Melissa Ferrick v. Spotify USA Inc.
- Alison Nathan
- 1:16-cv-08412
- U.S. District Court · Southern District of New York
- 3
In Melissa Ferrick v. Spotify USA Inc., Judge Nathan sought class counsel’s views before ruling on Spotify’s motion to modify the settlement.
The order concerns the class members covered by the settlement, class counsel, and Spotify. It asks for briefing about a proposed settlement modification but does not decide whether the modification will be approved.
What happened
In Melissa Ferrick v. Spotify USA Inc., the court had previously approved a class-action settlement that created a program for class members to receive statutory royalties from certain Spotify uses of their musical works.
Spotify asked to modify that settlement because the Music Modernization Act changed how mechanical licensing and royalty payments operate. Spotify argued that the requested changes would not harm class members and that additional notice was unnecessary. Class counsel said it did not oppose the motion.
Judge Alison J. Nathan did not decide the motion in this order. She directed class counsel to respond by May 7, 2021, addressing whether the changes would affect class members’ rights, whether the rule Spotify cited was the proper procedure, and whether notice or a hearing was needed.
The detailed version
- Melissa Ferrick v. Spotify USA Inc. · No. 1:16-cv-08412
- Alison Nathan
- Apr. 29, 2021
Background
In May 2018, the Court gave final approval to a class-action settlement. The settlement created a Future Royalty Payments Program with two forms of relief:
- Class members who filed claims during the initial claims process could receive statutory royalties for Spotify’s streaming or downloading of tracks embodying their claimed musical works after June 29, 2017. - Class members who did not participate in the initial process could submit claims later and receive the same statutory royalty payments, dating back to June 29, 2017, and continuing afterward.
After the settlement was approved, Congress enacted the Music Modernization Act. The opinion states that the Act changed mechanical licensing throughout the music industry, including by replacing the prior licensing system with a new blanket license that took effect in January 2021 and by centralizing responsibility for paying statutory royalties in the Mechanical Licensing Collective, a nonprofit entity.
Spotify’s Motion
Spotify moved under Federal Rule of Civil Procedure 60(b)(5), a provision that can permit modification of an order when circumstances have changed, to modify the settlement in light of the Music Modernization Act. The specific proposed changes were set out in Spotify’s supporting brief and proposed order. Class counsel indicated that it did not oppose the motion.
Spotify also argued that the proposed modifications would not impair class members’ rights and that additional notice to class members would be wasteful and confusing.
Court’s Action
The Court did not grant or deny Spotify’s motion in this order. Instead, Judge Alison J. Nathan requested more specific views from class counsel on procedural questions and ordered a response by May 7, 2021. The Court asked whether the modifications would affect class members’ legal rights, whether Rule 60(b)(5) was the proper procedure, and whether class members needed notice or a fairness hearing.
The Court also asked whether, even if the class-settlement notice rule did not apply, it should require notice and a hearing under another provision governing class actions. Spotify was permitted to file supplemental briefing on those questions.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.