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

• Decision Date: 26 October 2017
• Docket Number: No. SC16–1161,SC16–1161
• Citation: 229 So.3d 305
• Parties: FLO & EDDIE, INC., etc., Appellant, v. SIRIUS XM RADIO, INC., etc., Appellee.
• Court: Florida Supreme Court

229 So.3d 305

FLO & EDDIE, INC., etc., Appellant,

v.SIRIUS XM RADIO, INC., etc., Appellee.

No. SC16–1161

Supreme Court of Florida.

October 26, 2017

Angel A. Cortinas and Jonathan H. Kaskel of Gunster, Miami, Florida; Henry D. Gradstein and Maryann R. Marzano of Gradstein & Marzano, P.C., Los Angeles, California; and Glen H. Waldman, Eleanor T. Barnett, and Jason Gordon of Waldman Barnett, P.L., Coconut Grove, Florida, for Appellant

David M. Gersten of Gordon & Rees Scully Mansukhani, Miami, Florida; and Daniel M. Petrocelli and Cassandra L. Seto of O'Melveny & Myers, LLP, Los Angeles, California, Anton Metlitsky of O'Melveny & Myers, LLP, New York,

New York, and Jonathan D. Hacker of O'Melveny & Myers, LLP, Chevy Chase, Maryland, for Appellee

Julee L. Milham, St. Pete Beach, Florida, Charlotte C. Towne, Dani Beach, Florida, Stephen M. Carlisle, Fort Lauderdale, Florida, and Robert A. McNeeley, Tallahassee, Florida, Amicus Curiae Entertainment, Arts, and Sports Law Section of the Florida Bar

Lisa K. Rushton and Stephen B. Kinnaird of Paul Hastings, LLP, Washington, District of Columbia, Richard Adam Kaplan of National Association of Broadcasters, Washington, District of Columbia, Amicus Curiae National Association of Broadcasters

Dineen Pashoukos Wasylik of DPW Legal, Tampa, Florida, Amicus Curiae Electronic Frontier Foundation

Danielle M. D'Oyley and Jonathan Y. Ellis of Lathan & Watkins, Washington, District of Columbia, Andrew M. Gass and James K. Lynch of Latham & Watkins, San Francisco, California, Amici Curiae iHeartMedia, Inc. and Pandora Media, Inc.

Daniel A. Bushell of Bushell Law, P.A., Fort Lauderdale, Florida, Amicus Curiae Copyright and Intellectual Property Law Professors

CANADY, J.

This Court has for review four questions of Florida law certified by the United States Court of Appeals for the Eleventh Circuit in a copyright dispute involving the satellite-radio broadcasting of certain "pre–1972" sound recordings.¹ This Court has jurisdiction. See art. V, § 3(b)(6), Fla. Const. The dispute in this case concerns rights in sound recordings of performances of musical works as distinct from rights in the composition of such works. The crucial question presented is whether Florida common law recognizes an exclusive right of public performance in pre–1972 sound recordings. We conclude that Florida law does not recognize any such right and that Flo & Eddie's various state law claims fail.

I. BACKGROUND AND CERTIFIED QUESTIONS

Appellant/plaintiff, Flo & Eddie, Inc. ("Flo & Eddie"), is a California corporation that owns the master sound recordings of certain pre–1972 musical performances by The Turtles. Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 827 F.3d 1016, 1018 (11th Cir. 2016).² Appellee/defendant, Sirius XM Radio, Inc. ("Sirius"), is a satellite and internet radio provider that operates a nationwide broadcast service. Id. Flo & Eddie has never licensed Sirius to play Turtles recordings, and Sirius broadcasts Turtles songs to Sirius's subscribers in Florida without paying any royalties to Flo & Eddie. Id. As part of its digital music broadcast service, Sirius creates certain "back-up" and "buffer" copies of recordings on its servers and satellites. Id. A description of those copies is set forth in the district court's opinion. See Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. 13-23182-CIV, 2015 WL 3852692, at *1 (S.D. Fla. June 22, 2015).

Flo & Eddie brought suit against Sirius in federal district court in Florida on September 3, 2013, claiming that Sirius's broadcasting of Turtles songs constitutes unauthorized public performances of the recordings and that Sirius's back-up and buffer copies constitute unauthorized reproductions of the recordings.³ Flo & Eddie, 827 F.3d at 1018. Flo and Eddie alleged the following four causes of action under Florida law: (1) common law copyright infringement; (2) common law misappropriation and unfair competition; (3) common law conversion; and (4) civil theft under section 772.11, Florida Statutes, for violations of section 812.014(1), Florida Statutes. Id. at 1018–19. On July 15, 2014, Sirius moved for summary judgment on liability. Id. at 1019. After a hearing, the district court granted Sirius's motion for summary judgment on all claims. Id.

A. The District Court

After noting that States are free to regulate pre–1972 sound recordings and that the Florida Statutes do not directly address these issues, the district court looked to Florida's common law and separately analyzed the copyright issues of public performance and reproduction. Flo & Eddie, 2015 WL 3852692, at *3–6.

As to the exclusive right of public performance, the district court concluded that no such right exists under Florida common law. Id. at *5. The district court noted that there was no Florida case law directly on point and that there was very little Florida case law interpreting common law copyright related to the arts in general.⁴ Id. at *4. The district court thus determined that it was being asked to "creat[e] a new property right in Florida" and declined to do so, concluding that such a task was a legislative one. Id. at *5. The district court also noted that many unanswered questions would result from the recognition of such a new right—issues such as ownership, royalty administration, exceptions, and other stakeholders. Id.

As to the right of reproduction, the district court implicitly assumed that Florida common law recognizes a pre- and post-sale right of reproduction for pre–1972 sound recordings and then concluded that Sirius's back-up and buffer copies "do not constitute an improper reproduction." Id. at *6. The district court found that "none of the buffer or back-up copies are maintained by Sirius or accessible to the public. They are discarded immediately after use. In addition, the buffer copies are not full length copies of the recording." Id. In concluding that Sirius did not unlawfully reproduce the sound recordings, the district court cited two decisions from the Second Circuit for the proposition that buffer copies do not constitute copyright infringement. Id. (citing Cartoon Network, LP v. CSC Holdings, Inc., 536 F.3d 121, 127–30 (2d Cir. 2008), and Authors Guild v. HathiTrust, 755 F.3d 87, 97–99 (2d Cir. 2014) ).

After determining that Flo & Eddie's common law copyright claims failed, the district court then summarily dismissed Flo & Eddie's remaining non-copyright claims—for common law misappropriation and unfair competition, common law conversion, and civil theft—on the basis that they were all dependent on the copyright claim. Id. ⁵

B. The Eleventh Circuit

On appeal, the Eleventh Circuit found the existence of "significant doubt" regarding answers to the material questions of Florida law upon which the case turns. Flo & Eddie, 827 F.3d at 1025. As to the exclusive right of public performance, the Eleventh Circuit examined this Court's decision in Glazer v. Hoffman, 153 Fla. 809, 16 So.2d 53 (1943), and ultimately expressed uncertainty regarding the potential application of Glazer to the instant case. Flo & Eddie, 827 F.3d at 1020–22.

In Glazer, Charles Hoffman, a magician/entertainer, sought a permanent injunction against Maurice Glazer, another magician/entertainer, alleging infringement of common law copyright, among other things. Glazer, 16 So.2d at 53–55. In the complaint it was alleged that, among other things, Glazer imitated several acts and performances that were the "result of great labor, time and efforts." Id. at 53–54. The acts and performances generally involved using certain mechanical equipment to produce various types of drinks for the audience members through "sleight of hand performance." Id. at 54. Glazer argued that he did not attempt to deceive the public into thinking his performance was like Hoffman's, and that the drink performance was the common property of all magicians because it was merely an old sleight of hand trick. Id. This Court concluded that the performance was "not such a dramatic composition as to bring it within the meaning of the" federal copyright statutes. Id. at 55. This Court then addressed the "asserted common law property right" in and to the performance, concluding that Hoffman's performing of the tricks in front of many audiences over the years constituted a publication and a dedication to the public such that the tricks "became the property of the general public, and [Glazer] had a lawful right to use the same." Id.

Here, the Eleventh Circuit noted that Glazer could be read to mean that Florida may recognize a common law copyright in sound recordings, which, "no less than magic tricks, are ‘intellectual productions,’ " Flo & Eddie, 827 F.3d at 1021 (quoting Glazer, 16 So.2d at 55 ), while noting that Glazer could also be read to mean that any such common law copyright is extinguished at the moment of "publication" or dedication to the public, which could include the public distribution and sale of phonorecords under the facts of this case, id. at 1021–22.⁶

After concluding that Florida law was unclear regarding the existence of an exclusive public performance right, the Eleventh Circuit then analyzed whether Florida law recognizes an exclusive right of reproduction. Id. at 1023–24. The Eleventh Circuit noted that CBS, Inc. v. Garrod, 622 F.Supp. 532 (M.D. Fla. 1985), provided some support for the conclusion that Florida common law recognizes such a right.⁷ Flo & Eddie, 827 F.3d at 1023–24 ; see also id. at 1023 n.5. The Eleventh Circuit also noted as potentially relevant the fact that Florida has a criminal record piracy statute and that the statute contains an exception for radio broadcasters. Id. at 1024 (citing § 540.11, Fla. Stat.). Finally, in reviewing the district court's conclusion that Sirius's buffer and back-up copies were non-infringing, the Eleventh Circuit observed that the two Second Circuit decisions relied on by the district court— Cartoon Network and Authors Guild—relied extensively on analyses of the...