By Chris Castle
[This post first appeared on MusicTechPolicy]
“The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread.”
It’s hard to believe, but the major labels have filed an “emergency motion” at the Copyright Royalty Board asking the Judges to “clarify” their historic rejection of the insider deal to extend the freeze on physical mechanical royalties for songwriters that many have criticized as being flat out corrupt (and the Judges certainly hinted at it, smoke and fire being what they are). I don’t know about that, but what they seem to really mean is for the Judges to limit the rejection to George Johnson because he’s the only songwriter in the Phonorecords IV proceeding–like that will help them–but screw every other songwriter in the world, and indie label, too, for that matter.
Look, everyone is entitled to a hail mary, but the labels are essentially asking the Judges to say “just kidding” about their rejection of the insider deal. I must say that it’s kind of hard to follow the pretzel logic in places, but one point was very, very clear and it is this:
Nor would there be any basis for the Judges to reject the Settlement as to non-participants [that would be every songwriter except George]. Non-participants take a calculated risk when they choose to sit out a proceeding. Specifically, they decide that to save the expense and burden of participating in a proceeding, they will live with the outcome of the proceeding whatever it is. In particular, just as a dissatisfied non-participant [that would be you and me] cannot seek appellate review of the outcome of a rate proceeding, non-participants may not object to any settlement reached by those who are prepared to undertake the expense and burden of participation. [Well judging by the uniformly negative public comments lots of people including me did not get that memo.] Thus, while Congress has authorized the Judges to decline to adopt a settlement as to an objecting participant, it expressly did not authorize the Judges to decline a settlement as to non-participants who, by definition, have chosen to allow the participants to reach an agreement on their behalf. In so doing, Congress reasonably chose to promote participation in proceedings while also giving settlements broad effect.
Guys, guys, guys…there are a lot of ways you could have said this, but why on Earth you chose this one is beyond me. By definition, non-participants have chosen to allow the participants to reach an agreement on their behalf? Really? Really? By whose definition? I’m sorry, but that just does not pass the laugh test.
And are they really saying that the preferred outcome–promoted by Congress, no less–is to have every songwriter and independent label in the world crammed into the Copyright Royalty Board’s hearing room? Do they really want a line out the door and around several blocks? Because if that’s really what they want, maybe that could be arranged in Phonorecords V. But we also may see real scorched earth litigation ensue here if the Judges refuse to reverse themselves instead of making lemonade out of lemons.
Actually, Congress did not charge the well-heeled major label and publisher participants to look out for the interests of nonparticipants. (Almost sounds like…gasp…a fiduciary duty, don’t it?) You know who Congress does charge with that obligation as true blue fiduciaries?
The Judges. That’s their job. And the Judges showed up for work, rejected the insider deal, and did their job just as they are supposed to in order to preserve equal justice under law.
[If you want to tell the Copyright Royalty Board what you think, try email@example.com]