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

• Decision Date: 16 February 2017
• Docket Number: August Term, 2015,Docket No. 15–1164–cv
• Court: U.S. Court of Appeals — Second Circuit
• Parties: FLO & EDDIE, INC., a California Corporation, individually and on behalf of all others similarly situated, Plaintiff–Appellee, v. SIRIUS XM RADIO, INC., a Delaware Corporation, Defendant–Appellant, Does, 1 through 10, Defendants.

849 F.3d 14

FLO & EDDIE, INC., a California Corporation, individually and on behalf of all others similarly situated, Plaintiff–Appellee,

v.SIRIUS XM RADIO, INC., a Delaware Corporation, Defendant–Appellant,Does, 1 through 10, Defendants.

Docket No. 15–1164–cv

August Term, 2015

United States Court of Appeals, Second Circuit.

Argued: February 2, 2016

Question Certified: April 13, 2016

Certified Question Answered: December 20, 2016

Decided: February 16, 2017

HARVEY GELLER (Henry Gradstein, Maryann R. Marzano, on the brief), Gradstein & Marzano , P.C., Los Angeles, CA; (Evan S. Cohen, on the brief), Los Angeles, CA; Michael Gervais, Arun S. Subramanian, Susman Godfrey LLP, New York, NY; Robert Rimberg, Goldberg Rimberg & Weg PLLC, for Plaintiff–Appellee

DANIEL M. PETROCELLI (Cassandra L. Seto, on the brief), O'Melveny & Myers LLP, Los Angeles, CA; (Johnathan D. Hacker, on the brief), O'Melveny & Myers LLP, Washington, DC; for Defendant–Appellant

BRANDON BUTLER, American University Washington College of Law , Washington, DC, for Amici Curiae Law Professors Gary Pulsinelli, Julie Ross, and Peter Jaszi, in support of Defendant–Appellant

EUGENE VOLOKH, UCLA School of Law , Los Angeles, CA, for Amici Curiae Howard Abrams, Brandon Butler, Michael Carrier, Michael Carroll, Ralph Clifford, Brian Frye, William Gallagher, Eric Goldman, James Grimmelmann, Yvette Liebesman, Brian Love, Tyler Ochoa, David Olson, David Post, Michael Risch, Matthew Sag, Rebecca Tushnet, and David Welkowitz, in support of Defendant–Appellant

MITCHELL STOLTZ, VERA RANIERI, Electronic Frontier Foundation, San Francisco, CA, for Amicus Curiae Electronic Frontier Foundation, in support of Defendant–Appellant

R. BRUCE RICH, BENJAMIN E. MARKS, GREGORY SILBERT, TODD LARSON, KAMI LIZARRAGA, Weil, Gotshal & Manges LLP, New York, NY, for Amicus Curiae Pandora Media, Inc., in support of Defendant–Appellant

SHERWIN SIY, JOHN BERGMAYER, RAZA PANJWANI, Public Knowledge, Washington, DC, for Amicus Curiae Public Knowledge, in support of Defendant–Appellant

STEPHEN B. KINNAIRD, Paul Hastings LLP, Washington, DC; RICK KAPLAN, National Association of Broadcasters, Washington, DC; for Amicus Curiae National Association of Broadcasters, in support of Defendant–Appellant

ADAM R. BIALEK, STEPHEN J. BARRETT, Wilson Elser Moskowitz Edelman & Dicker LLP, New York, NY; DAVID L. DONOVAN, New York State Broadcasters Association, Inc., Albany, NY; for Amicus Curiae New York State Broadcasters Association, Inc., in support of Defendant–Appellant

Before: Calabresi, Chin, and Carney, Circuit Judges.

PER CURIAM:

On September 3, 2013, Flo & Eddie, Inc. ("Appellee"), a California corporation that asserts it owns the recordings of "The Turtles," a well-known rock band with a string of hits in the 1960s, sued Sirius XM Radio, Inc. ("Appellant"), a Delaware corporation that is the largest radio and internet-radio broadcaster in the United States. The suit was brought on behalf of itself and a class of owners of pre–1972 recordings; it asserted claims for common-law copyright infringement and unfair competition under New York law. In particular, Appellee alleged that Appellant infringed Appellee's copyright in The Turtles' recordings by broadcasting and making internal reproductions of the recordings (e.g. , library, buffer and cache copies) to facilitate its broadcasts.

In due course, Appellant moved for summary judgment on two grounds. Appellant contended first that there is no public-performance right in pre–1972 recordings under New York copyright law, and hence that its internal reproductions of these recordings were permissible fair use. Second, Appellant argued that a state law public performance right, if recognized, would be barred by the Dormant Commerce Clause. On November 14, 2014, the District Court (McMahon, J. ) denied this motion. Flo & Eddie, Inc. v. Sirius XM Radio, Inc. , 62 F.Supp.3d 325, 330 (S.D.N.Y. 2014).

On the first issue, the court concluded that New York does afford a common-law right of public performance to copyright holders, and that Appellant's internal reproductions were correspondingly not fair use. Id . at 344–46. On the second issue, the court found that the recognition of a performance right did not implicate the Dormant Commerce Clause. It noted that, pursuant to Sherlock v. Alling , 93 U.S. 99, 23 L.Ed. 819 (1876), such a right did not constitute a "regulation" of commerce. Flo & Eddie, Inc. , 62 F.Supp.3d at 351–53.

Soon after, Appellant, with new counsel, filed a motion for reconsideration of the November 14, 2014 order. In the alternative, it asked the District Court to certify its summary judgment order for interlocutory appeal. The District Court denied Appellant's motion for reconsideration, Flo & Eddie, Inc. v. Sirius XM Radio, Inc. , No. 13–cv–5784, 2014 WL 7178134 (S.D.N.Y. Dec. 12, 2014), but did certify both the summary judgment and reconsideration orders for interlocutory appeal, Flo & Eddie, Inc. v. Sirius XM Radio, Inc. , No. 13–cv–5784, 2015 WL 585641 (S.D.N.Y. Feb. 10, 2015).

Appellant then petitioned us to permit the interlocutory appeal, which we did. Flo & Eddie, Inc. v. Sirius XM Radio, Inc. , No. 15–cv–497, 2015 WL 3478159 (2d Cir. May 27, 2015). After extensive briefing and oral argument, we concluded...