged about the Flo and Eddie cases more than any other topic. ³Yet, for this particular decision, I was more than just another blogger on the internet. The Florida Bar’s Entertainment Arts and Sports Law Section filed an amicus curiae brief in support of Flo and Eddie, and I was part of the team that wrote the brief. So, needless to say, I am disappointed in the SCOF’s decision. When you add in the fact that this was a unanimous 7-0 loss, the Court’s ruling left me feeling like Chip Diller in “Animal House” saying “Thank you Sir. May I have another?”

So, having read, and re-read, the SCOF opinion, I still think we’re right, and here’s why.

The SCOF basically adopted the same reasoning as the New York Court of Appeals did, and suffers from the same flaws in logic, as I outlined in a previous post. ⁴ There, I pointed out that this was a results driven ruling. So afraid are the Courts that they are going to create a difficult situation, that the chosen course is to do nothing. This is the argument in a nutshell:

Performance rights for pre-1972 recording do not exist, because no Court in this State has ever ruled that they exist.

This is like concluding as a matter of law that there is no life on other planets because no one has ever proven that there is life on other planets.

The EASL team would have liked to have brought up this point in our brief, but we couldn’t. The briefs on all sides were already filed before the decision on the NY Courts of Appeals was made public.

Further, what the SCOF answered was not the whole question that was asked by the Eleventh Circuit. What the SCOF did was rephrase the question, and in rephrasing the question, put Flo and Eddie at a disadvantage.

The question posed was this:

“Whether Florida recognizes common law copyright in sound recordings and, if so, whether that copyright includes the exclusive right of reproduction and/or the exclusive right of public performance?”

The SCOF changed the question to this:

“Does Florida common law recognize the exclusive right of public performance in pre-1972 sound recordings?”

As legal blogger Zvi Rosen observed:

“This could be excused as judicial minimalism if it wasn’t central to the case – Flo & Eddie sued in Florida specifically because SiriusXM has servers there, and alleged that copying was ongoing on those servers in violation of their exclusive right of reproduction…[s]o, in revising the question formulating by the Circuit Court to one it preferred, the Florida Supreme Court effectively ignored one of the main claims being brought by Flo & Eddie.” ⁵

If the question is first and foremost “does Florida recognize common-law copyrights in sound recordings” this becomes a different case. First off, it’s fairly clear that Florida does recognize common law copyrights in sound recordings, it has a specific statute on point, criminalizing the copying and sale of pre-1972 sound recordings. ⁶ So, then the question becomes, if common law copyright exists in sound recordings, then why don’t they have performance rights? Because every other kind of copyright has them. What makes sound recordings different?

They’re not any different. Two courts, including the Supreme Court of Pennsylvania have ruled that common law copyright in sound recordings includes the right of public performance. As I have argued previously, the common law came over wholesale from England. In light of this, how is New York’s or Florida’s common law somehow different than the common law of Pennsylvania or North Carolina? This point was raised twice in the EASL brief.

Neither Court squarely addresses this question. The SCOF, following the reasoning of the NY Court of Appeals merely states that “Pennsylvania common law is not dispositive here.” ⁷ This is true, as Pennsylvania common law is not binding upon the State of Florida. But both Pennsylvania and Florida common law derive from the same source. What is it about Florida’s common law that dictates a different result? This is never explained.

Instead, the SCOF delves into a long recitation of the treatment of performance rights at the Federal level. This misses the point says Zvi Rosen:

“[C]ommon law copyright is not statutory copyright, and does not obey the same boundaries – courts routinely found that common law copyright included performance rights well beyond what statutory copyright included in the 19th century.” ⁸

The SCOF recitation of the treatment at the Federal level also ignores the vehement opposition of the very powerful broadcasting industry to granting Federal Copyrights to sound recordings. Broadcasters have long maintained they should pay absolutely nothing for playing music over the airwaves due to the value of their “promotion” of the songs and recordings:

“[R]adio airplay increases music sales and that performing artists and record labels profit from exposure provided by radio airplay. Findings demonstrate that a significant portion of music industry sales of albums and digital tracks can be attributed to radio airplay – at minimum 14 percent and as high as 23 percent. These results show that radio is providing the record industry with significant, incremental sales revenues or promotional sales benefit that ranges from $1.5 to $2.4 billion annually.” ⁹

The fact that the record industry found it easier to lobby Congress than to file lawsuits in 50 different States does not mean that the common law right of performance of sound recordings did not exist. Remember that two Courts in two different States had ruled that they did. So, when the SCOF states that common law performance rights for sound recordings couldn’t have existed because that would mean Congress took away that right when it passed sound recording copyright legislation, ¹⁰ this argument really misses the mark. Because that’s exactly what Congress did for the residents of Pennsylvania and North Carolina.

Then there’s the whole issue of Florida Legislature in 1941 taking the step to “abolish any common law rights attaching to phonograph records” which was discussed in a previous blog post. ¹¹ Here, the SCOF holds that since common law rights in sound recordings didn’t exist (because no Court had ever said they existed), the Legislature wasn’t really abolishing anything, and that the legislation was somehow prophylactic in nature. ¹² For this line of reasoning, the SCOF offers no citation to any legislative history in support.

The statute itself (repealed in 1977) says this:

“The sole intendment [sic] of this enactment is to abolish any common law rights attaching to phonograph records…”

The Legislature clearly thought there was some problem that needed clearing up. They probably figured that if Pennsylvania had decided there were common law performance rights, it was very likely that Florida’s common law would have the same result. Which brings us back to the central flaw in the reasoning of the SCOF: how is Florida’s common law different than that of Pennsylvania that mandates a completely opposite result? This is never explained.

The Court might also consider that the absence of any court decision in Florida regarding common law copyrights for sound recordings is that for 36 years those rights had been specifically repealed by the legislature. There would be no point in filing such a lawsuit.

Similarly, the Court rules that the publication of Flo and Eddie sound recordings would have stripped them of all common law rights, ¹³ forgetting the fact that at the time of the initial publication of the Flo and Eddie sound recordings all such common law rights had been legislatively abolished in Florida. In short, there was nothing for them to lose.

The SCOF also thinks that Sirius XM is protected as a “broadcaster” under F.S. 540.11. ¹⁴ Except that this statute is a criminal statute, not a civil statute. Just because an action does not create criminal liability does not mean there is not civil liability for the same act. Again, here’s Zvi Rosen’s critique:

“One only need to look at federal copyright law (or, indeed, nearly any body of law) for ample demonstration of this – most conduct which gives rise to a civil claim for infringement does not give rise to a criminal claim for the same conduct.” ¹⁵

Lastly, the SCOF argues that:

“[F]inding that that a pre-repeal purchase of say “Happy Together” could be freely played in public while a post-repeal purchase of that same recording was subject to licensing and royalty payments would be illogical and unworkable.” ¹⁶

Except this is most likely not the case. Is there a jukebox in Florida that still plays vinyl records? I doubt it. Is the copy of “Happy Together” that resides on Sirius XM servers made from a vinyl record? Very doubtful. Most likely it was made from a CD, which of course did not exist between 1941 and 1977. Indeed, the first consumer CD player did not debut until 1982. ¹⁷

And here’s the real slippery slope. If the CD from which Sirius XM copied “Happy Together” was remastered from the original tapes, then according to the decision by the Federal District Court in California in the case of ABS Entertainment v. CBS Corporation, ¹⁸ this creates a new sound recording copyright, ¹⁹ which would be governed by Federal law not Florida common-law.

This would mean that Sirius XM, as a digital broadcaster would owe Flo and Eddie royalties after all.

Could Flo and Eddie be right, even for the wrong reason?

That would be some kind of trick.

Notes: