Sony Music Settles Class Action Lawsuit Filed By Recording Artists Over Termination Rights

Sony Music has reached a settlement to resolve a lawsuit filed by New York Dolls singer David Johansen and other artists in an effort to regain control of their masters, finally ending years of closely-watched class-action litigation against major record labels over copyright law’s termination right.

The tentative agreement, announced in court papers last week, will resolve a case in which artists claimed Sony had unfairly rejected their efforts to invoke termination – a federal law that’s supposed to let authors take back control of their works decades after they sold them away.

The exact terms of the settlement, which attorneys for Sony called “an agreement in principle to settle all claims in this case,” were not disclosed. Neither side immediately returned request for comment on the agreement.

Johansen, along with fellow artists John Lyon and Paul Collins, filed the case against Sony in 2019, claiming the company had essentially refused to approve any termination requests from its recording artists. The case, filed as a proposed class action that aimed to represent hundreds of others in a similar situation, was lodged the same day as a closely-related case against Universal Music Group.

Taken together, the two lawsuits represented a sweeping critique of how the two music giants were allegedly approaching termination rights, which were created in the 1970s as a means of helping correct the imbalance of power between large entertainment companies and individual creators. In the case of the music business, if a musician sold away the rights to a song that later became a smash hit, termination theoretically allows them to get those lucrative copyrights back decades later — between 35 and 56 years later, depending on when the song was sold.

According to the lawsuits against Sony and UMG, the music companies had imposed an across-the-board rule that sound recordings (separate from the underlying musical compositions) were effectively never subject to the termination. The labels allegedly argued that most recordings were “works for hire,” in which the company simply hires artists to contribute to them; if true, that would mean the label was the legal author, and performers had no rights to win back in the first place.

But the lawsuits were dealt a serious blow last year, when a federal judge ruled that the UMG case could not proceed as a class action. Though he noted that the artists “raise issues of fairness in copyright law that undoubtedly extended beyond their own grievances,” the judge said that each of the individual musician’s circumstances were different, meaning each would need to file their own case against UMG.

That ruling did not decide the merits of the case, but it presented a severe logistical hurdle. Such lawsuits are extremely expensive, and artists typically lack the same kind of legal resources as the major labels who have allegedly denied their termination requests. A class action would have allowed the artists to pool their resources and secure a sweeping decision with only a single set of legal costs.

Following that ruling – and the judge’s subsequent rejection of the artists efforts to quickly appeal it – the two sides began moving toward a settlement. “Missing You” singer John Waite, one of the artists who filed the case against UMG, settled out in May; the remaining defendants in that case reached a settlement with UMG in December.

The UMG ruling was not directly binding on the lawsuit against Sony, which was being handled by a different judge in the same federal district court. But the two cases were filed by the same lawyers and were largely identical, meaning the UMG ruling certainly did not bode well for the Sony case’s chances to be approved as a class action.

Before last week, the Sony case had long been paused while the two sides worked on a settlement. In Friday’s motion announcing such an agreement, Sony asked to extend that pause until May, allowing them time to finalize the settlement in writing and submit it to the judge. The request was approved Monday, putting the case on track to be closed out this spring.

Attorneys for Sony and the plaintiffs both did not return requests for comment on Wednesday.