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Hey DOJ – see you in court!

Songwriters and composers have been relegated to the sidelines for way too long on an issue that directly affects their livelihoods.  So today, songwriter advocacy group Songwriters of North America (SONA) and a few individual songwriters and composers took matters into their own hands and filed a lawsuit against the Department of Justice.

On Aug. 4, 2016, the DOJ announced a new rule following a two-year review of the 75-year-old consent decrees that govern the two largest U.S. performing rights organizations (“PROs”), ASCAP and BMI, requiring that these organizations must now license 100% of songs of which they only control a fractional portion.  Huh?

{mosads}This is a massive and detrimental shift in decades of industry practice that will only further harm songwriters.  Songwriters are sick and tired of having no control over their own property, and they’re even more sick and tired of all the government regulation—especially by the DOJ.  

The DOJ claims it was only “confirming” existing practices under the consent decrees, but they have no idea what they are talking about.  Instead, the 100% licensing mandate will significantly alter the licensing landscape because any songs that are ineligible for licensing on a 100% basis by ASCAP or BMI (due to contractual or other reasons) will no longer be included in those blanket licenses.  As such, the new 100% rule will effectively regulate the copyright interests and contractual choices of every songwriter and composer in the United States even though individual songwriters and composers are not even parties to those decrees.

Acting without statutory or other legal authority, the DOJ engaged in extraordinary and unprecedented regulation of the copyrights.  Further, the DOJ cast aside the strenuous objections of songwriters, composers and others of the massive disruption and harm such new rule would entail, as well as the carefully articulated views of the U.S. Copyright Office in response to an inquiry by Congress that explained why such a mandate would undermine creators’ rights under the Copyright Act. 

75% percent of songwriters’ income in America is already regulated by the U.S. government, and this new “interpretation” takes that unwarranted government regulation even farther.  The PROs do not currently license full songs that they do not 100% represent, nor have they ever.  Licensees are well aware of this practice and know not to exploit a work without obtaining permission from each individual rightsholder.  This is how the industry has operated for 100 years. 

It is common for a song to be co-written by several songwriters who are each affiliated with a different PRO.  In fact, the vast majority of hit songs are written by multiple songwriters who are not affiliated with the same PRO—per one publishing executive cited in Billboard, 93 of the top 100 songs of 2014 were co-writes, with 68 registered to more than one PRO. Industry practice dictates that a licensee will obtain a license from each writer’s PRO. 

Full-work licensing is unfeasible for several reasons.  First, the PROs may receive different rates due to inconsistent rate court decisions (another by-product of the consent decrees) or under negotiated agreements.  Logically, this would quickly lead to a “race to the bottom” where licensees seek the lowest rate and license as many works as possible from the PRO with the lower rate.  For example, the rate courts recently ruled that BMI should receive 2.5% of Pandora Internet Radio’s revenues while ASCAP receives only 1.85%.  In this scenario, Pandora might choose to license everything it could from ASCAP.

Second, full-work licensing would create an accounting nightmare.  The licensing PRO would be forced to account to songwriters and composers with whom they have no pre-existing relationship or payment information.  Or worse, the songwriter affiliated with the licensing PRO will be responsible for distributing royalties to co-writers!

Last but certainly not least, songwriters will be strongly incentivized to only co-write with other songwriters whose works are administered by the same PRO.  How is this good for the flourishing of creativity?  

Songwriters generally love ASCAP and BMI, who are both already fighting hard to reverse this new development, but there is only so much the PROs can do.  ASCAP is working towards a legislative fix to this issue, but legislation is not a sure thing and moves at a snail’s pace regardless.  BMI is bringing their own action to sue the DOJ, but there’s a catch…first they need permission from their rate court to proceed with their motion and it is already facing steep resistance from the DOJ as it goes down this road. 

Thus, songwriters are left with really no alternative but to take matters into their own hands.   Songwriters are frankly fed up with the way they’re being treated—by the DOJ, by digital service providers, by outdated copyright laws—and they’re not going to take this any longer.

So to the DOJ—we’ll see you in court.

Dina LaPolt, Esq. and John Meller practice law at LaPolt Law, P.C., a boutique transactional entertainment law firm in West Hollywood, California that specializes in representing music creators. In addition to practicing law, Ms. LaPolt serves the attorney advisor to the GRAMMY Creators Alliance and Songwriters of North America (SONA).   She was named to both the Hollywood Reporter’s Power Lawyers 2015 and 2016 Top Music Business Attorneys and Billboard’s Music’s Most Powerful Attorneys.  Mr. Meller serves on the Los Angeles Chapter of the Grammys Advocacy Committee. 

The views expressed by authors are their own and not the views of The Hill.


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