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ROYALTY ROUNDUP Loan-Out Companies; Limitations Defense

By Stan Soocher

The 2010 ruling by the U.S. Court of Appeals for the Ninth Circuit that artists can be entitled, under their pre-existing recording agreements, to half of record-label income from digital sales has triggered claims involving thousands of artists. F.B.T. Productions LLC v. Aftermath Records, 621 F.3d 958 (9th Cir. 2010). Following are three recent developments in this litigation area.

First, the U.S. District Court for the Northern District of California dismissed a suit by Mexican artist Graciela Beltran seeking 50% of record label income from the sale of sound-recording downloads. Beltran v. Capitol Records LLC, 12-cv-1002. Beltran claimed in her class action case that online sales of her recordings should be deemed third-party licenses made by Capitol and EMI to such digital services as iTunes, rather than calculated at lower-royalty-paying physical product sales. Beltran's complaint sought a declaratory judgment and alleged an open book account, breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of California Business & Professions Code '17200 for unfair competition.

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