The Rick Nelson Company, LLC, v. Sony Music Entertainment
SME Foreign Streaming Settlement
1:18-cv-08791-LLS

FREQUENTLY ASKED QUESTIONS

 
 

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  • A Court authorized the Notice because you have a right to know about a proposed settlement of a class action lawsuit, and about all of your options, before the Court decides whether to give final approval to this settlement. The Notice explains the lawsuit, the proposed settlement, and your legal rights. A full copy of the Stipulation and Agreement of Settlement (“Stipulation”) is available for download from the Important Documents page.

    Judge Louis L. Stanton, United States District Court, Southern District of New York, is overseeing this case. The case is known as The Rick Nelson Company, LLC v. Sony Music Entertainment, 18-cv-08791 (LLS). The person who sued is called the “Plaintiff.” The “Defendant” is Sony Music Entertainment.

  • This lawsuit claims that Sony Music Entertainment failed to properly calculate royalties on the foreign streaming of sound recordings subject to agreements between Class Members and Sony Music Entertainment. Specifically, it is alleged that royalties were not calculated “at source” but instead were based on some other, lesser, amount.

  • In a class action lawsuit, one or more people, called “Class Representatives” (in this case, Plaintiff The Rick Nelson Company LLC), sue on behalf of people who have similar claims. All these people together are a “Class” or “Class Members.” In a settlement of a class action, one court resolves the issues for all Class Members, except for those who choose to exclude themselves from the Class (see FAQs 13 – 16).

  • The Court has not determined who is right. Rather, both sides have agreed to settle the lawsuit to avoid the uncertainties and expenses of continuing the lawsuit. By agreeing to settle, both sides avoid the cost and risk of a trial, and the people affected will get a chance to receive benefits. The Class Representative and its attorneys think this Settlement is best for all Class Members. This Settlement does not mean that Sony Music Entertainment did anything wrong, and Sony Music Entertainment denies all allegations of wrongdoing in the lawsuit.

  • Class Members are all persons and entities who are parties to a “Class Contract” (defined by the Settlement Agreement as a contract (i) to which Sony Music Entertainment or various affiliated U.S. entities, divisions, or joint ventures ("SME"), or any entity of which SME is a member or partner and on behalf of which SME pays or credits royalties, is a party; (ii) that provides for exploitation of Recordings, the copyrights in which SME owns and/or controls; and (iii) in connection with which SME paid or credited any royalties for Foreign Streams calculated on a basis other than Foreign Streams At-Source Revenue during the period from September 25, 2012, through June 30, 2019, or any portion thereof).

    Excluded from the Settlement Class are:

    • SME and any person, trust, firm, corporation or other entity affiliated with or related to SME; and
    • Any persons or entities who exclude themselves by filing a valid and timely Request for Exclusion in accordance with the requirements set forth in the Notice.
  • If you have at least one Class Contract with Sony Music Entertainment or various affiliated U.S. entities, divisions or joint ventures, or you are the heir, successor or assign of someone who does, you are potentially a Class Member. Whether you are entitled to both the Past Settlement Relief and the Prospective Settlement Relief, or just the Prospective Settlement Relief, depends on your circumstances. See FAQs 8 – 11.

  • If you are still not sure whether you are included, you can get help by contacting the Settlement Administrator.

    You are not required to pay anyone to assist you in obtaining information about this Settlement.

  • The Notice is only a summary of the proposed settlement. The complete terms of the proposed settlement are set forth in the formal Stipulation and Agreement of Settlement (the “Stipulation”) which is on file with the Court and is also available on the Important Documents page.

    The Court did not decide in favor of Plaintiff or Defendant. Instead, both sides, with the assistance of a mediator, agreed to this settlement. Settlement avoids the costs of a trial, and assures that settlement benefits go to Class Members. The Class Representative and its attorneys think the Settlement is in the best interests of the Class.

    The Settlement is summarized below.

    • The $12.7 million fund for foreign streams through June 30, 2019 (Past Settlement Relief)

    $12.7 million, less certain deductions as may be approved by the Court, is available for Class Members on behalf of whom a timely and valid Claim Form has been submitted (“Authorized Past Claimants”). Authorized Past Claimants will be paid or credited their pro rata share of this fund based on the calculation described in FAQ 9.

    • Additional Royalty for Foreign Streams as of July 1, 2019 (Prospective Settlement Relief)

    For Class Members who qualify for Prospective Settlement Relief as set forth below, Sony Music Entertainment ("SME") shall add an additional royalty for Subject Recordings (as that term is defined in the Stipulation) equal to 36% of the royalty currently paid or credited to the Class Member (“Additional Royalty”) for foreign streaming of such Subject Recordings. This Additional Royalty is available only to Class Members who are party to a Class Contract (“Authorized Future Claimants”), provided that such Class Members shall not be Authorized Future Claimants—and thus the Additional Royalty shall not apply—with respect to any Class Contract for which another party to that Class Contract has timely submitted a valid Request for Exclusion, and with respect to any recording:

    1. for which such Class Member was paid a Foreign Streams At-Source Royalty as of the period ended June 30, 2019, or
    2. that is subject to an express contractual provision for a Foreign Streams At-Source Royalty that was in effect on or after July 1, 2019.

    Authorized Future Claimants shall not be entitled to the Additional Royalty for Subject Recordings for any period for which such Authorized Future Claimant has provided a release with respect to royalty accountings for such Subject Recordings, nor shall the Additional Royalty apply to territories for which royalties on Foreign Streams were paid or credited as a Foreign Streams At-Source Royalty for the royalty period ended June 30, 2019.

    Commencing no later than the application of the Additional Royalty for all Authorized Future Claimants, SME shall report royalties on Foreign Streams for all Class Members on a New Effective Rate basis. As detailed in the Stipulation, the New Effective Rate will be equivalent to the Effective At-Source Rate already being paid to each Class Member, plus any applicable Additional Royalty (see FAQ 9 below).

    The Additional Royalty shall apply to the Authorized Future Claimants’ “all-in rate,” and thus SME (unless directed otherwise by an Authorized Future Claimant) will continue to pay third parties under so-called “Letters of Direction” based on the same proportion of an Authorized Future Claimant’s “all-in” royalty on which they are currently paid. Specifically, if an Authorized Future Claimant has, before July 1, 2019, requested SME pay a portion of the royalties attributed to a Subject Recording under a Class Contract to a third party (a “Letter of Direction”), then unless the Authorized Future Claimant directs SME otherwise in writing, a portion of the Additional Royalty attributed to such Subject Recording (“the Letter of Direction Deduction”) shall be deducted from the amount paid or credited to the Class Member’s royalty account, and will be paid or credited pursuant to such Letter of Direction. The Letter of Direction Deduction shall be a fraction of the Additional Royalty equivalent to the fraction in which (x) the numerator is the amount paid or credited under such Letter of Direction for foreign streams attributed to each such Subject Recording for the royalty period ended June 30, 2019, and (y) the denominator is the total amount of royalties for foreign streams attributed to each such Subject Recording for the royalty period ended June 30, 2019. Similarly, the Additional Royalty payable to “guest artists,” or other similar royalties payable to a Class Member that are deductible from the royalty payable to another Class Member shall continue to be deductible from the royalties payable to such other Class Member.

    The Prospective Settlement Relief will be applied by SME regardless of whether a Claim Form is submitted. However, if a Class Member does not submit a timely and valid Claim Form, SME has one additional year to apply the new royalty rate (although the date from which that new royalty amount will be calculated will be the same even if a Claim Form is not returned).

    In exchange for these benefits, Class Members agree to release SME and various affiliated U.S. entities, divisions, and joint ventures from all claims they in the past had, now have, or might in the future have against the Released Parties or any of them on the basis of, connected with, or in any way arising out of royalties credited or paid under Class Contracts with respect to foreign streams up to and including June 30, 2019. Except as expressly provided in connection with the Prospective Settlement Relief, nothing in this release shall be deemed to terminate, modify or cancel any provision of any Class Contract, each of which shall otherwise continue in full force and effect in accordance with its terms. See the Stipulation for the precise release language.

  • If the Settlement is approved by the Court, then, in accordance with the settlement terms set forth in the Stipulation and summarized in FAQ 8, above:

    Authorized Past Claimants will receive their pro rata share of the Past Settlement Relief, which will be credited to their royalty accounts. The share will be a fraction, the numerator of which shall be the total royalty amounts credited or paid to such Authorized Past Claimant for foreign streams attributed to such Authorized Past Claimant’s Class Contract(s) from July 1, 2015, through June 30, 2019, less (i) any such royalty amounts attributed to any period from July 1, 2015, through June 30, 2019, for which the Authorized Past Claimant has provided Sony Music Entertainment or various affiliated U.S. entities, divisions, or joint ventures ("SME") with a release and (ii) any such royalty amounts that were credited or paid as a Foreign Streams At-Source Royalty. The denominator of such fraction shall be the sum of the numerators for all Authorized Past Claimants entitled to Past Settlement Relief; and

    Authorized Future Claimants will have the Additional Royalty paid or credited to their royalty accounts with respect to foreign streams of Subject Recordings, commencing retroactive to July 1, 2019, other than for any period for which such Authorized Future Claimant has provided SME with a release with respect to royalty accountings for such Subject Recordings.

    PLEASE NOTE THAT if you are a Class Member and do not submit a valid Claim Form, you will not receive the Past Settlement Relief, but you nevertheless will be bound to the terms of the Settlement by the judgment of the Court, and will receive Prospective Settlement Relief.

  • The exact amount each qualifying Class Member will receive for Past Settlement Relief cannot be calculated until: (1) the Court approves the settlement; (2) amounts are deducted from the Past Settlement Relief fund for notice and administration costs, attorneys’ fees and expenses, and any Class Representative participation awards; and (3) the number of persons who opt out of the Settlement is known. See FAQ 9 for the general method of calculating claims payments.

  • The deadline to receive a credit or payment from the Past Settlement Relief fund has passed. If you are a Class Member and wished to receive your pro rata share of the Past Settlement Relief, you had to submit a completed Claim Form by mail postmarked by November 30, 2020 or submit a completed Claim Form electronically by November 30, 2020.

    To be eligible for the Prospective Settlement Relief, while you must be a Class Member, you do not need to do anything, although if you did not submit a valid Claim Form, Sony Music Entertainment has additional time within which to calculate the royalties to be credited to you under the new rate. Regardless, all Class Members will participate in the Prospective Settlement Relief commencing retroactive to July 1, 2019. This new royalty amount shall be paid or credited to the Class Member’s royalty account, and subject to the terms set forth in the Stipulation.

  • The Past Settlement Relief will be paid or credited, as applicable, to eligible Class Members with your next royalty account statement issued at least 60 days after the Court grants “final approval” of the Settlement and after appeals are resolved, if any.

    The Court will hold a Fairness Hearing on May 25, 2021, at noon (Eastern time) to decide whether to approve the Settlement. If you want to attend the hearing, keep in mind that the date and/or time may be changed after this Notice is sent, so you should check this website before making travel plans.

    If the Court approves the Settlement (see FAQs 21 – 23), there may be appeals. It’s always uncertain whether these appeals can be resolved, and resolving them can take time. Please be patient. You can check for updates and other important information by using any of the methods listed in FAQ 24.

  • If this Settlement receives final approval from the Court, this Settlement will be legally binding on all Class Members, including Class Members who object, unless you exclude yourself from the Settlement. This means you will not be able to pursue the claims being released in this Settlement. The Notice is only a summary. The specific claims that you are giving up are described in detail in the Stipulation. You will be “releasing” Sony Music Entertainment (“SME”) and all related entities (the “Released Parties”) as described in the Stipulation. Again, the Stipulation is available from the Important Documents page.

    If you, or someone acting on your behalf, are currently asserting or litigating claims against SME or the other Released Parties, you will be barred from pursuing the claims released by this Settlement unless you validly “opt out” as described below. If you are currently asserting or litigating claims against SME or the other Released Parties, speak to your lawyer in that matter immediately.

    The Stipulation describes the released claims with specific descriptions, so read it carefully. If you have any questions, you can talk to Class Counsel listed in FAQ 17 or you can, of course, talk to your own lawyer if you have questions about what this means.

  • The deadline to exclude yourself has passed.  To exclude yourself, you had to mail a letter to the Settlement Administrator postmarked by November 30, 2020 that included:

    • Your full name, current address, telephone number, email address and signature;
    • The name of the artist (individual or band), producer or company seeking exclusion (if any different from your name); and
    • A statement that you are otherwise a Class Member and that you “request to be excluded from the class settlement in the SME Foreign Streaming Settlement.”

    Your written "opt-out request" had to be personally signed by you.  As to each Class Contract, Requests for Exclusion will be valid only if submitted by, or on behalf of, all persons and/or entities who are parties to such Class Contract.

  • No. Unless you excluded yourself from the Settlement, you gave up any right to sue the Defendant for the claims that are resolved by the Settlement. If you have a pending lawsuit, speak to your lawyer in that lawsuit immediately. Remember, the exclusion deadline was November 30, 2020.

  • No. If you excluded yourself from the Settlement, you will not be able to get any payments and you cannot object to the settlement. You will not be legally bound by anything that happens in the Settlement.

  • Class Counsel

    The Court has appointed the law firms listed below to represent you and other Class Members in the Settlement. These lawyers are called "Class Counsel". If you want to be represented by your own lawyer, you may hire one at your own expense.

    If you want to contact Class Counsel about this settlement, they can be reached as set out below. Alternatively, you can contact the Settlement Administrator.

    Neville L. Johnson (njohnson@jjllplaw.com)
    Douglas Johnson (djohnson@jjllplaw.com)
    Johnson & Johnson LLP
    439 North Canon Drive, Suite 200
    Beverly Hills, CA 90210
    (310) 975-1080

    Jeffrey A. Koncius (koncius@kiesel.law)
    Nicole Ramirez (ramirez@kiesel.law)
    Kiesel Law LLP
    8648 Wilshire Boulevard
    Beverly Hills, CA 90211
    (310) 854-4444

    Daniel L. Warshaw (dwarshaw@pswlaw.com)
    Bobby Pouya (bpouya@pswlaw.com)
    Pearson, Simon & Warshaw, LLP
    15165 Ventura Boulevard, Suite 400
    Sherman Oaks, CA 91403
    (818) 788-8300

    SME’s Attorneys

    Defendant SME is represented by the law firm of Covington & Burling LLP. If you want to contact Defendant SME’s Attorneys about this settlement, they can be reached by contacting:

    Jonathan M. Sperling
    Covington & Burling LLP
    The New York Times Building
    620 Eighth Avenue
    New York, NY 10018-1405

  • Class Counsel will ask the Court for an award of attorneys’ fees and expenses, and the Class Representative will ask for a participation award, all of which, if awarded, will be paid from the Past Settlement Relief:

    Attorneys’ Fees and Expenses

    • Class Counsel will ask the Court to approve payment of their attorneys’ fees of up to $4,233,333.33, as well as for reimbursement for costs and expenses incurred in the prosecution of the lawsuit not to exceed $60,000.

    Participation Award to Class Representative

    • Class Counsel will ask the Court to approve a $25,000 payment (called a “Participation Award”) to Plaintiff and Class Representative The Rick Nelson Company, LLC. The Participation Award compensates Plaintiff for its service as a Class Representative. Any Participation Award ordered by the Court will be in addition to what the Class Representative is eligible to receive from its claim as a Class Member.

    The Court will determine the appropriate amount of these amounts. The Settlement is not conditioned upon approval of any of the attorneys’ fees and expenses or Class Representative participation award amounts.

  • If you did not exclude yourself, you could have object to the Settlement. To object, you had to mail your objection, along with any supporting papers, to the Settlement Administrator and. You also had to (1) serve copies of your objection and supporting papers upon Jeffrey A. Koncius (Kiesel Law LLP) and SME’s Attorneys, at the addresses set forth in FAQ 17, and (2) file your objection and supporting papers, showing due proof of service upon such counsel, with the Clerk of the Court, United States District Court for Southern District of New York, Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York, NY 10007-1312.

    The deadline to object to the Settlement has now passed.  To be timely, your objection had to be mailed to the Settlement Administrator so that it is postmarked by November 30, 2020.

  • Objecting is telling the Court that you do not like something about the Settlement. You can object to a settlement only if you stay in that settlement. Excluding yourself is telling the Court that you do not want to be part of the Settlement. If you exclude yourself, you have no right to object, because the case no longer affects you. If you object, and the Court approves the Settlement anyway, you will still be legally bound by the result.

  • The Court will hold a “Fairness Hearing” (also known as a “Final Approval Hearing”) to decide whether to finally approve the proposed settlement. The Fairness Hearing will be on May 25, 2021, at noon before Judge Louis L. Stanton in Courtroom 21C of the Daniel Patrick Moynihan United States Courthouse, located at 500 Pearl Street, New York, New York 10007-1312. If you want to attend the Fairness Hearing, keep in mind that the date and/or time may be changed after this Notice is sent, so you should check this website before making travel plans.

    At the Fairness Hearing, the Court will consider whether the proposed settlement and all of its terms are adequate, fair, and reasonable. If there are objections, the Court will consider them. The Court may listen to people who have asked for permission to speak at the Hearing and have complied with the other requirements for objections explained in FAQ 19. The Court may also decide how much to award Class Counsel for fees and expenses, and whether and how much to award the Class Representatives for representing the Class (the Participation Award).

    There is no set timeline for either the Court’s final approval decision, or for any appeals that may be brought from that decision, so it is impossible to know exactly when the Settlement will become final.

    The Court may change deadlines listed in this Notice without further notice to the Class. To keep up on any changes in the deadlines, please contact the Settlement Administrator or review this website.

  • No. Class Counsel will answer any questions asked by the Court.

    If you send an objection, you do not have to come to Court to talk about it. So long as you mailed your written objection on time and complied with the other requirements for a proper objection, the Court will consider it. You may also pay another lawyer to attend, but it’s not required.

  • Yes. If you submitted a proper written objection to the settlement, you or your lawyer may, at your own expense, come to the Fairness Hearing and speak. To do so, you must follow the procedures set out in FAQ 19. You must also file a Notice of Intention to Appear, which must be mailed to the Settlement Administrator so that it is postmarked no later than November 30, 2020, and it must be filed with the Clerk of the Court by that same date. If you intend to have a lawyer appear on your behalf, your lawyer must enter a written notice of appearance of counsel with the Clerk of the Court no later than November 30, 2020. See FAQ 17 for the addresses of the Settlement Administrator. You cannot speak at the Fairness Hearing if you excluded yourself.

  • This Notice summarizes the proposed settlement. For the precise terms and conditions of the Settlement, please see the Stipulation, available on the Important Documents page.

For More Information

Visit this website often to get the most up-to-date information.

Mail

SME Foreign Streaming Settlement
c/o JND Legal Administration
PO Box 91345
Seattle, WA 98111