Controversy

Published on September 16th, 2016 | by Amber Healy

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Department of Justice Sued for Royalty Ruling  

The Songwriters of America are suing the US Department of Justice (DoJ) over the recent contentious ruling about song royalty payments.

In a lawsuit filed this week, the year-old organization says DoJ “overstepped its authority and that its ruling violated the property rights of songwriters by potentially nullifying private contracts between writers who have worked on the same song,” the New York Times reports.

Earlier this summer and following a long investigation, DoJ ruled that it was not going to change the existing consent decrees that govern how songwriting royalties are credited. The decision was immediately met with disdain from ASCAP and BMI, the two largest performing rights organizations (PROs), who have also promised to consider legal action against the decision.

The 200-member Songwriters of North America group represents a long list of hit makers, whose song writing credits include 80s and 90s hits “True Colors,” “Like a Virgin” and “Genie in a Bottle,” the Times notes.

“Songwriters want a seat at the table,” Dina Polt, an entertainment lawyer and advisor to the organization, tells the Times.

The decision is gaining attention on Capitol Hill, too.

Rep. Doug Collins (R-Ga.) told Billboard that DoJ’s decision “will only make it harder for songwriters who are already being harmed by government overregulation in this space. Under current law, songwriters are being paid pennies on the dollar for their creative works, particularly when it comes to streaming. That’s why I’ve introduced the Songwriter Equity Act to ensure that fair market value is taken into account when rates are set.”

Billboard quotes the lawsuit: “Plaintiffs are being, and will continue to be, significantly harmed by the 100-percent mandate. The experience of plaintiff… is illustrative. (She) was a long-time member of BMI until recently, when she determined it would be in her interest to leave BMI and join SESAC—in part because SESAC is not itself subject to the 100-percent mandate. By any standards (the songwriter) is a highly successful songwriter, and, on information and belief, SESAC would like to sign her. Although (she) provided notice of her resignation to BMI, she has not yet been able to join SESAC due to the fact that some of her most valuable songs are co-written by ASCP and BMI writers, and are thus subject to 100-percent licensing. Because SESAC may not be able to collect for (her) shares [which will be paid to ASCAP or BMI under the 100-percent rule], SESAC aces significant risk in providing (the songwriter) with what would otherwise be a typical advance against her future royalties for the performance of her works. So not only is (the singer) without a pro to license her performance rights at the moment, she has also been deprived of a critical income system.

For more insight and analysis on the case, read here and here. We’ll add this case to our list of ones to watch this fall.




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About the Author

I write about music policy and lawsuits because they're endlessly fascinating.


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