In May 2016, Irell & Manella’s Robert “Bobby” Schwartz won summary judgment for CBS, in a closely watched class action brought by plaintiffs who claimed to own the rights to hundreds of iconic recordings from the 1960s.
Although radio stations had played the pre-1972 recordings that were subject of the dispute for decades without paying the owners, the plaintiffs sued CBS in August 2015 for broadcasting without permission. In 2014, SiriusXM and Pandora agreed to pay nearly $300 million to settle similar claims.
Schwartz, however, put forward an argument that none of the other broadcasters raised—CBS wasn’t actually playing the pre-1972 recordings. It was playing remastered versions that are subject to federal copyright law, which eliminates any state law protection. The court agreed and CBS won. The Recorder asked Schwartz about how he and his client helped turn the tide in this line of cases.
What were the things that had previously gone against CBS in this case and other pre-1972 recordings cases before you scored this win? What sorts of hurdles was the company facing? In the cases filed against SiriusXM and Pandora, federal and state court judges in California and New York had ruled the laws of those states recognized a performance right in pre-‘72 sound recordings. And the federal court judge in California was on the verge of certifying the case as a class action.
Although we thought those decisions were in error, it would have been useless to seek to convince two other federal court judges (one in California and one in New York) that their colleagues were wrong. Plus, SiriusXM had just paid over $200 million and Pandora had paid $90 million to the major record companies for a partial settlement of their liability. Everyone assumed that CBS would have to do the same thing.
How were you and your team able to turn the tide? We reframed the dispute. Instead of being about whether there was a performance right under California and New York law for pre-’72 recordings, we changed the issue to whether CBS had even played such recordings.
If CBS had not played those recordings, the issue of whether there was a performance right was irrelevant. Because federal copyright law pre-empts equivalent state law rights, we set out to convince the district court that: (a) the versions CBS aired, which had been remastered long after 1972, constituted derivative works under federal copyright law and (b) once a work was subject to federal copyright, it could not also be subject to state law.
What sorts of skills does a litigator need to have in order to score a come-from-behind victory for a client? When behind on the scoreboard, one has to get away from the internal thinking and genuinely hear what the judge is saying, and what that may also reveal about what the judge is thinking.
It’s a mistake to assume that a losing argument can be successful when repackaged at a more “appropriate” stage of the case, such as reviving at the summary judgment stage an argument that lost at the pleading stage. Even where the judge invites that, most judges are more interested in hearing something they haven’t already considered. Another skill is to anticipate the loss of an early dispositive motion, but use it to compel the other side into making arguments that will harm their case at a later stage.
How does playing from behind in litigation differ from getting out to an early lead in a case? No one likes to be in a hole early on. But it can be liberating, by encouraging one to be more creative. And it can encourage the judge to be more forthcoming about the direction and disposition of the case and to invite discussion of issues that the court had not yet considered. Remember that large stakes cases are usually endurance races, not sprints. Many lost causes have been won after years of battle.
Who is a litigator outside your own firm that you admire and why? John Quinn. He’s maintained a superb trial practice while building a game-changing law firm.