Flo & Eddie, Inc. v. Sirius XM Radio, Inc.

Filing

OPINION, reversing the district court s denial of Appellant s motion for summary judgment and remanding to that court with instructions, per curiam, by GC, DC, SLC, FILED.[1970447] [15-1164]

Case 15-1164, Document 228, 02/16/2017, 1970447, Page1 of 6

15-1164-cv
Flo & Eddie, Inc. v. Sirius XM Radio, Inc.
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UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term, 2015
Argued: February 2, 2016
Question Certified: April 13, 2016
Certified Question Answered: December 20, 2016
Decided: February 16, 2017
Docket No. 15-1164-cv
FLO & EDDIE, INC., a California Corporation,
individually and on behalf of all others similarly situated,
Plaintiff-Appellee,
– v. –
SIRIUS XM RADIO, INC., a Delaware Corporation,
Defendant-Appellant,
DOES, 1 THROUGH 10,
Defendants.
Before: CALABRESI, CHIN, and CARNEY, Circuit Judges.
Defendant-Appellant Sirius XM Radio, Inc., appeals from the November 14, 2014
and December 12, 2014 orders of the United States District Court for the Southern District
of New York (McMahon, J.) denying its motions, respectively, for summary judgment and
for reconsideration in connection with Plaintiff-Appellee Flo & Eddie, Inc.’s copyright
infringement suit. Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. 13-cv-5784 (CM), 2014 WL
7178134 (S.D.N.Y. Dec. 12, 2014) (denial of motion for reconsideration); Flo & Eddie, Inc. v.
Sirius XM Radio, Inc., 62 F. Supp. 3d 325 (S.D.N.Y. 2014) (denial of motion for summary
judgment). We previously concluded that the appeal raised a significant and unresolved
issue of New York law that is determinative of this appeal: Is there a right of public

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performance for creators of pre-1972 sound recordings under New York law and, if so, what
is the nature and scope of that right?

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We certified this question to the New York Court of Appeals. Flo & Eddie, Inc. v.
Sirius XM Radio, Inc., 821 F.3d 265 (2d Cir. 2016). The Court of Appeals accepted
certification and responded that New York common law does not recognize a right of public
performance for creators of pre-1972 sound recordings. Flo & Eddie, Inc. v. Sirius XM Radio,
Inc., 2016 WL 7349183 (N.Y. Dec. 20, 2016).

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In light of this ruling, we REVERSE the district court’s denial of Appellant’s motion
for summary judgment and REMAND with instructions to grant Appellant’s motion for
summary judgment and to dismiss the case with prejudice.

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HARVEY GELLER (Henry Gradstein, Maryann R.
Marzano, on the brief), GRADSTEIN & MARZANO, P.C.,
Los Angeles, CA; (Evan S. Cohen, on the brief), Los
Angeles, CA; Michael Gervais, Arun S. Subramanian,
SUSMAN GODFREY LLP, New York, NY; Robert
Rimberg, GOLDBERG RIMBERG & WEG PLLC, for
Plaintiff-Appellee
DANIEL M. PETROCELLI (Cassandra L. Seto, on the
brief), O’MELVENY & MYERS LLP, Los Angeles, CA;
(Johnathan D. Hacker, on the brief), O’MELVENY &
MYERS LLP, Washington, DC; for Defendant-Appellant
BRANDON BUTLER, AMERICAN UNIVERSITY
WASHINGTON COLLEGE OF LAW, Washington, DC, for
Amici Curiae Law Professors Gary Pulsinelli, Julie Ross,
and Peter Jaszi, in support of Defendant-Appellant
EUGENE VOLOKH, UCLA SCHOOL OF LAW, Los
Angeles, CA, for Amici Curiae Howard Abrams, Brandon
Butler, Michael Carrier, Michael Carroll, Ralph
Clifford, Brian Frye, William Gallagher, Eric Goldman,
James Grimmelmann, Yvette Liebesman, Brian Love,
Tyler Ochoa, David Olson, David Post, Michael Risch,
Matthew Sag, Rebecca Tushnet, and David Welkowitz,
in support of Defendant-Appellant
MITCHELL STOLTZ, VERA RANIERI, Electronic
Frontier Foundation, San Francisco, CA, for Amicus

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Curiae Electronic Frontier Foundation, in support of
Defendant-Appellant
R. BRUCE RICH, BENJAMIN E. MARKS,
GREGORY SILBERT, TODD LARSON, KAMI
LIZARRAGA, WEIL, GOTSHAL & MANGES LLP, New
York, NY, for Amicus Curiae Pandora Media, Inc., in
support of Defendant-Appellant
SHERWIN SIY, JOHN BERGMAYER, RAZA
PANJWANI, Public Knowledge, Washington, DC, for
Amicus Curiae Public Knowledge, in support of
Defendant-Appellant
STEPHEN B. KINNAIRD, PAUL HASTINGS LLP,
Washington, DC; RICK KAPLAN, National
Association of Broadcasters, Washington, DC; for
Amicus Curiae National Association of Broadcasters, in
support of Defendant-Appellant
ADAM R. BIALEK, STEPHEN J. BARRETT,
WILSON ELSER MOSKOWITZ EDELMAN & DICKER LLP,
New York, NY; DAVID L. DONOVAN, New York
State Broadcasters Association, Inc., Albany, NY; for
Amicus Curiae New York State Broadcasters Association,
Inc., in support of Defendant-Appellant

PER CURIAM:

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On September 3, 2013, Flo & Eddie, Inc. (“Appellee”), a California corporation that

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asserts it owns the recordings of “The Turtles,” a well-known rock band with a string of hits

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in the 1960s, sued Sirius XM Radio, Inc. (“Appellant”), a Delaware corporation that is the

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largest radio and internet-radio broadcaster in the United States. The suit was brought on

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behalf of itself and a class of owners of pre-1972 recordings; it asserted claims for common-

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law copyright infringement and unfair competition under New York law. In particular,

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Appellee alleged that Appellant infringed Appellee’s copyright in The Turtles’ recordings by

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broadcasting and making internal reproductions of the recordings (e.g., library, buffer and

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cache copies) to facilitate its broadcasts.

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In due course, Appellant moved for summary judgment on two grounds. Appellant

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contended first that there is no public-performance right in pre-1972 recordings under New

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York copyright law, and hence that its internal reproductions of these recordings were

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permissible fair use. Second, Appellant argued that a state law public performance right, if

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recognized, would be barred by the Dormant Commerce Clause. On November 14, 2014,

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the District Court (McMahon, J.) denied this motion. Flo & Eddie, Inc. v. Sirius XM Radio,

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Inc., 62 F. Supp. 3d 325, 330 (S.D.N.Y. 2014).

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On the first issue, the court concluded that New York does afford a common-law

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right of public performance to copyright holders, and that Appellant’s internal reproductions

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were correspondingly not fair use. Id. at 344-46. On the second issue, the court found that

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the recognition of a performance right did not implicate the Dormant Commerce Clause. It

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noted that, pursuant to Sherlock v. Alling, 93 U.S. (3 Otto) 99 (1876), such a right did not

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constitute a “regulation” of commerce. Flo & Eddie, Inc., 62 F. Supp. 3d at 351–53.

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Soon after, Appellant, with new counsel, filed a motion for reconsideration of the

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November 14, 2014 order. In the alternative, it asked the District Court to certify its

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summary judgment order for interlocutory appeal. The District Court denied Appellant’s

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motion for reconsideration, Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. 13-cv-5784, 2014

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WL 7178134 (S.D.N.Y. Dec. 12, 2014), but did certify both the summary judgment and

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reconsideration orders for interlocutory appeal, Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No.

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13-cv-5784, 2015 WL 585641 (S.D.N.Y. Feb. 10, 2015).

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Appellant then petitioned us to permit the interlocutory appeal, which we did. Flo &

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Eddie, Inc. v. Sirius XM Radio, Inc., No. 15-cv-497, 2015 WL 3478159 (2d Cir. May 27,

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2015). After extensive briefing and oral argument, we concluded that the appeal raised a

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significant and unresolved issue of New York law that is determinative of this appeal: Is

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there a right of public performance for creators of pre-1972 sound recordings under New

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York law and, if so, what is the nature and scope of that right?

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Accordingly, we certified this question to the New York Court of Appeals. Flo &

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Eddie, Inc., 821 F.3d 265. The Court of Appeals accepted certification, and on December

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20, 2016, responded that New York common law does not recognize a right of public

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performance for creators of pre-1972 sound recordings. Flo & Eddie, Inc. v. Sirius XM Radio,

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Inc., 2016 WL 7349183 (N.Y. Dec. 20, 2016).

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Following the Court of Appeals’ answer, we ordered the parties to submit letter briefs

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addressing the effect of the Court of Appeals’ decision on the appeal before this court. In its

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letter brief, Appellee argued that the Court of Appeals “did not resolve [Appellant’s] liability

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for unauthorized copying of [Appellee’s] recordings and engaging in unfair competition by

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publicly performing those copies for profit, which the District Court had identified as

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separate and independent grounds for finding [Appellant] liable.” Letter Brief for Appellee,

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Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 821 F.3d 265 (2d Cir. 2016) (No. 15-1164), ECF

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No. 215.

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In our opinion certifying the question to the Court of Appeals, however, we noted
and held that
The fair-use analysis applicable to this copying . . . is bound up
with whether the ultimate use of the internal copies is
permissible. As a result, the certified question is determinative of
Appellee’s copying claims . . . . Similarly, Appellee’s unfair-

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competition claim depends upon the resolution of the certified
question.
Flo & Eddie, Inc., 821 F.3d at 270 n.4 (emphasis added).

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The answer to the certified question being determinative of the other claims, we

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REVERSE the district court’s denial of Appellant’s motion for summary judgment and

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REMAND to that court with instructions to grant Appellant’s motion for summary

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judgment and to dismiss the case with prejudice.

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