Policy Radio!

By John Simson

Music lovers who enjoy Pandora Internet radio may wonder why they can only skip six songs in an hour and then must wait to skip again. For that matter, why they can’t pick a specific song to hear—instead of creating a channel based upon that song? And why they can’t hear more than 4 songs by their favorite artist in a three-hour period?

Congress created all of these limitations and restrictions when it passed legislation in 1995 and 1998 creating the first digital performance rights legislation in the United States.

The legislation was a careful balancing act: Congress trying to balance the rights of creators: recording artists, record labels, songwriters and music publishers, along with a new category of content users “webcasters” and satellite radio services included then new services, like Pandora, that desired to stream music across cable wires, from satellites and over the Internet.

Of course, for years broadcast radio has streamed music to the public from radio towers, and never had to pay recording artists or record labels for the right to play their music. But radio stations did have to pay songwriters and music publishers through ASCAP, BMI and SESAC (three organizations which represent those who own and compose music).

After passage of this historic legislation, “new” services like Sirius and XM satellite radio (now merged as Sirius/XM), Yahoo and AOL Internet radio, and later Pandora and other Internet radio stations, had to pay a royalty to the recording artist as well as the songwriter.

Background Music

In the early 1990’s, recording artists and their record labels lobbied Congress to pass a comprehensive performance rights bill that included terrestrial radio. But the terrestrial broadcast lobby was too strong, and so a compromise was reached: the old guard terrestrial broadcasters would continue with their so-called “free pass,” but new services over cable, Internet or satellite would have to pay. Thus, while Aretha Franklin would still receive no payment from AM/FM broadcasters when they played “Natural Woman” she would now receive payment from internet, satellite and cable streaming services. Carole King, the songwriter, would continue to receive payments from both the AM/FM broadcasters and these new services.

The first issue that Congress had to address had nothing to do with the content users. It was an issue between recording artists and record labels on the one hand and music publishers and songwriters on the other.

1) The record companies and recording artists would siphon off money that was currently being paid to songwriters and music publishers, who already had a right to be paid 2) More importantly, that recording companies and recording artists could simply prevent the use of their recordings by saying no to these new digital services, thus preventing the songwriters and music publishers from receiving any remuneration at all.

The second concern was settled by Congress rather easily. The new right for record companies and recording artists was subject to a compulsory license; they must license their recordings—they had no choice! That’s why Pandora and other services licensed under this congressionally-mandated system can play any recording ever commercially released, while services like Spotify, which aren’t under this system, may be restricted from playing certain content.

Enter the ‘Net

Having settled the main bone of contention between music publishers and songwriters and recording artists and labels, Congress carved out a new compulsory license. for webstreaming.

Long before Napster and P2P services sprang up, the artists and labels wanted to ensure that their music wasn’t stolen over these new digital outlets. Restrictions were made part of the license.

While a new online radio service could play any recording ever released, they could only play four songs in a three-hour period by the same artist, thus preventing the creation of “all artist channels”. Online, the bandwidth was available to have as many channels as a service wanted to provide. If there was an all-Madonna channel or an all-Daft Punk channel, a listener could tune in to that channel any time they wanted to hear that artist, lessening the impulse to purchase that artist’s music (so the logic went…)

So when you hear an all-artist channel, like “Siriusly Frank” or “E Street Radio”, both on Sirius/XM, you know that the artist specially licenses them. The playlist restriction,” also restricted the playing of no more than two songs in a row by a particular artist (unless it was from a box set, in which case you could play three songs in a row).

John Lennon could only Imagine how much time the lobbyists representing the content owner side spent creating the language that became known as the “performance complement” in section 114 of the Copyright Act, which governs these playlist restrictions.

2 ©2014 John Simson. All rights reserved. But their work was not without complications. I’m sure they simply weren’t thinking about classical music when they created the playlist restrictions and the definitions in the statute. By their definitions, it was impossible for a classical internet radio service to play four movements in a row from the same symphony because each movement was deemed a separate track!. Imagine if you had to play the first two movements from one version of Beethoven’s Fifth and then additional movements from a different version! Classical stations cried foul and needed help to resolve this issue.

Section 114 of the U.S. Copyright Act does not specifically mention skips. Why can a listener only skip six recordings in an hour? In the early days of Internet radio, the Recording Association Industry of America, (“RIAA”), acting on behalf of content owners, took the position that any skips made a service “interactive” and thus ineligible for the Congressional license. If they were interactive, like Spotify or Deezer, they’d need to get licenses from thousands of content owners and not simply take the statutory license given to them by Congress.

But the RIAA entered into an agreement with a fledgling internet radio service, and for a premium price, allowed that service to offer their listeners the ability to skip up to six recordings per hour. Eventually, this became the de facto standard: six skips per hour was allowable within a non-interactive service.

We don’t often think that Congressional regulations and statute may actually impact the music we hear, or the method by which we hear it, but that is certainly the case today for listeners of Sirius/XM, Pandora and other non-interactive internet webcasters.

~ ~ Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 2 of 23 Page ID #:15 nI

GRADSTEIN & MARZANO, P.C. HENRY GRADSTEIN (State Bar No. 89747) 2 haradstein uiastein.cam MARYANN. R.: MARZANO (State Bar No. 96867) F I LED 3 mmarzanof(dstcin . com Los Angeles Superfar;court ROBERT E. 'ALLEN (State'BarNo. 166589) 4 ralleii r gradstein s 6,310 San Vicerite .Blvd., Suite 510 AUG 0 1 ' ~~ 5c Los Angeles, California 90048 Ob T: 323776-3100 - F: 323931-4990. Jahn A. , FWcerIGler4t EV AN , S. COHEN (State Bar No . 119601 ) 7 csc n -Hans f' 'to.eom • 1 180 South Beverly Drive, Suite 510 8 Los Angeles, `California 90035 T: 310-556-9860: F: 310-556-9801 9. Attorneys for'Plaintif -~-~ 10 FLO'&EDDIE, INC.

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`" .. 13 FO1 THE COUNTY-OF LOS ANGELES, CENTRAL -DISTRICT' . 14 FLO' & EDDIE INC., a California , Case No. corporation , individually and on behalf of all 1•5: .others similarly situated, CLASS- ACTION 16 Plaintiff, COMPLAINT FOR: 17Q v. 1. MISAPPROPRIATION (Cal Clio. Code '§ 980(a)(2) enid Common 18 STRIPS : M RADIO, 'INC., a Delaware Law]; - corpiration; and DOES I through 100, 2. UNFAIR COMPETITION 19 [Cal Bus. & Piro#. Code § 17200 and Defendants. Common Law]; AND 20 3. CONVERSION 21 • DEMAND FOR Jli1RYJRIAL

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} 'CLASS ACTION COMPLAINT L Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 3 of 23 Page ID #:16

Plaintiff FLO & EDDIE, INC. ("Plaintiff` or "Flo & Eddie") files this class action

21 Complaint on behalf of itself and on behalf of all other similarly situated owners of sound recordings of musical performances that initially were "fixed" (€.e., recorded) prior to February 15,

4 1972 (the "Pre -1972 Recordings") against Defendants SIRIUS XM RADIO, INC. ("Defendant" or

5 "SiriusXM") and DOES 1-100, and alleges as follows: 6 NATURE OF THE ACTION 7 California Civil Code Section 980 (a)(2) provides that "[t]he author of an original work of authorship consisting of a sound recording initially fixed prior to February 15, 1972, has

9 an exclusive ownership therein until February 15, 2047, as against all persons except one who 10 independently makes or duplicates another sound recording that does not directly or indirectly

11 recapture the actual sounds fixed in such prior sound recording, but consists entirely of an

V A 12 independent fixation of other sounds, even though such sounds imitate or simulate the sounds

13 contained in the prior sound recording." The unauthorized duplication and exploitation of Pre- 1t; tZ W R 14 1972 Recordings in California constitutes misappropriation, unfair competition and conversion. 151 2. The principals of Flo & Eddie, Mark Volman and Howard Kaylan, have been cam 16 performing together as The Turtles since 1965 and have recorded numerous iconic hits including 171 "Happy Together," "It Ain't Me Babe," "She'd Rather Be With Me," "You Baby," "She's My 18. Girl," "Elenore," and many others. Since approximately 1971, Flo & Eddie has owned the entire

19 catalog of 100 original master recordings by The Turtles, all of which were recorded prior to February 15, 1972. Notwithstanding the absence of any license or authorization from Plaintiff, 21 The Turtles recordings can be heard every hour of every day by subscribers in California to the

22 satellite and Internet services owned by Defendant known as "Sirius Satellite Radio," "XM 23 Satellite Radio" and "SiriusXM Satellite Radio" (individually and collectively, the "Service"). 24 Plaintiff Flo & Eddie brings this class action on its own behalf and on behalf of all other similarly 25 situated owners of Pre- 1972 Recordings (the "Class" or "Class Members") to put an end to 26 SiriusXM's wholesale misappropriation of their Pre-1972 Recordings and to obtain damages, 27 including punitive damages. 28 3. The Service is a highly profitable business which engages in the large-scale I CLASS ACTION COMPLAINT Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 4 of 23 Page ID #:17

distribution and public performance of sound recordings to over 24 million subscribers. The 2 1 Service is distributed in California to its subscribers through (a) satellite digital transmission directly to subscribers via digital radios manufactured or licensed by SiriusXM; (b) satellite digital

4 transmission to subscribers of other services, such as DIRECTV Satellite Television Service and

5 Dish Network Satellite Television Service via digital set top boxes manufactured or licensed by

6 DIRECTV or Dish; and (c) the Internet, by way of (i) digital media streaming devices, such as

7 Roku, digital radios and home audio systems, such as Sonos; (ii) its website at 8 www.Siri XM.com; or (iii) computer, smart phone and other mobile applications for various

9 operating systems, including Apple iOS, Android, Windows, Blackberry and HP webOS. In 10 furtherance of the Service, SiriusXM, without any license or authority, has copied Plaintiffs and 11 each Class Members' Pre-1972 Recordings onto the Service's central server(s) and makes such a-m 12 copies available to its subscribers in California. SiriusXM publicly performs these recordings in ci t=~8 13 California via streaming audio transmission through the Service for a fee as part of a subscription 14 plan that currently includes up to 72 different music channels. As part of the Service, many 15 subscribers in California are also able to: (A) download the stream of a selected channel on the m~ 16 Service, allowing later or multiple listenings of the sound recordings previously streamed during 17 the selected time period; (B) download particular sound recordings, allowing later or multiple 18 listenings of such sound recordings; (C) download particular programs incorporating sound 19 recordings as part of the Service's "On Demand" feature, allowing later or multiple listenings of 20 such sound recordings; and (D) allow subscribers to pause, rewind and replay sound recordings 21 using the Service's "Replay" feature. 4. Simply stated, SiriusXM has disregarded the Plaintiff's and other Class Members' 22 23 "exclusive ownership" of their Pre-1972 Recordings in California, impaired their ability to sell, 24 lawfully exploit, or otherwise control their Pre-1972 Recordings as permitted under California law 25 and misappropriated same for its own financial gain. SiriusXM's conduct is causing, and will 26 continue to cause, enormous and irreparable harm to Plaintiff and the other Class Members unless n. 27 compensatory and punitive damages are awarded against SiriusXM and it is enjoined and 28, restrained from engaging in further misappropriation of the Pre-1972 Recordings,

2 CLASS ACTtON COMPLAINT Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 5 of 23 Page ID #:18

THE PARTIES, 3URISDIC]'ION AND VENUE 2 5. Plaintiff Flo & Eddie is a corporation duly organized and existing under the laws of 3 California, with its principal place of business in Los Angeles, California. Plaintiff is engaged in

4 the business of distributing, selling, and/or licensing the reproduction, distribution, sale, and

5 performance of its Pre-1972 Recordings in phonorccords, in audiovisual works, and for streaming

6 (i.e., performing) and downloading over the Internet. Plaintiff invests substantial money, time, 7 effort, and creative talent in creating, advertising, promoting, selling, and licensing its unique and

8 valuable sound recordings. 9 6. Plairitiffpossesses exclusive ownership rights in The Turtles Pre-1972 Recordings, 10 the titles of which are specified on the schedule attached hereto as Exhibit A and incorporated herein by reference ("Plaintiff's Recordings"). The United States Congress expressly has

12 recognized that the states provide exclusive protection through various state law doctrines to z 13 1 recordings "fixed" before February 15, 1972, and that the federal Copyright Act does not "annul[] U 14 or limitJthose rights until February 15, 2067." 17 U.S.C. § 301(c). Accordingly, as quoted

15' above, California Civil Code § 980(a)(2) protects the exclusive ownership of Plaintiff and the

16 I other Class Members to their Pre-1972 Recordings in California. I7 7. Upon information and belief, Defendant SitiusXM is a corporation duly organized 18' and existing under the laws of Delaware, with its principal place of business in New York, New

19. York, with offices throughout California, including, without limitation, in Glendale, California 20 and Long Beach, California. The Court has personal jurisdiction over Defendant in that Defendant 21, has multiple offices in Los Angeles County, Defendant is engaged in tortious conduct in 22 California, and Defendant's conduct causes injury to Plaintiff and the other Class Members in 23 California. Venue of this action is proper in Los Angeles County in that Defendant maintains 24 offices in Los Angeles County. 25 8. The true names and capacities, whether individual, corporate, associate or otherwise, of defendants named herein as Does I through 100, inclusive, are unknown to Plaintiff who 27 11 therefore sues said defendants by such fictitious names (the "Doe Defendants"). Plaintiff wilt 28 amend this Complaint to allege their true names and capacities when such have been ascertained, 3 CLASS ACTION COMPLAINT Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 6 of 23 Page ID #:19

Upon information and belief, each of the Doe Defendants herein is responsible in some manner for

2 the occurrences herein alleged , and Plaintiffs injuries and those of the other Class Members as

3 herein alleged were proximately caused by such defendants ' acts or omissions . (All of the

4 Defendants, including the Doe Defendants , collectively are referred to as "Defendants"). 51 CLASS ACTION ALLEGATIONS 9. Plaintiff brings this action as a class action pursuant to Section 382 of the California Code of Civil Procedure on behalf of itself and the other Class Members defined as the owners of

Pre-1972 Recordings reproduced, perforated , distributed or otherwise exploited by Defendants in California without a license or authorization to do so during the period from August 1, 2009 to the

present . Plaintiff reserves the right to modify this definition of the Class after further discovery; the Court may also be requested to utilize and certify subclasses in the interests of aseertainability, Uo manageability , justice and/or judicial economy. 10. This action may be properly brought and maintained as a class action because there I is a well-defined community of interest in the litigation and the Class Members are readily ascertainable from Defendant SiriusXM ' s database Files and records. Plaintiffis informed and can a ll~-

believes, and on that basis alleges , that Defendants have engaged Rovi Corporation to supply the l7 metadata, including the metadata relating to Pre-1972 Recordings unlawfully streamed to

18 subscribers in California , and that such metadata contains the name and location of the owners

19 thereof. The Class members are further ascertainable through methods typical of class action 20 practice and procedure. 21 11. Plaintiff is informed and believes , and alleges thereon , that the Pre - 1972 Recordings 22 misappropriated in California by Defendants number in the millions and are owned by many 23 thousands of Class Members. It is therefore impractical to join all of the Class Members as named

24 Plaintiff 's. Further , the claims of the Class Members may range from smaller starts to larger sums. 25 Accordingly, using the class action mechanism is the most economically feasible means of 26 determining and adjudicating the merits of this litigation.

27 12. The claims of Plaintiff ' are typical of the claims of the Class Members , and Plaintiff's 28 I interests arc consistent with and not antagonistic to those of the other Class Members it seeks to 4 CLASS ACTION COMPLAINT Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 7 of 23 Page ID #:20

1, 'represerii., Plaintiff and the -other Class Members have all been subject'tomisappropriation of their 2 Pre 972 Recordings-in California, have sustained,actual pecuniary loss and face;irieparable harm 3, from Defendants' continued misappropriation of their Pre. 1972 Recordings. 4,, 13. Plaintiff has no interests that are adverse to, or which conflict with',.the.interests of 5 the.othec.Class Members and is ready and"ablc.to fairly and adequately represent aiid'protect the 6. interests of the other Class Members. Plaintiffrbelieves strongly in•the'protection -dfartists' rights 7 in 'connection with ,their creative work. Plaintiff has raised viable claims for mi appropriation, 8 unfair competition and conversion of the type well established-in California'and reasonably_ 9 expected to.be raised by Class Members. Plaintiff will-diligently pursue those:claims. If

.10 necessary,. Plaintiff may seek leave of the Court to amend this Complaint to1nclude additional' 11 class representatives to represent the Class'or additional claims as may be appropriate.' Plaintiff is 12 represented by experienced, qualified and competent counsel who arecommitted to'prosecuting 13 this action. 14 14. Common questions of fact and law exist,as-to all Class.Members that plainly 15 ptcdominate.over any questions affecting only individual Class Members. These:common legal 16 and, factual questions, which do not vary from Class Member to Class mcnilier ;.and'Which may be 17 deter°mined:without reference to the individual circumstances of any Class Member include, 18 without limitation, the following: I j' (A) Whether Defendant SiriusXM reproduced, performed', distributed or '20 otherwise exploited Pre-1972 Recordings in the California;

21 . i (B) Whether Defendant SiriusXM's reproduction ,,performance,-;distribution or •22 other exploitation of Pre-1972 Recordings in California•constitutes misappropriation under 23 California Civil Code Section 980(a)(2); 24 (C) Whether Defendant SiriusXM's reproduction, performance, distribution or

• 25 other exploitation of Pre»1972 Recordings in the California constitutes unlawful or unfair

26 business acts or practices in violation of California Business & Professions Code Section ' r c : 27 1.7200;

28 . (D) Whether Defendant-SiriusXM's reproduction, performance, distribution or 5 I n CLASS.ACTION COMPLAINT

.'. .. .. . _ e ms • r.. Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 8 of 23 Page ID #:21

1 other exploitation of Pre-1972 Recordings in California constitutes conversion under 2 California common law; 3 (E) The basis on which restitution and/or damages to all injured members of the 4 Class can be computed; 5 (F) Whether Defendant SiriusXM's violation of California Civil Code Section 6 980(a)(2) entitles the Class Members to recover punitive damages; 7 (G) Whether Defendant SiriusXM's violation of California Civil Code Section 8 980(a)(2) is continuing, thereby entitling Class Members to injunctive or other equitable 9 relief; 10 (14) Whether Defendant SiriusXM's violation of California Business &

I I Professions Code § 17200 entitles the Class Members to recover punitive damages; 12 (1) Whether Defendant SiriusXM's violation of California Business & Professions ot 13 Code § 17200 is continuing, thereby entitling Class Members to injunctive or other relief, 14 (J) Whether Defendant SiriusXM's violation of California's common law of 15 conversion entitles Class Members to recover punitive damages; and c a 16 (K) Whether Defendant SiriusXM's violation of California's common law of 17 conversion is continuing, thereby entitling Class Members to injunctive or other relief. 18 15. A class action is superior to all other available methods for the fair and efficient 19 adjudication of this controversy, since individual litigation of the claims of all Class Members is 20 highly impractical. Even if every Class Member could afford to pursue individual litigation, the 21 Court system could not, it would be unduly burdensome to the courts in which individual 22 ' litigation of numerous cases would proceed. Individualized litigation would also present the 23 potential for varying, inconsistent or contradictory judgments and would magnify the delay and 24 expense to all parties and to the court system resulting from multiple trials of the same factual 25 issues. By contrast, maintenance of this action as a class action, with respect to some or all of the 26 issues presented herein, presents few management difficulties, conserves the resources of the ti 27 parties and of the court system, and protects the rights of each Class Member. Plaintiff anticipates

28 no difficulty in the management of this action as: 01855 action. 5 CLASS ACTION COMPLAINT Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 9 of 23 Page ID #:22

1 16. Additionally, the prosecution of separate actions by individual Class Members may 2 create a risk of adjudications with respect to them that would, as a practical matter, be dispositive of the interests of the other Class Members not parties to such adjudications or that would substantially impair or impede the ability of such nonparty Class Members to protect their interests. The prosecution of individual actions by Class Members could establish inconsistent results and incompatible standards of conduct for Defendant SiriusXM. 17. Defendants have engaged in misappropriation, unfair competition and conversion which has affected all of the Class Members such that final and injunctive relief on behalf of the Class as a whole is efficient and appropriate. 10 FIRST CAUSE OF ACTION

(For Violation of California Civil Code § 980(a)(2) and Common Law Misappropriation) 12 18. Plaintiff hereby incorporates the allegations set forth in paragraphs I through 17, 13 I above, as though set forth in full herein. 14 19. Plaintiff and the other Class Members have exclusive ownership of their Pre -1972 15 Recordings in California pursuant to California Civil Code § 980(a)(2) quoted above and under r 16 California common law. By their conduct alleged above, Defendants have violated Plaintiffs and 17 each Class Members' right to exclusive ownership of their Pre-1972 Recordings. The Plaintiff 18 and Class Members have invested substantial time and money in the development of their Pre- 19 1972 Recordings. 20 20. The Defendants have misappropriated the Pre-1972 Recordings at little or no cost 21 and without license or authority. They have copied the Pre-1972 Recordings owned by Plaintiff 22 and the other Class Members and publicly perform these recordings in California for their 23 subscribers as set forth in paragraph 3, above. Defendants have disregarded the Plaintiffs and 24 other Class Members' "exclusive ownership" of their Pre-1972 Recordings, impaired their ability to sell, lawfully exploit, or otherwise control their Pre-1972 Recordings and misappropriated these 26 Pre- 1972 Recordings for their own financial gain. 27 21. As a direct and proximate consequence of Defendants' misappropriation of the Pre- 28 1972 Recordings owned by Plaintiff and the Class Members in violation of Civil Code § 980(a)(2) 7 COMPLA Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 10 of 23 Page ID #:23

I as alleged above, Plaintiff and the Class Members have been damaged in an amount that is not as I yet fully ascertained but which Plaintiff is informed and believes, and alleges thereon, exceeds 3 11 $100,000,000, according to proof. 22. Plaintiff is informed and believes, and alleges thereon, that in engaging in the

5 conduct described above, the Defendants acted with oppression, fraud and/or malice. The conduct

6 of the Defendants has been despicable and undertaken in conscious disregard of the Plaintiff's and 7 each Class Member's rights. Accordingly, Plaintiff and the Class members are entitled to an

8 award of punitive damages against Defendants in an amount sufficient to punish and make an

9 example of them according to proof. 10 23. Defendants' conduct is causing, and unless enjoined and restrained by this Court, will continue to cause, Plaintiff and each Class Member great and irreparable injury that cannot C) o za,a 12 fully be compensated or measured in money. Plaintiff and the other Class Members are entitled to 13 temporary, preliminary and permanent injunctions, prohibiting farther violation of Plaintiff's and 14 Class Members' exclusive ownership of their Pre-1972 Recordings in California. 15 SECOND CAUSE OF ACTION bG1 o ftp 16~ (For Statutory and Common Law Unfair Competition) 17 24. Plaintiff hereby incorporates the allegations set forth in paragraphs 1 through 23, 18 I above, as though set forth herein. 19 25. The acts and conduct of Defendants alleged above constitute an appropriation and 20 invasion of the property rights of Plaintiff and each Class Member to their Pre-1972 Recordings in 21 California, and constitute unfair competition under California Business & Professions Code § 22 17200 and common law. Defendants have engaged in unfair competitive business practices forbidden by law. 24 26. As a direct and proximate result of Defendants' conduct, Plaintiff and the Class 25 1 Members are entitled to recover all proceeds and other compensation received or to be received by 26 Defendants from their misappropriation of the Pre-1972 Recordings. Plaintiff and the members of 27 the Class have been damaged, and Defendants have been unjustly enriched, in an amount that is not as yet fully ascertained but which Plaintiff is informed and believes, and alleges thereon, 8 CLASS ACTION COMPLAINT Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 11 of 23 Page ID #:24

1 exceeds S 100,000 ,000, according to proof at trial . Such damages and/or restitution and 2 disgorgement should include a declaration by this Court that Defendants arc constructive trustees 3 for the benefit of Plaintiff and the other Class Members, and an order that Defendants convey to 4 Plaintiff and Class Members the gross receipts received or to be received that are attributable to

5 Defendants misappropriation of the Pre - 1972 Recordings.

6 27. Plaintiff is informed and believes , and alleges thereon, that in engaging in the

7 conduct as described above , the Defendants acted with oppression , fraud and/or malice. The conduct of the Defendants has been despicable and undertaken in conscious disregard of 8 9 Plaintiff's rights. Accordingly, Plaintiff and the Class Members are entitled to an award of

10 punitive damages against Defendants , and each of them, in an amount sufficient to punish and II make an example of them according to proof at trial. C] o 12 28. Defendants' conduct is causing, and unless enjoined and restrained by this Court, ci o 13 will continue to cause , Plaintiff and the Class Members great and irreparable injury that cannot 14 fully be compensated or measured in money. Plaintiffand the other Class Members are entitled to

15 temporary, preliminary and permanent injunctions , prohibiting further violation of Plaintiffs and m ~ 16 the other Class Members right to exclusive ownership of their Pre-1972 Recordings and further 17 acts of unfair competition pursuant to California Business & Professions Code § 17203. I8 THIRD CAUSE OF ACTION

19 (For Conversion) 29. Plaintiff hereby incorporates the allegations set forth in paragraphs I through 28, 21 above, as though set forth in full herein. 22 30, Plaintiff and each Class Member are, and at relevant times were , the exclusive 23 I owner of all right, We and interest in and to their Pre-1972 Recordings and possession thereof in 24 I California. 25 3II. By their acts and conduct alleged above , Defendants have converted Plaintiff's and

I.' ar 26 the Class Members' property rights in their Pre - 1972 Recordings for Defendants' own use and 27 wrongful disposition for financial gain.

28 1 32. As a direct and proximate result of Defendants ' conversion, Plaintiff and the 9 1141 Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 12 of 23 Page ID #:25

1 members of the Class have been damaged, and Defendants have been unjustly'enriched, in an 2 amount that is not as yet fully ascertained but•which Plaintiff is infonned.arid.believes, and alleges 3, thcreori,-cxceeds $100,000,000 according to proof at trial. Defendants are'consttuctive trustees for 4 the +benef t of Plaintiff and Class Members, and the Court should order Defendants to convey to 5 Plaintiff .and the Class Members the gross receipts received or to be recdived from,.Defendaths 6 misappropriation of the Pre-1972 Recordings. 7 i 33. Plaintiff is informed and believes, and based thereon alleges,,that in engaging 'iii the 8 conduct: as described: above, the Defendants acted with oppression, fraud and/or malice. The 9 conduct,'of the.Defendants has been despicable and undertaken in•conscious disregardof 10 Plaintiffs rights. Accordingly, Plaintiff and each member of the Classils entitled tb an award of 11 puniiiye damages against defendants, and each of them, in an amount sufficient to'- punish and H a 12 make an exaniple,ofthern.according to proof at trial, 13 34. Defendants' conduct is causing, and unless enjoined and"restrained'by this Court will 14 continue to -cause, Plaintiff and the Class Members ,great and irreparable injury that cannot fully be 15 compensated or. measured in money. Plaintiff and each Class Member arc entitled 'to temporary, :t6 preliminary and permanent injunctions prohibiting further acts of conversion of theii 1Pre-1 972 17 Recordings. 18 PRAYER FOR RELIEF 19 WHEREFORE, Plaintiff, on behalf of itself and the other Class: Members,, prays for 20 Judgment against Defendants, and each of them, as follows: 21 Rcgardi•>ng the Class Action: 22, L That this is a proper class action maintainable pursuant to the applicable; provisions of the 23 1 California Code of Civil Procedure; and e 24 2: That the 'named Plaintiff is appropriate to be appointed represents ti e:of the respective 25 Class, On The'Fiest Cause of Action ForMisappropriation against ,all'Defenda'ats: a 26 , 27 1•! For compensatory damages in excess of $100,000,000 according to.proof at trial'; 28• 2! Punitive and'exemplary damages according to proof trial; and

to , CLASS ACTION COMPLAINT Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 13 of 23 Page ID #:26

1 " 3. A temporary, preliminary , and permanent injunction enjoining and restraining Defendants,

2 and their respective agents , servants, directors, officers, principals, employees,

3 representatives , subsidiaries and affiliated companies , successors, assigns, and those acting 4 in concert with them or at their direction, from directly or indirectly misappropriating in 5 any mariner the Pre-1972 Recordings in California, including without limitation by directly

6 or indirectly copying, reproducing, downloading , distributing, communicating to the 7 public, uploading, linking to, transmitting, publicly performing, or otherwise exploiting in 8 any manner any of the Pre-1972 Recordings. 9 On The Second Cause of Action For Unfair Compelitionaaaanst all Defendants:

10 1. For compensatory damages in excess of $ 100,000,000 according to proof at trial; 11 2. Punitive and exemplary damages according to proof at trial;

12 3. Imposition of a constructive trust; g ~ k 13 4. Restitution of Defendants' unlawful proceeds, including Defendants' gross profits; and i 14 5 . A temporary , preliminary , and permanent injunction enjoining and restraining Defendants,

15 and their respective agents, servants, directors , officers, principals, employees, C o 16 representatives, subsidiaries and affiliated companies, successors , assigns, and those acting 17 in concert with them or at their direction, from directly or indirectly misappropriating in 18 any manner the Pre-1972 Recordings, including without limitation by directly or indirectly

19 copying , reproducing , downloading , distributing , communicating to the public, uploading, 20 linking to, transmitting, publicly performing, or otherwise exploiting in any manner any of

21 the Pre-1972 Recordings. 22 On The Third Cause of Action For Conversion against all Defendants: 23 1. For compensatory damages in excess of $100,000,000 according to proof at trial; 24 2. Punitive and exemplary damages according to proof at trial;

25 3. Imposition of a constructive trust; 26 4. Restitution of Defendants' unlawful proceeds, including Defendants' gross profits; and 27 5, A temporary , preliminary , and permanent injunction enjoining and restraining Defendants, rt? 28 and their respective agents, servants, directors, officers, principals, employees, :r.

li CLASS ACTION COMPLAINT Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 14 of 23 Page ID #:27

representatives, subsidiaries and affiliated companies, successors, assigns, and those acting 2 in concert with them or at their direction, from directly or indirectly infringing in any 3 manner any right in any and all of the Pre-1972 Recordings, including without limitation 4 by directly or indirectly copying, reproducing, downloading, distributing, communicating 5 to the public, uploading, linking to, transmitting, publicly performing, or otherwise 6 exploiting in any manner any of the Pre-1972 Recordings. 7 On All Causes of Action:

8 I. For reasonable attorneys' fees and costs as permitted by law; 9 2. For prejudgement interest at the legal rate; and 10 3. For such other and further relief as the Court deems just and proper.

11 DATED: July 31, 2013 GRADSTEIN & MARZANO, P.C. ~? o m HENRY GRADSTEIN 12 MARYANN R. MARZANO U 1 3 ROBERT E. ALLEN 11 5 -and- 14 EVAN S. COHEN 1z d is ______m 16 By: H radstein 17 Attorneys for Plaintiff 18 FLO & EDDIE, INC.

19 20 21 22 23 24 25 r,. 26 Ai 27 28 ~I S 12 CLASS INT Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 15 of 23 Page ID #:28

1 DEMAND FOR JURY TRIAL 2 Plaintiff, individually and on behalf of the Class Members, demands a trial by jury of the 3 causes of action alleged in this Complaint, 4 DATED: July 31, 2013 GRADSTEIN & MARZANO, P.C. 5 HENRY GRADSTEIN 6 MARYANN R. MARZANO ROBERT E. ALLEN 7 -and- EVAN S. COHEN 8 9 10 L UU111r.ph 1R74por 11111111 11 FLO & EDDIE, INC. Cin 12 13 14 15 16 Pu~ r 17 18 19 20 21 22 23 24 25 26 27 28 13 CCLASSLASS ACTION COMPLAINT Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 16 of 23 Page ID #:29 ~ M

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CM-010

ATTORNEY OR PARTY wmrour M' C1ORNEY (Nam•, S lua, pt, an7adi•si# FOR CD4. TUSEONL r GMDSTEIN & MARZANO, P.C. ,lenry Gradstel n (SBN 89747) Maryann R . Mariano (SBN 96867); Robert E. Allen (SBN 166589) 6310 San Vicente Boulevard, Suite 510 Los Angeles, California 90048 FILED Los Angeles Superior Court TELEFHONENO.: (323) 776-3100 FAX NO: ATTORNEY FOR Plaintiff t' LO & EDDIE, INC. IUPERiOR COURT OF CALIFORNIA, COUNTY OF LOS ANGELES AUG 0 1 2013 sTRELTAConse 111 North Hill Street rauUNO ADORE54: Jahn R. , ~xect~ive ~~icerlCd~ttk crtYANO ZICODE: Los Angeles, 90012 , , C]eput

CIVIL CASE COVER SHEET Complex Case Designation Unlimited ❑ Limited ❑ Counter ❑ Joinder (Amount (Amount demanded demanded is Filed with first appearance by defendant DEPT:

t. Check one box below for the case type that best describes this case: Auto Tort Contract Provisionally Complex Civil Llttgatlon ❑ Auto (22) ❑ breach of contred/warranty (06) (Cat. Rules of Court= rater 3.40o4,4031 ❑ Uninsured motorist (45) 0 Rule 3.740 collection (05) ❑ AntltrustlTrada regulation (03) Other Pi/POIWD (Personal lniurylPmperty ❑ Other collections (09) ❑ Construction dated (10) DamageiWrongful Death ) Tort ❑ Insurance coverage (1 B) ❑ Mass tort (40) ❑ ❑ Asbestos (04) ❑ our oantraCt (37) Securities litigation (26) ❑ Product liab lity (24) Real Property Envimnmentalfrordc tort (30) ❑ Medical malpractice (45) ❑ Eminent domaiMnverse U Insurance coverage claims arising from the ❑ Other PI/PDN D (23) condemnation (14) above listed provisionally complex case Mon•PUPDWD (Other) Tort ❑ Wrongful eviction (33) types (41) Enforcement of Judgment J Bosir(Sss tort/unfair business practice (07) [J Other real prtiperty (26) ❑ Ctvii rights (08) Unlawful Detainer p, 3 Enforcement of judgment (20) ❑ Defamation (13) Commercial (31) Miscaitaneous ChM Complaint RICO (27) Fraud (1 B) 8 Residential (32) Other complaint (not specified above) (42) ❑ intellectual property (10) [J Drugs (38) a scellaneous ❑ Professional negligence (25) udlclal Review Mi Civil Petition J—l Partnership and corporate governance (21) ❑ other non-PVPDAND tan (35) k.. Asset forfielture (05) k_,,,u Employment [J Petition to: arbitration award (11) ❑ Other petition (not spectied above) (43) ❑ Wro ngful termination (36) ❑ Writ of mandate (02) n Other nmplavment ( 15) ❑ Other judicial review (39) 2. This case IZ9 is U is not complex under rule 3,400 of the California Rules of Court. If the case is complex, mark the factors requiring exceptional judicial management: a. 0 Large number of separately represented parties d . ® Large number of witnesses b. ® Extensive motion pract ice raising ditticuit or novel e. ❑ Coordination with related actions pending in one or more courts issues that will be time-consuming to resolve In other counties , states, or countries, or in a federal court c. ® Substantial amount of documentary evidence f. ❑ Substantial postjudgment Judicial supervision 3. Remedies sought (check all that apply): a. 0 monetary b. ® nonmonelary: declaratory or injunctive relief c. ® punitive 4. Number of causes of action (specify); 5. This case ® is ❑ is not a class action suit. 5. If there are any known related cases , the and serve a notice of related terse . (You may use form CM-015.) Date: August 1, 2013 MARYANN R. MARZANO ► rrvPS nR PRWT MAYF1 . "T2JRVf P ATTORNPV PA• PA 1Y, NOTICE V • Plaintiff mjrst file this cover sheet with the first paper filed in the action or proceeding (except small claims cases or cases filed 17 3. under Use Probate Code, Family Code, or Welfare and Institutions Code). (Cal. Rules of Court, rule 3.220,) Failure to file may result J1 in sanctions. • File this cover sheet in addition to any cover sheet required by local court rule. 11 'If this case Is complex under rule 3 .400 at seq . of the California Rules of Court. you must serve a copy of this cover sheet on all other parties to the action or proceeding. • Unless this is a collections case under rule 3.740 or a complex case , this cover sheet will be used for statistical purposes only. _ _

FarmAdmw1cwLUr40 ryua~ ",RA dOft^ng"EX. 3.xxl,3xaa.s403, 3?40; ii caumq CIVIL. CASE COYER f3HEllT Jud l Camel u rd, 3tw vd71 d hreor Adrrer: * tY i. tht. 3. t0 CAW10 IR.v..lur 1.20071 curaxnrdodDov Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 19 of 23 Page ID #:32

CM-010 • INSTR~wT1ONS ON HOW TO COMPLETE THE COVER SHEET To Plaintiffs and Others Filing First Papers . If you are filing a first paper (fat example, a complaint) in a civic case, you must complete and file, along with your first paper, the CMI Case Cover Shoot contained on page 1. This informalion will be used to compile statistics about the types and numbers of cases tiled , You must complete items I through 0 on the sheet . In item 1 , you must check one box for the case type that best describes the case . If the case fits both a general and a more specific type of case listed In item 1, check the more specific one. If the case has multiple causes of action , check the box that best indicates the primary cause of action. To assist you In completing the sheet, examples of the cases that bebng under each case type In Item 1 are provided below. A cover sheet must be filed only with your initial paper . Failure to file a cover sheet with the first paper teed In a civil case may subject a party. its counsel, or both to sanctions under rules 2.30 and 3.220 of the California Rules of Court. To Parties In Rule 3 .740 Collections Cases. A "collections case" under rule 3.740 Is defined as an action for recovery of money owed in a sum stated to be certain that is not more than $25.000. exclusive of Interest and attorneys fees, "rising from a transaction in which properly, services , or money was acquired on credit . A collections case does not Include an action seeking the following : ( 1) tort damages, (2) punitive damages, (3) recovery of real property , (4) recovery of personal property , or (5) a prejudgment writ of attachment. The Identification of a case as a rule 3 .740 collections case on this form means that it will be exempt from the general time-for-service requirements and case management rules , unless a defendant tiles a responsive pleading . A rule 3.740 collections case will be subject to the requirements for service and obtaining a judgment in rule 3.740, To Parties In Complex Cases . In complex cases only, parties must also use the Civil Case Cover Sheet to designate whether the case Is complex_ It a plaintiff believes the case Is complex under rule 3 .400 of the California Rules of Court , this must be Indicated by completing the appropriate boxes in items I and 2. If a plaintiff designates a case as complex, the cover sheet must be served with the complaint on all parties to the action . A defendant may file and serve no later than the time of Its first appearance a joinder In the plaintiff's designation, a counter-designation that the case is not complex . or, It the pl:IIntlft has made no designation , a designation that the case is complex. CASE TYPES AND EXAMPLES Auto Tort Contract Provisionally Complex Civil Litigation (Cal. Auto (22)-Personal lrrurylProperty Breach of ConirataIWarranty (06) Rules of Court Rules 3.400-3.453) DamageNVrongful Death Breach of Rentauteass Ant'rtrusttrrade Regulation (03) Uninsured Motorist (48) (N the Contract (not unlawful detainer Construction Oefect (10) case !evolves an unlnswed or wrorrgtt+f eviction) Cults Involving Mass Tort (40) r ofodsl claim subject to ContracWarranty Breach-Seller Securities Litigation (28) arbitration, Chick this item Plaintiff (not fraud or negliperx:e) Env€ronmentatlTo lc Tort (30) instead of Auto) Negligent Breach of Contract) Insurance Coverage Claims Other PUPD1WD (Personal injury! Warranty (erising from provltifonefy complex Property Damag+elWrongful Death) Other Breach of ConiracWlarranty case type Haled above) (41) Tort Collections (e.g., money owed , open Enforcement of Judgment Asbestos (04) book accounts) (09) Enforcement of Judgment (2D) Asbestos Property Damage Collection Case-Seller Plaintiff Abstract of Judgment (Out of Asbestos Personal Injury! Other Promissory NotelColle tlons County) Wrongful Death Case Confession of Judgment (non- Ptcxtuct Uat oy (not asbestos or tnsur'amoe Coverage (not pmvisbnaRY domestic relations) loxiclenvlronmental) (24) complex) ( 18) Sister State Judgment Medical Malpractice (45) Auto Subrogation Administrative Agency Award Medicitl Malpractice- Other Coverage (not unpaid taxes) Physicians 8 Surgeons Other Contract (37) PetitionlCertiflc atton of Entry of Other Professional Health Care Contractual Fraud Judgment on Unpaid Taxes Malpractice Other Contract Dispute Other Enforcement of Judgment Other PI/PDM/D (23) Real Property Case Premises Liability (e ,g., slip Eminent Domainllnverse Miscellaneous Civil Complaint and fall) Condemnation (14) RICO (27) Intentional Bodily lnjuryJPDANO Wrongful Eviction (33) Other Complaint (cwt specJf>ed (e.g.. assault, vandalism ) Other Real Property (e.g,. quiet title) (26) above) (42) Intentional Infliction of WOE of Possession of Real Property Declaratory Relief Only Emotional Distress Mortgage Foreclosure Injunctive Relief Only (non- Negligent Infliction of Quiet Tole harassment) Emotional Distress Other Real Property (not eminent Mechanics Uen Other PIIPOIWO domain, landlonttenant. or Other Commercial Complaint Non4'IIPDMWD (Other) Tort faecosum) Case (non-fortrton-complex) Business Teri/Unfair Business Unlawful Detainer Other Civil Complaint Practice (07) Commercial (31) (non-foilmon.ccrplax) Civil Rights (e.g,, discrimination. Residential (32) Miscellaneous Civil Petition raise arrest ) (Trot clot! Drugs (38) (if the case ihvolvis !ldepal Partnership and Corporate harassment) (05) drugs, check this !tern; otherwise. Governance (21) Defamation (e.g., slander, libel) report as Ccmmerriaf or Residential) Other Petition (not specified (13) Judicial Review above) (43) Fraud (16) Asset Forfeiture f05) Civil Harassment Intellectual Property (19) Petition Re : Arbitration Award ( 11) Workplace Violence Professional Negligence (25) Writ Of Mandate (02) Eider/Dependent Adult Legal Malpractice Writ-Administrative Mandamus Abuse Other Professional Malpractice Writ-Mandamus on Limited Court Election Contest (not rnedkaaf or iepaq Case Matter Petition for Name Change Other Non-PI/PDAND Tort (35 ) Writ-Other Limited Court Case Petition for Relief From Late Employment Review Clain Wrongful Termination (38) Other Other Judicial Review (39) Other Civil Petition Employment ( 15) Rw+ew of Health OAicar Ord.r Notice of Appeal-Labor Commissioner Appeals craa tom -r t. i CIVIL CASE COVER SHEET z at 7 Amsea n 1..prriI I, ire wit,, r'crsruWbrkAa. c+xn Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 20 of 23 Page ID #:33

1 srrt)n1t WIE7 . EASE M MER PLO & EDDIE, INC, V. SIRIUS XM RADIO, INC., et at. WC 51 7fl 2

CIVIL CASE COVER SHEET ADDENDUM AND STATEMENT OF LOCATION (CERTIFICATE OF GROUNDS FOR ASSIGNMENT TO COURTHOUSE LOCATION) This form Is required pursuant to Local Rule 2.0 In all new civil case filings In the Los Angeles Superior Court.

Item 1. Check the types of hearing and fill in the estimated length of hearing expected for this case: JURY TRIAL? (K YES CLASS ACTION? 19 YES LIMITED CASE? ❑ YES TIME ESTIMATED FOR TRIAL, 15 0 HOURS! DAYS Item U. indicate the correct district and courthouse location (4 steps - If you checked "Limited Case". skip to Item III, Pg. 4):

Stop 1: After first completing the Civil Case Cover Sheet form, find the main Civil Case Cover Sheet heading for your case in the left margin below, and, to the right in Column A. the Civil Case Cover Sheet case type you selected.

Step 2: Check Superior Court type of action in Column B below which best describes the nature of this case.

Step 3: in Column C, circle the reason for the court location choice that applies to the type of action you have checked. For any exception to the court location, see Local Rule 2.0. Appiicabte Reasons for Choosing Courthouse Location (see Column C below)

1.Claris adlons must be tiled in the Stanley Mosk Courthouse, central district. 8. Location of property or permanently garaged vehicle. 2. May be filed In central (other county, of no bodily Injury!property damage). 7. Location where petitioner resides. 3. Location where cause of action arose. 8. Location wherein detendarWrespondent functions wholly. 4, Location where bodily inlury, death or dama9e occurred. 9. Location whom one or more of the parties reside. 5. Location where perrormanoe required or defendant resides, 10. Location of Labor Commissioner Office

Step 4: Fill in the information requested on page 4 In Item III; complete Item IV. Sign the declaration.

A B C Civil case Cover Sheet Type of Action APplible Reasons - Category No, (Check only one) See Step 3 Above

Auto (22) O A7100 Motor Vehicle - Personal lnjurylProperty Damege/Wmngrut Death 1., 2., 4. o t Uninsured Motorist (46) ❑ A7110 Personal InjurylPfoperty DamagetWrongtul Death — Uninsured Motorist 1.. 2.. 4.

O A6070 Asbestos Property Damage 2. ASbestas (04) ❑ A7221 Asbestos - Personal lnjuryWrongful Death 2. 1 Prodict Liability (24) ❑ A7280 Product LiabHrty (not asbestos or Ioxic!environmentat) 1., 2., 3., 4, 8. ❑ AT210 Medical Malpractice - Physicians & Surgeons L4. Medical Malpractice (45) O A7240 Other Professional Health Cars Malpractice 1., 4.

❑ A7250 Premises liability (e.g., slip and fail) Other 1. 4. Personal Injury 0 A7230 Intentional Bodily Injury/Property Dania geP !rongfuI Death (e.g., 1 • 4 Property Damage assault, vandalism, sic.) death Wronmi ❑ t., 3. (23) A7270 Intentional Infliction of Emotional Distress 0 A7220 Other Personal Injury/Property Dama e/Wron l Death "4, iN LACIV 109 (Rev. 03111) CIVIL CASE COVER SHEET ADDENDUM Local Rule 2.0 Page 1 of 4 LASC Approved 03-04 AND STATEMENT OF LOCATION Ass UaWr . rya, wwyF WzdFwcw Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 21 of 23 Page ID #:34

SHORT Tm.E: I CASE NUMBER

FLO & EDDIE , INC. v. SIRIUS XM RADIO , INC.. et al,

A B C Civil Case Cover Sheet Type of Action Applicable Reasons - Category No. (Chem only one) See Stop 3 Above

Business Tort (07) ®A6029 Other CommerctaYBusiness Tort (not fraudlbreach of contract) 0 3.

Civil Rights (08) [} A6005 Civil RightsfDiscrimination 1., 2., 3. o Defamation (13) ❑ A6010 Defamation (slanderilibel) 1., 2.. 3.

c Fraud (16) ❑ _ A6013 Fraud (no contract) ❑ A6017 Legal Malpractice 1.. 2., 3. Professional Negligence (25) Li ❑ A6050 Other Professional Malpractice (not medical or legal) 1 ., 2., 3. Other (35) ❑ A6025 Other Non-Personal Injury/Property Damage tort 2..3.

Wrongful Termination (36) ❑ A6037 Wrongful Termination 1., 2.. 3.

A8024 Other Employment Complaint Cast 1.. 2.. 3. 0. Other Employment ( 15) E a A8109 Labor Commissioner Appeals 10.

❑ A6004 Breach of Rentats.ease Contract (not unlawful detainer or wrongful 2.. S. eviction) Breach of Contract) Warranty ❑ A6008 ContractiWarranty Breach .Seller Plaintiff (no fraud/negligence) 2.. 5. (06) (not Insurance) ❑ A6019 Negligent Breach of CorthactNvarranty Ino fraud) 0 A6026 Other Breath of Contracilvvarranty (not fraud Or negligenC,) 1 " 2 .5.

❑ A6002 Collections Case -Seller Plaintiff 2 ., 5., 6. c Coll eWans (09) 0 A6012 Other Promissory Note1COBecttons Case 2., 5, U

Insurance Coverage (18) ❑ A6015 Insurance Coverage (not complex) i. 2•. 5„ B.

❑ A6009 Contractual Fraud 1., 2 , 3., 5. Other Contract (37) ❑ AS031 TOrtlous Interference 1., ❑ AW27 Other Contract Dlspute (not breachlinsurancelfraudlrtegligence ) 1., 2., 3., 8.

Erttinent Domairtlinverse Number of parcels 2. Condemnation (14) ❑ A7300 Eminent OornalnlCondemnetion a Wrongful Eviction (33) (0 AW23 Wrongful Eviction Case 0 ❑ A6018 Mortgage Foreclosure 2.. 6.

f;! Other Real Property (Z6) D A6032 Quiet We 2.• 6, o A8060 Other Real Property (not eminent domain, landlordltenant. foreclosure) 2., 6,

Unlawful Detainer-Commerclat ❑ A6021 Unlawful Detainer-Commercial (not drugs or wrongful eviction) 2 , 6. (31) Unlawful Detainer-Residential 2.6, A60200 Unlawful Dt takxlr-Residential (not drugs or wrongful cvlcllon)

Unlawful Detainer- r^t -iat Feraclosure 2., 6. Post-Forecloeure 3+! A6020F Unlawful petalr+ar 2.6. unlawful Detainer-Drugs (38) ❑ A8022 Unlawful Detainer.Drugs

LACIV 109 (Rev. 0311 1) CIVIL CASE COVER SHEET ADDENDUM Local Rule 2.0 Pa e 2 of 4 fASC Approved 03-04 AND STATEMENT OF LOCATION ,a_ . tNrr, t_ w.v ts+wnau' F'Iwv.e~n Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 22 of 23 Page ID #:35

SHa 1r1LE. . CASE NUMAEA FLO & EDDIE, INC. V. SIRIUS XM RADI©, INC., et al.

A B C ~vit Case Cover Sheet Type of Action Applicable Reasons. Category No, (Check only one) See Step 3 Above

Asset Forfeiture (05) ❑ A6108 Asset Forfeiture Case 2.. 6.

11) ❑ R Petition re Arbitration ( A8115 PaWon to ContpellConfirmNacate Arbitration 2-. 5.

ac ❑ A6151 Writ. - Adrninbtrative Mandamus 2., 8. Writ of Mandate (02) ❑ A6152 Writ • Mandamus on Limited Court Case Matter 2. ❑ A8153 Writ - Other Limited Court Case Review 2.

Other Judicial Review (39) ❑ A6150 Other Wr WJudicial Review 2-, 8.

Antitrust/Trade Regulation (03) ❑ A6003 AntilrustlTrade Regulation 1 .. 2., 8. ii Construction Defect (10) ❑ AB007 Construction Defect 1., 2., 3. Clams Involving Mass Tort ro ❑ AM Claims Involving Mass Tort i., 2, 6. a (40) E 0 Securities Litigation (28) ❑ A6035 Securities Litigation Case I., 2.. 8. .2~ Is Toxic Tan 1., 2., 3.. 6. 0 ❑ A6038 Toxic Tort/Environmental Is Environmental (30)

Insurance Coverage Claims r-t 1., 2., 5.. 8. M ham Complex Case (41 ) ❑ A6014 insurancnee CraetSubttionovegogep (complex case onl y)

❑ A6141 Sister State Judgment 2.9. ❑ A5160 Abstract of Judgment 2.. 0, ❑ A6107 Confession of Judgment (non domestic relations) 2.. 0. IL Enforcement of Judgment (20) Q A6140 Adminiskattvu Agency Award (not unpaid tams) 2., 8. ❑ A6114 Petitton/CerSficate for Entry of Judgment an Unpaid Tax 2., 6. ❑ AM112 Other Enforcement of Judgment Case 2.. 8., 9.

RICO (27) ❑ A6033 Racketeering (RICO) Case 1., 2., 8.

❑ A6030 Declaratory Relief Only 1., 2., 8. rdE 2., 8. O Other Complaints ❑ A6040 Injunctive Relief Only (not domesllCMarassrnent) (Not Specified Above ) (42) ❑ A6011 Other Commercial Complaint Case (non-toi lnon-cumplex) 1., 2.. 8. ❑ A6000 Other Civil Complaint (non-tod/non-complex) 1.. Z., B.

Corporation Partnership A6113 Partnership and Corporate Governance Case 2.. 8. Goveniance (21) d

❑ A6121 Ckri Harassment 2.. 3., 9. C 2., 3., 9. 0 0 A6123 Workplace Harassment r A6124 ElderlDependent Aduti Abus e Case 2., a, 9. Other Petitions ❑ (Not Specified Above) ❑ A619D Election Contest 2. a a. tj (43) ❑ A6110 PetHlan foe Change of Name 2., 7. ❑ Ml 70 Petition for Relief from Late Claim Law 2., 3., 4., 8. yS O P6100 Other Civil Petition 2.. 9,

LACIV 109 (Rev. 03111) CIVIL CASE COVER SHEET ADDENDUM Local Rule 2.0 of 4 LASC Approved 03.04 AND STATEMENT OF LOCATION Pa e 3 A:P.nru r,ep.Lrer. Inc. ~~+' E71~CE1.,,,,,Flmy turn Case 2:13-cv-05693-PSG-RZ Document 1-1 Filed 08/06/13 Page 23 of 23 Page ID #:36

FHaRT~rlTLE: CA$E MUMBER FLO & EDDIE, INC. V. SIRIUS XM RADIO. INC., et al.

Item Ill. Statement of Location : Enter the address of the accident, party's residence or place of business , performance, or other circumstance indicated in item II., Step 3 on Page 1. as the proper reason for filing in the court location you selected.

AO0RESS: REASON: Check the appr opriate boxes for the numbers Shown Flo & Eddie, Inc. under Columi C for the type of action that you have selected for 1180 South Beverly Drive this case. Suite 510 1. 02.0 3. 04.05.06. 07. 08.09.010. Crrv; STATE: ZIP CODE: Los Angeles CA 90035

Item IV. Oeclaratian of Assignment I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct and that the above-entitled matter Is property tiled for assignment to the STANLEY MOSK courthouse in the CENTRAL District of the Superior Court of California , County of Los Angeles [Code Civ. Proc ., § and Local _ 392 et seq., Rule 2 .0. subds. (b), (c) and (d)).

oaten; August 1, 2013 (SIGMA ATTOR'LEYIFi PARrI) MARY NN R. MA 0

PLEASE HAVE THE FOLLOWING ITEMS COMPLETED AND READY TO BE FILED IN ORDER TO PROPERLY COMMENCE YOUR NEW COURT CASE» 1, Original Complaint or Petition. 2. If filing a Complaint, a Completed Summons form for issuance by the Clerk. 3, Civil Case Cover Sheet. Judicial Council form CM-010, 4. Civil Case Cover Sheet Addendum and Statement of Location form, LACIV 109, LASC Approved 03-04 (Rev, 0311 1). 50 Payment in full of the filing fee , unless fees have been waived. 6. A signed order appointing the Guardian ad Litem , Judicial Council form CIV-010, if the plaintiff or petitioner is a minor under 18 years of age will be required by Court in order to Issue a summons, 7. Additional copies of documents to be conformed by the Clerk. Copies of the cover sheet and this addendum must be served along with the summons and complaint , or other initiating pleading in the case.

4 M

LACIV ttlg ( Rev. 03111 ) CIVIL CASE COVER SHEET ADDENDUM Local Rule 2.0 LASC Approved 03'{!4 AND STATEMENT OF LOCATION Pa e 4 of 4 AWAMN LMAVOL k8c. Case 2:13-cv-05693-PSG-RZ Document 38 Filed 11/18/13 Page 1 of 10 Page ID #:469

1 WEIL, GOTSHAL & MANGES LLP R. BRUCE RICH (admitted pro hac vice) 2 [email protected] BRUCE S. MEYER (admitted pro hac vice) 3 [email protected] BENJAMIN E. MARKS (admitted pro hac vice) 4 [email protected] TODD LARSON (admitted pro hac vice) 5 [email protected] 767 Fifth Avenue 6 New York, New York 10153 Telephone: 212.310.8000 7 Facsimile: 212.310.8007 KRAMER LEVIN NAFTALIS & FRANKEL LLP 8 MICHAEL S. OBERMAN, Cal. Bar. No. 101857 [email protected] 9 1177 Avenue of the Americas New York, New York 10036 10 Telephone: 212.715.9294 11 Facsimile: 212.715.8294 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP 12 A Limited Liability Partnership Including Professional Corporations 13 FRED R. PUGLISI, Cal. Bar No. 121822 [email protected] 14 1901 Avenue of the Stars, Suite 1600 Los Angeles, California 90067-6055 15 Telephone: 310.228.3700 Facsimile: 310.228.3701 16 Attorneys for Defendant SIRIUS XM RADIO INC. 17 18 UNITED STATES DISTRICT COURT 19 CENTRAL DISTRICT OF CALIFORNIA 20 FLO & EDDIE, INC., individually and Case No. 13-CV-5693 PSG (RZx) on behalf of all others similarly situated, CLASS ACTION 21 Plaintiff, DEFENDANT’S: 22 (1) ANSWER AND AFFIRMATIVE 23 v. DEFENSES; AND SIRIUS XM RADIO INC., and DOES 24 (2) DEMAND FOR JURY TRIAL 1 through 100, 25 Defendants. 26 27 28

SMRH:413328098.2 SIRIUS XM’S ANSWER

Case 2:13-cv-05693-PSG-RZ Document 38 Filed 11/18/13 Page 2 of 10 Page ID #:470

1 Defendant Sirius XM Radio Inc. (“Sirius XM” or “Defendant”), by its attorneys, 2 Weil, Gotshal & Manges LLP, for its Answer to the Complaint (“Complaint”) of 3 plaintiff Flo & Eddie, Inc. (“Plaintiff”) states as follows: 4 1. The allegations contained in paragraph 1 of the Complaint call for legal 5 conclusions to which no responsive pleading is required. To the extent a response is 6 required, Sirius XM denies the allegations. 7 2. Sirius XM denies knowledge or information sufficient to respond to the 8 allegations of the first two sentences of paragraph 2 of the Complaint, and denies the 9 remaining allegations of paragraph 2. 10 3. Sirius XM denies the allegations of paragraph 3 of the Complaint, 11 except it admits (a) that Sirius XM has over 24 million subscribers to its satellite 12 radio service; (b) that Sirius XM’s nationwide broadcasts can be received: (i) via 13 satellite radio by subscribers who receive the satellite broadcast on authorized Sirius 14 XM receivers; (ii) via the Internet by subscribers who may receive the transmission 15 on computers (at www.siriusxm.com), smart phones and tablets (via the Sirius XM 16 mobile applications), and/or home audio devices/systems such as Roku and Sonos; 17 and (iii) via satellite television channels on Dish Network; (c) that Sirius XM’s 18 central servers contain copies of certain recordings by the Turtles; and (d) that 19 recordings by the Turtles are among the thousands of recordings transmitted as part 20 of Sirius XM’s nationwide broadcasts through the above-described outlets. 21 4. The allegations contained in paragraph 4 of the Complaint call for legal 22 conclusions to which no responsive pleading is required. To the extent a response is 23 required, Sirius XM denies the allegations. 24 5. Sirius XM denies knowledge or information sufficient to respond to the 25 allegations of paragraph 5 of the Complaint. 26 6. Sirius XM denies knowledge or information sufficient to respond to the 27 allegations in the first sentence of paragraph 6 of the Complaint. The remaining 28 -1- SMRH:413328098.2 SIRIUS XM’S ANSWER

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1 allegations of paragraph 6 of the Complaint call for legal conclusions to which no 2 responsive pleading is required. To the extent a response is required, Sirius XM 3 denies the allegations. 4 7. Sirius XM denies the allegations of paragraph 7 of the Complaint, 5 except admits that Sirius XM is a Delaware corporation with its principal place of 6 business in New York, New York, that Sirius XM has facilities in Glendale and 7 Long Beach, California, and in Los Angeles County, and that this Court has 8 personal jurisdiction over Sirius XM. 9 8. Sirius XM does not respond to paragraph 8 of the Complaint, which 10 contains no factual allegations about Sirius XM. 11 9. The allegations contained in paragraph 9 of the Complaint are not 12 factual in nature; they merely characterize the basis on which Plaintiff purports to 13 bring this action and purport to reserve certain rights to the Plaintiff. Accordingly, 14 no responsive pleading is required. To the extent a response is required, Sirius XM 15 denies the allegations. 16 10. The allegations contained in paragraph 10 of the Complaint call for 17 legal conclusions to which no responsive pleading is required. To the extent a 18 response is required, Sirius XM denies the allegations. 19 11. The allegations contained in paragraph 11 of the Complaint call for 20 legal conclusions to which no responsive pleading is required. To the extent a 21 response is required, Sirius XM denies the allegations. 22 12. The allegations contained in paragraph 12 of the Complaint call for 23 legal conclusions to which no responsive pleading is required. To the extent a 24 response is required, Sirius XM denies the allegations. 25 13. The allegations contained in paragraph 13 of the Complaint call for 26 legal conclusions to which no responsive pleading is required. To the extent a 27 response is required, Sirius XM denies the allegations. 28 -2- SMRH:413328098.2 SIRIUS XM’S ANSWER

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1 14. The allegations contained in paragraph 14 of the Complaint call for 2 legal conclusions to which no responsive pleading is required. To the extent a 3 response is required, Sirius XM denies the allegations. 4 15. The allegations contained in paragraph 15 of the Complaint call for 5 legal conclusions to which no responsive pleading is required. To the extent a 6 response is required, Sirius XM denies the allegations. 7 16. The allegations contained in paragraph 16 of the Complaint call for 8 legal conclusions to which no responsive pleading is required. To the extent a 9 response is required, Sirius XM denies the allegations. 10 17. The allegations contained in paragraph 17 of the Complaint call for 11 legal conclusions to which no responsive pleading is required. To the extent a 12 response is required, Sirius XM denies the allegations. 13 With Respect to the First Cause of Action 14 18. Sirius XM repeats and incorporates by reference its responses to 15 paragraph 1-17 of the Complaint. 16 19. The allegations contained in the first two sentences of paragraph 19 of 17 the Complaint call for legal conclusions to which no responsive pleading is required. 18 To the extent a response is required, Sirius XM denies the allegations. Sirius XM 19 denies knowledge or information sufficient to respond to the allegations in the third 20 sentence of paragraph 19 of the Complaint. 21 20. The allegations contained in paragraph 20 of the Complaint call for 22 legal conclusions to which no responsive pleading is required. To the extent a 23 response is required, Sirius XM denies the allegations. 24 21. The allegations contained in paragraph 21 of the Complaint call for 25 legal conclusions to which no responsive pleading is required. To the extent a 26 response is required, Sirius XM denies the allegations. 27 28 -3- SMRH:413328098.2 SIRIUS XM’S ANSWER

Case 2:13-cv-05693-PSG-RZ Document 38 Filed 11/18/13 Page 5 of 10 Page ID #:473

1 22. The allegations contained in paragraph 22 of the Complaint call for 2 legal conclusions to which no responsive pleading is required. To the extent a 3 response is required, Sirius XM denies the allegations. 4 23. The allegations contained in paragraph 23 of the Complaint call for 5 legal conclusions to which no responsive pleading is required. To the extent a 6 response is required, Sirius XM denies the allegations. 7 With Respect to the Second Cause of Action 8 24. Sirius XM repeats and incorporates by reference its responses to 9 paragraphs 1-23 of the Complaint. 10 25. The allegations contained in paragraph 25 of the Complaint call for 11 legal conclusions to which no responsive pleading is required. To the extent a 12 response is required, Sirius XM denies the allegations. 13 26. The allegations contained in paragraph 26 of the Complaint call for 14 legal conclusions to which no responsive pleading is required. To the extent a 15 response is required, Sirius XM denies the allegations. 16 27. The allegations contained in paragraph 27 of the Complaint call for 17 legal conclusions to which no responsive pleading is required. To the extent a 18 response is required, Sirius XM denies the allegations. 19 28. The allegations contained in paragraph 28 of the Complaint call for 20 legal conclusions to which no responsive pleading is required. To the extent a 21 response is required, Sirius XM denies the allegations. 22 With Respect to the Third Cause of Action 23 29. Sirius XM repeats and incorporates by reference its responses to 24 paragraphs 1-28 of the Complaint. 25 30. Sirius XM denies knowledge or information sufficient to respond to the 26 allegations in paragraph 30 of the Complaint. 27 28 -4- SMRH:413328098.2 SIRIUS XM’S ANSWER

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1 31. The allegations contained in paragraph 31 of the Complaint call for 2 legal conclusions to which no responsive pleading is required. To the extent a 3 response is required, Sirius XM denies the allegations. 4 32. The allegations contained in paragraph 32 of the Complaint call for 5 legal conclusions to which no responsive pleading is required. To the extent a 6 response is required, Sirius XM denies the allegations. 7 33. The allegations contained in paragraph 33 of the Complaint call for 8 legal conclusions to which no responsive pleading is required. To the extent a 9 response is required, Sirius XM denies the allegations. 10 34. The allegations contained in paragraph 34 of the Complaint call for 11 legal conclusions to which no responsive pleading is required. To the extent a 12 response is required, Sirius XM denies the allegations. 13 AFFIRMATIVE DEFENSES 14 35. Without assuming the burden of proof where such burden properly 15 rests with Plaintiff, and expressly reserving and not waiving the right to assert any 16 and all such defenses at such time and to such extent as discovery and factual 17 developments establish a basis therefor, Sirius XM hereby asserts the following 18 defenses to the claims asserted in the Complaint. 19 First Affirmative Defense 20 (Failure to State A Claim) 21 36. The Complaint fails to state any claim upon which relief can be 22 granted. 23 Second Affirmative Defense 24 (Laches) 25 37. Plaintiff’s claims are barred, in whole or in part, by the doctrine of 26 laches. 27 28 -5- SMRH:413328098.2 SIRIUS XM’S ANSWER

Case 2:13-cv-05693-PSG-RZ Document 38 Filed 11/18/13 Page 7 of 10 Page ID #:475

1 Third Affirmative Defense 2 (Waiver) 3 38. Plaintiff’s claims are barred, in whole or in part, by the doctrine of 4 waiver. 5 Fourth Affirmative Defense 6 (Estoppel) 7 39. Plaintiff’s claims are barred, in whole or in part, by the doctrine of 8 estoppel. 9 Fifth Affirmative Defense 10 (License) 11 40. Plaintiff’s claims are barred, in whole or in part, by an implied license 12 conveyed by Plaintiff to Sirius XM or because Plaintiff otherwise licensed, 13 authorized, or consented to Sirius XM’s alleged conduct. 14 Sixth Affirmative Defense 15 (Fair Use) 16 41. Plaintiff’s claims are barred, in whole or in part, by the doctrine of fair 17 use. 18 Seventh Affirmative Defense 19 (Statute of Limitations) 20 42. Plaintiff’s claims are barred, in whole or in part, by applicable statutes 21 of limitations, including Cal. Code Civ. Proc. § 338 and Cal. Bus. & Profs. Code § 22 17208. 23 Eighth Affirmative Defense 24 (Lack of Harm) 25 43. Plaintiff’s claims are barred, in whole or in part, because Plaintiff has 26 not suffered any harm from Sirius XM’s alleged conduct. 27 28 -6- SMRH:413328098.2 SIRIUS XM’S ANSWER

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1 Ninth Affirmative Defense 2 (Failure to Mitigate Damages) 3 44. Plaintiff’s claims are barred, in whole or in part, because Plaintiff has 4 failed to take appropriate and necessary steps to mitigate its alleged damages, if any. 5 Tenth Affirmative Defense 6 (Lack of Ownership) 7 45. Plaintiff’s claims are barred, in whole or in part, because Plaintiff does 8 not own the purported rights at issue. 9 Eleventh Affirmative Defense 10 (Adequate Remedy At Law) 11 46. The injunctive relief sought by Plaintiff is barred, in whole or in part, 12 because Plaintiff has available an adequate remedy at law. 13 PRAYER FOR RELIEF 14 For the reasons set forth above, Sirius XM respectfully requests that the Court: 15 1. Dismiss Plaintiff’s Complaint in its entirety with prejudice; 16 2. Enter judgment in favor of Defendant Sirius XM and against Plaintiff 17 on each and every cause of action set forth in the Complaint; 18 3. Award attorneys’ fees and costs in favor of Defendant Sirius XM 19 against Plaintiff as permitted by applicable law; and 20 4. Award such other and further relief as the Court deems just and proper 21 22 23 24 25 26 27 28 -7- SMRH:413328098.2 SIRIUS XM’S ANSWER

Case 2:13-cv-05693-PSG-RZ Document 38 Filed 11/18/13 Page 9 of 10 Page ID #:477

1 Dated: November 18, 2013

2 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP 3

4 By /s/ Fred R. Puglisi 5 FRED R. PUGLISI

6 WEIL, GOTSHAL & MANGES LLP

7 R. BRUCE RICH (admitted pro hac vice) BRUCE S. MEYER (admitted pro hac vice) 8 BENJAMIN E. MARKS (admitted pro hac vice) TODD LARSON (admitted pro hac vice) 9 10 KRAMER LEVIN NAFTALIS & FRANKEL LLP 11 MICHAEL S. OBERMAN 12 Attorneys for Defendant 13 SIRIUS XM RADIO INC. 14 15 [List of additional counsel for Defendant SIRIUS XM RADIO INC.] 16 WEIL, GOTSHAL & MANGES LLP JOHN R. GERBA (admitted pro hac vice) 17 [email protected] 767 Fifth Avenue 18 New York, New York 10153 Telephone: 212-310-8000 19 Facsimile: 212-310-8007

20 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP A Limited Liability Partnership 21 Including Professional Corporations KENT R. RAYGOR, Cal. Bar No. 117224 22 [email protected] VALERIE E. ALTER, Cal. Bar No. 239905 23 [email protected] 1901 Avenue of the Stars, Suite 1600 24 Los Angeles, California 90067-6055 Telephone: 310.228.3700 25 Facsimile: 310.228.3701 26 27 28 -8- SMRH:413328098.2 SIRIUS XM’S ANSWER

Case 2:13-cv-05693-PSG-RZ Document 38 Filed 11/18/13 Page 10 of 10 Page ID #:478

1 DEMAND FOR JURY TRIAL 2 Defendant Sirius XM Radio Inc. hereby demands a jury trial on all issues

3 triable as of right to a jury. FED. R. CIV. P. 38(b). 4 5 Dated: November 18, 2013

6 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP 7

8 By /s/ Fred R. Puglisi 9 FRED R. PUGLISI

10 WEIL, GOTSHAL & MANGES LLP

11 R. BRUCE RICH (admitted pro hac vice) BRUCE S. MEYER (admitted pro hac vice) 12 BENJAMIN E. MARKS (admitted pro hac vice) TODD LARSON (admitted pro hac vice) 13 14 KRAMER LEVIN NAFTALIS & FRANKEL LLP 15 MICHAEL S. OBERMAN 16 Attorneys for Defendant 17 SIRIUS XM RADIO INC. 18 19 20 21 22 23 24 25 26 27 28 -9- SMRH:413328098.2 SIRIUS XM’S ANSWER

Case 2:13-cv-05693-PSG-RZ Document 1 Filed 08/06/13 Page 1 of 7 Page ID #:7 COPY 1 CHRISTOPHER J. COX (Bar No. 151650) Email: chris,cox weil.cnm 2 WEIL, GOTSHAL & MANGES LLP 201 Redwood Shores Parkway 3 Redwood Shores CA 94065-1134 Telephone: +1 630 802 3000 4 Facsimile: +1 650 802 3 100

5 R. BRUCE RICH Pro Hac Vice Application to be filed) Email: bruce.rich weil.com 6 BRUCE S. MEYE Fro Hac Vice Application to be filed) Email: bruce.meyer weil.corn 7 BENJAMIN E. M (S (Pro Hac Vice Application to be filed) Email: ben amin.marlcss weil.com 8 TODD LARSON (Pro ac Vice Application to be filed) Email: todd.larson(~weil.com E 9 WEIL, GOTSHAL -& MANGES LLP CLERK, U.S.UAT D ICrCO 767 Fifth Avenue 10 New York, NY 10153 Telephone: +1 212 310 8000 6 2013 11 Facsimile: +1 212 310 8007 CENti3Ai. ~SMICT aF CR,I.iFoRNl.4 12 Attorneyss for Defendant 13Y o>;PUr~ SIRIUS~XM RADIO INC. 13 14 UNITED STATES DISTRICT COURT 15 CENTRAL DISTRICT OF CALIFORNIA 16 evi3 5 6 93~ t 17 FLO & EDDIE INC. a California Case No. corporation, individually and an behalf of all 18 others similarlyy situated, [L~ os Angeles County Superior Court Case No. BC517032) 19 Plaintiff, DEFENDANT SIRIUS XM 20 vs. RADIO INC.'S NOTICE OF REMOVAL 21 SIRIUS XM RADIO INC., a Delaware corporation; and DOES I through 100, 1)1) Defendants. 23 24 25 26 27 28

Nunci, Or RE OVAL.

Case 2:13-cv-05693-PSG-RZ Document 1 Filed 08/06/13 Page 2 of 7 Page ID #:8

1 PLEASE TAKE NOTICE THAT, pursuant to 28 U.S.C. §§ 1441 and 1446, 2 I Defendant Sirius X.M. Radio Inc. ("Defendant") hereby removes this action from the 3 Superior Court of California, County of Los Angeles, to this Court, on the grounds 4 that this Court has original jurisdiction over this action under 28 U.S.C. §

5 1332(d)(2)(A). 6 1. On August 1, 2013, Plaintiff Flo & Eddie, Inc. ("Plaintiff'), individually

7 and on behalf of all others similarly situated, filed a complaint entitled Flo & Eddie,

8 Inc. v. Sirius XMRadio, Inc.; and Does 1 through 100, Case No. BC517032 (the

9 "Complaint"), in the Superior Court for the State of California, County of Los

10 Angeles (the "Superior Court"). A copy of the Complaint is attached as Exhibit A to

11 the Declaration of Christopher J. Cox in Support of this notice. 12 2. Defendant became aware of and received the Complaint on or about

13 August 1, 2013. Neither the Complaint, nor any other papers or pleadings in this

14 action, have been served on Defendant as of the date hereof. Thus, Defendant is 15 informed and believes that the document attached to this Notice as Exhibit A

16 constitutes the entirety of the state court file in this Action, as these were the papers

17 filed with the Superior Court. 18 3. This Notice is timely in that it is filed within thirty days of Defendant's 19 receipt of the Complaint. See 28 U.S.C. § 1446(b). 20 4. Defendant will serve written notice of the filing of this Notice of

21 Removal to Plaintiff, and will file a copy of the Notice of Removal with the clerk of

22 the Superior Court of the State of California in and for the County of Los Angeles, as

23 required by 28 U.S.C. § 1446(d). 24 5. Venue lies in the United States District Court for the Central District of

25 California because this Court's territorial jurisdiction includes Los Angeles County, 26 where the state court action was filed and is pending. See 28 U.S.C. § 1441(a).

NOTICE OF RE MoVAL, 1 Case 2:13-cv-05693-PSG-RZ Document 1 Filed 08/06/13 Page 3 of 7 Page ID #:9

GROUNDS FOR REMOVAL 6. At the time of the filing of the Complaint, Plaintiff was a corporation

3 organized under the laws of California with its principal place of business in Los 4 Angeles, California. Complaint at ¶ 5. Plaintiff therefore was, and on information

5 and belief continues to be, a citizen of California for purposes of diversity jurisdiction.

6 See 28 U.S.C. § 1332(c)(1).

7 7. At the time of the filing of the Complaint, Defendant was a corporation

8 organized under the laws of Delaware, with its principal place of business in New

9 York, New York. See Complaint at ¶ 7; Declaration of Patrick L. Donnelly in support

10 of Defendant's Notice of Removal at ¶ 2. Defendant therefore was, and continues to

11 be, a citizen of Delaware and New York for purposes of diversity jurisdiction. See

12 28 U.S.C. § 1332(c)(1).

13 8. The defendants designated as DOES 1 through 100 in the Complaint are

14 fictitious defendants. Pursuant to 28 U.S.C. § 1441(b)(1), for diversity purposes, "the

15 citizenship of defendants sued under fictitious names shall be disregarded."

16 9. Plaintiff purports to bring a "class action," as defined in 28 U.S.C. 17 1 1332(d)(1 )(B), under California state law. See Complaint at ¶¶ 9-17. 18 10. The Complaint defines the purported class as consisting of "the owners

19 of Pre-1972 Recordings reproduced, performed, distributed or otherwise exploited by

20 Defendants in California without a license or authorization to do so during the period 21 from August 1, 2009 to the present." Id. at ¶ 9.

22 11. Plaintiff alleges that the putative class contains "many thousands of Class

23 Members." Id. at ¶ 11.

24 12. Plaintiff brings three causes of action on behalf of itself and the putative 25 class, all of which are based on allegations that Defendant has used pre-1972 sound

26 recordings without authorization.

No1nncE OF REMOVAL. 2 Case 2:13-cv-05693-PSG-RZ Document 1 Filed 08/06/13 Page 4 of 7 Page ID #:10

1 13, The First Cause of Action alleges a claim for violation of California Civil 2 Code § 908(a)(2) and common law misappropriation. See id. at ¶¶ 18-23. For this

3 claim, Plaintiff alleges that it and the putative class members have been damaged in an 4 amount that is not yet fully ascertained but which exceeds $100 million. See id. at 5 IT, 21. 6 14. The Second Cause of Action alleges a claim for statutory and common

7 law unfair competition. See id. at ¶¶ 24-28. Plaintiff alleges that it and the putative

8 class members have been damaged in an amount that is not yet fully ascertained but

9 which exceeds $100 million on this claim. See id. at ¶ 26. 15. The Third Cause of Action alleges a claim for conversion. See id. at ¶

11 29-34. For this claim, Plaintiff also alleges that it and the putative class members

12 have been damaged in an amount that is not yet fully ascertained but which exceeds

13 $100 million. See id. at ¶ 32.

14 16. In addition, Plaintiff claims entitlement to punitive damages and 15 attorneys' fees on each of these claims. See id. at ¶ 22.

16 17. The Class Action Fairness Act of 2005 "provides the federal district

17 courts with `original jurisdiction' to hear a `class action' if the class has more than 100

18 members, the parties are minimally diverse, and the `matter in controversy exceeds the

19 sum or value of $5,000,000." Std. Fire Ins. Co. v. Knowles, 133 S. Ct. 1345, 1348 20 (2013) (citing 28 U.S.C. §§1332(d)(2), (5)(B)). In determining the amount in

21 controversy, "'the claims of the individual class members shall be aggregated." Id. 22 (quoting 28 U.S.G. §1332(d)(6)).

23 18. As noted above, Plaintiff is a citizen of California and Defendant is a

24 citizen of Delaware and New York. Thus, minimal diversity, if not complete

25 diversity, exists. The requirement that the class contain more than 100 members is

26 also satisfied because Plaintiff alleges that the putative class contains "many

27 thousands" of members.

28 NoTIcE OF REMOVAL 3 Case 2:13-cv-05693-PSG-RZ Document 1 Filed 08/06/13 Page 5 of 7 Page ID #:11

1 19. With respect to the amount in controversy , "[i]n determining the amount,

2 I I we first look to the complaint." Lewis v. Verizon Communs., Inc., 627 F . 3d 395, 399

3 (9th Cir . 2010). "[I]f the complaint alleges damages in excess of the federal amount- 4 in-controversy requirement , then the amount-in-controversy requirement is 5 presumptively satisfied unless ` it appears to a legal certainty that the claim is actually 6 for less than the jurisdictional minimum ."' Lowdermilk v. U.S. Bank Nat'l Ass'n, 7 479 F.3d 994, 998 (9th Cir. 2007) (emphasis in original). 8 20. Here, the Complaint alleges compensatory damages in excess of $100 9 ~ I million plus punitive damages and a request for attorneys ' fees . This is well in excess 10 of the $5 million jurisdictional requirement. 11 21. Accordingly , this Court has original jurisdiction over this matter pursuant 12 to 28 U.S .C. 1332 (d)(2)(A), and the matter may be removed to this Court pursuant to 13 28 U.S.C. § 1441(b). 14 22. Defendant denies that Plaintiff is entitled to any recovery in this action, 15 and by filing this Notice of Removal , Defendant specifically preserves and does not 16 waive any and all defenses that may be available to it, including , without limitation, 17 any defenses contained in Rule 12 of the Federal Rules of Civil Procedure. 18 BASED ON THE FOREGOING , Defendant hereby removes the Action from 19 the Superior Court of the State of California, for the County of Los Angeles, to the 20 United States District Court for the Central District of California. 21 Dated: August 6, 2013 Respectfully submitted, 22 WEIL, GOT 8 M1 S LLP 23 } . By: 24 ri stop er ox 25 Attorneys for Defendant SIRIUS XM RADIO INC. 26 27

NoTIcr or R.EMoval_ 4 Case 2:13-cv-05693-PSG-RZ Document 1 Filed 08/06/13 Page 6 of 7 Page ID #:12

UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA c©rr CIVIL COVER SHEET I. (a) PLAINTIFFS { Check box If you are representing yourself r l DEFENDANTS ( Check box if you are representing yourself ) FLO & EDDIE. INC, Individually and on behalf of all others similarly situated 51RIUS XM RADIO INC.

(b) Attorneys (Firm Name, Address and Telephone Number . Ifyau {b) Attorneys (Firm Name, Address and Telephone Number. If you are representing yourself, provide same .) are representing yourself , provide same.) , 201 Redwood Shores Parkway, GRADSTEIN & MARAZANO, P.C., Henry Gradstoin, Maryann R . Marzano, and Robert E. WEIL. GOTSHAL& MANGES LLP, Christopher J. Cox Allen. 6310 San Vicente Blvd_ Suite 510 , Los Angeles, California 90048 , Tel: Redwood Shores, CA 94065.Teh 650.802-3000 ; and R. Bruce Rich, Bruce S. Meyer, , 767 Filth Avenue, New York, NY 10153, Tel: 323-776-3100 Benjamin E. Marks, and Todd Larson 212-310.8000

I1. BASIS OF JURISDICTION (Place an X In one box only,) Ill. CITIZENSHIP OF PRINCIPAL PARTIES- For Diversity Cases Only (Place an X In one box for plaintiff and one for defendant) PTF DEF PTF DEF 1 Incorporated or Principal Place 4 4 3. Federal Question U,S, I tEl ❑ 1. U.S. Government ( Citizen of This State tEl© © of Business In this State Plaintiff Government Not a Party) Citizen of Another State 9 2 ❑x 2 incorporated and Principal Place ❑ S i or Business in Another State 2. U.S. Government (Indicate Citizenship Citizen or Subject of a ❑ 4, Divers ity 3 3 Foreign Nation Q 6 © 6 Defendant of Parties In Item III) Foreign Country a. Itinsicrr earremAno:ncr o.wuru• IV. ORIGIN (Place an X in one b ©x Only.) ❑ District District ISpaci.'y) ❑ 1, Orlginal X 2. Removed from 3. Remanded from 4. Reinstated or Litigation ❑ Proceeding ❑ State Caurt ❑ Appellate Court ❑ Reopened

V. REQUESTED IN COMPLAINT: JURY DEMAND : [x Yes ❑ No (Check "Yes" only If demanded in complaint.) over Si DO million CLASS ACTION under F . R.Ctr.P. 23: [~x' Yes ❑ No ❑x MONEY DEMANDED IN COMPLAINT ,, $ Vi. CAUSE OF ACTION (Cite the U.S. Civil Stature under which you are filing and write a brief statement of cause. Do not citejurlsdtctionaI statutes unless diversity.) Defendant removed this action pursuant to 28 U.S .C. §§ 1441 and 1446 because the District Court has original Jurisdiction under 28 U.S.C . § 1332(d)(2)(AI.

VII. NATURE OF SUIT ( Place an X In one box only). OTHER STATUTES CONTRACT RALPFIOPERTVCONTJ IMMIGRA ON PRISONERPE1ITION5 PROPERTVRIGHTS 240 Torts to Land 462 Naturalization Habeas Carpus: 620 Copyrights ❑ 110 insurance © ❑ 375 False Claims Act ❑ Application © 463 Allen Delainee ❑ 245 Tort Product 830 Patent © 400 State ❑ 120 Marine ❑ Liability 465 Other ❑ 510 Motions to Vacate Reapport ionment ❑ immigration Actions Sentence 840 Trademark ❑ 130 Miller Act 290 All Other Real ❑ 410 Antitrust ❑ S30Genaral SOCIAL SECURITY 140 Negotiah5ie ❑ Property TORTS Li 430 Banks and Banking ❑ ❑ 535 Death Penalty ❑ Instrument TORTS PSRSONALPROPERTY 861 NIA (139510 J ❑ Other: 450 Commerce/ICC 1511 Recovery of R ONA 378 Other Fraud ❑ 862 Black Lung (923) RatesrEtc. Overpayment & ❑ 310 Airplane ❑ 540Mandamus/Other 371 Truth in Lending 863 DIWC/DIWW (405 (g)) [) 460 Deportation Enforcement of 315 Airplane ❑ ❑ 550 Civil Rights 0 Judgment © Product Liability 1164 SSIDTILle XVI 470 Racketeer Influ- 380 Other Personal 555 Prison Condition ❑ 320 Assault, Libel & Property Damage ❑ enced & Corrupt Otg. © 151 Medicare Act 865 R51 (405 o Slander 560 Civil Dotalnee ❑ (g)I © 480 CansumerCtedlt 152flecaveryof 330 fed. Employers © PrroductUablIllty age ❑ Confnement FEDERALTAXSUITS © Loan Student ❑ Liability 490 Cable/SatTV Loan (Excl,Bad. BANxRUPTCY FORFEITURE/PENALTY 870Taxes (US, Plaintiff or o Vet.) ❑ ❑ 340 Marine 850 Securities/Com 422 Appeal 28 625 Drug Related Defendant) 153 Recovery oI 345Maiine Product U5C 158 modifies/Exchange Overpayment of ❑ Scloure ny Tl ❑ 8 71 ift5•ThlrtiParty26USCRS-ThlrdParty2&USC Liability 423 WI thdrawal 28 Vet. Benefits © USC881orPtope 76097809 890 Other Statutory USC 157 Actions © 350 Motor Vehicle ❑ htack alders' CitrlLRIGHTS ❑ 690 Other 891 Agricultural Acts Suits 355 Motor Vehicle © © Product liability ❑ 440 Other Civil Rights Environmental LABOR ❑ 360rOther Personal 441 Voting Matters 190 Otht r © ❑ 710Falr Labor Standards ❑ Act 895 Freedom of info. 195 Contract 362 Personal injury- Q 442 Employment Act © ProductUebility MadMalpralice ❑ 720Labor/Mgmt, © 443 Housing/ Relations © a96 Arbitration 365 Personal injury- 146 Franchise © product Liability Accomodatlons ❑ 740Pallway Labor Act REAL P OPERTV 899 Adm w Procedures 367 Health Care! 445 American with 710 Land ©DlsabUlties 751 Family and Medical © Act/Review of Appeal of Pharmaceutical Leave Act Agency Decision Condemnation ❑ Persona€Injury Employment 790 Other Labor © 220 Foreclosure Product Liability 446 American with ❑ Cl Olsabliltles-Other Litigation 950 Constitutionality or 36a Asbestos 230 Rent Lease & ❑ 791 tOe Ref, Inc. © State Statutes © Persona€ Injury ❑ 448 Education ❑ E ectment ypl ott FOR OFFICE USE ONLY: Case Number : C V-i 3 5 6 9 AFTER COMPLETING PAGE 1 OF FORM CV-71, COMPLETE THE INFORMATION REQUESTED ON PAGE 2.

CV•71 102/13) CIVIL COVER SHEET Page 1 o12 t4 Case 2:13-cv-05693-PSG-RZ Document 1 Filed 08/06/13 Page 7 of 7 Page ID #:13 UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA CIVIL COVER SHEET

VIII(a}. IDENTICAL CASES: Has this action been previously filed in this court and dismissed, remanded or closed? ® NO [j YES

If yes, list case number(s):

❑ VIII(b). RELATED CASES : Have any cases been previously filed in this court that are related to the present case ? J NO YES

if yes, list case number(s):

Civil cases are deemed related if a previously filed case and the present case:

(Check all boxes that apply) ❑ A. Arise from the same or closely related transactions, happenings, or events; or

B. Call for determination of the same or substantially related or similar questions of law and fact; or

® C. For other reasons would entail substantial duplication of labor if heard by different judges; or Q D. Involve the same patent, trademark or copyright,,,gnt .one of the factors identified above in a, b or c also is present. IX, VENUE: (When completing the following information, use an additional sheet if necessary.) (a) List the County in this District; California County outside of this District; State if other than California; or Foreign Country, in which EACH named plaintiff resides. ® Check here if the government, its agencies or employees is a named plaintiff. If this box is checked, go to item (b). State, if other than California; or Foreign County In this District California County outside of this Distr ict; :* C unt Fla & Eddie, Inc. e. Los Angeles County

(b) List the County in this District; California County outside of this District; State if other than California; or Foreign Country, in which EACH named defendant resides,

® Check here if the government, its agencies or employees is a named defendant. If this box is checked, go to item (c). California County outside of this District; State, if other than California; or Foreign County In this District:* Count Sirius XM Radio Inc., principal place of business in New York; incorporated in Delaware

(c) List the County in this District; California County outside of this District; State if other than California; or Foreign Country, in which EACH claim arose. NOTE: In land condemnation cases, use the location of the tract of land involved. California County outside of this District; State, if other than California; or Foreign County in this District ;" Countr

Plaintiff has alleged claims that are state-wide.

"Los Angeles, Orange, San Bernardino, Riverside, Ventura , Santa Barbara , or San L is Obispo Coun es Note : In land condemnation cases. use the location of the tract of land involved

X. SIGNATURE OF ATTORNEY (OR SELFREPRESENTED LITIGANT): ( ~"°® DATE: ~~„~;~ Notice to Counsel/Parties. The CV-71 (JS-44) Civil Cover Sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law. This form, approved by the Judicial Conference of the United States in September 1974, is required pursuant to Local Rule 3.1 Is not filed but is used by the Clerk of the Court for the purpose of statistics, venue and initiating the civil docket sheet, (For more detailed instructions, see separate instructions sheet), Key to Statistical codes relating to Social Security Cases: Nature of Suit Code Abbreviation Substantive Statement of Cause of Action All claims for health insurance benefits (Medicare) underTitle 18, Part A, of the Social Security Act, as amended. Also, 861 HIA include claims by hospitals, skilled nursing facilities, etc., for certification as providers of services under the program. (42 U.S.C. 1935FF(b))

862 Bt All claims for "Black Lung" benefits under Title 4, Part B, of the Federal Coal Mine Health and Safety Act of 1969. (30 U.S.C, 923)

863 DIWC All claims filed by insured workers for disability insurance benefits under Title 2 of the Social Security Act, as amended; plus all claims filed for child's insurance benefits based on disability. (42 U.S.C. 405 (g))

863 DlWW All claims filed for widows or widowers insurance benefits based on disability under Title 2 of the Social Security Act, as amended. (42 U.S.C. 405(g))

864 SSID All claims for supplemental security income payments based upon disability filed under Title 16 of the Social Security Act, as amended. 865 RSI All claims for retirement (old age) and survivors benefits under Title 2 of the Social Security Act, as amended. (42 U.S.C. 405 (g))

CV-71 (02113) CIVIL COVER SHEET Page 2 of 2 Case 2:13-cv-05693-PSG-RZ Document 43 Filed 12/03/13 Page 1 of 11 Page ID #:560

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA #30/31 CIVIL MINUTES - GENERAL

Case No. CV 13-5693 PSG (RZx) Date December 3, 2013 Title Flo & Eddie, Inc. v. Sirius XM Radio Inc.

Present: The Honorable Philip S. Gutierrez, United States District Judge

Wendy K. Hernandez Not Present n/a Deputy Clerk Court Reporter Tape No.

Attorneys Present for Plaintiff(s): Attorneys Present for Defendant(s):

Not Present Not Present Proceedings: (In Chambers) Order DENYING Motion to Transfer Venue

Before the Court is Defendant Sirius XM Radio Inc.’s (“Sirius XM”) motion to transfer venue to the Southern District of New York, pursuant to 28 U.S.C. § 1404(a). Dkt. # 30. The Court held a hearing on this matter on December 2, 2013. Having considered the arguments in the moving, opposing, and reply papers, as well as those raised at oral argument, the Court DENIES the motion.

I. Background

Plaintiff Flo & Eddie, Inc. (“Plaintiff”) filed this putative class action in state court on August 1, 2013, alleging that Sirius XM had unlawfully exploited certain audio recordings made before February 15, 1972 (the “Pre-1972 Recordings”) by duplicating and broadcasting those audio recordings through its satellite and internet radio service. Complaint ¶¶ 1-2. Plaintiff claims that the class members own the rights to the Pre-1972 Recordings under California Civil Code § 980(a)(2) and California common law. Id. ¶ 6. Plaintiff asserts causes of action for: (1) misappropriation, (2) unfair competition, and (3) conversion. Id. ¶¶ 18-34.

Sirius XM removed this case to federal court on August 6, 2013. Dkt. # 1.

On August 16, 2013, and September 3, 2013, Plaintiff filed similar suits in the Southern District of New York (the “New York action”) and the Southern District of Florida (the “Florida action”), respectively, raising corresponding claims under New York and Florida state law. See

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Flo & Eddie, Inc. v. Sirius XM Radio, Inc., et al., No. CV 13-5784 CM (S.D.N.Y.); Flo & Eddie, Inc. v. Sirius XM Radio, Inc., et al., No. CV 13-23182 KMM (S.D. Fla.).

Two other related cases have been filed by different plaintiffs. Capitol Records LLC, et al. v. Sirius XM Radio Inc., et al., BC 520981 (Cal. Super. Ct.) (the “Capitol Records action”) was filed on September 11, 2013 in California state court by five major recording companies, and is essentially identical to this case.

SoundExchange, Inc. v. Sirius XM Radio Inc., No. CV 13-1290 RJL (D.D.C.) (the “SoundExchange action”) was filed on August 26, 2013 in the District of the District of Columbia. That case is somewhat related to the three Flo & Eddie cases and the Capitol Records action, but is based on a different theory of liability arising out of the federal Copyright Act and Copyright Royalty Board regulations.

Sirius XM has moved to transfer this case to the Southern District of New York, pursuant to 28 U.S.C. § 1404(a). Dkt. # 30.

II. Legal Standard

Under 28 U.S.C. § 1404(a), a district court has the discretion to transfer a civil action to any other district in which the action might have been filed “[f]or the convenience of the parties and witnesses, [and] in the interest of justice.” Although § 1404(a) only explicitly defines three factors—the convenience of the parties, the convenience of witnesses, and the interest of justice—the Ninth Circuit has explained that district courts may consider factors used in the forum non conveniens context:

(1) the location where the relevant agreements were negotiated and executed, (2) the state that is most familiar with the governing law, (3) the plaintiff’s choice of forum, (4) the respective parties’ contacts with the forum, (5) the contacts relating to the plaintiff’s cause of action in the chosen forum, (6) the differences in the costs of litigation in the two forums, (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses, and (8) the ease of access to sources of proof. . . . [as well as (9)] the relevant public policy of the forum state[.]

Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir. 2000). The district court may also consider factors such as (10) relative court congestion, (11) “the local interest in having localized controversies decided at home,” and (12) “the unfairness of burdening citizens in an CV-90 (06/04) CIVIL MINUTES - GENERAL Page 2 of 11 Case 2:13-cv-05693-PSG-RZ Document 43 Filed 12/03/13 Page 3 of 11 Page ID #:562

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Case No. CV 13-5693 PSG (RZx) Date December 3, 2013 Title Flo & Eddie, Inc. v. Sirius XM Radio Inc. unrelated forum with jury duty.” Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986). The burden is on the moving party to show that transfer is appropriate. See CFTC v. Savage, 622 F.2d 270, 279 (9th Cir. 1979). Overall, § 1404(a) “is intended to place discretion in the district court to adjudicate motions for transfer according to an individualized, case-by-case consideration of convenience and fairness.” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (citation and internal quotation marks omitted).

III. Discussion

A. Jurisdiction and Venue in the Southern District of New York

The parties agree that this case could have been properly filed in the Southern District of New York. See Mem. 7:1-7:14; Opp. 6:14-6:20.

B. Convenience of the Parties and Party Witnesses

These factors are neutral. Plaintiff is a California corporation whose day-to-day operations are managed in Los Angeles by its employee Evan Cohen. See Opp. 7:23-7:28. Sirius XM is headquartered in New York. See Mem. 8:8:15-8:18. It has identified three employees as likely witnesses in this case: Terrence R. Smith, Corporate Vice President & Chief Engineering Officer with responsibility for Broadcast Operations and Engineering; Robert Law, Senior Vice President & General Manager, Streaming Services and Products; and Steven Blatter, Senior Vice President & General Manager, Music Programming. See id. 8:19-9:2. All three likely Sirius XM witnesses are based in New York. See id.

Sirius XM argues that the locations of Plaintiff’s principals should also be considered in this analysis. See Mem. 9:9-10:5. Plaintiff, on the other hand, argues that the location of its principals is irrelevant. See Opp. 14:27-15:2. Mark Volman resides in Tennessee. See Mem. 9:13-9:14. Howard Kaylan resides in Washington state, and tours through the United States. See id. 9:14-10:1. This dispute is not material to the Court’s decision. Both New York and California are inconvenient from Tennessee, and it would likely be inconvenient for Kaylan to come to either forum from Washington or during the course of a tour.

In short, whether this case proceeds in California or New York, one of the parties, and its party witnesses, will need to travel during the course of the litigation. In fact, it appears that both parties will have to travel, notwithstanding the venue of this case, because Plaintiff is CV-90 (06/04) CIVIL MINUTES - GENERAL Page 3 of 11 Case 2:13-cv-05693-PSG-RZ Document 43 Filed 12/03/13 Page 4 of 11 Page ID #:563

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Case No. CV 13-5693 PSG (RZx) Date December 3, 2013 Title Flo & Eddie, Inc. v. Sirius XM Radio Inc. litigating the New York action in New York and Sirius XM is facing the Capitol Records action in California. Moreover, the convenience of party witnesses, as opposed to third parties, is accorded little weight in the transfer analysis. See Allstar Mktg. Grp., LLC v. Your Store Online, LLC, 666 F. Supp. 1109, 1132 (C.D. Cal. 2009). Under the circumstances, the Court finds that the party convenience factors are neutral.

C. Convenience of Third Party Witnesses and the Availability of Compulsory Process

These factors weigh in favor of transfer. Sirius XM states that it will likely subpoena three third party witnesses: the Recording Industry Association of America (“RIAA”) (based in Washington, D.C.); SoundExchange, Inc. (“SoundExchange”) (based in Washington, D.C.); and the American Association of Independent Music (“AAIM”) (based in New York). Mem. 10:10- 10:23. Based on the proximity between New York and Washington, D.C., Sirius XM argues that the convenience of third party witnesses favors transfer to New York. Id. Sirius XM also notes that if this case is transferred, compulsory process will be available against AAIM. Id.

The Court agrees with Sirius XM on these points. The Court is not persuaded by Plaintiff’s arguments that the three identified third party witnesses are not material to the case, or may be willing to provide documents and depositions without subpoenas. See Opp. 11:25-12:3, 12:14-13:2. From the discussion at oral argument, it appears that the discovery from RIAA, SoundExchange, and AAIM may be central to Sirius XM’s affirmative defenses, and even if the third parties are willing to provide discovery, it appears that it would be more convenient for them to do so in New York than in California. The Court is also not persuaded that Sirius XM has not adequately identified the third party witnesses it may call. See Opp. 12:4-12:13.

D. Relevant Agreements

This factor is neutral. The parties agree that there are no relevant agreements in this case. See Mem. 11:5-11:8; Opp. 23:3-23:6.

E. Familiarity with the Governing Law

This factor is neutral. To the extent Plaintiff’s claims relate to federal copyright law, this Court and the Southern District of New York are equally capable of resolving the relevant legal issues. And, while this Court may have more experience in dealing with California law, the Court has no reason to question the ability of the Southern District of New York to correctly

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Case No. CV 13-5693 PSG (RZx) Date December 3, 2013 Title Flo & Eddie, Inc. v. Sirius XM Radio Inc. apply the law of foreign jurisdictions. See, e.g., Martin v. Spring Break %2C83 Prods., LLC, No. CV 09-6104 PSG (FMOx), 2009 WL 4673918, at *4 (C.D. Cal. Dec. 3, 2009).

F. Plaintiff’s Choice of Forum

This factor weighs very slightly against transfer.

The plaintiff’s choice of forum is generally accorded substantial weight in the transfer analysis; however, the plaintiff’s choice is entitled to less weight if the plaintiff represents a class, and is entitled to only “minimal consideration” if the parties have minimal contacts with the forum and the operative facts did not occur within the forum. See Lou v. Belzberg, 834 F.2d 730, 739 (9th Cir. 1987). The plaintiff’s choice of forum is also given less weight where the plaintiff has filed related lawsuits in several fora. See Golden Bridge Tech., Inc. v. Apple Inc., CV 12-4014 ODW (FFMx), 2012 WL 3999854, at *4 (C.D. Cal. Sept. 11, 2012); Bristol-Myers Squibb Co. v. Andrx Pharm., LLC, 03 CIV 2503 (SHS), 2003 WL 22888804, at *5 (S.D.N.Y. Dec. 5, 2003).

Here, Plaintiff seeks to represent a class. As a result, Plaintiff’s choice of forum is accorded less weight. See id. The Court is not persuaded by Plaintiff’s argument that Belzberg does not apply where a class has not been certified. See Opp. 8:4-8:9; Van Slyke v. Capital One Bank, 503 F. Supp. 2d 1353, 1363 (N.D. Cal. 2007). Motions to transfer are almost always raised early in a case, prior to class certification. Indeed, it is unlikely that a motion to transfer would be seriously entertained after class certification. As a result, Plaintiff’s narrow reading of Belzberg would essentially nullify the Ninth Circuit’s statement that “when an individual . . . represents a class, the named plaintiff’s choice of forum is given less weight.” Belzberg, 834 F.2d 739.

The weight given to Plaintiff’s choice of forum is further reduced by the fact that Plaintiff has also filed a closely-related suit in New York, and has thus shown that it is willing and able to litigate in that forum. See Golden Bridge Tech., 2012 WL 3999854, at *4.

That said, the Court is not persuaded by Sirius XM’s argument that Plaintiff’s choice should be accorded minimal or no weight. Sirius XM argues that nothing uniquely connects the operative facts of this lawsuit with California. See Reply 7:19-8:16. As discussed further below, the Court agrees. However, for the purposes of determining whether Plaintiff’s choice of forum carries any weight in the transfer analysis, the relevant inquiries are whether the parties have

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Case No. CV 13-5693 PSG (RZx) Date December 3, 2013 Title Flo & Eddie, Inc. v. Sirius XM Radio Inc. more than minimal contacts with the chosen forum, and whether operative facts—unique or not—took place in the forum. See Belzberg, 834 F.2d at 739.

Both parties have contacts in California. Plaintiff is a California corporation and manages its day-to-day operations from California. See Opp. 7:23-7:26. Sirius XM has offices and broadcasting equipment in California, and broadcasts into California. See id. 8:17-8:20. Further, because Plaintiff claims Sirius XM has misappropriated its rights by performing the Pre- 1972 Recordings, at least some of the operative facts have taken place in California. See id.

Accordingly, the Court finds that this factor weighs—albeit slightly—against transfer.

G. The Parties’ Contacts with the Chosen Forum

This factor weighs against transfer. As noted above, both Plaintiff and Sirius XM operate in California, Plaintiff is based in California, and Sirius XM has offices in California. See Opp. 7:23-7:26, 8:17-8:20. Although Sirius XM is headquartered in New York, it does not appear that its contacts with California are de minimis; on the other hand, Plaintiff does not appear to have any meaningful contacts with New York, aside from its litigation activity in the New York action.

H. Contacts Relating to Plaintiff’s Causes of Action in the Chosen Forum

This factor weighs in favor of transfer.

Plaintiff’s claims are based principally on Sirius XM’s broadcasts of the Pre-1972 Recordings into California. See Opp. 17:23-17:25. Although Sirius XM’s transmissions constitute contacts with California, they are not particular to California, because Sirius XM broadcasts nationwide. See Reply 7:23-8:2. As a result, there is nothing that specifically connects this case to California.

On the other hand, there are specific connections between this case and New York. Plaintiff alleges Sirius XM has wrongfully duplicated the Pre-1972 Recordings, see Complaint ¶ 9, and Sirius XM’s central servers—where any such duplication would likely have taken place—are located in New York. See Reply 8:13-8:15. Plaintiff also alleges Sirius XM has wrongfully broadcasted the Pre-1972 Recordings, see Complaint ¶ 9, and Sirius XM’s broadcast and programming operations, as well as at least some of its song tracking operations, are based

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Case No. CV 13-5693 PSG (RZx) Date December 3, 2013 Title Flo & Eddie, Inc. v. Sirius XM Radio Inc. in New York. See Mem. 15:7-15:11; Reply 8:13-8:15. As a result, it appears that the contacts related to Plaintiff’s cause of action are stronger in New York than in California.

I. Differences in the Cost of Litigation

This factor weighs slightly in favor of transfer.

The Court sees no reason to believe that this it would be either more or less expensive to litigate this case in New York, as opposed to Los Angeles. And as discussed above, at least one side will have to travel regardless of where this case is sited. Accordingly, litigation costs would only be meaningfully reduced by transfer to the extent that transfer would limit duplicative discovery.

If this case is transferred to New York, this case may be consolidated or otherwise formally coordinated with the New York action. Ordinarily, the prospect of potential consolidation or formal coordination would weigh heavily towards transfer. See Cont’l Grain Co. v. The FBL-585, 364 U.S. 19, 26 (1960) (“To permit a situation in which two cases involving precisely the same issues are simultaneously pending in different District Courts leads to the wastefulness of time, energy and money that § 1404(a) was designed to prevent.”); A.J. Indus., Inc. v. U.S. Dist. Ct. for the Central Dist. of Ca., 503 F.2d 384, 389 (9th Cir. 1974) (“The feasibility of consolidation is a significant factor in a transfer decision . . . although even the pendency of an action in another district is important because of the positive effects it might have in possible consolidation of discovery and convenience to witnesses and parties.”) (citation omitted).

However, in this case, the incremental benefit of that coordination would be minimal, given that Sirius XM will be exposed to discovery in California, regardless of the Court’s decision, as part of the Capitol Records action. It is also unclear whether the Florida action will be transferred to New York. In short, transfer might reduce overlapping discovery, but will not eliminate it.

A more weighty issue is the possibility that if this case is not transferred, any discovery disputes between the parties—particularly regarding the scope of discovery—may be litigated in three different federal courts. Such repetitious litigation is wasteful and creates a risk of inconsistent decisions. Yet it is again unclear whether transferring this case would materially reduce the fragmentation of discovery disputes, given that the New York action and the Florida action may proceed separately. Although the Court would give this factor significant weight if CV-90 (06/04) CIVIL MINUTES - GENERAL Page 7 of 11 Case 2:13-cv-05693-PSG-RZ Document 43 Filed 12/03/13 Page 8 of 11 Page ID #:567

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Case No. CV 13-5693 PSG (RZx) Date December 3, 2013 Title Flo & Eddie, Inc. v. Sirius XM Radio Inc. transfer would bring all discovery disputes into one forum, the Court is not persuaded that there is a substantial difference between two and three proceedings—or between three and four proceedings, given that similar disputes may arise in the Capitol Records action.

On the other hand, even if this case is not transferred, the Court would expect Plaintiff and Sirius XM to work together to coordinate discovery (and particularly third party discovery) in this case, the New York action, and the Florida action.

Considering the situation as a whole, the Court finds that this factor weighs in favor of transfer, but only slightly.

J. Access to Sources of Proof

This factor weighs slightly in favor of transfer.

As noted above, it appears that most of the witnesses in this case are based in New York or Washington, D.C. In addition, because Sirius XM is located in New York, it is likely that any relevant documents and records are in New York. See Mem. 15:16-15:24. Although these issues do not carry any great weight, because the Court has already accounted for the location of the witnesses and any document production in discovery is likely to be electronic (or convertible to an electronic format), they weigh slightly in favor of transfer.

K. Relevant Policy of the Forum State

This factor is neutral. Although it appears California has expressed an interest in protecting certain ownership interests in the Pre-1972 Recordings, see Cal. Civ. Code § 980(a)(2), Plaintiff has not identified anything suggesting that California has a policy of having disputes related to those ownership interests litigated in California. See Opp. 22:12- 22:28.

L. Relative Court Congestion

The Central District of California and the Southern District of New York are both busy courts with heavy caseloads. The Court notes that the median time from filing to disposition of a civil matter in the Southern District of New York is 8.3 months, as opposed to 5.6 months in this

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District. See Opp. 21:21-21:24. The mean time from filing to trial in a civil matter is also considerably shorter in this District. See Opp. 21:24-21:27. Although these differences are not overwhelming, they do suggest that this case might proceed more expeditiously in this District. On the other hand, the marginal difference is slight, and “[a]dministrative considerations such as docket congestion are given little weight in this circuit in assessing the propriety of a § 1404 transfer.” See Allstar Mktg. Grp., LLC, 666 F. Supp. 2d at 1134 (citation omitted). All things considered, this factor is neutral.

M. Local Interest in Having Localized Controversies Decided at Home

This factor weighs against transfer.

Sirius XM notes that “Plaintiff’s position that California law protects a performance right in Pre-1972 Recordings is a novel claim,” and that this case will be decided in a “precedential vacuum.” Mem. 11:20-11:22 & n.9; Reply 9:16-9:19. Sirius XM also forcefully argues that Plaintiff’s claim depends on a “new state-law right that would radically overturn decades of settled practice.” Mem. 2:12-2:13.

Although the facts of this case are not localized to California, the fact that this case appears to present a question of first impression regarding the meaning and scope of California law weighs heavily against transfer. California undoubtedly has a strong interest in having such an issue “decided at home,” especially if it might “radically overturn decades of settled practice.” N. Unfairness of Burdening Citizens in an Unrelated Forum

This factor is neutral. The Court is not persuaded that a jury in New York would be particularly burdened by this case, even if this case were not consolidated with the New York action. The factual issues that are likely to arise are not likely to be overly complex. Moreover, if this case were consolidated for trial with the New York action, the Court is not persuaded that a jury would be confused by the need to deal with both New York and California law, given that Plaintiff has not identified any differences between the applicable laws that would require a jury to make different factual determinations. Finally, it is not at all clear that New York would be an “unrelated forum” for this case, given that Plaintiff seeks to represent a nationwide class.

O. The Interest of Justice

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Sirius XM has raised two issues that implicate the interest of justice. The Court is not persuaded that either weighs in favor of transfer. First, Sirius XM argues that Plaintiff is playing the “lawsuit lottery” by filing three essentially identical suits, hoping that at least one court will adopt its allegedly novel view of the law. See Mem. 2:12-2:16. If Plaintiff’s suits were materially identical, such an effort would smack of forum shopping, and give rise to an unfair risk that the courts would reach inconsistent judgments. However, Sirius XM has not met its burden of showing that Plaintiff’s three suits are materially identical or that the relevant laws are so closely related that it would be unjust for this Court and the courts hearing the New York and Florida actions to decide issues differently. Rather, it seems at this point that although the three suits share a common factual core, they are legally distinct and will turn on the separate interpretations of California, New York, and Florida law, respectively.

Second, Sirius XM noted at oral argument that the parties will likely disagree about the proper scope of discovery. Specifically, Sirius XM intends to seek discovery regarding historical licensing practices in the terrestrial radio industry (and perhaps in the music industry in general) to support its laches and estoppel defenses. Plaintiff argues that those practices are irrelevant because they do not relate to the type of digital and satellite services offered by Sirius XM. Sirius XM expressed a concern that disputes about the discoverability of such evidence might not be decided consistently if this case, the New York action, and the Florida action are not heard by the same court.

However, it appears to the Court that the fragmentation of these types of discovery disputes actually favors Sirius XM: if the three actions remain separate, Sirius XM will have three chances to obtain the discovery it seeks. Accordingly, the Court is not persuaded that the possibility of overlapping discovery disputes on this point would be unjust for Sirius XM.

In short, Sirius XM has not shown that a transfer is necessary to serve the interest of justice. This factor is neutral.

P. Balancing Analysis

After considering the factors discussed above, the Court concludes that transfer is not warranted. Many of the transfer factors are neutral. As to the factors that carry weight one way or the other, several factors related to efficiency and convenience weigh toward transfer. However, California’s interest in having a novel question of state law decided at home, as well as the slight weight given to Plaintiff’s choice of forum, weighs against transfer.

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The parties’ arguments suggest that this case will principally turn on a legal dispute over a matter of first impression in California law, which could have far-reaching effects. Accordingly, California’s interest in having such an issue decided in a California court carries considerable weight.

On the other hand, the factor that weighs most heavily in favor of transfer is the convenience of the three third party witnesses identified by Sirius XM: RIAA, SoundExchange, and AAIM. All three industry groups are based on the East Coast, and it would likely be more convenient for them if this case were litigated in New York. However, Sirius XM has not made any showing that any of the three industry groups would be substantially burdened if this case were to remain in California.

The other significant factor that weighs toward transfer is the fact that the contacts related to Plaintiff’s cause of action are stronger in New York than in California. However, this factor is counterbalanced by Plaintiff’s choice of California as the forum for its lawsuit and the fact that both parties have contacts in California, while only Sirius XM has any meaningful non-litigation contacts in New York.

Under the circumstances, and considering all of the factors discussed above, the Court is not persuaded that Sirius XM has met its burden of showing that transfer is warranted.

IV. Conclusion

For the reasons set forth above, Sirius XM’s motion is DENIED.

IT IS SO ORDERED.

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(RZx),DISCOVERY,MANADR

UNITED STATES DISTRICT COURT for the CENTRAL DISTRICT OF CALIFORNIA (Western Division − Los Angeles) CIVIL DOCKET FOR CASE #: 2:13−cv−05693−PSG−RZ

Flo &Eddie Inc v. Sirius XM Radio Inc et al Date Filed: 08/06/2013 Assigned to: Judge Philip S. Gutierrez Jury Demand: Both Referred to: Magistrate Judge Ralph Zarefsky Nature of Suit: 890 Other Statutory Case in other court: Superior Court of CA for the County of Actions Los Angeles, BC517032 Jurisdiction: Federal Question Cause: 28:1441 Notice of Removal Plaintiff Flo &Eddie Inc represented by Evan Seth Cohen a California corporation, individually Cohen and Cohen and on behalf of all others similarly 1180 South Beverly Drive Suite 510 situated Beverly Hills, CA 90035−1157 310−556−9800 Fax: 310−556−9801 Email: [email protected] LEAD ATTORNEY ATTORNEY TO BE NOTICED Henry D Gradstein Gradstein and Marzano PC 6310 San Vicente Boulevard Suite 510 Los Angeles, CA 90048 323−776−3100 Fax: 323−931−4990 Email: [email protected] LEAD ATTORNEY ATTORNEY TO BE NOTICED Maryann R Marzano Gradstein and Marzano PC 6310 San Vicente Boulevard Suite 510 Los Angeles, CA 90048 323−776−3100 Fax: 323−931−4990 Email: [email protected] LEAD ATTORNEY ATTORNEY TO BE NOTICED Robert Edward Allen Gradstein and Marzano PC 6310 San Vicente Boulevard Suite 510 Los Angeles, CA 90048 323−776−3100 Fax: 323−931−4990 Email: [email protected] LEAD ATTORNEY ATTORNEY TO BE NOTICED

V. Defendant Sirius XM Radio Inc represented by Christopher J Cox a Delaware corporation Weil Gotshal and Manges LLP Silicon Valley Office 201 Redwood Shores Parkway Redwood Shores, CA 94065−1175 Case: 2:13-cv-05693-PSG-RZ As of: 02/20/2014 12:19 PM PST 2 of 7

650−802−3000 Fax: 650−802−3100 Email: [email protected] LEAD ATTORNEY ATTORNEY TO BE NOTICED Benjamin E Marks Weil Gotshal and Manges LLP 767 Fifth Avenue New York, NY 10153−0119 212−310−8029 Fax: 212−310−8007 Email: [email protected] PRO HAC VICE ATTORNEY TO BE NOTICED Bruce S Meyer Weil Gotshal and Manges LLP 767 Fifth Avenue New York, NY 10153 212−310−8013 Fax: 212−310−8007 Email: [email protected] PRO HAC VICE ATTORNEY TO BE NOTICED Fred R Puglisi Sheppard Mullin Richter and Hampton LLP 1901 Avenue of the Stars Suite 1600 Los Angeles, CA 90067−6017 310−228−3700 Fax: 310−228−3701 Email: [email protected] ATTORNEY TO BE NOTICED John R Gerba Weil Gotshal and Manges LLP 767 Fifth Avenue New York, NY 10153 212−310−8029 Fax: 212−310−8007 Email: [email protected] PRO HAC VICE ATTORNEY TO BE NOTICED Michael S Oberman Kramer Levin Naftalis &Frankel LLP 1177 Avenue of the Americas New York, NY 10036−2714 212−715−9294 Fax: 212−715−8000 Email: [email protected] ATTORNEY TO BE NOTICED R Bruce Rich Weil Gotshal and Manges LLP 767 Fifth Avenue New York, NY 10153 212−310−8170 Fax: 212−310−8007 Email: [email protected] PRO HAC VICE ATTORNEY TO BE NOTICED Case: 2:13-cv-05693-PSG-RZ As of: 02/20/2014 12:19 PM PST 3 of 7

Todd Larson Weil Gotshal and Manges LLP 767 Fifth Avenue New York, NY 10153 212−310−8238 Fax: 212−310−8007 Email: [email protected] PRO HAC VICE ATTORNEY TO BE NOTICED

Defendant Does 1 through 100

Date Filed # Docket Text 08/06/2013 1 NOTICE OF REMOVAL from Superior Court of CA for the County of Los Angeles, Central District, case number BC517032 with CONFORMED FILED copy of summons and class action complaint, attached to Exhibit A to Declaration of Christopher J. Cox. Case assigned to Judge Philip S. Gutierrez, Discovery to Magistrate Judge Ralph Zarefsky. (Filing fee $ 400 PAID. ), filed by Defendant Sirius XM Radio Inc. (et) (Additional attachment(s) added on 8/9/2013: # 1 Exhibit) (mg). (Entered: 08/08/2013) 08/06/2013 2 DECLARATION of CHRISTOPHER J. COX in Support of Notice of Removal 1 filed by Defendant Sirius XM Radio Inc. [Conformed Copy of Summons and Class Action Complaint Submitted Attached to Exhbiit A.] (et) (mg). (Entered: 08/08/2013) 08/06/2013 3 DECLARATION of PATRICK L. DONNELLY in Support of Notice of Removal 1 filed by Defendant Sirius XM Radio Inc. (et) (mg). (Entered: 08/08/2013) 08/06/2013 4 CORPORATE DISCLOSURE STATEMENT AND NOTICE of Interested Parties filed by Defendant Sirius XM Radio Inc, identifying Corporate Parent Liberty Media Corporation for Sirius XM Radio Inc. (et) (mg). (Entered: 08/08/2013) 08/06/2013 5 PROOF OF SERVICE filed by Defendant Sirius XM Radio Inc, re Notice of Removal, 1 , Certificate/Notice of Interested Parties 4 , Declaration of Christopher J. Cox 2 , Declaration of Patrick L. Donnelly 3 and civil cover sheet served on 8/6/2013. (et) (mg). (Entered: 08/08/2013) 08/06/2013 6 NOTICE TO PARTIES OF COURT−DIRECTED ADR PROGRAM filed. (et) (Entered: 08/08/2013) 08/09/2013 7 NOTICE OF FILING FEE DUE on Pro Hac Vice Application mailed to R. Bruce Rich for Defendant Sirius XM Radio Inc. Your Pro Hac Vice application has not been received by the court. Please return your completed Application of Non−Resident Attorney to Appear in a Specific Case, form G−64, or a copy of the Notice of Electronic Filing of your application and the $325.00 fee and this notice immediately. Out−of−state federal government attorneys who are not employed by the U.S. Department of Justice are required to file a Pro Hac Vice application; no filing fee is required. (et) (Entered: 08/09/2013) 08/09/2013 8 NOTICE OF FILING FEE DUE on Pro Hac Vice Application mailed to Bruce S. Meyer for Defendant Sirius XM Radio Inc. Your Pro Hac Vice application has not been received by the court. Please return your completed Application of Non−Resident Attorney to Appear in a Specific Case, form G−64, or a copy of the Notice of Electronic Filing of your application and the $325.00 fee and this notice immediately. Out−of−state federal government attorneys who are not employed by the U.S. Department of Justice are required to file a Pro Hac Vice application; no filing fee is required. (et) (Entered: 08/09/2013) 08/09/2013 9 NOTICE OF FILING FEE DUE on Pro Hac Vice Application mailed to Benjamin E. Marks for Defendant Sirius XM Radio Inc. Your Pro Hac Vice application has not been received by the court. Please return your completed Application of Non−Resident Attorney to Appear in a Specific Case, form G−64, or a copy of the Case: 2:13-cv-05693-PSG-RZ As of: 02/20/2014 12:19 PM PST 4 of 7

Notice of Electronic Filing of your application and the $325.00 fee and this notice immediately. Out−of−state federal government attorneys who are not employed by the U.S. Department of Justice are required to file a Pro Hac Vice application; no filing fee is required. (et) (Entered: 08/09/2013) 08/09/2013 10 NOTICE OF FILING FEE DUE on Pro Hac Vice Application mailed to Todd Larson for Defendant Sirius XM Radio Inc. Your Pro Hac Vice application has not been received by the court. Please return your completed Application of Non−Resident Attorney to Appear in a Specific Case, form G−64, or a copy of the Notice of Electronic Filing of your application and the $325.00 fee and this notice immediately. Out−of−state federal government attorneys who are not employed by the U.S. Department of Justice are required to file a Pro Hac Vice application; no filing fee is required. (et) (Entered: 08/09/2013) 08/09/2013 11 PROOF OF SERVICE filed by Defendant Sirius XM Radio Inc, re Notice to Parties of Court−Directed ADR Program (ADR−8) 6 Proof of Service on Notice of Assignment to United States Judges; Notice to Parties of Court−Directed ADR Program and New Civil Actions served on August 7, 2013. (Cox, Christopher) (Entered: 08/09/2013) 08/13/2013 12 STANDING ORDER REGARDING NEWLY ASSIGNED CASES by Judge Philip S. Gutierrez. (ji) (Entered: 08/13/2013) 08/13/2013 13 [DOCUMENT STRICKEN PURSUANT TO ORDER DATED 7/15] PROOF OF SERVICE filed by Defendant Sirius XM Radio Inc, re Initial Order upon Filing of Complaint 12 Proof of Service on Standing Order Regarding Newly Assigned Cases served on August 13, 2013. (Cox, Christopher) Modified on 8/16/2013 (bp). (Entered: 08/13/2013) 08/14/2013 14 NOTICE TO FILER OF DEFICIENCIES in Electronically Filed Documents RE: Proof of Service (subsequent documents) 13 . The following error(s) was found: Title page is missing. Other error(s) with document(s): NOTE: Missing title page with caption, "Proof of Service on Standing Order Regarding Newly Assigned Cases." "Standing Order...." should be an attachment.. In response to this notice the court may order (1) an amended or correct document to be filed (2) the document stricken or (3) take other action as the court deems appropriate. You need not take any action in response to this notice unless and until the court directs you to do so. (bp) (Entered: 08/15/2013) 08/15/2013 15 ORDER TO STRIKE ELECTRONICALLY FILED DOCUMENTS by Judge Philip S. Gutierrez: the following document(s) be STRICKEN for failure to comply with the Local Rules, General Order and/or the Courts Case Management Order: Proof of Service (subsequent documents) 13 , for the following reasons: Title page is missing; (bp) (Entered: 08/16/2013) 08/16/2013 16 PROOF OF SERVICE filed by Defendant Sirius XM Radio Inc, re Proof of Service (subsequent documents), 13 , Striking Electronically Filed Documents (G−106), 15 , Initial Order upon Filing of Complaint 12 , Notice of Deficiency in Electronically Filed Documents (G−112),, 14 Proof of Service served on August 13, 2013. (Cox, Christopher) (Entered: 08/16/2013) 08/16/2013 17 Interested Parties of Interested Parties filed by Plaintiff Flo &Eddie, Inc. Flo &Eddie Inc, (Gradstein, Henry) (Entered: 08/16/2013) 08/22/2013 18 WAIVER OF SERVICE Returned Executed filed by Plaintiff Flo &Eddie Inc. upon Sirius XM Radio Inc waiver sent by Plaintiff on 8/19/2013, answer due 10/18/2013. Waiver of Service signed by Benjamin E. Marks, Attorney. (Gradstein, Henry) (Entered: 08/22/2013) 09/20/2013 19 APPLICATION for attorney John R. Gerba to Appear Pro Hac Vice (PHV FEE NOT PAID.) filed by Defendant Sirius XM Radio Inc. (Attachments: # 1 Proposed Order)(Puglisi, Fred) (Entered: 09/20/2013) 09/20/2013 20 APPLICATION for attorney Todd Larson to Appear Pro Hac Vice (PHV FEE NOT PAID.) filed by Defendant Sirius XM Radio Inc. (Attachments: # 1 Proposed Order)(Puglisi, Fred) (Entered: 09/20/2013) Case: 2:13-cv-05693-PSG-RZ As of: 02/20/2014 12:19 PM PST 5 of 7 09/20/2013 21 APPLICATION for attorney Bruce S. Meyer to Appear Pro Hac Vice (PHV FEE NOT PAID.) filed by Defendant Sirius XM Radio Inc. (Attachments: # 1 Proposed Order)(Puglisi, Fred) (Entered: 09/20/2013) 09/20/2013 22 APPLICATION for attorney R. Bruce Rich to Appear Pro Hac Vice (PHV FEE NOT PAID.) filed by Defendant Sirius XM Radio Inc. (Attachments: # 1 Proposed Order)(Puglisi, Fred) (Entered: 09/20/2013) 09/20/2013 23 APPLICATION for attorney Benjamin E. Marks to Appear Pro Hac Vice (PHV FEE NOT PAID.) filed by Defendant Sirius XM Radio Inc. (Attachments: # 1 Proposed Order)(Puglisi, Fred) (Entered: 09/20/2013) 09/24/2013 24 ORDER by Judge Philip S. Gutierrez: granting 19 Application to Appear Pro Hac Vice by Attorney John R. Gerba on behalf of Defendant Sirius XM Radio Inc., designating Fred R. Puglisi as local counsel. (lt) (Entered: 09/25/2013) 09/24/2013 25 ORDER by Judge Philip S. Gutierrez: granting 20 Application to Appear Pro Hac Vice by Attorney Todd Larson on behalf of Defendant Sirius XM Radio Inc., designating Fred R. Puglisi as local counsel. (lt) (Entered: 09/25/2013) 09/24/2013 26 ORDER by Judge Philip S. Gutierrez: granting 21 Application to Appear Pro Hac Vice by Attorney Bruce S. Meyer on behalf of Defendant Sirius XM Radio Inc., designating Fred R. Puglisi as local counsel. (lt) (Entered: 09/25/2013) 09/24/2013 27 ORDER by Judge Philip S. Gutierrez: granting 22 Application to Appear Pro Hac Vice by Attorney R. Bruce Rich on behalf of Defendant Sirius XM Radio Inc., designating Fred R. Puglisi as local counsel. (lt) (Entered: 09/25/2013) 09/24/2013 28 ORDER by Judge Philip S. Gutierrez: granting 23 Application to Appear Pro Hac Vice by Attorney Benjamin E. Marks on behalf of Defendant Sirius XM Radio Inc., designating Fred R. Puglisi as local counsel. (lt) (Entered: 09/25/2013) 10/03/2013 29 Joint STIPULATION Extending Time to Answer the complaint as to Sirius XM Radio Inc answer now due 11/18/2013, filed by Defendant Sirius XM Radio Inc.(Puglisi, Fred) (Entered: 10/03/2013) 10/09/2013 30 NOTICE OF MOTION AND MOTION to Change Venue to District Court for the Southern District of New York filed by Defendant Sirius XM Radio Inc. Motion set for hearing on 12/2/2013 at 01:30 PM before Judge Philip S. Gutierrez. (Attachments: # 1 Declaration Terrence Smith, # 2 Proposed Order)(Puglisi, Fred) (Entered: 10/09/2013) 10/09/2013 31 REQUEST FOR JUDICIAL NOTICE re MOTION to Change Venue to District Court for the Southern District of New York 30 filed by Defendant Sirius XM Radio Inc. (Attachments: # 1 Declaration Fred R. Puglisi, # 2 Exhibit 1, # 3 Exhibit 2, # 4 Exhibit 3, # 5 Exhibit 4, # 6 Exhibit 5, # 7 Exhibit 6, # 8 Exhibit 7, # 9 Exhibit 8, # 10 Exhibit 9, # 11 Exhibit 10)(Puglisi, Fred) (Entered: 10/09/2013) 10/18/2013 32 NOTICE OF MOTION AND MOTION to Stay Case pending Resolution of its Motion to Transfer This Action to the Southern District of New York filed by Defendant Sirius XM Radio Inc. Motion set for hearing on 12/16/2013 at 01:30 PM before Judge Philip S. Gutierrez. (Attachments: # 1 Proposed Order)(Puglisi, Fred) (Entered: 10/18/2013) 10/21/2013 33 EX PARTE APPLICATION to Shorten Time for Hearing to November 4, 2013 filed by Defendant Sirius XM Radio Inc. (Attachments: # 1 Exhibit A, # 2 Proposed Order)(Puglisi, Fred) (Entered: 10/21/2013) 10/22/2013 34 OPPOSITION OPPOSITION re: EX PARTE APPLICATION to Shorten Time for Hearing to November 4, 2013 33 filed by Plaintiff Flo &Eddie Inc. (Allen, Robert) (Entered: 10/22/2013) 10/23/2013 35 MINUTES (IN CHAMBERS): ORDER DENYING Defendant's Ex Parte Motion to Advance the Hearing on Its Motion to Stay by Judge Philip S. Gutierrez: Before the Court is Defendant's ex parte motion to advance the hearing on its motion to stay and shorten the corresponding briefing schedule. Dkt. # 33. The Court finds this matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78(b); L.R. 7−15. After considering Defendant's motion and Plaintiff's opposition, the Court DENIES Defendant's motion. RE: denying 33 Ex Parte Application to Case: 2:13-cv-05693-PSG-RZ As of: 02/20/2014 12:19 PM PST 6 of 7

Shorten Time for Hearing (PLEASE REVIEW DOCUMENT FOR FULL AND COMPLETE DETAILS) (lw) (Entered: 10/24/2013) 11/08/2013 36 Opposition To Defendant's Motion To Transfer Venue re: MOTION to Change Venue to District Court for the Southern District of New York 30 filed by Plaintiff Flo &Eddie Inc. (Attachments: # 1 Declaration Decl. of R. Allen ISO Plaintiff's Opposition, # 2 Appendix Appendix of CA Authorities ISO Plaintiff's Opposition)(Allen, Robert) (Entered: 11/08/2013) 11/15/2013 37 REPLY in Support MOTION to Change Venue to District Court for the Southern District of New York 30 filed by Defendant Sirius XM Radio Inc. (Attachments: # 1 Exhibit A)(Puglisi, Fred) (Entered: 11/15/2013) 11/18/2013 38 ANSWER to Notice of Removal, 1 JURY DEMAND. filed by Defendant Sirius XM Radio Inc.(Puglisi, Fred) (Entered: 11/18/2013) 11/25/2013 39 MEMORANDUM in Opposition to MOTION to Stay Case pending Resolution of its Motion to Transfer This Action to the Southern District of New York 32 filed by Plaintiff Flo &Eddie Inc. (Allen, Robert) (Entered: 11/25/2013) 11/25/2013 40 DECLARATION of Robert E. Allen In opposition to MOTION to Stay Case pending Resolution of its Motion to Transfer This Action to the Southern District of New York 32 filed by Plaintiff Flo &Eddie Inc. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3)(Allen, Robert) (Entered: 11/25/2013) 12/02/2013 41 REPLY in support of MOTION to Stay Case pending Resolution of its Motion to Transfer This Action to the Southern District of New York 32 filed by Defendant Sirius XM Radio Inc. (Attachments: # 1 Declaration of Fred Puglisi, # 2 Exhibit 1)(Puglisi, Fred) (Entered: 12/02/2013) 12/02/2013 42 MINUTES OF DEFENDANT'S MOTION TO TRANSFER VENUE PURSUANT TO 28 USC 1404(a) FILED 10−09−13 (DOC. 30); REQ FOR JUDICIAL NOTICE (DOC. 31) taking under submission 30 Motion to Change Venue Hearing held before Judge Philip S. Gutierrez: Having considered all papers submitted in support of and in opposition to the Motion referenced above, and the oral argument presented today, the Court takes the motion Under Submission. A ruling shall be issued after full consideration of the submitted pleadings. Court Reporter: Miriam Baird. (bm) (Entered: 12/03/2013) 12/03/2013 43 MINUTES (IN CHAMBERS) ORDER DENYING Motion to Transfer Venue by Judge Philip S. Gutierrez denying 30 Motion to Change Venue; denying 32 Motion to Stay Case: Before the Court is Defendant Sirius XM Radio Inc.'s ("Sirius XM") motion to transfer venue to the Southern District of New York, pursuant to 28 U.S.C. § 1404(a). Dkt. 30. The Court held a hearing on this matter on December 2, 2013. Having considered the arguments in the moving, opposing, and reply papers, as well as those raised at oral argument, the Court DENIES the motion. (see document for further details) (bm) (Entered: 12/03/2013) 12/04/2013 44 MINUTE ORDER IN CHAMBERS DENYING Motion to Stay by Judge Philip S. Gutierrez re MOTION to Stay 32 : Sirius XM, as the moving party, has the burden of showing that a stay is warranted. It has not done so. Accordingly, the motion is DENIED. (see document for further details) (bm) (Entered: 12/05/2013) 01/08/2014 45 ORDER SETTING SCHEDULING CONFERENCE by Judge Philip S. Gutierrez: Scheduling Conference set for 3/24/2014 02:00 PM. (wm) (Entered: 01/08/2014) 01/10/2014 46 Notice of Appearance or Withdrawal of Counsel: for attorney Michael S Oberman counsel for Defendant Sirius XM Radio Inc. Adding Michael S. Oberman as attorney as counsel of record for Sirius XM Radio Inc. for the reason indicated in the G−123 Notice. Filed by Defendant Sirius XM Radio Inc.. (Attorney Michael S Oberman added to party Sirius XM Radio Inc(pty:dft))(Oberman, Michael) (Entered: 01/10/2014) 02/12/2014 47 NOTICE OF MOTION AND MOTION to Strike Class Allegations filed by Defendant Sirius XM Radio Inc. Motion set for hearing on 3/24/2014 at 01:30 PM before Judge Philip S. Gutierrez. (Attachments: # 1 Proposed Order)(Puglisi, Fred) (Entered: 02/12/2014) Case: 2:13-cv-05693-PSG-RZ As of: 02/20/2014 12:19 PM PST 7 of 7 02/14/2014 48 NOTICE OF MOTION AND MOTION for Extension of Time to File MOTION FOR CLASS CERTIFICATION filed by PLAINTIFF Flo &Eddie Inc. Motion set for hearing on 3/24/2014 at 01:30 PM before Judge Philip S. Gutierrez. (Attachments: # 1 Declaration DECLARATION OF ROBERT E. ALLEN IN SUPPORT OF PLAINTIFF FLO &EDDIE, INC.'S MOTION FOR ORDER EXTENDING THE TIME FOR FILING ITS MOTION FOR CLASS CERTIFICATION)(Allen, Robert) (Entered: 02/14/2014) 02/14/2014 49 NOTICE OF LODGING filed re MOTION for Extension of Time to File MOTION FOR CLASS CERTIFICATION 48 (Attachments: # 1 Proposed Order PROPOSED ORDER ON MOTION FOR ORDER EXTENDING THE TIME FOR FILING MOTION FOR CLASS CERTIFICATION)(Allen, Robert) (Entered: 02/14/2014) Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 1 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 2 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 3 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 4 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 5 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 6 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 7 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 8 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 9 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 10 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 11 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 12 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 13 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 14 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 15 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 16 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 17 of 18 Case 1:13-cv-05784-CM Document 1 Filed 08/16/13 Page 18 of 18 Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 1 of 25

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

FLO & EDDIE, INC., individually and on behalf of all others similarly situated,

Plaintiff, CIVIL ACTION No. 13-CV-5784 (CM) v.

SIRIUS XM RADIO INC., and DOES 1 through 10,

Defendants.

MEMORANDUM OF LAW IN SUPPORT OF SIRIUS XM’S PARTIAL MOTION TO DISMISS PLAINTIFF’S COMPLAINT

R. Bruce Rich Benjamin E. Marks Todd Larson WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Tel: (212) 310-8000 Fax: (212) 310-8007 [email protected] [email protected] [email protected]

and

Michael S. Oberman KRAMER LEVIN NAFTALIS & FRANKEL LLP 1177 Avenue of the Americas New York, New York 10036 Tel: (212) 715-9294 Fax: (212) 715-8294 [email protected]

Attorneys for Defendant Sirius XM Radio Inc. Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 2 of 25

TABLE OF CONTENTS

Page

PRELIMINARY STATEMENT ...... 1

ARGUMENT ...... 7

THERE IS NO PUBLIC PERFORMANCE RIGHT FOR PRE-1972 RECORDINGS UNDER NEW YORK COMMON LAW ...... 7 A. The History of Failed Efforts by the Recording Industry To Obtain a Right of Public Performance for Sound Recordings ...... 8 B. New York’s Cause of Action for Common Law Copyright Infringement Does Not Cover Public Performances of Sound Recordings ...... 12 C. Plaintiff Does Not State a Claim for Unfair Competition By Alleging That Sirius XM Publicly Performs Its Sound Recordings Without Permission ...... 14 1. New York’s Cause of Action for Unfair Competition Does Not Cover Public Performances of Sound Recordings ...... 14 2. Plaintiff Has Failed to Plead Competition Between It and Sirius XM as Needed To State a Common Law Unfair Competition Claim ...... 15 3. Plaintiff Has Failed To Plead a Competitive Injury Adequate To Support a Common Law Unfair Competition Claim ...... 18

CONCLUSION ...... 20

Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 3 of 25

TABLE OF AUTHORITIES

CASES PAGE(S)

Agee v. Paramount Commc’ns, Inc., 59 F.3d 317 (2d Cir. 1995)...... 18, 19

Apple Corps Ltd. v. The Adirondack Grp., 476 N.Y.S.2d 716 (Sup. Ct. 1983) ...... 15

Arista Records, LLC v. Launch Media, Inc., 578 F.3d 148 (2d Cir. 2009)...... 4, 5

Arista Records LLC v. Lime Grp. LLC, 784 F. Supp. 2d 398 (S.D.N.Y. 2011)...... 12, 15

Ashcroft v. Iqbal, 556 U.S. 662 (2009) ...... 16, 17

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ...... 16

Broad. Music, Inc. v. Columbia Broad. Sys., Inc., 441 U.S. 4 (1979) ...... 4

Capitol Records, Inc. v. Greatest Records, Inc., 252 N.Y.S.2d 553 (Sup. Ct. 1964) ...... 12, 15

Capitol Records, Inc. v. Mercury Records Corp., 221 F.2d 657 (2d Cir. 1955)...... 12

Capitol Records, Inc. v. Naxos of America, Inc., 4 N.Y.3d 540, 830 N.E.2d 250 (2005) ...... passim

In re DoubleClick Inc. Privacy Litig., 154 F. Supp. 2d 497 (S.D.N.Y. 2001)...... 8

Edelman v. Starwood Capital Grp., LLC, No. 0601077, 2008 WL 2713489 (Sup. Ct. June 27, 2008) ...... 17

Flo & Eddie, Inc. v. Sirius XM Radio, Inc., et al., No. 1:13-cv-23182 (KMM) (S.D. Fla. Sept. 3, 2013) ...... 6

Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. BC 517032 (Cal. Super. Ct. L.A. Cnty. Aug. 1, 2013) ...... 6

Gaughan v. Nelson, No. 94 CIV. 3859(JFK), 1997 WL 80549 (S.D.N.Y. Feb. 26, 1997) ...... 8

Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 4 of 25

TABLE OF AUTHORITIES (continued)

PAGE(S)

Hill v. Opus Corp., 841 F. Supp. 2d 1070 (C.D. Cal. 2011) ...... 7, 8

ITC Ltd. v. Punchgini, Inc., 9 N.Y.3d 467, 880 N.E.2d 852 (2007) ...... 16

Metro. Opera Ass’n v Wagner-Nichols Recorder Corp., 101 N.Y.S.2d 483 (Sup. Ct. 1950), aff’d, 107 N.Y.S.2d 795 (App. Div. 1951) (per curiam) ...... 13, 15

Parker v. Time Warner Entm't Co., 98 CV 4265 (ERK), 1999 WL 1132463 (E.D.N.Y. Nov. 8, 1999) ...... 8

Roy Export Co. v. Columbia Broad. Sys., Inc., 672 F.2d 1095 (2d Cir. 1982)...... 16

Schuloff v. Queens Coll. Found., Inc., 994 F. Supp. 425 (E.D.N.Y. 1998), aff’d, 165 F.3d 183 (2d Cir. 1999) ...... 8

Tarcher v. Penguin Putnam, Inc., No. 01 CIV 6754 DLC, 2001 WL 1646453 (S.D.N.Y. Dec. 20, 2001) ...... 8

Yantha v. Omni Childhood Ctr., Inc., 13-CV-1948 ARR JMA, 2013 WL 5327516 (E.D.N.Y. Sept. 20, 2013) ...... 15, 18, 19

Zinter Handling, Inc. v. Gen. Elec. Co., 956 N.Y.S.2d 626 (App. Div. 2012) ...... 17

Statutes

17 U.S.C. § 102 ...... 4

17 U.S.C. § 106 ...... 4, 5, 9, 11

17 U.S.C. § 114 ...... 5, 9

17 U.S.C. § 301 ...... 4, 5

Act of Jan. 6, 1897, 29 Stat. 481 ...... 4

Pub. L. No. 104-39, 109 Stat. 336 (1995) ...... 5, 11

Pub. L. No. 92-140, 85 Stat. 391 (1971) ...... 4, 9

iii

Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 5 of 25

TABLE OF AUTHORITIES (continued)

PAGE(S)

Other Authorities

117 Cong. Rec. 2002 (Feb. 8, 1971) ...... 9

141 Cong. Rec. S945-02 (Jan. 13, 1995) ...... 12

Authorizing A Composer’s Royalty in Revenues from Coin-operated Machines and to Establish a Right of Copyright in Artistic Interpretations: Hearings Before Subcomm. on Patents, Trade-marks, and Copyrights of the Comm. on the Judiciary on H.R. 1269, H.R. 1207, and H.R. 2570, 80th Cong., 1st Sess. 6 (Comm. Print 1947) ...... 10

Economic Conditions in the Performing Arts: Hearings Before the Select Subcomm. on Ed. of the Comm. on Ed. and Labor, 87th Cong., 1st 2d Sess. 64-65 (Comm. Print 1962) ...... 10, 11

Fed. R. Civ. P. 12 ...... 1, 8

Fed. R. Civ. P. 56 ...... 8

H.R. Rep. No. 92-487 (1971) ...... 9

H.R. Rep. No. 104-274 (1995) ...... 5, 10

Revision of Copyright Laws: Hearings Before the Comm. on Patents, 74th Cong., 2d Sess. 622 (Comm. Print 1936) ...... 10

S. Rep. No. 92-72 (1971) ...... 9

Second Supplementary Register’s Report on the General Revision of the U.S. Copyright Law (1975) ...... 11

Statement on S. 227 of ASCAP (Mar. 9, 1995), 1995 WL 552160 (Westlaw) ...... 12

Supplementary Register’s Report on the General Revision of the U.S. Copyright Law, 89th Cong., 1st Sess. (Comm. Print 1965) ...... 11

Testimony of Jason S. Berman Chairman and CEO of RIAA Before the Judiciary Subcomm. on Counts & Intellectual Property: Hearing on H.R. 1506, (June 21, 1995) 1995 WL 371088 (Westlaw) ...... 11

Testimony of the NAB Before the House Judiciary Comm. Subcomm. on Courts & Intellectual Property on H.R. 1506 (June 21, 1995), 1995 WL 371107 (Westlaw) ...... 11, 12

Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 6 of 25

Defendant Sirius XM Radio Inc. (“Sirius XM”) respectfully submits this memorandum in support of its Partial Motion to Dismiss the Complaint of Flo & Eddie, Inc. (“Plaintiff”) under

Rule 12(b)(6) of the Federal Rules of Civil Procedure.

PRELIMINARY STATEMENT

By this action, Plaintiff, the owner of sound recordings made nearly fifty years ago and publicly performed widely ever since by myriad broadcast and other outlets, asks the Court to radically transform the scope of protection accorded to sound recordings under New York common law. Plaintiff asks the Court to recognize a right of public performance for sound recordings under New York common law in the absence of any supporting precedent—indeed, in the face of the New York Court of Appeals’ definitive statements of the elements of common law copyright infringement and unfair competition causes of action in New York, which make no mention of any such right. See Capitol Records, Inc. v. Naxos of America, Inc., 4 N.Y.3d

540, 830 N.E.2d 250 (2005). The result Plaintiff seeks would dramatically expand New York law and unravel a century of contrary understandings between the music and broadcasting industries.

Plaintiff alleges that it has owned some 100 master recordings of songs by the rock group

The Turtles since 1971. Compl. ¶ 2. It concedes that none of these sound recordings is entitled to protection under federal copyright law, as the Copyright Act only affords protection to sound recordings made on or after February 15, 1972, and each of the sound recordings at issue here was made before that date. Id. Deliberately left without rights under federal law, Plaintiff asserts that Sirius XM’s broadcasts of sound recordings created before February 15, 1972 (“Pre-

1972 Recordings”) infringe a purported performance right under New York common law and alleges that the performances at issue support a recovery of more than $100 million in damages supposedly sustained by Plaintiff and members of a putative class of similarly situated owners of

Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 7 of 25

Pre-1972 Recordings. Id. ¶¶ 25, 26. Underscoring the lack of legal foundation for Plaintiff’s performance right claim, the Complaint leaves unanswered why, if a state-law performance right in Pre-1972 Recordings in fact exists, Plaintiff waited more than four decades to assert it, let alone why Plaintiff has asserted this supposed right against just one broadcaster out of many thousands of music users. Nothing about Sirius XM’s scale of operations or its ability to deliver digital-quality music and other offerings to subscribers nationwide suffices to fill the legal vacuum in which Plaintiff’s performance right-based claims were fashioned.

As we demonstrate herein, New York common law has afforded relief to owners of Pre-

1972 Recordings solely to combat copying and distribution of sound recordings by record pirates or other commercial competitors. It has never provided a means for record companies to collect enormous sums of money from broadcasters or other music users arising out of performances of

Pre-1972 Recordings. A determination by this Court that New York law provides a performance right in such older recordings would immediately turn every radio and television broadcaster, webcaster, nightclub, retail establishment, fitness center, and the like that performs such recordings within the State of New York into a serial copyright infringer. The Court should reject Plaintiff’s invitation to disrupt industry practices that have prevailed over a century and informed countless transactions involving sound recordings during that time.

While the Complaint contends that the claimed injury to Plaintiff and the putative class derives from multiple asserted unauthorized acts on the part of Sirius XM—to wit, the

“unauthorized reproduction, performance, distribution, or other exploitation” of Pre-1972

Recordings (id. ¶ 1)—it is unquestionably the asserted performance right that is central to this action. See id. ¶ 2 (adverting to Sirius XM’s performances of Turtles recordings “every hour of every day” to subscribers in New York); id. ¶ 3 (describing the various platforms by which Sirius

2 Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 8 of 25

XM programming allegedly is transmitted). Sirius XM therefore brings this motion for partial dismissal of the Complaint at the threshold of this action because there is no performance right for sound recordings under New York common law. A ruling in Sirius XM’s favor would materially narrow this dispute, resulting in more efficient litigation of the case and conservation of judicial resources, impacting, among other matters, the propriety of class treatment, the identity of prospective class members should class treatment be determined appropriate, as well as the scope of fact and putative damages discovery more generally. What would remain is the balance of Plaintiff’s claims premised on alleged reproductions made by Sirius XM. Sirius XM intends to seek disposition of that part of Plaintiff’s claims on a motion for summary judgment on the basis that Sirius XM only makes non-actionable server copies of sound recordings in aid of its broadcast transmissions (and not copies for sale or distribution via download as Plaintiff alleges), but recognizes that limited discovery must first be completed before it addresses those claims.

BACKGROUND

Terminology and Statutory Background

Plaintiff alleges in the preamble to the Complaint that it owns “sound recordings of musical performances that initially were ‘fixed’ (i.e., recorded) prior to February 15, 1972,” and later alleges that it engages in the business of licensing, inter alia, the “performance of its Pre-

1972 Recordings.” Id. ¶ 5. Although the Complaint asserts claims only under New York common law, the allegations of the Complaint as well as the arguments made below addressing those allegations are best understood in relation to certain definitions and rights found in the federal Copyright Act, which we briefly summarize here.

The Copyright Act recognizes two separate copyrights associated with recorded music— one copyright in the music and lyrics (together, a “musical composition”) and another in a

3 Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 9 of 25

recorded rendition of that song, e.g., when it is recorded by a particular singing group or orchestra (a “sound recording”). See 17 U.S.C. § 102(a)(2), (7). While musical compositions have enjoyed copyright protection since 1897, sound recordings—the category of works at issue in this case—were not covered by the federal Copyright Act until February 15, 1972, the effective date of the Sound Recording Act of 1971. See Act of Jan. 6, 1897, 29 Stat. 481; Pub. L.

No. 92-140, 85 Stat. 391 (1971) (“Sound Recording Act”). The Sound Recording Act afforded only prospective protection—only recordings created on or after the effective date would be protected under federal law—and limited that protection to the right “[t]o reproduce and distribute” “tangible” copies of sounds recordings. Sound Recording Act, 85 Stat. 391; see also

Naxos, 4 N.Y.3d at 555-56, 830 N.E.2d at 260.

The upshot of the Sound Recording Act was twofold. First, Pre-72 Recordings like those at issue in this case remained subject to state law and whatever protections such law did (or did not) provide. See Naxos, 4 N.Y.3d at 555-56, 830 N.E.2d at 260; see also 17 U.S.C. § 301(c)

(preserving unspecified state law remedies for Pre-1972 Recordings). Second, even as to those post-72 recordings granted federal copyright protection for the first time, the copyright owners

(usually record companies) received no right of public performance, and therefore “no right to extract licensing fees from radio stations and other broadcasters of recorded music.” Arista

Records, LLC v. Launch Media, Inc., 578 F.3d 148, 152 (2d Cir. 2009). Congress thus put sound recordings on a distinctly different footing than musical compositions, which had long enjoyed a public performance right. See 17 U.S.C. § 106(4); Broad. Music, Inc. v. Columbia Broad. Sys.,

Inc., 441 U.S. 4 (1979) (“Since 1897, the copyright laws have vested in the owner of a copyrighted musical composition the exclusive right to perform the work publicly for profit. . .”)

(citing Act of Jan. 6, 1897, 29 Stat. 481); Arista Records v. Launch Media, 578 F.3d at 152

4 Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 10 of 25

(“Notably, unlike the copyright of musical works, the sound recording copyright created by the

[Sound Recording Act] did not include a right of performance.”).

Finally, effective on February 1, 1996, the Digital Performance Right in Sound

Recordings Act of 1995 granted owners of sound recordings created on or after February 15,

1972 the right “to perform the copyrighted work publicly by means of a digital audio transmission.” Pub. L. No. 104-39 § 2(3), 109 Stat. 336 (1995) (codified at 17 U.S.C. §§ 106(6),

114); see also Arista Records v. Launch Media, 578 F.3d at 154 (the Act gave “sound recording copyright holders an exclusive but ‘narrow’ right to perform—play or broadcast—sound recordings via a digital audio transmission”) (citing H.R. Rep. No. 104-274, at 12, 13-14 (1995)).

Pursuant to section 106(6), Sirius XM is required to pay royalties for its digital audio transmissions of copyrighted sound recordings protected by federal law. Because Congress has never afforded copyright protection to Pre-72 Recordings, they remain protected, if at all, under state law.

The Complaint

Plaintiff’s principals have been performing together as The Turtles since 1965. Compl. ¶

2. Plaintiff has owned the entire catalog of 100 master recordings made by The Turtles since approximately 1971. Id. Each of these master recordings was made prior to February 15, 1972, and therefore each falls outside of the scope of federal copyright protection. Id.; 17 U.S.C. §

301(c). While the Complaint includes allegations that Sirius XM has copied Plaintiff’s Pre-1972

Recordings onto central servers and enables subscribers to download streams of sound recordings for later or multiple listenings, Compl. ¶ 3, the focus of the Complaint is that Sirius

XM performs Turtles recordings “every hour of every day” to subscribers in New York. Id. ¶ 2.

Apart from the bare allegation that Plaintiff “is engaged in the business of distributing, selling, and/or licensing the reproduction, distribution, sale, and performance of its Pre-1972

5 Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 11 of 25

Recordings,” id. ¶ 5, and notwithstanding its contention that its recordings include “numerous iconic hits,” id. ¶ 2, Plaintiff fails to allege a single instance in which it has licensed the public performance of its recordings, that any radio broadcaster, webcaster, bar, restaurant, retail establishment or other third party that publicly performs music has ever requested such a license from it, or that any third party has refused to take a license from Plaintiff because of Sirius XM’s use of the recordings.

Plaintiff also alleges that Sirius XM’s “use of the Pre-1972 Recordings is likely to cause confusion, mistake or deception as to the source, sponsorship, affiliation or connection between

Plaintiff and the other Class Members, and Defendants.” Id. ¶ 31. Even though Sirius XM

(together with its predecessors) has been offering its service continuously since 2001, Plaintiff neither identifies a single instance of actual confusion by anyone, nor alleges how Sirius XM’s inclusion of Plaintiff’s songs among the millions of tracks it performs each year by thousands of recording artists could possibly deceive or confuse the public into the mistaken belief that

Plaintiffs are somehow sponsoring or affiliated with Sirius XM.

Related Actions

Plaintiff has filed a nearly identical suit against Sirius XM in California, on behalf of the same putative class, the only meaningful difference being that Plaintiff there seeks relief under

California law rather than New York. Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. BC

517032 (Cal. Super. Ct. L.A. Cnty. Aug. 1, 2013) (subsequently removed to the federal district court for the Central District of California). Shortly after filing this action, Plaintiff filed a third action in Florida, again identical save for pressing claims under Florida law. Flo & Eddie, Inc. v.

Sirius XM Radio, Inc., et al., No. 1:13-cv-23182 (KMM) (S.D. Fla. Sept. 3, 2013). Sirius XM has filed motions to transfer those cases to the Southern District of New York.

6 Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 12 of 25

ARGUMENT

THERE IS NO PUBLIC PERFORMANCE RIGHT FOR PRE-1972 RECORDINGS UNDER NEW YORK COMMON LAW

The Complaint hinges on the mistaken notion that New York common law affords to the owner of a Pre-1972 Recording the exclusive right of public performance. Because no such right exists, no liability arises out of Sirius XM’s broadcasting of Pre-1972 Recordings. This conclusion is compelled by:

(i) Longstanding, consistent customs and practices that for over a century

have recognized the absence of a performance right for sound recordings. This is

reflected in the largely unsuccessful, decades-long efforts of the record industry

(of which Plaintiff and the putative class members are a part) to secure a first-ever

performance right for sound recordings in any venue, which yielded in 1995 only

the limited grant under federal copyright law of such a right, confined to digital

audio transmissions of post-1972 recordings (see Point A infra). This legislative

history confirms the utter absence of pre-existing New York (or any other state)

law conferring upon sound recording owners the right to license public

performances of their sound recordings of any vintage.

(ii) The authoritative construction given to New York’s common law of

and lower court decisions interpreting these bodies of New York common law

(see Points B and C infra).

Those portions of the Complaint premised on a public performance right for Pre-1972

Recordings fail to state a claim upon which relief may be granted, and partial dismissal of the

Complaint is warranted. See, e.g., Hill v. Opus Corp., 841 F. Supp. 2d 1070, 1082 (C.D. Cal.

7 Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 13 of 25

2011) (granting motion to dismiss parts of plaintiff’s claims); Gaughan v. Nelson, No. 94 CIV.

3859(JFK), 1997 WL 80549, at *6 (S.D.N.Y. Feb. 26, 1997) (granting motion to dismiss part of claim); Tarcher v. Penguin Putnam, Inc., No. 01 CIV 6754 DLC, 2001 WL 1646453, at *3

(S.D.N.Y. Dec. 20, 2001) (denying plaintiff’s motion for reconsideration of the court’s partial dismissal of breach of contract claim). In the alternative, pursuant to Rules 12(d) and 56(a) of the Federal Rules of Civil Procedure, the Court could convert this motion to a partial motion for summary judgment addressed to that part of each claim premised on an exclusive right of public performance.

A. The History of Failed Efforts by the Recording Industry To Obtain a Right of Public Performance for Sound Recordings

For nearly a century, the recording industry tried, and failed, to obtain a public performance right for sound recordings. The legislative history of those efforts to amend the

Copyright Act to provide this sought-after right reflects the widespread and uniform understanding, shared by Congress, the United States Copyright Office, the recording industry, and broadcasters alike, as to its historic absence under state law, whether in New York or elsewhere. The Court may consider such legislative history on a motion to dismiss for failure to state a claim. See, e.g., In re DoubleClick Inc. Privacy Litig., 154 F. Supp. 2d 497 (S.D.N.Y.

2001); Schuloff v. Queens Coll. Found., Inc., 994 F. Supp. 425 (E.D.N.Y. 1998), aff’d, 165 F.3d

183 (2d Cir. 1999); Parker v. Time Warner Entm't Co., 98 CV 4265 (ERK), 1999 WL 1132463

(E.D.N.Y. Nov. 8, 1999).

As introduced above, the words “sound recording” appeared for the first time in the

Copyright Act in 1971, when Congress granted a new copyright for sound recordings previously left unprotected under federal law. This new grant of rights was limited: Federal copyright protection was afforded only to recordings created on or after February 15, 1972, and the scope

8 Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 14 of 25

of that protection was circumscribed and much narrower than that already afforded to musical compositions. See Sound Recording Act §§ 1, 3; 17 U.S.C. § 106(4)-(5) (public performance and display rights for musical compositions). The limitations on the scope of the right were intentional. The stated goal of the Sound Recording Act was to address the problem of rampant record piracy, which had “rapid[ly] increase[d]” in preceding years due to technological advances. 117 Cong. Rec. 2002 (Feb. 8, 1971); see also H.R. Rep. No. 92-487, at 2 (1971)

(explaining that the Act was intended to combat the problem of “record pirates” and the

“widespread unauthorized reproduction of phonograph records and tapes”); S. Rep. No. 92-72, at

1 (1971) (the Act’s purpose was “protecting against unauthorized duplication and piracy of sound recordings”); S. Rep. No. 92-72, at 7 (1971) (“Neither the present Federal copyright statute nor the common law or statutes of the various States are adequate [to combat record piracy].”). In furtherance of those goals, owners of qualifying sound recordings were granted exclusive rights of reproduction and commercial distribution of their works. See 17 U.S.C. §

106(1), (3).

At the same time, however, Congress determined not to extend to owners of sound recordings the right to prevent others from publicly performing those recordings without license authority. See Sound Recording Act §§ 1(a), 3; 17 U.S.C. § 114(a) (stating that sound recording rights “do not include any right of performance under section 106(4)”); see also H.R. Rep. No.

92-487, at 14 (1971) (“[T]he exclusive right accorded by this bill does not extend to the reproduction of the sounds themselves, as, for example, by playing a sound recording over the radio.”). The record industry’s advocacy for a performance right was viewed by Congress as an unnecessary augmentation of the rights needed to accomplish the main goal of the legislation.

See H.R. Rep. No. 104-274, at 11 (1995) (explaining that sound recordings “were not granted the

9 Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 15 of 25

rights of public performance, on the presumption that the granted rights would suffice to protect against record piracy”).

The denial of a federal performance right comported with the uniform understanding that, unlike for the rights of reproduction and distribution, where a patchwork of state laws had existed to address record piracy, there was no existing protection for public performance of sound recordings at the state level. Indeed, it was clearly recognized that the prospect of creating a performance right for the first time would have been so novel, and so vehemently opposed by broadcasters (which for the first time ever would have become subject to licensing and performance royalty obligations in respect of sound recordings) that legislation embodying that right could not have passed. As early as the 1930s, during congressional hearings on one such piece of proposed legislation, record producers acknowledged that “the law up to date has not granted” protection against radio stations’ “indiscriminate use of phonograph records.” Revision of Copyright Laws: Hearings Before the Comm. on Patents, 74th Cong., 2d Sess. 622 (Comm.

Print 1936). This lament was repeated during 1947 hearings on similar bills, with record industry representatives noting that “use of records . . . has become standard practice with hundreds of radio stations,” concerning which the performing artist “has no rights at all beyond an original agreement with the manufacturer.” Authorizing A Composer’s Royalty in Revenues from Coin-operated Machines and to Establish a Right of Copyright in Artistic Interpretations:

Hearings Before Subcomm. on Patents, Trade-marks, and Copyrights of the Comm. on the

Judiciary on H.R. 1269, H.R. 1207, and H.R. 2570, 80th Cong., 1st Sess. 6 (Comm. Print 1947).

Similarly, during 1961 and 1962, performing artists complained to Congress as to the absence of royalties “from repeated use” of “[p]laying [records] on radios.” Economic Conditions in the

10 Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 16 of 25

Performing Arts: Hearings Before the Select Subcomm. on Ed. of the Comm. on Ed. and Labor,

87th Cong., 1st & 2d Sess. 64-65 (Comm. Print 1962).

The Register of Copyrights observed in a 1965 report to Congress that the proposed

addition of a public performance right for sound recordings was “explosively controversial” and noted the heavy opposition from music users. Supplementary Register’s Report on the General

Revision of the U.S. Copyright Law, 89th Cong., 1st Sess. 51 (Comm. Print 1965). A decade later, the Register reported to Congress that a sound recording performance right had yet again been removed from the proposed general revision of federal copyright law because of the concern that it would “impose severe financial burdens on broadcasters.” Second Supplementary

Similar recognition of the absence of a sound recording public performance right under state law was expressed during the enactment of the Digital Performance Rights in Sound

Recordings Act of 1995. Pub. L. No. 104-39 § 3(3), 109 Stat. 336 (creating limited right in

“digital audio transmissions” of sound recordings at 17 U.S.C. § 106(6)). In the lead-up to the legislation, the Recording Industry Association of America (“RIAA”) acknowledged that,

“[u]nder existing law, record companies and performers . . . have no rights to authorize or be compensated for the broadcast or other public performance of their works.” Testimony of Jason

S. Berman Chairman and CEO of RIAA Before the Judiciary Subcomm. on Counts & Intellectual

Property: Hearing on H.R. 1506, (June 21, 1995) 1995 WL 371088 (Westlaw) (emphasis added). For its part, the broadcast industry’s major trade association, the National Association of

Broadcasters, testified that “public performance rights” in sound recordings are “essentially alien to ways we have conducted our business for over 60 years” and that their imposition “would be enormously disruptive and harmful.” Testimony of the NAB Before the House Judiciary Comm.

11 Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 17 of 25

Subcomm. on Courts & Intellectual Property on H.R. 1506, § C (June 21, 1995), 1995 WL

371107 (Westlaw). The American Society of Composers, Authors and Publishers (“ASCAP”) echoed this recognition, testifying that “established user industries” such as broadcasters “have fully developed in an economic context which does not call for payment for performing rights in sound recordings [and] should not incur payments for those rights now.” Statement on S. 227 of

ASCAP, § II(C) (Mar. 9, 1995), 1995 WL 552160 (Westlaw) (emphasis added). The Senate co- sponsors of the legislation were in accord. See 141 Cong. Rec. S945-02 at S949 (Jan. 13, 1995)

(statement of Sen. Feinstein) (noting that performers and record companies still “ha[d] no legal right to control or to receive compensation for [a] public performance of their work[s]”); id. at

S947 (statement of Sen. Hatch).

B. New York’s Cause of Action for Common Law Copyright Infringement Does Not Cover Public Performances of Sound Recordings

There is not now, and there never has been, any public performance right for sound recordings under New York law. No New York court has ever held that unlicensed public performances of Pre-1972 Recordings constitute copyright infringement. Nothing in the history or controlling body of New York law in any way cuts against the common understanding that no such performance right exists. To the contrary, the only common law copyright claims upheld by New York courts have involved defendants—most often record pirates or digital file-sharing sites trafficking in pirated song files and, at least, competitors for sale of records—which made and distributed copies of sound recordings owned or licensed by the plaintiffs. See, e.g., Capitol

Records, Inc. v. Mercury Records Corp., 221 F.2d 657 (2d Cir. 1955); Arista Records LLC v.

Lime Grp. LLC, 784 F. Supp. 2d 398 (S.D.N.Y. 2011); Capitol Records, Inc. v. Greatest

Records, Inc., 252 N.Y.S.2d 553 (Sup. Ct. 1964).

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New York’s tort of copyright infringement is thus directed at unauthorized reproduction and not at public performance. This recognition is confirmed by the New York Court of

Appeals’ 2005 opinion in Naxos, a case involving a record company defendant which restored and sold copies of certain recordings made in the 1930s. Capitol Records sued Naxos in federal court claiming that Capitol alone owned the exclusive rights to make and distribute the recordings in New York and elsewhere in the U.S. The Second Circuit certified several questions to the New York Court of Appeals, including whether “a cause of action for common law copyright infringement include[s] some or all of the elements of unfair competition?” 4

N.Y.3d at 546, 830 N.E.2d at 254. To answer the questions, the Court of Appeals first engaged in a comprehensive and scholarly analysis of Anglo-American copyright history dating to the

15th century, culminating in an exhaustive review of the protections afforded to sound recordings in New York over the past 100 years. 4 N.Y.3d at 546-62, 830 N.E.2d at 254-65.

The court also examined New York sound recording cases asserting claims of unfair competition rather than common law copyright (which was commonly understood to expire upon publication and was thus not typically available as a cause of action for sound recordings sold to the public).

See, e.g., Metro. Opera Ass’n v Wagner-Nichols Recorder Corp., 101 N.Y.S.2d 483, 492 (Sup.

Ct. 1950), aff’d, 107 N.Y.S.2d 795 (App. Div. 1951) (per curiam) (finding that defendants who made and sold recordings of Met performances engaged in “piratical conduct” that injured the

Opera’s own sale of records). The court held that a claim for common law copyright infringement under New York law contains the following elements: “(1) the existence of a valid copyright; and (2) unauthorized reproduction of the work protected by copyright.” 4 N.Y.3d at

550, 563, 830 N.E.2d at 257, 266 (emphasis added) (citing, inter alia, New York’s original

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The court made no mention of a right of public performance.

Thus, as defined by the New York Court of Appeals following its review of hundreds of years of history, a New York common law copyright claim does not reach unlicensed public performances of Plaintiff’s Pre-1972 Recordings. Although Plaintiff’s Complaint begins with the bald assertion that New York “common law” protects its recordings from unauthorized

“performance,” Plaintiff acknowledges just one sentence later that a common law copyright infringement claim in New York consists of the two elements identified in Naxos: “(1) the existence of a valid copyright; and (2) unauthorized reproduction of the work protected by copyright.” Compl. ¶ 1 (emphasis added). The conclusion is inescapable: to the extent

Plaintiff’s common law copyright claim is predicated on Sirius XM’s public performances of its recordings in New York, it should be dismissed.

C. Plaintiff Does Not State a Claim for Unfair Competition By Alleging That Sirius XM Publicly Performs Its Sound Recordings Without Permission

Plaintiff’s unfair competition claim, to the extent directed at Sirius XM’s broadcasts, fails to state a claim upon which relief may be granted for at least three reasons. First, New York’s tort of unfair competition does not prohibit the unauthorized public performance of a sound recording. Second, Plaintiff does not allege the requisite competition in the marketplace between itself and Sirius XM or any other marketplace activity that could give rise to such a claim. Third,

Plaintiff does not allege any competitive injury, as required to state a claim for unfair competition under New York law.

1. New York’s Cause of Action for Unfair Competition Does Not Cover Public Performances of Sound Recordings

The New York Court of Appeals made clear in Naxos that a claim under New York law for unfair competition with the owner of a sound recording requires “unauthorized copying and

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distribution” of a plaintiff’s work, as well as “competition in the marketplace or similar actions designed for commercial benefit … or deception of the public.” Naxos, 4 N.Y.3d at 563-64, 830

N.E.2d at 266 (citations omitted); see also Compl. ¶ 1 (acknowledging that unauthorized reproduction is an element of a claim for unfair competition under New York law). Consistent with this holding, the cause of action has been applied in the context of record piracy or its digital file-sharing equivalent. See, e.g., Arista Records LLC v. Lime Grp. LLC, 784 F. Supp. 2d at 437; Apple Corps Ltd. v. The Adirondack Grp., 476 N.Y.S.2d 716, 719 (Sup. Ct. 1983);

Capitol Records v. Greatest Records, 252 N.Y.S.2d 553; Metro. Opera Ass’n, 101 N.Y.S.2d 483.

No New York case has ever found the unlicensed public performance of sound recordings to be unfair competition. To the extent that Plaintiff’s claim for unfair competition is based on public performance, rather than unauthorized reproduction, see Compl. ¶¶ 1, 2, 16(C), it should be dismissed.

2. Plaintiff Has Failed To Plead Competition Between It and Sirius XM as Needed To State a Common Law Unfair Competition Claim

The New York Court of Appeals has made clear that a claim for unfair competition under

New York law requires “competition in the marketplace or similar actions designed for commercial benefit … or deception of the public.” Naxos, 4 N.Y.3d at 563-64, 830 N.E.2d at

266 (citations omitted). This requirement was recently discussed at length in Yantha v. Omni

Childhood Ctr., Inc., 13-CV-1948 ARR JMA, 2013 WL 5327516 (E.D.N.Y. Sept. 20, 2013).

There, the district court dismissed the plaintiff’s unfair competition claim for failing to adequately allege competition between the parties, explaining that unfair competition does not simply mean that the defendant benefits by getting something without paying, but that it does so to gain an unfair competitive advantage over the plaintiff. Id. at *7 (noting lack of allegation of defendant “obtaining business that should rightfully be plaintiff’s or in any other way usurping

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her commercial advantage”); see also ITC Ltd. v. Punchgini, Inc., 9 N.Y.3d 467, 478-79, 880

N.E.2d 852, 859 (2007) (“[M]isappropriation theory . . . prohibits a defendant from using a plaintiff’s property right or commercial advantage . . . to compete unfairly against the plaintiff in

New York.” (emphasis added)); Roy Export Co. v. Columbia Broad. Sys., Inc., 672 F.2d 1095,

1105 (2d Cir. 1982) (“An unfair competition claim involving misappropriation usually concerns the taking and use of the plaintiff’s property to compete against the plaintiff’s own use of the same property.” (emphasis added)).

Plaintiff’s allegations on this element of the claim do not come close to satisfying the pleading standards established by the Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662 (2009).

There, the Supreme Court explained:

Id. at 678-79 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-57 (2007)). Thus,

“[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements,” are insufficient and courts “‘are not bound to accept as true a legal conclusion couched as a factual allegation.’” Id. at 678 (quoting Twombly, 550 U.S. at 555). The

Complaint contains only the conclusory statement that Sirius XM “unfairly and directly compet[es]” with Plaintiff and other members of the putative class, Compl. ¶ 30, without a single factual allegation to support this “threadbare recital of the elements of [the] cause of action.” Id.

The Complaint does not, for example, allege that Sirius XM competes with the Plaintiff as a creator, seller, or licensor of sound recordings, nor does it allege that Plaintiff offers a satellite radio broadcast service (or any other broadcast service) in competition with Sirius XM. The

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Complaint is devoid of even any allegations that Plaintiff has ever licensed a competitor of Sirius

XM to make public performances of Pre-1972 Recordings, or that Sirius XM has paid another record company (that is, one of Plaintiff’s competitors) for the right to publicly perform its Pre-

1972 Recordings. Although each of the 100 works at issue was recorded more than 40 years ago, Plaintiff does not point to a single broadcaster, webcaster, bar, restaurant, retail establishment or other third party that has ever taken a license from it for the right to perform any of its “numerous iconic hits.” These shortcomings are fatal to the pleading. See, e.g., Edelman v. Starwood Capital Grp., LLC, No. 0601077, 2008 WL 2713489 (Sup. Ct. June 27, 2008)

(granting motion to dismiss because unfair competition “requires competition in the marketplace”); Zinter Handling, Inc. v. Gen. Elec. Co., 956 N.Y.S.2d 626, 630 n.6 (App. Div.

2012) (dismissing claim because “Plaintiff failed to plead . . . that it was in competition with GE for commercial benefit” (citing Edelman v. Starwood Capital Grp., LLC, 892 N.Y.S.2d 37, 39

(App. Div. 2009)).

Plaintiff fares no better by alleging that Sirius XM’s “unauthorized use of the Pre-1972

Recordings is likely to cause confusion, mistake or deception as to the source, sponsorship, affiliation or connection between Plaintiff and the other Class Members, and Defendants.”

Compl. ¶ 31. As Iqbal makes clear, a court is “not bound to accept as true a legal conclusion couched as a factual allegation.” 556 U.S. at 678. Plaintiff does not allege any facts to support the legal conclusion concerning confusion it hopes this Court will reach. Plaintiff does not allege a single instance of actual confusion, even though it alleges that Sirius XM has been playing its sound recordings “every hour of every day.” Compl. ¶ 2. Moreover, there is no factual allegation that even attempts to explain how anything Sirius XM does might cause confusion or deception as to an affiliation between Sirius XM and Plaintiff and the owners of other Pre-1972

17 Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 23 of 25

Recordings broadcast on the Sirius XM service. The Complaint simply gives no basis on which this Court could credit Plaintiff’s naked assertion about a purported likelihood of confusion as to source, sponsorship or affiliation.

Plaintiff’s unfair competition claim with respect to Sirius XM’s performances boils down to a claim that Sirius XM is broadcasting its sound recordings without paying for them. But this contention is insufficient to state a claim for unfair competition under New York law.

3. Plaintiff Has Failed To Plead a Competitive Injury Adequate To Support a Common Law Unfair Competition Claim

Plaintiff’s Complaint also fails to “allege a commercial or competitive injury cognizable under New York law.” Yantha, 2013 WL 5327516, at *6 (granting motion to dismiss). This deficiency is also fatal. In Yantha, the court probed at length the requirement to plead

“competitive injury”:

The complaint is deficient . . . in stating a competitive injury as a result of any unfair competition by defendants. Although the law of unfair competition has been broadly construed to provide protection from any form of commercial immorality, the tort is not all-encompassing. Not every act, even if taken in bad faith, constitutes unfair competition. Instead, to state a claim for unfair competition, a plaintiff must allege either a direct financial loss, lost dealings, or lost profits resulting from the anticompetitive acts at issue, or, at the very least, that defendant diverted plaintiff's customers and business to defendant. . . . Plaintiff . . . cannot claim that she lost profits to which she was entitled, or that defendants diverted her business, or that defendants otherwise deprived her of proceeds she would have been able to reap but for defendants’ unfair competition. Consequently, plaintiff cannot allege a direct competitive injury.

Id. at *7 (internal quotation marks and citations omitted).

Similarly, in Agee v. Paramount Commc’ns, Inc., 59 F.3d 317 (2d Cir. 1995), the defendants, a television network and the local stations through which it distributed programming, synchronized portions of sound recordings to video without a license to create a feature for the

Hard Copy program. The plaintiff, who owned the copyrights in the sound recordings, alleged unfair competition under New York law. The court dismissed the unfair competition claim as

18 Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 24 of 25

“baseless” because the plaintiff “failed to plead facts indicating that his record sales or licensing revenues have in any way been affected by Paramount’s use of the recording.” Id. at 327.

Consequently, “[t]here is no reasonable ground for believing that [plaintiff] has suffered economic losses as a result of appellees’ actions, or that consumers think less of the recording.”

Id.

The Complaint here fails for similar reasons. Plaintiff alleges that Sirius XM has

“impaired [its] ability to sell, lawfully exploit, or otherwise control [its] Pre-1972 Recordings,”

Compl. ¶¶ 4, 25, and done “enormous and irreparable harm,” id. ¶ 4. The Complaint also alleges that Plaintiff and other putative class members have been “damaged” in an amount exceeding

$100 million, id. ¶¶ 26, 33, and suffered “great and irreparable injury,” id. ¶¶ 28, 35. But these conclusory and unsupported allegations fail to describe any actual financial losses or lost dealings Plaintiff has suffered due to Sirius XM’s broadcasting of the Pre-1972 Recordings. Just as in Agee, Plaintiff has “failed to plead facts indicating that [its] record sales or licensing revenues have in any way been affected by [Sirius XM’s] use of the recordings – or that Plaintiff

“has suffered economic losses . . . or that consumers think less of the recording[s].” 59 F.3d at

327. And just like the plaintiff in Yantha, Flo & Eddie cannot claim that Sirius XM has

“diverted [its] business” or “otherwise deprived [it] of proceeds [it] would have been able to reap but for defendants’ unfair competition.” 2013 WL 5327516, at *7. Again, Plaintiff’s claimed injury is merely that Sirius XM (like every other broadcaster) does not pay license fees to perform Plaintiff’s recordings. This is not legally cognizable injury under New York unfair competition law. There were no “proceeds” the company failed to “reap” on account of Sirius

XM’s activities; “but for” Sirius XM’s unlicensed use, Flo & Eddie would have been in the exact same position they find themselves now.

19 Case 1:13-cv-05784-CM Document 16 Filed 10/28/13 Page 25 of 25

CONCLUSION

For the foregoing reasons, the Complaint should be dismissed with prejudice to the extent its claims are premised on a common law public performance right for Pre-1972 Recordings under New York law.

Dated: New York, New York Respectfully submitted, October 28, 2013 By: __/s/ R. Bruce Rich______R. Bruce Rich Benjamin E. Marks Todd Larson WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Tel: (212) 310-8000 Fax: (212) 310-8007 [email protected] [email protected] [email protected]

and

Michael S. Oberman KRAMER LEVIN NAFTALIS & FRANKEL LLP 1177 Avenue of the Americas New York, New York 10036 Tel: (212) 715-9294 Fax: (212) 715-8294 [email protected]

Attorneys for Defendant Sirius XM Radio Inc.

20 Case 1:13-cv-05784-CM Document 15 Filed 10/28/13 Page 1 of 3

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

FLO & EDDIE, INC., individually and on behalf of all others similarly situated,

Plaintiff, CIVIL ACTION No. v. 13-CV-5784 (CM)

SIRIUS XM RADIO INC., and DOES 1 through 10,

Defendants.

NOTICE OF SIRIUS XM’S PARTIAL MOTION TO DISMISS PLAINTIFF’S COMPLAINT

PLEASE TAKE NOTICE that Defendant Sirius XM Radio Inc. (“Sirius XM”) hereby

moves this Court, before the Honorable Colleen McMahon, United States District Judge, United

States District Court for the Southern District of New York, Daniel Patrick Moynihan United

States Courthouse, 500 Pearl Street, Room 14C, New York, New York, for an order pursuant to

Rule 12(b)(6) of the Federal Rules of Civil Procedure to partially dismiss Plaintiff Flo & Eddie,

Inc.’s Complaint with prejudice. In support of this motion, Sirius XM relies upon and expressly

adopts and incorporates by reference the contemporaneously filed Memorandum of Law in

Support of Sirius XM’s Partial Motion to Dismiss Plaintiff’s Complaint.

Case 1:13-cv-05784-CM Document 15 Filed 10/28/13 Page 2 of 3

Dated: New York, New York October 28, 2013 By: /s/ R. Bruce Rich R. Bruce Rich Benjamin E. Marks Todd Larson

WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Tel: (212) 310-8000 Fax: (212) 310-8007 [email protected] [email protected] [email protected]

and

Michael S. Oberman KRAMER LEVIN NAFTALIS & FRANKEL LLP 1177 Avenue of the Americas New York, New York 10036 Tel: (212) 715-9294 Fax: (212) 715-8294 [email protected]

Attorneys for Defendant Sirius XM Radio Inc.

TO: Henry Gradstein MaryAnn R. Marzano Robert E. Allen GRADSTEIN & MARZANO, P.C. 6310 San Vicente Blvd., Suite 510 Los Angeles, CA 90048 Tel: (323) 776-3100 Fax: (323) 931-4990 and

Evan S. Cohen 1800 South Beverly Drive, Suite 510 Los Angeles, CA 90035 Tel: (310) 556-9800

Case 1:13-cv-05784-CM Document 15 Filed 10/28/13 Page 3 of 3

Fax: (310) 556-9801 and

Kathryn L. Crawford Rajika L. Shah Kristen L. Nelson SCHWARCZ, RIMBERG, BOYD & RADER, LLP 6310 San Vicente Blvd., Suite 360 Los Angeles, CA 90048 Tel: (323) 302-9488 Fax: (323) 931-4990

Attorneys for Plaintiff Flo & Eddie, Inc.

Case 1:13-cv-05784-CM Document 31 Filed 11/12/13 Page 1 of 2

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

FLO & EDDIE, INC., a California corporation, individually and on behalf of all Civil Action No.: 13-CV-5784(CM)(HP) others similarly situated,

Plaintiff, PLAINTIFF’S OPPOSITION TO DEFENDANT SIRIUS XM RADIO, v. INC.’S PARTIAL MOTION TO DISMISS PLAINTIFF’S COMPLAINT SIRIUS XM RADIO, INC., a Delaware corporation; and DOES 1 through 10,

Defendants.

Pending before the Court is the motion of defendant SIRIUS XM Radio, Inc. (“Defendant”), made pursuant to Fed. R. Civ. P. 12(b)(6), to dismiss partially Plaintiff FLO & EDDIE, INC.’s (“Plaintiff” or “Flo & Eddie”) Complaint of August 16, 2013. Plaintiff shall be filing an amended complaint as of right pursuant to Fed. R. Civ. P. 15(a)(1)(B).1 The filing of the amended complaint supercedes the original and renders it a nullity. Dluhos v. Floating & Abandoned Vessel, 162 F.3d 63, 68 (2d Cir. 1998) (“[I]t is well established that an amended complaint ordinarily supersedes the original, and renders it of no legal effect.") (citations omitted). Castro v. Covenant Aviation Sec., LLC, 2013 U.S. Dist. LEXIS 102972, at *2 n.2 (S.D.N.Y. July 22, 2013) (Amended Complaint superseded the original and "render[ed] it of no legal effect”); Gonzalez v. Paine, Webber, Jackson & Curtis, Inc., 493 F. Supp. 499, 501 (S.D.N.Y. 1980) (“Since the original complaint has been superseded by the amended complaint, the motion to dismiss the original complaint has been rendered moot”). As a necessary consequence, Defendant’s Partial Motion to Dismiss Plaintiff’s Complaint shall be moot and must be denied upon Plaintiff’s filing of the first amended complaint pursuant to Fed. R. Civ. P.

1 Rule 15(a)(1) was amended in 2009 to allow a plaintiff to amend its complaint “as a matter of course” within 21 days of the service of a motion under Fed. R. Civ. P. 12(b), (e) or (f). Plaintiff intends to file its first amended complaint tomorrow, November 13, 2013, well within the 21-day period for amending its complaint as a matter of course after service of Defendant’s motion on October 28, 2013.

1 Case 1:13-cv-05784-CM Document 31 Filed 11/12/13 Page 2 of 2

15(a)(1)(B). CONCLUSION For the foregoing reasons, Plaintiff respectfully request that the Court deny Defendant’s partial motion to dismiss Plaintiff’s Complaint as moot.

DATED: November 12, 2013

By: /S/ Robert E. Allen HENRY GRADSTEIN (pro hac vice) [email protected] MARYANN R. MARZANO (pro hac vice) [email protected] ROBERT E. ALLEN (pro hac vice) [email protected] GRADSTEIN & MARZANO, P.C. 6310 San Vicente Blvd., Suite 510 Los Angeles, California 90048 T: 323-776-3100 F: 323-931-4990 and EVAN S. COHEN (pro hac vice pending) [email protected] 1180 South Beverly Drive, Suite 510 Los Angeles, California 90035 T: 310-556-9800 F: 310-556-9801 and KATHRYN L. CRAWFORD (KC5593) [email protected] RAJIKA L. SHAH (pro hac vice) [email protected] KRISTEN L. NELSON (pro hac vice) [email protected] SCHWARCZ, RIMBERG, BOYD & RADER, LLP 6310 San Vicente Blvd., Suite 360 Los Angeles, California 90048 T: 323-302-9488 F: 323-931-4990

Attorneys for Plaintiff FLO & EDDIE, INC.

2 Case 1:13-cv-05784-CM Document 32 Filed 11/13/13 Page 1 of 19

HENRY GRADSTEIN (pro hac vice) [email protected] MARYANN R. MARZANO (pro hac vice) [email protected] ROBERT E. ALLEN (pro hac vice [email protected] GRADSTEIN & MARZANO, P.C. 6310 San Vicente Blvd., Suite 510 Los Angeles, California 90048 T: 323-776-3100 F: 323-931-4990 and EVAN S. COHEN (pro hac vice pending) [email protected] 1180 South Beverly Drive, Suite 510 Los Angeles, California 90035 T: 310-556-9800 F: 310-556-9801 and KATHRYN L. CRAWFORD (KC5593) [email protected] RAJIKA L. SHAH (pro hac vice) [email protected] KRISTEN L. NELSON (pro hac vice) [email protected] SCHWARCZ, RIMBERG, BOYD & RADER, LLP 6310 San Vicente Blvd., Suite 360 Los Angeles, California 90048 T: 323-302-9488 F: 323-931-4990

Attorneys for Plaintiff FLO & EDDIE, INC.

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

FLO & EDDIE, INC., a California Civil Action No.: 13-CIV-5784(CM)(HP) corporation, individually and on behalf of all others similarly situated, FIRST AMENDED Plaintiff, CLASS ACTION COMPLAINT

SIRIUS XM RADIO, INC., a Delaware [DEMAND FOR JURY TRIAL] corporation; and DOES 1 through 10,

Defendants.

Case 1:13-cv-05784-CM Document 32 Filed 11/13/13 Page 2 of 19

Plaintiff FLO & EDDIE, INC. (“Plaintiff” or “Flo & Eddie”) files this first amended class action complaint (the “Complaint”) pursuant to Fed. R. Civ. P. 15(a)(1)(B) on behalf of itself and on behalf of all other similarly situated owners of sound recordings of musical performances that initially were “fixed” (i.e., recorded) prior to February 15, 1972 (the “Pre-1972 Recordings”) against Defendants SIRIUS XM RADIO, INC. (“Defendant” or “SiriusXM”) and DOES 1-10, and alleges as follows: NATURE OF THE ACTION 1. New York common law provides protection for Pre-1972 Recordings from unauthorized reproduction, performance, distribution or other exploitation, and provides the owners of Pre-1972 Recordings the right to bring a claim for common law copyright infringement and a separate claim for unfair competition against parties who engage in such unauthorized actions. A common law copyright infringement claim in New York consists of two elements: (1) the existence of a valid copyright; and (2) unauthorized use, reproduction or other exploitation of the work protected by the copyright. In addition to these two elements, a claim for unfair competition in New York requires competition in the marketplace or similar actions designed for commercial benefit or deception of the public. 2. The principals of Flo & Eddie, Mark Volman and Howard Kaylan, have been performing together as The Turtles since 1965 and have recorded numerous iconic hits including “Happy Together,” “It Ain’t Me Babe,” “She’d Rather Be With Me,” “You Baby,” “She’s My

Girl,” “Elenore,” and many others. Since approximately 1971, Flo & Eddie has owned the entire catalog of 100 original master recordings by The Turtles, all of which were recorded prior to February 15, 1972, and which have been and remain popular and valuable, notwithstanding changes in how recordings are made, distributed and performed. Plaintiff’s Pre-1972 Recordings are the product of a significant investment of time, effort, money and creative talent in creating, manufacturing, advertising, promoting, selling, and licensing its recordings. In return, Plaintiff receives revenues, royalties and other compensation from its ongoing licensing and exploitation of these works.

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3. Plaintiff receives payments for, among other uses, the distribution, reproduction and digital public performance of its Pre-72 Recordings, including by offering for sale (directly or though licenses) compact discs and digital music files for download, by licensing them to digital services (including for digital streaming to the public), and licensing them for use in motion pictures, television programs and commercials. The payments that Plaintiff receives are a main source of revenue used to pay Plaintiff’s ongoing investment and expenses, and to compensate its principals, employees and representatives for their talent and work in creating the Pre-72 Recordings and for administering and collecting revenue generated by such works. 4. Digital music streaming is becoming integral to the dissemination of music. As technology changes and greater numbers of people listen to music via digital transmissions in lieu of purchasing music on CDs or digital music files, Plaintiff relies increasingly on revenues from the digital public performance of music, including Pre-72 Recordings. It is extremely important to Plaintiff’s business that those who make a commercial use of Plaintiff’s Pre-72 Recordings obtain licenses and pay Plaintiff for their use of Pre-72 Recordings. 5. Defendant SiriusXM is the sole provider of satellite radio service in the United States, known as “Sirius Satellite Radio,” “XM Satellite Radio” and “SiriusXM Satellite Radio” (individually and collectively, the “Service”). SiriusXM uses satellite technology to transmit the Service to its subscribers. SiriusXM’s channels are beamed from the ground to satellites, which then transmit digital audio files to SiriusXM receivers possessed by its subscribers. Over the past few years, SiriusXM has expanded into Internet-based digital streaming transmissions, increasing the number of its subscribers to over 25 million and earning billions of dollars in revenue. 6. The Service is distributed in New York to its subscribers through (a) satellite digital transmission directly to subscribers via digital radios manufactured or licensed by SiriusXM; (b) satellite digital transmission to subscribers of other services, such as DIRECTV Satellite Television Service and Dish Network Satellite Television Service via digital set top boxes manufactured or licensed by DIRECTV or Dish; and (c) the Internet, by way of (i) digital media

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streaming devices, such as Roku, digital radios and home audio systems, such as Sonos; (ii) its website at www.SiriusXM.com; or (iii) computer, smart phone and other mobile applications for various operating systems, including Apple iOS, Android, Windows, Blackberry and HP webOS. As part of the Service, many subscribers in New York are also able to: (A) download the stream of a selected channel on the Service, allowing later or multiple listenings of the sound recordings previously streamed during the selected time period; (B) download particular sound recordings, allowing later or multiple listenings of such sound recordings; (C) download particular programs incorporating sound recordings as part of the Service’s “On Demand” feature, allowing later or multiple listenings of such sound recordings; and (D) allow subscribers to pause, rewind and replay sound recordings using the Service’s “Replay” feature or its “My SXM” feature. 7. SiriusXM sells the Service to subscribers for $14.49 per month for its “Select” package and $17.99 per month for its “Premier” package. The “Select” package provides over 165 satellite radio channels to its subscribers, including around-the-clock “commercial-free music, sports, talk, and entertainment.” Of the seven categories into which SiriusXM characterizes its channels (for example, “Sports Talk/Play-by-Play,” “News & Issues,” and “Comedy”), by far the largest category is “Commercial-Free Music,” which SiriusXM claims has 72 channels (The second-largest category, “Talk & Entertainment,” has only 22 channels.). 8. The significant value of Pre-72 Recordings to SiriusXM’s business and the popularity of Pre-72 Recordings among its paying subscribers is evidenced by, among other things, its advertising and promotion of the availability of Pre-72 Recordings on the Service. A significant portion of SiriusXM’s channels feature classic recordings, including channels exclusively devoted to continuous public performances of the most popular Pre-72 Recordings by well-known recording artists. 9. SiriusXM uses Plaintiff’s Pre-72 Recordings by distributing, reproducing and then publicly performing them to millions of SiriusXM subscribers. Additionally, SiriusXM has copied Plaintiffs’ Pre-72 Recordings without Plaintiff’s consent. Plaintiff is informed and believes, and on that basis alleges, that SiriusXM has done so, among other ways, by obtaining

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Plaintiff’s recordings and copying them to its servers and to its satellites. SiriusXM then uses those unauthorized copies of Plaintiff’s Pre-72 Recordings to transmit the performances embodied thereon to its subscribers. Plaintiff is informed and believes, and on that basis alleges, that in such way, SiriusXM has distributed, reproduced and publicly performed Plaintiff’s Pre-72 Recordings numerous times throughout the United States, including in the state and county of New York. 10. SiriusXM has never been licensed or authorized to duplicate, distribute, reproduce or publicly perform any of Plaintiff’s Pre-72 Recordings. Although a significant portion of SiriusXM’s $3.4 billion in revenue earned in 2012 is attributable to Pre-72 Recordings, and though SiriusXM capitalizes on its customers’ desire to listen to these recordings, SiriusXM refuses to seek licenses from Plaintiff or pay to Plaintiff any royalties or other compensation. Conversely, SiriusXM pays digital public performance royalties for the performance of post- 1972 sound recordings that are covered by the federal Copyright Act. 11. By its conduct, SiriusXM not only deprives Plaintiff of the revenues to which it and others are entitled, but also places those streaming services that do obtain licenses from, account to, and pay Plaintiff for the performance of Plaintiff’s Pre-72 Recordings in a competitive disadvantage. SiriusXM’s refusal to pay for its continued use of Pre-72 Recordings directly contravenes New York law and policy, which always have provided equal, if not greater, rights to owners of sound recordings than the federal Copyright Act.

12. In 1972, Congress amended the United States Copyright Act to add for the first time “sound recordings” to the list of works protected under federal copyright law. 17 U.S.C. § 102(a)(7) (2013). At the same time, Congress also preserved “any rights or remedies under the common law or statutes of any State” with respect to sound recordings “fixed” before February 15, 1972. 17 U.S.C. § 301(c) (2013). As a result, pre-existing New York protection for Pre-72 Recordings was left untouched and subject to evolution and refinement by the courts. Congress initially limited the federal sound recording copyright to include certain of the exclusive rights conferred on other works – namely, the rights of reproduction, adaptation, and distribution – and

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to exclude the right to publicly perform sound recordings. New York law has never delimited, either explicitly or implicitly, the scope of common law protection of Pre-72 Recordings, and did not exclude the right of public performance from the rights of owners in Pre-72 Recordings. 13. This broad protection afforded to Pre-72 Recordings is consistent with the recognition by New York courts of critical, important public policy interests in providing strong state law protection for sound recordings. These interests include ensuring that record companies receive compensation from their substantial expenditure of effort, skill and money in creating, marketing and exploiting recorded performances, as well as ensuring that the owners of sound recordings possess adequate remedies against those who misappropriate and profit from such performances. New York’s protections for sound recordings thus are complete, providing exclusive ownership and rights in Pre-72 Recordings that are not limited in any way, and that include any conduct by which individuals or entities seek to unfairly compete and profit from the skill and labor of Plaintiff by appropriating and exploiting Pre-72 Recordings for their own benefit, including by unauthorized and unlicensed reproduction and public performance of these recordings. 14. The need for effective state law protection of Pre-72 Recordings is especially great today. Pre-72 Recordings comprise a significant and important share of the overall body of existing musical recordings, and include some of the most popular and valued recordings in history. Many digital radio channels and services are dedicated entirely to the dissemination and performance of Pre-72 Recordings, such as classic rock, jazz, R&B, and classical recordings. The rise of digital media has made the threat to Pre-72 Recordings acute, as virtually anyone with a computer and an Internet connection can copy and then distribute and perform high- quality music instantaneously to millions. As digital technology has improved, the cost of digital services has diminished, and, as a result music consumption habits have changed. Music consumers increasingly obtain and enjoy music via online or satellite “radio” or digital streaming services instead of purchasing CDs or digital music files.

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15. To address the anticipated shift in music consumption habits and the rise of digital radio services and, therefore, the need to provide federal protection for the performance of copyrighted sound recordings, Congress passed the Digital Performance Rights in Sound Recordings Act (“DPRA”), granting owners of post-72 copyrighted sound recordings the right to “perform the copyrighted work publicly by means of a digital audio transmission.” 17 U.S.C. § 106(6) (2013). 16. New York’s protection for Pre-72 Recordings has never been less extensive than federal copyright protection for post-72 recordings. New York had provided common law protection for Pre-72 Recordings without any exclusions and including the right of public performance. Those, like SiriusXM, who build their business and make money from the copying, reproduction and public performance of Pre-72 Recordings must obtain the right under New York law to use them and must compensate their owners. 17. Plaintiff Flo & Eddie brings this class action on its own behalf and on behalf of all other similarly situated owners of Pre-1972 Recordings (the “Class” or “Class Members”) to put an end to SiriusXM’s wholesale infringement and misappropriation of their Pre-1972 Recordings and to obtain damages, including punitive damages, and injunctive relief. Simply stated, SiriusXM has disregarded the Plaintiff’s and other Class Members’ exclusive ownership of their Pre-1972 Recordings in New York, impaired their ability to sell, lawfully exploit, or otherwise control their Pre-1972 Recordings as permitted under New York law and misappropriated same for its own financial gain. SiriusXM’s conduct is causing, and will continue to cause, enormous and irreparable harm to Plaintiff and the other Class Members unless compensatory and punitive damages are awarded against SiriusXM and it is enjoined and restrained from engaging in further infringement and misappropriation of the Pre-1972 Recordings. THE PARTIES, JURISDICTION AND VENUE 18. Plaintiff Flo & Eddie is a corporation duly organized and existing under the laws of California, with its principal place of business in Los Angeles, California. Plaintiff is engaged in the business of distributing, selling, and/or licensing the reproduction, distribution, sale, and

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performance of its Pre-1972 Recordings in phonorecords, in audiovisual works, and for streaming (i.e., performing) and downloading over the Internet. Plaintiff invests substantial money, time, effort, and creative talent in creating, advertising, promoting, selling, and licensing its unique and valuable sound recordings. 19. Plaintiff possesses exclusive ownership rights in The Turtles Pre-1972 Recordings, the titles of which are specified on the schedule attached hereto as Exhibit A and incorporated herein by reference (“Plaintiff’s Recordings”). The United States Congress expressly has recognized that the states provide exclusive protection through various state law doctrines to recordings “fixed” before February 15, 1972, and that the federal Copyright Act does not “annul[] or limit[]those rights until February 15, 2067.” 17 U.S.C. § 301(c). Accordingly, as quoted above, New York law protects the exclusive ownership of Plaintiff and the other Class Members to their Pre-1972 Recordings in New York. 20. Upon information and belief, Defendant SiriusXM is a corporation duly organized and existing under the laws of Delaware, with its principal place of business in New York, New York. The Court has personal jurisdiction over Defendant in that Defendant’s principal place of business is in the County of New York, Defendant is engaged in tortious conduct in New York, and Defendant’s conduct causes injury to Plaintiff and the other Class Members in New York. 21. This court has subject matter jurisdiction over the subject matter of this class action pursuant to 28 U.S.C. § 1332(d). The amount in controversy exceeds Five Million Dollars

($5,000,000), there are more than one thousand (1,000) putative Class Members, and the requisite minimal diversity of citizenship exists because Plaintiff and Defendant are citizens of different States. 22. Venue of this action is proper in this jurisdiction under 28 U.S.C. § 1391(b) in that Defendant maintains its principal offices in the County of New York. 23. The true names and capacities, whether individual, corporate, associate or otherwise, of defendants named herein as Does 1 through 10, inclusive, are unknown to Plaintiff who therefore sues said defendants by such fictitious names (the “Doe Defendants”). Plaintiff

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will amend this Complaint to allege their true names and capacities when such have been ascertained. Upon information and belief, each of the Doe Defendants herein is responsible in some manner for the occurrences herein alleged, and Plaintiff’s injuries and those of the other Class Members as herein alleged were proximately caused by such defendants’ acts or omissions. (All of the Defendants, including the Doe Defendants, collectively are referred to as “Defendants”). CLASS ACTION ALLEGATIONS 24. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil Procedure 23 on behalf of itself and the other Class Members defined as the owners of Pre-1972 Recordings reproduced, performed, distributed or otherwise exploited by Defendants in New York without a license or authorization to do so during the period from August 10, 2009 to the present. Plaintiff reserves the right to modify this definition of the Class after further discovery; the Court may also be requested to utilize and certify subclasses in the interests of ascertainability, manageability, justice and/or judicial economy. 25. This action may be properly brought and maintained as a class action because there is a well-defined community of interest in the litigation and the Class Members are readily and easily ascertainable and identifiable from Defendant SiriusXM’s database files and records. Plaintiff is informed and believes, and on that basis alleges, that Defendants have engaged a third party to supply the metadata, including the metadata relating to Pre-1972 Recordings unlawfully streamed to subscribers in New York, and that such metadata contains the name and location of the owners thereof. The Class members are further ascertainable through methods typical of class action practice and procedure. 26. Plaintiff is informed and believes, and alleges thereon, that the Pre-1972 Recordings infringed and misappropriated in New York by Defendants number in the millions and are owned by many thousands of Class Members. It is therefore impractical to join all of the Class Members as named Plaintiffs. Further, the claims of the Class Members may range from

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smaller sums to larger sums. Accordingly, using the class action mechanism is the most economically feasible means of determining and adjudicating the merits of this litigation. 27. The claims of Plaintiff are typical of the claims of the Class Members, and Plaintiff’s interests are consistent with and not antagonistic to those of the other Class Members it seeks to represent. Plaintiff and the other Class Members have all been subject to infringement and misappropriation of their Pre-1972 Recordings in New York, have sustained actual pecuniary loss and face irreparable harm from Defendants’ continued infringement and misappropriation of their Pre-1972 Recordings. 28. Plaintiff has no interests that are adverse to, or which conflict with, the interests of the other Class Members and is ready and able to fairly and adequately represent and protect the interests of the other Class Members. Plaintiff believes strongly in the protection of artists’ rights in connection with their creative work. Plaintiff has raised viable claims for infringement and unfair competition of the type well established in New York and reasonably expected to be raised by Class Members. Plaintiff will diligently pursue those claims. If necessary, Plaintiff may seek leave of the Court to amend this Complaint to include additional class representatives to represent the Class or additional claims as may be appropriate. Plaintiff is represented by experienced, qualified and competent counsel who are committed to prosecuting this action. 29. Common questions of fact and law exist as to all Class Members that plainly predominate over any questions affecting only individual Class Members. These common legal and factual questions, which do not vary from Class Member to Class Member, and which may be determined without reference to the individual circumstances of any Class Member include, without limitation, the following: (A) Whether Defendant SiriusXM reproduced, performed, distributed or otherwise exploited Pre-1972 Recordings in New York; (B) Whether Defendant SiriusXM’s reproduction, performance, distribution or other exploitation of Pre-1972 Recordings in New York constitutes common law copyright infringement under New York law;

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(C) Whether Defendant SiriusXM’s reproduction, performance, distribution or other exploitation of Pre-1972 Recordings in New York constitutes unfair competition in violation of New York law; (D) The basis on which restitution and/or damages to all injured members of the Class can be computed; (E) Whether Defendant SiriusXM’s violation of New York common law for copyright infringement entitles the Class Members to recover punitive damages; (F) Whether Defendant SiriusXM’s violation of New York common law for copyright infringement is continuing, thereby entitling Class Members to injunctive or other equitable relief; (G) Whether Defendant SiriusXM’s violation of New York’s laws against unfair competition entitles the Class Members to recover punitive damages; and (H) Whether Defendant SiriusXM’s violation of New York’s laws against unfair competition is continuing, thereby entitling Class Members to injunctive or other relief. 30. A class action is superior to all other available methods for the fair and efficient adjudication of this controversy, since individual litigation of the claims of all Class Members is highly impractical. Even if every Class Member could afford to pursue individual litigation, the Court system could not. It would be unduly burdensome to the courts in which individual litigation of numerous cases would proceed. Individualized litigation would also present the potential for varying, inconsistent or contradictory judgments and would magnify the delay and expense to all parties and to the court system resulting from multiple trials of the same factual issues. By contrast, maintenance of this action as a class action, with respect to some or all of the issues presented herein, presents few management difficulties, conserves the resources of the parties and of the court system, and protects the rights of each Class Member. Plaintiff anticipates no difficulty in the management of this action as a class action.

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31. Additionally, the prosecution of separate actions by individual Class Members may create a risk of adjudications with respect to them that would, as a practical matter, be dispositive of the interests of the other Class Members not parties to such adjudications or that would substantially impair or impede the ability of such nonparty Class Members to protect their interests. The prosecution of individual actions by Class Members could establish inconsistent results and incompatible standards of conduct for Defendant SiriusXM. 32. Defendants have engaged in common law copyright infringement and unfair competition, which has affected all of the Class Members such that final and injunctive relief on behalf of the Class as a whole is efficient and appropriate. FIRST CAUSE OF ACTION (Common Law Copyright Infringement) 33. Plaintiff hereby incorporates the allegations set forth in paragraphs 1 through 32, above, as though set forth in full herein. 34. The Pre-1972 Recordings are unique intellectual property subject to common law copyright protection under the law of the State of New York. 35. As the owners of valid common law copyrights or exclusive licensees in and to the Pre-1972 Recordings, Plaintiff and the other Class Members possess the exclusive rights to reproduce, perform, distribute or otherwise exploit the Pre-1972 Recordings, and license, or refrain from licensing, others to do so.

36. Plaintiff and the other Class Members have not authorized or licensed Defendants to reproduce, perform, distribute or otherwise exploit the Pre-1972 Recordings in any manner. 37. The distribution, reproduction, performance or other exploitation by Defendants of unauthorized copies of the Pre-1972 Recordings, including, without limitation, those listed in Exhibit A, constitute infringement of Plaintiff and the Other Class Member’s common law copyrights in such recordings and violation of their exclusive rights therein. The Plaintiff and Class Members have invested substantial time and money in the development of their Pre-1972 Recordings.

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38. The Defendants have infringed the copyrights to the Pre-1972 Recordings at little or no cost and without license or authority. They have copied the Pre-1972 Recordings owned by Plaintiff and the other Class Members, and distributed and publicly perform these recordings in New York for their subscribers. Defendants have disregarded the Plaintiff’s and other Class Members’ copyrights in and exclusive ownership of their Pre-1972 Recordings, impaired their ability to sell, lawfully exploit, or otherwise control their Pre-1972 Recordings, all for their own financial gain. 39. As a direct and proximate consequence of Defendants’ copyright infringement of the Pre-1972 Recordings owned by Plaintiff and the Class Members, Plaintiff and the Class Members have been damaged in an amount that is not as yet fully ascertained but which Plaintiff is informed and believes, and alleges thereon, exceeds $100,000,000, according to proof. 40. Plaintiff is informed and believes, and alleges thereon, that in engaging in the conduct described above, the Defendants acted with oppression, fraud and/or malice. The conduct of the Defendants has been despicable and undertaken in conscious disregard of the Plaintiff’s and each Class Member’s rights. Accordingly, Plaintiff and the Class Members are entitled to an award of punitive damages against Defendants in an amount sufficient to punish and make an example of them according to proof. 41. Defendants’ conduct is causing, and unless enjoined and restrained by this Court, will continue to cause, Plaintiff and each Class Member great and irreparable injury that cannot fully be compensated or measured in money, and for which Plaintiff and each Class Member has no adequate remedy at law. Plaintiff and the other Class Members are entitled to temporary, preliminary and permanent injunctions, prohibiting further violation of Plaintiff’s and Class Members’ rights in and exclusive ownership of their Pre-1972 Recordings in New York. SECOND CAUSE OF ACTION (Unfair Competition) 42. Plaintiff hereby incorporates the allegations set forth in paragraphs 1 through 41, above, as though set forth herein.

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43. Plaintiff’s Pre-1972 Recordings are valuable assets to Plaintiff. Plaintiff is engaged in the selling and licensing of all forms of distribution, reproduction, performance or other exploitation of their Pre-1972 Recordings, including, without limitation, by selling physical compact discs and digital Phonorecord deliveries, licensing distribution and performances via digital streaming transmission and licensing the master use in audio-visual recordings, such as movies and commercials. From inception, such Pre-1972 Recordings have generated for Plaintiff millions of dollars in revenues from such selling and licensing activities. Plaintiff’s licensing the distribution of the Pre-1972 Recordings via digital streaming transmission has increased significantly over the past several years, and now represent a significant portion of the overall revenues received by Plaintiff. 44. Without a license or payment, SiriusXM copies, distributes, reproduces and performs the Pre-1972 Recordings, and allows its subscribers to: (a) listen to Pre-1972 Recordings via satellite or online digital audio transmissions without purchasing or licensing them; (b) replay, skip and remove (for such subscriber) sound recordings on certain channels through its “Replay” feature and its “MySXM” feature; and (c) download Pre-1972 Recordings to a subscriber’s device, including through its OnDemand feature. 45. Defendants have paid nothing to Plaintiff or the Other Class Members for distributing, reproducing and performing the Pre-1972 Recordings. Without expending any time, labor or money of its own, Defendants have simply appropriated the commercial qualities, reputation and salable properties of the Pre-1972 Recordings, including, without limitation those recordings listed on Exhibit A, by unfairly and directly competing with Plaintiff and the other Class Members’ use, sale, distribution and exploitation of the Pre-1972 Recordings. In so doing, Defendants have undermined Plaintiff and the other Class Members’ substantial creative and financial investment for Defendants’ own commercial benefit. 46. Defendants have usurped for itself the fruits of Plaintiff and the other Class Members’ financial and creative investments. Defendants are profiting from the results of Plaintiff and the other Class Members’ expenditures and skill without having to incur any

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expense or risk of its own in relation to the Pre-1972 Recordings. Furthermore, Defendants’ unauthorized use of the Pre-1972 Recordings is likely to cause confusion, mistake or deception as to the source, sponsorship, affiliation or connection between Plaintiff and the other Class Members, and Defendants. 47. Through its marketing, selling and licensing activities, Plaintiff is in the business of exploiting its Pre-1972 Recordings for Plaintiff’s commercial gain. Through marketing and operating the Service, Defendants are using and exploiting the Pre-1972 Recordings without license or payment for Defendants’ financial gain and commercial advantage. Defendants’ copying, distribution, reproduction and performance of Pre-1972 Recordings through the Service compete with Plaintiff in several ways. First, Defendants copying, distribution, reproduction and performance of the Pre-1972 Recordings without a license and without payment place a significant, unfair and anticompetitive downward pressure on the licensing fees Plaintiff is able to charge other services in the marketplace who do license and pay for such rights from Plaintiff, resulting in a direct financial loss to Plaintiff. Second, as digital transmissions are substituting over time for sales of sound recordings, Defendants are diverting to themselves income Plaintiff would have otherwise collected from sales of Plaintiff’s Pre-1972 Recordings, resulting in Defendants’ obtaining business that rightfully belongs to Plaintiff, and lost dealings and lost profits to Plaintiff from Defendants’ anticompetitive acts. Such actions by Defendants are designed for their commercial benefit to the detriment of Plaintiff and the other Class Members.

As a result, Plaintiff has been harmed by lost license fees and lost sales. 48. Defendants’ acts constitute a misappropriation of Plaintiff and the other Class Members’ property and rights in and to the Pre-1972 Recordings, and constitute misappropriation and unfair competition under New York law. 49. As a direct and proximate result of Defendants’ misappropriation and unfair competition, Plaintiff and the Class Members are entitled to recover all proceeds and other compensation received or to be received by Defendants from their misappropriation and unfair competition of the Pre-1972 Recordings. Plaintiff and the members of the Class have been

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damaged, and Defendants have been unjustly enriched, in an amount that is not as yet fully ascertained but which Plaintiff is informed and believes, and alleges thereon, exceeds $100,000,000, according to proof at trial. Such damages and/or restitution and disgorgement should include a declaration by this Court that Defendants are constructive trustees for the benefit of Plaintiff and the other Class Members, and an order that Defendants convey to Plaintiff and Class Members the gross receipts received or to be received that are attributable to Defendants misappropriation of the Pre-1972 Recordings. 50. Plaintiff is informed and believes, and alleges thereon, that in engaging in the conduct as described above, the Defendants acted with oppression, fraud and/or malice. The conduct of the Defendants has been despicable and undertaken in conscious disregard of Plaintiff’s rights. Accordingly, Plaintiff and the Class Members are entitled to an award of punitive damages against Defendants, and each of them, in an amount sufficient to punish and make an example of them according to proof at trial. 51. Defendants’ conduct is causing, and unless enjoined and restrained by this Court, will continue to cause, Plaintiff and the Class Members great and irreparable injury that cannot fully be compensated or measured in money. Plaintiff and the other Class Members are entitled to temporary, preliminary and permanent injunctions, prohibiting further violation of Plaintiff’s and the other Class Members right to exclusive ownership of their Pre-1972 Recordings and further acts of unfair competition and misappropriation.

PRAYER FOR RELIEF WHEREFORE, Plaintiff, on behalf of itself and the other Class Members, prays for Judgment against Defendants, and each of them, as follows: Regarding the Class Action: 1. That this is a proper class action maintainable pursuant to the applicable provisions of the Federal Rules of Civil Procedure; and 2. That the named Plaintiff is appropriate to be appointed representative of the respective Class.

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On The First Cause of Action For Common Law Copyright Infringement against all Defendants: 1. For compensatory damages in excess of $100,000,000 according to proof at trial; 2. Punitive and exemplary damages according to proof trial; and 3. A temporary, preliminary, and permanent injunction enjoining and restraining Defendants, and their respective agents, servants, directors, officers, principals, employees, representatives, subsidiaries and affiliated companies, successors, assigns, and those acting in concert with them or at their direction, from directly or indirectly infringing the copyrights in the Pre-1972 Recordings in New York in any manner, including without limitation by directly or indirectly copying, reproducing, downloading, distributing, communicating to the public, uploading, linking to, transmitting, publicly performing, or otherwise exploiting in any manner any of the Pre-1972 Recordings. On The Second Cause of Action For Unfair Competition against all Defendants: 1. For compensatory damages in excess of $ 100,000,000 according to proof at trial; 2. Punitive and exemplary damages according to proof at trial; 3. Imposition of a constructive trust; 4. Restitution of Defendants’ unlawful proceeds, including Defendants’ gross profits; and 5. A temporary, preliminary, and permanent injunction enjoining and restraining Defendants, and their respective agents, servants, directors, officers, principals,

employees, representatives, subsidiaries and affiliated companies, successors, assigns, and those acting in concert with them or at their direction, from directly or indirectly misappropriating in any manner the Pre-1972 Recordings, including without limitation by directly or indirectly copying, reproducing, downloading, distributing, communicating to the public, uploading, linking to, transmitting, publicly performing, or otherwise exploiting in any manner any of the Pre-1972 Recordings. On All Causes of Action: 1. For reasonable attorneys’ fees and costs as permitted by law;

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2. For prejudgement interest at the legal rate; and 3. For such other and further relief as the Court deems just and proper.

DATED: November 19, 2013

By: ______HENRY GRADSTEIN (pro hac vice application pending) [email protected] MARYANN R. MARZANO (pro hac vice application pending) [email protected] ROBERT E. ALLEN (pro hac vice application pending) [email protected] GRADSTEIN & MARZANO, P.C. 6310 San Vicente Blvd., Suite 510 Los Angeles, California 90048 T: 323-776-3100 F: 323-931-4990 and EVAN S. COHEN (pro hac vice pending) [email protected] 1180 South Beverly Drive, Suite 510 Los Angeles, California 90035 T: 310-556-9800 F: 310-556-9801 and KATHRYN L. CRAWFORD (KC5593) [email protected] RAJIKA L. SHAH (pro hac vice application pending) [email protected] KRISTEN L. NELSON (pro hac vice application pending) [email protected] SCHWARCZ, RIMBERG, BOYD & RADER, LLP 6310 San Vicente Blvd., Suite 360 Los Angeles, California 90048 T: 323-302-9488 F: 323-931-4990

Attorneys for Plaintiff FLO & EDDIE, INC.

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DEMAND FOR JURY TRIAL Pursuant to the Federal Rules of Civil Procedure, Rule 38(b), Plaintiff FLO & EDDIE, INC. hereby demands a jury trial on all issues so triable.

DATED: November 19, 2013

By: ______/s/______HENRY GRADSTEIN (pro hac vice) [email protected] MARYANN R. MARZANO (pro hac vice) [email protected] ROBERT E. ALLEN (pro hac vice) [email protected] GRADSTEIN & MARZANO, P.C. 6310 San Vicente Blvd., Suite 510 Los Angeles, California 90048 T: 323-776-3100 F: 323-931-4990 and EVAN S. COHEN (pro hac vice pending) [email protected] 1180 South Beverly Drive, Suite 510 Los Angeles, California 90035 T: 310-556-9800 F: 310-556-9801 and KATHRYN L. CRAWFORD (KC5593) [email protected] RAJIKA L. SHAH (pro hac vice) [email protected] KRISTEN L. NELSON (pro hac vice) [email protected] SCHWARCZ, RIMBERG, BOYD & RADER, LLP 6310 San Vicente Blvd., Suite 360 Los Angeles, California 90048 T: 323-302-9488 F: 323-931-4990

Attorneys for Plaintiff FLO & EDDIE, INC.

18 Case 1:13-cv-05784-CM Document 34 Filed 12/06/13 Page 1 of 15

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

FLO & EDDIE, INC., individually and on behalf of all others similarly situated,

Plaintiff, CIVIL ACTION No. 13-CV-5784 (CM) v.

SIRIUS XM RADIO INC., and DOES 1 through 10,

Defendants.

DEFENDANT SIRIUS RADIO XM’S ANSWER TO THE FIRST AMENDED CLASS ACTION COMPLAINT

R. Bruce Rich Benjamin E. Marks Bruce S. Meyer John R. Gerba Todd Larson WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Tel: (212) 310-8000 Fax: (212) 310-8007 [email protected] [email protected] [email protected]

and

Michael S. Oberman KRAMER LEVIN NAFTALIS & FRANKEL LLP 1177 Avenue of the Americas New York, New York 10036 Tel: (212) 715-9294 Fax: (212) 715-8294 [email protected]

Attorneys for Defendant Sirius XM Radio Inc. Case 1:13-cv-05784-CM Document 34 Filed 12/06/13 Page 2 of 15

Defendant Sirius XM Radio Inc. (“Sirius XM” or “Defendant”), by its attorneys, Weil,

Gotshal & Manges LLP and Kramer Levin Naftalis & Frankel LLP, for its Answer to the First

Amended Class Action Complaint (the “First Amended Complaint”) of plaintiff Flo & Eddie,

Inc. (“Plaintiff”) states as follows:

INTRODUCTION

By this action, Plaintiff, the owner of sound recordings made nearly fifty years ago and publicly performed widely ever since by myriad broadcast and other outlets, asks this Court to radically transform the scope of protection accorded to sound recordings under New York law.

Plaintiff asks the Court to recognize an exclusive right of public performance under New York law for sound recordings created before February 15, 1972, as well as an exclusive right to create pre-broadcast server copies to facilitate such performances, in the absence of any authority recognizing such a right. The result Plaintiff seeks would dramatically expand New York law and unravel a century of contrary understandings between the music and broadcasting industries.

Worse, it would immediately turn each radio and television broadcaster, webcaster, nightclub, retail establishment, fitness center, and the like that performs such recordings in New York into a serial copyright infringer. Because no New York court has ever recognized the claim Plaintiff seeks to plead, the First Amended Complaint fails to state a claim upon which relief may be granted and should be dismissed in its entirety.

RESPONSES TO SPECIFIC ALLEGATIONS

1. The allegations contained in paragraph 1 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations.

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2. Sirius XM denies knowledge or information sufficient to respond to the allegations of paragraph 2 of the First Amended Complaint.

3. Sirius XM denies knowledge or information sufficient to respond to the allegations of paragraph 3 of the First Amended Complaint.

4. Sirius XM denies knowledge or information sufficient to respond to the allegations of paragraph 4 of the First Amended Complaint, except it admits that music users have enjoyed music on CDs in digital format since at least the 1980s and have accessed music via digital streaming since at least the mid-1990s.

5. Sirius XM denies the allegations of paragraph 5 of the First Amended Complaint, except it admits that Sirius XM (a) has over 25 million subscribers to its satellite radio service;

(b) operates the sole national satellite radio service in the United States, which makes digital audio transmissions via satellite technology; and (c) offers certain digital streaming services via the Internet.

6. Sirius XM denies the allegations of paragraph 6 of the First Amended Complaint, except it admits that Sirius XM’s nationwide broadcasts can be received in New York: (a) via satellite radio by subscribers who receive the satellite broadcast on authorized Sirius XM receivers; (b) via the Internet by subscribers who may receive the transmission on computers (at www.siriusxm.com), smart phones and tablets (via the Sirius XM mobile applications), and/or home audio devices/systems, such as Roku and Sonos; and (c) via satellite television channels on

Dish Network. Sirius XM further admits that its Internet radio product has features identified as

“MySXM” and “On Demand” and that certain devices capable of receiving the Sirius XM satellite service offer a feature identified as “Replay.” Users of the “Replay” and “My SXM”

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features are provided with limited pause, rewind and replay functionality depending upon the device, channel and delivery method.

7. Sirius XM denies the allegations of paragraph 7 of the First Amended Complaint, except it admits that Sirius XM (a) has a variety of packages it offers to subscribers at various prices, including the “Premier” and “Select” packages; and (b) has approximately 70 channels that are, at times, referred to as “Commercial-Free Music” channels, although the number of such channels may vary across time and subscriber platform.

8. Sirius XM denies the allegations of paragraph 8 of the First Amended Complaint, except it admits that Sirius XM’s service includes some channels that play sound recordings of musical performances that initially were “fixed” (i.e., recorded) prior to February 15, 1972 (“Pre-

1972 Recordings”).

9. Sirius XM denies the allegations of paragraph 9 of the First Amended Complaint, except it admits (a) that some Sirius XM servers located in New York state contain copies of certain Pre-1972 Recordings, including certain recordings by the Turtles, to facilitate broadcasts of those recordings; and (b) that recordings by the Turtles are among the thousands of recordings transmitted as part of Sirius XM’s nationwide broadcasts, which are available to subscribers in

New York state.

10. Sirius XM denies the allegations of paragraph 10 of the First Amended

Complaint, except it admits that Sirius XM (a) pays royalties for digital audio transmissions of sound recordings created on or after February 15, 1972 as required by federal copyright law; and

(b) does not pay royalties for performances of Pre-1972 Recordings because no such royalties are required by law.

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11. Sirius XM denies the allegations in the first sentence of paragraph 11 of the First

Amended Complaint. The allegations contained in the second sentence call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations.

12. The allegations contained in paragraph 12 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations.

13. The allegations contained in paragraph 13 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations.

14. Sirius XM denies knowledge or information sufficient to respond to the allegations of paragraph 14 of the First Amended Complaint, except that Sirius XM admits that consumers enjoy music via satellite radio and Sirius XM Internet radio.

15. The allegations contained in paragraph 15 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required.

16. The allegations contained in paragraph 16 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations.

17. The allegations contained in paragraph 17 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations and, without limitation, expressly denies all allegations of wrongdoing by Sirius XM.

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18. Sirius XM denies knowledge or information sufficient to respond to the allegations of paragraph 18 of the First Amended Complaint.

19. Sirius XM denies knowledge or information sufficient to respond to the allegations in the first sentence of paragraph 19 of the First Amended Complaint. The remaining allegations of paragraph 19 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations.

20. Sirius XM denies the allegations of paragraph 20 of the First Amended

Complaint, except it admits that Sirius XM is a Delaware corporation with its principal place of business in New York City, and that this Court has personal jurisdiction over Sirius XM.

21. Sirius XM denies knowledge or information sufficient to respond to the allegations in paragraph 21 of the First Amended Complaint, except it admits that this Court has subject matter jurisdiction over the subject matter of this class action pursuant to 28 U.S.C. §

1332(d).

22. The allegations contained in paragraph 22 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. Sirius XM admits, however, that venue is proper in this District.

23. Sirius XM does not respond to paragraph 23 of the First Amended Complaint, which contains no factual allegations about Sirius XM.

24. The allegations contained in paragraph 24 of the First Amended Complaint are not factual in nature; they merely characterize the basis on which Plaintiff purports to bring this action and purport to reserve certain rights to the Plaintiff. Accordingly, no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations.

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25. The allegations contained in paragraph 25 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations.

26. The allegations contained in paragraph 26 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations and, without limitation, expressly denies all allegations of wrongdoing by Sirius XM.

27. The allegations contained in paragraph 27 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations and, without limitation, expressly denies all allegations of wrongdoing by Sirius XM.

28. The allegations contained in the first sentence of paragraph 28 of the First

Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies knowledge or information sufficient to respond to the allegations, as it does for the allegations in the second and last sentences of paragraph 28. Sirius XM denies the allegations in the third sentence of paragraph 28, and does not respond to the fourth and fifth sentences, which are not factual in nature.

29. The allegations contained in paragraph 29 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations and, without limitation, expressly denies all allegations of wrongdoing by Sirius XM.

30. The allegations contained in paragraph 30 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is

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required, Sirius XM denies the allegations. Sirius XM denies knowledge or information sufficient to respond to the allegations in the last sentence of paragraph 30.

31. The allegations contained in paragraph 31 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations.

32. The allegations contained in paragraph 32 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations and, without limitation, expressly denies all allegations of wrongdoing by Sirius XM.

With Respect to the First Cause of Action

33. Sirius XM repeats and incorporates by reference its responses to paragraphs 1-32 of the First Amended Complaint.

34. The allegations contained in paragraph 34 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations.

35. The allegations contained in paragraph 35 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations.

36. The allegations contained in paragraph 36 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations.

37. The allegations contained in the first sentence of paragraph 37 of the First

Amended Complaint call for legal conclusions to which no responsive pleading is required. To

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the extent a response is required, Sirius XM denies the allegations and, without limitation, expressly denies all allegations of wrongdoing by Sirius XM. Sirius XM denies knowledge or information sufficient to respond to the allegations in the second sentence of paragraph 37 of the

First Amended Complaint.

38. The allegations contained in the first sentence of paragraph 38 of the First

Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations and, without limitation, expressly denies all allegations of wrongdoing by Sirius XM. Sirius XM denies the allegations contained in the remaining sentences of paragraph 38 of the First Amended Complaint, except it admits that (a) that some Sirius XM servers located in New York state contain copies made by

Sirius XM of certain Pre-1972 Recordings, including certain recordings by the Turtles, to facilitate broadcasts of those recordings; and (b) that recordings by the Turtles and certain other

Pre-1972 Recordings are among the thousands of recordings transmitted as part of Sirius XM’s nationwide broadcasts, which are available to subscribers in New York state.

39. The allegations contained in paragraph 39 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations and, without limitation, expressly denies all allegations of wrongdoing by Sirius XM.

40. The allegations contained in paragraph 40 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations and, without limitation, expressly denies all allegations of wrongdoing by Sirius XM.

9 Case 1:13-cv-05784-CM Document 34 Filed 12/06/13 Page 10 of 15

41. The allegations contained in paragraph 41 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations and, without limitation, expressly denies all allegations of wrongdoing by Sirius XM.

With Respect to the Second Cause of Action

42. Sirius XM repeats and incorporates by reference its responses to paragraphs 1-41 of the First Amended Complaint.

43. Sirius XM denies knowledge or information sufficient to respond to the allegations of paragraph 43 of the First Amended Complaint.

44. Sirius XM denies the allegations contained in paragraph 44 of the First Amended

Complaint, except admits that (a) some Sirius XM servers located in New York state contain copies made by Sirius XM of certain Pre-1972 Recordings in order to facilitate broadcast of such recordings; (b) certain Pre-1972 Recordings are among the thousands of recordings transmitted as part of Sirius XM’s nationwide broadcasts and online digital audio transmissions, which are available to subscribers in New York state; (c) users of the “Replay” and “My SXM” features are provided with limited skip functionality depending upon the device, channel and delivery method. Sirius XM further admits that its Internet radio product has features identified as

“MySXM” and “On Demand” and that certain devices capable of receiving the Sirius XM satellite service offer a feature identified as “Replay.”

45. The allegations contained in paragraph 45 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM admits that Sirius XM does not pay royalties for Pre-1972 Recordings

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because no such royalties are required by law, but otherwise denies all allegations of wrongdoing by Sirius XM.

46. The allegations contained in paragraph 46 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations and, without limitation, expressly denies all allegations of wrongdoing by Sirius XM.

47. Sirius XM denies knowledge or information sufficient to respond to the allegations in the first sentence of paragraph 47 of the First Amended Complaint. The remaining allegations of paragraph 47 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations and, without limitation, expressly denies all allegations of wrongdoing by Sirius XM.

48. The allegations contained in paragraph 48 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations and, without limitation, expressly denies all allegations of wrongdoing by Sirius XM.

49. The allegations contained in paragraph 49 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations and, without limitation, expressly denies all allegations of wrongdoing by Sirius XM.

50. The allegations contained in paragraph 50 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations and, without limitation, expressly denies all allegations of wrongdoing by Sirius XM.

11 Case 1:13-cv-05784-CM Document 34 Filed 12/06/13 Page 12 of 15

51. The allegations contained in paragraph 51 of the First Amended Complaint call for legal conclusions to which no responsive pleading is required. To the extent a response is required, Sirius XM denies the allegations and, without limitation, expressly denies all allegations of wrongdoing by Sirius XM.

AFFIRMATIVE DEFENSES

52. Without assuming the burden of proof where such burden properly rests with

Plaintiff, and expressly reserving and not waiving the right to assert any and all such defenses at such time and to such extent as discovery and factual developments establish a basis therefor,

Sirius XM hereby asserts the following defenses to the claims asserted in the First Amended

Complaint.

First Affirmative Defense

(Failure to State a Claim)

53. The First Amended Complaint fails to state any claim upon which relief can be granted.

Second Affirmative Defense

(Laches)

54. Plaintiff’s claims are barred, in whole or in part, by the doctrine of laches.

Third Affirmative Defense

(Waiver)

55. Plaintiff’s claims are barred, in whole or in part, by the doctrine of waiver.

Fourth Affirmative Defense

(Estoppel)

56. Plaintiff’s claims are barred, in whole or in part, by the doctrine of estoppel.

12 Case 1:13-cv-05784-CM Document 34 Filed 12/06/13 Page 13 of 15

Fifth Affirmative Defense

(License)

57. Plaintiff’s claims are barred, in whole or in part, by an implied license conveyed by Plaintiff to Sirius XM or because Plaintiff otherwise licensed, authorized, or consented to

Sirius XM’s alleged conduct.

Sixth Affirmative Defense

(Fair Use)

58. Plaintiff’s claims are barred, in whole or in part, by the doctrine of fair use.

Seventh Affirmative Defense

(Statute of Limitations)

59. Plaintiff’s claims are barred, in whole or in part, by applicable statutes of limitations.

Eighth Affirmative Defense

(Lack of Harm)

60. Plaintiff’s claims are barred, in whole or in part, because Plaintiff has not suffered any harm from Sirius XM’s alleged conduct.

Ninth Affirmative Defense

(Failure to Mitigate Damages)

61. Plaintiff’s claims are barred, in whole or in part, because Plaintiff has failed to take appropriate and necessary steps to mitigate its alleged damages, if any.

13 Case 1:13-cv-05784-CM Document 34 Filed 12/06/13 Page 14 of 15

Tenth Affirmative Defense

(Lack of Ownership)

62. Plaintiff’s claims are barred, in whole or in part, because Plaintiff does not own the purported rights at issue.

Eleventh Affirmative Defense

(Adequate Remedy at Law)

63. The injunctive relief sought by Plaintiff is barred, in whole or in part, because

Plaintiff has available an adequate remedy at law.

PRAYER FOR RELIEF

For the reasons set forth above, Sirius XM respectfully requests that the Court:

1. Dismiss Plaintiff’s First Amended Complaint in its entirety with prejudice;

2. Enter judgment in favor of Defendant Sirius XM and against Plaintiff on each and

every cause of action set forth in the First Amended Complaint;

3. Award attorneys’ fees and costs in favor of Defendant Sirius XM against Plaintiff

as permitted by applicable law; and

4. Award such other and further relief as the Court deems just and proper.

14 Case 1:13-cv-05784-CM Document 34 Filed 12/06/13 Page 15 of 15

Dated: New York, New York Respectfully submitted, December 6, 2013 By: /s/ R. Bruce Rich______R. Bruce Rich Benjamin E. Marks Bruce S. Meyer Todd Larson John R. Gerba WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Tel: (212) 310-8000 Fax: (212) 310-8007 [email protected] [email protected] [email protected]

and

Michael S. Oberman Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas New York, New York 10036 Tel: (212) 715-9294 Fax: (212) 715-8294 [email protected]

Attorneys for Defendant Sirius XM Radio Inc.

15 Case: 1:13-cv-05784-CM As of: 02/20/2014 03:19 PM EST 1 of 7

ECF U.S. District Court Southern District of New York (Foley Square) CIVIL DOCKET FOR CASE #: 1:13−cv−05784−CM

Flo &Eddie, Inc v. Sirius XM Radio, Inc. et al Date Filed: 08/16/2013 Assigned to: Judge Colleen McMahon Jury Demand: Plaintiff Demand: $9,999,000 Nature of Suit: 820 Copyright Cause: 28:1332 Diversity−Account Receivable Jurisdiction: Federal Question Plaintiff Flo &Eddie, Inc represented by Robert L. Rimberg A california Corporation, individually Goldberg &Rimberg, PLLC and on behalf of all others similarly 115 Broadway, Suite 302 situated New York, NY 10006 (212) 697−3250 Fax: (212) 812−0696 Email: [email protected] LEAD ATTORNEY ATTORNEY TO BE NOTICED Evan S Cohen Evan S. Cohen 1180 South Beverly Drive, Suite 510 Los Angeles, CA 90035 (310) 721−5159 Email: [email protected] PRO HAC VICE ATTORNEY TO BE NOTICED Harvey Wayne Geller Gradstein &Marzano, P.C. 6310 San Vincente Blvd., Suite 510 Los Angeles, CA 90048 (323)−776−3100 Fax: (323)−931−4990 Email: [email protected] PRO HAC VICE ATTORNEY TO BE NOTICED Henry D. Gradstein Gradstein &Marzano, P.C. 6310 San Vicente Blvd., Suite 510 Los Angeles, CA 90048 (310) 489−6551 Fax: (310) 571−1717 Email: [email protected] PRO HAC VICE ATTORNEY TO BE NOTICED Joel Steven Schneck Goldberg &Rimberg, PLLC 115 Broadway, Suite 302 New York, NY 10006 (212)−697−3250 Fax: (212)−227−4533 Email: [email protected] ATTORNEY TO BE NOTICED Kathryn Lee Crawford Schwarcz Rimberg Boyd &Rader, LLP 115 Broadway, Suite 302 New York, CA 10066 Case: 1:13-cv-05784-CM As of: 02/20/2014 03:19 PM EST 2 of 7

(212) 697−3250 Fax: (212) 227−4533 Email: lboyd@srbr−law.com ATTORNEY TO BE NOTICED Kristen Leigh Nelson Schwartz & Perry 295 Madison Avenue New York, NY 10017 (323)−302−9488 Fax: (323)−931−4990 Email: knelson@srbr−law.com ATTORNEY TO BE NOTICED Larry Steven Castruita Gradstein &Marzano, P.C. 6310 San Vicente Blvd., Suite 510 Los Angeles, CA 90048 (213)−675−0650 Email: [email protected] ATTORNEY TO BE NOTICED Maryann Rose Marzano Gradstein &Marzano, P.C. 6310 San Vicente Blvd, Suite 510 Los Angeles, CA 90048 (323)−776−3100 Fax: 323−931−4990 Email: [email protected] PRO HAC VICE ATTORNEY TO BE NOTICED Rajika Lynn Shah Schwarcz, Rimberg, Boyd &Rader, LLP 6310 San Vicente Boulevard, Suite 360 Los Angeles, CA 90048 (323) 302−9488 Fax: (323) 931−4990 Email: rshah@srbr−law.com ATTORNEY TO BE NOTICED Robert Edward Allen Gradstein &Marzano, P.C. 6310 San Vicente Blvd, Suite 510 Los Angeles, CA 90048 (310)−895−8925 Email: [email protected] PRO HAC VICE ATTORNEY TO BE NOTICED

V. Defendant Sirius XM Radio, Inc. represented by Benjamin Ely Marks A Delaware Corporation Weil, Gotshal &Manges LLP (NYC) 767 Fifth Avenue, 25th Fl. New York, NY 10153 (212)−735−4566 Fax: (212)−310−8007 Email: [email protected] LEAD ATTORNEY ATTORNEY TO BE NOTICED Bruce S. Meyer Case: 1:13-cv-05784-CM As of: 02/20/2014 03:19 PM EST 3 of 7

Weil, Gotshal &Manges LLP (NYC) 767 Fifth Avenue, 25th Fl. New York, NY 10153 2123108000 Fax: 2128333148 Email: [email protected] LEAD ATTORNEY ATTORNEY TO BE NOTICED Robert Bruce Rich Weil, Gotshal &Manges LLP (NYC) 767 Fifth Avenue, 25th Fl. New York, NY 10153 (212) 310−8000 Fax: (212) 310−8007 Email: [email protected] LEAD ATTORNEY ATTORNEY TO BE NOTICED John Ryan Gerba Weil, Gotshal &Manges LLP (NYC) 767 Fifth Avenue, 25th Fl. New York, NY 10153 (212)−310−8190 Fax: (212)−310−8007 Email: [email protected] ATTORNEY TO BE NOTICED Michael Stewart Oberman Kramer Levin Naftalis &Frankel, LLP 1177 Avenue of the Americas New York, NY 10036 (212) 715−9294 Fax: (212)−715−8000 Email: [email protected] ATTORNEY TO BE NOTICED Todd Daniel Larson Weil, Gotshal &Manges LLP (NYC) 767 Fifth Avenue, 25th Fl. New York, NY 10153 (212)−310−8238 Fax: (212)−310−8007 Email: [email protected] ATTORNEY TO BE NOTICED

Defendant Does 1 through 10 TERMINATED: 11/13/2013

Defendant DOES 1 through 10

Date Filed # Docket Text 08/16/2013 1 COMPLAINT against Does, Sirius XM Radio, Inc. (Filing Fee $ 350.00, Receipt Number 465401074674)Document filed by Flo &Eddie, Inc.(jd) (jd). (Entered: 08/20/2013) 08/16/2013 SUMMONS ISSUED as to Does, Sirius XM Radio, Inc. (jd) (Entered: 08/20/2013) Case: 1:13-cv-05784-CM As of: 02/20/2014 03:19 PM EST 4 of 7 08/16/2013 Magistrate Judge Henry B. Pitman is so designated. (jd) (Entered: 08/20/2013) 08/16/2013 Case Designated ECF. (jd) (Entered: 08/20/2013) 08/20/2013 3 FILING ERROR − DEFICIENT DOCKET ENTRY − MOTION for Maryann R. Marzano to Appear Pro Hac Vice. Filing fee $ 200.00, receipt number 0208−8800462. Motion and supporting papers to be reviewed by Clerk's Office staff. Document filed by Flo &Eddie, Inc. (Attachments: # 1 Exhibit Certificate of Good Standing, # 2 Text of Proposed Order)(Marzano, Maryann) Modified on 8/20/2013 (bcu). (Entered: 08/20/2013) 08/20/2013 >>>NOTICE REGARDING DEFICIENT MOTION TO APPEAR PRO HAC VICE. Notice regarding Document No. 3 MOTION for Maryann R. Marzano to Appear Pro Hac Vice. Filing fee $ 200.00, receipt number 0208−8800462. Motion and supporting papers to be reviewed by Clerk's Office staff.. The filing is deficient for the following reason(s): Missing Certificate of Good Standing. Certificate of Good Standing must be issued from the State Court not from a State Bar Association. Re−file the document as a Corrected Motion to Appear Pro Hac Vice and attach a valid Certificate of Good Standing, issued within the past 30 days. (bcu) (Entered: 08/20/2013) 08/21/2013 4 RULE 7.1 CORPORATE DISCLOSURE STATEMENT. No Corporate Parent. Document filed by Flo &Eddie, Inc.(Crawford, Kathryn) (Entered: 08/21/2013) 09/18/2013 5 NOTICE OF APPEARANCE by Robert Bruce Rich on behalf of Sirius XM Radio, Inc.. (Rich, Robert) (Entered: 09/18/2013) 09/18/2013 6 RULE 7.1 CORPORATE DISCLOSURE STATEMENT. Identifying Corporate Parent Liberty Media Corporation for Sirius XM Radio, Inc.. Document filed by Sirius XM Radio, Inc..(Rich, Robert) (Entered: 09/18/2013) 09/18/2013 7 NOTICE OF APPEARANCE by Robert Bruce Rich on behalf of Sirius XM Radio, Inc.. (Rich, Robert) (Entered: 09/18/2013) 09/18/2013 8 NOTICE OF APPEARANCE by Bruce S. Meyer on behalf of Sirius XM Radio, Inc.. (Meyer, Bruce) (Entered: 09/18/2013) 09/18/2013 9 NOTICE OF APPEARANCE by Benjamin Ely Marks on behalf of Sirius XM Radio, Inc.. (Marks, Benjamin) (Entered: 09/18/2013) 09/18/2013 10 NOTICE OF APPEARANCE by Todd Daniel Larson on behalf of Sirius XM Radio, Inc.. (Larson, Todd) (Entered: 09/18/2013) 09/18/2013 11 NOTICE OF APPEARANCE by John Ryan Gerba on behalf of Sirius XM Radio, Inc.. (Gerba, John) (Entered: 09/18/2013) 09/18/2013 12 NOTICE OF APPEARANCE by Michael Stewart Oberman on behalf of Sirius XM Radio, Inc.. (Oberman, Michael) (Entered: 09/18/2013) 10/28/2013 13 FILING ERROR − DEFICIENT DOCKET ENTRY − FILER ERROR − MOTION to Dismiss Plaintiff's Complaint. Document filed by Sirius XM Radio, Inc..(Marks, Benjamin) Modified on 10/29/2013 (ka). (Entered: 10/28/2013) 10/28/2013 14 FILING ERROR − DEFICIENT DOCKET ENTRY − FILER ERROR − MEMORANDUM OF LAW in Support re: 13 MOTION to Dismiss Plaintiff's Complaint.. Document filed by Sirius XM Radio, Inc.. (Marks, Benjamin) Modified on 10/29/2013 (ka). (Entered: 10/28/2013) 10/28/2013 15 MOTION to Dismiss Plaintiff's Complaint. Document filed by Sirius XM Radio, Inc..(Rich, Robert) (Entered: 10/28/2013) 10/28/2013 16 MEMORANDUM OF LAW in Support re: 15 MOTION to Dismiss Plaintiff's Complaint.. Document filed by Sirius XM Radio, Inc.. (Rich, Robert) (Entered: 10/28/2013) 10/29/2013 17 MOTION for Maryann R. Marzano to Appear Pro Hac Vice. Filing fee $ 200.00, receipt number 0208−9025339. Motion and supporting papers to be reviewed by Clerk's Office staff. Document filed by Flo &Eddie, Inc. (Attachments: # 1 Exhibit Certificate of Good Standing, # 2 Text of Proposed Order)(Marzano, Maryann) (Entered: 10/29/2013) Case: 1:13-cv-05784-CM As of: 02/20/2014 03:19 PM EST 5 of 7 10/29/2013 >>>NOTICE REGARDING PRO HAC VICE MOTION. Regarding Document No. 17 MOTION for Maryann R. Marzano to Appear Pro Hac Vice. Filing fee $ 200.00, receipt number 0208−9025339. Motion and supporting papers to be reviewed by Clerk's Office staff.. The document has been reviewed and there are no deficiencies. (bcu) (Entered: 10/29/2013) 10/29/2013 18 MOTION for Robert Edward Allen to Appear Pro Hac Vice. Filing fee $ 200.00, receipt number 0208−9025517. Motion and supporting papers to be reviewed by Clerk's Office staff. Document filed by Flo &Eddie, Inc. (Attachments: # 1 Exhibit Certificate of Good Standing, # 2 Text of Proposed Order)(Allen, Robert) (Entered: 10/29/2013) 10/29/2013 19 MOTION for Henry Daniel Gradstein to Appear Pro Hac Vice. Filing fee $ 200.00, receipt number 0208−9025686. Motion and supporting papers to be reviewed by Clerk's Office staff. Document filed by Flo &Eddie, Inc. (Attachments: # 1 Exhibit Certificate of Good Standing, # 2 Text of Proposed Order)(Gradstein, Henry) (Entered: 10/29/2013) 10/29/2013 20 MOTION for Larry Steven Castruita to Appear Pro Hac Vice. Filing fee $ 200.00, receipt number 0208−9025753. Motion and supporting papers to be reviewed by Clerk's Office staff. Document filed by Flo &Eddie, Inc. (Attachments: # 1 Exhibit Certificate of Good Standing, # 2 Text of Proposed Order)(Castruita, Larry) (Entered: 10/29/2013) 10/29/2013 >>>NOTICE REGARDING PRO HAC VICE MOTION. Regarding Document No. 19 MOTION for Henry Daniel Gradstein to Appear Pro Hac Vice. Filing fee $ 200.00, receipt number 0208−9025686. Motion and supporting papers to be reviewed by Clerk's Office staff., 20 MOTION for Larry Steven Castruita to Appear Pro Hac Vice. Filing fee $ 200.00, receipt number 0208−9025753. Motion and supporting papers to be reviewed by Clerk's Office staff.. The document has been reviewed and there are no deficiencies. (wb) (Entered: 10/29/2013) 10/29/2013 21 MOTION for Rajika L. Shah to Appear Pro Hac Vice. Filing fee $ 200.00, receipt number 0208−9026322. Motion and supporting papers to be reviewed by Clerk's Office staff. Document filed by Flo &Eddie, Inc. (Attachments: # 1 Exhibit Certificate, # 2 Text of Proposed Order)(Shah, Rajika) (Entered: 10/29/2013) 10/29/2013 22 MOTION for Kristen L. Nelson to Appear Pro Hac Vice. Filing fee $ 200.00, receipt number 0208−9026334. Motion and supporting papers to be reviewed by Clerk's Office staff. Document filed by Flo &Eddie, Inc. (Attachments: # 1 Exhibit Certificate, # 2 Text of Proposed Order)(Nelson, Kristen) (Entered: 10/29/2013) 10/30/2013 >>>NOTICE REGARDING PRO HAC VICE MOTION. Regarding Document No. 21 MOTION for Rajika L. Shah to Appear Pro Hac Vice. Filing fee $ 200.00, receipt number 0208−9026322. Motion and supporting papers to be reviewed by Clerk's Office staff., 22 MOTION for Kristen L. Nelson to Appear Pro Hac Vice. Filing fee $ 200.00, receipt number 0208−9026334. Motion and supporting papers to be reviewed by Clerk's Office staff.. The document has been reviewed and there are no deficiencies. (wb) (Entered: 10/30/2013) 10/31/2013 23 ORDER FOR ADMISSION PRO HAC VICE granting 17 Motion for Maryann R. Marzano to Appear Pro Hac Vice. (Signed by Judge Colleen McMahon on 10/31/2013) (rjm) (Entered: 10/31/2013) 10/31/2013 24 ORDER FOR ADMISSION PRO HAC VICE granting 18 Motion for Robert E. Allen to Appear Pro Hac Vice. (Signed by Judge Colleen McMahon on 10/31/2013) (rjm) (Entered: 10/31/2013) 10/31/2013 25 ORDER FOR ADMISSION PRO HAC VICE granting 19 Motion for Henry Gradstein to Appear Pro Hac Vice. (Signed by Judge Colleen McMahon on 10/31/2013) (rjm) (Entered: 10/31/2013) 10/31/2013 26 ORDER FOR ADMISSION PRO HAC VICE granting 20 Motion for Larry S. Castruita to Appear Pro Hac Vice. (Signed by Judge Colleen McMahon on Case: 1:13-cv-05784-CM As of: 02/20/2014 03:19 PM EST 6 of 7

10/31/2013) (rjm) (Entered: 10/31/2013) 10/31/2013 27 ORDER FOR ADMISSION PRO HAC VICE granting 21 Motion for Rajika L. Shah to Appear Pro Hac Vice. (Signed by Judge Colleen McMahon on 10/31/2013) (rjm) (Entered: 10/31/2013) 10/31/2013 28 ORDER FOR ADMISSION PRO HAC VICE granting 22 Motion for Kristen L. Nelson to Appear Pro Hac Vice. (Signed by Judge Colleen McMahon on 10/31/2013) (rjm) (Entered: 10/31/2013) 11/04/2013 29 ENDORSED LETTER addressed to Judge Colleen McMahon from Robert E. Allen, Esq. dated 11/1/2013 re: Plaintiff seeks clarification from this Court as to whether: (1) the Court will be holding a conference after the motion pursuant to option (c) above; (2) if such a conference will not be held, whether Plaintiff may amend its Complaint to address the alleged deficiencies identified by Defendant in its Motion (either pursuant to Section III(A)(4) above or Fed. R. Civ. Proc. 15(a)(1)(B)); and (3) whether the time for opposing Defendant's Motion is stayed until after Plaintiff has an opportunity to file a First Amended Complaint. ENDORSEMENT: I do not require a pre−motion conference. I do not do any of the procedures listed below. "May" is not "must". Defendant has no obligation to consent with you before availing itself of Rule 12(b). Respond to the motion. If the federal rules allow you to amend as of right you may amend. (Signed by Judge Colleen McMahon on 11/4/2013) (ft) Modified on 11/6/2013 (ft). (Entered: 11/05/2013) 11/07/2013 30 ENDORSED LETTER addressed to Judge Colleen McMahon from R. Bruce Rich dated 11/4/2013 re: Counsel writes on behalf of Sirius XM Radio Inc. to respond to the letter to the Court submitted by Plaintiff Flo &Eddie, Inc. on Friday, 11/1/2013. ENDORSEMENT: This letter was not necessary. I have responded to plaintiff. (Signed by Judge Colleen McMahon on 11/7/2013) (tro) (Entered: 11/07/2013) 11/12/2013 31 RESPONSE in Opposition to Motion re: 15 MOTION to Dismiss Plaintiff's Complaint.. Document filed by Flo &Eddie, Inc. (Allen, Robert) (Entered: 11/12/2013) 11/13/2013 32 FIRST AMENDED COMPLAINT amending 1 Complaint against Sirius XM Radio, Inc., DOES 1 through 10 with JURY DEMAND.Document filed by Flo &Eddie, Inc. Related document: 1 Complaint filed by Flo &Eddie, Inc.(djc) (Entered: 11/19/2013) 11/25/2013 33 AMENDED CALENDAR NOTICE: Rule (16) Conference rescheduled for 1/10/2014 at 10:15 AM in Courtroom 14C, U.S. District Court, 500 Pearl Street, New York, NY 10007 before Judge Colleen McMahon. (Signed by Judge Colleen McMahon on 11/25/2013) (ft) (Entered: 11/25/2013) 12/06/2013 34 ANSWER to 32 Amended Complaint. Document filed by Sirius XM Radio, Inc..(Rich, Robert) (Entered: 12/06/2013) 01/07/2014 35 NOTICE OF APPEARANCE by Robert L. Rimberg on behalf of Flo &Eddie, Inc. (Rimberg, Robert) (Entered: 01/07/2014) 01/09/2014 36 NOTICE OF APPEARANCE by Joel Steven Schneck on behalf of Flo &Eddie, Inc. (Schneck, Joel) (Entered: 01/09/2014) 01/10/2014 Minute Entry for proceedings held before Judge Colleen McMahon: Initial Pretrial Conference held on 1/10/2014. Decision: Conference held. Limited discovery (on issues other than the amount of damages that may be owed) must be completed by Thursday, April 3, 2014. All other discovery is stayed. At 2:00 PM on April 3, 2014, the parties will conference with the Court to discuss the possibility of more discovery in this case.(Submitted by Zachary Vaughan). (mde) (Entered: 01/10/2014) 01/10/2014 Set/Reset Hearings: Conference set for 4/3/2014 at 2:00 PM in Courtroom 14C, 500 Pearl Street, New York, NY 10007 before Judge Colleen McMahon. (mde) (Entered: 01/10/2014) 01/29/2014 37 MOTION for Harvey Wayne Geller to Appear Pro Hac Vice. Filing fee $ 200.00, receipt number 0208−9306608. Motion and supporting papers to be reviewed Case: 1:13-cv-05784-CM As of: 02/20/2014 03:19 PM EST 7 of 7

by Clerk's Office staff. Document filed by Flo &Eddie, Inc. (Attachments: # 1 Exhibit Certificate of Good Standing, # 2 Text of Proposed Order)(Geller, Harvey) (Entered: 01/29/2014) 01/29/2014 >>>NOTICE REGARDING PRO HAC VICE MOTION. Regarding Document No. 37 MOTION for Harvey Wayne Geller to Appear Pro Hac Vice. Filing fee $ 200.00, receipt number 0208−9306608. Motion and supporting papers to be reviewed by Clerk's Office staff.. The document has been reviewed and there are no deficiencies. (bcu) (Entered: 01/29/2014) 01/30/2014 38 ORDER FOR ADMISSION PRO HAC VICE granting 37 Motion for Harvey Wayne Geller to Appear Pro Hac Vice. (Signed by Judge Colleen McMahon on 1/30/2014) (mro) (Entered: 01/30/2014) Case 1:13-cv-23182-KMM Document 1 Entered on FLSD Docket 09/03/2013 Page 1 of 18

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

Case No.______-CV-______

FLO & EDDIE, INC., a California corporation, individually and on behalf of all others similarly situated,

Plaintiff,

SIRIUS XM RADIO, INC., a Delaware corporation; and DOES 1 through 10,

Defendants. / CLASS ACTION COMPLAINT

Plaintiff FLO & EDDIE, INC. (“Plaintiff” or “Flo & Eddie”) files this class action

Complaint on behalf of itself and on behalf of all other similarly situated owners of sound recordings of musical performances that initially were “fixed” (i.e., recorded) prior to February 15, 1972 (the “Pre-1972 Recordings”) against Defendants SIRIUS XM RADIO, INC. (“Defendant” or “SiriusXM”) and DOES 1-10, and alleges as follows: NATURE OF THE ACTION 1. Florida common law and statutory law provide protection for Pre-1972 Recordings

from their unauthorized reproduction, performance, distribution or other exploitation, and permit the owners of Pre-1972 Recordings the right to bring the following separate claims for relief against parties who engage in such unauthorized actions: (a) common law copyright infringement; (b) common law misappropriation / unfair competition; (c) common law conversion; and (d) civil theft under Fla. Stat. § 772.11 for violations of Fla. Stat. § 812.014(1). A person commits common law copyright infringement of a sound recording not protected by the

US Copyright Act in Florida by doing, without the consent of the owner, anything which is the sole right of the owner to do, including reproducing, distributing, performing or otherwise exploiting such recording. The elements of a misappropriation / unfair competition claim

1 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00107175.DOCX } Case 1:13-cv-23182-KMM Document 1 Entered on FLSD Docket 09/03/2013 Page 2 of 18

involving record piracy in Florida are: (A) time, labor and money expended by the Plaintiff; (B) competition; and (C) commercial damage. A claim for conversion exists for a wrongful taking of intangible interests in a business venture. Finally, Fla. Stat. § 812.014(1) provides that one is liable for theft if one “knowingly obtains or uses the property of another with intent to appropriate the property to his or her own use.” 1 2. The principals of Flo & Eddie, Mark Volman and Howard Kaylan, have been

performing together as The Turtles since 1965 and have recorded numerous iconic hits including “Happy Together,” “It Ain’t Me Babe,” “She’d Rather Be With Me,” “You Baby,” “She’s My Girl,” “Elenore,” and many others. Since approximately 1971, Flo & Eddie has owned the entire catalog of 100 original master recordings by The Turtles, all of which were recorded prior to February 15, 1972. Notwithstanding the absence of any license or authorization from Plaintiff, The Turtles recordings can be heard every hour of every day by subscribers in Florida to the

satellite and Internet services owned by Defendant known as “Sirius Satellite Radio,” “XM Satellite Radio” and “SiriusXM Satellite Radio” (individually and collectively, the “Service”). Plaintiff Flo & Eddie brings this class action on its own behalf and on behalf of all other similarly situated owners of Pre-1972 Recordings (the “Class” or “Class Members”) to put an end to SiriusXM’s wholesale infringement, misappropriation / unfair competition, conversion

and civil theft of their Pre-1972 Recordings and to obtain damages, including punitive damages, and injunctive relief.

3. The Service is a highly profitable business that engages in the large-scale distribution and public performance of sound recordings to over 24 million subscribers. The

1 As set forth below, Plaintiff intends to amend this Complaint to add a claim for civil theft pursuant to Fla. Stat. § 722.11 for violating Fla. Stat. § 812.014(1) in the event the letter attached hereto as Exhibit B does not result in a return of the monies described therein.

2 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00107175.DOCX }

Case 1:13-cv-23182-KMM Document 1 Entered on FLSD Docket 09/03/2013 Page 3 of 18

Service is distributed in Florida to its subscribers through (a) satellite digital transmission directly to subscribers via digital radios manufactured or licensed by SiriusXM; (b) satellite digital transmission to subscribers of other services, such as DIRECTV Satellite Television Service and Dish Network Satellite Television Service via digital set top boxes manufactured or licensed by DIRECTV or Dish; and (c) the Internet, by way of (i) digital media streaming devices, such as Roku, digital radios and home audio systems, such as Sonos; (ii) its website at

www.SiriusXM.com; or (iii) computer, smart phone and other mobile applications for various operating systems, including Apple iOS, Android, Windows, Blackberry and HP webOS. In furtherance of the Service, SiriusXM, without any license or authority, has copied Plaintiff’s and each Class Members’ Pre-1972 Recordings onto the Service’s central server(s) and makes such copies available to its subscribers in Florida. SiriusXM publicly performs these recordings in Florida via streaming audio transmission through the Service for a fee as part of a subscription

plan that currently includes up to 72 different music channels. As part of the Service, many subscribers in Florida are also able to: (A) download the stream of a selected channel on the Service, allowing later or multiple listenings of the sound recordings previously streamed during the selected time period; (B) download particular sound recordings, allowing later or multiple listenings of such sound recordings; (C) download particular programs incorporating sound

recordings as part of the Service’s “On Demand” feature, allowing later or multiple listenings of such sound recordings; and (D) allow subscribers to pause, rewind and replay sound recordings

using the Service’s “Replay” feature. 4. Simply stated, SiriusXM has disregarded the Plaintiff’s and other Class Members’ exclusive ownership of their Pre-1972 Recordings in Florida, impaired their ability to sell, license, lawfully exploit, or otherwise control their Pre-1972 Recordings as permitted under

Florida law, and misappropriated / unfairly competed, converted and stolen same for its own financial gain. SiriusXM’s conduct is causing, and will continue to cause, enormous and 3 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00107175.DOCX }

Case 1:13-cv-23182-KMM Document 1 Entered on FLSD Docket 09/03/2013 Page 4 of 18

irreparable harm to Plaintiff and the other Class Members unless compensatory and punitive damages are awarded against SiriusXM and it is enjoined and restrained from engaging in further infringement, misappropriation / unfair competition, conversion and civil theft of the Pre-1972 Recordings. THE PARTIES, JURISDICTION AND VENUE 5. Plaintiff Flo & Eddie is a corporation duly organized and existing under the laws of

California, with its principal place of business in Los Angeles, California. Plaintiff is engaged in the business of distributing, selling, and/or licensing the reproduction, distribution, sale, and performance of its Pre-1972 Recordings in phonorecords, in audiovisual works, and for streaming (i.e., performing) and downloading over the Internet. Plaintiff invests substantial money, time, effort, and creative talent in creating, advertising, promoting, selling and licensing its unique and valuable sound recordings.

6. Plaintiff possesses exclusive ownership rights in The Turtles Pre-1972 Recordings, the titles of which are specified on the schedule attached hereto as Exhibit A and incorporated herein by reference (“Plaintiff’s Recordings”). The United States Congress expressly has recognized that the states provide exclusive protection through various state law doctrines to recordings initially “fixed” before February 15, 1972, and that the federal Copyright Act does not

“annul[] or limit[]those rights until February 15, 2067.” 17 U.S.C. § 301(c). Accordingly, as quoted above, Florida law protects the exclusive ownership of Plaintiff and the other Class

Members to their Pre-1972 Recordings in Florida. 7. Upon information and belief, Defendant SiriusXM is a corporation duly organized and existing under the laws of Delaware, with its principal place of business in New York, New York. The Court has personal jurisdiction over Defendant in that Defendant has offices

throughout Florida, including, without limitation, in Miami, Jupiter, Deerfield Beach and Boca

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Raton, Defendant is engaged in tortious conduct in Florida, and Defendant’s conduct causes injury to Plaintiff and the other Class Members in Florida. 8. This court has subject matter jurisdiction over the subject matter of this class action pursuant to 28 U.S.C. § 1332(d). The amount in controversy exceeds Five Million Dollars ($5,000,000), there are more than one thousand (1,000) putative Class Members, and the requisite minimal diversity of citizenship exists because Plaintiff and Defendant are citizens of

different States. 9. Venue of this action is proper in this jurisdiction under 28 U.S.C. § 1391(b) in that Defendant maintains several offices in the Southern District of Florida and a substantial part of the events giving rise to the claims alleged herein occurred in the Southern District of Florida. 10. The true names and capacities, whether individual, corporate, associate or otherwise, of defendants named herein as Does 1 through 10, inclusive, are unknown to Plaintiff

who therefore sues said defendants by such fictitious names (the “Doe Defendants”). Plaintiff will amend this Complaint to allege their true names and capacities when such have been ascertained. Upon information and belief, each of the Doe Defendants herein is responsible in some manner for the occurrences herein alleged, and Plaintiff’s injuries and those of the other Class Members as herein alleged were proximately caused by such defendants’ acts or

omissions. (All of the Defendants, including the Doe Defendants, collectively are referred to as “Defendants”).

CLASS ACTION ALLEGATIONS 11. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil Procedure 23 on behalf of itself and the other Class Members defined as the owners of Pre-1972 Recordings reproduced, performed, distributed or otherwise exploited by Defendants in Florida

without a license or authorization to do so during the period from August 29, 2009 to the present. Plaintiff reserves the right to modify this definition of the Class after further discovery; the Court 5 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00107175.DOCX }

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may also be requested to utilize and certify subclasses in the interests of ascertainability, manageability, justice and/or judicial economy. 12. This action may be properly brought and maintained as a class action because there is a well-defined community of interest in the litigation and the Class Members are readily and easily ascertainable and identifiable from Defendant SiriusXM’s database files and records. Plaintiff is informed and believes, and on that basis alleges, that Defendants have engaged a third

party to supply the metadata, including the metadata relating to Pre-1972 Recordings unlawfully streamed to subscribers in Florida, and that such metadata contains the name and location of the owners thereof. The Class members are further ascertainable through methods typical of class action practice and procedure. 13. Plaintiff is informed and believes, and alleges thereon, that the Pre-1972 Recordings infringed, misappropriated / unfairly competed, converted and/or stolen in Florida by

Defendants number in the millions and are owned by many thousands of Class Members. It is therefore impractical to join all of the Class Members as named Plaintiffs. Further, the claims of the Class Members may range from smaller sums to larger sums. Accordingly, using the class action mechanism is the most economically feasible means of determining and adjudicating the merits of this litigation.

14. The claims of Plaintiff are typical of the claims of the Class Members, and Plaintiff’s interests are consistent with and not antagonistic to those of the other Class Members

it seeks to represent. Plaintiff and the other Class Members have all been subject to infringement, misappropriation / unfair competition, conversion and theft of their Pre-1972 Recordings in Florida, have sustained actual pecuniary loss and face irreparable harm from Defendants’ continued infringement, misappropriation / unfair competition, conversion and theft

of their Pre-1972 Recordings.

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15. Plaintiff has no interests that are adverse to, or which conflict with, the interests of the other Class Members and is ready and able to fairly and adequately represent and protect the interests of the other Class Members. Plaintiff believes strongly in the protection of artists’ rights in connection with their creative work. Plaintiff has raised viable claims for infringement, misappropriation / unfair competition, conversion and theft of the type well established in Florida and reasonably expected to be raised by Class Members. Plaintiff will diligently pursue

those claims. If necessary, Plaintiff may seek leave of the Court to amend this Complaint to include additional class representatives to represent the Class or additional claims as may be appropriate. Plaintiff is represented by experienced, qualified and competent counsel who are committed to prosecuting this action. 16. Common questions of fact and law exist as to all Class Members that plainly predominate over any questions affecting only individual Class Members. These common legal

and factual questions, which do not vary from Class Member to Class Member, and which may be determined without reference to the individual circumstances of any Class Member include, without limitation, the following: (A) Whether Defendant SiriusXM reproduced, performed, distributed or otherwise exploited Pre-1972 Recordings in Florida;

(B) Whether Defendant SiriusXM’s reproduction, performance, distribution or other exploitation of Pre-1972 Recordings in Florida constitutes common law copyright

infringement under Florida law; (C) Whether Defendant SiriusXM’s reproduction, performance, distribution or other exploitation of Pre-1972 Recordings in Florida constitutes misappropriation / unfair competition under Florida law;

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(D) Whether Defendant SiriusXM’s reproduction, performance, distribution or other exploitation of Pre-1972 Recordings in Florida constitutes conversion under Florida law; (E) Whether Defendant SiriusXM’s reproduction, performance, distribution or other exploitation of Pre-1972 Recordings in Florida constitutes civil theft in violation of Fla. Stat. §§ 722.11 and 812.014(1);

(F) The basis on which restitution and/or damages to all injured members of the Class can be computed; (G) Whether Defendant SiriusXM’s violation of Florida common law for copyright infringement entitles the Class Members to recover punitive damages; (H) Whether Defendant SiriusXM’s violation of Florida common law for copyright infringement is continuing, thereby entitling Class Members to injunctive or

other equitable relief; (I) Whether Defendant SiriusXM’s violation of Florida’s laws against misappropriation / unfair competition entitles the Class Members to recover punitive damages; (J) Whether Defendant SiriusXM’s violation of Florida’s laws against

misappropriation / unfair competition is continuing, thereby entitling Class Members to injunctive or other relief;

(K) Whether Defendant SiriusXM’s violation of Florida’s laws against conversion entitles the Class Members to recover punitive damages; (L) Whether Defendant SiriusXM’s violation of Florida’s laws against conversion is continuing, thereby entitling Class Members to injunctive or other relief;

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(M) Whether Defendant SiriusXM’s violation of Fla. Stat. § 812.014(1) for civil theft entitles the Class Members to recover treble the amount of compensatory damages in accordance with Fla. Stat. § 772.11; and (N) Whether Defendant SiriusXM’s violation of Fla. Stat. § 812.014(1) for civil theft is continuing, thereby entitling Class Members to injunctive or other relief. 17. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy, since individual litigation of the claims of all Class Members is highly impractical. Even if every Class Member could afford to pursue individual litigation, the Court system could not. It would be unduly burdensome to the courts in which individual litigation of numerous cases would proceed. Individualized litigation would also present the potential for varying, inconsistent or contradictory judgments and would magnify the delay and expense to all parties and to the court system resulting from multiple trials of the same factual

issues. By contrast, maintenance of this action as a class action, with respect to some or all of the issues presented herein, presents few management difficulties, conserves the resources of the parties and of the court system, and protects the rights of each Class Member. Plaintiff anticipates no difficulty in the management of this action as a class action. 18. Additionally, the prosecution of separate actions by individual Class Members may

create a risk of adjudications with respect to them that would, as a practical matter, be dispositive of the interests of the other Class Members not parties to such adjudications or that would

substantially impair or impede the ability of such nonparty Class Members to protect their interests. The prosecution of individual actions by Class Members could establish inconsistent results and incompatible standards of conduct for Defendant SiriusXM. 19. Defendants have engaged in common law copyright infringement, misappropriation

/ unfair competition, conversion and civil theft, which has affected all of the Class Members such that final and injunctive relief on behalf of the Class as a whole is efficient and appropriate. 9 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00107175.DOCX }

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FIRST CLAIM FOR RELIEF

(Common Law Copyright Infringement) 20. Plaintiff hereby incorporates the allegations set forth in paragraphs 1 through 19, above, as though set forth in full herein. 21. The Pre-1972 Recordings are unique intellectual property subject to common law copyright protection under the law of the State of Florida.

22. As the owners of valid common law copyrights or exclusive licensees in and to the Pre-1972 Recordings, Plaintiff and the other Class Members possess the exclusive rights to reproduce, perform, distribute or otherwise exploit the Pre-1972 Recordings, and license, or refrain from licensing, others to do so. 23. Plaintiff and the other Class Members have not authorized or licensed Defendants to reproduce, perform, distribute or otherwise exploit the Pre-1972 Recordings in any manner.

Defendants are not, and at all relevant times were not, entitled to or authorized to reproduce, perform, distribute or otherwise exploit the Pre-1972 Recordings. 24. The reproduction, performance, distribution or other exploitation by Defendants of unauthorized copies of the Pre-1972 Recordings, including, without limitation, Plaintiff’s Recordings, constitute infringement of Plaintiff and the Other Class Member’s common law

copyrights in such recordings and violation of their exclusive rights therein. The Plaintiff and Class Members have invested substantial time and money in the development of their Pre-1972

Recordings. 25. The Defendants have infringed the copyrights to the Pre-1972 Recordings at little or no cost and without license or authority. They have copied the Pre-1972 Recordings owned by Plaintiff and the other Class Members and publicly perform these recordings in Florida for

their subscribers as set forth in paragraph 3, above. Defendants have disregarded the Plaintiff’s and other Class Members’ copyrights in and exclusive ownership of their Pre-1972 Recordings, 10 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00107175.DOCX }

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impaired their ability to sell, lawfully exploit, or otherwise control their Pre-1972 Recordings, all for their own financial gain. 26. As a direct and proximate consequence of Defendants’ copyright infringement of the Pre-1972 Recordings owned by Plaintiff and the Class Members, Plaintiff and the Class Members have been damaged in an amount that is not as yet fully ascertained but which Plaintiff is informed and believes, and alleges thereon, exceeds $100,000,000, according to proof.

27. Plaintiff is informed and believes, and alleges thereon, that in engaging in the conduct described above, the Defendants acted with oppression, fraud and/or malice. The conduct of the Defendants has been despicable and undertaken in conscious disregard of the Plaintiff’s and each Class Member’s rights. Accordingly, Plaintiff and the Class Members are entitled to an award of punitive damages against Defendants in an amount sufficient to punish and make an example of them according to proof.

28. Defendants’ conduct is causing, and unless enjoined and restrained by this Court, will continue to cause, Plaintiff and each Class Member great and irreparable injury that cannot fully be compensated or measured in money, and for which Plaintiff and each Class Member has no adequate remedy at law. Plaintiff and the other Class Members are entitled to temporary, preliminary and permanent injunctions, prohibiting further violation of Plaintiff’s and Class

Members’ rights in and exclusive ownership of their Pre-1972 Recordings in Florida. SECOND CLAIM FOR RELIEF

(Misappropriation / Unfair Competition) 29. Plaintiff hereby incorporates the allegations set forth in paragraphs 1 through 28, above, as though set forth herein. 30. Plaintiff and each Class Member are, and at relevant times were, the exclusive

owner of all right, title and interest in and to their Pre-1972 Recordings and possession thereof in Florida. 11 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00107175.DOCX }

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31. Plaintiff and the other Class Members have not authorized or licensed Defendants to reproduce, perform, distribute or otherwise exploit the Pre-1972 Recordings in any manner. Defendants are not, and at all relevant times were not, entitled to or authorized to to reproduce, perform, distribute or otherwise exploit the Pre-1972 Recordings. 32. Plaintiff and the Other Class Members have expended significant time, labor and money in the making, marketing and distributing the Pre-1972 Recordings. Defendants have

paid nothing to Plaintiff or the Other Class Members for reproducing, performing, distributing or otherwise exploiting the Pre-1972 Recordings. Without expending any time, labor or money of its own, Defendants have simply appropriated the commercial qualities, reputation and salable properties of the Pre-1972 Recordings, including, without limitation Plaintiff’s Recordings, by unfairly and directly competing with Plaintiff and the other Class Members’ use, sale, distribution and exploitation of the Pre-1972 Recordings. In so doing, Defendants have

undermined Plaintiff and the other Class Members’ substantial creative and financial investment for Defendants’ own commercial benefit and have commercially damaged the market value of the licenses Plaintiff and the Other Class Members are now and had been able to negotiate with third parties to reproduce, perform, distribute or otherwise exploit the Pre-1972 Recordings. 33. Defendants have usurped for itself the fruits of Plaintiff and the other Class

Members’ financial and creative investments. Defendants are profiting from the results of Plaintiff and the other Class Members’ expenditures and skill without having to incur any

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34. Defendants’ acts constitute a misappropriation of Plaintiff and the other Class Members’ rights in and to the Pre-1972 Recordings, and constitute misappropriation and unfair competition involving record piracy under Florida law. 35. As a direct and proximate result of Defendants’ misappropriation and unfair competition, Plaintiff and the Class Members are entitled to recover all proceeds and other compensation received or to be received by Defendants from their misappropriation and unfair

competition of the Pre-1972 Recordings. Plaintiff and the members of the Class have been damaged, and Defendants have been unjustly enriched, in an amount that is not as yet fully ascertained but which Plaintiff is informed and believes, and alleges thereon, exceeds $100,000,000, according to proof at trial. Such damages and/or restitution and disgorgement should include a declaration by this Court that Defendants are constructive trustees for the benefit of Plaintiff and the other Class Members, and an order that Defendants convey to

Plaintiff and Class Members the gross receipts received or to be received that are attributable to Defendants misappropriation of the Pre-1972 Recordings. 36. Plaintiff is informed and believes, and alleges thereon, that in engaging in the conduct as described above, the Defendants acted with oppression, fraud and/or malice. The conduct of the Defendants has been despicable and undertaken in conscious disregard of

Plaintiff’s rights. Accordingly, Plaintiff and the Class Members are entitled to an award of punitive damages against Defendants, and each of them, in an amount sufficient to punish and

make an example of them according to proof at trial. 37. Defendants’ conduct is causing, and unless enjoined and restrained by this Court, will continue to cause, Plaintiff and the Class Members great and irreparable injury that cannot fully be compensated or measured in money. Plaintiff and the other Class Members are entitled

to temporary, preliminary and permanent injunctions, prohibiting further violation of Plaintiff’s

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and the other Class Members right to exclusive ownership of their Pre-1972 Recordings and further acts of unfair competition and misappropriation. THIRD CLAIM FOR RELIEF (Conversion) 38. Plaintiff hereby incorporates the allegations set forth in paragraphs 1 through 37, above, as though set forth in full herein.

39. Plaintiff and each Class Member are, and at relevant times were, the exclusive owner of all right, title and interest in and to their Pre-1972 Recordings and possession thereof in Florida. 40. Plaintiff and each Class Member have, and for all times relevant herein has had, an intangible property interest in the time, effort and expense of producing the Pre-1972 Recordings. Additionally, as set forth in paragraphs 20 through 24 above, Plaintiff and each

Class Member have a common law copyright in each of the Pre-1972 Recordings. 41. Plaintiff and the Class Members created and produced the Pre-1972 Recordings as part of a business venture to commercially reproduce, perform, distribute and otherwise exploit the Pre-1972 Recordings. 42. By their acts and conduct alleged above, Defendants have converted Plaintiff’s and

the Class Members’ property rights in their Pre-1972 Recordings, including, without limitation Plaintiff’s Recordings, for Defendants’ own use and wrongful disposition for financial gain.

43. As a direct and proximate result of Defendants’ conversion, Plaintiff and the members of the Class have been damaged, and Defendants have been unjustly enriched, in an amount that is not as yet fully ascertained but which Plaintiff is informed and believes, and alleges thereon, exceeds $100,000,000 according to proof at trial. Defendants are constructive

trustees for the benefit of Plaintiff and Class Members, and the Court should order Defendants to

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convey to Plaintiff and the Class Members the gross receipts received or to be received from Defendants conversion of the Pre-1972 Recordings. 44. Plaintiff is informed and believes, and based thereon alleges, that in engaging in the conduct as described above, the Defendants acted with oppression, fraud and/or malice. The conduct of the Defendants has been despicable and undertaken in conscious disregard of Plaintiff’s rights. Accordingly, Plaintiff and the Class Members are entitled to an award of

punitive damages against Defendants, and each of them, in an amount sufficient to punish and make an example of them according to proof at trial. 45. Defendants’ conduct is causing, and unless enjoined and restrained by this Court will continue to cause, Plaintiff and the Class Members great and irreparable injury that cannot fully be compensated or measured in money. Plaintiff and each Class Member are entitled to temporary, preliminary and permanent injunctions prohibiting further acts of conversion of their

Pre-1972 Recordings. FOURTH CLAIM FOR RELIEF (Civil Theft under Fla. Stat. § 772.11 for violations of Fla. Stat. § 812.014) 46. Plaintiff has submitted the demand letter attached hereto as Exhibit B required by Fla. Stat. §772.11(1) before it can bring a claim for Civil Theft. As soon as the thirty (30) days

have run and assuming Defendants have not agreed to pay the amounts contained in that demand, Plaintiff will amend this Complaint to add a claim for Civil Theft pursuant to Fla. Stat. §772.11.

PRAYER FOR RELIEF WHEREFORE, Plaintiff, on behalf of itself and the other Class Members, prays for Judgment against Defendants, and each of them, as follows: Regarding the Class Action:

1. That this is a proper class action maintainable pursuant to the applicable provisions of the Federal Rules of Civil Procedure; and 15 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00107175.DOCX }

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2. That the named Plaintiff is appropriate to be appointed representative of the respective Class.

On The First Claim For Relief For Common Law Copyright Infringement against all Defendants: 1. For compensatory damages in excess of $100,000,000 according to proof at trial;

2. Punitive and exemplary damages according to proof trial; and 3. A temporary, preliminary, and permanent injunction enjoining and restraining Defendants, and their respective agents, servants, directors, officers, principals, employees, representatives, subsidiaries and affiliated companies, successors, assigns, and those acting in concert with them or at their direction, from directly or indirectly infringing in any manner the copyrights in the Pre-1972 Recordings in Florida, including

without limitation by directly or indirectly copying, reproducing, downloading, distributing, communicating to the public, uploading, linking to, transmitting, publicly performing, or otherwise exploiting in any manner any of the Pre-1972 Recordings.

On The Second Claim For Relief For Misappropriation / Unfair Competition against all Defendants: 1. For compensatory damages in excess of $100,000,000 according to proof at trial;

2. Punitive and exemplary damages according to proof at trial; 3. Imposition of a constructive trust; 4. Restitution of Defendants’ unlawful proceeds, including Defendants’ gross profits; and 5. A temporary, preliminary, and permanent injunction enjoining and restraining Defendants, and their respective agents, servants, directors, officers, principals, employees, representatives, subsidiaries and affiliated companies, successors, assigns,

and those acting in concert with them or at their direction, from directly or indirectly

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misappropriating and/or unfairly competing in any manner the Pre-1972 Recordings in Florida, including without limitation by directly or indirectly copying, reproducing, downloading, distributing, communicating to the public, uploading, linking to, transmitting, publicly performing, or otherwise exploiting in any manner any of the Pre- 1972 Recordings. On the Third Claim For Relief For Conversion against all Defendants:

1. For compensatory damages in excess of $100,000,000 according to proof at trial; 2. Punitive and exemplary damages according to proof at trial; 3. Imposition of a constructive trust; 4. Restitution of Defendants’ unlawful proceeds, including Defendants’ gross profits; and 5. A temporary, preliminary, and permanent injunction enjoining and restraining Defendants, and their respective agents, servants, directors, officers, principals,

employees, representatives, subsidiaries and affiliated companies, successors, assigns, and those acting in concert with them or at their direction, from directly or indirectly converting in any manner the Pre-1972 Recordings in Florida, including without limitation by directly or indirectly copying, reproducing, downloading, distributing, communicating to the public, uploading, linking to, transmitting, publicly performing, or

otherwise exploiting in any manner any of the Pre-1972 Recordings. On All Causes of Action:

1. For reasonable attorneys’ fees and costs as permitted by law; 2. For prejudgement interest at the legal rate; and 3. For such other and further relief as the Court deems just and proper.

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JURY TRIAL DEMAND Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff and the Class Members demand a trial by jury on claims alleged in this Complaint.

DATED: September 3, 2013

Respectfully submitted,

HELLER WALDMAN, P.L. Attorneys for FLO & EDDIE, INC. 3250 Mary Street, Suite 102 Coconut Grove, Florida 33133 Telephone: (305) 448-4144 Telecopier: (305) 448-4155

By: s/Glen H. Waldman Glen H. Waldman, Esq. Fla. Bar No. 618624 Eleanor T. Barnett, Esq. Fla. Bar No. 0355630 Jason Gordon, Esq. Fla. Bar No. 0012973

Henry Gradstein (pro hac vice motion will be filed once a case number has been assigned) Maryann R. Marzano (pro hac vice motion will be filed once a case number has been assigned) Robert E. Allen (pro hac vice motion will be filed once a case number has been assigned) GRADSTEIN & MARZANO, P.C. 6310 San Vicente Blvd., Suite 510 Los Angeles, California 90048 Telephone: (323) 776-3100 Fax: (323) 931-4990

And

Evan S. Cohen (pro hac vice motion will be filed once a case number has been assigned) 1180 South Beverly Drive, Suite 510 Los Angeles, California 90035 Telephone: (310) 556-9800 Fax: (310) 556-9801

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA MIAMI DIVISION Case 1:13-CV-23182 (Moore)

------x FLO & EDDIE, INC., individually and on behalf of all others similarly situated,

Plaintiff,

-against-

SIRIUS XM RADIO INC., and DOES 1 through 10,

Defendants. ------x

DEFENDANT SIRIUS XM’S PARTIAL MOTION TO DISMISS PLAINTIFF’S COMPLAINT AND SUPPORTING MEMORANDUM OF LAW

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TABLE OF CONTENTS

Page

MOTION...... 1

MEMORANDUM OF LAW ...... 1

I. PRELIMINARY STATEMENT ...... 1

II. BACKGROUND ...... 3

III. ARGUMENT ...... 6

THERE IS NO PUBLIC PERFORMANCE RIGHT FOR PRE-1972 RECORDINGS UNDER FLORIDA LAW ...... 6 A. The History of Failed Efforts by the Recording Industry To Obtain a Right of Public Performance for Sound Recordings...... 7 B. Sirius XM’s Public Performance of Plaintiff’s Pre-1972 Recordings Does Not Constitute Common Law Copyright Infringement ...... 10 C. Sirius XM’s Public Performance of Plaintiff’s Pre-1972 Recordings Does Not Constitute Unfair Competition ...... 12 1. Plaintiff Has Failed to Plead Deceptive or Fraudulent Conduct or a Likelihood of Consumer Confusion ...... 13 2. Plaintiff Has Failed to Plead That It Competes With Sirius XM as a Broadcaster ...... 14 D. Sirius XM’s Public Performance of Plaintiff’s Pre-1972 Recordings Does Not Constitute Conversion ...... 18

IV. CONCLUSION ...... 20

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TABLE OF AUTHORITIES

Page(s)

Cases

Agee v. Paramount Commc’ns , 59 F.3d 317 (2d Cir. 1995)...... 17, 18

Arista Records, LLC v. Launch Media, Inc. , 578 F.3d 148 (2d Cir. 2009)...... 4

Ashcroft v. Iqbal , 556 U.S. 662 (2009) ...... passim

Bell Atlantic Corp. v. Twombly , 550 U.S. 544 (2007) ...... 13, 16, 20

Breckenridge Pharm., Inc. v. Metabolite Labs., Inc., 444 F.3d 1356 (Fed. Cir. 2006)...... 16

Carnival Corp. v. Rolls-Royce PLC , No. 08-23318-CIV, 2009 WL 3861450 (S.D. Fla. Nov. 17, 2009) ...... 7

CBS, Inc. v. Garrod , 622 F. Supp. 532 (M.D. Fla. 1985) ...... passim

Clever Covers, Inc. v. Storm Guard, Inc. , No. 806CV1062T27MAP, 2006 WL 2691759 (M.D. Fla. Sept. 20, 2006) ...... 15

DeSilva Constr. Corp. v. Herrald , 213 F. Supp. 184 (M.D. Fla. 1962) ...... 11, 12

Donald Frederick Evans & Assocs., Inc. v. Cont’l Homes, Inc. , 785 F.2d 897 (11th Cir. 1986) ...... 12

Ediciones Musicales Y Representaciones Internacionales, S.A. v. San Martin , 582 F. Supp. 2d 1358 (S.D. Fla. 2008) ...... 14

Flo & Eddie, Inc. v. Sirius XM Radio, Inc. , No. 13-CV-5784 (CM) (S.D.N.Y. Aug. 15, 2013) ...... 6

Flo & Eddie, Inc. v. Sirius XM Radio, Inc. , No. BC 517032 (Cal. Super. Ct. L.A. Cnty. Aug. 1, 2013) ...... 6

Gary v. D. Agustini & Asociados, S.A. , 865 F. Supp. 818 (S.D. Fla. 1994) ...... 8

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TABLE OF AUTHORITIES (continued)

Page (S)

Hill v. Celebrity Cruises, Inc. , No. 09–23815–CIV, 2011 WL 9379007 (S.D. Fla. July 11, 2011) ...... 7

Hill v. Opus Corp. , 841 F. Supp. 2d 1070 (C.D. Cal. 2011) ...... 7

Hogan v. Provident Life & Acc. Ins. Co. , No. 6:08-cv-1897-Orl-19KRS, 2009 WL 2169850 (M.D. Fla. July 20, 2009) ...... 20

Home Design Servs., Inc. v. Park Square Enters., Inc. , No. 6:02-CV-637-ORL28JGG, 6:03-CV-595-ORL28JGG, 2005 WL 1027370 (M.D. Fla. May 2, 2005) ...... 15, 16

In re Aqua Clear Techs., Inc. , 361 B.R. 567 (Bankr. S.D. Fla. 2007)...... 20

In re Corbin’s Estate , 391 So. 2d 731 (Fla. Dist. Ct. App. 1980) ...... 20

Int’l Tape Mfrs. Ass’n v. Gerstein , 344 F. Supp. 38 (S.D. Fla. 1972) ...... 11

Kisling v. Rothschild , 388 So. 2d 1310 (Fla. Dist. Ct. App. 1980) ...... 11

Larach v. Standard Chartered Bank Int’l (Am.) Ltd. , 724 F. Supp. 2d 1228 (S.D. Fla. 2010) ...... 8

Leggins v. Orlando Hous. Auth. , No. 6:13-cv-232-Orl-37DAB, 2013 WL 937739 (M.D. Fla. Mar. 11, 2013)...... 8

M.G.B. Homes, Inc. v. Ameron Homes, Inc. , 903 F.2d 1486 (11th Cir. 1990) ...... 12

Magical Mile, Inc. v. Benowitz , 510 F. Supp. 2d 1085 (S.D. Fla. 2007) ...... 12, 13

Manasa v. Univ. of Miami , 320 So. 2d 467 (Fla. Dist. Ct. App. 1975) ...... 11

Mfg. Research Corp. v. Greenlee Tool Co. , 693 F.2d 1037 (11th Cir. 1982) ...... 17

iii

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TABLE OF AUTHORITIES (continued)

Page (S)

Marine Transp. Servs. Sea-Barge Grp., Inc. v. Python High Performance Marine Corp. , 16 F.3d 1133 (11th Cir. 1994) ...... 19

Murrell v. Trio Towing Serv., Inc. , 294 So. 2d 331 (Fla. Dist. Ct. App. 1974) ...... 19

Nat’l Union Fire Ins. Co. v. Carib Aviation, Inc. , 759 F.2d 873 (11th Cir. 1985) ...... 18

Neva, Inc. v. Christian Duplications Int'l, Inc. , 743 F. Supp. 1533 (M.D. Fla. 1990) ...... 11

Practice Mgmt. Assocs., Inc. v. Old Dominion Ins. Co. , 601 So. 2d 587 (Fla. Dist. Ct. App. 1992) (per curiam) ...... 15

Rochelle Asparagus Co. v. Princeville Canning Co. , 170 F. Supp. 809 (D.C. Ill. 1959) ...... 12

Schism v. United States , 972 F. Supp. 1398 (N.D. Fla. 1997)...... 8

Senfeld v. Bank of Nova Scotia Trust Co. (Cayman) Ltd. , 450 So. 2d 1157 (Fla. Dist. Ct. App. 1984) ...... 19

Shelby Mut. Ins. Co. of Shelby, Ohio v. Crain Press, Inc. , 481 So. 2d 501 (Fla. Dist. Ct. App. 1985) ...... 18

Small Bus. Admin. v. Echevarria , 864 F. Supp. 1254 (S.D. Fla. 1994) ...... 18, 19

SmokEnders, Inc. v. Smoke No More, Inc. , 184 U.S.P.Q. 309 (S.D. Fla. 1974) ...... 12

Stagg Shop of Miami, Inc. v. Moss , 120 So. 2d 39 (Fla. Dist. Ct. App. 1960) ...... 13

Star Fruit Co. v. Eagle Lake Growers , 33 So. 2d 858 (Fla. 1948)...... 18, 19

Third Party Verification v. Signaturelink , 492 F. Supp. 2d 1314 (M.D. Fla. 2007) ...... 15

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TABLE OF AUTHORITIES (continued)

Page (S)

Van Dusen v. Se. First Nat’l Bank , 478 So. 2d 82 (Fla. Dist. Ct. App. 1985) ...... 12

Workplace Corp. v. Office Depot, Inc. , No. 89-1485-CIV-T-13A, 1990 WL 106727 (M.D. Fla. June 5, 1990) ...... 14, 15

Statutes

17 U.S.C. § 102 ...... 4

17 U.S.C. § 106 ...... 4, 5, 8, 10

17 U.S.C. § 114 ...... 5, 8

17 U.S.C. § 301 ...... 4, 5

Act of Jan. 6, 1897, 29 Stat. 481 ...... 4

Fla. Stat. § 768.72 ...... 20

Pub. L. No. 92-140, 85 Stat. 391 (1971) ...... 4, 8

Pub. L. No. 104-39 § 2(3), 109 Stat. 336 (1995) ...... 5, 10

Other Authorities

117 Cong. Rec. 2002 (Feb. 8, 1971) ...... 8

55 Fla. Jur. 2d Trademarks & Unfair Competition § 22 ...... 12

Authorizing a Composer’s Royalty in Revenues from Coin-operated Machines and to Establish a Right of Copyright in Artistic Interpretations: Hearings Before Subcomm. on Patents, Trade-marks, and Copyrights of the Comm. on the Judiciary on H.R. 1269, H.R. 1207, and H.R. 2570 , 80th Cong., 1st Sess. (Comm. Print 1947) ...... 9

Economic Conditions in the Performing Arts: Hearings Before the Select Subcomm. on Ed. of the Comm. on Ed. and Labor, 87th Cong., 1st & 2d Sess. (Comm. Print 1962) ...... 9

Fed. R. Civ. P. 8 ...... 13

Fed. R. Civ. P. 12 ...... 1, 7

Fed. R. Civ. P. 56 ...... 7

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TABLE OF AUTHORITIES (continued)

Page (S)

H.R. Rep. No. 92-487 (1971) ...... 8

H.R. Rep. No. 104-274 (1995) ...... 8, 9

Plaintiff’s Response to Defendant, Sirius XM Inc.’s, Motion to Transfer Venue, Flo & Eddie, Inc. v. Sirius XM Radio, Inc. , No. 1:13-cv-23182 (KMM) (S.D. Fla. Oct. 28, 2013), ECF No. 23 ...... 2, 3, 14

Revision of Copyright Laws: Hearings Before the Comm. on Patents , 74th Cong., 2d Sess. (Comm. Print 1936) ...... 9

S. Rep. No. 92-72 (1971) ...... 8

Second Supplementary Register’s Report on the General Revision of the U.S. Copyright Law (1975), available at Melville B. Nimmer & David Nimmer, 9 Nimmer on Copyright, App. 16 (Lexis 2013) ...... 10

Testimony of Jason S. Berman Chairman and CEO of RIAA Before the Judiciary Subcomm. on Counts & Intellectual Property: Hearing on H.R. 1506 , (June 21, 1995) 1995 WL 371088 (Westlaw) ...... 10

Testimony of the NAB Before the House Judiciary Comm. Subcomm. on Courts & Intellectual Property on H.R. 1506 (June 21, 1995), 1995 WL 371107 (Westlaw) ...... 10

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MOTION

Defendant Sirius XM Radio Inc. (“Sirius XM”) hereby respectfully moves the Court to

dismiss the Complaint of Flo & Eddie, Inc. (“Plaintiff”) pursuant to Federal Rule of Civil

Procedure 12(b)(6) to the extent the Complaint is premised on Sirius XM’s public performance

of Plaintiff’s sound recordings. Since Florida law does not provide, and has never provided,

owners of sound recordings with a right of public performance, for the reasons set forth in more

detail in the Memorandum of Law below, partial dismissal is warranted.

MEMORANDUM OF LAW

I. PRELIMINARY STATEMENT

By this action, Plaintiff, the owner of sound recordings made nearly fifty years ago and

publicly performed widely ever since by myriad broadcast and other outlets, asks this Court to

radically transform the scope of protection accorded to sound recordings under Florida law.

Plaintiff asks the Court to recognize an exclusive right of public performance under Florida law

for sound recordings created before February 15, 1972 (“Pre-1972 Recordings”) in the absence

of any authority recognizing such a right. The result Plaintiff seeks would dramatically expand

Florida law and unravel a century of contrary understandings between the music and

broadcasting industries. Worse, it would immediately turn each radio and television broadcaster,

webcaster, nightclub, retail establishment, fitness center, and the like that performs such

recordings in Florida into a serial copyright infringer. This overt effort to use Florida law as a

means of providing record companies with windfall recoveries from broadcasters or other music

users arising out of performances of such sound recordings, having no basis in law, should be

rejected at the outset of this litigation. Doing so will avoid both needless expense and Plaintiff’s

hoped-for in terrorem effect associated with retaining this critical element of Plaintiff’s case.

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Plaintiff alleges that since 1971 it has owned some 100 master recordings of songs by

The Turtles. Compl. ¶ 2. It concedes that none of these sound recordings is entitled to

protection under federal copyright law, as the Copyright Act only affords certain protections to

sound recordings made on or after February 15, 1972, and each of the sound recordings at issue

here was made before that date. Id. Bereft of rights under federal law, Plaintiff (a) asserts that

Sirius XM’s broadcasts of Pre-1972 Recordings infringe a purported performance right under

Florida common law and (b) alleges that the performances at issue support a recovery in excess

of $100 million in damages supposedly sustained by Plaintiff and members of a putative class of

similarly situated owners of Pre-1972 Recordings. Id. ¶¶ 24, 26, 35, 43. The Complaint leaves

unanswered why, if a state-law performance right in Pre-1972 Recordings in fact exists, Plaintiff

waited more than four decades to assert it, let alone why Plaintiff has asserted this supposed right

against just one broadcaster out of many thousands of music users. Nothing about Sirius XM’s

operations either distinguishes it from other music users in this regard or otherwise overcomes

the legal vacuum in which Plaintiff’s performance right-based claims have been fashioned.

While the Complaint contends that the claimed injury to Plaintiff and the putative class

derives from multiple asserted unauthorized acts on the part of Sirius XM—to wit, the

“unauthorized reproduction, performance, distribution, or other exploitation” of Pre-1972

Recordings ( id. ¶ 1)—it is unquestionably the asserted performance right that is central to this

action. See id. ¶ 2 (adverting to Sirius XM’s performances of Turtles recordings “every hour of

every day” to subscribers in Florida); id. ¶ 3 (describing various platforms by which Sirius XM

programming allegedly is transmitted); Pl.’s Resp. to Def.’s Mot. To Transfer Venue at 11 & n.2,

Flo & Eddie, Inc. v. Sirius XM Radio, Inc. , No. 1:13-cv-23182 (KMM) (S.D. Fla. Oct. 28, 2013),

ECF No. 23 (asserting that “transmissions” are “gravamen of the Complaint” and conceding that

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allegations regarding copying are “secondary to the larger claim involving Sirius’ transmissions

of the Masters in Florida to Sirius’ Florida subscribers”). Sirius XM therefore brings this motion

for partial dismissal of the Complaint at the threshold of this action because there is no

performance right for sound recordings under Florida law. A ruling in Sirius XM’s favor would

materially narrow this dispute, resulting in more efficient litigation of the case and conservation

of judicial resources, impacting, among other matters, the propriety of class treatment, the

identity of prospective class members should class treatment be determined appropriate, as well

as the scope of fact and putative damages discovery more generally. What would remain is the

balance of Plaintiff’s claims premised on alleged reproductions made by Sirius XM via server

copies of sound recordings in aid of its broadcast transmissions and copies offered for sale or

distribution via download. Sirius XM intends to seek disposition of that part of Plaintiff’s claims

on a motion for summary judgment on the basis that Sirius XM makes no such copies of sound

recordings in Florida (and in the case of downloads, makes no such copies at all), but recognizes

that limited discovery must first be completed before it addresses those claims. 1

II. BACKGROUND

Terminology and Statutory Background

Plaintiff alleges in the preamble to the Complaint that it owns “sound recordings of

musical performances that initially were ‘fixed’ ( i.e. , recorded) prior to February 15, 1972,” and

later alleges that it engages in the business of licensing, inter alia , the “performance of its Pre-

1972 Recordings.” Id. ¶ 5. Although the Complaint asserts claims only under Florida law, the

allegations of the Complaint as well as the arguments made below addressing those allegations

are best understood in relation to certain definitions and rights found in the federal Copyright

1 This motion does not address Plaintiff’s civil theft claim. Although the Complaint stated Plaintiff’s intention to amend to add such a claim, Compl. ¶ 46, Plaintiff has not done so. 3

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Act, which are briefly summarized here.

The Copyright Act recognizes two separate copyrights associated with recorded music:

one copyright in the music and lyrics (together, a “musical composition”) and another in a

recorded rendition of that song, e.g. , when it is recorded by a particular singing group or

orchestra (a “sound recording”). See 17 U.S.C. § 102(a)(2), (7). While musical compositions

have enjoyed copyright protection since 1897, see Act of Jan. 6, 1897, 29 Stat. 481, sound

recordings—the only category of works at issue in this case—were not covered by the federal

See Pub. L. No. 92-140, 85 Stat. 391 (1971) (“Sound Recording Act”). The Sound Recording

Act afforded only prospective protection, such that only recordings created on or after the

effective date would be protected under federal law, and it limited that protection to the right

“[t]o reproduce and distribute” “tangible” copies of sounds recordings. Id.

The upshot of the Sound Recording Act was twofold. First, Pre-1972 Recordings like

those at issue in this case remained subject to state law and whatever protections such law did (or

did not) provide. See 17 U.S.C. § 301(c) (preserving unspecified state law remedies for Pre-

1972 Recordings). Second, even as to those “post-1972” recordings granted federal copyright

protection for the first time, the copyright owners (usually record companies) received no right

of public performance, and therefore “no right to extract licensing fees from radio stations and

other broadcasters of recorded music.” Arista Records, LLC v. Launch Media, Inc. , 578 F.3d

148, 152 (2d Cir. 2009). Congress thus left sound recordings on a distinctly different footing

than musical compositions, which had long enjoyed a public performance right. See 17 U.S.C. §

106(4); Arista Records, 578 F.3d at 152.

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Effective February 1, 1996, the Digital Performance Right in Sound Recordings Act of

1995 granted owners of federally copyrighted sound recordings ( i.e. , those created on or after

February 15, 1972) the limited right “to perform the copyrighted work publicly by means of a

digital audio transmission.” Pub. L. No. 104-39 § 2(3), 109 Stat. 336 (1995) (codified at 17

U.S.C. §§ 106(6), 114). Pursuant to section 106(6), Sirius XM is required to pay royalties for its

digital audio transmissions of post-1972 sound recordings. Because Congress has never afforded

The Complaint

Plaintiff’s principals have been performing together as The Turtles since 1965. Compl. ¶

2. Since approximately 1971, Plaintiff has owned the entire catalog of 100 master recordings

made by The Turtles. Id. Each of these master recordings was made prior to February 15, 1972,

and therefore each falls outside of the scope of federal copyright protection. Id. ; 17 U.S.C. §

301(c). While the Complaint includes allegations that Sirius XM has copied Plaintiff’s Pre-1972

Recordings onto central servers and enables subscribers to download streams of sound

recordings for later listening, Compl. ¶ 3, the gravamen of the Complaint is that Sirius XM

performs Turtles recordings “every hour of every day” to subscribers in Florida. Id. ¶ 2. Apart

from the bare allegation that Plaintiff “is engaged in the business of distributing, selling, and/or

licensing the reproduction, distribution, sale, and performance of its Pre-1972 Recordings,” id. ¶

5, and notwithstanding its contention that its recordings include “numerous iconic hits,” id. ¶ 2,

Plaintiff fails to allege a single instance in which it has licensed the public performance of its

recordings, that any radio broadcaster or other performer of music has ever requested such a

license from it, or that any third party has refused to take a license from Plaintiff because of

Sirius XM’s use of the recordings.

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Plaintiff also alleges that Sirius XM’s “use of the Pre-1972 Recordings is likely to cause

confusion, mistake or deception as to the source, sponsorship, affiliation or connection between

Plaintiff and the other Class Members, and Defendants.” Id. ¶ 33. Even though Sirius XM

(together with its predecessors) has been offering its service continuously since 2001, Plaintiff

neither identifies a single instance of actual confusion by anyone, nor alleges how Sirius XM’s

inclusion of Plaintiff’s songs among the millions of tracks it performs each year by thousands of

recording artists could possibly deceive or confuse the public into the mistaken belief that

Plaintiff is somehow sponsoring or affiliated with Sirius XM.

Related Actions

Plaintiff has filed nearly identical suits against Sirius XM in California and New York on

behalf of the same putative class, the only meaningful difference being that Plaintiff seeks relief

in those cases under California and New York law, rather than Florida law. Flo & Eddie, Inc. v.

Sirius XM Radio, Inc. , No. BC 517032 (Cal. Super. Ct. L.A. Cnty. Aug. 1, 2013) (subsequently

removed to federal court); Flo & Eddie, Inc. v. Sirius XM Radio, Inc. , No. 13-CV-5784 (CM)

(S.D.N.Y. Aug. 15, 2013). Sirius XM has moved to transfer this case and the California action

to the Southern District of New York, and to stay Sirius XM’s time to respond until the transfer

motions are decided. Those motions are pending. Sirius XM has filed a partial motion to

dismiss the complaint in the New York action on grounds similar to those argued in this motion.

III. ARGUMENT

THERE IS NO PUBLIC PERFORMANCE RIGHT FOR PRE-1972 RECORDINGS UNDER FLORIDA LAW

The Complaint hinges on the mistaken notion that Florida law affords to the owner of a

Pre-1972 Recording the exclusive right of public performance. Because no such right exists, no

liability arises out of Sirius XM’s broadcasting of Pre-1972 Recordings. This conclusion is

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compelled by (i) the decades-long efforts of the record industry to secure a first-ever

performance right for sound recordings in any venue , the legislative history of which confirms

the absence of state law, in Florida or elsewhere, providing for such a right ( see infra , Section A)

and (ii) the lack of any cases finding an exclusive right of public performance for sound

recordings under the causes of action asserted by Plaintiff or Florida law more generally ( see

infra, Sections B-D).

Insofar as those portions of the Complaint premised on a public performance right for

Pre-1972 Recordings fail to state a claim upon which relief may be granted, partial dismissal of

the Complaint is warranted. See, e.g. , Hill v. Opus Corp. , 841 F. Supp. 2d 1070, 1082 (C.D. Cal.

2011) (granting motion to dismiss parts of plaintiff’s claims); Hill v. Celebrity Cruises, Inc. , No.

09–23815–CIV, 2011 WL 9379007, at *1, *3 (S.D. Fla. July 11, 2011); Carnival Corp. v. Rolls-

Royce PLC , No. 08-23318-CIV, 2009 WL 3861450, at *6 (S.D. Fla. Nov. 17, 2009). In the

alternative, pursuant to Rules 12(d) and 56(a) of the Federal Rules of Civil Procedure, the Court

could convert this motion to a partial motion for summary judgment addressed to that part of

each claim premised on an exclusive right of public performance.

A. The History of Failed Efforts by the Recording Industry To Obtain a Right of Public Performance for Sound Recordings

For nearly a century, the recording industry tried, and failed, to obtain a public

performance right for sound recordings. The legislative history of those efforts to amend the

understanding, shared by Congress, the United States Copyright Office, the recording industry,

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and broadcasters alike as to the historic absence of such a right under state law, whether in

Florida or elsewhere. 2

The words “sound recording” appeared for the first time in the Copyright Act in 1971,

following passage of the Sound Recording Act. This new grant of rights was limited: Federal

the scope of that protection was circumscribed. See Sound Recording Act §§ 1, 3. The stated

goal of the Sound Recording Act was to address the problem of rampant record piracy, which

had “rapid[ly] increase[d]” in preceding years due to technological advances. 117 Cong. Rec.

2002 (Feb. 8, 1971); see also H.R. Rep. No. 92-487, at 2 (1971); S. Rep. No. 92-72, at 1, 7

(1971). In furtherance of those goals, owners of qualifying sound recordings were granted

exclusive rights of reproduction and commercial distribution of their works. See 17 U.S.C. §

106(1), (3). At the same time, however, Congress determined not to extend to owners of sound

recordings the right to prevent others from publicly performing those recordings without license

authority. See Sound Recording Act §§ 1(a), 3; 17 U.S.C. § 114(a) (stating that sound recording

rights “do not include any right of performance under section 106(4)”); see also H.R. Rep. No.

92-487, at 14 (1971) (“[T]he exclusive right accorded by this bill does not extend to the

reproduction of the sounds themselves, as, for example, by playing a sound recording over the

radio.”). The record industry’s advocacy for a performance right was viewed by Congress as an

unnecessary augmentation of the rights needed to accomplish the main goal of the legislation.

See H.R. Rep. No. 104-274, at 11 (1995) (explaining that sound recordings “were not granted the

2 The Court may consider such legislative history on a motion to dismiss for failure to state a claim. See, e.g. , Larach v. Standard Chartered Bank Int’l (Am.) Ltd. , 724 F. Supp. 2d 1228 (S.D. Fla. 2010); Gary v. D. Agustini & Asociados, S.A. , 865 F. Supp. 818 (S.D. Fla. 1994); Leggins v. Orlando Hous. Auth. , No. 6:13-cv-232-Orl-37DAB, 2013 WL 937739 (M.D. Fla. Mar. 11, 2013); Schism v. United States , 972 F. Supp. 1398 (N.D. Fla. 1997). 8

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rights of public performance, on the presumption that the granted rights would suffice to protect

against record piracy”).

Congress’s denial of a performance right comported with the uniform understanding that,

unlike for the rights of reproduction and distribution, where a patchwork of state laws had

existed to address record piracy, there was no existing protection for public performance of

sound recordings at the state level. This recognition permeates repeated legislative efforts by the

record industry to expand legal protections to encompass public performances of sound

recordings. As early as the 1930s, record producers acknowledged that “the law up to date has

not granted” protection against radio stations’ “indiscriminate use of phonograph records.”

Revision of Copyright Laws: Hearings Before the Comm. on Patents , 74th Cong., 2d Sess. 622

(Comm. Print 1936) (Ex. A).3 This lament was repeated during 1947 hearings, with record

industry representatives noting that while “use of records . . . has become standard practice with

hundreds of radio stations,” the performing artist “has no rights at all beyond an original

agreement with the manufacturer.” Authorizing a Composer’s Royalty in Revenues from Coin-

operated Machines and to Establish a Right of Copyright in Artistic Interpretations: Hearings

Before Subcomm. on Patents, Trade-marks, and Copyrights of the Comm. on the Judiciary on

H.R. 1269, H.R. 1207, and H.R. 2570 , 80th Cong., 1st Sess. 6 (Comm. Print 1947) (Ex. B).

During 1961 and 1962, performing artists similarly complained to Congress as to the absence of

royalties “from repeated use” of “[p]laying [records] on radios.” Economic Conditions in the

Performing Arts: Hearings Before the Select Subcomm. on Ed. of the Comm. on Ed. and Labor ,

87th Cong., 1st & 2d Sess. 64-65 (Comm. Print 1962) (Ex. C).

3 Relevant excerpts of several older authorities cited herein are appended as Exhibits A to C. 9

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In connection with efforts by the recording industry to obtain a right of public

performance during the overhaul of the copyright laws that led to the Copyright Act of 1976, the

removed from the proposed general revision of federal copyright law because such change, in

practice, would “impose severe financial burdens on broadcasters.” Second Supplementary

at Melville B. Nimmer & David Nimmer, 9 Nimmer on Copyright, App. 16 (Lexis 2013). Prior

to enactment of the Digital Performance Rights in Sound Recordings Act of 1995, Pub. L. No.

104-39 § 3(3), 109 Stat. 336, which created a limited right in “digital audio transmissions” of

sound recordings at 17 U.S.C. § 106(6), the Recording Industry Association of America

acknowledged that, “[u]nder existing law, record companies and performers . . . have no rights to

authorize or be compensated for the broadcast or other public performance of their works.”

Testimony of Jason S. Berman Chairman and CEO of RIAA Before the Judiciary Subcomm. on

Counts & Intellectual Property: Hearing on H.R. 1506 , (June 21, 1995) 1995 WL 371088

(Westlaw) (emphasis added). This was echoed by the broadcast industry’s trade association, the

National Association of Broadcasters, which testified that “public performance rights” in sound

recordings are “essentially alien to ways we have conducted our business for over 60 years” and

that their imposition “would be enormously disruptive and harmful.” Testimony of the NAB

Before the House Judiciary Comm. Subcomm. on Courts & Intellectual Property on H.R. 1506 , §

C (June 21, 1995), 1995 WL 371107 (Westlaw).

B. Sirius XM’s Public Performance of Plaintiff’s Pre-1972 Recordings Does Not Constitute Common Law Copyright Infringement

Plaintiff asserts that: (1) it is the owner of common law copyrights in its Pre-1972

Recordings; (2) as the purported owner of such common law copyrights, Plaintiff possesses the

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exclusive right to perform its Pre-1972 Recordings; and (3) Sirius XM infringes these purported

common law copyrights by broadcasting Plaintiff’s Pre-1972 Recordings without a license.

Compl. ¶¶ 21-24. These assertions are incorrect.

First, to the extent Plaintiff ever owned any common law copyrights in its Pre-1972

Recordings, it no longer does. Plaintiff does not (and cannot) allege that any of its Pre-1972

Recordings have not been published. Under Florida law, “common law copyrights are lost

through publication.” DeSilva Constr. Corp. v. Herrald , 213 F. Supp. 184, 194 (M.D. Fla.

1962); see also Manasa v. Univ. of Miami , 320 So. 2d 467, 468 (Fla. Dist. Ct. App. 1975)

(affirming dismissal of common law copyright infringement claim because work at issue was

published, and “therefore, not subject to common law copyright”). As the appellate court in

Kisling v. Rothschild , 388 So. 2d 1310 (Fla. Dist. Ct. App. 1980), observed: “[t]he umbrella of

protection afforded by a common law copyright folds up and vanishes when the owner of the

product ‘publishes’ it, or in some manner dedicates it to the public.” Id. at 1312. This principle

applies to sound recordings like any other form of work otherwise capable of protection under

common law copyright. Once a sound recording has been disseminated to the public—and

Plaintiff’s “numerous iconic hits” unquestionably have been—“the performances embodied

within the recorded sounds lose common law copyright protection.” Int’l Tape Mfrs. Ass’n v.

Gerstein , 344 F. Supp. 38, 57 (S.D. Fla. 1972), vacated on other grounds , 494 F.2d 25 (5th Cir.

1974); see also Neva, Inc. v. Christian Duplications Int'l, Inc. , 743 F. Supp. 1533, 1544 (M.D.

Fla. 1990) (explaining that “[u]pon the creation of a work, the author of the work is vested with a

4 In CBS, Inc. v. Garrod , 622 F. Supp. 532 (M.D. Fla. 1985) (“ CBS ”), a case involving record piracy rather than broadcasting activities, the court concluded that sound recordings that had 11

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Second, even for unpublished works, the scope of protection afforded to common law

copyrights is limited to acts of reproduction and distribution. It does not extend to public

performance. As stated in DeSilva Construction , “there is not copyright infringement unless the

copyrighted work itself had been copied.” 213 F. Supp. at 198 (quoting Rochelle Asparagus Co.

v. Princeville Canning Co. , 170 F. Supp. 809 (D.C. Ill. 1959)); see also Van Dusen v. Se. First

Nat’l Bank , 478 So. 2d 82, 87-88 (Fla. Dist. Ct. App. 1985) (limiting infringement to cases

where defendant publishes copies of a work in violation of the plaintiff’s right of first

publication); SmokEnders, Inc. v. Smoke No More, Inc. , 184 U.S.P.Q. 309, 318 (S.D. Fla. 1974)

(noting need to prove “actual copying” in case involving unpublished teaching manuals). In

short, no Florida court has ever held that unlicensed public performances of Pre-1972

Recordings constitute copyright infringement. Nothing in the history or controlling body of

Florida law in any way cuts against the common understanding described in detail in Section A,

supra , that no such performance right exists.

C. Sirius XM’s Public Performance of Plaintiff’s Pre-1972 Recordings Does Not Constitute Unfair Competition

The elements of a Florida common-law unfair competition claim are most typically stated

as (1) deceptive or fraudulent conduct of a competitor, and (2) a likelihood of consumer

confusion. See 55 Fla. Jur. 2d Trademarks & Unfair Competition § 22; M.G.B. Homes, Inc. v.

Ameron Homes, Inc. , 903 F.2d 1486, 1493 (11th Cir. 1990) (“Florida law requires that [plaintiff]

establish deceptive or fraudulent conduct of a competitor and likelihood of consumer

confusion.”) (citing Donald Frederick Evans & Assocs., Inc. v. Cont’l Homes, Inc. , 785 F.2d

897, 914 (11th Cir. 1986)); Magical Mile, Inc. v. Benowitz , 510 F. Supp. 2d 1085, 1089-90 (S.D.

been published could nonetheless be protected under other common law doctrines, including unfair competition and conversion. We address CBS in more detail below. See , infra , Section C. 12

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Fla. 2007) (citing Stagg Shop of Miami, Inc. v. Moss , 120 So. 2d 39 (Fla. Dist. Ct. App. 1960)).

No Florida court has ever found unauthorized public performances of sound recordings to

constitute unfair competition under this test. Plaintiff’s woefully deficient unfair competition

claim must be dismissed because its threadbare and implausible allegations of deceptive or

fraudulent conduct by Sirius XM, consumer confusion, and competition between Plaintiff and

Sirius XM fail to satisfy the pleading standards under Rule 8 of the Federal Rules of Civil

Procedure as articulated by the U.S. Supreme Court in Ashcroft v. Iqbal , 556 U.S. 662, 678-79

(2009) (“ Iqbal ”) and Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555-57 (2007) (“ Twombly ”).

1. Plaintiff Has Failed to Plead Deceptive or Fraudulent Conduct or a Likelihood of Consumer Confusion

Plaintiff’s sole allegation concerning deceptive conduct or a likelihood of consumer

confusion is the conclusory assertion that Sirius XM’s “unauthorized use of the Pre-1972

Recordings is likely to cause confusion, mistake or deception as to the source, sponsorship,

affiliation or connection between Plaintiff and the other Class Members, and Defendants.”

Compl. ¶ 33. That statement does not come close to satisfying the pleading standards established

in Iqbal :

[T]he pleading standard Rule 8 announces does not require “detailed factual allegations,” but it demands more than an unadorned, the-defendant-unlawfully- harmed-me accusation. A pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Nor does a complaint suffice if it tenders “naked assertion[s]” devoid of “further factual enhancement.” . . . Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. . . . We “are not bound to accept as true a legal conclusion couched as a factual allegation.”

556 U.S. 662, 678-79 (2009) (quoting Twombly , 550 U.S. at 555-57).

Plaintiff does not allege any facts to support the legal conclusions concerning deceptive

conduct, fraud, and the likelihood of consumer confusion it hopes this Court will reach. There is

no factual allegation concerning Sirius XM’s open and notorious broadcasting of sound 13

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recordings that could be construed as evidencing deception or fraud. Plaintiff cannot allege even

a single instance of actual consumer confusion despite alleging that Sirius XM has been playing

its sound recordings “every hour of every day.” Compl. ¶ 2. Moreover, there is no factual

allegation that attempts to explain how anything Sirius XM does might cause confusion as to an

affiliation between Sirius XM and Plaintiff or the owners of other Pre-1972 Recordings

broadcast by Sirius XM. The Complaint simply gives no basis on which this Court could credit

Plaintiff’s naked assertion about fraud or a purported likelihood of consumer confusion. It is at

best a “legal conclusion couched as a factual allegation.” Iqbal , 556 U.S. at 678.

2. Plaintiff Has Failed to Plead That It Competes With Sirius XM as a Broadcaster

Perhaps in recognition of its inability to meet the pleading standards for a typical Florida

unfair competition claim, Plaintiff contends that it need only show “(A) time, labor and money

expended by the Plaintiff; (B) competition; and (C) commercial damage.” Compl. ¶ 1. To the

extent Plaintiff’s unfair competition claim is directed at Sirius XM’s broadcast activities, i.e. , the

activities it contends are “the gravamen of the dispute,”5 Plaintiff is relying on an inapposite test

from a single outlier case involving the copying and sale of bootlegged records rather than

performances by a broadcaster. See CBS , 622 F. Supp. at 536. The CBS court adopted its

alternative formulation solely to deal with the specific problem of record piracy, and subsequent

cases have recognized its application is limited to that factual setting. See, e.g. , Ediciones

Musicales Y Representaciones Internacionales, S.A. v. San Martin , 582 F. Supp. 2d 1358, 1361

(S.D. Fla. 2008) (“[I]n CBS , the court limited the availability of these elements to state a cause of

action for unfair competition to those cases involving record piracy.”); Workplace Corp. v. Office

Depot, Inc. , No. 89-1485-CIV-T-13A, 1990 WL 106727, at *1 & n.2 (M.D. Fla. June 5, 1990)

5 Pl.’s Resp. to Def.’s Mot. To Transfer Venue at 11. 14

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(“As specifically stated in CBS , [the court’s] list of requisite elements extend[] only to cases

involving record piracy.”); Clever Covers, Inc. v. Storm Guard, Inc. , No. 806CV1062T27MAP,

2006 WL 2691759, at *1 n.1 (M.D. Fla. Sept. 20, 2006) . No case has ever applied CBS to public

performances like those made every day by Sirius XM and other radio broadcasters.

Even if the Court were to adopt this inapposite set of elements, Plaintiff’s performance-

based claims would still fail. Plaintiff does not adequately allege either (a) competition with

Sirius XM’s broadcast activities, or (b) any commercial damage that flows from them. As the

Florida appellate court has recognized:

The phrase “unfair competition” . . . refers unambiguously only to actions affecting competitors. This is consistent with the Florida case law that requires injury to a competitor as an essential element of any claim of unfair competition. Even giving the phrase “unfair competition” its broadest ordinary meaning, the offense must include at least two elements, “unfairness” and “competition.” This requirement that the offense include an element of rivalry is consistent with the plain meaning of the words and with recognized definitions. To define “unfair competition” simply to mean any act of a commercial enterprise which is unfair would be to expand the phrase to include all alleged wrongdoing by business and therefore include all manner of breach of contract, torts and violations of statutes, administrative regulations and the like. Such a boundless definition is therefore unreasonable.

Practice Mgmt. Assocs., Inc. v. Old Dominion Ins. Co. , 601 So. 2d 587, 587-88 (Fla. Dist. Ct.

App. 1992) (per curiam). Numerous other courts are in accord. See, e.g. , Third Party

Verification v. Signaturelink, 492 F. Supp. 2d 1314, 1325 (M.D. Fla. 2007) (“To state [a] claim

for unfair competition, the pleading party must allege that it competes with its opponent for a

common pool of customers.”); Home Design Servs., Inc. v. Park Square Enters., Inc. , No. 6:02-

CV-637-ORL28JGG, 6:03-CV-595-ORL28JGG, 2005 WL 1027370, at *14 (M.D. Fla. May 2,

2005) (“Although Park Square might reasonably be seen as both a homebuilder and home

designer, there is no indication in the record that it competes with Home Design for a common

pool of customers. While Home Design is exclusively an architectural design firm which

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develops house plans for homebuilders, Park Square designs architectural plans for its own

purposes as a homebuilder.”); Breckenridge Pharm., Inc. v. Metabolite Labs., Inc., 444 F.3d

1356, 1362 (Fed. Cir. 2006) (“A claim of unfair competition in Florida arises under the common

law and, while elusive of precise definition, requires a plaintiff to prove, at minimum,

competition and unfairness.” (emphasis removed)).

Plaintiff does not plead competition between it and Sirius XM in a manner consistent

with the Iqbal /Twombly standard. The Complaint contains only the conclusory statement that

Sirius XM “unfairly and directly compet[es]” with Plaintiff and other members of the putative

class, Compl. ¶ 32, without a single factual allegation to support this “[t]hreadbare recital[] of the

elements of [the] cause of action.” Iqbal , 556 U.S. at 678 (citing Twombly , 550 U.S. at 555).

The Complaint does not, for example, allege that Sirius XM competes with the Plaintiff as a

creator, seller, or licensor of sound recordings, nor does it allege that Plaintiff offers a satellite

radio broadcast service (or any other broadcast service) in competition with Sirius XM. The

Complaint is devoid even of any allegations that Plaintiff has ever licensed a competitor of Sirius

XM to make public performances of Pre-1972 Recordings, or that Sirius XM has paid another

record company (that is, one of Plaintiff’s competitors) for the right to publicly perform its Pre-

1972 Recordings. Although each of the 100 works at issue was recorded more than 40 years

ago, Plaintiff does not point to a single broadcaster, bar, restaurant, retail establishment or other

third party that has ever taken a license from it for the right to perform any of its “numerous

iconic hits.” These shortcomings are fatal to the pleading.

Plaintiff fares no better with its attempt to plead “commercial damage.” In CBS , the

“damage” was the plaintiff’s failure to make a sale it would have made but for the record piracy.

No comparable damage is alleged to arise from the public performance of Pre-1972 Recordings

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here. While no subsequent Florida case has interpreted the “commercial damage” prong of the

CBS standard, cases from analogous settings suggest that commercial damage requires either

diminution of the value of the plaintiff’s product, or some loss suffered by the plaintiff that

would not have occurred absent defendant’s actions – i.e. , something more than the defendant’s

failure to pay for its own use of the property. For example, in Manufacturing Research Corp. v.

Greenlee Tool Co. , 693 F.2d 1037 (11th Cir. 1982), the Eleventh Circuit explained that

cognizable damage under an unfair competition claim (there based on tortious interference)

could result from statements by the defendant “either calculated to diminish the market for

[plaintiff’s product] or made knowing the market was substantially certain to be diminished.” Id .

at 1040. In Agee v. Paramount Communications , 59 F.3d 317 (2d Cir. 1995), the court dismissed

the sound recording owner’s unfair competition claim as “baseless” because the plaintiff “failed

to plead facts indicating that his record sales or licensing revenues have in any way been affected

by [defendants’] use of the recording.” Id. at 327. Consequently, “[t]here is no reasonable

ground for believing that [plaintiff] has suffered economic losses as a result of [the defendants’]

actions, or that consumers think less of the recording.” Id.

The Complaint here fails for similar reasons. Plaintiff alleges that Sirius XM has

“impaired [its] ability to sell, license, lawfully exploit, or otherwise control [its] pre-1972

Recordings” (Compl. ¶ 4) and done “enormous and irreparable harm” (id. ) in an amount

exceeding $100 million (id. ¶¶ 26, 33). But these conclusory and unsupported allegations fail to

describe any actual financial losses or lost dealings Plaintiff has suffered due to Sirius XM’s

broadcasting of its Pre-1972 Recordings. Unlike in Manufacturing Research Corp. , Plaintiff has

failed to allege any actual facts as to how its market has been “diminished” (that is, how its

ability to sell its Pre-1972 Recordings has been “impaired”) by Sirius XM’s performances. And

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just as in Agee , Plaintiff has “failed to plead facts indicating that [its] record sales or licensing

revenues have in any way been affected by [Sirius XM’s] use of the recordings” – or that

Plaintiff “has suffered economic losses . . . or that consumers think less of the recording[s].” See

Agee , 59 F.3d at 327. Again, Plaintiff’s claimed injury is merely that Sirius XM (like every

other broadcaster) does not pay license fees to perform Plaintiff’s recordings. This is not a

legally cognizable injury under Florida unfair competition law. Accordingly, Plaintiff’s claim

should be dismissed insofar as it is based on unauthorized performances of its works.

D. Sirius XM’s Public Performance of Plaintiff’s Pre-1972 Recordings Does Not Constitute Conversion

Plaintiff does not allege facts sufficient to state a claim for conversion. Under Florida

law, “conversion is an unauthorized act which deprives another of his property permanently or

for an indefinite time.” Small Bus. Admin. v. Echevarria , 864 F. Supp. 1254 (S.D. Fla. 1994)

(Moore, J.) (citing Nat’l Union Fire Ins. Co. v. Carib Aviation, Inc. , 759 F.2d 873 (11th Cir.

1985)); see Shelby Mut. Ins. Co. of Shelby, Ohio v. Crain Press, Inc. , 481 So. 2d 501, 503 (Fla.

Dist. Ct. App. 1985). Dispossession or deprivation of the property is essential to the tort, and it

is absent here. As the Florida Supreme Court explained nearly 60 years ago:

[The] [e]ssential element of a conversion is a wrongful deprivation of property to the owner…. The gist of a conversion has been declared to be not the acquisition of the property of the wrongdoer, but the wrongful deprivation of a person of property to the possession of which he is entitled. A conversion consists of an act in derogation of the plaintiff’s possessory rights, and any wrongful exercise or assumption of authority over another’s goods, depriving him of the possession, permanently or for an indefinite time.

Star Fruit Co. v. Eagle Lake Growers , 33 So. 2d 858, 860 (Fla. 1948) (en banc) (internal

quotation marks and citations omitted); see also id. (describing conversion as “detaining goods

so as to deprive the person entitled to the possession of them his dominion over them” and

“exercise of dominion to the exclusion and in defiance of the plaintiff’s right” (internal quotation

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marks and citations omitted)). Moreover, to state a claim for conversion, a plaintiff must show

not just that it was deprived of its property, but that the defendant intended to deprive the

plaintiff of possession:

The Court has examined the cases addressing this issue and concludes that if the Supreme Court chose to revisit the issue, it would not disturb its prior rulings holding that intent is a necessary element of conversion. Specifically, the Court follows the Third District Court of Appeals decision in Senfeld , which found that “the essence of conversion is not the possession of property by the wrongdoer but rather such possession in conjunction with a present intent … to deprive the person entitled to possession of the property.”

Small Business Admin. , 864 F. Supp. at 1262-63 (quoting Senfeld v. Bank of Nova Scotia Trust

Co. (Cayman) Ltd. , 450 So. 2d 1157, 1161 (Fla. Dist. Ct. App. 1984)).

In other words, conversion does not arise merely where a defendant benefits by the use of

property without paying for it, but only where that use deprives the property owner of its

possession. As this Court has explained: “Acquisition of the property is unimportant. The

essence of the tort of conversion is a party’s refusal to surrender the property after demand has

been made.” Small Business Admin. , 864 F. Supp. at 1262 (citing Murrell v. Trio Towing Serv.,

Inc. , 294 So. 2d 331 (Fla. Dist. Ct. App. 1974) and Star Fruit Co. , supra ); see also Marine

Transp. Servs. Sea-Barge Grp., Inc. v. Python High Performance Marine Corp. , 16 F.3d 1133,

1140 (11th Cir. 1994) (explaining that “the essence of the tort is not the acquisition of the

property; rather, it is the wrongful deprivation” (internal quotation marks and citations omitted)).

Here, no demand was made and there is nothing to surrender. Not surprisingly, no Florida court

has ever held the unlicensed public performance of sound recordings to constitute conversion of

those recordings. Plaintiff cannot state a conversion claim because Sirius XM’s performances of

copies of the Plaintiff’s recordings do not deprive or dispossess Plaintiff of its master recordings.

Plaintiff does not even attempt to allege that it does (much less that Sirius XM acts intentionally

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to deprive Plaintiff of its recordings). 6

Again, CBS is not to the contrary. As noted above, the case involved record piracy—that

is to say, a defendant whose sale of bootleg records interfered with and deprived the plaintiff of

the opportunity to sell its own copies. Thus, while the case does represent an extension of the

traditional conversion tort from tangible items to the conversion of “intangible interests in a

business venture,” see Compl. ¶ 1, the logic of the decision puts it squarely in line with the

requirements outlined above: namely, that the defendant be deprived of its property as a result of

the defendant’s actions (in that case, sales revenue the plaintiff otherwise could have earned and

“possessed” itself). 7 That logic does not extend to unauthorized performances that do not

interfere with any of Plaintiff’s existing business activities.

IV. CONCLUSION

For the foregoing reasons, the Complaint should be dismissed with prejudice to the extent

it is premised on a public performance right for Pre-1972 Recordings under Florida law.

6 As to the latter, the closest Plaintiff comes is the boilerplate recitation of the required elements for obtaining punitive damages, i.e. , that Sirius XM acted with “oppression, fraud and/or malice.” Compl. ¶ 44. As Iqbal instructs, however, courts “‘are not bound to accept as true a legal conclusion couched as a factual allegation.’” 556 U.S. at 678 (quoting Twombly , 550 U.S. at 555); see also Hogan v. Provident Life & Acc. Ins. Co. , No. 6:08-cv-1897-Orl-19KRS, 2009 WL 2169850, at *5-7 (M.D. Fla. July 20, 2009) (rejecting punitive damage claim as “merely conclusory” and thus in violation of Iqbal as well as substantive punitive damage pleading standard of Fla. Stat. § 768.72, which requires “reasonable showing” that demonstrates “a reasonable basis for recovery of such damages”). 7 This interpretation is confirmed by the cases on which CBS relies. In re Corbin’s Estate , for example, involved a defendant who sold a deceased’s entire business to a third party in a way that deprived the heirs of possession of the business and its income stream and profits. 391 So. 2d 731, 731-32 (Fla. Dist. Ct. App. 1980). Similarly, In re Aqua Clear Techs., Inc. involved the taking of a business phone number whereby calls to the number would be diverted to the defendant rather than to the estate of the original “owner” of the phone number. 361 B.R. 567, 574-75 (Bankr. S.D. Fla. 2007). Unlike these situations, where the “business interest” could be possessed by one, and only one, person at a time, Sirius XM’s performance of its copies of the class members’ recordings does not deprive them of anything. 20

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Dated: November 14, 2013 Respectfully submitted,

/s/ Edward Soto Edward Soto (Fla. Bar No. 0265144) [email protected] Weil, Gotshal & Manges LLP 1395 Brickell Ave, Suite 1200 Miami, FL 33131 (305) 577-3100

R. Bruce Rich ( pro hac vice pending) Bruce S. Meyer ( pro hac vice pending) Benjamin E. Marks ( pro hac vice pending) Todd Larson ( pro hac vice pending) John R. Gerba ( pro hac vice pending) Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 Tel: 212-310-8000

Michael S. Oberman ( pro hac vice pending) Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas New York, New York 10036 Tel: 212-715-9294

Attorneys for Defendant Sirius XM Radio Inc.

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CERTIFICATE OF SERVICE

I hereby certify that on November 14, 2013, I electronically filed the foregoing with the

Clerk of the Court for the United States District Court for the Southern District of Florida by

using the CM/ECF system, which sent notification of such filing to all CM/ECF participants. All

other counsel shall be served by United States mail.

Plaintiff Flo & Eddie, Inc.’s Counsel:

Glen H. Waldman Eleanor T. Barnett Jason Gordon Heller Waldman, P.L. 3250 Mary Street, Suite 102 Coconut Grove, Florida 33133

Henry Gradstein Maryann R. Marzano Robert E. Allen Gradstein & Marzano, P.C. 6310 San Vincente Blvd., Suite 510 Los Angeles, California 90048

/s/ Edward Soto ______Edward Soto (Fla. Bar No. 0265144) [email protected] WEIL, GOTSHAL & MANGES LLP 1395 Brickell Ave, Suite 1200 Miami, FL 33131 (305) 577-3100

Attorneys for Defendant Sirius XM Radio Inc.

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

Case No. 13-CV-23182

FLO & EDDIE, INC., a California corporation, individually and on behalf of all others similarly situated,

Plaintiff,

SIRIUS XM RADIO, INC., a Delaware corporation; and DOES 1 through 10,

Defendants. /

AMENDED CLASS ACTION COMPLAINT1

Plaintiff FLO & EDDIE, INC. (“Plaintiff” or “Flo & Eddie”), by and through its

undersigned counsel, files this class action Amended Complaint on behalf of itself and on behalf

of all other similarly situated owners of sound recordings of musical performances that initially

were “fixed” (i.e., recorded) prior to February 15, 1972 (the “Pre-1972 Recordings”) against

Defendants SIRIUS XM RADIO, INC. (“Defendant” or “SiriusXM”) and DOES 1-10, and

alleges as follows:

NATURE OF THE ACTION

1. Florida common law and statutory law provide protection for Pre-1972 Recordings

from their unauthorized reproduction, performance, distribution or other exploitation, and permit

the owners of Pre-1972 Recordings the right to bring the following separate claims for relief

1 Pursuant to Fed. R. Civ. P. 15(a)(1)(B), Plaintiff is filing this Amended Complaint as a matter of course in lieu of filing a Response to Defendant, SIRIUS XM RADIO, INC.’s Partial Motion to Dismiss, since the Amended Complaint is being filed within twenty-one (21) days of the date of the Motion.

1 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX } Case 1:13-cv-23182-KMM Document 36 Entered on FLSD Docket 12/05/2013 Page 2 of 31

against parties who engage in such unauthorized actions: (a) common law copyright

infringement; (b) common law misappropriation/unfair competition; (c) common law

conversion; (d) civil theft under Fla. Stat. § 772.11 for violations of Fla. Stat. § 812.014(1); and

(e) preliminary injunction and permanent injunction. A person commits common law copyright

infringement of a sound recording not protected by the US Copyright Act in Florida by doing,

without the consent of the owner, anything which is the sole right of the owner to do, including

reproducing, distributing, performing or otherwise exploiting such recording. The elements of a

misappropriation/unfair competition claim involving record piracy in Florida are: (A) time,

labor and money expended by the Plaintiff; (B) competition; and (C) commercial damage. A

claim for conversion exists for a wrongful taking of intangible interests in a business venture.

Finally, Fla. Stat. § 812.014(1) provides that one is liable for theft if one “knowingly obtains or

uses the property of another with intent to appropriate the property to his or her own use.”

“Property” is defined under Section 812.012(4)(b) as “anything of value” including “[t]angible

or intangible personal property.”

2. The principals of Flo & Eddie, Mark Volman and Howard Kaylan, have been

performing together as The Turtles since 1965 and have recorded numerous iconic hits including

“Happy Together,” “It Ain’t Me Babe,” “She’d Rather Be With Me,” “You Baby,” “She’s My

Girl,” “Elenore,” and many others. Since approximately 1971, Flo & Eddie has owned the entire

catalog of 100 original master recordings by The Turtles, all of which were recorded prior to

February 15, 1972, and which have been and remain popular and valuable, notwithstanding

changes in how recordings are made, distributed and performed. Plaintiff’s Pre-1972 Recordings

are the product of a significant investment of time, effort, money and creative talent in creating, 2 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

Case 1:13-cv-23182-KMM Document 36 Entered on FLSD Docket 12/05/2013 Page 3 of 31

manufacturing, advertising, promoting, selling and licensing its recordings. In return, Plaintiff

receives revenues, royalties and other compensation from its ongoing licensing and exploitation

of these works.

3. Plaintiff receives payments for, among other uses, the distribution, reproduction

and digital public performance of its Pre-72 Recordings, including by offering for sale (directly

or through licenses) compact discs and digital music files for download, by licensing them to

digital services (including for digital streaming to the public), and licensing them for use in

motion pictures, television programs and commercials. The payments that Plaintiff receives are

a main source of revenue used to pay Plaintiff’s ongoing investment and expenses, and to

compensate its principals, employees and representatives for their talent and work in creating the

Pre-72 Recordings and for administering and collecting revenue generated by such works.

4. Digital music streaming is becoming integral to the dissemination of music. As

technology changes and greater numbers of people listen to music via digital transmissions in

lieu of purchasing music on CDs or digital music files, Plaintiff relies increasingly on revenues

from the digital public performance of music, including Pre-72 Recordings. It is extremely

important to Plaintiff’s business that those who make a commercial use of Plaintiff’s Pre-72

Recordings obtain licenses and pay Plaintiff for their use of Pre-72 Recordings.

5. Defendant SiriusXM is the sole provider of satellite radio service in the United

States, known as “Sirius Satellite Radio,” “XM Satellite Radio” and “SiriusXM Satellite Radio”

(individually and collectively, the “Service”). SiriusXM uses satellite technology to transmit the

Service to its subscribers. SiriusXM’s channels are beamed from the ground to satellites, which

then transmit digital audio files to SiriusXM receivers possessed by its subscribers. Over the 3 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

Case 1:13-cv-23182-KMM Document 36 Entered on FLSD Docket 12/05/2013 Page 4 of 31

past few years, SiriusXM has expanded into Internet-based digital streaming transmissions,

increasing the number of its subscribers to over 25 million and earning billions of dollars in

revenue.

6. The Service is distributed in Florida to its subscribers through (a) satellite digital

transmission directly to subscribers via digital radios manufactured or licensed by SiriusXM; (b)

satellite digital transmission to subscribers of other services, such as DIRECTV Satellite

Television Service and Dish Network Satellite Television Service via digital set top boxes

manufactured or licensed by DIRECTV or Dish; and (c) the Internet, by way of (i) digital media

streaming devices, such as Roku, digital radios and home audio systems, such as Sonos; (ii) its

website at www.SiriusXM.com; or (iii) computer, smart phone and other mobile applications for

various operating systems, including Apple iOS, Android, Windows, Blackberry and HP webOS.

As part of the Service, many subscribers in Florida are also able to: (A) download the stream of

a selected channel on the Service, allowing later or multiple listenings of the sound recordings

previously streamed during the selected time period; (B) download particular sound recordings,

allowing later or multiple listenings of such sound recordings; (C) download particular programs

incorporating sound recordings as part of the Service’s “On Demand” feature, allowing later or

multiple listenings of such sound recordings; and (D) allow subscribers to pause, rewind and

replay sound recordings using the Service’s “Replay” feature or its “My SXM” feature.

7. SiriusXM sells the Service to subscribers for $14.49 per month for its “Select”

package and $17.99 per month for its “Premier” package. The “Select” package provides over

165 satellite radio channels to its subscribers, including around-the-clock “commercial-free

music, sports, talk, and entertainment.” Of the seven categories into which SiriusXM 4 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

Case 1:13-cv-23182-KMM Document 36 Entered on FLSD Docket 12/05/2013 Page 5 of 31

characterizes its channels (for example, “Sports Talk/Play-by-Play,” “News & Issues,” and

“Comedy”), by far the largest category is “Commercial-Free Music,” which SiriusXM claims has

72 channels (The second-largest category, “Talk & Entertainment,” has only 22 channels.).

8. The significant value of Pre-72 Recordings to SiriusXM’s business and the

popularity of Pre-72 Recordings among its paying subscribers is evidenced by, among other

things, its advertising and promotion of the availability of Pre-72 Recordings on the Service. A

significant portion of SiriusXM’s channels feature classic recordings, including channels

exclusively devoted to continuous public performances of the most popular Pre-72 Recordings

by well-known recording artists.

9. SiriusXM uses Plaintiff’s Pre-72 Recordings by distributing, reproducing and then

publicly performing them to millions of SiriusXM subscribers. Additionally, SiriusXM has

copied Plaintiffs’ Pre-72 Recordings without Plaintiff’s consent. Plaintiff is informed and

believes, and on that basis alleges, that SiriusXM has done so, among other ways, by obtaining

Plaintiff’s recordings and copying them to its servers and to its satellites. SiriusXM then uses

those unauthorized copies of Plaintiff’s Pre-72 Recordings to transmit the performances

embodied thereon to its subscribers. Plaintiff is informed and believes, and on that basis alleges,

that in such way, SiriusXM has distributed, reproduced and publicly performed Plaintiff’s Pre-72

Recordings numerous times throughout the United States, including in Florida.

10. SiriusXM has never been licensed or authorized to duplicate, distribute, reproduce

or publicly perform any of Plaintiff’s Pre-72 Recordings. Although a significant portion of

SiriusXM’s $3.4 billion in revenue earned in 2012 is attributable to Pre-72 Recordings, and

though SiriusXM capitalizes on its customers’ desire to listen to these recordings, SiriusXM 5 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

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refuses to seek licenses from Plaintiff or pay to Plaintiff any royalties or other compensation.

Conversely, SiriusXM pays digital public performance royalties for the performance of post-

1972 sound recordings that are covered by the federal Copyright Act.

11. By its conduct, SiriusXM not only deprives Plaintiff of the revenues to which it and

others are entitled, but also places those streaming services that do obtain licenses from, account

to, and pay Plaintiff for the performance of Plaintiff’s Pre-72 Recordings in a competitive

disadvantage. SiriusXM’s refusal to pay for its continued use of Pre-72 Recordings directly

contravenes Florida law and policy, which always have provided equal, if not greater, rights to

owners of sound recordings than the federal Copyright Act.

12. In 1972, Congress amended the United States Copyright Act to add for the first

time “sound recordings” to the list of works protected under federal copyright law. 17 U.S.C. §

102(a)(7) (2013). At the same time, Congress also preserved “any rights or remedies under the

common law or statutes of any State” with respect to sound recordings “fixed” before February

15, 1972. 17 U.S.C. § 301(c) (2013). As a result, pre-existing Florida protection for Pre-72

Recordings was left untouched and subject to evolution and refinement by the courts. Congress

initially limited the federal sound recording copyright to include certain of the exclusive rights

conferred on other works – namely, the rights of reproduction, adaptation, and distribution – and

to exclude the right to publicly perform sound recordings. Florida law has never delimited,

either explicitly or implicitly, the scope of common law protection of Pre-72 Recordings, and did

not exclude the right of public performance from the rights of owners in Pre-72 Recordings.

13. This broad protection afforded to Pre-72 Recordings is consistent with the

recognition by Florida courts of critical, important public policy interests in providing strong 6 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

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state law protection for sound recordings. These interests include ensuring that record

companies receive compensation from their substantial expenditure of effort, skill and money in

creating, marketing and exploiting recorded performances, as well as ensuring that the owners of

sound recordings possess adequate remedies against those who misappropriate and profit from

such performances. Florida’s protections for sound recordings thus are complete, providing

exclusive ownership and rights in Pre-72 Recordings that are not limited in any way, and that

include any conduct by which individuals or entities seek to unfairly compete and profit from the

skill and labor of Plaintiff by appropriating and exploiting Pre-72 Recordings for their own

benefit, including by unauthorized and unlicensed reproduction and public performance of these

recordings.

14. The need for effective state law protection of Pre-72 Recordings is especially great

today. Pre-72 Recordings comprise a significant and important share of the overall body of

existing musical recordings, and include some of the most popular and valued recordings in

history. Many digital radio channels and services are dedicated entirely to the dissemination and

performance of Pre-72 Recordings, such as classic rock, jazz, R&B, and classical recordings.

The rise of digital media has made the threat to Pre-72 Recordings acute, as virtually anyone

with a computer and an Internet connection can copy and then distribute and perform high-

quality music instantaneously to millions. As digital technology has improved, the cost of digital

services has diminished, and, as a result music consumption habits have changed. Music

consumers increasingly obtain and enjoy music via online or satellite “radio” or digital streaming

services instead of purchasing CDs or digital music files.

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15. To address the anticipated shift in music consumption habits and the rise of digital

radio services and, therefore, the need to provide federal protection for the performance of

copyrighted sound recordings, Congress passed the Digital Performance Rights in Sound

Recordings Act (“DPRA”), granting owners of post-72 copyrighted sound recordings the right to

“perform the copyrighted work publicly by means of a digital audio transmission.” 17 U.S.C.

§ 106(6) (2013).

16. Florida’s protection for Pre-72 Recordings has never been less extensive than

federal copyright protection for post-72 recordings. Florida had provided common law

protection for Pre-72 Recordings without any exclusions and including the right of public

performance. Those, like SiriusXM, who build their business and make money from the

copying, reproduction and public performance of Pre-72 Recordings must obtain the right under

Florida law to use them and must compensate their owners.

17. SiriusXM has never been licensed or authorized to duplicate, distribute, reproduce

or publicly perform any of Plaintiff’s Pre-72 Recordings. Although a significant portion of

SiriusXM’s $3.4 billion in revenue earned in 2012 is attributable to Pre-72 Recordings, and

though SiriusXM capitalizes on its customers’ desire to listen to these recordings, SiriusXM

refuses to seek licenses from Plaintiff or pay to Plaintiff any royalties or other compensation.

Conversely, SiriusXM pays digital public performance royalties for the performance of post-

1972 sound recordings that are covered by the federal Copyright Act.

18. Simply stated, SiriusXM has disregarded the Plaintiff’s and other Class Members’

exclusive ownership of their Pre-1972 Recordings in Florida, impaired their ability to sell,

license, lawfully exploit, or otherwise control their Pre-1972 Recordings as permitted under 8 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

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Florida law, and misappropriated/unfairly competed, converted and stolen same for its own

financial gain. SiriusXM’s conduct is causing, and will continue to cause, enormous and

irreparable harm to Plaintiff and the other Class Members unless compensatory and punitive

damages are awarded against SiriusXM and it is enjoined and restrained from engaging in further

infringement, misappropriation/unfair competition, conversion and civil theft of the Pre-1972

Recordings.

THE PARTIES, JURISDICTION AND VENUE

19. Plaintiff Flo & Eddie is a corporation duly organized and existing under the laws of

California, with its principal place of business in Los Angeles, California. Plaintiff is engaged in

the business of distributing, selling, and/or licensing the reproduction, distribution, sale, and

performance of its Pre-1972 Recordings in phonorecords, in audiovisual works, and for

streaming (i.e., performing) and downloading over the Internet. Plaintiff invests substantial

money, time, effort, and creative talent in creating, advertising, promoting, selling and licensing

its unique and valuable sound recordings.

20. Plaintiff possesses exclusive ownership rights in The Turtles Pre-1972 Recordings,

the titles of which are specified on the schedule attached hereto as Exhibit A and incorporated

herein by reference (“Plaintiff’s Recordings”). The United States Congress expressly has

recognized that the states provide exclusive protection through various state law doctrines to

recordings initially “fixed” before February 15, 1972, and that the federal Copyright Act does not

“annul[] or limit[]those rights until February 15, 2067.” 17 U.S.C. § 301(c). Accordingly, as

quoted above, Florida law protects the exclusive ownership of Plaintiff and the other Class

Members to their Pre-1972 Recordings in Florida. 9 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

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21. Upon information and belief, Defendant SiriusXM is a corporation duly organized

and existing under the laws of Delaware, with its principal place of business in New York, New

York. The Court has personal jurisdiction over Defendant in that Defendant has offices

throughout Florida, including, without limitation, in Miami, Jupiter, Deerfield Beach and Boca

Raton, Defendant is engaged in tortious conduct in Florida, and Defendant’s conduct causes

injury to Plaintiff and the other Class Members in Florida.

22. This court has subject matter jurisdiction over the subject matter of this class action

pursuant to 28 U.S.C. § 1332(d). The amount in controversy exceeds Five Million Dollars

($5,000,000), there are more than one thousand (1,000) putative Class Members, and the

requisite minimal diversity of citizenship exists because Plaintiff and Defendant are citizens of

different States.

23. Venue of this action is proper in this jurisdiction under 28 U.S.C. § 1391(b) in that

Defendant maintains several offices in the Southern District of Florida and a substantial part of

the events giving rise to the claims alleged herein occurred in the Southern District of Florida.

24. The true names and capacities, whether individual, corporate, associate or

otherwise, of defendants named herein as Does 1 through 10, inclusive, are unknown to Plaintiff

who therefore sues said defendants by such fictitious names (the “Doe Defendants”). Plaintiff

will amend this Complaint to allege their true names and capacities when such have been

ascertained. Upon information and belief, each of the Doe Defendants herein is responsible in

some manner for the occurrences herein alleged, and Plaintiff’s injuries and those of the other

Class Members as herein alleged were proximately caused by such defendants’ acts or

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omissions. (All of the Defendants, including the Doe Defendants, collectively are referred to as

“Defendants”).

CLASS ACTION ALLEGATIONS

25. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil

Procedure 23 on behalf of itself and the other Class Members defined as the owners of Pre-1972

Recordings reproduced, performed, distributed or otherwise exploited by Defendants in Florida

without a license or authorization to do so during the period from August 29, 2009 to the present.

Plaintiff reserves the right to modify this definition of the Class after further discovery; the Court

may also be requested to utilize and certify subclasses in the interests of ascertainability,

manageability, justice and/or judicial economy.

26. This action may be properly brought and maintained as a class action because there

is a well-defined community of interest in the litigation and the Class Members are readily and

easily ascertainable and identifiable from Defendant SiriusXM’s database files and records.

Plaintiff is informed and believes, and on that basis alleges, that Defendants have engaged a third

party to supply the metadata, including the metadata relating to Pre-1972 Recordings unlawfully

streamed to subscribers in Florida, and that such metadata contains the name and location of the

owners thereof. The Class members are further ascertainable through methods typical of class

action practice and procedure.

27. Plaintiff is informed and believes, and alleges thereon, that the Pre-1972

Recordings infringed, misappropriated/unfairly competed, converted and/or stolen in Florida by

Defendants number in the millions and are owned by many thousands of Class Members. It is

therefore impractical to join all of the Class Members as named Plaintiffs. Further, the claims of 11 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

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the Class Members may range from smaller sums to larger sums. Accordingly, using the class

action mechanism is the most economically feasible means of determining and adjudicating the

merits of this litigation.

28. The claims of Plaintiff are typical of the claims of the Class Members, and

Plaintiff’s interests are consistent with and not antagonistic to those of the other Class Members

it seeks to represent. Plaintiff and the other Class Members have all been subject to

infringement, misappropriation / unfair competition, conversion and theft of their Pre-1972

Recordings in Florida, have sustained actual pecuniary loss and face irreparable harm from

Defendants’ continued infringement, misappropriation / unfair competition, conversion and theft

of their Pre-1972 Recordings.

29. Plaintiff has no interests that are adverse to, or which conflict with, the interests of

the other Class Members and is ready and able to fairly and adequately represent and protect the

interests of the other Class Members. Plaintiff believes strongly in the protection of artists’

rights in connection with their creative work. Plaintiff has raised viable claims for infringement,

misappropriation/unfair competition, conversion and theft of the type well established in Florida

and reasonably expected to be raised by Class Members. Plaintiff will diligently pursue those

claims. If necessary, Plaintiff may seek leave of the Court to amend this Complaint to include

additional class representatives to represent the Class or additional claims as may be appropriate.

Plaintiff is represented by experienced, qualified and competent counsel who are committed to

prosecuting this action.

30. Common questions of fact and law exist as to all Class Members that plainly

predominate over any questions affecting only individual Class Members. These common legal 12 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

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and factual questions, which do not vary from Class Member to Class Member, and which may

be determined without reference to the individual circumstances of any Class Member include,

without limitation, the following:

(A) Whether Defendant SiriusXM reproduced, performed, distributed or

otherwise exploited Pre-1972 Recordings in Florida;

(B) Whether Defendant SiriusXM’s reproduction, performance, distribution or

other exploitation of Pre-1972 Recordings in Florida constitutes common law copyright

infringement under Florida law;

other exploitation of Pre-1972 Recordings in Florida constitutes misappropriation / unfair

competition under Florida law;

(D) Whether Defendant SiriusXM’s reproduction, performance, distribution or

other exploitation of Pre-1972 Recordings in Florida constitutes conversion under Florida

law;

(E) Whether Defendant SiriusXM’s reproduction, performance, distribution or

other exploitation of Pre-1972 Recordings in Florida constitutes civil theft in violation of

Fla. Stat. §§ 722.11 and 812.014(1);

(F) The basis on which restitution and/or damages to all injured members of

the Class can be computed;

(G) Whether Defendant SiriusXM’s violation of Florida common law for

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(H) Whether Defendant SiriusXM’s violation of Florida common law for

other equitable relief;

(I) Whether Defendant SiriusXM’s violation of Florida’s laws against

misappropriation/unfair competition entitles the Class Members to recover punitive

damages;

(J) Whether Defendant SiriusXM’s violation of Florida’s laws against

misappropriation / unfair competition is continuing, thereby entitling Class Members to

injunctive or other relief;

(K) Whether Defendant SiriusXM’s violation of Florida’s laws against

conversion entitles the Class Members to recover punitive damages;

(L) Whether Defendant SiriusXM’s violation of Florida’s laws against

conversion is continuing, thereby entitling Class Members to injunctive or other relief;

(M) Whether Defendant SiriusXM’s violation of Fla. Stat. § 812.014(1) for

civil theft entitles the Class Members to recover treble the amount of compensatory

damages in accordance with Fla. Stat. § 772.11; and

(N) Whether Defendant SiriusXM’s violation of Fla. Stat. § 812.014(1) for

civil theft is continuing, thereby entitling Class Members to injunctive or other relief.

31. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy, since individual litigation of the claims of all Class Members is

highly impractical. Even if every Class Member could afford to pursue individual litigation, the

Court system could not. It would be unduly burdensome to the courts in which individual 14 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

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litigation of numerous cases would proceed. Individualized litigation would also present the

potential for varying, inconsistent or contradictory judgments and would magnify the delay and

expense to all parties and to the court system resulting from multiple trials of the same factual

issues. By contrast, maintenance of this action as a class action, with respect to some or all of

the issues presented herein, presents few management difficulties, conserves the resources of the

parties and of the court system, and protects the rights of each Class Member. Plaintiff

anticipates no difficulty in the management of this action as a class action.

32. Additionally, the prosecution of separate actions by individual Class Members may

create a risk of adjudications with respect to them that would, as a practical matter, be dispositive

of the interests of the other Class Members not parties to such adjudications or that would

substantially impair or impede the ability of such nonparty Class Members to protect their

interests. The prosecution of individual actions by Class Members could establish inconsistent

results and incompatible standards of conduct for Defendant SiriusXM.

33. Defendants have engaged in common law copyright infringement,

misappropriation/unfair competition, conversion and civil theft, which has affected all of the

Class Members such that final and injunctive relief on behalf of the Class as a whole is efficient

and appropriate.

FIRST CLAIM FOR RELIEF

(Common Law Copyright Infringement)

34. Plaintiff hereby incorporates the allegations set forth in paragraphs 1 through 33

above as though set forth in full herein.

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35. The Pre-1972 Recordings are unique intellectual property subject to common law

36. As the owners of valid common law copyrights or exclusive licensees in and to the

Pre-1972 Recordings, Plaintiff and the other Class Members possess the exclusive rights to

reproduce, perform, distribute or otherwise exploit the Pre-1972 Recordings, and license, or

refrain from licensing, others to do so.

37. Plaintiff and the other Class Members have not authorized or licensed Defendants

to reproduce, perform, distribute or otherwise exploit the Pre-1972 Recordings in any manner.

Defendants are not, and at all relevant times were not, entitled to or authorized to reproduce,

perform, distribute or otherwise exploit the Pre-1972 Recordings.

38. The reproduction, performance, distribution or other exploitation by Defendants of

unauthorized copies of the Pre-1972 Recordings, including, without limitation, Plaintiff’s

Recordings, constitute infringement of Plaintiff and the Other Class Member’s common law

copyrights in such recordings and violation of their exclusive rights therein. The Plaintiff and

Class Members have invested substantial time and money in the development of their Pre-1972

Recordings.

39. The Defendants have infringed the copyrights to the Pre-1972 Recordings at little

or no cost and without license or authority. They have copied the Pre-1972 Recordings owned

by Plaintiff and the other Class Members and publicly perform these recordings in Florida for

their subscribers as set forth in paragraph 3, above. Defendants have disregarded the Plaintiff’s

and other Class Members’ copyrights in and exclusive ownership of their Pre-1972 Recordings,

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impaired their ability to sell, lawfully exploit, or otherwise control their Pre-1972 Recordings, all

for their own financial gain.

40. As a direct and proximate consequence of Defendants’ copyright infringement of

the Pre-1972 Recordings owned by Plaintiff and the Class Members, Plaintiff and the Class

Members have been damaged in an amount that is not as yet fully ascertained but which Plaintiff

is informed and believes, and alleges thereon, exceeds $100,000,000, according to proof.

41. Plaintiff is informed and believes, and alleges thereon, that in engaging in the

conduct described above, the Defendants acted with oppression, fraud and/or malice. The

conduct of the Defendants has been despicable and undertaken in conscious disregard of the

Plaintiff’s and each Class Member’s rights. Accordingly, Plaintiff and the Class Members are

entitled to an award of punitive damages against Defendants in an amount sufficient to punish

and make an example of them according to proof.

42. Defendants’ conduct is causing, and unless enjoined and restrained by this Court,

will continue to cause, Plaintiff and each Class Member great and irreparable injury that cannot

fully be compensated or measured in money, and for which Plaintiff and each Class Member has

no adequate remedy at law. Plaintiff and the other Class Members are entitled to temporary,

preliminary and permanent injunctions, prohibiting further violation of Plaintiff’s and Class

Members’ rights in and exclusive ownership of their Pre-1972 Recordings in Florida.

SECOND CLAIM FOR RELIEF

(Misappropriation/Unfair Competition)

43. Plaintiff hereby incorporates the allegations set forth in paragraphs 1 through 33

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44. Plaintiff and each Class Member are, and at relevant times were, the exclusive

owner of all right, title and interest in and to their Pre-1972 Recordings and possession thereof in

Florida.

45. Plaintiff’s Pre-1972 Recordings are valuable assets to Plaintiff. Plaintiff is engaged

in the selling and licensing of all forms of distribution, reproduction, performance or other

exploitation of their Pre-1972 Recordings, including, without limitation, by selling physical

compact discs and digital Phonorecord deliveries, licensing distribution and performances via

digital streaming transmission and licensing the master use in audio-visual recordings, such as

movies and commercials. From inception, such Pre-1972 Recordings have generated for

Plaintiff millions of dollars in revenues from such selling and licensing activities. Plaintiff’s

licensing the distribution of the Pre-1972 Recordings via digital streaming transmission has

increased significantly over the past several years, and now represent a significant portion of the

overall revenues received by Plaintiff.

46. Through marketing and operating the Service, Defendants are using and exploiting

the Pre-1972 Recordings without license or payment for Defendants’ financial gain and

commercial advantage. Defendants’ copying, distribution, reproduction and performance of Pre-

1972 Recordings through the Service compete with Plaintiff in several ways. First, Defendants

copying, distribution, reproduction and performance of the Pre-1972 Recordings without a

license and without payment place a significant, unfair and anticompetitive downward pressure

on the licensing fees Plaintiff is able to charge other services in the marketplace who do license

and pay for such rights from Plaintiff, resulting in a direct financial loss to Plaintiff. Second, as

digital transmissions are substituting over time for sales of sound recordings, Defendants are 18 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

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diverting to themselves income Plaintiff would have otherwise collected from sales of Plaintiff’s

Pre-1972 Recordings, resulting in Defendants’ obtaining business that rightfully belongs to

Plaintiff, and lost dealings and lost profits to Plaintiff from Defendants’ anticompetitive acts.

Such actions by Defendants are designed for their commercial benefit to the detriment of

Plaintiff and the other Class Members. As a result, Plaintiff has been harmed by lost license fees

and lost sales.

47. Without a license or payment, SiriusXM copies, distributes, reproduces and

performs the Pre-1972 Recordings, and allows its subscribers to: (a) listen to Pre-1972

Recordings via satellite or online digital audio transmissions without purchasing or licensing

them; (b) replay, skip and remove (for such subscriber) sound recordings on certain channels

through its “Replay” feature and its “MySXM” feature; and (c) download Pre-1972 Recordings

to a subscriber’s device, including through its OnDemand feature.

48. Defendants have usurped for itself the fruits of Plaintiff and the other Class

Members’ financial and creative investments. Defendants are profiting from the results of

Plaintiff and the other Class Members’ expenditures and skill without having to incur any

expense or risk of its own in relation to the Pre-1972 Recordings. Furthermore, Defendants’

unauthorized use of the Pre-1972 Recordings is likely to cause confusion, mistake or deception

as to the source, sponsorship, affiliation or connection between Plaintiff and the other Class

Members, and Defendants.

49. Plaintiff and the Other Class Members have expended significant time, labor and

money in the making, marketing and distributing the Pre-1972 Recordings. Defendants have

paid nothing to Plaintiff or the Other Class Members for reproducing, performing, distributing or 19 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

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otherwise exploiting the Pre-1972 Recordings. Without expending any time, labor or money of

its own, Defendants have simply appropriated the commercial qualities, reputation and salable

properties of the Pre-1972 Recordings, including, without limitation Plaintiff’s Recordings, by

unfairly and directly competing with Plaintiff and the other Class Members’ use, sale,

distribution and exploitation of the Pre-1972 Recordings. In so doing, Defendants have

undermined Plaintiff and the other Class Members’ substantial creative and financial investment

for Defendants’ own commercial benefit and have commercially damaged the market value of

the licenses Plaintiff and the Other Class Members are now and had been able to negotiate with

third parties to reproduce, perform, distribute or otherwise exploit the Pre-1972 Recordings.

50. Defendants’ acts constitute a misappropriation of Plaintiff and the other Class

Members’ rights in and to the Pre-1972 Recordings, and constitute misappropriation and unfair

competition involving record piracy under Florida law.

51. As a direct and proximate result of Defendants’ misappropriation and unfair

competition, Plaintiff and the Class Members are entitled to recover all proceeds and other

compensation received or to be received by Defendants from their misappropriation and unfair

competition of the Pre-1972 Recordings. Plaintiff and the members of the Class have been

damaged, and Defendants have been unjustly enriched, in an amount that is not as yet fully

ascertained but which Plaintiff is informed and believes, and alleges thereon, exceeds

$100,000,000, according to proof at trial. Such damages and/or restitution and disgorgement

should include a declaration by this Court that Defendants are constructive trustees for the

benefit of Plaintiff and the other Class Members, and an order that Defendants convey to

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Plaintiff and Class Members the gross receipts received or to be received that are attributable to

Defendants misappropriation of the Pre-1972 Recordings.

52. Plaintiff is informed and believes, and alleges thereon, that in engaging in the

conduct as described above, the Defendants acted with oppression, fraud and/or malice. The

conduct of the Defendants has been despicable and undertaken in conscious disregard of

Plaintiff’s rights. Accordingly, Plaintiff and the Class Members are entitled to an award of

punitive damages against Defendants, and each of them, in an amount sufficient to punish and

make an example of them according to proof at trial.

53. Defendants’ conduct is causing, and unless enjoined and restrained by this Court,

will continue to cause, Plaintiff and the Class Members great and irreparable injury that cannot

fully be compensated or measured in money. Plaintiff and the other Class Members are entitled

to temporary, preliminary and permanent injunctions, prohibiting further violation of Plaintiff’s

and the other Class Members right to exclusive ownership of their Pre-1972 Recordings and

further acts of unfair competition and misappropriation.

THIRD CLAIM FOR RELIEF

(Conversion)

54. Plaintiff hereby incorporates the allegations set forth in paragraphs 1 through 33

above as though set forth in full herein.

55. Plaintiff and each Class Member are, and at relevant times were, the exclusive

owner of all right, title and interest in and to their Pre-1972 Recordings and possession thereof in

Florida.

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56. Plaintiff and each Class Member have, and for all times relevant herein has had, an

intangible property interest in the time, effort and expense of producing the Pre-1972

Recordings. Additionally, as set forth in paragraphs 20 through 24 above, Plaintiff and each

Class Member have a common law copyright in each of the Pre-1972 Recordings.

57. Plaintiff and the Class Members created and produced the Pre-1972 Recordings as

part of a business venture to commercially reproduce, perform, distribute and otherwise exploit

the Pre-1972 Recordings.

58. By their acts and conduct alleged above, Defendants have converted Plaintiff’s and

the Class Members’ property rights in their Pre-1972 Recordings, including, without limitation

Plaintiff’s Recordings, for Defendants’ own use and wrongful disposition for financial gain.

59. As a direct and proximate result of Defendants’ conversion, Plaintiff and the

members of the Class have been damaged, and Defendants have been unjustly enriched, in an

amount that is not as yet fully ascertained but which Plaintiff is informed and believes, and

alleges thereon, exceeds $100,000,000 according to proof at trial. Defendants are constructive

trustees for the benefit of Plaintiff and Class Members, and the Court should order Defendants to

convey to Plaintiff and the Class Members the gross receipts received or to be received from

Defendants conversion of the Pre-1972 Recordings.

60. Plaintiff is informed and believes, and based thereon alleges, that in engaging in the

conduct as described above, the Defendants acted with oppression, fraud and/or malice. The

conduct of the Defendants has been despicable and undertaken in conscious disregard of

Plaintiff’s rights. Accordingly, Plaintiff and the Class Members are entitled to an award of

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punitive damages against Defendants, and each of them, in an amount sufficient to punish and

make an example of them according to proof at trial.

61. Defendants’ conduct is causing, and unless enjoined and restrained by this Court

will continue to cause, Plaintiff and the Class Members great and irreparable injury that cannot

fully be compensated or measured in money. Plaintiff and each Class Member are entitled to

temporary, preliminary and permanent injunctions prohibiting further acts of conversion of their

Pre-1972 Recordings.

FOURTH CLAIM FOR RELIEF

(Civil Theft under Fla. Stat. § 772.11 for violations of Fla. Stat. § 812.014)

(Statutory Theft under Fla. Stat. § 812.014)

62. Plaintiff hereby incorporates the allegations set forth in paragraphs 1 through 33

above as though set forth in full herein.

63. Plaintiff and each Class Member are, and at relevant times were, the exclusive

owners of all right, title and interest in and to their Pre-1972 Recordings and possession thereof

in Florida.

64. Plaintiff and the other Class Members have not authorized or licensed Defendants

to copy, reproduce, perform, distribute or otherwise exploit the Pre-1972 Recordings in any

manner. Defendants are not, and at all relevant times were not, entitled to or authorized to use of

the Pre-1972 Recordings for copying, reproduction, performance, distribution or other

exploitation.

65. By their acts and conduct alleged above, Defendants knowingly obtained and used

the Pre-1972 Recordings with the intent to temporarily or permanently appropriate the Pre-1972 23 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

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Recordings, including, without limitation Plaintiff’s Recordings, for Defendants’ own use and

for the use of the subscribers of the Service, and by so doing, Defendants have committed

statutory theft pursuant to Fla. Stat. § 812.014.

66. Plaintiff is informed and believes, and based thereon alleges, that in engaging in the

conduct as described above, the Defendants acted with oppression, fraud and/or malice. The

conduct of the Defendants has been despicable and undertaken in conscious disregard of

Plaintiff’s rights. Accordingly, Plaintiff and the Class Members are entitled to an award of treble

the amount of compensatory damages against Defendants, and each of them, pursuant to Fla.

Stat. § 772.11(1).

67. Plaintiff and each Class Member are also entitled to reasonable attorney’s fees and

court costs pursuant to Fla. Stat. § 772.11(1).

68. Defendants’ conduct is causing, and unless enjoined and restrained by this Court

will continue to cause, Plaintiff and the Class Members great and irreparable injury that cannot

fully be compensated or measured in money. Plaintiff and each Class Member are entitled to

temporary, preliminary and permanent injunctions prohibiting further acts of statutory theft of

their Pre-1972 Recordings.

69. Plaintiff has submitted the demand letter attached hereto as Exhibit B required by

Fla. Stat. §772.11(1) as required to sustain a claim for Civil Theft. Thirty (30) days have run

since the demand was sent.

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FIFTH CLAIM FOR RELIEF

(Preliminary Injunction and Permanent Injunction)

70. Plaintiff hereby incorporates the allegations set forth in paragraphs 1 through 33

above as though set forth in full herein.

71. Plaintiff and each Class Members are, and at relevant times were, the exclusive

owners of all right, title and interest in and to their Pre-1972 Recordings and possession thereof

in Florida.

72. Plaintiff and the other Class Members have not authorized or licensed Defendants

to copy, reproduce, perform, distribute or otherwise exploit the Pre-1972 Recordings in any

manner. Defendants are not, and at all relevant times were not, entitled to or authorized to use of

the Pre-1972 Recordings for copying reproduction, performance, distribution or other

exploitation.

73. By their acts and conduct alleged above, Defendants knowingly obtained and used

the Pre-1972 Recordings with the intent to temporarily or permanently appropriate the Pre-1972

Recordings, including, without limitation Plaintiff’s Recordings, for Defendants’ own use and

for the use of the subscribers of the Service.

74. Based on the facts alleged, Plaintiff and the other Class Members have a substantial

likelihood of success on the merits of their claims.

75. Defendants’ infringing conduct has caused, and is causing, substantial and

irreparable injury and damage to Plaintiff and the other Class Members in an amount not capable

of determination, and, unless restrained, will cause further irreparable injury, leaving Plaintiff

and the other Class Members without an adequate remedy at law. 25 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

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76. The need to protect the copyrighted works of Plaintiff and the other Class Members

outweighs any harm that may be suffered by Defendants if injunctive relief is granted.

77. The public interest will be served by awarding Plaintiff and the other Class

Members injunctive relief as it will uphold the protection of copyrights and prevent infringement

upon such rights.

78. By reason of the foregoing facts, Plaintiff and the other Class Members are entitled

to preliminary and permanent injunctive relief against Defendants.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff, on behalf of itself and the other Class Members, prays for

Judgment against Defendants, and each of them, as follows:

Regarding the Class Action:

1. That this is a proper class action maintainable pursuant to the applicable provisions of the

Federal Rules of Civil Procedure; and

2. That the named Plaintiff is appropriate to be appointed representative of the respective

Class.

On The First Claim For Relief For Common Law Copyright Infringement against all

Defendants:

1. For compensatory damages in excess of $100,000,000 according to proof at trial;

2. Punitive and exemplary damages according to proof trial; and

3. A temporary, preliminary, and permanent injunction enjoining and restraining

Defendants, and their respective agents, servants, directors, officers, principals,

employees, representatives, subsidiaries and affiliated companies, successors, assigns, 26 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

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and those acting in concert with them or at their direction, from directly or indirectly

infringing in any manner the copyrights in the Pre-1972 Recordings in Florida, including

without limitation by directly or indirectly copying, reproducing, downloading,

distributing, communicating to the public, uploading, linking to, transmitting, publicly

performing, or otherwise exploiting in any manner any of the Pre-1972 Recordings.

On The Second Claim For Relief For Misappropriation / Unfair Competition against all

Defendants:

1. For compensatory damages in excess of $100,000,000 according to proof at trial;

2. Punitive and exemplary damages according to proof at trial;

3. Imposition of a constructive trust;

4. Restitution of Defendants’ unlawful proceeds, including Defendants’ gross profits; and

5. A temporary, preliminary, and permanent injunction enjoining and restraining

Defendants, and their respective agents, servants, directors, officers, principals,

employees, representatives, subsidiaries and affiliated companies, successors, assigns,

and those acting in concert with them or at their direction, from directly or indirectly

misappropriating and/or unfairly competing in any manner the Pre-1972 Recordings in

Florida, including without limitation by directly or indirectly copying, reproducing,

downloading, distributing, communicating to the public, uploading, linking to,

transmitting, publicly performing, or otherwise exploiting in any manner any of the Pre-

1972 Recordings.

On the Third Claim For Relief For Conversion against all Defendants:

1. For compensatory damages in excess of $100,000,000 according to proof at trial; 27 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

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2. Punitive and exemplary damages according to proof at trial;

3. Imposition of a constructive trust;

4. Restitution of Defendants’ unlawful proceeds, including Defendants’ gross profits; and

5. A temporary, preliminary, and permanent injunction enjoining and restraining

Defendants, and their respective agents, servants, directors, officers, principals,

employees, representatives, subsidiaries and affiliated companies, successors, assigns,

and those acting in concert with them or at their direction, from directly or indirectly

converting in any manner the Pre-1972 Recordings in Florida, including without

limitation by directly or indirectly copying, reproducing, downloading, distributing,

communicating to the public, uploading, linking to, transmitting, publicly performing, or

otherwise exploiting in any manner any of the Pre-1972 Recordings.

On the Fourth Claim For Relief For Statutory Fraud under Fla. Stat. § 812.014 against all

Defendants:

1. For compensatory damages in excess of $100,000,000 according to proof at trial;

2. For treble the amount of compensatory damages pursuant to Fla. Stat. § 772.11(1);

3. For reasonable attorneys’ fees and court costs pursuant to Fla. Stat. § 772.11(1); and

4. A temporary, preliminary, and permanent injunction enjoining and restraining

Defendants, and their respective agents, servants, directors, officers, principals,

employees, representatives, subsidiaries and affiliated companies, successors, assigns,

and those acting in concert with them or at their direction, from directly or indirectly

committing theft in any manner of the Pre-1972 Recordings in Florida, including

without limitation by directly or indirectly copying, reproducing, downloading, 28 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

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distributing, communicating to the public, uploading, linking to, transmitting,

publicly performing, or otherwise exploiting in any manner any of the Pre-1972

Recordings.

On the Fifth Claim For Relief For Preliminary and Permanent Injunctive Relief against all

Defendants:

1. A temporary, preliminary, and permanent injunction enjoining and restraining

Defendants, and their respective agents, servants, directors, officers, principals,

employees, representatives, subsidiaries and affiliated companies, successors, assigns,

and those acting in concert with them or at their direction, from directly or indirectly

committing theft in any manner of the Pre-1972 Recordings in Florida, including

without limitation by directly or indirectly copying, reproducing, downloading,

distributing, communicating to the public, uploading, linking to, transmitting,

publicly performing, or otherwise exploiting in any manner any of the Pre-1972

Recordings.

On All Causes of Action:

1. For reasonable attorney’s fees and costs as permitted by law;

2. For prejudgement interest at the legal rate; and

3. For such other and further relief as the Court deems just and proper.

JURY TRIAL DEMAND

Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff and the Class

Members demand a trial by jury on claims alleged in this Complaint. 29 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

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DATED: December 5, 2013

Respectfully submitted,

HELLER WALDMAN, P.L. Attorneys for FLO & EDDIE, INC. 3250 Mary Street, Suite 102 Coconut Grove, Florida 33133 Telephone: (305) 448-4144 Telecopier: (305) 448-4155

By: s/Glen H. Waldman Glen H. Waldman, Esq. Fla. Bar No. 618624 Eleanor T. Barnett, Esq. Fla. Bar No. 0355630 Jason Gordon, Esq. Fla. Bar No. 0012973

Henry Gradstein (pro hac vice motion is being filed) Maryann R. Marzano (pro hac vice motion is being filed) Robert E. Allen (pro hac vice motion is being filed) GRADSTEIN & MARZANO, P.C. 6310 San Vicente Blvd., Suite 510 Los Angeles, California 90048 Telephone: (323) 776-3100 Fax: (323) 931-4990

And

Evan S. Cohen (pro hac vice motion is being filed) 1180 South Beverly Drive, Suite 510 Los Angeles, California 90035 Telephone: (310) 556-9800 Fax: (310) 556-9801

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 5th day of December, 2013, I electronically filed the

foregoing with the Clerk of the Court by using the CM/ECF System.

/s/ Glen H. Waldman______Glen H. Waldman

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FLO & EDDIE, INC. v. SIRIUS XM RADIO, INC., ET AL CASE NO.: 13-CV-23182-Moore/Torres

SERVICE LIST

Edward Soto Bruce Rich WEIL GOTSHAL & MANGES LLP Benjamin Marks 1395 Brickell Ave, Suite 1200 WEIL GOTSHAL & MANGES Miami, FL 33131 767 Fifth Avenue Phone: (305) 577-3100 Florida, NY 10153-0119 Fax: (305) 374-7159 Phone: (212) 310-8000 Email: [email protected] Fax: (212) 310-8007 Email: [email protected] [email protected]

Michael S. Oberman Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas Florida, NY 10036 Phone: (212) 715-9100 Fax: (212) 715-8000 Email: [email protected]

31 HELLER WALDMAN, P.L. 3250 MARY STREET, SUITE 102 ● COCONUT GROVE, FLORIDA 33133 {00110481.DOCX }

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA MIAMI DIVISION Case 1:13-CV-23182 (Moore)

------x FLO & EDDIE, INC., individually and on behalf of all others similarly situated,

Plaintiff,

-against-

SIRIUS XM RADIO INC., and DOES 1 through 10,

Defendants. ------x

DEFENDANT SIRIUS XM RADIO INC.’S ANSWER TO THE AMENDED CLASS ACTION COMPLAINT

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Defendant Sirius XM Radio Inc. (“Sirius XM” or “Defendant”), by its attorneys, Weil,

Gotshal & Manges LLP and Kramer Levin Naftalis & Frankel LLP, for its Answer to the

Amended Class Action Complaint (the “Amended Complaint”) of plaintiff Flo & Eddie, Inc.

(“Plaintiff”) states as follows:

INTRODUCTION

By this action, Plaintiff, the owner of sound recordings made nearly fifty years ago and

publicly performed widely ever since by myriad broadcast and other outlets, asks this Court to

radically transform the scope of protection accorded to sound recordings under Florida law.

Plaintiff asks the Court to recognize an exclusive right of public performance under Florida law

for sound recordings created before February 15, 1972, as well as an exclusive right to create

pre-broadcast server copies to facilitate such performances, in the absence of any authority

recognizing such a right. The result Plaintiff seeks would dramatically expand Florida law and

unravel a century of contrary understandings between the music and broadcasting industries.

Worse, it would immediately turn each radio and television broadcaster, webcaster, nightclub,

retail establishment, fitness center, and the like that performs such recordings in Florida into a

serial copyright infringer. Because no Florida court has ever recognized the claim Plaintiff seeks

to plead, the Amended Complaint fails to state a claim upon which relief may be granted and

should be dismissed in its entirety.

Each numbered response in this Answer to Plaintiff’s Amended Complaint (the

“Answer”) is made subject to the following limitations as if fully set forth therein. First , except

as expressly admitted or otherwise responded to below, Sirius XM denies all of the allegations in

the numbered paragraphs of the Amended Complaint. Second , any responses in this Answer do

not constitute Sirius XM’s acknowledgement or admission of the validity or relevance of such

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allegations. Third , Sirius XM denies any and all of Plaintiff’s characterizations of fact or law in

the Amended Complaint. Fourth , any responses in this Answer as to documents or

communications referenced in the Amended Complaint do not constitute Sirius XM’s

acknowledgement or admission of the admissibility or relevance of such documents or

communications. Further, Sirius XM hereby expressly denies that Plaintiff has accurately,

completely, or in context cited from such documents or communications; rather, such documents

and communications speak for themselves. Fifth , to the extent a response is deemed required to

any of the section headings in the Amended Complaint, Sirius XM denies any and all allegations

in such headings. The section headings in this Answer exist for the purpose of convenience only

and shall not be deemed admissions. Sixth , as to the prayer for relief, Sirius XM denies any

liability or obligation, in any form or amount, to Plaintiff or any putative class members.

Seventh, Sirius XM files this Answer without waiving and expressly reserving its arguments in

its Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a) and Supporting Memorandum of

Law [D.E. 15] and Motion to Stay Proceedings Pending Resolution of Its Motion to Transfer

This Action to the Southern District of New York and Supporting Memorandum of Law [D.E.

16].

Sirius XM further reserves its right under the Federal Rules of Civil Procedure to amend

its pleading to add additional or other affirmative defenses or to delete and withdraw affirmative

defenses as may become necessary after additional discovery, investigation, or subsequent

developments relating to this case and expressly reserves its right to amend this Answer to assert

such additional affirmative defenses in the future.

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RESPONSES TO SPECIFIC ALLEGATIONS

1. The allegations contained in paragraph 1 of the Amended Complaint call for legal

conclusions to which no responsive pleading is required. To the extent a response is required,

Sirius XM denies the allegations.

2. Sirius XM denies knowledge or information sufficient to respond to the

allegations of paragraph 2 of the Amended Complaint.

3. Sirius XM denies knowledge or information sufficient to respond to the

allegations of paragraph 3 of the Amended Complaint.

4. Sirius XM denies knowledge or information sufficient to respond to the

allegations of paragraph 4 of the Amended Complaint, except it admits that music users have

enjoyed music on CDs in digital format since at least the 1980s and have accessed music via

digital streaming since at least the mid-1990s.

5. Sirius XM denies the allegations of paragraph 5 of the Amended Complaint,

except it admits that Sirius XM (a) has over 25 million subscribers to its satellite radio service;

(b) operates the sole national satellite radio service in the United States, which makes digital

audio transmissions via satellite technology; and (c) offers certain digital streaming services via

the Internet.

6. Sirius XM denies the allegations of paragraph 6 of the Amended Complaint,

except it admits that Sirius XM’s nationwide broadcasts can be received in Florida: (a) via

satellite radio by subscribers who receive the satellite broadcast on authorized Sirius XM

receivers; (b) via the Internet by subscribers who receive the transmission on computers (at

www.siriusxm.com), smart phones and tablets (via the Sirius XM mobile applications), and/or

home audio devices/systems, such as Roku and Sonos; and (c) via satellite television channels on

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Dish Network. Sirius XM further admits that its Internet radio service has features identified as

“MySXM” and “On Demand” and that certain devices capable of receiving the Sirius XM

satellite service offer a feature identified as “Replay”; users of the “Replay” and “My SXM”

features are provided with limited pause, rewind and replay functionality depending upon the

device, channel and delivery method.

7. Sirius XM denies the allegations of paragraph 7 of the Amended Complaint,

except it admits that Sirius XM (a) has a variety of packages it offers to subscribers at various

prices, including the “Premier” and “Select” packages; and (b) has approximately 70 channels

that are, at times, referred to as “Commercial-Free Music” channels, although the number of

such channels may vary across time and subscriber platform.

8. Sirius XM denies the allegations of paragraph 8 of the Amended Complaint,

except it admits that Sirius XM’s service includes some channels that play sound recordings of

musical performances that initially were “fixed” ( i.e. , recorded) prior to February 15, 1972 (“Pre-

1972 Recordings”).

9. Sirius XM denies the allegations of paragraph 9 of the Amended Complaint,

except it admits (a) that some Sirius XM servers located in New York state contain copies of

certain Pre-1972 Recordings, including certain recordings by the Turtles, to facilitate broadcasts

of those recordings; and (b) that recordings by the Turtles are among the thousands of recordings

transmitted as part of Sirius XM’s nationwide broadcasts, which are available to subscribers in

Florida.

10. Sirius XM denies the allegations of paragraph 10 of the Amended Complaint,

except it admits that Sirius XM (a) pays royalties for digital audio transmissions of sound

recordings created on or after February 15, 1972 as required by federal copyright law; and (b)

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does not pay royalties for performances of Pre-1972 Recordings because no such royalties are

required by law.

11. Sirius XM denies the allegations in the first sentence of paragraph 11 of the

Amended Complaint. The allegations contained in the second sentence call for legal conclusions

to which no responsive pleading is required. To the extent a response is required, Sirius XM

denies the allegations.

12. The allegations contained in paragraph 12 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations.

13. The allegations contained in paragraph 13 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations.

14. Sirius XM denies knowledge or information sufficient to respond to the

allegations of paragraph 14 of the Amended Complaint, except that Sirius XM admits that

consumers enjoy music via satellite radio and Sirius XM Internet radio.

15. The allegations contained in paragraph 15 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM refers to the Digital Performing Rights in Sound Recordings Act and its

legislative history for the true contents of that act and Congress’s intent in passing it and

otherwise denies the allegations.

16. The allegations contained in paragraph 16 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations.

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17. Sirius XM denies the allegations of paragraph 17 of the Amended Complaint,

except it admits that Sirius XM (a) pays royalties for digital audio transmissions of sound

recordings created on or after February 15, 1972 as required by federal copyright law; and (b)

does not pay royalties for performances of Pre-1972 Recordings because no such royalties are

required by law.

18. The allegations contained in paragraph 18 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

19. Sirius XM denies knowledge or information sufficient to respond to the

allegations of paragraph 19 of the Amended Complaint.

20. Sirius XM denies knowledge or information sufficient to respond to the

allegations in the first sentence of paragraph 20 of the Amended Complaint. The remaining

allegations of paragraph 20 of the Amended Complaint call for legal conclusions to which no

responsive pleading is required. To the extent a response is required, Sirius XM denies the

allegations.

21. Sirius XM denies the allegations of paragraph 21 of the Amended Complaint,

except it admits that Sirius XM is a Delaware corporation with its principal place of business in

New York City, Sirius XM has certain offices in Florida, and this Court has personal jurisdiction

over Sirius XM.

22. Sirius XM denies knowledge or information sufficient to respond to the

allegations in paragraph 22 of the Amended Complaint, except it admits that this Court has

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subject matter jurisdiction over the subject matter of this purported class action pursuant to 28

U.S.C. § 1332(d).

23. The allegations contained in paragraph 23 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. Sirius XM admits, however, that

venue is proper in this District.

24. Sirius XM does not respond to paragraph 24 of the Amended Complaint, which

contains no factual allegations about Sirius XM.

25. The allegations contained in paragraph 25 of the Amended Complaint are not

factual in nature; they merely characterize the basis on which Plaintiff purports to bring this

action and purport to reserve certain rights to the Plaintiff. Accordingly, no responsive pleading

is required. To the extent a response is required, Sirius XM denies the allegations.

26. The allegations contained in paragraph 26 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations.

27. The allegations contained in paragraph 27 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

28. The allegations contained in paragraph 28 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

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29. The allegations contained in the first and last sentences of paragraph 29 of the

Amended Complaint call for legal conclusions to which no responsive pleading is required. To

the extent a response is required, Sirius XM denies knowledge or information sufficient to

respond to the allegations in those sentences and also denies knowledge or information sufficient

to respond to the allegations in the second sentence of paragraph 29. Sirius XM denies the

allegations in the third sentence of paragraph 29, and does not respond to the fourth and fifth

sentences, which are not factual in nature.

30. The allegations contained in paragraph 30 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

31. The allegations contained in paragraph 31 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies knowledge or information sufficient to respond to the allegations in

the last sentence of paragraph 31 and denies the remaining allegations in paragraph 31.

32. The allegations contained in paragraph 32 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations.

33. The allegations contained in paragraph 33 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

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With Respect to the First Claim for Relief

34. Sirius XM repeats and incorporates by reference its responses to paragraphs 1-33

of the Amended Complaint.

35. The allegations contained in paragraph 35 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations.

36. The allegations contained in paragraph 36 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations.

37. The allegations contained in paragraph 37 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations.

38. The allegations contained in the first sentence of paragraph 38 of the Amended

Complaint call for legal conclusions to which no responsive pleading is required. To the extent a

response is required, Sirius XM denies the allegations and, without limitation, expressly denies

all allegations of wrongdoing by Sirius XM. Sirius XM denies knowledge or information

sufficient to respond to the allegations in the second sentence of paragraph 38 of the Amended

Complaint.

39. The allegations contained in the first sentence of paragraph 39 of the Amended

Complaint call for legal conclusions to which no responsive pleading is required. To the extent a

response is required, Sirius XM denies the allegations and, without limitation, expressly denies

all allegations of wrongdoing by Sirius XM. Sirius XM denies the allegations contained in the

remaining sentences of paragraph 39 of the Amended Complaint, except it admits that (a) some

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Sirius XM servers located in New York state contain copies made by Sirius XM of certain Pre-

1972 Recordings, including certain recordings by the Turtles, to facilitate broadcasts of those

recordings; and (b) recordings by the Turtles and certain other Pre-1972 Recordings are among

the many thousands of recordings transmitted as part of Sirius XM’s nationwide broadcasts,

which are available to subscribers in Florida.

40. The allegations contained in paragraph 40 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

41. The allegations contained in paragraph 41 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

42. The allegations contained in paragraph 42 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

With Respect to the Second Claim for Relief

43. Sirius XM repeats and incorporates by reference its responses to paragraphs 1-42

of the Amended Complaint.

44. The allegations contained in paragraph 44 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

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required, Sirius XM denies knowledge or information sufficient to respond to the allegations of

paragraph 44 of the Amended Complaint.

45. Sirius XM denies knowledge or information sufficient to respond to the

allegations of paragraph 45 of the Amended Complaint.

46. The allegations contained in paragraph 46 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

47. Sirius XM denies the allegations contained in paragraph 47 of the Amended

Complaint, except it admits that (a) some Sirius XM servers located in New York contain copies

made by Sirius XM of certain Pre-1972 Recordings in order to facilitate broadcast of such

recordings; (b) certain Pre-1972 Recordings are among the many thousands of recordings

transmitted as part of Sirius XM’s nationwide broadcasts and online digital audio transmissions,

which are available to subscribers in Florida; (c) users of the “Replay” and “My SXM” features

are provided with limited skip functionality depending upon the device, channel and delivery

method. Sirius XM further admits that its Internet radio product has features identified as

“MySXM” and “On Demand” and that certain devices capable of receiving the Sirius XM

satellite service offer a feature identified as “Replay.”

48. The allegations contained in paragraph 48 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

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49. Sirius XM denies knowledge or information sufficient to respond to the

allegations in the first sentence of paragraph 49 of the Amended Complaint. The remaining

allegations of paragraph 49 of the Amended Complaint call for legal conclusions to which no

responsive pleading is required. To the extent a response is required, Sirius XM admits that it

does not pay royalties for Pre-1972 Recordings because no such royalties are required by law,

but otherwise denies all allegations of wrongdoing by Sirius XM.

50. The allegations contained in paragraph 50 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

51. The allegations contained in paragraph 51 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

52. The allegations contained in paragraph 52 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

53. The allegations contained in paragraph 53 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

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With Respect to the Third Claim for Relief

54. Sirius XM repeats and incorporates by reference its responses to paragraphs 1-53

of the Amended Complaint.

55. The allegations contained in paragraph 55 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies knowledge or information sufficient to respond to the allegations.

56. The allegations contained in paragraph 56 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies knowledge or information sufficient to respond to the allegations in

the first sentence of paragraph 56 and denies the allegations in the second sentence of paragraph

56.

57. Sirius XM denies knowledge or information sufficient to respond to the

allegations of paragraph 57 of the Amended Complaint.

58. The allegations contained in paragraph 58 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

59. The allegations contained in paragraph 59 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

60. The allegations contained in paragraph 60 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

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required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

61. The allegations contained in paragraph 61 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

With Respect to the Fourth Claim for Relief

62. Sirius XM repeats and incorporates by reference its responses to paragraphs 1-61

of the Amended Complaint.

63. The allegations contained in paragraph 63 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies knowledge or information sufficient to respond to the allegations.

64. The allegations contained in paragraph 64 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

65. The allegations contained in paragraph 65 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

66. The allegations contained in paragraph 66 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

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required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

67. The allegations contained in paragraph 67 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations.

68. The allegations contained in paragraph 68 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

69. The allegations contained in paragraph 69 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations except admits that it received the letter attached to the

Amended Complaint as Exhibit B more than 30 days before filing of the Amended Complaint.

With Respect to the Fifth Claim for Relief

70. Sirius XM repeats and incorporates by reference its responses to paragraphs 1-69

of the Amended Complaint.

71. The allegations contained in paragraph 71 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies knowledge or information sufficient to respond to the allegations.

72. The allegations contained in paragraph 72 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

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73. The allegations contained in paragraph 73 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

74. The allegations contained in paragraph 74 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations.

75. The allegations contained in paragraph 75 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations and, without limitation, expressly denies all

allegations of wrongdoing by Sirius XM.

76. The allegations contained in paragraph 76 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations.

77. The allegations contained in paragraph 77 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations.

78. The allegations contained in paragraph 78 of the Amended Complaint call for

legal conclusions to which no responsive pleading is required. To the extent a response is

required, Sirius XM denies the allegations.

With Respect to the Prayer for Relief

79. In response to the prayer for relief, Sirius XM denies that Plaintiff is entitled to

any of the relief requested.

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AFFIRMATIVE DEFENSES

80. Without assuming the burden of proof where such burden properly rests with

Plaintiff, and expressly reserving and not waiving the right to assert any and all such defenses at

such time and to such extent as discovery and factual developments establish a basis therefor,

Sirius XM hereby asserts the following defenses to the claims asserted in the Amended

Complaint.

First Affirmative Defense

(Failure to State a Claim)

81. The Amended Complaint fails to state any claim upon which relief can be

granted.

Second Affirmative Defense

(Laches)

82. Plaintiff’s claims are barred, in whole or in part, by the doctrine of laches.

Third Affirmative Defense

(Waiver)

83. Plaintiff’s claims are barred, in whole or in part, by the doctrine of waiver.

Fourth Affirmative Defense

(Estoppel)

84. Plaintiff’s claims are barred, in whole or in part, by the doctrine of estoppel.

Fifth Affirmative Defense

(License)

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85. Plaintiff’s claims are barred, in whole or in part, by an implied license conveyed

by Plaintiff to Sirius XM or because Plaintiff otherwise licensed, authorized, or consented to

Sirius XM’s alleged conduct.

Sixth Affirmative Defense

(Fair Use)

86. Plaintiff’s claims are barred, in whole or in part, by the doctrine of fair use.

Seventh Affirmative Defense

(Statute of Limitations)

87. Plaintiff’s claims are barred, in whole or in part, by applicable statutes of

limitations.

Eighth Affirmative Defense

(Lack of Harm)

88. Plaintiff’s claims are barred, in whole or in part, because Plaintiff has not suffered

any harm from Sirius XM’s alleged conduct.

Ninth Affirmative Defense

(Failure to Mitigate Damages)

89. Plaintiff’s claims are barred, in whole or in part, because Plaintiff has failed to

take appropriate and necessary steps to mitigate its alleged damages, if any.

Tenth Affirmative Defense

(Lack of Ownership/Rights)

90. Plaintiff’s claims are barred, in whole or in part, because Plaintiff does not own

the purported works or rights at issue and/or lost such rights upon publication of the works.

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Eleventh Affirmative Defense

(Improper Demand)

91. Plaintiff’s Civil Theft claim is barred for failure to comply with the requirements of Fla.

Stat. § 772.11(1).

Twelfth Affirmative Defense

(Adequate Remedy at Law)

92. The injunctive relief sought by Plaintiff is barred, in whole or in part, because

Plaintiff has available an adequate remedy at law.

PRAYER FOR RELIEF

For the reasons set forth above, Sirius XM respectfully requests that the Court:

1. Dismiss Plaintiff’s Amended Complaint in its entirety with prejudice;

2. Enter judgment in favor of Defendant Sirius XM and against Plaintiff on each and

every cause of action set forth in the Amended Complaint;

3. Award attorneys’ fees and costs in favor of Defendant Sirius XM against Plaintiff

as permitted by applicable law; and

4. Award such other and further relief as the Court deems just and proper.

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Dated: December 23, 2013 Respectfully submitted,

/s/ Edward Soto Edward Soto (Fla. Bar No. 0265144) [email protected] Weil, Gotshal & Manges LLP 1395 Brickell Ave, Suite 1200 Miami, FL 33131 (305) 577-3100

R. Bruce Rich ( pro hac vice pending) Benjamin E. Marks ( pro hac vice pending) Todd Larson ( pro hac vice pending) John R. Gerba ( pro hac vice pending) Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 Tel: 212-310-8000

Michael S. Oberman ( pro hac vice pending) Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas New York, New York 10036 Tel: 212-715-9294

Attorneys for Defendant Sirius XM Radio Inc.

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CERTIFICATE OF SERVICE

I hereby certify that on December 23, 2013, I electronically filed the foregoing with the

Clerk of the Court for the United States District Court for the Southern District of Florida by

using the CM/ECF system, which sent notification of such filing to all CM/ECF participants. All

other counsel shall be served by United States mail.

Plaintiff Flo & Eddie, Inc.’s Counsel:

Glen H. Waldman Eleanor T. Barnett Jason Gordon Heller Waldman, P.L. 3250 Mary Street, Suite 102 Coconut Grove, Florida 33133

Henry Gradstein Maryann R. Marzano Robert E. Allen Gradstein & Marzano, P.C. 6310 San Vincente Blvd., Suite 510 Los Angeles, California 90048

/s/ Edward Soto ______Edward Soto (Fla. Bar No. 0265144) [email protected] WEIL, GOTSHAL & MANGES LLP 1395 Brickell Ave, Suite 1200 Miami, FL 33131 (305) 577-3100

Attorneys for Defendant Sirius XM Radio Inc.

US_ACTIVE:\44392508\4\76061.0012 Case: 1:13-cv-23182-KMM As of: 02/20/2014 03:20 PM EST 1 of 10

EGT,MEDREQ,REF_DISCOV U.S. District Court Southern District of Florida (Miami) CIVIL DOCKET FOR CASE #: 1:13−cv−23182−KMM

Flo &Eddie, Inc. v. Sirius XM Radio, Inc., et al Date Filed: 09/03/2013 Assigned to: Judge K. Michael Moore Jury Demand: Plaintiff Cause: 28:1331 Federal Question Nature of Suit: 820 Copyright Jurisdiction: Federal Question Plaintiff Flo &Eddie, Inc. represented by Eleanor Trotman Barnett a California corporation, individually Heller Waldman, P.L. and on behalf of all others similarly 3250 Mary Street situated Suite 102 Coconut Grove, FL 33133 305−448−4144 Fax: 305−448−4155 Email: [email protected] LEAD ATTORNEY ATTORNEY TO BE NOTICED Harvey Wayne Geller Gradstein &Mzrzano, P.C. 6310 San Vincente Blvd. Suite 510 Los Angeles, CA 90048 323−776−7100 Email: [email protected] LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED Henry Gradstein Gradstein &Marzano PC 6310 San Vicente Boulevard Suite 510 Los Angeles, CA 90048 323−776−7100 Email: [email protected] LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED Jason Gordon Heller Waldman, P.L. 3250 Mary Street Suite 102 Coconut Grove, FL 33133 305−448−4144 Fax: 305−448−4155 Email: [email protected] LEAD ATTORNEY ATTORNEY TO BE NOTICED Maryann R. Marzano Gradstein &Marzano PC 6310 San Vicente Boulevard Suite 510 Los Angeles, CA 90048 323−776−7100 Email: [email protected] LEAD ATTORNEY Case: 1:13-cv-23182-KMM As of: 02/20/2014 03:20 PM EST 2 of 10

PRO HAC VICE ATTORNEY TO BE NOTICED Robert E. Allen Gradstein &Marzano PC 6310 San Vicente Boulevard Suite 510 Los Angeles, CA 90048 323−776−7100 Email: [email protected] LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED Glen H. Waldman Heller Waldman, P.L. 3250 Mary Street Suite 102 Coconut Grove, FL 33133 305−448−4144 Fax: 305−448−4155 Email: [email protected] ATTORNEY TO BE NOTICED

V. Defendant Sirius XM Radio, Inc. represented by Benjamin E. Marks a Delaware corporation Weil, Gotshal &Manges, LLP 767 Fifth Avenue New York, NY 10153 Email: [email protected] LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED Bruce S. Meyer Weil Gotshal &Manges 767 5th Avenue New York, NY 10153−0119 212−310−8000 Fax: 310−8007 Email: [email protected] LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED Edward Soto Weil Gotshal &Manges 1395 Brickell Avenue Suite 1200 Miami, FL 33131 305−577−3177 Fax: 374−7159 Email: [email protected] LEAD ATTORNEY ATTORNEY TO BE NOTICED John R. Gerba Weil, Gotshal &Manges, LLP 767 Fifth Avenue New York, NY 10153 Email: [email protected] LEAD ATTORNEY Case: 1:13-cv-23182-KMM As of: 02/20/2014 03:20 PM EST 3 of 10

PRO HAC VICE ATTORNEY TO BE NOTICED Michael S. Oberman Kramer, Levin, Naftalis &Frankel, LLP 1177 Avenue of the Americas New York, NY 10036 212−715−9294 Email: [email protected] LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED R. Bruce Rich Weil Gotshal &Manges 767 5th Avenue New York, NY 10153−0119 212−310−8153 Fax: 310−8007 Email: [email protected] LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED Todd D. Larson Weil, Gotshal &Manges, LLp 767 Fifth Avenue New York, NY 10153 Email: [email protected] LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED

Defendant Does 1 through 10

Date Filed # Docket Text 09/03/2013 1 COMPLAINT (Class Action) against Sirius XM Radio, Inc.. Filing fees $ 400.00 receipt number 113C−6027049, filed by Flo &Eddie, Inc.. (Attachments: # 1 Exhibit Exhibit A, # 2 Exhibit Exhibit B, # 3 Civil Cover Sheet, # 4 Summon(s) Summons − Sirius)(Waldman, Glen) (Entered: 09/03/2013) 09/03/2013 2 Judge Assignment to Judge K. Michael Moore (ail) (Entered: 09/04/2013) 09/03/2013 3 Clerks Notice to Filer re: Electronic Case. Parties Not Added. The Filer failed to add all parties associated with the case.Filer is instructed in the future to add all parties during case opening. It is not necessary to re−file this document. (ail) (Entered: 09/04/2013) 09/04/2013 4 Summons Issued as to Sirius XM Radio, Inc.. (ail) (Entered: 09/04/2013) 09/04/2013 5 FORM AO 121 SENT TO DIRECTOR OF U.S. COPYRIGHT OFFICE (ail) (Entered: 09/04/2013) 09/05/2013 6 PAPERLESS ORDER REFERRING PRETRIAL DISCOVERY MATTERS TO MAGISTRATE JUDGE EDWIN G. TORRES. PURSUANT to 28 U.S.C. § 636 and the Magistrate Rules of the Local Rules of the Southern District of Florida, the above captioned Cause is referred to United States Magistrate Judge Edwin G. Torres to take all necessary and proper action as required by law with respect to any and all pretrial discovery matters. Any motion affecting deadlines set by the Court's Scheduling Order is excluded from this referral, unless specifically referred by separate Order. Signed by Judge K. Michael Moore on 9/5/2013. (nhl) (Entered: 09/05/2013) Case: 1:13-cv-23182-KMM As of: 02/20/2014 03:20 PM EST 4 of 10 09/05/2013 7 PAPERLESS PRETRIAL ORDER. THIS ORDER has been entered upon the filing of the complaint. Plaintiff's counsel is hereby ORDERED to forward to all defendants, upon receipt of a responsive pleading, a copy of this order. It is further ORDERED that S.D. Fla. L.R. 16.1 shall apply to this case and the parties shall hold a scheduling conference no later than twenty (20) days after the filing of the first responsive pleading by the last responding defendant, or within sixty (60) days after the filing of the complaint, whichever occurs first. However, if all defendants have not been served by the expiration of this deadline, Plaintiff shall move for an enlargement of time to hold the scheduling conference, not to exceed 120 days from the filing of the Complaint. Within ten (10) days of the scheduling conference, counsel shall file a joint scheduling report. Failure of counsel to file a joint scheduling report within the deadlines set forth above may result in dismissal, default, and the imposition of other sanctions including attorney's fees and costs. The parties should note that the time period for filing a joint scheduling report is not tolled by the filing of any other pleading, such as an amended complaint or Rule 12 motion. The scheduling conference may be held via telephone. At the conference, the parties shall comply with the following agenda that the Court adopts from S.D. Fla. L.R. 16.1: (1) Documents (S.D. Fla. L.R. 16.1.B.1 and 2) − The parties shall determine the procedure for exchanging a copy of or a description by category and location of all documents and other evidence that is reasonably available and that a party expects to offer or may offer if the need arises. Fed. R. Civ. P. 26(a)(1)(B). (a) Documents include computations of the nature and extent of any category of damages claimed by the disclosing party unless the computations are privileged or otherwise protected from disclosure. Fed. R. Civ. P. 26(a)(1)(C). (b) Documents include insurance agreements which may be at issue with the satisfaction of the judgment. Fed. R. Civ. P. 26(a)(1)(D). (2) List of Witnesses − The parties shall exchange the name, address and telephone number of each individual known to have knowledge of the facts supporting the material allegations of the pleading filed by the party. Fed. R. Civ. P. 26(a)(1)(A). The parties have a continuing obligation to disclose this information. (3) Discussions and Deadlines (S.D. Fla. L.R. 16.1.B.2) − The parties shall discuss the nature and basis of their claims and defenses and the possibilities for a prompt settlement or resolution of the case. Failure to comply with this Order or to exchange the information listed above may result in sanctions and / or the exclusion of documents or witnesses at the time of trial. S.D. Fla. L.R. 16.1.M. Telephonic appearances are not permitted for any purpose. Upon reaching a settlement in this matter the parties are instructed to notify the Court by telephone and to file a Notice of Settlement within twenty−four (24) hours. Signed by Judge K. Michael Moore on 9/5/2013. (nhl) (Entered: 09/05/2013) 10/01/2013 8 WAIVER OF SERVICE Returned Executed by Flo &Eddie, Inc.. Sirius XM Radio, Inc. waiver sent on 9/15/2013, answer due 11/14/2013. (Gordon, Jason) (Entered: 10/01/2013) 10/08/2013 9 NOTICE of Attorney Appearance by Edward Soto on behalf of Sirius XM Radio, Inc.. Attorney Edward Soto added to party Sirius XM Radio, Inc.(pty:dft). (Soto, Edward) (Entered: 10/08/2013) 10/08/2013 10 MOTION to Appear Pro Hac Vice for John R. Gerba, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filing. Filing Fee $ 75.00. Receipt # 66909. (ksa) (Entered: 10/09/2013) 10/08/2013 11 MOTION to Appear Pro Hac Vice for Todd D. Larson, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filing. Filing Fee $ 75.00. Receipt # 66910. (ksa) (Entered: 10/09/2013) 10/08/2013 12 MOTION to Appear Pro Hac Vice for Michael S. Oberman, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filing. Filing Fee $ 75.00. Receipt # 66911. (ksa) (Entered: 10/09/2013) 10/08/2013 13 MOTION to Appear Pro Hac Vice for Benjamin E. Marks, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filing. Filing Fee $ 75.00. Receipt # 66912. (ksa) (Entered: 10/09/2013) 10/08/2013 14 MOTION to Appear Pro Hac Vice for R. Bruce Rich, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filing. Filing Fee $ 75.00. Receipt # 66913. (ksa) (Entered: 10/09/2013) Case: 1:13-cv-23182-KMM As of: 02/20/2014 03:20 PM EST 5 of 10 10/09/2013 15 MOTION to Change Venue and Supporting Memorandum of Law by Sirius XM Radio, Inc.. Responses due by 10/28/2013 (Attachments: # 1 Affidavit of Edward Soto, # 2 Exhibit 1 − Complaint in Cal Superior Court, # 3 Exhibit 2 − Complaint in SDNY, # 4 Exhibit 3 − Volman biography, # 5 Errata 4 − Volman personal website, # 6 Exhibit 5 − Volman twitter website, # 7 Exhibit 6 − Record Collector News article, # 8 Exhibit 7 − MyNorthwest article, # 9 Exhibit 8 − Kaylan twitter website, # 10 Exhibit 9 − Kaylan personal website, # 11 Affidavit of Terrence Smith)(Soto, Edward) (Entered: 10/09/2013) 10/09/2013 16 MOTION to Stay Proceedings Pending Resolution of its Motion to Transfer by Sirius XM Radio, Inc.. Responses due by 10/28/2013 (Soto, Edward) (Entered: 10/09/2013) 10/09/2013 17 Corporate Disclosure Statement by Sirius XM Radio, Inc. (Soto, Edward) (Entered: 10/09/2013) 10/10/2013 18 PAPERLESS ORDER. THIS CAUSE came before the Court upon Defendant's Motions to Appear Pro Hac Vice, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filings 10 11 12 13 14 . UPON CONSIDERATION of the Motions, the pertinent portions of the record, and being otherwise fully advised in the premises, it is ORDERED AND ADJUDGED that the Motions 10 11 12 13 14 are GRANTED. John R. Gerba, Todd D. Larson, Michael S. Oberman, Benjamin E. Marks, and R. Bruce Rich may appear Pro Hac Vice in this matter. The Clerk of the Court shall provide electronic notification of all electronic filings to [email protected], [email protected], [email protected], [email protected] and [email protected]. Signed by Judge K. Michael Moore on 10/10/2013. (nhl) (Entered: 10/10/2013) 10/21/2013 19 MOTION to Appear Pro Hac Vice for Bruce S. Meyer, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filing. Filing Fee $ 75.00. Receipt # 67627. (ksa) (Entered: 10/22/2013) 10/23/2013 20 PAPERLESS ORDER. THIS CAUSE came before the Court on Defendant's Motion to Appear Pro Hac Vice, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filings 19 . UPON CONSIDERATION of the Motion, the pertinent portions of the record, and being otherwise fully advised in the premises, it is ORDERED AND ADJUDGED that the Motion 19 is GRANTED. Bruce S. Meyer may appear Pro Hac Vice in this matter. The Clerk of the Court shall provide electronic notification of all electronic filings to [email protected]. Signed by Judge K. Michael Moore on 10/23/2013. (nhl) (Entered: 10/23/2013) 10/23/2013 21 Plaintiff's MOTION for Extension of Time to File Response/Reply as to 15 MOTION to Change Venue and Supporting Memorandum of Law and Motion to Stay Pending Resolution of Motion to Transfer by Flo &Eddie, Inc.. (Gordon, Jason) (Entered: 10/23/2013) 10/24/2013 22 PAPERLESS ORDER. THIS CAUSE came before the Court upon Plaintiff's Motion for Extension of Time to Respond to Motion to Transfer Venue and Motion to Stay 21 . UPON CONSIDERATION of the Motion, the pertinent portions of the record, and being otherwise fully advised in the premises, it is hereby ORDERED AND ADJUDGED that the Motion 21 is GRANTED IN PART AND DENIED IN PART. Plaintiff may respond on or before October 28, 2013. Signed by Judge K. Michael Moore on 10/24/2013. (nhl) (Entered: 10/24/2013) 10/24/2013 Set/Reset Deadlines as to 16 MOTION to Stay Proceedings Pending Resolution of its Motion to Transfer, 15 MOTION to Change Venue and Supporting Memorandum of Law. Responses due by 10/28/2013. (See DE 22.) (wc) (Entered: 10/24/2013) 10/28/2013 23 RESPONSE to Motion re 15 MOTION to Change Venue and Supporting Memorandum of Law filed by Flo &Eddie, Inc.. Replies due by 11/7/2013. (Attachments: # 1 Exhibit Exhibit A, # 2 Exhibit Exhibit B)(Gordon, Jason) (Entered: 10/28/2013) Case: 1:13-cv-23182-KMM As of: 02/20/2014 03:20 PM EST 6 of 10 10/28/2013 24 RESPONSE in Opposition re 16 MOTION to Stay Proceedings Pending Resolution of its Motion to Transfer filed by Flo &Eddie, Inc.. (Gordon, Jason) (Entered: 10/28/2013) 11/04/2013 25 REPLY Memorandum in Further Support of 16 MOTION to Stay Proceedings Pending Resolution of its Motion to Transfer filed by Sirius XM Radio, Inc.. (Soto, Edward) Modified text on 11/5/2013 (asl). (Entered: 11/04/2013) 11/05/2013 26 REPLY to Response to Motion re 15 MOTION to Change Venue and Supporting Memorandum of Law filed by Sirius XM Radio, Inc.. (Attachments: # 1 Exhibit A − Factors Relevant to Transfer)(Soto, Edward) (Entered: 11/05/2013) 11/14/2013 27 Defendant's MOTION to Dismiss 1 Complaint, Defendant Sirius XM's Partial Motion to Dismiss Plaintiff's Complaint and Supporting Memorandum of Law by Sirius XM Radio, Inc.. Responses due by 12/2/2013 (Attachments: # 1 Exhibit A − Revision of Copyright Laws Hearing Before the Select Subcomm, # 2 Exhibit B − Authorizing a Composer's Royalty in Revenues, # 3 Exhibit C − Economic Conditions in the Performing Arts)(Soto, Edward) (Entered: 11/14/2013) 11/14/2013 28 Joint SCHEDULING and Discovery REPORT − Rule 16.1 by Flo &Eddie, Inc. (Attachments: # 1 Exhibit Proposed Joint Scheduling Order)(Gordon, Jason) Modified text on 11/18/2013 (asl). (Entered: 11/14/2013) 11/18/2013 29 PAPERLESS ORDER OF REFERRAL TO MEDIATION. Trial having been set in this matter, pursuant to Federal Rule of Civil Procedure 16 and Southern District Local Rule 16.2, it is ORDERED AND ADJUDGED as follows: 1. All parties are required to participate in mediation. The mediation shall be completed no later than sixty (60) days before the scheduled trial date. 2. Plaintiff's counsel, or another attorney agreed upon by all counsel of record and any unrepresented parties, shall be responsible for scheduling the mediation conference. The parties are encouraged to avail themselves of the services of any mediator on the List of Certified Mediators, maintained in the office of the Clerk of this Court, but may select any other mediator. The parties shall agree upon a mediator and file a Notice of Mediator Selection within fifteen (15) days from the date of this Order. If there is no agreement, lead counsel shall notify the Clerk of Court in writing within fifteen (15) days from the date of this Order, and the Clerk shall designate a mediator from the List of Certified Mediators, which designation shall be made on a blind rotation basis. 3. A place, date and time for mediation convenient to the mediator, counsel of record, and unrepresented parties shall be established. If the parties cannot agree to a place, date, and time for the mediation, they may motion the Court for an order dictating the place, date, and time. 4. The appearance of counsel and each party or representatives of each party with full authority to enter in a full and complete compromise and settlement is mandatory. If insurance is involved, an adjuster with authority up to the policy limits or the most recent demand, whichever is lower, shall attend. 5. All discussions, representations and statements made at the mediation conference shall be confidential and privileged. 6. At least ten (10) days prior to the mediation date, all parties shall present to the mediator a brief written summary of the case identifying issues to be resolved. Copies of these summaries shall be served on all other parties. 7. The Court may impose sanctions against parties and/or counsel who do not comply with the attendance or settlement authority requirements herein or who otherwise violate the terms of this Order. The mediator shall report non−attendance and may recommend imposition of sanctions by the Court for non−attendance. 8. The mediator shall be compensated in accordance with the standing order of the Court entered pursuant to Rule 16.2.B.6, or on such basis as may be agreed to in writing by the parties and the mediator selected by the parties. The cost of mediation shall be shared equally by the parties unless otherwise ordered by the Court. All payments shall be remitted to the mediator within 30 days of the date of the bill. Notice to the mediator of cancellation or settlement prior to the scheduled mediation conference must be given at least two (2) full business days in advance. Failure to do so will result in imposition of a fee for one hour. 9. If a full or partial settlement is reached in this case, counsel shall promptly notify the Court of the settlement in accordance with Local Rule 16.2.F, by the filing of a notice of settlement signed by counsel of record within ten (10) days of the mediation conference. Thereafter, the parties shall forthwith submit an appropriate pleading concluding the case. 10. Within five (5) days following the mediation conference, the mediator shall file a Mediation Case: 1:13-cv-23182-KMM As of: 02/20/2014 03:20 PM EST 7 of 10

Report indicating whether all required parties were present. The report shall also indicate whether the case settled (in full or in part), was continued with the consent of the parties, or whether the mediator declared an impasse. 11. If mediation is not conducted, the case may be stricken from the trial calendar, and other sanctions may be imposed. Signed by Judge K. Michael Moore on 11/18/2013. (nhl) (Entered: 11/18/2013) 11/18/2013 30 PAPERLESS ORDER SCHEDULING TRIAL IN MIAMI. This case is now set for trial commencing the two−week trial period of September 22, 2014 at 9 a.m. in Courtroom 13−1, (thirteenth floor) United States Courthouse, 400 North Miami Avenue, Miami, Florida. All parties are directed to report to the calendar call on September 18, 2014 at 2 p.m., at which time all matters relating to the scheduled trial date may be brought to the attention of the Court. A final pretrial conference as provided for by Rule 16, Fed. R. Civ. P., and Rule 16.1(C), S.D. Fla. L.R., is scheduled for September 9, 2014 at 11 a.m. A bilateral pretrial stipulation and all other pretrial preparations shall be completed NO LATER THAN FIVE DAYS PRIOR TO THE PRETRIAL CONFERENCE. All motions to amend the pleadings or to join additional parties must be filed by the later of forty−five (45) days after the date of entry of this Order, or forty−five(45) days after the first responsive pleading by the last responding defendant. Any and all pretrial motions, including motions for summary judgment, must be filed no later than sixty (60) days prior to the trial date. Responses to summary judgment motions must be filed no later than fourteen (14) days after service of the motion, and replies in support of the motion must be filed no later than seven (7) days after service of the response, with both deadlines computed as specified in Rule 6, Fed. R. Civ. P. All discovery shall be completed seventy (70) days prior to the date of trial. The failure to engage in discovery pending settlement negotiations shall not be grounds for continuance of the trial date. All exhibits must be pre−marked, and a typewritten exhibit list setting forth the number and description of each exhibit must be submitted at the time of trial. For a jury trial, counsel shall prepare and submit proposed jury instructions to the Court. For a non−jury trial, the parties shall prepare and submit to the Court proposed findings of fact and conclusions of law fully supported by the evidence which counsel expects the trial to develop and fully supported by citations to law. The proposed jury instructions or the proposed findings of fact and conclusions of law shall be submitted to the Court no later than five (5) business days prior to the scheduled trial date. Final Pretrial Conference set for 9/9/2014 11:00 AM in Miami Division before Judge K. Michael Moore. Jury Trial set for 9/22/2014 09:00 AM in Miami Division before Judge K. Michael Moore. Calendar Call set for 9/18/2014 02:00 PM in Miami Division before Judge K. Michael Moore. Signed by Judge K. Michael Moore on 11/18/2013. (nhl) (Entered: 11/18/2013) 12/02/2013 31 Plaintiff's MOTION for Extension of Time to File Response to Defendant's Partial Motion to Dismiss the Complaint re 27 Defendant's MOTION to Dismiss 1 Complaint, Defendant Sirius XM's Partial Motion to Dismiss Plaintiff's Complaint and Supporting Memorandum of Law by Flo &Eddie, Inc.. Responses due by 12/19/2013 (Waldman, Glen) (Entered: 12/02/2013) 12/03/2013 32 PAPERLESS ORDER. THIS CAUSE came before the Court upon Plaintiff's Motion for Extension of Time to Respond to Motion to Dismiss 31 . UPON CONSIDERATION of the Motion, the pertinent portions of the record, and being otherwise fully advised in the premises, it is hereby ORDERED AND ADJUDGED that the Motion 31 is GRANTED. Plaintiff may respond on or before December 9, 2013. Signed by Judge K. Michael Moore on 12/3/2013. (nhl) (Entered: 12/03/2013) 12/03/2013 Reset Deadlines per 32 Order as to 27 Defendant's MOTION to Dismiss 1 Complaint, Defendant Sirius XM's Partial Motion to Dismiss Plaintiff's Complaint and Supporting Memorandum of Law. Responses due by 12/9/2013 (asl) (Entered: 12/03/2013) 12/03/2013 33 MOTION for Extension of Time to Designate Mediator by Flo &Eddie, Inc.. Responses due by 12/20/2013 (Gordon, Jason) (Entered: 12/03/2013) 12/04/2013 34 NOTICE by Flo &Eddie, Inc. of Filing of Order Denying Defendant's Motion to Transfer Venue Filed in Related Case Pending in the Central District of California Case: 1:13-cv-23182-KMM As of: 02/20/2014 03:20 PM EST 8 of 10

in Support of Plaintiff's Response to Motion to Transfer Venue (Attachments: # 1 Exhibit Exhibit A)(Gordon, Jason) (Entered: 12/04/2013) 12/04/2013 35 PAPERLESS ORDER. THIS CAUSE came before the Court upon Plaintiff's Motion for Extension of Time to Designate Mediator 33 . UPON CONSIDERATION of the Motion, the pertinent portions of the record, and being otherwise fully advised in the premises, it is hereby ORDERED AND ADJUDGED that the Motion 33 is GRANTED. The Parties may designate a mediator on or before December 10, 2013. Signed by Judge K. Michael Moore on 12/4/2013. (nhl) (Entered: 12/04/2013) 12/05/2013 36 AMENDED COMPLAINT against All Defendants, filed by Flo &Eddie, Inc.. (Attachments: # 1 Exhibit Exhibit A, # 2 Exhibit EXhbiit B)(Gordon, Jason) (Entered: 12/05/2013) 12/06/2013 37 PAPERLESS ORDER. THIS CAUSE came before the Court upon the Defendant's Motion to Dismiss 27 . This Motion is mooted by the filing of the Amended Complaint 36 . Consequently, upon consideration of the Motion, the pertinent portions of the Record, and being otherwise fully advised in the premises, it is hereby ORDERED AND ADJUDGED that the Defendants' Motion 27 is DENIED AS MOOT. Signed by Judge K. Michael Moore on 12/6/2013. (nhl) (Entered: 12/06/2013) 12/10/2013 38 NOTICE by Flo &Eddie, Inc. of Mediator Designation (Gordon, Jason) (Entered: 12/10/2013) 12/13/2013 39 Defendant's MOTION for Leave to File Excess Pages by Sirius XM Radio, Inc.. (Soto, Edward) (Entered: 12/13/2013) 12/18/2013 40 WITHDRAWAL of Motion by Sirius XM Radio, Inc. re 39 Defendant's MOTION for Leave to File Excess Pages filed by Sirius XM Radio, Inc. (Soto, Edward) (Entered: 12/18/2013) 12/23/2013 41 Defendant's ANSWER and Affirmative Defenses to Amended Complaint by Sirius XM Radio, Inc.. (Soto, Edward) (Entered: 12/23/2013) 12/23/2013 42 MOTION to Appear Pro Hac Vice, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filing for Henry Gradstein. Filing Fee $ 75. Receipt # 70936. (cw) (Entered: 12/27/2013) 12/23/2013 43 MOTION to Appear Pro Hac Vice, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filing for Maryann R. Marzano. Filing Fee $ 75. Receipt # 70935. (cw) (Entered: 12/27/2013) 12/23/2013 44 MOTION to Appear Pro Hac Vice, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filing for Robert E. Allen. Filing Fee $ 75. Receipt # 70934. (cw) (Entered: 12/27/2013) 12/30/2013 45 PAPERLESS ORDER. THIS CAUSE came before the Court on Plaintiff's Motions to Appear Pro Hac Vice, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filings 42 43 44 . The instant Motions have been filed by Movant Glen H. Waldman. However, the Movant has included electronic, rather than an original signatures on the Motions. Section 5J of the Court's CM/ECF Administrative Procedures requires a motion to appear pro hac vice be "filed in the conventional manner." See also CM/ECF Admin. P. § 2B. Conventionally filed documents must include original signatures, as an "s/" signature is used only for electronically filed documents. See id. at § 3J. Because the proper CM/ECF Administrative Procedures and Local Rules were not followed, the Court will not grant the Motions. UPON CONSIDERATION of the Motions, the pertinent portions of the record, and being otherwise fully advised in the premises, it is ORDERED AND ADJUDGED that the Motions 42 43 44 are DENIED. Signed by Judge K. Michael Moore on 12/30/2013. (nhl) (Entered: 12/30/2013) 12/30/2013 Attorney Maryann R. Marzano; Robert E. Allen and Henry Gradstein terminated per 45 Order. Notice of Termination delivered by US Mail to Robert Allen, Henry Gradstein, Maryann Marzano. (asl) (Entered: 12/31/2013) Case: 1:13-cv-23182-KMM As of: 02/20/2014 03:20 PM EST 9 of 10 01/07/2014 Attorneys Maryann R. Marzano representing Flo &Eddie, Inc. (Plaintiff); Robert E. Allen representing Flo &Eddie, Inc. (Plaintiff) and Henry Gradstein representing Flo &Eddie, Inc. (Plaintiff) Activated. (ksa) (Entered: 01/07/2014) 01/07/2014 46 Amended MOTION to Appear Pro Hac Vice, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filing for Henry Gradstein. Filing Fee $ 75.00. Receipt # 70936. (ksa) (Entered: 01/07/2014) 01/07/2014 47 Amended MOTION to Appear Pro Hac Vice, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filing for Maryann R. Marzano. Filing Fee $ 75.00. Receipt # 70935. (ksa) (Entered: 01/07/2014) 01/07/2014 48 Amended MOTION to Appear Pro Hac Vice, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filing for Robert E. Allen. Filing Fee $ 75.00. Receipt # 70934. (ksa) (Entered: 01/07/2014) 01/08/2014 49 PAPERLESS ORDER. THIS CAUSE came before the Court on Plaintiff's Motions to Appear Pro Hac Vice, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filings 46 47 48 . UPON CONSIDERATION of the Motions, the pertinent portions of the record, and being otherwise fully advised in the premises, it is ORDERED AND ADJUDGED that the Motions 46 47 48 are GRANTED. Henry Gradstein, Maryann R. Marazno, and Robert E. Allen may appear Pro Hac Vice in this matter. The Clerk of the Court shall provide electronic notification of all electronic filings to [email protected], [email protected], and [email protected]. Signed by Judge K. Michael Moore on 1/8/2014. (nhl) (Entered: 01/08/2014) 01/10/2014 50 PAPERLESS ORDER. THIS CAUSE came before the Court upon Defendant Sirius XM Radio Inc.'s Motion to Transfer Venue to the United States District Court for the Southern District of New York 15 . Plaintiff Flo &Eddie, Inc. responded 23 and Defendant replied 26 . Plaintiff has filed three similar actions concerning rights to pre−1972 sound recordings in this Court, the Southern District of New York, and the Central District of California. Mot., at 2−3. Defendant seeks to transfer all three actions to New York. Id. The Parties do not dispute that the instant action may have been brought in New York. See 28 U.S.C. § 1404(a); Mot., at 5; Resp., at 3. Accordingly, this Court must apply a multi−factor test to determine whether transfer is appropriate. See Global Innovation Tech. v. Acer Am. Corp., 634 F. Supp. 2d 1346, 1348 (S.D. Fla. 2009). This Court finds that, with two exceptions, the factors are neutral and do not favor either Florida or New York. This Court finds that the factor of Plaintiff's choice of forum favors Florida, the location in which the instant action was filed. This Court further finds that the factor of trial efficiency and the interests of justice favors transfer to New York, where a similar action is pending. However, the California court has denied Defendant's Motion for Transfer, thereby diminishing the utility of transfer to New York. See Order Denying Mot. to Transfer Venue, Case No. 13−5693, D.E. 43 (C.D. Cal. Dec. 3, 2013). On these facts, Defendant has failed to meet its burden to establish that this action should be transferred. UPON CONSIDERATION of the Motion, the pertinent portions of the record, and being otherwise fully advised in the premises, it is hereby ORDERED AND ADJUDGED that the Motion 15 is DENIED. Signed by Judge K. Michael Moore on 1/10/2014. (nhl) (Entered: 01/10/2014) 01/13/2014 51 PAPERLESS ORDER. THIS CAUSE came before the Court upon Defendant's Motion to Stay Pending Resolution of Motion to Transfer 16 . This Court has denied Defendant's Motion to Transfer. See Paperless Order 50 . Consequently, upon consideration of the Motion, the pertinent portions of the Record, and being otherwise fully advised in the premises, it is hereby ORDERED AND ADJUDGED that Defendant's Motion 16 is DENIED AS MOOT. Signed by Judge K. Michael Moore on 1/13/2014. (nhl) (Entered: 01/13/2014) 01/14/2014 52 NOTICE OF UNAVAILABILITY by Flo &Eddie, Inc. for dates of 2/6/14 − 2/9/14; 3/21/14 − 3/24/14 (Waldman, Glen) (Entered: 01/14/2014) 01/28/2014 53 MOTION for Reconsideration re 30 Scheduling Order,,,,,,,,,, (Motion for Conference to Reconsider Scheduling Order and Supporting Memorandum of Law) by Sirius XM Radio, Inc.. (Attachments: # 1 Exhibit A − Jan. 10, 2014 Minute Entry)(Soto, Edward) (Entered: 01/28/2014) Case: 1:13-cv-23182-KMM As of: 02/20/2014 03:20 PM EST 10 of 10 01/30/2014 54 NOTICE by Flo &Eddie, Inc. of Intention to File Response to Defendant, Sirius XM Radio, Inc.'s Motion for a Conference to Reconsider the Scheduling Order (Waldman, Glen) (Entered: 01/30/2014) 02/07/2014 55 RESPONSE in Opposition re 53 MOTION for Reconsideration re 30 Scheduling Order,,,,,,,,,, (Motion for Conference to Reconsider Scheduling Order and Supporting Memorandum of Law) filed by Flo &Eddie, Inc.. (Attachments: # 1 Exhibit Exhibit A, # 2 Exhibit Exhibit B)(Waldman, Glen) (Entered: 02/07/2014) 02/07/2014 57 MOTION to Appear Pro Hac Vice, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filing for Harvey Wayne Geller. Filing Fee $ 75.00. Receipt # 73560. (ksa) (Entered: 02/13/2014) 02/12/2014 56 REPLY to Response to Motion re 53 MOTION for Reconsideration re 30 Scheduling Order,,,,,,,,,, (Motion for Conference to Reconsider Scheduling Order and Supporting Memorandum of Law) filed by Sirius XM Radio, Inc.. (Soto, Edward) (Entered: 02/12/2014) 02/14/2014 58 PAPERLESS ORDER. THIS CAUSE came before the Court on Plaintiff's Motion to Appear Pro Hac Vice, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filings 57 . UPON CONSIDERATION of the Motion, the pertinent portions of the record, and being otherwise fully advised in the premises, it is ORDERED AND ADJUDGED that the Motion 57 is GRANTED. Harvey Wayne Geller may appear Pro Hac Vice in this matter. The Clerk of the Court shall provide electronic notification of all electronic filings to [email protected]. Signed by Judge K. Michael Moore on 2/14/2014. (nhl) (Entered: 02/14/2014) 02/20/2014 59 PAPERLESS ORDER. THIS CAUSE came before the Court upon Defendant's Motion for Conference to Reconsider Scheduling Order 53 . Plaintiff responded in opposition 55 and Defendant replied 56 . UPON CONSIDERATION of the Motion, the pertinent portions of the record, and being otherwise fully advised in the premises, it is hereby ORDERED AND ADJUDGED that the Motion 53 is DENIED. Signed by Judge K. Michael Moore on 2/20/2014. (nhl) (Entered: 02/20/2014)

1 MITCHELL SILBERBERG & KNUPP LLP RUSSELL J. FRACKMAN (SBN 49087) [email protected] 2 MARC E. MAYER (SBN 190969) [email protected] EMILY F. EVITT (SBN 261491) [email protected] 3 11377 West Olympic Boulevard Los Angeles, CA 90064-1683 4 Telephone: (310) 312-2000 Facsimile: (310) 312-3100 5 Attorneys for Plaintiffs 6 7

8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 FOR THE COUNTY OF LOS ANGELES 10

11 CAPITOL RECORDS, LLC, a Delaware CASE NO. BC 520981 limited liability corporation; SONY MUSIC 12 ENTERTAINMENT, a Delaware partnership; Judge: Honorable John Shepard Wiley UMG RECORDINGS, INC., a Delaware 13 corporation; WARNER MUSIC GROUP NOTICE OF MOTION AND MOTION CORP., a Delaware corporation; and ABKCO OF PLAINTIFFS FOR JURY 14 MUSIC & RECORDS, INC., a New York INSTRUCTION REGARDING A corporation, DIGITAL PERFORMANCE RIGHT IN 15 SOUND RECORDINGS FIXED BEFORE Plaintiffs, FEBRUARY 15,1972; 16 V. MEMORANDUM OF POINTS AND 17 AUTHORITIES IN SUPPORT SIRIUS XM RADIO INC., a Delaware 18 corporation; and DOES 1 through 10, [Request for Judicial Notice and Appendix of inclusive, Non-California Authorities Filed 19 Concurrently Herewith] Defendants. 20 Hearing Information: 21 Location: Dept. 311 Date: May 14,2014 22 Time: 10:00 a.m.

23 File Date: September 11, 2013 Trial Date: none set 24

25 26 27 Mitchell 28 Silberberg & Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT

1 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: 2

3 PLEASE TAKE NOTICE that, on May 14, 2014 at 10:00 a.m., or as soon thereafter as 4 the matter may be heard by the Honorable John Shepard Wiley in Department 311 of the above-

5 captioned Court, located at Central Civil West Courthouse, 600 South Commonwealth Ave., Los

6 Angeles, CA 90005, Plaintiffs Capitol Records, LLC, Sony Music Entertainment, UMG

7 Recordings, Inc., Warner Music Group Corp., and ABKCO Music & Records, Inc. will and 8 hereby do move the Court to adopt the following instruction to be given to a jury at the trial of this 9 action: 10 The owner of a sound recording "fixed" (i.e., recorded) prior to 11 February 15, 1972, possesses a property interest and exclusive ownership rights in that sound recording. This property interest and 12 the ownership rights under California law include the exclusive right to publicly perfolin, or authorize others to publicly perform, the 13 sound recording by means of digital transmission — whether by satellite transmission, over the Internet, through mobile smartphone 14 applications, or otherwise. 15

16 As set forth in the attached Memorandum of Points and Authorities, the foregoing jury

17 instruction is warranted by California Civil Code Section 980 and California common law,

18 including (but not limited to) Capitol Records, LLC v. BlueBeat, Inc., 765 F. Supp. 2d 1198 (C.D.

19 Cal. 2010); ii&M Records, Inc. v. Heilman, 75 Cal. App. 3d 554 (1977); and Capitol Records, Inc. 20 v. Erickson, 2 Cal. App. 3d 526 (1969).

21 22 This motion is made pursuant to the Stipulated Briefing Schedule filed by the parties on

23 January 16, 2014, and the Court's Order thereon, entered January 27, 2014. 24 25 This motion is based on this Notice of Motion, the attached Memorandum of Points and 26 Authorities, any reply that may be filed in support of this motion, the concurrently filed Appendix 27 of Non-California Authorities, the complete files and records in this action, any facts of which the

Mitchell 28 Silberberg & 1 Knupp LLP MOTION FOR JURY INSTRUCTION AND 5836169.1/11224-00127 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Court may take judicial notice under California Evidence Code §§ 451 and 452 (including the

2 materials contained in the concurrently filed Request for Judicial Notice), and any other further 3 argument or evidence that Plaintiffs may present at or before the hearing on the motion. 4

5 DATED: February 3,2014 MITCHELL SILBERBERG & KNUPP LLP RUSSELL J. FRACKMAN 6 MARC E. MAYER EMILY F. EVITT 7

By: F-4---utA4/1e/v\-7/110/ 9 Russell J. Frac an Attorneys for laintiffs 10

11 12

13 14

15 16 17

20 21 22

23 24 25 26 27

Mitchell 28 Silberberg & 2 Knupp LLP MOTION FOR JURY INSTRUCTION AND 5836169.1/11224-001 7 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 TABLE OF CONTENTS 2 Page 3 Introduction 1 4 I. PROPOSED JURY INSTRUCTION 3 5 II. PRE-72 SOUND RECORDINGS ARE PROTECTED BY STATE LAW 6 4 7 III. CALIFORNIA LAW RECOGNIZES A PROPERTY INTEREST IN PRE-72 RECORDINGS THAT INCLUDES THE EXCLUSIVE RIGHT OF DIGITAL 8 PUBLIC PERFORMANCE 5

9 A. The Case Law Establishes The Existence Of A Common Law Intangible Property Interest In Pre-72 Recordings. 5 10 B. The Policies And Principles Of California Law Confirm The Existence Of A 11 Digital Performance Right In Pre-72 Recordings. 9 12 C. The Plain Language And Structure Of Civil Code Section 980 Confirm The 13 Existence Of An Exclusive Digital Public Performance Right In Pre-72 Recordings 12 14 D. Congress Has Recognized That A Digital Public Performance Right Is 15 Necessary To Protect Owners Of Sound Recordings 15

16 Conclusion 17 17 18 19

20 21 22

23 24

25 26

27 Mitchell 28 Silberberg & Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 TABLE OF AUTHORITIES 2 Page(s)

3 CASES 4 A&M Records, Inc. v. Heilman, 75 Cal. App. 3d 554 (1977) passim 5 A&M Records, Inc. v. Napster, 6 239 F.3d 1011 (9th Cir. 2001) 1

7 Balboa Ins. Co. v. Trans Global Equities, 218 Cal. App. 3d 1327 (1990) 8 10 9 Bonneville Int'l Corp. v. Peters, 153 F. Supp. 2d 763 (E.D. Pa. 2001) 16 10 Bonneville Intl Corp. v. Peters, 11 347 F.3d 485 (3d Cir. 2003) 1, 16

12 California School Employees Assn. v. Travis Unified School Dist., 156 Cal. App. 3d 242 (1984) 13 13 14 Capitol Records, Inc. v. Erickson, 2 Cal. App. 3d 526 (1969) passim 15 Capitol Records, LLC v. BlueBeat, Inc., 16 765 F. Supp. 2d 1198 (C.D. Cal. 2010) 5, 6, 8, 15 Order Granting Temporary Restraining Order 5 17 Preliminary Injunction 6 Temporary Restraining Order 5 18

19 Cassel v. Superior Court, 51 Cal. 4th 113 (2011) 13 20 Fnb Mortgage Corp. v. Pac. General Corp., 21 76 Cal. App. 4th 1116 (1999) 14

22 Geertz v. Ausonio, 4 Cal. App. 4th 1363 (1992) 14 23 Goldstein v. California, 24 412 U.S. 546 (1973) 4, 14, 17 25 Hollywood Screentest of America, Inc. v. NBC Universal, Inc., 26 151 Cal. App. 4th 631 (2007) 10

27 International News Service v. Associated Press, 248 U.S. 215 (1918) 1, 9, 10 Mitchell 28 Silberberg & 11 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT

1 TABLE OF AUTHORITIES (continued) 2 Page(s) 3 Lane v. Whitaker, 4 50 Cal. App. 2d 327 (1942) 13

5 Law Offices of Mathew Higbee v. Expungement Assistance Services, 6 214 Cal. App. 4th 544 (2013) 11

7 Leader v. Cords, 182 Cal. App. 4th 1588 (2010) 14 8 Lone Ranger Television, Inc. v. Program Radio Corp., 9 740 F.2d 718 (9th Cir. 1984) 7

10 Lopez v. Superior Court, 50 Cal. 4th 1055 (2010) 11 14

12 Metropolitan Opera Ass 'n v. Wagner-Nichols Recorder Corp., 101 N.Y.S.2d 483 (N.Y. Sup. Ct. 1950) 7, 11 13 Ojala v. Bohlin, 14 178 Cal. App. 2d 292 (1960) 11

15 Pineda v. Williams-Sonoma Stores, Inc., 51 Cal. 4th 524 (2011) 14 16 Smith v. Paul, 17 174 Cal. App. 2d 744 (1959) 12 18 Williams v. Weisser, 19 273 Cal. App. 2d 726 (1969) 12, 13

20 WorldMark, The Club v. Wyndham Resort Development Corp., 187 Cal. App. 4th 1017 (2010) 15 21

22 STATUTES 23 17 U.S.C. § 102(a)(7) 24 §106 13 25 § 114(a) 15 § 301(c) 4 26 California Civil Code 27 §4 14

Mitchell 28 Silberberg & 111 Knupp LLP MOTION FOR JURY INSTRUCTION AND 5836169.1/11224-00127 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 TABLE OF AUTHORITIES (continued) 2 Page(s) 3 §654 13 4 § 980 passim 5 Fla. Stat. 543.02 (enacted 1941) 14 6 Laws of Florida, 1977, c. 77-440, § 1 14 7 N.C. Gen. Stat. § 66-28 (enacted 1939) 14 8 S.C. Code 39-3-510 (enacted 1939; previously codified at §§ 6641, 66-101) 14 9

10 OTHER AUTHORITIES 11 13 B. E. Witkin, Summary of California Law, §§ 46, 47 (10th ed. 2005) 12 12 6 W. F. Patry, Patry On Copyright, § 18:55 (2013 ed.) 4 13 H.R. Conf. Rep. No. 105-796, at 79 (1998) 16 14 H.R. Rep. 15 No. 92-487 (1971) 11 16 No. 104-274 (1995) 16

17 S. Rep. No. 104-128 (1995) 16

27 Mitchell 28 Silberberg & iv Knupp LLP MOTION FOR JURY INSTRUCTION AND 5836169.1711224-00127 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 Introduction 2 Defendant Sirius XM Radio Inc. ("Sirius XM") has built a multi-billion dollar business on 3 transmitting sound recordings to the public. Every day, Sirius XM exploits, for commercial gain,

4 many hundreds, if not thousands, of Plaintiffs' sound recordings that were "fixed" (i.e., recorded) 5 before February 15, 1972 ("Pre-72 Recordings"), by transmitting high-quality digital versions of 6 those recordings to more than 25 million paying customers.' In fact, Sirius XM unabashedly seeks 7 to attract users to its service by offering channels dedicated to Pre-72 Recordings (including 8 1940s, 1950s, and 1960s channels) and by using Pre-72 Recordings to promote its channels, such 9 as by using classic Rolling Stones recordings to advertise the "Deep Tracks" channel and, just last

10 week, highlighting the works of the late singer/songwriter Pete Seeger on Sirius XM's "The 11 Village" and "Outlaw Country" channels. Notwithstanding the bounty that Sirius XM is receiving 12 from its unfettered use of some of the most iconic sound recordings of all time — including 13 recordings by artists such as the Beatles, the Rolling Stones, Led Zeppelin, The Supremes, Bob

14 Dylan, and hundreds of others — it refuses to pay the artists who created those cultural treasures, 15 and those who own the rights to them, any portion of the millions of dollars Sirius XM makes each

16 year from those Pre-72 Recordings. In addition to being fundamentally unfair, Sirius XM's

17 conduct violates California common law and statutes grounded in the century-old maxim that "one

18 may not reap where [it] has not sown." International News Service v. Associated Press, 248 U.S. 19 215, 239-40 (1918) ("INS").

21 ' Sirius XM describes its service as follows: "Thanks to those satellites high in the sky, you can enjoy Sirius XM Satellite Radio almost anywhere — within the 48 contiguous United States, the 22 District of Columbia and Puerto Rico (with some limitations), hundreds of miles out into the Atlantic and Pacific Oceans, the Gulf of Mexico, Caribbean Sea and the Great Lakes." 23 https://listenercare.siriusxm.corn/app/answers/detail/a id/3570 (last visited Feb. 3, 2014). Sirius XM has now expanded its services beyond satellite radio. Sirius XM's website describes its 24 digital service, MySXM, as an Internet radio feature "so you can enjoy it on your computer or with a Sirius XM app for your iPhoneC, iPadS, iPod® touch or compatible Android device." See 25 http://www.siriusxm.com/mysxm (last visited Feb. 3, 2014). 26 2 Sound recordings can be digitally transmitted by satellite, over the Internet, and over mobile networks. "Real time" Internet transmissions are known as "streaming" transmissions. Bonneville 27 Intl Corp. v. Peters, 347 F.3d 485, 489 (3d Cir. 2003). Alternatively, music files may be distributed via digital download, which is a way "to receive information, typically a file, from Mitchell 28 another computer to yours." A&M Records, Inc. v. Napster, 239 F.3d 1011, n. 1 (9th Cir. 2001). Silberberg & 1 Knupp LLP MOTION FOR JURY INSTRUCTION AND 5836169.1/11224-00127 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 This motion asks the Court to recognize a basic legal principle: the exclusive intellectual 2 property rights that California law grants to the owners of Pre-72 Recordings are broad and

3 adaptable, and include the right to publicly perform Pre-72 Recordings by digital transmission, 4 whether by satellite, over the Internet, through smartphone applications, or otherwise. For over 40 5 years, California law explicitly has recognized the existence of a common law property right in

6 Pre-72 Recordings. This exclusive property right, which is necessary to protect and encourage the

7 investment of time, money and creative effort involved in providing these unique recordings to the 8 public, was written into Section 980 of the California Civil Code in 1982, which states, in 9 unqualified terms, that the ownership rights of Pre-72 Recordings are "exclusive ... as against all 10 persons."

11 The property right in Pre-72 Recordings has for many years been exploited by the creators

12 and owners of those recordings by reproduction and physical distribution to the public (i.e., on 13 vinyl records, audio tapes, and CDs). The methods by which consumers enjoy music, and by

14 which sound recording owners and artists distribute and are paid for that music, have changed, but 15 the property exploited is the same. The same music now is widely accessed by means of digital 16 audio transmissions such as those that are the foundation of Sirius XM's business. These 17 transmissions enable businesses like Sirius XM to provide paying subscribers located anywhere in

18 the United States (and beyond) high-quality recordings through car radios, desktop and laptop

19 computers, smartphones, tablets, and other connected devices. Sirius XM's own representations

20 that it currently has over 25 million paying subscribers confirm this change in consumer habits in 21 listening to music. In 2012, Sirius XM's hardware was in two out of every three new cars sold, 22 and its business generated more than $3.4 billion.' Put simply, Sirius XM is using Pre-72 23 Recordings to provide access to the same music that Plaintiffs created, own, and have the right to 24 sell to the public, whether on CDs, digital copies, or digital transmissions. That Sirius XM is 25 publicly performing those recordings via digital transmission, rather than selling a download or a 26 27 See Sirius XM Satellite Radio Proxy Statement and 2012 Annual Report, available at http://investor.siriusxm.com/annuals.cfm (last visited Feb. 3, 2014); Sirius XM Satellite Radio Mitchell 28 Corporate Overview, available at http://www.siriusxrn.com/corporate (last visited Feb. 3, 2014). Silberberg & 2 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 physical copy, does not change the fact that it appropriates for itself the value of Plaintiffs' 2 property.

3 The requested jury instruction does not implicate any proposed affirmative defenses that 4 Sirius XM may later assert in these proceedings. Nor does this motion ask the Court to address 5 the ultimate proof of a claim for violation of a digital public performance right in Pre-72 6 Recordings. The only issue before the Court is recognizing the existence of a digital performance 7 right under California law.' As set forth below, the existence of a digital perfoimance right in Pre-

8 72 Recordings as part of the exclusive rights conferred by California law is confirmed by caselaw 9 extending over 40 years; by the policies that underpin California common law theories of

10 misappropriation, conversion, and unfair competition; by the plain language, structure, and intent 11 of California Civil Code Section 980; and by the very same market considerations that in 1995

12 drove Congress to amend the Copyright Act (which, unlike California law, previously specifically 13 excluded a performance right in sound recordings) to give sound recording owners a digital 14 performance right in their federally copyrighted post-72 recordings. These authorities, whether 15 taken individually or collectively, establish conclusively that there exists a broad intangible 16 property right in Pre-72 Recordings that includes the valuable right to perform these recordings

17 digitally. Accordingly, the Court should grant this motion and adopt Plaintiffs' proposed jury 18 instruction.

20 I. PROPOSED JURY INSTRUCTION 21 Plaintiffs respectfully request that the Court adopt the following jury instruction: 22 The owner of a sound recording "fixed" (i.e., recorded) prior to February 15, 1972, possesses a property interest and exclusive 23 ownership rights in that sound recording. This property interest and the ownership rights under California law include the exclusive right 24 to publicly perform, or authorize others to publicly perform, the sound recording by means of digital transmission — whether by 25 26 Plaintiffs also claim that Sirius XM is liable for copying thousands of Plaintiffs' Pre-72 Recordings to its servers or satellites without authorization. There is no dispute that California 27 law recognizes the exclusive right to reproduce copies of Pre-72 Recordings. See A&M Records, Inc. v. Heilman, 75 Cal. App. 3d 554 (1977). Sirius XM's violations of Plaintiffs' reproduction Mitchell 28 right are not part of this motion and will be addressed at a later time. Silberberg & 3 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 satellite transmission, over the Internet, through mobile smartphone applications, or otherwise. 2

3 II. PRE-72 SOUND RECORDINGS ARE PROTECTED BY STATE LAW

4 In 1971, Congress passed the Sound Recording Amendment to the 1909 Copyright Act.

5 This amendment granted certain federal protections to sound recordings "fixed" on or after 6 February 15, 1972 ("Post-72 Recordings"). 5 Congress' extension of federal copyright protection 7 to such sound recordings, however, did not disturb the pre-existing state law regimen. Instead, the 8 Sound Recording Amendment expressly preserved state law protection for Pre-72 Recordings. 9 See 17 U.S.C. § 301(c) ("With respect to sound recordings fixed before February 15, 1972, any

10 rights or remedies under the common law or statutes of any state shall not be annulled or limited 11 by this title until February 15, 2067.") (emphasis added).

12 Section 301(c) of the Copyright Act does not limit the extent or nature of the protection 13 that states can grant to Pre-72 Recordings. To the contrary, Congress expressly left existing state 14 law intact, and further allowed the states to retain, adopt, and continue to develop common law

15 and statutory protection for Pre-72 Recordings as they saw fit. Thus, Congress empowered the

16 states to provide full protection for any unauthorized and uncompensated exploitation of Pre-72 17 Recordings. See Goldstein v. California, 412 U.S. 546 (1973) (California had broad power to 18 protect Pre-72 Recordings that are not covered by the federal Copyright Act); see generally 6 W.

19 F. Patry, Patry On Copyright, § 18:55 at 18-198 (2013 ed.) ("Section 301(c) is directed toward

20 material (pre-1972 sound recordings) which Congress has expressly told the states they may 21 protect.... States are thus free to extend pre-1972 sound recordings the full panoply of rights 22 granted original works of authorship by the Federal Copyright and beyond (for example, a

23 performance right...)"). As explained below, California provides a valuable, intangible property 24 right in the performances embodied in Pre-72 Recordings that includes the exclusive right to use 25 (and authorize others to use) Pre-72 Recordings by digitally transmitting them. 26 27 The protection for sound recordings "fixed" after February 15, 1972, later was codified in the 1976 Copyright Act, which lists "sound recordings" as a "work of authorship" protected by federal Mitchell 28 copyright law. See 17 U .S.C. § 102(a)(7). Silberberg & 4 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 III. CALIFORNIA LAW RECOGNIZES A PROPERTY INTEREST IN PRE-72 RECORDINGS THAT INCLUDES THE EXCLUSIVE RIGHT OF DIGITAL 2 PUBLIC PERFORMANCE 3 A. The Case Law Establishes The Existence Of A Common Law Intangible 4 Property Interest In Pre-72 Recordings.

5 California case law supports the existence of a digital performance right in Pre-72 6 Recordings under theories of unfair competition, misappropriation, and conversion.

7 Capitol Records, LLC v. BlueBeat, Inc., 765 F. Supp. 2d 1198 (C.D. Cal. 2010), is the only 8 reported decision applying California law to the digital performance of Pre-72 Recordings. The

9 defendants were the owners of websites (bluebeat.com and basebeat.com) that transmitted and 10 distributed sound recordings, including a large number of Pre-72 Recordings (most notably

11 recordings by the Beatles), to members of the public, both by digital download and by digital 12 streaming, without authorization from the owners of the recordings. The plaintiffs, six affiliated 13 record labels, sued, alleging that the defendants had engaged in federal copyright infringement

14 with respect to the plaintiffs' Post-72 Recordings and had violated state law with respect to the 15 plaintiffs' Pre-72 Recordings. Specifically, the plaintiffs alleged that the defendants had engaged 16 in common law misappropriation, conversion, and unfair competition and had violated California

17 Civil Code Section 980 (discussed at Section III.C. below), which provides that "[t]he author of an 18 original work of authorship consisting of a sound recording initially fixed prior to February 15, 19 1972, has an exclusive ownership therein ....." (emphasis added). 20 The case initially was assigned to Judge John Walter who issued both a temporary

21 restraining order and preliminary injunction, finding that "by offering ... digital streaming 22 transmissions of Plaintiffs' Recordings, Defendants' actions can cause irreparable damage to the 23 perceived value of Plaintiffs' music and to Plaintiffs' digital distribution strategies and 24 relationships." See Order Granting Temporary Restraining Order, Case No. 09-8030 JST at 6 25 (Docket No. 13); Temporary Restraining Order, Case No. 09-8030 JST (Docket No. 14) at 4 26 27 Mitchell 28 Silberberg & 5 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 ("TRO"); Preliminary Injunction, Case No. 09-8030 JST (Docket No. 25) at 411 1(b).6 The TRO and 2 Preliminary Injunction enjoined the defendants from "directly or indirectly infringing in any 3 manner any right in any and all sound recordings originally fixed in a tangible medium of 4 expression prior to February 15, 1972, in which any Plaintiff.., owns or controls an exclusive 5 right under state or common law (the 'Pre-1972 Sound Recordings'), including without limitation 6 by directly or indirectly copying, reproducing, downloading, distributing, communicating to the

7 public, uploading, linking to, transmitting, publicly performing, or otherwise exploiting in any 8 manner any of Plaintiffs' Pre-1972 Sound Recordings..." TRO at 4; Preliminary Injunction at 2 9 (emphasis added).

10 Several months later, the BlueBeat case was transferred to Judge Josephine Tucker who, 11 after the completion of discovery, granted summary judgment to the plaintiffs, holding that the 12 defendants "reproduced, sold, and publicly performed the pre-72 recordings without proper 13 authorization" (emphasis added), and that "[for these actions, [defendants are] liable for

14 misappropriation, unfair competition, and conversion." BlueBeat, 765 F. Supp. 2d at 1206. Thus, 15 two judges concluded that defendants had violated the plaintiffs' rights, including by digitally 16 performing their Pre-72 Recordings publicly.

17 BlueBeat relied on, and was a natural result of, the two seminal California cases addressing

18 common law rights in Pre-72 Recordings — Capitol Records, Inc. v. Erickson, 2 Cal. App. 3d 526

19 (1969) and il&M Records, Inc. v. Heilman, 75 Cal. App. 3d 554 (1977). In Erickson, the Court of 20 Appeal held that the production, distribution, and sale of tape cartridges that copied the 21 performances embodied in plaintiff's recordings gave rise to a claim for unfair competition 22 because:

23 Capitol expends substantial effort, skill and money in selecting performing artists and obtaining the exclusive right to record their 24 performances, in mechanically reproducing their performances on discs and tapes of the highest quality, and in promoting the sale of 25 the tapes and discs.... [Defendant] unfairly appropriates artistic performances produced by Capitol's efforts, and [defendant] profits 26 27 6 Copies of these documents are included in the Appendix of Non-California Authorities filed concurrently herewith and subject to judicial notice. See Request for Judicial Notice, filed concurrently herewith. Mitchell 28 Silberberg & 6 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 thereby to the disadvantage of Capitol. Such conduct by [defendant] is unfair competition.... 2 Cal. App. 3d at 537•7 2

3 Erickson was followed by and expanded in Heilman, which held that making and 4 distributing unauthorized copies of the performances embodied in plaintiffs' Pre-72 Recordings

5 constituted unfair competition and also misappropriation and conversion. Heilman, 75 Cal. App. 6 3d at 564 (duplicating Pre-1972 Recordings and selling them for profit "presents a classic example 7 of the unfair business practice of misappropriation of the valuable efforts of another. Such 8 conduct unquestionably constitutes unfair competition....").

9 These cases recognized the basic proposition that there exists a property right in, and 10 common law protection for, Pre-72 Recordings. Heilman, 75 Cal. App. 3d at 570 ("[R]ecorded

11 performances are [plaintiff record company's] intangible personal property."); Erickson, 2 Cal. 12 App. 3d at 537-38 (copying and distributing plaintiff's Pre-72 Recordings "appropriates artistic

13 performances produced by [plaintiff's] efforts" and defendant "had appropriated the product itself 14 — performances embodied on the records."); see Lone Ranger Television, Inc. v. Program Radio

15 Corp., 740 F.2d 718, 725 (9th Cir. 1984) (plaintiff had an "intangible property interest in the 16 performances on its tapes" of scripts broadcast over the radio); see also Metropolitan Opera Ass 'n 17 v. Wagner-Nichols Recorder Corp., 101 N.Y.S.2d 483 (N.Y. Sup. Ct. 1950), aff'd, 107 N.Y.S.2d 18 795 (N.Y. App. Div. 1951) (per curiam) ("[T]o refuse the groups who expend time, effort, money,

19 and great skill in producing these artistic performances, the protection of giving them a property

20 right in the resulting artistic creation would be contrary to existing law, inequitable, and repugnant 21 to the public interest.").

22 These cases protected the valuable intangible property in the recorded perfolinances in Pre- 23 72 Recordings (not the tangible tapes in which the intangible recordings were embodied). 24 Defendants in those cases were selling, and their customers were buying, the ability to listen to 25 ' The Pre-72 Recording found protectable and sold to the public in Erickson was "Goin' Out of 26 My Head" by the Lettermen. 2 Cal. App. 3d at 529. Sirius XM also transmits recordings by the Letteimen without authorization or payment. See Complaint Schedule A; see also Heilman, 75 27 Cal. App. 3d at 560 n.5 (listing some of the recorded performances at issue here: "We've Only Just Begun" by the Carpenters and "You Were On My Mind" by We Five. See Complaint, Mitchell 28 Schedule A). Silberberg 7 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 and enjoy the recorded perfoimances in Pre-72 Recordings. In Erickson and Heilman, defendants 2 accomplished that end by copying and distributing "hard copies" (i.e., tape recordings) of Pre-72 3 Recordings. That conduct violated the exclusive rights of the owners of those Pre-72 Recordings. 4 Digital audio transmission is just another means of providing customers with access to the same 5 Pre-72 Recordings that they could obtain and enjoy by other commercial means. The intangible 6 property appropriated and used is the same, and the harm to the owners is the same. There is no 7 factual or legal reason to carve out Sirius XM's means of commercial use — digital audio 8 transmission — from the established exclusive property rights of owners of Pre-72 Recordings. 9 These exclusive rights should apply regardless of the means by which a defendant uses Pre-72 10 Recordings and sells these recordings to the public.

11 Collectively, Erickson, Heilman, and BlueBeat applied the well-developed elements of 12 California common law causes of action for misappropriation, unfair competition, and conversion

13 to Pre-72 Recordings. The BlueBeat court summarized the elements of these claims as applied to 14 the copying, distribution, and digital public performance of Pre-72 Recordings as follows:

15 For a successful misappropriation claim, a plaintiff must show that (1) the plaintiff has invested substantial time and money in 16 development of its ... property; (2) the defendant has appropriated the [property] at little or no cost; and (3) the plaintiff has been 17 injured by the defendant's conduct.... Under California Civil Code § 980(a)(2), the author of an original work of authorship consisting 18 of a sound recording initially fixed prior to February 15, 1972, has an exclusive ownership therein ... against all persons except one 19 who independently makes or duplicates another sound recording that does not directly or indirectly recapture the actual sounds fixed in 20 such prior sound recording. 21 For an unfair competition claim under California Business and Professions Code § 17200, plaintiff must show anything that can 22 properly be called a business practice and that at the same time is forbidden by law.... Section 17200 borrows violations from other 23 laws by making them independently actionable as unfair competitive practices ... [and] a practice may be deemed unfair even if not 24 specifically proscribed by some other law. ... Under California Business and Professions Code § 17200, unfair competition ... 25 include[s] any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising .... 26 Finally, for a conversion claim, a plaintiff has to show ownership or 27 right to possession of property, wrongful disposition of the property Mitchell 28 Silberberg & 8 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 right and damages. BlueBeat, 765 F. Supp. 2d at 1205 (citations and quotations omitted). 8 2 3 These legal principles apply to the unauthorized exploitation by digital transmission of

4 performances embodied in Pre-72 Recordings every bit as much as they apply to the unauthorized 5 reproduction or distribution of the same performances embodied in Pre-72 Recordings. Nothing

6 in the case law has negated the existence of a digital performance right in Pre-72 Recordings, or 7 has limited or restricted an owner's property interest in Pre-72 Recordings to physical or digital

8 reproduction or distribution rights.

9 B. The Policies And Principles Of California Law Confirm The Existence Of A Digital Performance Right In Pre-72 Recordings. 10

11 The decisions in Erickson and Heilman to confirm ownership rights in Pre-72 Recordings 12 were premised on established common law principles, embodying California public policy. These 13 cases recognized that a defendant may not "gain substantial profit" by "circumvent[ing] the 14 necessity of expending skill and money in acquiring the artists and recording their performances,"

15 and that providing a return to those who do expend "skill and money" encourages further

16 investment and invention. Erickson, 2 Cal. App. 3d at 537-38. The courts in both cases supported 17 their conclusions with a line of unfair competition cases, including the seminal decision in INS,

18 248 U.S. 215 (1918). These and other cases confirm that the valuable performances in Pre-72

19 Recordings should be and are protected from appropriation or use by digital transmission.

20 In INS, the parties (INS and the Associated Press ("AP")) were competitors in the 21 gathering and publication of news, which they sold to newspapers for an annual subscription or 22 membership fee. AP alleged that INS appropriated AP's news through a variety of means, 23 including by copying news items from early editions of AP's member papers and copying and 24 disseminating the substance of AP's articles to the public. The Court held that AP was entitled to 25 protect an intangible property interest in its timely collection and distribution of its news pieces as 26 against their appropriation (by publication) by INS:

27 Plaintiffs expect to prove all the elements of a violation of these causes of action; however, the issue here is the existence of the right, not its violation. Mitchell 28 Silberberg & 9 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 [T]o both [parties], news matter, however little susceptible of ownership or dominion in the absolute sense, is stock in trade, to be 2 gathered at the cost of enterprise, organization, skill, labor and money, and to be distributed and sold to those who will pay money 3 for it, as for any other merchandise. Regarding the news, therefore, as but the material out of which both parties are seeking to make 4 profits at the same time and in the same field, we hardly can fail to recognize that for this purpose, and as between them, it must be 5 regarded as quasi property, irrespective of the rights of either as against the public.... 6 [D]efendant, by its very act, admits that it is taking material that has 7 been acquired by complainant as the result of organization and the expenditure of labor, skill, and money, and which is salable by 8 complainant for money, and that defendant in appropriating it and selling it as its own is endeavoring to reap where it has not sown, 9 and by disposing of it to newspapers that are competitors of complainant's members is appropriating to itself the harvest of those 10 who have sown. Stripped of all disguises, the process amounts to an unauthorized interference with the normal operation of 11 complainant's legitimate business precisely at the point where the profit is to be reaped, in order to divert a material portion of the 12 profit from those who have earned it to those who have not; with special advantage to defendant in the competition because of the fact 13 that it is not burdened with any part of the expense of gathering the news. The transaction speaks for itself, and a court of equity ought 14 not to hesitate long in characterizing it as unfair competition in business. 248 U.S. at 236, 239-40. 15

16 The basic concepts and policies espoused by INS — namely, that one may not "reap where 17 it has not sown" by profiting from the product of skill, labor and money of another — were adopted 18 virtually verbatim by the Court in Erickson, relying extensively on INS. See 2 Cal. App. 3d at

19 531-33. The INS doctrine is firmly embedded in California law and the policies it articulates are a

20 precise fit to this case. See, e.g., Balboa Ins. Co. v. Trans Global Equities, 218 Cal. App. 3d 1327, 21 1342 (1990) (listing elements of misappropriation cause of action and citing INS); Hollywood 22 Screentest of America, Inc. v. NBC Universal, Inc., 151 Cal. App. 4th 631, 650 (2007) (elements

23 of misappropriation cause of action include "the defendant has appropriated the 'thing' at little or 24 no cost, such that the court can characterize defendant's actions as 'reaping where it has not 25 sown'."); see also Metropolitan Opera, 101 N.Y.S. 2d at 490 (unfair competition by recording and 26 selling copies of radio broadcasts and "taking material that has been acquired by complainant as a 27 result of organization and the expenditure of labor, skill, and money, and which is salable by Mitchell 28 Silberberg & 10 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 complainant for money, and that defendant in appropriating it and selling it as its own is 2 endeavoring to reap where it has not sown....").

3 It follows that the common law necessarily must, and does, adapt to keep pace with and

4 meet technological changes and developments that create new ways to "reap where one has not 5 sown." See, e.g., Ojala v. Bohlin, 178 Cal. App. 2d 292, 301 (1960) ("The legal concept of unfair 6 competition has evolved as a broad and flexible doctrine with a capacity for further growth to meet 7 changing conditions. . . ."); see also Law Offices of Mathew Higbee v. Expungement Assistance 8 Services, 214 Cal. App. 4th 544, 551 (2013) ("[w]ith passage of time and accompanying epochal 9 changes in industrial and economic conditions, the legal concept of unfair competition broadened

10 appreciably."). As technology and circumstances have evolved, the common law governing Pre-

11 72 Recordings also has evolved, and the scope of rights has taken shape. This flexibility to adapt 12 to new technologies and new circumstances was demonstrated in Erickson, where the court 13 applied traditional common law principles to the copying and distribution of Pre-72 Recordings

14 that were fixed in a then-new medium, tape cartridges. Erickson was decided in response to tape

15 recording technology that changed the playing field by enabling the widespread, unauthorized 16 copying and distribution to the public of tape recorded copies of sound recordings to the public

17 without paying the owners. 2 Cal. App. 3d at 528; see H.R. Rep. No. 92-487 at 19 (1971) 18 (Statement of Chaitinan, Committee on the Judiciary: "The widespread availability and use of 19 phonograph record and tape-playing machines, particularly the comparatively inexpensive cassette

20 or cartridge tape players, give added impetus to piracy of sound recordings."). 21 New technological developments tap into new sources of value inherent in an owner's 22 intellectual property. In the present environment, what was true for unlawful duplication and sale

23 of Pre-72 Recordings as described by Erickson in 1969, is just as true today for digital 24 transmission of Pre-72 Recordings. It is unfair for others to take the value belonging to the owner 25 of that property without authorization or compensation. The precise means by which a defendant 26 appropriates and uses that property interest is not the issue. Rather, the issue is that (1) the

27 plaintiff has invested "effort, skill and money" in its endeavor, by virtue of which, the plaintiff has Mitchell 28 Silberberg & 11 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 created something of value, and (2) the defendant has appropriated and profited from that valuable

2 property. Erickson, 2 Cal. App. 3d at 537. That is the case whether the value is realized by the

3 sale of CDs, as in Erickson, or, as with Sirius XM, by the sale of subscriptions for digital 4 transmissions of those same recordings. By populating its channels with many of Plaintiffs' most 5 valuable recordings, Sirius XM has engaged in precisely the type of "reaping without sowing"

6 articulated in Erickson and INS. Indeed, many of the channels to which Sirius XM sells access 7 would not exist were it not for Plaintiffs' Pre-72 Recordings. Sirius XM had no hand in creating 8 these recordings, yet profits handsomely from them.

9 C. The Plain Language And Structure Of California Civil Code Section 980 Confirm The Existence Of An Exclusive Digital Public Performance Right In 10 Pre-72 Recordings. 11 California common law copyright, codified in Civil Code Section 980, provides a separate 12 basis for a state law digital performance right in Pre-72 Recordings. Historically, that statute was 13 worded broadly to confirm "exclusive ownership" rights in various types of common law 14 property. See generally 13 B. E. Witkin, Summary of California Law, §§ 46, 47 (10th ed. 2005). 15 Its scope has been interpreted expansively. See, e.g., Smith v. Paul, 174 Cal. App. 2d 744, 746-58 16 (1959) (then Civil Code Section 980(b) applied to architectural designs, plans, and specifications, 17 even though not specifically mentioned); Williams v. Weisser, 273 Cal. App. 2d 726, 730 (1969) 18 (then Civil Code Section 980(a) applied to professors' lectures). In that context, in 1982

19 California added protection for Pre-72 Recordings by statute when it amended Civil Code Section 20 980 to explicitly provide comprehensive, exclusive rights to owners of Pre-72 Recordings: 21 The author of an original work of authorship consisting of a sound 22 recording initially fixed prior to February 15, 1972, has an exclusive ownership therein until February 15, 2047, as against all persons 23 except one who independently makes or duplicates another sound recording that does not directly or indirectly recapture the actual 24 sounds fixed in such prior sound recording, but consists entirely of an independent fixation of other sounds, even though such sounds 25 imitate or simulate the sounds contained in the prior sound recording. Civ. Code § 980(a)(2) (emphasis added). 26

27 When it was amended, this new Section 980(a)(2) continued to use the same broad

Mitchell 28 language as in previous iterations, providing for "exclusive ownership" in Pre-72 Recordings "as Silberberg & 12 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 against all persons." The plain language of the statute does not limit in any way the scope of the 2 "exclusive" rights that are reserved to owners of Pre-72 Recordings. The inclusive statutory 3 language was neither inadvertent nor imprecise. It tracked terms that have been defined in 4 California law for over 100 years. See Civ. Code § 654 (defining "Property" as "The ownership 5 of a thing is the right of one or more persons to possess and use it to the exclusion of others ... 6 Mlle thing of which there may be ownership is called property.") (emphasis added); id. § 679 7 ("The ownership of property is absolute when a single person has the absolute dominion over it, 8 and may use it or dispose of it according to his pleasure....") (emphasis added); see also, e.g.,

9 Lane v. Whitaker, 50 Cal. App. 2d 327, 330 (1942) ("[O]wnership is the right of a person to 10 possess and use a thing to the exclusion of others."). These terms had been applied specifically to

11 define the meaning of "exclusive ownership" as used in an earlier version of Section 980: 12 There may be ownership of such products of labor or skill as the composition of an author and of rights created by statute (Civ. Code 13 § 655). The ownership of a thing is the right of one or more persons to possess and use it to the exclusion of others. The thing of which 14 there may be ownership is called property. (Civ. Code § 654).... A product of the mind is property. It is an intangible, incorporeal 15 right." Johnson v. Twentieth Century Film Corp., 82 Cal. App. 2d 796, 807-08 (1947) (citing former Civ. Code § 980). 16 Years later, when the legislature enacted Section 980(a)(2), it used the same statutorily defined 17 teims to provide that the owner of a Pre-72 Recording has the right to "possess and use it to the

18 exclusion of others" and that the ownership of that property was "absolute."

19 This plain language of Section 980(a)(2) makes clear its intent and purpose to give owners

20 of Pre-72 Recordings the sole right to use the product of their "labor or skill." See California 21 School Employees Assn. v. Travis Unified School Dist., 156 Cal. App. 3d 242, 247 (1984) ("We 22 are required to give effect to statutes according to the usual, ordinary import of the language 23 employed in framing them."). There is no basis for the Court to impose exceptions in Section 24 980(a)(1) where none exist. Cassel v. Superior Court, 51 Cal. 4th 113, 124 (2011) ("Judicial 25 construction, and judicially crafted exceptions, are permitted only where due process is implicated, 26 or where literal construction of a statute would produce absurd results."). When the Legislature 27 chose to draft Section 980(a)(2), it pointedly did not, as it surely could have, construct the statute Mitchell 28 Silberberg & 13 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 to enumerate limited, specific rights accorded to the owners of sound recordings — unlike the

2 structure of the federal Copyright Act. See 17 U.S.C. § 106 (listing exclusive rights of copyright 3 owners). Rather, the statute employed language that provided ownership rights that were not

4 tethered to specific enumerated uses. It made ownership rights broad and provided for "exclusive 5 ownership" in order to most effectively protect the investment, creativity, and commercial

6 exploitation of those performances.' Lopez v. Superior Court, 50 Cal. 4th 1055, 1063 (2010) 7 (courts should apply "the construction that comports most closely with the apparent intent of the 8 Legislature, with a view to promoting rather than defeating the general purpose of the statute...."). 9 Section 980 is to be liberally construed to effectuate its purpose of protecting the

10 commercial value created and contributions made by owners of Pre-72 Recordings by affording 11 them exclusive ownership rights to what was, and is, a "large industry in California." Goldstein, 12 412 U.S. at 571; see Cal. Civ. Code § 4 ("The [Civil Code] establishes the law of this state

13 respecting the subjects to which it relates, and its provisions are to be liberally construed with a 14 view to effect its objects and to promote justice."); Pineda v. Williams-Sonoma Stores, Inc., 51

15 Cal. 4th 524, 530 (2011) ("courts should liberally construe remedial statutes in favor of their 16 protective purpose"); see also, e.g., Leader v. Cords, 182 Cal. App. 4th 1588, 1597 (2010) (a 17 remedial statute, i.e., "one which provides a means for the enforcement of a right or the redress of 18 a wrong," must be liberally construed). The fact that the technology now used to exploit Pre-72

19 9 The only "exception" made a part of Section 980 was the "independent fixation of other sounds" 20 (i.e., "cover" recordings or re-recordings that are made by others and do not use the performances on the original recording). Geertz v. Ausonio, 4 Cal. App. 4th 1363, 1370 (1992) ("We presume 21 the Legislature included all the exceptions it intended to create."). Had the California legislature intended that other exceptions be applied to the broad rights provided to sound recording owners, 22 it would have done so. Fnb Mortgage Corp. v. Pac. General Corp., 76 Cal. App. 4th 1116, 1133 (1999) ("where exceptions to a general rule are specified by statute, other exceptions are not to be 23 implied or presumed, absent a discernible and contrary legislative intent."). 24 On the other hand, other states did what California chose not to do — expressly exclude by statute public performance rights in Pre-72 Recordings. At the time Civil Code Section 980(a)(2) was 25 adopted, at least three states had statutes that denied any common law performance right in sound recordings. See N.C. Gen. Stat. § 66-28 (enacted 1939) (abrogating common law rights in Pre-72 26 Recordings for commercial use of recorded performances after initial sale of recording); S.C. Code 39-3-510 (enacted 1939; previously codified at §§ 6641, 66-101) (same); Fla. Stat. 543.02 27 (enacted 1941) ("[A]ll asserted common law rights" in recorded performances embodied in sound recordings are "abrogated and expressly repealed" after initial sale). The Florida statute later was Mitchell 28 repealed, effective July 1, 1977. See Laws of Florida, 1977, c. 77-440, § 1. Silberberg & 14 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 Recordings through digital transmission did not exist in 1982 when Section 980(a)(2) was enacted

2 in no way deprives Plaintiffs of their exclusive right to exploit (or authorize others to exploit) their

3 property using this technology, as the BlueBeat court recognized. 765 F. Supp. 2d at 1205; see, 4 e.g., WorldMark, The Club v. Wyndham Resort Development Corp., 187 Cal. App. 4th 1017, 1036 5 (2010) (statute requiring disclosure of "address" includes e-mail addresses, stating "courts must be

6 sufficiently receptive to the notion of adapting legal principles to address societal changes.... This 7 is a particularly apt formulation of the standard in cases of emerging technologies lest our laws be 8 interpreted only in light of yesterday's accomplishments"). Owners of Pre-72 Recordings invest 9 their time, creativity, and money to make and provide their product to the public. The right to 10 exploit the value they have created could not be any more clear or any more justifiable.

11 D. Congress Has Recognized That A Digital Public Performance Right Is Necessary To Protect Owners Of Sound Recordings. 12

13 As discussed above, the digital transmission to the public of Pre-72 Recordings as part of a

14 commercial venture exploits a valuable property right protected under California law. In addition, 15 Congress's analysis of the digital performance right under federal law is highly instructive, and

16 further illustrates the wisdom of applying California law to digital technologies such as those used

17 by Sirius XM. Prior to 1995, federal law, unlike California law, expressly denied a performance 18 right in sound recordings. See 17 U.S.C. § 114(a). In 1995, Congress amended the Copyright Act

19 by the Digital Performance Right in Sound Recordings Act ("DPRA"). The DPRA conferred on

20 the owners of Post-72 Recordings the exclusive right to publicly perform these recordings by 21 digital audio transmission (including by satellite transmissions or over the Internet). When it 22 enacted the DPRA, Congress noted the impact of current technology on the marketplace for sound

23 recordings and required services like Sirius XM to obtain consent and pay for the right to 24 reproduce and digitally perform Post-72 Recordings, i.e. all sound recordings within the purview 25 of the Copyright Act:

26 Trends within the music industry, as well as the telecommunications and information services industries, suggest that digital transmission 27 of sound recordings is likely to become a very important outlet for the performance of recorded music in the near future.... These new Mitchell 28 Silberberg & 15 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 digital transmission technologies may permit consumers to enjoy performances of a broader range of higher-quality recordings than 2 has ever before been possible.... [C]urrent copyright law is inadequate to address all of the issues raised by these new 3 technologies dealing with the digital transmission of sound recordings and musical works and, thus, to protect the livelihoods of 4 the recording artists, songwriters, record companies, music publishers and others who depend upon revenues derived from 5 traditional record sales. S. Rep. No. 104-128, at 14 (1995) ("S. Rep."). 6

7 As Congress repeatedly recognized, new technologies "affect the ways in which ... 8 creative works are used" (id. at 10) and "Whese new technologies also may lead to new systems

9 for the electronic distribution of phonorecords...." H.R. Rep. No. 104-274, at 12. Congress was 10 not "unmindful of the possibility that technological developments could well cause substantial

11 changes in existing systems for public delivery of sound recordings." S. Rep. 104-128, at 11.

12 Accordingly, Congress's expressed "purpose" was to "ensure that performing artists, record 13 companies, and others whose livelihood depends upon effective copyright protection for sound 14 recordings will be protected as new technologies affect the way in which their creative works are

15 used." Id. at 10. More specifically, the digital performance right was the result of "a concern on

16 the part of Congress to protect record companies and recording artists from the danger of reduced 17 record sales due to technological advances enabling high-quality copying by a large number of

18 listeners." Bonneville Intl Corp. v. Peters, 153 F. Supp. 2d 763, 778-79 (E.D. Pa. 2001), aff'd

19 347 F.3d 485 (2003). As the Bonneville court explained, "[t]he motivating force behind Congress'

20 creation of the limited public performance right was the desire to protect record companies and 21 recording artists from a reduction of record sales threatened by technological developments, 22 specifically interactive and subscription services made possible by the emergence of digital audio 23 services capable of delivering high-quality transmissions of sound recordings." Id. at 767, citing 24 S. Rep. at 14-15; H.R. Rep. No. 104-274 at 5-9, 12-13. Again, in 1998, in enacting the Digital

25 Millennium Copyright Act (commonly known as the "DMCA"), Congress reiterated its objective 26 "to ensure that recording artists and record companies will be protected as new technologies affect 27 the ways in which their creative works are used." H.R. Conf. Rep. No. 105-796, at 79 (1998). Mitchell 28 Silberberg & 16 Knupp LLP MOTION FOR WRY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 These same considerations — namely, to protect the property rights of record companies 2 and recording artists from new ways in which their creative works are used commercially, 3 specifically, digital transmission — apply to and provide further support for the existence of a 4 digital performance right under California law. The amendments to the Copyright Act enacted by

5 the DPRA were driven by the need to adapt the statute to technological change. However, unlike 6 the Copyright Act, which previously excluded performance rights for sound recordings, California 7 has long provided evolving and flexible common law protection to intellectual property, including 8 Pre-72 Recordings, and broad, exclusive statutory protection specifically to Pre-72 Recordings. 9 Thus, both California Civil Code Section 980 and California common law accommodate and

10 include a digital performance right in Pre-72 Recordings. That property right is made all the more

11 valuable and necessary by the ability to offer high-quality transmissions of Pre-72 Recordings to 12 the public.

13 There is no basis or authority to construe California law to provide less protection to digital 14 transmissions of Pre-72 Recordings than federal law does to Post-72 Recordings, especially when

15 California traditionally has, if anything, provided greater protection for sound recordings than has 16 federal law. See, e.g., Goldstein, 412 U.S. at 546 (affirming California protection for sound 17 recordings at a time when no federal protection existed). In practical terms, there is no legal or 18 logical reason why Sirius XM should have to pay, for example, for the right to digitally transmit to

19 the public a Justin Bieber recording but not pay for most of the iconic recordings of the Beatles or

20 the Rolling Stones, or, for that matter, to pay for the right to transmit the Rolling Stones' "Start 21 Me Up" (1981) but not their "(I Can't Get No) Satisfaction" (1965). 22

23 Conclusion 24 California common law and Civil Code Section 980 both provide that unauthorized 25 exploitation of performances embodied in Pre-72 Recordings violates the exclusive rights of their 26 owners. Whether such exploitation is by the sale of CDs, digital downloads, or digital 27 transmissions is not the point. The digital transmission of Pre-72 Recordings to the public is the

Mitchell 28 Silberberg & 17 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 equivalent of copying and distributing those recordings to the public. Failing to compensate for 2 digital transmissions causes the same harm and loss of revenue as does unauthorized distribution 3 of CDs or unauthorized downloading of digital copies embodying those sound recordings. Such

4 commercial exploitation of Pre-72 Recordings without authorization violates a fundamental right 5 to control the use of property and "unfairly appropriates artistic performances produced by

6 [plaintiff's] effort, and [defendant] profits thereby to the disadvantage of [plaintiff]." Erickson, 2 7 Cal. App. 3d at 537. By publicly performing Pre-72 Recordings owned by Plaintiffs by means of

8 a digital audio transmission without authorization or compensation, Sirius XM is misappropriating 9 Plaintiffs' exclusive property interests under California law. Plaintiffs ask the Court to accept and

10 adopt their proposed jury instruction in its entirety.

12 DATED: February 3, 2014 Respectfully submitted, 13 MITCHELL SILBERBERG & KNUPP LLP RUSSELL J. FRACKMAN 14 MARC E. MAYER EMILY F. EVITT 15

By: fr.;1-7--Ztitiev"Pt4.27 7Aile49 17 Russell J. Fr an Attorneys forTlaintiffs 18 19

20 21 22

23 24 25 26 27 Mitchell 28 Silberberg & 18 Knupp LLP MOTION FOR JURY INSTRUCTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 1 PROOF OF SERVICE

2 STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

3 I am employed in the County of Los Angeles, State of California, I am over the age of eighteen years and am not a party to this action; my business address is Mitchell Silberberg & 4 Knupp LLP, 11377 West Olympic Boulevard, Los Angeles, CA 90064-1683, and my business email address is [email protected]. 5 On February 3, 2014, I served a copy of the foregoing document(s) described as NOTICE 6 OF MOTION AND MOTION OF PLAINTIFFS FOR JURY INSTRUCTION REGARDING A DIGITAL PERFORMANCE RIGHT IN SOUND RECORDINGS FIXED 7 BEFORE FEBRUARY 15,1972; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT on the interested parties in this action at their last known address as set forth below by 8 taking the action described below:

9 SEE ATTACHED SERVICE LIST

10 BY ELECTRONIC SERVICE: I served the above-mentioned document electronically using the CaseAnywhere website email service on the parties listed at the email addresses 11 in the attached Service List, and, to the best of my knowledge, the transmission was complete and without error in that I did not receive an electronic notification to the 12 contrary. 13

14 I declare under penalty of perjury under the laws of the State of California that the above is true and correct. 15 Executed on February 3, 2014, at Los Angeles, C lifornia. 16 17 Desiree Cabrera 18 19 20 21 22 23 24 25 26 27 Mitchell 28 Silberberg & Knupp LLP 19 5803405.1 PROOF OF SERVICE 1 SERVICE LIST 2 R. Bruce Rich Fred R. Puglisi 3 Benjamin E. Marks Valerie E. Alter Todd Larson Jay Ramsey 4 John Gerba , Kent Raygor Bruce Meyer Sheppard Mullin Richter & Hampton LLP 5 Weil, Gotshal & Manges LLP 1901 Avenue of the Stars, Suite 1600 767 Fifth Avenue Los Angeles, CA 90067 6 New York, NY 10153 Phone: 310-228-3733 Phone: 212-310-8029 Fax: 310-228-3933 7 Fax: 212-310-8007 E-mails: [email protected] ; E-mails: bruce.rich weil.com ; [email protected]; 8 [email protected]; [email protected] ; [email protected] ; [email protected]; [email protected] 9 [email protected] Attorneys for Defendant Attorneys for Defendant Sirius XM Radio Inc. 10 Sirius XM Radio Inc. 11 Michael S. Oberman Kramer Levin Naftalis & Frankel LLP 12 1177 Avenue of the Americas New York, NY 10036 13 Phone: 212-715-9100 Fax: 212-715-8000 14 E-mail: [email protected] Attorneys for Defendant 15 Sirius XM Radio Inc. 16 17 18 19 20 21 22 23 24 25 26 27 Mitchell 28 Silberberg & Knupp LLP 20 5803405.1 PROOF OF SERVICE 2/20/2014 LASC - Case Summary

Case Summary

Please make a note of the Case Number.

Click here to access document images for this case. If this link fails, you may go to the Case Document Images site and search using the case number displayed on this page.

Case Number: BC520981 CAPITOL RECORDS LLC ET AL VS SIRIUS XM RADIO INC

Filing Date: 09/11/2013 Case Type: Other Commercial/Business Tort (General Jurisdiction) Status: Pending

Cases Related: BC517032 on 10/04/2013

Future Hearings

05/14/2014 at 10:00 am in department 311 at 600 South Commonwealth Ave., Los Angeles, CA 90005 Conference-Case Management(PLAINTIFFS' MOTION FOR A JURYINSTRUCTION)

Documents Filed | Proceeding Information

Parties

ABKCO MUSIC & RECORDS INC. - Plaintiff/Petitioner

CAPITOL RECORDS LLC - Plaintiff/Petitioner

DOES 1 THROUGH 10 - Defendant/Respondent

MITCHELL SILBERBERG & KNUPP LLP - Attorney for Plaintiff/Petitioner

SHEPPARD MULLIN RICHTER AND HAMPTON - Attorney for Defendant/Respondent

SIRIUS XM RADIO INC. - Defendant/Respondent

SONY MUSIC ENTERTAINMENT - Plaintiff/Petitioner

UMG RECORDINGS INC. - Plaintiff/Petitioner

WARNER MUSIC GROUP CORP. - Plaintiff/Petitioner

Case Information | Party Information | Proceeding Information

Please make a note of the Case Number.

Click here to access document images for this case. If this link fails, you may go to the Case Document Images site and search using the case number displayed on this page.

Documents Filed (Filing dates listed in descending order)

02/03/2014 Motion (OF PLAINTIFFS FOR JURY INSTRUCTION REGARDING A DIGITAL PERFORMANCE RIGHT IN SOUND RECORDINGS FIXED BEFORE FEBRUARY 15, 1972; MEMORAN- DUM OF POINTS AND http://www.lasuperiorcourt.org/civilcasesummarynet/ui/popupCaseSummary.aspx 1/3 2/20/2014 LASC - Case Summary AUTHORITIES IN SUPPORT) Filed by Attorney for Plaintiff/Petitioner

02/03/2014 Request for Judicial Notice (IN SUPPORT OF PLAINTIFFS' MOTION FOR JURY INSTRUCTION REGARDING A DIGITAL PERFORMANCE RIGHT IN SOUND RECORDINGS FIXED BEFORE FEBRUARY 15, 1972 ) Filed by Attorney for Plaintiff/Petitioner

02/03/2014 Miscellaneous-Other (APPENDIX OF NON-CALIFORNIA AUTHORI TIES CITED IN SUPPORT OF MOTION OF PLAINTIFFS FOR JURY INSTRUCTION REGARDING A DIGITAL PERFORMANCE RIGHT IN PRE- 72 SOUND RECORDINGS RECEIVED) Filed by Attorney for Plaintiff/Petitioner

01/31/2014 Notice of Continuance (RE: CASE MANAGEMENT CONFERENCE 05/14/14 ) Filed by Attorney for Defendant/Respondent

01/27/2014 Report-Status (JOINT STATUS REPORT RE: STIPULATED BRIEFING SCHEDULE FOR PLAINTIFFS' MOTION FOR JURY INSTRUCTION AND ORDER THEREON ) Filed by Attorney for Plaintiff/Petitioner

01/16/2014 Report-Status (JOINT RE: SITPULATED BRIEFING SCHEDULE FOR PLAINTIFFS' MOTION FOR JURY INSTRUCTION ) Filed by Attorney for Plaintiff/Petitioner

11/25/2013 Order (granting application for admission of John R. Gerba as counsel pro hac vice on behalf of defendant conformed copy mailed) Filed by Attorney for Defendant/Respondent

11/22/2013 Order (granting application for admission of Bruce S. Meyer as counsel pro hac vice on behalf of defendant conformed copy mailed) Filed by Attorney for Defendant/Respondent

11/18/2013 Order (granting application for admission of R. Bruce Rich as counsel pro hac vice on behalf of defendant conformed copy mailed) Filed by Attorney for Defendant/Respondent

11/18/2013 Order (granting application for admission of Benjamin E. Marks as counsel pro hac vice on behalf of defendant conformed copy mailed) Filed by Attorney for Defendant/Respondent

11/18/2013 Order (granting application for admission of Todd D. Larson as counsel pro hac vice on behalf of defendant conformed copy mailed) Filed by Attorney for Defendant/Respondent

11/18/2013 Report-Status Filed by Attorney for Plaintiff/Petitioner

11/13/2013 Application-Pro Hac Vice ( FOR JOHN R.GERBA ) Filed by Attorney for Defendant/Respondent

11/13/2013 Application-Pro Hac Vice (TODD D. LARSON ) Filed by Attorney for Defendant/Respondent

11/13/2013 Application-Pro Hac Vice (BRUCE S MEYER ) Filed by Attorney for Defendant/Respondent

11/12/2013 Application-Pro Hac Vice (FOR AN PRO HAC VICE RE BENJAMIN E. MARKS ) Filed by Attorney for Defendant/Respondent

11/12/2013 Application-Pro Hac Vice ( RE R. BRUCE RICH ) Filed by Attorney for Defendant/Respondent http://www.lasuperiorcourt.org/civilcasesummarynet/ui/popupCaseSummary.aspx 2/3 2/20/2014 LASC - Case Summary 10/11/2013 Notice (RE: OF ORDER RE RELATED CASES ) Filed by Attorney for Plaintiff/Petitioner

10/11/2013 Ntc and Acknowledgement of Receipt (PARTY SERVED: SIRIUS XM RADIO INC ) Filed by Attorney for Plaintiff/Petitioner

10/04/2013 Notice (OF REASSIGNMENT ) Filed by Attorney for Pltf/Petnr

10/04/2013 OSC-Failure to File Proof of Serv Filed by Clerk

10/04/2013 Notice-Case Management Conference Filed by Clerk

10/04/2013 Notice (of case reassignment ) Filed by Attorney for Plaintiff/Petitioner

09/25/2013 CCP 170.6 Application Filed Filed by Attorney for Pltf/Petnr

09/11/2013 Complaint

09/11/2013 Notice-Related Cases ( with case number bc517032 ) Filed by Attorney for Pltf/Petnr

Case Information | Party Information | Documents Filed

Proceedings Held (Proceeding dates listed in descending order)

01/30/2014 at 08:30 am in Department 311, JOHN SHEPARD WILEY JR, Presiding Non-Appearance (Case Review) - Completed

11/25/2013 at 08:30 am in Department 311, JOHN SHEPARD WILEY JR, Presiding Status Conference - Completed

10/04/2013 at 08:30 am in Department 311, JOHN SHEPARD WILEY JR, Presiding Order Re: Related Cases - Completed

10/01/2013 in Department 25, Mary Ann Murphy, Presiding Affidavit of Prejudice - Court Disqualifies Self

Case Information | Party Information | Documents Filed | Proceeding Information

http://www.lasuperiorcourt.org/civilcasesummarynet/ui/popupCaseSummary.aspx 3/3 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 1 of 30

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------X : IN RE PETITION OF PANDORA MEDIA, INC. : 12 Civ. 8035 (DLC) : ------: : Related to : : 41 Civ. 1395 (DLC) UNITED STATES OF AMERICA, : : Plaintiff : OPINION & ORDER v. : : AMERICAN SOCIETY OF COMPOSERS, AUTHORS, : AND PUBLISHERS, : Defendant. : : ------X

For applicant Pandora Media, Inc.:

Kenneth L. Steinthal Joseph R. Wetzel King & Spalding, LLP 101 Second Street, Suite 2300 San Francisco, CA 94105

For ASCAP:

Jay Cohen Lynn B. Bayard Darren W. Johnson Paul, Weiss, Rifkind, Wharton & Garrison, LLP 1285 Avenue of the Americas New York, New York 10019

DENISE COTE, District Judge:

Pandora Media, Inc. (“Pandora”) provides internet radio services. In 2010, Pandora sought a blanket, through to the audience, license from the American Society of Composers, Authors Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 2 of 30

& Publishers (“ASCAP”) for a five year period beginning January

1, 2011. Through this motion for summary judgment, Pandora argues that the antitrust consent decree under which ASCAP operates requires ASCAP to license Pandora to perform for five years all of the works in the ASCAP repertory as of January 1,

2011, even though certain music publishers beginning in January

2013 have purported to withdraw from ASCAP the right to license their compositions to “New Media” services such as Pandora.

Because the language of the consent decree unambiguously requires

ASCAP to provide Pandora with a license to perform all of the works in its repertory, and because ASCAP retains the works of

“withdrawing” publishers in its repertory even if it purports to lack the right to license them to a subclass of New Media entities, Pandora’s motion for summary judgment is granted.

BACKGROUND

The following facts are undisputed or taken in the light most favorable to ASCAP. Pandora is company that provides streaming internet radio services using songs licensed from artists and their agents and licensees. ASCAP is a “performing rights organization” (“PRO”) composed of voluntary writer and publisher-members, which exists in part to facilitate licensing of artists’ works to third parties. ASCAP collects license fees on behalf of its 460,000 members from third parties.

2 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 3 of 30

The ASCAP Consent Decree

Since 1941, ASCAP has been operating under a consent decree stemming from a Department of Justice antitrust lawsuit that alleged monopolization of performance rights licenses. Since then, ASCAP has been governed by this consent decree, which has been modified from time to time. The most recent version of the consent decree was issued in 2001 and is known as the Second

Amended Final Judgment (“AFJ2”). See United States v. Am. Soc’y of Composers, Authors & Publishers, Civ. No. 41-CV-1395, 2001 WL

1589999 (S.D.N.Y. June 11, 2001).

In an attempt to ameliorate the anti-competitive concerns raised by ASCAP’s consolidation of music licenses, AFJ2 restricts how ASCAP may issue licenses in a variety of ways. First, AFJ2 provides a mechanism whereby a judge on the United States

District Court for the Southern District of New York (the “rate court”) will determine a reasonable fee for ASCAP licenses when

ASCAP and an applicant for a license cannot reach an agreement.

See AFJ2 § IX(D).

AFJ2 also sets out the characteristics of the licenses ASCAP issues. “The AFJ2 defines four types of licenses: blanket licenses, per-program licenses, per-segment licenses, and through-to-the-audience licenses.” Broad. Music, Inc. v. DMX

Inc., 683 F.3d 32, 36 (2d Cir. 2012) (citation omitted). Three of the provisions create categories of licenses, which are

3 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 4 of 30

distinguished in how user fees to ASCAP are calculated. See AFJ

§§ II(E), II(J), II(K).1 Importantly, these license categories do not affect the scope of the ASCAP music repertory available to a licensee. All of the license types contemplate that the user will have access to ASCAP’s entire repertory. See AJF2 §§ VI,

II(K); Columbia Broad. Sys., Inc. v. Am. Soc. of Composers,

Authors & Publishers, 620 F.2d 930, 933 (2d Cir. 1980) (noting, in reference to the prior AFJ, which distinguished between blanket and per-program licenses, that “both types of licenses permit the user to perform any music in the ASCAP repertory”).

AFJ2 also contains a provision preventing ASCAP from discriminating in pricing or with respect to other terms or conditions between similarly situated licensees. AFJ2 § IV(C).

And AFJ2 contains two provisions which prohibit ASCAP from denying a blanket license of all of the musical compositions in its repertory to any entity making a request therefor. AFJ2 §§

VI, IX(E). These last two provisions are at the center of the parties’ dispute and will govern the disposition of this motion.

1 AFJ2 Section II(S) also creates a “Through-to-the-Audience License” (“TTTA”) category. A TTTA license can be issued under any of the three license payment structures, and is characterized by the licensee’s right “to distribute the copyrighted materials to the cable and satellite [or other] companies (which distribution is considered one performance for purposes of copyright law) and further permits the cable and satellite [or other] companies to distribute the music to the public (deemed a separate performance).” United States v. Broad. Music, Inc., 316 F.3d 189, 191 (2d Cir. 2003) (interpreting the same provision in the BMI consent decree). 4 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 5 of 30

Pandora’s Licensing History with ASCAP

On July 11, 2005, Pandora and ASCAP first entered into a license agreement to allow Pandora to stream music from ASCAP’s repertory. Five years later, on October 28, 2010, Pandora sent a letter to ASCAP terminating its 2005 license agreement and applying for a new license, pursuant to the terms of AFJ2, to run from January 1, 2011 through December 31, 2015. Upon making a written request to ASCAP, Pandora obtained, pursuant to AFJ2 §

V’s requirement that “ASCAP is hereby ordered and directed to issue, upon request, a through-to the audience license to . . .

[inter alia] an on-line user,” the right to perform all of the compositions in ASCAP’s repertory for that period, with only the proper payment rates to be determined, either through negotiation or by the rate court. Unable to agree with ASCAP on the proper price for the license, on November 5, 2012, Pandora filed with this Court a petition for determination of reasonable licensing fees pursuant to AFJ2. See AFJ2 § IX. The litigation to determine the proper fee (“rate proceeding”) is presently ongoing. Trial is scheduled to occur on December 4, 2013.

ASCAP’s April 2011 Compendium Rule Change

In September 2010, music publisher EMI advised ASCAP that it intended to withdraw from ASCAP for all purposes. Before EMI’s resignation took effect ASCAP began to explore a proposal to allow members to withdraw from ASCAP only the right to license

5 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 6 of 30

works to a class of “New Media” users. In March 2011, ASCAP notified the Department of Justice of its consideration of such a proposal. And in April 2011, ASCAP’s board adopted a resolution to amend the Compendium Rules (“Compendium Modification”) to allow members to withdraw from ASCAP its rights to license their music to New Media outlets, while allowing ASCAP to retain the right to license those works to other outlets. ASCAP Compendium

Rule 1.12.1 provides that “[a]ny ASCAP Member may modify the grant of rights made to ASCAP . . . by withdrawing from ASCAP the right to license the right of public performance of certain New

[M]edia Transmissions.” The modified Compendium defines “New

Media Services” -- i.e., entities which make “New Media

Transmissions” and which would be purportedly subject to a decrease in their ASCAP rights as the result of publisher withdrawals -- as

[A]ny standalone offering by a ‘Music User’ by which a New Media Transmission of musical compositions is made available or accessible (i) exclusively by means of the Internet, a wireless mobile telecommunications network, and/or a computer network and (ii) to the public, whether or not, in exchange for a subscription fee, other fee or charge.

In the Compendium Modification, ASCAP provided that it would

“continue to have the right to license works only to those New

Media Services which are licensed under Licenses-in-Effect on the

Effective Date of the Membership Modification, and only for the duration of such Licenses-in-Effect.” ASCAP also provided that

ASCAP could still license to certain smaller New Media users the

6 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 7 of 30

works of withdrawing publishers under a so called “Standard

Services” licensing agreement, so long as those users fit certain criteria and accepted ASCAP’s terms. And ASCAP also continues to perform administrative royalty distribution services even with respect to withdrawn rights for at least one of the withdrawing publishers on a contractual basis.

Publisher Withdrawals of New Media Licensing Rights from ASCAP

Subsequent to ASCAP’s Compendium change, but after Pandora made its October 28, 2010 request for a blanket ASCAP license to begin on January 1, 2011, several music publishers withdrew their

New Media licensing rights from ASCAP. The first such publisher was EMI, which announced withdrawal of its New Media licensing rights from ASCAP in May 2011.

Upon learning of EMI’s withdrawal of its new media licensing rights from ASCAP, Pandora began to negotiate separately with EMI for a license to its catalog.2 During the course of those negotiations, EMI’s music catalog was purchased by Sony

(hereinafter “Sony/EMI”). Pandora completed an agreement with

Sony/EMI to license its catalog in June 2012. Subsequently, other major publishers, including Warner Brothers Group,

Universal Music Publishing Group, and BMG, announced their

2 ASCAP argues that these negotiations provide evidence that Pandora understood that AFJ2 allows for narrowing of Pandora’s consent decree license. Pandora counters that it only entered into separate negotiations to avoid any potential claim for copyright infringement and “massive damages.” These arguments are addressed below. 7 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 8 of 30

intentions to withdraw their New Media licensing rights from

ASCAP as well. Pandora then also engaged those publishers in licensing negotiations.

On July 1, 2013, Pandora filed this motion for summary judgment. It seeks a determination that “ASCAP publisher

‘withdrawals’ [of New Media rights] during the term of Pandora’s consent decree license do not affect the scope of the ASCAP repertory subject to that license.” On September 5, 2013 the

Court scheduled oral argument and set out seven questions for counsel for Pandora and ASCAP to address.3 Oral argument was held on September 11.

3 The seven questions set out for oral argument were: 1) Whether a musical composition which ASCAP has the right to license to traditional media users, but not to new media users, constitutes a “work[] in the ASCAP repertory” in the meaning of [AFJ2]; 2) Whether, in the AFJ2 § (II)(C)’s definition of “ASCAP repertory” as “those works the right of public performance of which ASCAP has or hereafter shall have the right to license at the relevant point in time,” the phrase “right to license” means the right to license to any user, or the right to license to a specific applicant; 3) Whether the term “works” as used throughout the AFJ2 means “compositions” or rights in compositions; 4) Whether AFJ2 § VI prohibits ASCAP from accepting partial assignment of public performance licensing rights in a composition, and requires ASCAP to license either all public performance rights in a composition or no rights in a composition; 5) Whether, to the extent there is any ambiguity in the terms of the AFJ2, the Court may look beyond the four corners of the consent decree to its purpose; 6) Whether, if appropriate to look to the purpose of the AFJ2, the AFJ2’s purpose weighs in favor or against granting this motion; and 7) How, if at all, any narrowing of the scope of Pandora’s rights to the ASCAP repertory would affect the Court’s rate determination for the period of January 1, 2011 through December 31, 2015. 8 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 9 of 30

DISCUSSION

A motion for summary judgment may be granted only if the submissions of the parties, taken together, “show[] that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).

In deciding whether a party is entitled to summary judgment a court “must view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in its favor.” Sologub v. City of New York, 202 F.3d 175, 178 (2d Cir.

2000). The substantive law governing the case will identify those issues that are material, and “[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1987). Thus, in order to decide whether to grant summary judgment, a court must determine (1) whether a genuine factual dispute exists based on the admissible evidence in the record, and (2) whether the facts in dispute are material based on the substantive law at issue.

Consent decrees “reflect a contract between the parties (as well as a judicial pronouncement), and ordinary rules of contract interpretation are generally applicable.” Doe v. Pataki, 481

F.3d 69, 75 (2d Cir. 2007). “[D]eference is to be paid to the plain meaning of the language of a decree.” United States v.

Broadcast Music, Inc., 275 F.3d 168, 175 (2d Cir. 2001) (citation

9 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 10 of 30

omitted). But “when faced with unclear language in a consent decree, a court of equity may, in construing the provision, consider the purpose of the provision in the overall context of the judgment at the time the judgment was entered.” Id. “[A] consent decree is an order of the court and thus, by its very nature, vests the court with equitable discretion to enforce the obligations imposed on the parties.” United States v. Local 359,

United Seafood Workers, 55 F.3d 64, 69 (2d Cir. 1995).

A. AFJ2 Provisions Relevant to this Motion

AFJ2 imposes restrictions on ASCAP’s control over how it licenses the works in its repertory. This motion is about whether any provisions of AFJ2 prevent ASCAP from withdrawing from Pandora the permission to use works whose New Media licensing rights have purportedly been withdrawn from ASCAP publishers pursuant to the Compendium Modification. The core of the parties’ briefing focuses on two AFJ2 provisions, and the

Decree’s definition of the “ASCAP repertory,” and it is helpful to note those provisions, along with the definition of this key term, at the outset.

Section VI of AFJ2 (“Section VI”) reads, in relevant part, as follows: “Licensing. ASCAP is hereby ordered and directed to grant to any music user making a written request therefor a nonexclusive license to perform all of the works in the ASCAP repertory.” “Music user” is defined in Section II(G) of AFJ2 as

10 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 11 of 30

“any person that (1) owns or operates an establishment or enterprise where copyrighted musical compositions are performed publically, or (2) is otherwise directly engaged in giving public performances of copyrighted musical compositions.”

Section IX(E) of AFJ2 (“Section IX(E)”) provides in relevant part that “[p]ending the completion of any [rate] negotiations or proceedings, the music user shall have the right to perform any, some or all of the works in the ASCAP repertory to which its application pertains. . . .” And AFJ2 § II(C) (“Section II(C)”) defines “ASCAP repertory” as “those works the right of public performance of which ASCAP has or hereafter shall have the right to license at the relevant point in time.”

Pandora argues principally that Sections VI and IX(E) mandate that any publisher New Media licensing rights withdrawals from ASCAP do not affect the scope of its consent decree license because both Sections require ASCAP to grant a continuing license to perform “all of the works in the ASCAP repertory” pending rate proceedings or negotiations. ASCAP disagrees.

B. The Meaning of “works in the ASCAP repertory” in AFJ2

Key to resolving this motion is determining the proper meaning of the term “works in the ASCAP repertory” in AFJ2.

Section VI of AFJ2 is unambiguous in requiring ASCAP to grant to

“any music user making a written request therefor a non-exclusive license to perform all of the works in the ASCAP repertory,” AFJ2

11 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 12 of 30

§ VI (emphasis added).4 And Section IX(E) is likewise clear in requiring that “[p]ending the completion of any [rate] negotiations or proceedings” following a music user’s application to ASCAP for a license, that music user “shall have the right to perform any, some or all of the works in the ASCAP repertory to which its application pertains.” AFJ2 § IX(E) (emphasis added).

Stated more specifically, the question is whether AFJ2 conceives of the atomic unit of the “ASCAP repertory” in terms of musical compositions, or in terms of ASCAP’s right to license musical compositions to particular types of purchasers. The parties disagree on this question.

ASCAP argues that “’ASCAP repertory’ refers only to the rights in musical works that ASCAP has been granted by its members as of a particular moment in time.” Pandora argues that

“ASCAP repertory” is a “defined term[] articulated in terms of

‘works’ or ‘compositions,’ as opposed to in terms of a gerrymandered parcel of ‘rights.’” Pandora is correct.

A few principles guide the interpretation of the term “works in the ASCAP repertory” in AFJ2. First, in interpreting the meaning of terms in a consent decree, plain meaning takes precedence over imputed purpose. See, e.g., Broadcast Music,

Inc., 275 F.3d at 175. The Supreme Court has emphasized that courts should be reluctant to look beyond text to purpose,

4 It is undisputed that Pandora has made a proper written request for a license in the meaning of Section VI. 12 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 13 of 30

because a “decree itself cannot be said to have a purpose; rather the parties have purposes, generally opposed to each other, and the resultant decree embodies as much of those opposing purposes as the respective parties have the bargaining power and skill to achieve.” United States v. Armour & Co., 402 U.S. 673, 681-82

(1971). At oral argument, counsel for ASCAP agreed that

“[t]here’s a lot of case law that says decrees don’t have purposes. Decrees are agreements. They can’t be stretched beyond their terms.” Consequently, determination of the meaning of the terms in AFJ2 must be discerned “within [AFJ2’s] four corners, and not by reference to what might satisfy the purposes of the parties to it.” Firefighters Local Union No. 1784 v.

Stotts, 467 U.S. 561, 574 (1984).

Applying these principles to the question at hand, it is clear that the “ASCAP repertory” is defined in terms of “works” and not “individual rights” in works with respect to classes of potential licensees. Section II(C) provides that “’ASCAP repertory’ means those works the right of public performance of which ASCAP has or hereafter shall have the right to license at the relevant point in time.” AFJ2 § II(C) (emphasis added). See also United States v. Am. Soc. of Composers, Authors, Publishers,

627 F.3d 64, 68 (2d Cir. 2010) (In re Application of

RealNetworks, Inc. et al.) (“A blanket license is a license that gives the licensee the right to perform all of the works in the

13 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 14 of 30

repertory”). Section II(C) does not define “ASCAP repertory” in terms of rights held by ASCAP to license works to particular classes of licensees. Rather, the natural reading of Section

II(C)’s definition of “ASCAP repertory” as consisting of “works the right of performance ASCAP has . . . the right to license” is that it means that the ASCAP repertory consists of works the right to which ASCAP has the ability to license at all. See

Broadcast Music, Inc., 275 F.3d at 175 (“deference is to be paid to . . . the normal usage of the terms selected”).

This natural reading of the term “ASCAP repertory” is entirely consistent with Second Circuit ASCAP and Copyright caselaw. That caselaw has employed the term “repertory” in reference to compositions and not rights in compositions. See, e.g., Major League Baseball Properties, Inc. v. Salvino, Inc.,

542 F.3d 290, 321 (2d Cir. 2008) (“users want . . . access to any and all of the repertory of compositions”) (emphasis added)(citation omitted); United States v. Am. Soc. of Composers,

Authors & Publishers, 32 F.3d 727, 728 (2d Cir. 1994) (In re

Application of Karmen)(“ASCAP, with three million songs in its repertory”) (emphasis added); Gershwin Pub. Corp. v. Columbia

Artists Mgmt., Inc., 443 F.2d 1159, 1160 (2d Cir. 1971)

(discussing “musical compositions in the ASCAP repertory”)

(emphasis added).

A remaining question is whether the term “works,” as used in

14 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 15 of 30

Section II(C), and in Sections VI’s and IX(E)’s uses of the term

“works in the ASCAP repertory,” is susceptible of an interpretation defining it in terms of “rights” within compositions rather than the “compositions” themselves. But

Pandora is correct that “works” means musical compositions and not rights with respect to those compositions.

Section § II(U) of AFJ2 defines “work” as “any copyrighted musical composition.” This definition is express and conclusive.

There is no reference to “rights in works” within the four corners of the consent decree. The meaning of “works” in AFJ2 is not ambiguous and it is consequently unnecessary to look beyond the text to extrinsic evidence. See E.E.O.C. v. Local 40, Int'l

Ass'n of Bridge, Structural & Ornamental Iron Workers, 76 F.3d

76, 80 (2d Cir. 1996) (“Extrinsic evidence should only be considered when the decree itself is ambiguous”).

The origin of this definition is not hard to discern. In ordinary usage the word “work” in the musical context means a composition and not a right in a composition. See e.g.,

Webster’s II New Riverside Dictionary 1327 (1984) (defining

“work” as “[s]omething that has been done, made, or performed as a result of one’s occupation, effort, or activity”). The term

“works” in AFJ2 has its origin in Copyright law, and it is clear from Copyright caselaw that works means “compositions” in that context. And “where contracting parties use terms and concepts

15 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 16 of 30

that are firmly rooted in federal law, and where there are no explicit signals to the contrary, we can presume that the prevailing federal definition controls.” CGS Indus., Inc. v.

Charter Oak Fire Ins. Co., 720 F.3d 71, 78 (2d Cir. 2013)

(citation omitted). Section 102 of the Copyright Act refers to

“works of authorship fixed in any tangible medium of expression .

. . from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.” 17 U.S.C. § 102(a). This definition is inconsistent with a reading of works that defines the word in terms of

“rights.” And the Supreme Court has referred to a “work” as the

“translat[ion] [of] an idea into a fixed, tangible expression.”

Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 737

(1989). Compositions, but not rights in compositions, are able to be “fixed” in “tangible medium[s] of expression.” ASCAP conceded this definition of “works” at oral argument.

Because “works” in AFJ2 means “composition[s]” and not

“rights in compositions”, and because it is undisputed that the terms of ASCAP’s Compendium Modification of April 2011 permit

ASCAP to retain the right to license the works of the withdrawing publishers for non–New Media purposes, those compositions remain

“works in the ASCAP repertory” within the meaning of Sections VI and IX(E) of AFJ2. In fact, ASCAP retains the right under the

“Standard Services” agreement to license the works of withdrawing

16 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 17 of 30

publishers even to certain smaller New Media licensees. Thus, the works remain in every facet of the ASCAP repertory.

C. Sections VI and IX(E) of AFJ2, and Pandora’s Rights

Having determined that “works” in AFJ2 means musical compositions, and that those musical compositions remain “in the

ASCAP repertory” so long as ASCAP retains any licensing rights for them, it remains only to apply the clear language of Sections

VI and IX(E) of AFJ2 to decide this motion. Section VI establishes the scope of a music user’s rights to works in the

ASCAP repertory following a “written request therefor” as extending to “all of the works in the ASCAP repertory.” AFJ2 §

VI. Section IX(E) is in accord with Section VI in providing that

“[p]ending the completion of any [rate] negotiations or proceedings, the music user shall have the right to perform any, some or all of the works in the ASCAP repertory to which its application pertains.” AFJ2 § IX(E). Sections VI and IX(E) of

AFJ2 consequently mandate that Pandora’s license to perform ASCAP compositions during the five year term of its license extends to

“all” of ASCAP’s repertory and is unaffected by any new media licensing rights withdrawals by ASCAP publishers.

It is worth noting that ASCAP has the continuing ability to grant Pandora the right to use those musical compositions whose

New Media licensing rights were purportedly withdrawn from ASCAP.

Section 1.12.5 of the Compendium of ASCAP Rules and Regulations

17 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 18 of 30

provides that “ASCAP shall continue to have the right to license

[works subject to New Media licensing rights withdrawals] only to those [N]ew [M]edia Services which are licensed under Licenses- in-Effect on the Effective Date of the Membership Modification.”

And whether ASCAP had negotiated this preservation of rights or not, under the terms of AFJ2 ASCAP did not have the right to permit the partial withdrawals of rights at issue and thereby acquiesce to a regime in which some music users could not obtain full public performance rights to works in the ASCAP repertory.

D. ASCAP’s Arguments as to the Text of AFJ2

ASCAP argues that “the term ‘ASCAP repertory’ as used in

Sections VI and IX(E) of the AFJ2 refers only to the rights in musical works that ASCAP has been granted by its members as of a particular moment in time” and that “[n]othing in the definition of ‘ASCAP repertory’ suggests otherwise.” But this interpretation is in direct conflict with AFJ2 Section II(C)’s definition of “ASCAP repertory.” Section II(C) does not refer to

“rights in musical works” but rather to “works the right of performance of which ASCAP has the right to license at the relevant point in time.” AFJ2 § II.C (emphasis added). ASCAP undisputedly presently has the “right to license” any of the works in question to all non-New Media licensees and to some New

Media licensees even following withdrawal of certain New Media licensing rights. Therefore those works remain in the ASCAP

18 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 19 of 30

repertory and AFJ2 requires that ASCAP license them.

ASCAP’s argument is predicated on the Copyright doctrine of

“divisibility of rights” within a copyrighted work. It is true that “[t]he Copyright Act confers upon the owner of a copyright a bundle of discrete exclusive rights, each of which may be transferred or retained separately by the copyright owner.”5

United States v. Am. Soc. of Composers, Authors, Publishers, 627

F.3d at 71. But while the Copyright Act allows rights within works to be alienated separately in general, AFJ2 imposes restrictions beyond those imposed by the Copyright Act on ASCAP.

AFJ2 Sections VI and IX(E) deny ASCAP the power to refuse to grant public performance rights to songs to particular users while, at the same time, retaining the songs in question in its repertory.

E. ASCAP’s Argument as to the History of “Licenses-in-Effect” Provisions

ASCAP points to the fact that AFJ2 removed an express

“licenses-in-effect” provision from the previous iteration of the

ASCAP consent decree, known as the 1950 Amended Final Judgment.

See Amended Final Judgment, United States v. American Society of

5 The divisibility doctrine is codified throughout the copyright law. See, e.g., 17 U.S.C. §§ 106, 201(d), 501(b). For example, Section 106 enumerates a series of rights with respect to a work assignable by a copyright owner (including, inter alia, the right of reproduction and the right of performance). And Section 201(d)(2) provides that “[a]ny of the exclusive rights comprised in a copyright, including any subdivision of any of the rights specified by section 106, may be transferred . . . and owned separately.” 17 U.S.C. § 201(d)(2). 19 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 20 of 30

Composers, Authors and Publishers, Civ. No. 13-95, 1950 Tr. Cas.

¶ 62,595, § IV(G) (S.D.N.Y. 1950) (hereinafter “AFJ”). ASCAP argues that this removal demonstrates that the parties to AFJ2 -- the Department of Justice and ASCAP -- intended for ASCAP to be free to decrease the scope of a user’s license even during the pendency of a rate proceeding. ASCAP also submits a 2001 memorandum from the Department of Justice (“2001 DOJ Memorandum”) submitted to the rate court prior to the entry of AFJ2 providing its justification for the removal of the express licenses-in- effect provision in AFJ2.

The history ASCAP presents does not prove what ASCAP would like it to prove. Rather, the 2001 DOJ Memorandum demonstrates that the concern driving the removal of the express licenses-in- effect provision from AFJ2 was that ASCAP members wishing to withdraw from ASCAP entirely should not be subject to existing licenses-in-effect. The 2001 DOJ memorandum justifies the removal of that provision by virtue of the fact “the provision had the unforeseen consequence of preventing members who wanted to leave ASCAP from being able to take their catalogs with them when they joined a competing PRO.” An understanding that the removal of the express license-in-effect provision was driven by a concern that a publisher would be inhibited from joining a competing PRO to ASCAP is compatible with the general pro- competitive goal of the consent decrees governing ASCAP. Here,

20 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 21 of 30

music publishers are attempting to withdraw licensing rights from

ASCAP with respect to only some uses of their music while remaining in ASCAP, and the pro-competitive rationale of facilitating the ability of artists to move between different

PROs that spurred the removal of the express license in effect provision from AFJ2 is inapposite.

ASCAP also makes the related argument that Pandora’s consent decree license may be narrowed because of the inclusion in AFJ2 of § XI(B)(3)(c) (“Section XI(B)(3)(c)”), which provides that

“for any member who resigns from ASCAP, ASCAP is enjoined and restrained from requiring that member to agree that the withdrawal of such works be subject to any rights or obligations existing between ASCAP and its licensees.” AFJ2 at *10. ASCAP argues that even though Section XI(B)(3)(c) is not yet operative because AFJ2 § XI(C) requires that a “substantially identical provision” be entered in the case of United States v. Broadcast

Music, Inc., No. 64 Civ. 3787 (S.D.N.Y), and that such a provision has not yet been entered in that case, the other sections of AFJ2 should be read in the light of the Department of

Justice’s attempt to include Section XI(B)(3)(c) in AFJ2.

ASCAP’s argument, in effect, is that the inclusion of this provision in AFJ2, even if inoperative, evinces intent by DOJ and

ASCAP to protect the freedom of copyright holders who are members of ASCAP to divide the rights in their works as they see fit.

21 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 22 of 30

This argument is misplaced. First, the text of Section

XI(B)(3)(c) restricts its application to “member[s] who resign from ASCAP.” None of the members who are withdrawing some of their New Media licensing rights from ASCAP are resigning from

ASCAP. Moreover, the 2001 DOJ Memorandum reinforces that Section

XI(B)(3)(c) was inserted in AFJ2 for the same reason that the express licenses-in-effect provision of the prior AFJ was removed: in order to allow publishers who were leaving ASCAP entirely to take their catalogues with them to join competing

PROs. Further, this is also the only reading of the decision to remove the express license-in-effect provision from AFJ that is consistent with the “all works in the ASCAP repertory” language of Sections VI and IX of AFJ2. To adopt ASCAP’s position would be to endorse the untenable proposition that Section XI(B)(3)(c) was intended to allow publishers to deprive certain existing licensees of individually chosen works while keeping those works in the ASCAP repertory, even in the face of Sections VI’s and

IX’s mandates that ASCAP license “all of the works in the ASCAP repertory” to any entity making a request therefor.

ASCAP also makes the argument that even if a license-in- effect provision did exist in AFJ2, such a provision would be irrelevant for purposes of this motion because, according to

ASCAP, Pandora is merely an “applicant” for a license and not a

“licensee.” For this reason, ASCAP objects to the use of the

22 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 23 of 30

term “consent decree license” to describe Pandora’s AFJ2 rights.

But while ASCAP draws a semantic line between so called

“applicants” –- i.e., according to ASCAP, entities that have applied for an ASCAP blanket license and who await rate court adjudication –- and “licensees” –- i.e., according to ASCAP, entities that have negotiated final licensing agreements -- ASCAP does not provide any evidence of a substantive difference in the rights of “applicants” and “licensees” under AFJ2 with respect to

ASCAP’s repertory during the pendency of a rate court proceeding.

Section IX(E)’s requirement that “[p]ending the completion of a [rate court proceeding], the music user shall have the right to perform any, some or all of the works in the ASCAP repertory to which its application pertains” makes clear that there could be no substantive difference relevant to this motion. “All” means all. So whether ASCAP purports to categorize Pandora as an

“applicant” or a “licensee,” Pandora’s right to perform the compositions in the ASCAP repertory extends to all of ASCAP’s repertory and ASCAP may not narrow that right by denying Pandora the right to play the songs of publishers who have withdrawn new media licensing rights from certain songs while keeping the songs in ASCAP’s repertory to be licensed for performance by other music users.

23 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 24 of 30

F. Pandora’s Conduct

ASCAP also argues that Pandora’s conduct in obtaining separate licenses from withdrawing publishers following the

Compendium Rule change provides evidence for ASCAP’s position that AFJ2 permits the withdrawal of publishers’ new media rights from ASCAP to narrow the scope of Pandora’s consent decree license. This argument is without merit. While courts will consider parties’ conduct that occurs subsequent to the formation of a contract to guide interpretation of terms, only the conduct of parties to the contract is relevant. See, e.g., IBJ Schroder

Bank & Trust Co. v. Resolution Trust Corp., 26 F.3d 370, 374 (2d

Cir. 1994)(“courts have looked to the conduct of the parties in resolving ambiguities in contractual language”) (emphasis added);

11 Williston on Contracts § 32:14 (4th ed.) (“the parties' own practical interpretation of the contract -- how they actually acted, thereby giving meaning to their contract during the course of performing it -- can be an important aid to the court)

(emphasis added). As a matter of logic it is unclear how the conduct of a non-party to a contract –- as Pandora is with respect to the AFJ2 consent decree –- could, on its own, bear on the proper interpretation of the terms negotiated by other parties. In the one case ASCAP cites for the proposition that post-contract formation conduct may influence a court’s interpretation of the contract terms the relevance of a non-

24 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 25 of 30

party’s conduct was primarily predicated on the reaction to that conduct by a party to the initial agreement. See Wardair can.,

Inc. v. Fla. Dep’t of Revenue, 477 U.S. 1, 12 (1986). Pandora is not a party to AFJ2 and its actions cannot guide the proper interpretation of AFJ2’s terms.6

G. ASCAP’s Argument as to AFJ2 Section IV

At oral argument, ASCAP argued that AFJ2 § IV’s (“Section

IV”) prohibition on ASCAP acquiring exclusive rights in a composition is the only place in AFJ2 speaking to “the scope of the rights that have to be granted by an ASCAP member to ASCAP,” and that the absence in Section IV of any express requirement that ASCAP license to all applicants any song in its repertory cuts against granting this motion.

Before addressing this specific argument it is worth noting that ASCAP’s effort to define the question in this motion as whether and in what provision AFJ2 restricts copyright holders is misplaced. AFJ2 only restricts ASCAP; it does not restrict copyright holders directly. Obviously, a restriction on ASCAP has an ancillary impact on how copyright holders may use ASCAP, but this is the case with respect to third parties any time an entity is regulated by a consent decree.

ASCAP’s objection fails even if it is construed to contend that Section IV would be the natural place for the licensing

6 In any event, Pandora’s argument that its actions were the result of commercial necessity is plausible. 25 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 26 of 30

requirement at issue here because that is where the restrictions on ASCAP’s freedom to make licensing decisions are found. The argument fails because the requirements in Sections VI and IX(E) are affirmative requirements, and not prohibitions. Section IV is entitled “Prohibited Conduct” and is consequently concerned with prohibiting conduct by ASCAP rather than with enforcing affirmative obligations. The affirmative obligations imposed by

AFJ2 are found in other sections. See, e.g., Sections VI; VII;

VIII; IX. The requirement that ASCAP license “all of the works in the ASCAP repertory” would be out of place in Section IV.

It is also possible that the absence of any express provision is explained by the fact that ASCAP has never tried to accept only partial licensing rights before. It is certainly imaginable that in 2001 DOJ and ASCAP simply did not contemplate the specific change in the Compendium Modification and consequently did not place an express prohibition in Section IV.

But even if DOJ and ASCAP failed in 2001 to contemplate the specific ASCAP rule change at issue here, such a failure is immaterial when the language of Sections VI and IX(E) so clearly forecloses ASCAP’s ability to narrow Pandora’s license here.

26 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 27 of 30

H. ASCAP’s Argument as to Section II(1)(c) of the 1941 Consent Decree

At oral argument, ASCAP also pointed to Section II(1)(c) of the 1941 ASCAP consent decree (the version prior to AFJ) in support of its position. That section provided in relevant part that “[n]othing herein contained shall be construed as preventing

[ASCAP] from regulating the activities of its members . . . by prohibiting the members from issuing exclusive licenses to commercial users of music.” United States of America v. American

Society of Composers, Authors and Publishers, No. 13-94 (March 4,

1941). ASCAP contends that because this provision was removed at the entry of AFJ, ASCAP publisher-members are now free to issue exclusive licenses to commercial users and that this right is what ASCAP is recognizing with its Compendium Modification.

This argument is unpersuasive. The fact that ASCAP cannot prohibit its members from granting exclusive licenses to music users without going through ASCAP is irrelevant to the question of whether ASCAP must grant any music user a license to perform a work once that work is in its repertory. Moreover, everybody agrees that a publisher-member of ASCAP may withdraw a composition from the ASCAP repertory entirely. Any prohibition on ASCAP banning exclusive licensing is entirely consistent with

AFJ2 permitting the total withdrawal of a song from ASCAP’s repertory.

27 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 28 of 30

I. Request by ASCAP and Publishers for Department of Justice Participation

ASCAP and non-party publishers EMI, Sony, and Universal have asked that the Court invite the participation of the Department of Justice (“DOJ”) before resolving this motion.7 But because consent decree interpretation is a matter of law for a court, and because AFJ2 §§ II(C), II(U), VI, and IX(E) are not ambiguous such that DOJ participation would be helpful to clarify the meaning of any terms, the Court has declined to solicit its participation. “Language whose meaning is otherwise plain does not become ambiguous merely because the parties urge different interpretations in the litigation. An unambiguous provision of the contract should be given its plain and ordinary meaning and the contract should be construed without reference to extrinsic evidence.” Olin Corp. v. Am. Home Assur. Co., 704 F.3d 89, 99

(2d Cir. 2012) (citation omitted); see also Hunt Ltd. v.

Lifschultz Fast Freight, Inc., 889 F.2d 1274, 1277 (2d Cir. 1989)

(“The court is not required to find the language ambiguous where the interpretation urged by one party would strain the contract language beyond its reasonable and ordinary meaning.”) (citation omitted). Even if DOJ were to “urge [a] different interpretation[] in the litigation” the unambiguous language of

7 Participation by DOJ is permitted by AFJ § IX(I) (“Section IX(I)”) which provides that “[p]ursuant to its responsibility to monitor and ensure compliance with [AFJ2] the United States may participate fully in any proceeding brought under this section IX.” 28 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 29 of 30

AFJ2 would still control. Olin Corp., 704 F.3d at 99.

J. Pandora’s Section IV.C Discrimination Argument

Finally, Pandora argues that allowing ASCAP to deny Pandora a continuing blanket license during the pendency of the rate proceeding while granting such licenses to other entities, such as terrestrial radio stations with online presences, impermissibly “discriminates . . . between licensees similarly situated” in violation of AFJ2 Section IV.C. Pandora argues in the alternative that even if the question of whether ASCAP is actually discriminating against “similarly situated” entities presents a genuine issue of material fact improper for resolution on a summary judgment motion, that ASCAP is improperly circumventing the Court’s review of the question by

“prejudg[ing]” the “similarly situated” inquiry by allowing withdrawing publishers to narrow the scope of Pandora’s license during the rate proceeding. ASCAP disputes Pandora’s claims and presents in its briefing a detailed argument as to why the entities in question are not similarly situated for purposes of

AFJ2 Section IV.C. But having resolved this motion on the clear text of AFJ2 Sections VI and IX(E) it is unnecessary to resolve the fact-intensive question of whether Pandora is similarly situated to any entities treated differently by ASCAP. And it is likewise unnecessary to resolve Pandora’s “prejudging” argument.

29 Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 30 of 30

CONCLUSION

Pandora’s July 1, 2013 motion for summary judgment that

ASCAP publisher withdrawals of New Media licensing rights during the term of Pandora’s five year license beginning on January 1,

2011 do not affect the scope of the ASCAP repertory subject to that license is granted.

SO ORDERED:

Dated: New York, New York September 17, 2013

______DENISE COTE United States District Judge

30 OORIGINAL USDC ｓｄｾｙ＠ DOCL:\U::\T United States v. Broadcast Music, Inc ELECTRO\IC \tLY FILED Doc. 61 UNITED STATES DISTRICT COURT DOC#: ＭＭＭＭＭＭＭＭｾｾｾＭＭＭ SOUTHERN DISTRICT OF NEW YORK DATE FILED: )J/)9//3 x I BROADCAST MUSIC, INC.,

Petitiorler, 13 C 4037 (LLS) against Related to 64 Civ. 3787 (LLS)

OPINION & ORDER

PANDORA MEDIA, INC.,

SONY/ATV MUSIC PUBLISHING LLC, EMI MUSIC PUBLISHING, UNIVERSAL MUSIC PUBLISHING, INC.

Intervenors.

-x

This case grows out of a series of "withdrawals u of digital

s, by music publishers affiliated with Broadcast Music Inc

U ("BMIU) from Pandora Media, Inc. ("Pandora ) and other "New

Media Services." BMI's petition seeks an order exercising the

Court's rate setting authority under article XIV of the BMI

Consent Dec , sett e music license terms and fees

after giving effect to the withdrawals, for performances of the

remainder of the compositions in BMI's ory.

1 United States v. Broadcast Mus c Trade Cas. (CCH) ｾ＠ 71,941 (S.D.N.Y. 1966), Trade Cas. (CCH) , 71,378 (S.D.N.Y. 1994).

1 -

Dockets.Justia.com Moving for partial summary judgment, Pandora argues that the withdrawals are ineffectual, because the antitrust consent decree which BMI s requires BMI to of r a license to Pandora to perform all of the compositions in the BMI repertory as of January I, 2013, de te the fact that certain music publishers have by agreement wi BMI withdrawn from BMI the right to license their composit to so called "New a

Services u such as

However, the BMI Consent Decree res BMI to offer

a license to perform all of the compositions in its

When BMI no longer is authorized by music publisher copyright holders to license their compositions to Pandora and

New Media Services, those composit are no longer el le for inclusion in BMI's ory. BMI can no longer license theIT. to Pandora or any other applicant.

ngly, Pandora's motion for summary judgment is denied.

BACKGROUND

BMI is a nonprofit performing rights organization ("PRO") that licenses nonexclusive rights of ic ormance to a variety of music users on behalf of affiliates who are the music compositions' copyright holders. BMI's affiliates se approximately 600,000 composers, songwriters and music

2 - publ ishers, and BMI' s consists mate 7.5 mill on musi compositions.

Pandora lS a streaming internet o service that plays music compositions Ii directly ir copyright holders, or through BMI and other PROs.

A. THE BMI CONSENT DECREE

BMI's ability to license public performance r s of

ts musical repertory is governed by the Consent Decree settl ng t santitrus suit brought the United States. An amendment to the BMI Consent Decree e ishes s Court as a "rate

court, If which sets fees for licenses when BMI and applicants cannot agree on a reasonable fee. BMI Consent Decree Art. XIII.

The Decree also s cert conditions and requirements on

BMI's issuance of licenses.

Sect on VTI(B) of the BMI Consent Decree states in relevant

"De shall, upon t request of any unl censed

aster, license the r s publi to perform l S

ory by broadcasting on either a per program or per programming od basis, at defendant's option. 1f

Section IX(C) of the BMI Consent Decree states:

De endant shal not, connection with any ffer to license it the public performance of musi

compositions by music users other than ste2..S I re use to offer a license at a price or prices to be fixed by defendant with ｴｾ･＠ consent of the copyr etor for the performance of such specific (i.e., per

3 compositions, use which 1 be sted by ::.1:1e prospect licensee.

Although not icitly mentioned in the BMI Consent

Decree, "Traditionally, the BMI's license of choice has been a

'blanket license,' a license that s the licensee access to

3MI's entire ory in exchange for an annual United

States v. Broadcast Music

2001) . As defined by Section II(C) of the BMI Consent Decree,

\\'!Jefendant's ory' means those compositions, the right of public of which defendant has or fter shall

the right to 1 icense or icense." BMI Consent Decree

Art. II (C) .

Section VIII des: "Def 11 not enter into,

ze as valid or perform any performing rights license agreement whi shall result in disc nating in rates or terms between licensees simil situated."

Section XIV (A) states:

ect to all provisions of this Final defendant shall, within nlne (90) days of its receipt of a written application from an applicant for a license for the right of public performance of any, some or all of the compositions in defendant's repertory, advise the applicant in writing of the fee which it deems reasonable for the license requested.

If BMI and an applicant cannot agree on a 1 icense fee, either may apply to s Court for the rmination of a reasonable license fee. Id.

4 • B. DEALINGS BETWEEN BMI & PANDORA

On June 30, 2005, Pandora and EMI entered into a standard

01 t form license agreement which allowed Pandora to stream all music compositions in EMI's repertory. Kennedy Decl. ｾｾ＠

8 9. In 2012, Pandora determined that the terms of this license were no ｬｯｾｧ･ｲ＠ appropriate ｦｯｾ＠ its iness, and terminated it effective December 31, 2012. Id. ｾ＠ 9. After the parties failed to iate a new type of license, Pandora filed a written

cation with EMI for a f year bl license inning

January I, 2013, id., which it may later wholly or partly withdrawn. While the parties were in iations, EMI fi ed its pet tion with the Court for ion of reasonable license fees on June 13, 2013 . No.1). EMI and Pandora have negot ed erim icense fees to be in ef from

January I, 2013 until the parties negotiate an agreed ｾ｡ｴ･＠ or the Court issues a final setting license terms and fees.

EMI Petition ｾ＠ 55.

C. PUBLISHER WITHDRAWALS OF NEW MEDIA LICENSING RIGHTS FROM BMI

Effective I, 2013, EMI allowed its affiliate publishers (the intervenors and others) to elect D tal Rights

Withdrawal and modi their affil ion agreements to excl

EMI's right to license "New Media Transmissions by New Media

- 5 Services,u 2 hereinafter re to as "New Media licensi rights." Guidelines gital s thdrawal

1 sn), available at ht ://www.bmi.

The Digital Rights Withdrawal Addendum to BM-'s publisher affiliation provides the following definitions:

1. Definitions.

a. A "New Media Transmission" shall mean:

1. a digital audio transmission that, addit to requiring a public performance license, also res the music user to comply with the license requirements 17 U.S.C. § 114, § 115 and/or § 106(1);

11. a gital transmission of a music video or useruploaded video (i.e., a vi uploaded to the service by the enduser) that, in addition to requiring a public license, also res that the ce, in order to offer the music video or useruploaded vi on or via the ce, obtain a license directly from the owner or administrator of the ghts the musical composition(s) embodied therein for s other than the right of public performance (e.g., synchronization or mechanical rights) and/or

111. a digital transmission made from a tal music file either (a) uploaded by an enduser to the server and/or (b) matched from a file on enduser's or device to a digita music file on the server (such server, in either case, often re to as either the "cloud" or a "locker").

b. "New Media ServiceD shall mean a standa one service by which New Media Transmissions of musical compositions are made available or accessible (i) marily by means of the Internet, a wireless mobile telecommunications network, and/or acomputer network and (ii) to the public, whether or not, in

6 com/entry/guidel s for_digit _rights_withdrawal (As of

September 16 1 2013). The modification was set in an addendum which states:

This addendum ("Addendum") to the publisher affiliation will confirm the understanding of BMI and ("Publisher") with respect to Publi IS sire to withdraw the right to license certain digital transmissions (the "New Media Transmissions" as defined below) of musical works licensed to BMI (the "Publisher Works" as defined below) .

DiMona Decl' l Ex. G I D ital Rights Withdrawal Addendum l p.

The ies (BMI and publisher) Accepted and Agreed:

For the avoi of doubt I as of the Effective Date of

Withdrawal I Publisher shall have the exclusive right to license New Media Transmissions of Identified Interests and

Corresponding Interests in Publisher Repertoire l Relat

Repertoire l and Administered Repertoire and BMI shall no longer have any right to license New Media Transmissions of Identified Interests and Corresponding Interests repertoire for the nder of Term.

Id. at p. 3.

BMI public announced:

s withdrawal does not affect any of BMI I s other

licensing act ies. It does not affect BMI I S right

to license traditional broadcast I e and satellite

transmissions l or their related new media transmissions. BMI cont s to have the right to

license I other dig al uses I even for publishers that have withdrawn from BMI the I ted digital rights defined above for new media services.

for a subscription feel other fee or i and whether or not such offering includes exposure to

advertisements before l during and/or after the transmission of such compositions .

7 Scope of Digital Rights Withdrawal, available at http://www.bmi.com/licensing/entry/drw (as of July

2013) Composit lic to BMI from affiliates other

ｴｾ｡ｮ＠ t withdrawing ishers are unaf cted,

"Cata"ogs that are subject to Di ta Rights Withdrawal wi : be restored to the BMI re if they are acquired or newly admi st by an Affiliate that has not e ected

igital Rights Withdrawal." de:ines p. 2.

In September 2012, Sony/EMI3 became the first publisher to announce its planned withdrawal of New Media licensing rights from BMI. 's Motion p. 9. Pandora negotiated direct licenses with Sony/EMI for the year 2013. Kennedy Decl. ｾ＠ 10.

On November I, 2013, filed this motion for ia: summary judgment. Pandora seeks a determination that, as the compositions are held in BMI's , BMI must offer to

Pandora without to publishers' ative withdrawals of BMI's right to do so.

Sony/EMI and fellow publisher Universal Music Publi

Group's motions to intervene in t s case were granted on

November 4, 2013 (Dkt. No. 28).

3"Sony/EMI" refers to the corrbined catalogs of Sony and EMIj Sony/ATV became the administrator of EMI's catalog in July 2012.

- 8 • DISCUSSION

Pandora argues the publisher withdrawals do not affect the scope of its license, and points to Sections VIII(A)

XIV{A) of the BMI Consent Decree whi ire BMI to grant a continuing license to perform "all of the compositions in the defendant's repertoryH rate proceedings or iations.

The BMI Consent Decree res t all compositions in the BMI

be offered to all applicants.

Under Section XIV of the BMI Consent Decree, when an applicant requests a license for "any, some or all of the compositions in defendant's repertory," BMI must grant a license for performance of the requested composit which may range from "anyH (a piece" license) to "all" (a blanket license).

Under the BMI Consent Decree, these opt ions are open to 1

icants l with fees that do not discriminate between

icants simil situated. By plac a composition in the

BMI repertory, the affiliate routinely authorizes its inclusion in blanket licenses of BMI's whole to all applicants.

But if the withdrawal of its authority to do so by some affi iates with to compositions for which they own or admi ster the ghts is within those affiliateS l ghts,

BMI cannot offer New Media licensing rights for those compositions to New Media app icants, including f BMI cannot offer those compositions to New Media applicants, their

9 • avail lity does not meet the standards of the BMI Consent

:Jecree, and t cannot be held in BMI's repertory. Since they are not in BMI's repertory, BMI cannot deal in or license those compositions to anyone.

As copyright holders, the publishers may divide their copyrights pursuant to Section 106 of the Copyright Act, 17

U.S.C. § 106, which provides:

Subject to sections 107 through 122, the owner of copyr under this title has the exclusive rights to do and to authorize any of the lowing:

(3) to distribute copies or phonorecords of the copyr ed work to the public by sale or other transfer of ownership, or by rental, lease, or lendingi

(4) in the case of literary, musical, dramatic, choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform t copyrighted work publiclYi

(5 ) in the case sound recordings, to perform the ed work publicly by means of a digital o

The publ ishers are priviI to license, or not license, the performance of their compositions as see fit. In the exercise of that right the publi have with BMI to withdraw their New Media performance licensing rights from

Pandora and New Media Services. is well within their power as copyright holders. See United States v. Am Soc' of

A.uthors & Publ ishers In re ication of Yahoo!

- 10 • Inc. 627 F.3d 64, 71 (2d Cir. 2010) ("The Copyright Act confers upon t owner of a copyright a bundle of screte exclus ghts, which may be ';:ransfe or retained

ely by the copyright owner. If) (citing and ing New

York Times Co. v. Tasini, 533 U.S. 483 (2001)) Buffalo Broad.

Co . v. Am. Soc' ers Authors & Publishers, 744 F. 2d

917, 920 (2d Cir. 1984) ("The ａ｣ｾ＠ specifical accords the copyright owner the right to authorize ｯｾｨ･ｲｳ＠ to use the various rights recognized by the Act, including the performing right and the reproduction right, and to convey t se rights ely." )

(citing Copyright Act). Thus, the copyright holders have the r ｾｯ＠ withdraw from BMI ｩｾｳ＠ authority ｾｯ＠ license the performance of their compositions by the New Media Services.

It is the BMI Consent Decree the antitrust law) which rest ｣ｾ＠ BMI ng In its yory compositions which it can no longer offer to the New Media Services, who were up until recent accepted as timate, qualified, licensed and performing those works. BMI's repertory consists of compositions whose performance BMI "has the right to license or

icense" i it "shal upon the request of any unlicensed broadcaster, license the rights publicly to perform its

ory" . BMI Consent Decree Arts. II(C) i VII{B). When

ions of t ght are withdrawn, the affected compositions

- 11 • are no longer eligible membership in BMI's rtory, and it cannot include them in a blanket license or license them at all.

BMI contends that its long-standing inability to license the "grand right" (the right of public dramatic performance) shows that t lS no universal to licenses to perform all the compositions in its repertory. BMI Brief pp. 6 9. But

BMI has never offered grand er s. All applicants are treated equally: BMI cannot licenses for grand theater performances to anybody. They are a commodi in which BMI does not deal. In contrast, New Media I icensing rights have until recently been of to any and 1 applicants; they have been ac by, licensed to and exercised by the New Media

Services, and (exc for those now withdrawn by some publishers from New Media applicants) the affected compositions are still offered by BMI to all applicants other than New ｾ･､ｩ｡Ｎ＠ Indeed, the withdrawal guidelines themselves recognize that when a withdrawing publisher's catalog is transferred to another affiliate who has not withdrawn their compositions from New

Media Services, compositions in the transferred catalog are

"restored to the BMI re." Guidel s p. 2. Thus, the

"grand r s" example has no analog in, and nothing to do with the ssues in this case.

It is sirr.ilarly imrr.aterial that BMI cannot offer certain synchronization rights (the to license musical

- 12 • composit ions in conj unct with visual images) or rights for jukebox licenses and noncommerci broadcasters, which are statutorily excluded from BMI's purview because of t operation

the ght Act, 17 U.S.C. §§ 116, 118. The publishers are free to license these rights to all music users. But BMI s not of , nor has it ever offered, these rights to anybody.

BMI and the intervenors argue nothing in the BMI

Consent Decree prevents BMI from agree not to serve particular customers. That puts matters backwards. Nothing in the Consent Decree settling this antitrust case can be read to allow one with BMI's market power to re to deal th certain of its icants. The copyright law necessarily gives that privil to the intervenors, but BMI cannot combine with them by holding its ory compositions that come th an invitation to a boycott attached. 4

The Department of Justice has submitted its views, which ore creation of any dable inconsistency between s decision and the ier one of the Honorable se Cote, U.S.D.J., I ition of Pandora Media Inc., No. 12 Civ. 8035 (DLC) , slip. op. (S.D.N.Y. . 17, 2013). The inconsistency is just a difference of view of the power of the application of Section 106 and the copyright holders' rights under the Copyright Law, and will be resolved the Court of Is for the Second Circuit or decree amendment procedures, or managed commercially.

- 13 CONCLUSION

Pandora's motion is ed. relevant compositions are not within ｂｾｉＧｳ＠ ory, and it lacks the power to license them to any applicant, lc.ding Pandora.

Nothing in this opinion af ts t right of licensees to cont to perform withdrawn compositions under sently existing licenses. They were legal when made, and the rights they ed are not to be altered retroact y. As far as this ru.L is concerned, t cont according to their terms until ir expiration.

So ordered.

Dated: New York, New York December 18, 2013 t",."j I.. ｾｴＮＮＮｊ［ＬＮ＠ LOUIS L. STANTON U.S.D.J.

14 - Case 1:13-cv-01290-RJL Document 1 Filed 08/26/13 Page 1 of 17

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

SOUNDEXCHANGE, INC. Civil Action No. ___ Plaintiff,

v. COMPLAINT SIRIUS XM RADIO INC.

Defendant. JURY TRIAL DEMANDED

PRELIMINARY STATEMENT

1. Under the Copyright Act, entities such as Defendant Sirius XM Radio Inc.

(“Sirius XM”) benefit from a statutory license for the rights necessary to digitally perform sound recordings protected by federal copyright. As a result of this license, these entities can digitally transmit sound recordings to their millions of paying subscribers without fear of copyright infringement. But the statutory license is not free: the Copyright Act requires licensees to pay royalties for the use of copyright owners’ valuable original content. By regulation, those royalties must be paid to SoundExchange, Inc. (“SoundExchange”), a non-profit organization authorized to collect digital performance and related royalties and distribute them to performing artists and copyright owners.

2. Sirius XM is the country’s only satellite digital audio radio service (“SDARS”).

The royalties that Sirius XM must pay under the statutory license are set periodically in regulations prescribed by the federal Copyright Royalty Board (“CRB”). For the time period

2007-2012, the amount that Sirius XM was required to pay was the product of two numbers: (1) a percentage set by the CRB (the “royalty rate”); and (2) Sirius XM’s “Gross Revenues” as

72715.1 1 Case 1:13-cv-01290-RJL Document 1 Filed 08/26/13 Page 2 of 17

defined by the CRB. Thus, Sirius XM’s Gross Revenues were the royalty base against which its royalty obligations were to be calculated.

3. The CRB’s regulations define Gross Revenues broadly. They also set forth exactly what Sirius XM may exclude from Gross Revenues for the purpose of calculating its royalty obligation.

4. Starting from at least January 1, 2007, and until December 31, 2012 (the “relevant time period”), Sirius XM systematically underpaid SoundExchange for the statutory license.

Rather than paying a percentage of Gross Revenues as that term is defined in the federal regulations, Sirius XM devised its own definition of Gross Revenues – a definition that substantially reduced its royalty payments to SoundExchange. Sirius XM’s definition improperly reduced its reported Gross Revenues in three ways. First, from January 1, 2007 until

December 31, 2012, Sirius XM improperly reduced its Gross Revenues by an amount purportedly attributable to performances of sound recordings fixed prior to February 15, 1972

(“pre-1972 sound recordings”). Second, from at least October 2008, Sirius XM excluded from its reported Gross Revenues the incremental revenue it received from the difference in price between its standard package (which includes both music and talk channels) and its “Sirius XM

Premier” package (which includes all the content in the standard package as well as certain additional all-talk channels).1 Third, Sirius XM and its legal predecessor excluded all revenue

derived from its Family Friendly and Mostly Music packages even though those packages

contained many channels broadcasting recordings covered by the statutory license.

1 Sirius XM, the product of a merger between formerly-separate Sirius and XM services, continues to offer separately-branded Sirius Premier and XM Premier packages, as well as a co- branded package (Sirius XM Premier). On information and belief, Sirius XM has been erroneously excluding incremental subscription revenue from all three packages in the same manner. For simplicity, this Complaint uses “Sirius XM Premier” to refer to all three packages.

72715.1 2 Case 1:13-cv-01290-RJL Document 1 Filed 08/26/13 Page 3 of 17

5. None of Sirius XM’s unilateral amendments to the exclusions and deductions to

the definition of Gross Revenues was permitted under federal law. SoundExchange now brings

this action to recover the royalty amounts Sirius XM has underpaid as a result.

JURISDICTION AND VENUE

6. This is a civil action seeking damages under the Copyright Act, 17 U.S.C. § 101,

et seq.

7. This Court has original subject matter jurisdiction over Copyright Act claims

pursuant to 28 U.S.C. §§ 1331 and 1338(a).

8. Venue is proper in this district pursuant to 28 U.S.C. § 1391(b)(1) and (b)(2).

Defendant Sirius XM resides in this District, and a substantial part of the events giving rise to

this suit have occurred in this District.

9. This Court has personal jurisdiction over Sirius XM because Sirius XM (i) resides

in this District; (ii) has substantial contacts within the United States, including in this District; and (iii) has transacted business throughout the United States, including in this District.

PARTIES

10. Plaintiff SoundExchange, Inc. is an independent nonprofit organization organized and existing under the law of the State of Delaware, with its headquarters at 733 10th Street,

N.W., 10th Floor, Washington, DC 20001. The CRB has designated SoundExchange as the sole entity in the United States to collect digital performance royalties from statutory license users and to distribute those royalties to performing artists and copyright owners. Specifically,

SoundExchange is charged by regulation with administering the statutory license, see, e.g., 17

U.S.C. § 114(e)(1); 37 C.F.R. § 380.4; id. at § 370.3, collecting and distributing statutory royalties, 17 U.S.C. § 114(e)(1); id., and enforcing the terms of the statutory license, see 17

72715.1 3 Case 1:13-cv-01290-RJL Document 1 Filed 08/26/13 Page 4 of 17

U.S.C. § 114(g)(3). Pursuant to this authority, SoundExchange collects statutory royalties from satellite radio, Internet radio, cable TV music channels, and other types of services for transmission of sound recordings, and distributes those royalties to artists and record companies.

11. Defendant Sirius XM Radio Inc. is a corporation organized and existing under the law of the State of Delaware, with its principal place of business located at 1221 Avenue of the

Americas, 36th Floor, New York, NY 10020. Sirius XM also has offices in Washington, D.C., and studio facilities throughout the country. Sirius XM is the only operator of an SDARS.

FACTUAL ALLEGATIONS

A. The Statutory Framework for the Licensing of Digital Performance Rights

12. Section 106 of the Copyright Act grants the owner of a copyright in a sound recording the exclusive right to perform and reproduce “the copyrighted work publicly by means of a digital audio transmission.” 17 U.S.C. § 106(6).

13. In turn, Congress granted various entities, including SDARS, a “statutory license,” 17 U.S.C. §§ 112; 114(d)(2), to render these digital public performances of copyrighted sound recordings. Copyright owners are unable to withhold this license, which allows Sirius XM to publicly perform all covered recordings (by transmitting them to its millions of paying subscribers) without fear of copyright infringement.

14. The federal statutory license, however, is not free. Rather, in the event that copyright owners and SDARS are unable to agree on the license’s royalty rates and terms, the

Copyright Act requires the CRB to “determine reasonable rates and terms of royalty payments” for the statutory license. 17 U.S.C. § 114(f)(1)(A). The Copyright Act provides that the CRB- set rates “shall . . . be binding on all copyright owners of sound recordings and entities performing sound recordings,” including Sirius XM. Id. § 114(f)(1)(B).

72715.1 4 Case 1:13-cv-01290-RJL Document 1 Filed 08/26/13 Page 5 of 17

15. Since shortly after enactment of the statutory license, SoundExchange and its

predecessor have been designated by the CRB and its predecessors to collect and distribute

statutory royalties. Notice and Recordkeeping for Digital Subscription Transmissions, 63 Fed.

Reg. 34,289, 34,292-94 (June 24, 1998). The Copyright Act directs how those royalties are to be

distributed. 17 U.S.C. § 114(g)(2)(A)-(D). The Copyright Act also provides that a non-profit

agent such as SoundExchange may deduct certain costs from the royalty payments that it

distributes. These costs include costs the non-profit agent incurs in enforcing performance rights

subject to the statutory license. Id. at § 114(g)(3)(A)-(C).

16. On January 24, 2008, the CRB promulgated its regulations setting the license fees

that the SDARS would pay for 2007 to 2012. See Determination of Rates and Terms for

Preexisting Subscription Services and Satellite Digital Audio Radio Services, 73 Fed. Reg. 4080,

4099 (Jan. 24, 2008) (“2007-2012 CRB Decision”). Those regulations remained in effect from

January 1, 2007 to December 31, 2012. The regulations prescribed (as they still do now) that

royalty payments were to be made to SoundExchange.

17. Under the CRB’s regulations, Sirius XM’s royalty fee was to be calculated as a

percentage of its Gross Revenues. Specifically, Sirius XM was to pay 6.0% of its Gross

Revenues for 2007 and 2008, 6.5% of its Gross Revenues for 2009, 7.0% of its Gross Revenues for 2010, 7.5% of its Gross Revenues for 2011, and 8.0% of its Gross Revenues for 2012. 2007-

2012 CRB Decision, 73 Fed. Reg. at 4098.

18. The CRB promulgated regulations that defined “Gross Revenues” for purposes of the royalty payment calculation. In relevant part, those regulations stated:

(1) Gross Revenues shall mean revenue recognized by [Sirius XM] in accordance with GAAP from the operation of an SDARS, and shall be comprised of the following:

72715.1 5 Case 1:13-cv-01290-RJL Document 1 Filed 08/26/13 Page 6 of 17

(i) Subscription revenue recognized by [Sirius XM] directly from residential U.S. subscribers for [Sirius XM’s] SDARS; and

(ii) [Sirius XM’s] advertising revenues, or other monies received from sponsors, if any, attributable to advertising on channels other than those that use only incidental performances of sound recordings . . .

(3) Gross revenues shall exclude: . . .

(vi) Revenues recognized by [Sirius XM] for the provision of . . .

(B) Channels, programming, products and/or other services offered for a separate charge where such channels use only incidental performances of sound recordings; . . . [and]

(D) Channels, programming, products and/or other services for which the performance of sound recordings and/or the making of ephemeral recordings is exempt from any license requirement or is separately licensed, including by a statutory license and, for the avoidance of doubt, webcasting, audio services bundled with television programming, interactive services, and transmissions to business establishments.

2007-2012 CRB Decision, 73 Fed. Reg. at 4102 (promulgating 37 C.F.R. § 382.11) (emphasis added).

19. During the relevant time period, Sirius XM reported its Gross Revenues to

SoundExchange on a monthly basis. Using the royalty rates set forth by the CRB, Sirius XM made payments for each month on the basis of its reported Gross Revenues.

B. Sirius XM’s Unauthorized Exclusions from “Gross Revenues”

1. Pre-1972 Sound Recordings

20. Sirius XM has taken the position that the federal statutory license does not cover pre-1972 sound recordings, and on information and belief Sirius XM is not separately licensing

72715.1 6 Case 1:13-cv-01290-RJL Document 1 Filed 08/26/13 Page 7 of 17

the pre-1972 sound recordings from their owners, even though they are subject to common law copyright or equivalent protection under state law.

21. The CRB’s regulations provide that Sirius XM’s “Gross Revenues” – the revenue base on which Sirius XM’s royalty payments are calculated – include all revenue recognized by

Sirius XM from the operation of an SDARS, subject only to a limited number of exclusions.

None of the regulatory exclusions in effect during the relevant time period permitted Sirius XM to reduce its reported Gross Revenues by an amount purportedly attributable to its performances of pre-1972 sound recordings.

22. As relevant here, the CRB’s regulations permitted Sirius XM to exclude

“[r]evenues recognized by [Sirius XM] for the provision of,” among other things, “[c]hannels, programming, products and/or other services for which the performance of sound recordings and/or the making of Ephemeral Recordings is exempt from any license requirement or is separately licensed, including by a statutory license and, for the avoidance of doubt, webcasting, audio services bundled with television programming, interactive services, and transmissions to business establishments.” 37 C.F.R. § 382.11 (paragraph (3) definition of Gross Revenues). The reduction of Gross Revenues purportedly corresponding to Sirius XM’s performances of pre-

1972 sound recordings did not fall into this category.

23. On information and belief, during the relevant time period Sirius XM did not recognize any revenue for the provision of channels, programming, products and/or services featuring performances of pre-1972 sound recordings. Rather, Sirius XM simply estimated that a certain percentage of its sound recording performances were of pre-1972 sound recordings, and it reduced the Gross Revenues that it reported to SoundExchange by a corresponding percentage.

In its recent decision announcing royalty rates and terms for 2013 to 2017, the CRB stated that

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Sirius XM did not dispute it had reduced its reported Gross Revenues by between 10% and 15%

of its subscription revenue on the theory that it corresponded to performances of pre-1972 sound

recordings. Determination of Rates and Terms for Preexisting Subscription Services and

Satellite Digital Audio Radio Services (“2013-2017 CRB Decision”), 78 Fed. Reg. 23,054,

23,080 (Apr. 17, 2013).

24. In its decision announcing royalty rates and terms for 2013 to 2017, the CRB

confirmed that the regulations in effect between 2007 and 2012 did not permit Sirius XM to

exclude revenues purportedly attributable to performances of pre-1972 sound recordings. The

CRB acknowledged that “Sirius XM broadcasts pre-1972 recordings . . . and [between 2007 and

2012 has] . . . exclude[d] a portion of revenues from its Gross Revenues calculation for such

use.” 78 Fed. Reg. 23,054, 23,074. The CRB then continued unambiguously that “[t]he current

Gross Revenues definition does not expressly recognize such an exclusion, which is not

surprising given that there is no revenue recognition for the performance of pre-1972 works.” Id. at 23,073; see also id. at 23,080. In fact, Sirius XM does not separately recognize any revenues based on the specific types of music programming that Sirius XM plays or on the specific types of music programming to which any particular user listens – which Sirius XM does not even track. Because no revenue is separately recognized for the performances of pre-1972 sound recordings, it was unlawful under the unambiguous regulations for Sirius XM to exclude from its

Gross Revenues any portion of its domestic subscription revenue that it felt was somehow attributable to performances of pre-1972 sound recordings. The CRB added that “revenue exclusion is not the proper means for addressing pre-1972 recordings. . . . To be allowable, a deduction must be precise and the methodology transparent.” Id. at 23,073 (emphasis added).

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25. On information and belief, Sirius XM’s unauthorized reduction of its reported

Gross Revenues by amounts purportedly attributable to performances of pre-1972 sound

recordings led it to underpay SoundExchange by tens of millions of dollars.

2. Sirius XM Premier Package

26. Beginning at least as early as October 2008, Sirius XM began offering a premium

subscription option in addition to its basic package. First marketed to Sirius and XM subscribers as “Best of Sirius” and “Best of XM,” the premium packages are now marketed as Sirius XM

Premier.

27. Sirius XM Select is Sirius XM’s basic satellite radio package, and includes access to over 150 music and talk channels. Prior to a January 2012 price increase, Sirius XM Select was offered for $12.95 a month. That price was raised after January 2012 to $14.49 per month.

28. The Sirius XM Premier package includes all of the music and talk channels encompassed by the Sirius XM Select package. Over and above these channels, the Sirius XM

Premier package also includes a number of additional premium all-talk channels. Prior to the

January 2012 price increase, Sirius XM Premier was offered for $16.99 a month. That price was raised after January 2012 to $17.99 a month.

29. The extra channels included in Sirius XM Premier are not an add-on offered for a separate charge; rather, Sirius XM charges each subscriber a single undifferentiated amount –

$17.99 – for all of the channels included in the Sirius XM Premier package.

30. During the most recent CRB rate-setting proceeding, Sirius XM CFO David Frear testified that, when determining the Gross Revenues reported to SoundExchange as the basis for its royalty payment calculations, Sirius XM excluded $3.50 per month for every Sirius XM

Premier subscription. Thus, instead of including the full $17.99 per month for each Sirius XM

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Premier subscription, Sirius XM included in Gross Revenues only $14.49 per month for each

such subscription. Mr. Frear justified Sirius XM’s exclusion of the additional $3.50 increment

on the ground that the additional channels included in Sirius XM Premier “don’t have any . . .

channels involving sound recording performances.”

31. Sirius XM’s deduction of $3.50 per month for each Sirius XM Premier subscriber

directly contravened the CRB’s regulations regarding how Gross Revenues are to be calculated.

By regulation, Gross Revenues were to include “Subscription revenue recognized by [Sirius

XM] directly from residential U.S. Subscribers for [Sirius XM’s] SDARS.” 37 C.F.R. § 382.11

(definition of Gross Revenues paragraph (1)(i)). The regulations permit Sirius XM to exclude

“[r]evenues recognized by [Sirius XM] for the provision of . . . [c]hannels, programming, products and/or other services offered for a separate charge where such channels use only

incidental performances of sound recordings.” Id. at §382.11 (definition of Gross Revenues paragraph (3)(vi)).

32. Sirius XM’s exclusion of the price difference between Sirius XM Premier and

Sirius XM Select did not comport with the CRB’s regulations. The $3.50 difference between the revenue that Sirius XM receives each month from a Sirius XM Premier subscriber, on the one hand, and a Sirius XM Select subscriber, on the other, does not reflect any channel, programming, product, or service “offered for a separate charge.” 37 C.F.R. §382.11 (definition of Gross Revenues paragraph (3)(vi)(B)). It is merely the price difference between Sirius XM’s basic product and its more expansive product. Nor, on information and belief, does Sirius XM separately recognize revenues attributable to the price difference between Sirius XM Premier and

Sirius XM Select.

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33. As with Sirius XM’s pre-1972 Gross Revenues reduction, the CRB’s recent

decision setting royalty rates and terms confirmed that Sirius XM’s exclusion of Sirius XM

Premier incremental revenue is unauthorized. The statutory royalty rate was set based on the understanding that it would be applied to a royalty base consisting substantially of subscriber payments for mixed packages of music and non-music programming. The rate presumably would have been higher if Sirius XM was authorized to allocate its package revenues. Thus, in discussing when a revenue exclusion is appropriate for non-music packages, the CRB stressed that “the exclusion is available only to the extent that the channels, programming, products and/or other services are offered for a separate charge.” 2013-2017 CRB Decision, 78 Fed. Reg. at 23,072 n.45.

34. Sirius XM’s exclusion of $3.50 per month for each Sirius XM Premier subscriber since January 2012 (and its exclusion of $4.04 per month prior to January 2012) has resulted in an underpayment of millions of dollars to SoundExchange during the relevant time period.

3. New XM Products

35. Prior to the July 2008 merger between Sirius and XM, XM began offering two new products to its subscribers, Family Friendly and Mostly Music. Both of these packages continue to be offered by Sirius XM today and, as seen in Sirius XM’s advertising, both packages contain numerous channels dedicated solely to the broadcast of sound recordings.

36. The Family Friendly package offers listeners access to most of Sirius XM’s music and talk channels, excluding those with an adult theme. The Mostly Music package, as the name suggests, offers access to channels covering “commercial-free music from nearly every genre” in addition to a number of talk channels.

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37. As with its other offerings that combine music and talk channels, Sirius XM does not separately recognize the revenue derived from music and non-music channels contained in the Family Friendly and Mostly Music packages.

38. Sirius XM excluded from Gross Revenues the revenue recognized from subscription packages, including its Family Friendly and Mostly Music packages, even though these packages contain channels that broadcast recordings covered by the statutory license and do not fall into any of the exclusions identified in the CRB regulations. Sirius XM’s unauthorized exclusion of this revenue from Gross Revenues resulted in an underpayment of approximately one million dollars or more to SoundExchange during the relevant time period.

C. Sirius XM’s Non-Payment of Late Fees

39. In the federal regulations promulgated as part of the 2007-2012 CRB Decision, the Copyright Royalty Judges provided that “a licensee shall pay a late fee of 1.5% per month, or the highest lawful rate, whichever is lower, for any payment and/or statement of account received by [SoundExchange] after the due date. Late fees shall accrue from the due date until payment and statement of account are received by [SoundExchange].” 37 C.F.R. § 382.13(d); see also 74 Fed. Reg. 40614, 40616; See 37 C.F.R. § 380.4(e); id. at § 383.4(a); id. at § 384.4(e).

40. For at least the years ending December 31, 2007, 2008, and 2009, Sirius XM and its predecessor entities repeatedly failed to make timely royalty payments and submit timely statements of account to SoundExchange. These untimely submissions were made not only for

Sirius XM’s satellite radio service, but also for Sirius XM’s webcasting service and other platforms. See 37 C.F.R. § 380.4(e); id. at § 383.4(a); id. at § 384.4(e).

41. When those payments were finally made, Sirius XM failed to include the additional late fee payments due to SoundExchange under the regulations. That failure extended

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to all of Sirius XM’s platforms. SoundExchange is thus owed millions of dollars in late payments from the period 2007 to 2009.

COUNT ONE

(Violation of 37 C.F.R § 382.13(a) and 17 U.S.C. § 114(f)(1)(B) – Underpayment Based on Reduction of Revenue Purportedly Corresponding to Use of Pre-1972 Sound Recordings)

42. SoundExchange incorporates by reference paragraphs 1 to 41 as if fully set forth herein.

43. The Copyright Act provides a statutory license for the digital performance rights in sound recordings and the making of ephemeral reproductions to facilitate the licensee’s performance of those recordings. 17 U.S.C. §§ 112, 114. Because Sirius XM has chosen to rely on that statutory license, it must make royalty payments to SoundExchange at the rates set by the

CRB. 37 C.F.R. § 382.13(a); see also 17 U.S.C. § 114(f)(1)(B).

44. Sirius XM’s payments to SoundExchange are calculated as a percentage of Sirius

XM’s Gross Revenues, a term defined in 37 C.F.R. § 382.11.

45. From at least January 1, 2007 until December 31, 2012, Sirius XM reduced its reported Gross Revenues by an amount that it deemed attributable to performances of pre-1972 sound recordings. The CRB’s regulations did not permit this reduction.

46. This unauthorized reduction in reported Gross Revenues reduced the amounts that

Sirius XM paid to SoundExchange under the terms of the federal statutory license. The unauthorized reduction in reported Gross Revenues, and consequent underpayment, contravened the requirement in the relevant regulations that a “Licensee shall make the royalty payments due under” the regulations to SoundExchange, 37 C.F.R. § 382.13(a), and the Copyright Act’s statement that the CRB-determined rates are “binding on . . . entities performing sound recordings” during the period when the rates are in effect. 17 U.S.C. § 114(f)(1)(B).

72715.1 13 Case 1:13-cv-01290-RJL Document 1 Filed 08/26/13 Page 14 of 17

47. Sirius XM’s improper actions have deprived SoundExchange of millions of

dollars of royalties to which SoundExchange was entitled under the CRB’s regulations.

COUNT TWO

(Violation of 34 C.F.R § 382.13(a) and 17 U.S.C. § 114(f)(1)(B) – Underpayment Based on Partial Exclusion of Revenue From Sirius XM Premier Subscriptions)

48. Plaintiff incorporates by reference paragraphs 1 to 47 as if set forth herein.

49. The Copyright Act provides a statutory license for the digital performance rights

in sound recordings and the making of ephemeral reproductions to facilitate the licensee’s

performance of those recordings. 17 U.S.C. §§ 112, 114. Because Sirius XM has chosen to rely

on that statutory license, it must make royalty payments to SoundExchange at the rates set by the

CRB. 37 C.F.R. § 382.13(a); see also 17 U.S.C. § 114(f)(1)(B).

50. Sirius XM’s payments to SoundExchange are calculated as a percentage of Sirius

XM’s Gross Revenues, a term defined in 37 C.F.R. § 382.11.

51. Starting from at least October 2008, Sirius XM excluded from its reported Gross

Revenues an amount corresponding to the incremental revenue that it received as a result of

subscribers electing its Sirius XM Premier package rather than its standard package. That

exclusion was not authorized by the CRB’s regulations.

52. This unauthorized exclusion reduced the amounts that Sirius XM paid to

SoundExchange. The unauthorized exclusion, and consequent underpayment, contravened the

requirement in the relevant regulations that a “Licensee shall make the royalty payments due

under” the regulations to SoundExchange, 37 C.F.R. § 382.13(a), and the Copyright Act’s statement that the CRB-determined rates are “binding on . . . entities performing sound recordings” during the period when the rates are in effect. 17 U.S.C. § 114(f)(1)(B).

72715.1 14 Case 1:13-cv-01290-RJL Document 1 Filed 08/26/13 Page 15 of 17

53. Sirius XM’s improper actions have deprived SoundExchange of millions of

dollars of royalties to which SoundExchange was entitled under the CRB’s regulations.

COUNT THREE

(Violation of 34 C.F.R § 382.13(a) and 17 U.S.C. § 114(f)(1)(B) – Underpayment Based on Exclusion of Revenue From Family Friendly and Mostly Music Subscriptions)

54. Plaintiff incorporates by reference paragraphs 1 to 53 as if set forth herein.

55. The Copyright Act provides a statutory license for the digital performance rights

in sound recordings and the making of ephemeral reproductions to facilitate the licensee’s

performance of those recordings. 17 U.S.C. §§ 112, 114. Because Sirius XM has chosen to rely

on that statutory license, it must make royalty payments to SoundExchange at rates set by the

CRB. 17 U.S.C. § 114(f)(1)(B).

56. Sirius XM’s payments to SoundExchange are calculated as a percentage of Sirius

XM’s Gross Revenues, a term defined in 37 C.F.R. § 382.11.

57. From at least January 1, 2008 until December 31, 2009, Sirius XM excluded from

its Gross Revenues the revenues it received from subscriptions to Family Friendly and Mostly

Music. That exclusion was not permitted by the CRB regulations.

58. This unauthorized exclusion reduced the amounts that Sirius XM paid to

SoundExchange. The unauthorized exclusion, and consequent underpayment, contravened the

requirement in the relevant regulations that a “Licensee shall make the royalty payments due

59. Sirius XM’s improper actions have deprived SoundExchange of approximately one million dollars or more to which SoundExchange was entitled under the CRB’s regulations.

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COUNT FOUR

(Violation of 37 C.F.R. § 382.13(d), 74 Fed. Reg. 40614, 40616, 37 C.F.R. § 383.4(a), and 37 C.F.R. § 384.4(e) – Failure To Make Late Fee Payments)

60. Plaintiff incorporates paragraphs 1 to 59 as if set forth herein.

61. 37 C.F.R. § 382.13(d) and related regulations provide that Sirius XM shall pay a late fee of 1.5% per month for any SDARS payment or statement of account that is received by

SoundExchange after the due date. Other regulations set for late fees applicable to Sirius XM’s other platforms. See 37 C.F.R. § 380.4(e); id. at § 383.4(a); id. at § 384.4(e).

62. For at least the years ending on December 31, 2007, 2008, and 2009, Sirius XM repeatedly failed to make timely royalty payments or submit timely statements of account to

SoundExchange, yet when those payments were finally made it failed to pay the applicable late fees.

63. Sirius XM’s improper failure to pay SoundExchange statutorily mandated late fees have denied SoundExchange millions of dollars to which it is entitled under the CRB’s regulations.

DEMAND FOR JURY TRIAL

Plaintiff hereby demands a jury trial on all issues so triable.

PRAYER FOR RELIEF

WHEREFORE, SoundExchange respectfully prays for judgment against Sirius XM as follows:

a. For compensatory damages not less than $50 million and up to $100 million or more in such amounts to be determined at trial arising from Sirius XM’s underpayment of royalties as required by the statutory license;

b. For appropriate late fees and interest;

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c. For SoundExchange’s costs, including reasonable attorney fees and costs and pursuant to

17 U.S.C. § 505; and

d. For any other relief the Court deems just and proper.

Dated: August 26, 2013 Respectfully submitted,

/s/ Michael B. DeSanctis

Michael B. DeSanctis (D.C. Bar #: 460961) Joshua M. Segal (D.C. Bar #: 975949) Ishan K. Bhabha (D.C. Bar #: 1015673) JENNER & BLOCK LLP 1099 New York Avenue NW Suite 900 Washington, DC 20001 (202) 639-6000 Counsel for Plaintiff SoundExchange, Inc.

72715.1 17 Case 1:13-cv-01290-RJL Document 5 Filed 08/27/13 Page 1 of 17

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

SOUNDEXCHANGE, INC. 733 10th Street, N.W., 10th Floor, Washington, DC 20001 Civil Action No. ___ Plaintiff,

v. COMPLAINT SIRIUS XM RADIO INC. 1221 Avenue of the Americas, 36th Floor, New York, NY 10020

Defendant. JURY TRIAL DEMANDED

PRELIMINARY STATEMENT

1. Under the Copyright Act, entities such as Defendant Sirius XM Radio Inc.

2. Sirius XM is the country’s only satellite digital audio radio service (“SDARS”).

The royalties that Sirius XM must pay under the statutory license are set periodically in

72715.1 1 Case 1:13-cv-01290-RJL Document 5 Filed 08/27/13 Page 2 of 17

regulations prescribed by the federal Copyright Royalty Board (“CRB”). For the time period

2007-2012, the amount that Sirius XM was required to pay was the product of two numbers: (1)

a percentage set by the CRB (the “royalty rate”); and (2) Sirius XM’s “Gross Revenues” as

defined by the CRB. Thus, Sirius XM’s Gross Revenues were the royalty base against which its royalty obligations were to be calculated.

3. The CRB’s regulations define Gross Revenues broadly. They also set forth exactly what Sirius XM may exclude from Gross Revenues for the purpose of calculating its royalty obligation.

4. Starting from at least January 1, 2007, and until December 31, 2012 (the “relevant time period”), Sirius XM systematically underpaid SoundExchange for the statutory license.

December 31, 2012, Sirius XM improperly reduced its Gross Revenues by an amount purportedly attributable to performances of sound recordings fixed prior to February 15, 1972

Premier” package (which includes all the content in the standard package as well as certain additional all-talk channels).1 Third, Sirius XM and its legal predecessor excluded all revenue

72715.1 2 Case 1:13-cv-01290-RJL Document 5 Filed 08/27/13 Page 3 of 17

derived from its Family Friendly and Mostly Music packages even though those packages contained many channels broadcasting recordings covered by the statutory license.

5. None of Sirius XM’s unilateral amendments to the exclusions and deductions to

the definition of Gross Revenues was permitted under federal law. SoundExchange now brings

this action to recover the royalty amounts Sirius XM has underpaid as a result.

JURISDICTION AND VENUE

6. This is a civil action seeking damages under the Copyright Act, 17 U.S.C. § 101,

et seq.

7. This Court has original subject matter jurisdiction over Copyright Act claims

pursuant to 28 U.S.C. §§ 1331 and 1338(a).

8. Venue is proper in this district pursuant to 28 U.S.C. § 1391(b)(1) and (b)(2).

Defendant Sirius XM resides in this District, and a substantial part of the events giving rise to

this suit have occurred in this District.

9. This Court has personal jurisdiction over Sirius XM because Sirius XM (i) resides

in this District; (ii) has substantial contacts within the United States, including in this District; and (iii) has transacted business throughout the United States, including in this District.

PARTIES

10. Plaintiff SoundExchange, Inc. is an independent nonprofit organization organized and existing under the law of the State of Delaware, with its headquarters at 733 10th Street,

erroneously excluding incremental subscription revenue from all three packages in the same manner. For simplicity, this Complaint uses “Sirius XM Premier” to refer to all three packages.

72715.1 3 Case 1:13-cv-01290-RJL Document 5 Filed 08/27/13 Page 4 of 17

SoundExchange is charged by regulation with administering the statutory license, see, e.g., 17

U.S.C. § 114(e)(1); 37 C.F.R. § 380.4; id. at § 370.3, collecting and distributing statutory royalties, 17 U.S.C. § 114(e)(1); id., and enforcing the terms of the statutory license, see 17

U.S.C. § 114(g)(3). Pursuant to this authority, SoundExchange collects statutory royalties from

satellite radio, Internet radio, cable TV music channels, and other types of services for

transmission of sound recordings, and distributes those royalties to artists and record companies.

11. Defendant Sirius XM Radio Inc. is a corporation organized and existing under the

law of the State of Delaware, with its principal place of business located at 1221 Avenue of the

Americas, 36th Floor, New York, NY 10020. Sirius XM also has offices in Washington, D.C.,

and studio facilities throughout the country. Sirius XM is the only operator of an SDARS.

FACTUAL ALLEGATIONS

A. The Statutory Framework for the Licensing of Digital Performance Rights

12. Section 106 of the Copyright Act grants the owner of a copyright in a sound

recording the exclusive right to perform and reproduce “the copyrighted work publicly by means

of a digital audio transmission.” 17 U.S.C. § 106(6).

13. In turn, Congress granted various entities, including SDARS, a “statutory

license,” 17 U.S.C. §§ 112; 114(d)(2), to render these digital public performances of copyrighted

sound recordings. Copyright owners are unable to withhold this license, which allows Sirius XM

to publicly perform all covered recordings (by transmitting them to its millions of paying

subscribers) without fear of copyright infringement.

14. The federal statutory license, however, is not free. Rather, in the event that

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for the statutory license. 17 U.S.C. § 114(f)(1)(A). The Copyright Act provides that the CRB-

set rates “shall . . . be binding on all copyright owners of sound recordings and entities

performing sound recordings,” including Sirius XM. Id. § 114(f)(1)(B).