Hundreds of UMG Artists Can’t Sue Label as Class Action Over Termination Rights, Judge Says
The case claims UMG has "systematically" rejected termination notices from hundreds of artists, but a judge says each musician will need bring their own case.
A federal judge ruled Friday that hundreds of artists cannot join forces to sue Universal Music Group to regain control of their masters, saying the case raised big questions about “fairness” but that it was ill-suited for class-action litigation.
The ruling came in a closely-watched case brought by “Missing You” singer John Waite and others over copyright law’s “termination right.” The rule is supposed to let authors take back control of their works, but the lawsuit claims UMG has flatly ignored that requirement when it comes to sounds recordings.
Waite wanted to certify the case as a class action — a make-or-break move that would have allowed hundreds of UMG artists to bring their claims as a single lawsuit, represented by a single set of lawyers.
But in a crucial ruling issued Friday, Judge Lewis Kaplan denied that request, citing the complex and unique questions raised by each individual artist’s relationship with UMG.
“Plaintiffs’ claims raise issues of fairness in copyright law that undoubtedly extended beyond their own grievances,” the judge wrote. “However, the individualized evidence and case-by-case evaluations necessary to resolve those claims make this case unsuitable for adjudication on an aggregate basis.”
Waite and other artists sued UMG in February 2019, claiming the label had effectively refused to honor the termination right. The case was filed as a proposed class action, aiming to eventually represent hundreds of others in a similar situation. A nearly-identical case was filed on the same day by the same attorneys against Sony Music Entertainment, claiming it had adopted a similar stance on terminations.
According to the lawsuits, the labels have long claimed that sound recordings – unlike the underlying musical compositions controlled by music publishers – are effectively never subject to the termination rule. The basic argument is that most recordings are so-called works for hire, meaning the label essentially creates them itself and simply hires artists to contribute to them.
In seeking to pull hundreds of other artists into the lawsuit, lawyers for the artists argued that UMG has made those “fictitious” and “erroneous” arguments “in every instance” that an artist invokes the termination right – meaning they represent the kind of “systematic wrongful conduct” that is best addressed by a huge class action.
But in Friday’s decision, Judge Kaplan disagreed. “The … analysis requires understanding for each artist the circumstances in which the recordings were produced, the creative involvement, if any, of the record label, and the types of resources and payments the record label provided the artist.”
To decide if a record really was produced simply as a work for hire, the judge said tricky questions would need to be answered for each separate artist. Judge Kaplan said the evidence indicated that UMG sometimes only provided “big picture approval authority,” which could help an artist prove their right to terminate. But for other artists, he said the label was “more involved in the creative process.”
“Did the record label agree on the lyrics and music with the artist?” the judge asked. “Did the record label select the producers and sound engineers to work on the sound recordings? What level of substantive artistic feedback, if any, did the record label provide?”
The ruling is not necessarily a death-knell for the lawsuit against UMG, which will now proceed on behalf of Waite and a handful of others. Evan Cohen, the attorney who represents the artists, did not immediately return a request for comment.
The case could still make a big impact, class-or-no-class. Countless other artists have similar arrangements with record labels over highly-lucrative masters, but the legal arguments about when sound recordings are subject to the termination right have thus far only been lightly tested in court. A final ruling in favor of Waite could provide key legal ammo for those other artists, even if they need to bring their own cases.
A representative for UMG did not immediately return a request for comment.
But it will doubtless be a severe logistical hurdle for such cases actually being filed, since they’re expensive to litigate and artists typically lack the same kind of legal resources as the major labels who have denied their termination requests. A class action would have allowed the artists to pool their resources and secure a sweeping decision with only a single set of legal costs.
Friday’s decision will not directly apply to the similar proposed class action against Sony, which has been on pause for months as the two sides attempt to strike a settlement. But the new ruling, issued by a judge in the same federal court district as the Sony case, certainly does not bode well for that case being certified as a class action.
Read the entire decision here: