Ferrick v. Spotify USA Inc.

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Basic Information

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1. Why did I receive a Notice?

   If you received a notice, you may be a member of a Settlement Class consisting of the following:

   All persons or entities who own copyrights in musical compositions (a) for which a certificate of registration has been issued or applied for on or before June 29, 2017; and (b) that was made available by Spotify for interactive streaming and/or limited downloads during the class period (December 28, 2012 through June 29, 2017) without a license, except for (i) Spotify and its affiliates, employees, and counsel; (ii) federal, state, and local governmental entities; (iii) the Court; (iv) persons and entities who, in 2016, executed a Participating Publisher Pending and Unmatched Usage Agreement in connection with the Pending and Unmatched Usage Agreement, dated as of March 17, 2016, between Spotify and the National Music Publishers’ Association, or any other person or entity who has agreed not to bring a claim against Spotify in this Action; and (v) any person or entity who has already provided Spotify with a release regarding claims for copyright infringement, with respect to such person’s released claims regarding one or more musical compositions for which a certificate of registration has been issued or applied for that Spotify made available for interactive streaming and/or limited downloads during the class period.

   The Notice explains the lawsuit, the settlement, your legal rights, what benefits are available, who is eligible for them, and how to get them.

   Judge Nathan of the United States District Court for the Southern District of New York is overseeing this case, which is captioned Ferrick v. Spotify USA Inc., No. 1:16-cv-8412 (AJN). The persons and entities who sued are called the “plaintiffs,” and the company they sued, Spotify is called the “defendant.”

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2. What is this lawsuit about?

   Spotify is a company that provides a digital music service that gives users on-demand access to, among other things, music.

   The plaintiffs are Melissa Ferrick, Jaco Pastorius, Inc., and Gerencia 360 Publishing, Inc. They allege that they own copyrights for which registration has been issued or applied for in musical compositions that Spotify made available for interactive streaming and/or limited downloading without a license, and that Spotify did so with respect to other musical compositions owned by others. The plaintiffs allege that Spotify is liable to the Settlement Class for copyright infringement in violation of 17 U.S.C. §§ 101 et seq.

   Spotify believes that plaintiffs’ factual and legal allegations in the lawsuit are incorrect and specifically denies any fault, wrongdoing, or liability to plaintiffs or the Settlement Class. In the lawsuit, Spotify has asserted defenses to the claims raised by plaintiffs.

   The Notice does not imply that there has been any finding of any violation of the law by Spotify or that any recovery could be had in any amount. Although the Court has authorized that the notice be distributed regarding the settlement, the notice does not express the opinion of the Court on the merits of the claims or defenses asserted by either side in the lawsuit.

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3. Why is this a class action?

   Class actions are lawsuits in which the claims and rights of many people are decided in a single Court proceeding. One or more people—sometimes called “class representatives” or “class plaintiffs”—sue on behalf of people who have similar claims. All of the people who have similar claims form a “class” and are “class members.” If the Court approves a settlement in a class action, the settlement resolves the claims for all class members, except those who exclude themselves from the class. Here, the class is called the “Settlement Class.”

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4. Why is there a settlement?

   The Court did not decide in favor of either side in the lawsuit. Neither the plaintiffs nor Spotify have won or lost.

   Instead, the lawyers representing plaintiffs and the Settlement Class, called “Class Counsel,” have investigated the facts and applicable law regarding the plaintiffs’ and the Settlement Class’s claims and Spotify’s defenses. The parties have engaged in lengthy and arms’-length negotiations in reaching this settlement. The plaintiffs and Class Counsel believe that the proposed settlement is fair, reasonable, and adequate under the circumstances, and that entering into this settlement is in the best interests of the Settlement Class. Both sides agree that, by settling, Spotify is not admitting any liability or that it did anything wrong, but both sides want to avoid the uncertainty, delay, and expense of continuing to litigate.

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Who Is In The Settlement

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5. How do I know if I am a part of the Settlement?

   To be included in the settlement, you must be a member of the Settlement Class. To be in the Settlement Class, you must satisfy three requirements:

   • First, you must be the owner of the copyright in a musical composition.
   • Second, you or someone else must have applied for or received a certificate of registration from the United States Copyright Office on or before June 29, 2017.
   • Third, Spotify must have made that musical composition available for interactive streaming and/or limited downloading without a license between December 28, 2012 and June 29, 2017.

   Even if those three requirements are met, you are excluded from the class, and thus are not a member of the class, if you are any of the following:

   • Spotify or one of its affiliates, employees, or counsel;
   • A federal, state, or local governmental entity, including the United States District Court for the Southern District of New York;
   • A party to a Participating Publisher Pending and Unmatched Usage Agreement entered into in 2016 in connection with the Pending and Unmatched Usage Agreement, dated as of March 17, 2016, between Spotify and the National Music Publishers’ Association;
   • Someone who has agreed not to bring a claim against Spotify in this class action or who has already provided Spotify with a release regarding claims for copyright infringement, to the extent that the release covers musical compositions that Spotify made available for interactive streaming and/or limited downloading between December 28, 2012 and June 29, 2017.
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6. I’m still not sure if I am included?

   If you are still not sure whether you are included, you can review the Settlement Agreement and other Court Documents here.

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The Settlement Benefits

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7. When were payments for the Settlement Fund sent?

   On May 26, 2020, checks constituting Settlement Payments were mailed to Authorized Claimants. Please allow up to 2 weeks for delivery. You can read about how the Settlement Payments were calculated in the Settlement Agreement, beginning on page 31, paragraph 3.5 - Allocation of Net Settlement Fund. Please click here for a copy of the Settlement Agreement. If you have any questions about your Settlement Payment, please contact the Settlement Administrator at 1-855-474-3853 or P.O. Box 3560, Portland, OR 97208-3560.

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8. What does the Settlement provide?

   If you are a member of the class, you may receive benefits under the settlement. Spotify has agreed to do the following:

   • Pay a total of $43.45 million into an account. That amount, plus any interest earned in the account, will be the Settlement Fund. After deductions for any Court-approved award of fees and costs to Class Counsel and incentive awards to plaintiffs for their service, the remainder—the Net Settlement Fund—will be used to make payments to members of the Settlement Class who submitted timely and valid claim forms. Settlement Class Members who submitted valid and timely claim forms will receive a pro rata share of the Net Settlement Fund. Specifically, each class member’s share will be the percentage of the Net Settlement Fund equal to the number of streams of that class member’s claimed musical compositions divided by the total number of streams of all class members’ claimed musical works. In the event that a class member is only a partial owner of the copyright of a claimed musical work, that class member’s share will be discounted in accordance with that class member’s ownership stake.
   • Pay all Settlement Administration Costs and Notice Costs. In addition to the Settlement Fund, Spotify will pay all settlement administration costs and notice costs incurred by the Court-appointed Settlement Administrator, Epiq, including all media costs for Publication Notice. The Settlement Administrator has estimated that these costs will exceed $1 million and may approach $2 million.
   • Pay ongoing statutory mechanical royalties. In addition to the Settlement Fund, Spotify will pay all Settlement Class members who submit valid claim forms the mechanical license royalties calculated in accordance with 37 C.F.R. §§ 385.10-17 for the musical compositions in the future. Settlement Class members who sent in valid claim forms in time to receive a payment from the Net Settlement Fund will be sent statutory mechanical license royalties automatically as they accrue in accordance with the process outlined in the settlement agreement. Settlement Class members who missed that deadline may still receive future statutory mechanical license royalties if they later submit a claim form, which will be available online, in accordance with the process outlined in the settlement agreement.
   • Establish a Mechanical Licensing Committee. This committee will develop proposals to facilitate the mechanical licensing of content on Spotify’s service.
   • Coordinate industry efforts to share publisher catalog data and digitize pre-1978 Copyright Records and make them available online for free use by the public. Spotify will establish a procedure to receive information from publishers about their catalogs of musical works in order to reduce the number of works that cannot be matched to copyright records so that mechanical license royalties may be paid. Spotify will also organize music industry participants to promote the sharing of catalog data and the digitization of old U.S. Copyright Records so that they may be posted on a website for free public use.
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9. How can I get a payment from the Settlement fund?

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   Per the terms of the Settlement Agreement, the deadline to submit a settlement Claim Form elapsed on December 11, 2019. We are no longer able to accept new settlement Claim Forms. However, even if you did not timely submit a Valid Claim Form for a payment from the Settlement Fund, under the Settlement Agreement, you may still be eligible to participate in the Future Royalty Payments Program. The Future Royalty Payments Program Website became operational and available for use by Settlement Class Members on March 25, 2020 and can be accessed here. Nevertheless, for the reasons detailed above, you are strongly encouraged to claim works through the MLC Portal instead of The Future Royalty Payments Program Website.

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10. How can I get future payments of mechanical license royalties?

    There are two ways for Settlement Class Members to obtain future payments of mechanical license royalties.

    First, any Settlement Class Member who timely submitted a Valid Claim Form and receives a payment from the Net Settlement Fund will also receive quarterly payments of statutory mechanical license royalties automatically. Those Settlement Class Members do not need to do anything else (except to update the Settlement Administrator and Spotify of any future changes to their contact information). However, those Settlement Class Members may still submit a Royalty Claim Form if they wish to identify additional tracks embodying their musical works in order to receive mechanical royalties for those tracks.

    Second, Settlement Class Members who missed the deadline to request payment from the Net Settlement Fund can still request quarterly payments of statutory mechanical license royalties. To do so, Settlement Class Members must fully complete a Royalty Claim Form, which can be done online here or by mailing a completed paper Royalty Claim Form to Ferrick v. Spotify, c/o Epiq, P.O. Box 3560, Portland, OR 97208-3560. You can download a paper claim form here. Nevertheless, for the reasons detailed above, you are strongly encouraged to claim works through the MLC Portal instead of The Future Royalty Payments Program Website.

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11. When would I get these benefits?

    On May 26, 2020, checks constituting Settlement Payments were mailed to Authorized Claimants. Please allow up to 2 weeks for delivery. You can read about how the Settlement Payments were calculated in the Settlement Agreement, beginning on page 31, paragraph 3.5 - Allocation of Net Settlement Fund. Please click here for a copy of the Settlement Agreement. If you have any questions about your Settlement Payment, please contact the Settlement Administrator at 1-855-474-3853 or P.O. Box 3560, Portland, OR 97208-3560.

    Mechanical license royalties paid pursuant to the Future Royalty Payments Program will accrue on a quarterly calendar basis and will be paid at least quarterly. Spotify may choose, at its discretion, the beginning and end dates of each quarterly royalty period. Pursuant to the Settlement Agreement, Spotify will inform the Settlement Administrator of the end date of the first quarterly royalty period by no later than August 22, 2020.

    Mechanical license royalties for the first quarterly royalty period shall be paid within the later of: (i) nine months after the Effective Date; or (ii) six months after Spotify receives the database from the Settlement Administrator with the final list of Identified Royalty Claimants.

    Mechanical license royalties for subsequent quarterly royalty periods shall be paid within six months after the later of: (i) the end of the quarterly royalty period or (ii) the date that Spotify receives the database from the Settlement Administrator with the final list of Identified Royalty Claimants who submitted Valid Royalty Claim Forms during the previous quarterly royalty period.

    Unless the claimant is involved in an ownership dispute, the payment in the first quarterly royalty period for an Identified Royalty Claimant shall include all mechanical license royalties accrued since June 29, 2017 with respect to tracks validly claimed by that claimant.

    Settlement Class Members who timely submitted a Valid Claim Form (for payment from the Net Settlement Fund) and are not involved in an ownership dispute are currently expected to begin receiving mechanical royalties pursuant to the Future Royalty Payments Program by no later than the fall of 2020. Settlement Class Members who did not timely submit a Valid Claim Form but did submit a Valid Royalty Claim Form and are not involved in an ownership dispute shall be deemed to be Identified Royalty Claimants as of the start of the next quarterly royalty period after the submission of the Valid Royalty Claim Form.

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12. What did Settlement Class Members give up to stay in the class and get payments?

    Upon the Court’s approval of the settlement, the Settlement Class Members who did not exclude themselves released and forever discharged Spotify (and any of its current or former direct or indirect parents, subsidiaries, affiliates, assigns, predecessors, and successors, as well as any agents, attorneys, directors, employees, insurers, investors, officers, representatives, direct or indirect shareholders, or trustees of Spotify or any of those entities) from all of the settled claims. That means that Settlement Class Members are no longer be able to sue Spotify (or the other released parties) regarding any of the settled claims.

    The claims that were settled and released are all claims—whether known or unknown—with respect to a musical work that Spotify made available for interactive streaming and/or downloading during the Class Period (between December 28, 2012 and June 29, 2017) that were, could have been, or could ever be asserted as a consequence of Spotify’s making the work available for interactive streaming and/or downloading without a valid license during the Class Period, including Spotify’s marketing or promoting that fact. In addition, Settlement Class Members expressly waive and relinquish the provisions of California Civil Code § 1542 (and all other similar provisions of law) to the full extent that these provisions may be applicable. California Civil Code § 1542 provides:

    A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

    The full text of the Settlement Agreement, which includes all of the provisions about settled claims and releases, is available here. The deadline to exclude yourself from the Spotify Publishing Settlement has passed.

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13. Will the class representatives receive any compensation for their efforts in bringing this class action?

    Ferrick; Jaco Pastorius, Inc.; and Gerencia 360 Publishing, Inc. have sought, and the Court approved incentive awards of $25,000 each for their services as class representatives and their efforts in bringing the class action.

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Excluding Yourself From The Settlement

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14. How do I get out of the Settlement?

    The deadline to exclude yourself from the settlement passed on September 12, 2017.

    THE ORIGINAL AND SUPPLEMENTAL EXCLUSION PERIODS AS ALLOWED BY THE COURT HAVE EXPIRED.

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15. If I didn’t exclude myself, can I sue Spotify about this later?

    No.

    THE ORIGINAL AND SUPPLEMENTAL EXCLUSION PERIODS AS ALLOWED BY THE COURT HAVE EXPIRED.

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16. If I excluded myself, can I get benefits from this Settlement?

    No. If you excluded yourself, you are not part of the Settlement.

    THE ORIGINAL AND SUPPLEMENTAL EXCLUSION PERIODS AS ALLOWED BY THE COURT HAVE EXPIRED.

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17. What happens if I did nothing at all?

    If you are a Settlement Class Member and did nothing, and you did not exclude yourself, you will not be able to start or proceed with a lawsuit, or be part of any other lawsuit, against Spotify and the other released parties about the settled claims in this case.

    THE ORIGINAL AND SUPPLEMENTAL EXCLUSION PERIODS AS ALLOWED BY THE COURT HAVE EXPIRED.

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The Lawyers Representing Class Members

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18. Do I have a lawyer in this case?

    The Court has appointed Gradstein & Marzano, P.C., and Susman Godfrey L.L.P. as Class Counsel to represent the interests of all Settlement Class members. If you want to be represented by your own lawyer, you may hire one at your own expense.

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19. How will the lawyers be paid?

    The Court approved the requested fees, expenses, and service awards after the Final Approval Hearing in the Order here.

    You are not responsible for direct payment of Class Counsel’s fees and expenses. To see a copy of Class Counsel’s application for attorneys’ fees and costs please click here.

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Objecting To The Settlement

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20. How do I tell the Court that I don’t like the Settlement?

    THE DATE TO OBJECT TO THE SETTLEMENT HAS PASSED.

    The Court held a fairness hearing on December 1, 2017 to determine whether to give final approval to the settlement. The Court entered an Order and Final Judgment Approving Class Action Settlement on May 22, 2018, overruling all objections. Moreover, all appeals from the Court’s order granting final approval to the settlement have been dismissed.

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21. What is the difference between objecting and excluding myself?

    THE DATE TO OBJECT AND EXCLUDE YOURSELF FROM THE SETTLEMENT HAS PASSED.

    Objecting is simply telling the Court that you don’t like something about the Settlement. You can object only if you stay in the Settlement Class. Excluding yourself is telling the Court that you don’t want to be part of the Settlement Class. If you exclude yourself, you cannot object to the settlement because it no longer affects you.

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The Court’s Fairness Hearing

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22. When and where did the Court decide whether to approve this Settlement?

    The Court held the Fairness Hearing on December 1, 2017 at United States District Court for the Southern District of New York, Thurgood Marshall United States Courthouse, 40 Foley Square, New York, NY 10007, Courtroom 906, before the Honorable Alison J. Nathan. The purpose of this hearing was to determine: (i) whether the settlement should be approved as fair, reasonable, adequate, and in the best interests of the Settlement Class; (ii) whether to grant the Class Counsel’s request for an award of attorneys’ fees and costs; and (iii) whether to grant incentive awards to the class representatives.

    UPDATE 2/1/2018:

    The Court held a fairness hearing on December 1, 2017 to determine whether to give final approval to the settlement and has now taken the matter under consideration.

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    UPDATE 4/5/2018:

    On February 13, 2018, the Court issued an Order establishing a supplemental exclusion period for certain individuals and entities which required an updated report describing the results of the supplemental exclusion period be provided to the Court by April 18, 2018. As explained in the Order issued on April 4, 2018, the Court is waiting to receive that supplemental exclusion report before issuing a decision regarding final approval of the settlement.

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    UPDATE 5/22/2018:

    On May 22, 2018, the Court entered an Order and Final Judgment Approving Class Action Settlement.

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    UPDATE 6/22/2018:

    There has been at least one appeal filed after the Court’s order was entered on May 22, 2018, therefore the Effective Date of the Settlement will be delayed until after all appeals of the Court’s order have been resolved. The appeal has caused a delay in the availability of claim forms.

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    UPDATE 12/3/2018:

    There have been five appeals filed after the Court's order was entered on May 22, 2018. Three of those five have been dismissed with prejudice. The last two appeals were previously dismissed, but remain subject to further Court review. Therefore, the Effective Date of the Settlement will be delayed until after all appeals of the Court's order are resolved.

    The claim form will not be available and the claim submission process will not start until after the Effective Date. This website will be updated with the claim form and the deadline for submitting claims once that information is available.

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    UPDATE 4/15/2019:

    On April 15, 2019, the Court’s order finally approving the settlement became the Final Order and Judgment. Since all appeals were dismissed and no certiorari petitions were filed after the last appeal was dismissed, the Effective Date is April 15, 2019.

    Per the terms of the Settlement Agreement, claim filing will begin on May 15, 2019. The Settlement Claims Webpage (“Claims Webpage”) will become operational and available for use by Settlement Class Members on May 15, 2019. Claim forms will also be available for download from the website, and a link to the Settlement Claim Facilitator Webpage (“Facilitator Portal”) will be provided. Class Counsel encourages Settlement Class Members to file their claims through the Claims Webpage and utilize the services provided by the Settlement Claim Facilitator.

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    UPDATE 5/15/2019:

    Claim filing begins on May 15, 2019. The Settlement Claims Webpage (“Claims Webpage”) became operational and available for use by Settlement Class Members on May 15, 2019.

    Class Counsel encourages Settlement Class Members to file their claims through the Claims Webpage and utilize the services provided by the Settlement Claim Facilitator.

    Royalty Review Council (“RRC”) is the third-party service provider retained by Class Counsel to act as the Settlement Claim Facilitator to assist Class Members with the completion and submission of a Claim Form.

    Through the Settlement Claim Facilitator Webpage (“Portal”) developed by RRC, you can locate and identify tracks embodying works that were made available on Spotify’s service during the Class Period. You will also be able to search the US Copyright Office database to obtain the copyright registration numbers for those works needed to submit a claim.

    You can access the Portal here.

    Class Counsel strongly encourages you to utilize the Portal since it can greatly assist you in submitting a claim. You can compile and download the track and copyright information you need for your claim online through the Portal, and export a spreadsheet to upload with your claim back on this Settlement Claims Webpage.

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    UPDATE 12/12/2019:

    Per the terms of the Settlement Agreement, the deadline to submit a settlement Claim Form elapsed on December 11, 2019. We are no longer able to accept new settlement Claim Forms. Per the terms of the Settlement Agreement, the Future Royalty Payments Program Website will become operational and available for use by Settlement Class Members on March 10, 2020. On that date, Royalty Claim Forms will also be available for download from the website.

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    UPDATE 5/26/2020:

    On May 26, 2020, checks constituting Settlement Payments were mailed to Authorized Claimants. Please allow up to 2 weeks for delivery. You can read about how the Settlement Payments were calculated in the Settlement Agreement, beginning on page 31, paragraph 3.5 - Allocation of Net Settlement Fund. Please click here for a copy of the Settlement Agreement. If you have any questions about your Settlement Payment, please contact the Settlement Administrator at 1-855-474-3853 or P.O. Box 3560, Portland, OR 97208-3560.

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Getting More Information

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23. How do I get more information about the Settlement?

    The notice summarizes the proposed settlement. On May 22, 2018, the Court entered an Order and Final Judgment Approving Class Action Settlement. To see a copy of the Order and Final Judgment Approving Class Action Settlement, which fully and finally approved the terms of the settlement as fair, reasonable, and adequate, click here. You can also view the underlying settlement agreement, complaints filed in this lawsuit, the Court’s preliminary approval order, Class Counsel’s application for attorneys’ fees and costs and incentive awards, and other information about the settlement here. The Effective Date of the Settlement is April 15, 2019.

    You may also contact the Settlement Administrator at info@SpotifyPublishingSettlement.com by calling toll-free 1-855-474-3853.

    To see the papers filed with the Court and a history of this lawsuit, you may visit the PACER website for the Court, https://ecf.nysd.uscourts.gov, and reference the docket for Ferrick v. Spotify USA Inc., No. 1:16-cv-8412 (AJN). You may also view the papers filed with the Court during regular business hours at the office of the Clerk of the Court, United States District Court for the Southern District of New York, 40 Foley Square, New York, NY 10007. The full settlement agreement and the pleadings filed in this lawsuit can be requested, in writing, from Class Counsel identified in here.

    PLEASE DO NOT ADDRESS ANY QUESTIONS ABOUT THE SETTLEMENT OR LITIGATION TO THE CLERK OF THE COURT OR THE JUDGE.

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24. What is the effective date?

    The Effective Date was April 15, 2019.

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Future Royalty Payments Program

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25. How do I find more information about how to file a claim through the Future Royalty Payments Program Website?

    You can find more information about how to file a claim here. Nevertheless, for the reasons detailed above, you are strongly encouraged to claim works through the MLC Portal instead of The Future Royalty Payments Program Website.

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26. When did claim filing for the Future Royalty Payments Program begin?

    Claim filing for the Future Royalty Payments Program began on March 25, 2020.

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27. For how long will the Future Royalty Payments Program Website be available?

    Per the Settlement Agreement, the Future Royalty Payments Program Website will be available until March 9, 2025.

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