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US judge again declines to delay Daniel Ek deposition in Eminem v Spotify case

By | Published on Tuesday 19 July 2022

Daniel Ek

A US judge has again rejected efforts by Spotify to stop – or at least delay – a deposition of its CEO Daniel Ek as part of an ongoing legal battle with Eminem’s music publisher Eight Mile Style.

District judge Aleta Trauger last week agreed with the conclusion reached earlier this year by magistrate judge Jeffery S Frensley that having Ek deposed as part of the initial discovery phase in this case would not be “unduly burdensome”.

Eight Mile Style sued Spotify back in 2019 over allegations that the streaming firm hadn’t properly licensed the rapper’s music for its US service and was therefore liable for copyright infringement. The dispute relates specifically to the so called mechanical rights in Eminem’s songs. Streaming services can rely on a compulsory available under US law when it comes to the mechanical rights, but only if they fulfil certain administrative requirements.

The 2018 Music Modernization Act changed the way that all works in the US, creating the collecting society the MLC which now administrates the compulsory licence. However, prior to all that, streaming services were required to send paperwork to the owners of each and every song copyright they intended to exploit under the compulsory licence, and a failure to do so meant that compulsory licence did not apply.

Spotify – and most streaming services – were accused of failing to complete the paperwork on a significant number of songs, meaning those songs were being streamed without licence. That resulted in a flurry of copyright infringement lawsuits seeking mega-bucks damages. The MMA was meant to bring those lawsuits to an end, but that didn’t stop Eight Mile Style going legal over Spotify’s alleged past streaming of Eminem’s music without licence.

As that case slowly worked its way through the motions and went into the so called discovery phase, Eight Mile Style’s lawyers requested a deposition with Ek, which would see the Spotify chief have to answer their questions under oath.

Ek and Spotify don’t want that to happen, and argued that the court should block such a deposition on the basis that the Spotify CEO is super busy and wasn’t hands-on involved in the licensing specifics this case centres on. Spotify’s lawyers also basically implied that the plaintiffs were mainly pushing for this particular deposition just to piss Ek off.

However, back in March, judge Frensley rejected Spotify’s legal arguments as to why Ek should not be deposed, although he did say that – given the Spotify chief’s all-round busy-ness – any deposition should be done remotely and should last no longer than three hours.

Spotify wasn’t happy with Frensley’s ruling, though, and had another go at blocking the Ek deposition. Or, actually, technically, its legal team didn’t ask for the deposition to be blocked entirely, but instead to be postponed to a later stage in the case. Basically so that Ek would only have to do the deposition if and when Spotify’s liability for copyright infringement was confirmed in court and the question of damages was being considered.

In his ruling on Friday, Trauger set out Spotify’s two main arguments for why Frensley reached the wrong conclusion earlier this year, and why the Ek deposition should indeed be delayed.

First, Frensley hadn’t properly applied the rules that say discovery requests from parties involved in litigation should be knocked back if the information sought “can be obtained from some other source that is more convenient, less burdensome, or less expensive”.

And secondly, he hadn’t properly applied the relevant case management order which said discovery regarding liability and damages should be dealt with separately, and “Ek’s testimony would only be relevant to the issue of damages”.

But Trauger rejected both of those arguments. Regarding the first point, the judge wrote: “The court has little difficulty rejecting Spotify’s argument … that the magistrate judge committed an error of law … by failing to properly consider the possibility that another witness, former Spotify executive and in-house counsel James Duffett-Smith, would be a less burdensome alternative witness”.

Why? Well, because, in fact, “the magistrate judge … engaged in a factual inquiry into whether Duffett-Smith was an adequate alternative to Ek and concluded that he was not because Duffett-Smith, who is an attorney, would be more constrained by privilege and the evidence had not established that Duffett-Smith’s knowledge was identical to Ek’s”.

The magistrate judge, Trauger added, also actively considered “the amount of hardship involved in deposing Ek and the potential availability of information from other sources, and … concluded that an appropriate balance could be reached by allowing a time-limited, remote deposition of Ek that could be completed from virtually anywhere on Earth in less than half a day”. And that, Trauger said, was a sound conclusion.

Regarding the more specific argument that Ek’s testimony is only relevant to the question of damages – and that the relevant case management order said discovery for damages should be handled separately – the rejection of that argument, by both judges, is slightly more complex.

It is true that discovery in this case in relation to Spotify’s possible liability for infringement and damages should be handled separately. And on a basic level, the liability point has nothing to do with decisions made by Ek and his team in the years following Spotify’s arrival in the US market – ie either copyright was infringed or it wasn’t, it doesn’t matter what decisions caused any possible infringement to occur. Those decisions are, however, relevant to damages, as damages will be higher if Eight Mile Style can show any infringement was ‘wilful’.

However, there is a complication here because of the Music Modernization Act. Among other things, the MMA made it harder for copyright owners to sue for past alleged infringement by streaming services, with that provision of the act applying from 1 Jan 2018.

Given that Eight Mile Style didn’t sue until summer 2019, the publisher needs to show that Spotify did not comply with certain obligations set out in the MMA, and therefore the limitations contained in the act regarding new litigation do not apply.

Trauger noted in his ruling that Spotify itself has conceded that the debate regarding MMA compliance is part of the first phase of this legal battle. And given that both he and judge Frensley agree that Ek’s deposition would be relevant to the question of MMA compliance, the second argument for postponing that deposition also fails.

With that in mind, Trauger concluded, Frensley was right to say a deposition of Ek can take place during this phase. And, therefore, Ek should just bloody well do this damn deposition.

This story is discussed on this edition of our Setlist podcast.