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Dispute over US IP Rights Distribution Fund becomes class action that could benefit at least 30,000 musicians

By | Published on Thursday 17 September 2020

Kevin Risto

The lawsuit being pursued by songwriter and record producer Kevin Risto over the distribution of equitable remuneration monies to session musicians in the US has been granted class action status. It means at least 30,000 musicians could benefit from any ruling in Risto’s favour.

Risto’s litigation targets American performer unions AFM and SAG-AFTRA and the IP Rights Distribution Fund that they set up to administrate various royalties due to performers who appear on sound recordings. Most importantly, that includes the so called Performer ER that is due to session musicians when their music is played on online or satellite radio services in the US.

That money is initially collected by the collecting society SoundExchange. However, whereas SoundExchange pays so called featured artists directly, the cut due to session musicians is paid out via the IP Rights Distribution Fund.

Risto’s lawsuit takes issue with a decision made by the trustees of that Fund back in 2013 to start paying both AFM and SAG-AFTRA a 1.5% fee for the services and data they provide. He argues that the trustees violated their fiduciary duty to the fund’s beneficiaries, ie the session musicians, by allowing regular payments to be made to the unions that set it up.

For their part, the various defendants have argued that the fund’s governing document gives the trustees wide discretion on how best to run the royalty body and specific permission to pay the two unions for any services or information they provide. Which means that, although such payments only began in 2013, the right to pay the unions for their input was there from the start.

Risto intended his lawsuit to be a class action, benefiting all session musicians, when he first filed it in 2018. But back in June he filed new legal papers specifically requesting that the court officially recognise that class action status.

And earlier this week it did. The judge overseeing the case, Christina A Snyder, concluded that the action posed common questions of law that were of equal concern to all class members.

It’s thought that class will include at least 30,000 session musicians who are paid ER royalties in the US. Though the Risto side says that tens of thousands more musicians could also be potential class members, those being music-makers who have never registered for those payments but are due them under law. The judge confirmed that those musicians would also qualify for class membership.