A Surreptitious Stingray is FOILed

A fascinating bit of legal news has come out of my old stomping grounds in Buffalo, New York. In the context of a lawsuit concerning a Freedom of Information Law (FOIL) request to the Erie County Sheriff’s Office, it was revealed that (1) local police forces like the Erie County Sheriffs have been using arguably military-grade surveillance technology to track suspects; and (2) the FBI was so scared of the public finding out the details of this technology, that it directed police forces using it, to drop criminal cases rather than reveal any information concerning the cell site simulator.

The “cell site simulator” is commonly called a “Stingray” device and is produced by the Harris Corporation. In essence, it is a movable device which mimics a cell phone tower, thereby tricking nearby cell phones into transmitting location data and other data to the device, rather than a real cell phone tower. Even more troubling, as Judge NeMoyer of the NYS Supreme Court in Erie County noted in his trial court order: “[e]vidently, cell site simulators also can be used to ascertain telephone calling information, such as the time of, the location from which, and the number of the call, and the device apparently allows for storage of that kind of information also for future review and analysis.” In re New York Civil Liberties Union v. Erie County Sheriff's Office, 2015 WL 1278798, at *2 (N.Y. Sup. 2015).

While the Fourth Amendment and various federal and state statutes do allow for the targeted collection of data such as call records, phone location, and even recordings of texts and conversations (i.e. wiretaps) from the phones of persons suspected of criminal activity, the Stingray device is apparently capable of collecting data from all cell phones in the area in which it is deployed. That is, it spoofs and surveils innocent phone users in the area as well as the suspected criminal’s phone.

So what is a concerned privacy advocate to do? According to the Court, “the cell phone must be ‘on,’ with some battery life remaining, in order to be located and tracked by the device, but a call need not be in progress.” Therefore, if you turn your phone off when not in use, or the battery dies (a not uncommon occurrence with an iPhone), it might be protected from this type of roving law enforcement spying.

Beyond the obvious civil liberties concerns inherent in this kind of cell phone tracking and data collection by local police forces, Judge NeMoyer also unearthed a very practical law enforcement problem with use of this technology. According to a nondisclosure agreement that the Court reviewed, the FBI required the Erie County Sheriff’s Office “to conceal from the public the existence, technological capabilities, or uses of the device. Indeed, the Sheriff's Office is instructed, upon the request of the FBI, to seek dismissal of a criminal prosecution (insofar as the Sheriff's Office may retain influence over it) in lieu of making any possibly compromising public or even case-related revelations of any information concerning the cell site simulator or its use. If that is not an instruction that affects the public, nothing is.” In re New York Civil Liberties Union v. Erie County Sheriff's Office, 2015 WL 1278798, at *13 (N.Y. Sup. 2015).

So, ironically enough, local police may use this technology to track, trace, and apprehend criminals, but if the circumstances of their identification is possibly revealed by the ensuing prosecution, the police are required to drop the case against that person. In which case, the current use of these Stingray devices may be unique in being simultaneously violative of civilians’ Fourth Amendment rights against unlawful search and seizure, and ineffective at obtaining useful evidence in a criminal prosecution.

An E-mail PSA (or Nine Nifty Tips to Avoid Ruin)

The following is a public service announcement aimed toward my fellow attorneys (especially small firms and solo practitioners), but the advice described below is worthwhile for anyone to bear in mind when receiving unsolicited e-mails.

Every once in a while, I am chagrined to read about some poor (i.e. ignorant) attorney who lost a fortune (sometimes of his own and sometimes of his client’s money) and who faces significant possible penalties, because he or she succumbed to the latest e-mail “phishing” scam.  As attorneys, I think we’re bred to be skeptical people, but often greed (or really need) for new clients can cloud our better judgment.  On top of this fact, it is increasingly difficult to automatically weed out “spam” e-mails from our inbox because phishing hackers are getting better at circumventing the normal spam filters, and we often don’t want to set our filters too conservatively, for fear of missing a good potential client with an otherwise zany e-mail address.

But after receiving more than a few of these “phishing” e-mails in the past 8 years, I’ve come recognize patterns in the ones that should be deleted right away.  Here are some tell-tale signs that an e-mail from a potential “client” is, more likely than not, just a scam:

1. The e-mail address is wacky, like [unrecognizable word]@[domain you’ve never heard of].com.[foreign country code].  Especially if you have a relatively focused geographic practice, it’s unlikely that you will attract very many clients from overseas.
2. The sender includes a “link” to another (equally odd-looking) e-mail address in the body of the e-mail, which differs from the sender’s e-mail address appearing in the "From" header.  NEVER CLICK ON SUCH A LINK.  More likely than not, it’s a hidden virus or other problematic part of the scheme.
3. The e-mail is generically addressed to “Dear Counsel” or “Dear Attorney”.  If you have a small or solo practice (and your e-mail address is some variation of your actual name), it’s unlikely a potential client would be (a) so lazy as to neglect to use your name in greeting; or (b) so uninterested in his or her case as to use an e-mail “blast” to hundreds of different attorneys.
4. There are one or more other apparent attorneys in the "CC" or "To" headers of the e-mail.  Even if this might be a legitimate potential client, do you really want someone who is just “blasting” a generic request to everyone on some attorney e-mail list?
5. The language of the e-mail uses horrible grammar and is completely devoid of facts, other than the generic request “… Do you handle X cases?”.
6. Conversely, if the grammatically-poor e-mail contains relatively succinct facts that seem too good to be true … it is.  For example, if a “potential client” e-mails you from overseas stating that he or she received a settlement in a divorce proceeding, but needs a U.S. attorney to cash the $250,000 check and return the proceeds to the sender (of course, keeping 10% for your fee), this is nothing more than a clever variation of the old “Nigerian Prince” scam.
7. The request/legal matter is something that you’ve never handled and/or never advertised as part of your firm’s services.  I believe that I am a good estates and family law attorney, and that my website has all the right SEO for my areas of practice, but I am not so blindly conceited to believe that, out of the blue, a Dutch shipping company decides that they want to hire me to craft the documents for a major merger with another international shipping company.  That would no doubt be fun, but I would be very worried about the judgment of the Board of Directors of such a company.
8. The nationality of the sender’s name does not match the apparent derivation of the e-mail address.  For example, a distinctly Japanese name at the end of an e-mail from a sender with an “.au” (Australia) country code in their e-mail address.
9. The sender does not bother to provide any contact information other than the original e-mail address (or the afore-mentioned dangerous “e-mail” link embedded in the text).  Most legitimate people – even overseas – will provide you with multiple avenues through which to contact them if they are truly interested in assistance.  One caveat on this point: even if there is a signature block on the e-mail that contains an official-sounding business name and mailing address, check to make sure that the purported e-mail matches said business domain.  It is possible (because I’ve seen it happen) that a clever phisher will spoof the name/mailing address of a real business, but direct victims to his or her fake e-mail address.

A scam or phishing e-mail may not contain all of these elements, but if any of these red flags are present, you should be very cautious before responding (if you don’t delete the e-mail outright).  A couple of minutes of due diligence on your part can save you not only thousands of dollars of potential loss, but your reputation, and possibly your very livelihood, as well.

Complication With Optimistic Outcome

It was recently reported that Facebook will allow users to “to designate a friend or family member to be your Facebook estate executor and manage your account when you're dead.”  This “legacy contact” will be able to manage the decedent’s Facebook page, download photographs, make postings, and respond to “friend” requests.  While this is welcome news to many, it got me thinking about whether such service-specific estate representatives are necessary, and, on the other hand, whether limitations imposed on the service-specific “executor” are necessarily enforceable.

With the growth of technology, more and more individuals have an online presence.  Most often, this includes the creation of substantial amounts of property in the digital world, such as photographs, essays (blogs), videos, audio recordings, and communications (e-mail, Twitter messages, etc.).  While not delving into issues of copyright law, internet security or technological feasibility, I would like to share my thoughts on what New York’s current estate administration rules may have to say about these issues.

First and foremost, a decedent’s "Estate" is deemed to be “[t]he interest which a person has in property” under Estates, Powers, and Trusts Law (EPTL) §1-2.6(a); and “property” is defined as “anything that may be the subject of ownership, and is real [i.e. real estate] or personal property” under EPTL §1-2.15 and Surrogates Court Procedure Act (SCPA) §103(44).  I am not aware of any New York cases interpreting these definitions with regard to access to (or distribution of) “digital” property, but I think these definitions are surely broad enough to encompass it.

Once a person is designated the executor of an estate (by being granted “Letters Testamentary”), one of his or her principle duties and rights is to, “…acquire the remaining undivided interest in the property of an estate or trust in which the fiduciary, in his fiduciary capacity, holds an undivided interest.” See EPTL §11-1.1(b)(2).  Additionally, under EPTL §11-1.1(c), a court “may authorize the fiduciary to exercise any other power which in the judgment of the court is necessary for the proper administration of the estate or trust.”  In sum, this means that it is the responsibility and right of the executor of an estate, to take possession of all property of the estate, so as to pay necessary debts and taxes, and transfer the remaining property to the proper recipients (the heirs or beneficiaries).  If a person states in his or her Will that “all my property goes to my wife”, arguably, even digital property should be so distributed.

But what if Facebook, Google, Twitter or some other e-mail service or website refuses to transfer a decedent’s accounts to the custody and control of a properly-appointed executor?  I think our law is currently broad enough to address that as well.  Under SCPA §2103, an executor “may present to the court … a petition showing ... that any property as defined in §103 or the proceeds or value thereof which should be paid or delivered to him is (a) in the possession or control of a person who withholds it from him, … or (b) within the knowledge or information of a person who refuses to impart knowledge or information he may have concerning it or to disclose any other fact which will aid the petitioner in making discovery of the property …”  If the court is satisfied that there are reasonable grounds to order an examination of the “withholding” party, “it must make an order accordingly.”  Additionally, “the court may issue a citation to the person alleged to be in possession or control of the property to [explain] why he should not deliver such property or its proceeds or value.”  This type of §2103 motion has been successfully made of individuals for the return of “a car, musical equipment, computers, software, a copy machine, furniture, sporting equipment and memorabilia, family photographs and a cell phone” (In re Estate of Fenlon, 95 A.D.3d 1406, 1407, 942 N.Y.S.2d 908, 909 (2012)).

Of course, qualifying as the executor or administrator of an estate, demanding access to the decedent’s online accounts, and then compelling the divulging of those digital properties through a Surrogate’s Court §2103 proceeding can be both time-consuming and expensive.  Certainly, it would be better to appoint such a “legacy contact” with Facebook (and other online services one uses).  But if doing so, it is imperative to make sure that the "legacy contact" is not a different person from that which you appointed as an executor in your Will.  Otherwise, your executor could have the same problems accessing the accounts holding your digital properties as if there were no “legacy contact” named at all.

Even One-Hit Wonders Are Entitled to Copyright Protection

Judge Gutierrez of the federal district court in the Central District of California recently granted summary judgment in favor of the plaintiffs in a copyright lawsuit against the satellite radio company Sirius XM.  The case is Flo & Eddie Inc. v. Sirius XM Radio Inc., CV 13-5693 PSG (C.D. Cal. 2014).   In essence, the plaintiffs (who were members of the 1960's band "The Turtles") successfully argued that they were entitled to royalty payments for public performances and reproductions of their songs on the satellite radio stations of Sirius XM, under California copyright laws.

Why am I mentioning this California-based case? Mostly because it reinforces my opinion of the case pending against Pandora internet radio in New York, that I discussed back in April of this year.  Like the New York case, the songs at issue in Flo & Eddie were recorded before 1972 (for example, the Turtles recorded the psychedelic-pop hit "Happy Together" in 1967), which would put them outside the protection of the federal Copyright Act.  However, to the extent that the federal Copyright Act doesn't pre-empt some provisions of state-based copyright laws, copyright owners may find more expansive protection of their rights on the state level and in the state courts.

The Flo & Eddie decision cuts both ways for New York's Capitol Records, LLC v. Pandora Media, Inc.  On the one hand, the former decision is based on one federal judge's interpretation of California law; not New York law.  However, to the extent our copyright protections may be similar to those of California, Capitol Records may take heart.  Furthermore Judge Gutierrez's decision was a grant of summary judgement, which is a very strong award by a court (it is an "automatic" win for the plaintiff without going through trial).  That remedy isn't rare, but it is only granted under federal law "if the [party] shows that there is no genuine dispute as to any material fact and the [party] is entitled to judgment as a matter of law.”  However, insofar as Capitol Records filed their case in New York state court, summary judgment standards under New York state civil procedure and common law will apply.  This might not be as generous as the federal standard, since section 3212 of the Civil Practice Law and Rules state that "[t]he motion [for summary judgment] will be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party ... [but] the motion shall be denied if any party shall show facts sufficient to require a trial of any issue of fact."

Nevertheless, this federal court ruling in California is significant as the first ruling on these types of issues in the many recent artist-and-record-label cases against internet and satellite radio companies.  And, as the New York Times reported, it is "a case that could have wide implications for the digital music business."

Bye, Bye Snow Bird

The New York State Court of Appeals (our highest court) recently provided some helpful clarification of – and a little relief from – New York Tax Law §601 and §605(b)(1)(B).  As one of the majority of U.S. states that collect a state-level income tax, New York imposes the income tax on people and corporations if:

1. The person is “domiciled” in New York (“domicile” is sometimes referred to as the location you “call home”, and is normally your place of permanent, full-time, residence); or
2. The person maintains a "permanent place of abode” in New York, and spends in aggregate, more than 183 days per year in the state (a day longer than one-half the calendar year). 

In the recent case of Gaied v. New York State Tax Appeals Tribunal, 22 N.Y.3d 592, 2014 NY Slip Op. 01101 (2014), the Court of Appeals reversed the tax court’s determination that the plaintiff (Mr. Gaied) had a “permanent place of abode” in New York State.  The plaintiff lived in New Jersey (near the NY/NJ border), he owned a 3-family residence in New York, and he spent more than 183 days in the state.  However, the apartments in the 3-family property were all rented to strangers, except for one apartment where he housed his ailing parents.  He evidently paid some of the utilities for his parents' apartment but, according to the plaintiff, he never actually stayed at that apartment he owned for more than a brief period, and only at his parents' request.  The tax court held that Mr. Gaied's "maintenance" of this family property in New York State established it as his "permanent place of abode" under the tax law.  However, the Court of Appeals reversed the tax court’s ruling in this case, finding that there was "no rational basis for [the tax court's] interpretation" of §605(b)(1)(B) in that way.

Although Mr. Gaied has prevailed on this issue so far, this case reminds us of some other issues that snow birds (and other transient visitors to New York) should keep in mind if they wish to avoid being saddled with an unexpected New York State income tax bill:

1. The 183 day period is an aggregate time period calculated across the whole taxable (calendar) year.  Thus, if you spend one whole day in New York at the beginning of the year, move away for some time, spend another 180 days in the state, then leave again, only to return to New York for the last 3 days of the year, your 184 total days in the state will qualify you as a taxable “resident” of our state (if you also have a permanent place of abode in the state).  
2. Secondly, a “permanent place of abode” is not necessarily only a house you might own.  If you rent an apartment all year long, for the purpose of living at that apartment while you are in New York for your 183+ days, you will similarly be caught up in the definition of a “statutory resident” under §605.  Although our Court has rejected the Tax Tribunal's interpretation of the regulations defining "permanent place of abode" as "a dwelling place of a permanent nature maintained by the taxpayer, whether or not owned by such taxpayer, [which] will generally include a dwelling place owned or leased by such taxpayer's spouse," (20 NYCRR 105.20[e][1]), the Court did go on to state that "[t]he legislative history of the statute, ... as well as the regulations, support the view that in order for a taxpayer to have maintained a permanent place of abode in New York, the taxpayer must, himself, have a residential interest in the property."  The idea of a "residential interest" in property is much broader than "ownership".  You might not own the apartment building in which you live, but if you have a valid lease for that space, you do have a legally-protectable "residential interest" in that space.  And, if that building is in New York State, it may wind up qualifying as your "permanent place of abode" in the State for Tax Law purposes.

Therefore, if you intend to leave the Empire State (and our income taxes) for good, make sure that you either get rid of your New York “place of abode”, or at least be very careful that you do not come back to visit for more than ½ of any future year.

Outside the Wall

"Believing with you that religion is a matter which lies solely between Man & his God, that he owes account to none other for his faith or his worship, that the legitimate powers of government reach actions only, & not opinions, I contemplate with sovereign reverence that act of the whole American people which declared that their legislature should 'make no law respecting an establishment of religion, or prohibiting the free exercise thereof,' thus building a wall of separation between Church & State."

Thomas Jefferson, Letter to the Danbury Baptists, 1802 

In my opinion, the Supreme Court's decision in Town of Greece v. Galloway, issued this week, has broken down the wall contemplated by Jefferson but supplied no clear alternative arrangement.  In fact, it seems that the Court clearly repudiated the idea of "ceremonial deism" championed by former Justice O'Connor, which I likewise favored in my previous blog post on this case.

As I discussed before, this case involves the predominately-Christian prayers held at the start of Town Board meetings in the Town of Greece, New York.  This kind of public prayer associated with a local government obviously entails the religion clauses of our First Amendment, which simultaneously guarantee citizens' "free exercise" of their religious beliefs, and "non-establishment" of one particular religion (or any religion) by the government.  These two clauses of the Amendment display a clear tension: if, for instance, the Town Supervisor is a devout Christian and is forbidden from any religious expression during his time at the Town Board, such would negatively impact his freedom of expression.  However, if that devout Town Supervisor decided to only hire fellow Christians, or impose special taxes on non-Christians, the government would be unlawfully "establishing" an official state religion.  Thus, there is a broad spectrum from maximum-expression (with collateral establishment issues) to maximum non-establishment (with collateral freedom of expression issues).  It is ultimately up to the courts (and usually the Supreme Court) to decide where the allowable point on that spectrum should be.

Unfortunately, the courts (and especially the Supreme Court in this case), provide very little usable guidance on these matters.  There have been dozens of different tests and rulings on a host of religious issues in the past 100 years, and the rulings have fallen on many different points on that spectrum.  In the Galloway case decided May 5th, there are no less than 5 official opinions (a majority by Kennedy; a concurrence by Alito; a concurrence by Thomas; a dissent by Breyer; and a dissent by Kagan), and two plurality opinions (i.e. part of Kennedy's majority opinion was only joined by two other Justices (Roberts and Alito), while Thomas' concurrence was only joined by Scalia in one part).  Almost every Supreme Court judge gave their opinion on this matter.

As has been widely-reported, the five-Justice majority opinion upheld the right of the Town of Greece to hold pre-session prayers, thus reversing the Second Circuit's ruling in this case.  In essence, the majority held that the test for the courts in this matter should be whether "the prayer practice in the town ... fits within the tradition long followed in Congress and the state legislatures", as approved by the Court previously in the case of Marsh v. Chambers (which approved of opening prayers in the Nebraska legislature).  According to Justice Kennedy's opinion, "Marsh stands for the proposition that it is not necessary to define the precise boundary of the Establishment Clause where history shows that the specific practice is permitted." Galloway, 572 U.S. ____ (2014) (Kennedy, at p. 8).  The majority squarely rejects the idea - what I would say constitutes ceremonial deism - that "nonsectarian or ecumenical prayer as a single, fixed standard" is necessary for the opening prayer at issue to be constitutional.  Instead, "Marsh nowhere suggested that the constitutionality of legislative prayer turns on the neutrality of its content. ... [and] the Court instructed that the 'content of the prayer is not of concern to judges,' provided 'there is no indication that the prayer opportunity has been exploited to proselytize or advance any one, or to disparage any other, faith or belief.' ... Government may not mandate a civil religion that stifles any but the most generic references to the sacred any more than it may prescribe a religious orthodoxy." (Kennedy, at pp. 12-13).  This latter prohibition - on government control of the content of an opening prayer - is consistent with the aversion to imposing on the prayer-giver's freedom of expression.  "Once it invites prayer into the public sphere, government must permit a prayer giver to address his or her own God or gods as conscience dictates, unfettered by what an administrator or judge considers to be nonsectarian." (Kennedy, at p. 14). 

But then how can (or should) a municipality insure that it is not "establishing" preference for one religion over another?  The majority declares that "[a]bsent a pattern of prayers that over time denigrate, proselytize, or betray an impermissible government purpose, a challenge based solely on the content of a prayer will not likely establish a constitutional violation." (Kennedy, at p. 17).  I find this troubling, in that it creates a kind of "smell test" for constitutional violations of the Establishment Clause.  This brings to mind former Justice Stewart's famous obscenity test: "I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description ["hard-core pornography"]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that." Jacobellis v. Ohio, 378 U.S. 184 (1964) (Stewart, J. concurring).  The majority in this case found that - although the Town used almost exclusively Christian clergy - it did not cross the "proselytizing" line, and "[s]o long as the town maintains a policy of nondiscrimination, the Constitution does not require it to search beyond its borders for non-Christian prayer givers in an effort to achieve religious balancing." (Kennedy, at p. 18).

The reason why I feel that the "wall of separation" coined by Jefferson has been conclusively breached, is that, not only does the majority opinion accept sectarian prayer in government contexts as non-violative of the Establishment Clause (and seemingly disdains more inclusive neutral / deist prayer), but the minority opinion authored by Justice Kagan likewise states that "I do not contend that [the principle of religious equality] translates here into a bright separationist line ... [a]nd I believe that pluralism and inclusion in a town hall can satisfy the constitutional requirement of neutrality." (Kagan, at pp. 1-2).  Furthermore, statements of profound belief articulated by some of the prayer-givers "'speak of the depths of [one's] life, of the source of [one's] being, of [one's] ultimate concern, of what [one] take[s] seriously without any reservation' ... If they (and the central tenets of other religions) ever become mere ceremony, this country will be a fundamentally different - and, I think, poorer - place to live." (Kagan, at pp. 22-23, quoting from The Shaking of the Foundations).  Thus, it seems to me, that the majority and dissenting Justices on the Supreme Court differ little in their jurisprudential concepts rejecting strict separation of Church & State, instead favoring pluralistic expression of various citizens' faiths in the public, governmental, sphere. The only real difference is their interpretation and assessment of the facts at issue in this case: whether or not the Town of Greece was as inclusive of various sects as they should be, rather than whether the Town impermissibly supported any sects at all.

While men and women of good conscience can disagree about religious doctrines, I believe it provides little assistance to municipalities and individuals trying to strike the right balance between religious expression protected by the First Amendment and religious establishment forbidden by the First Amendment, to say, in effect, "too much sectarian proselytizing in public prayer is bad" but the facts of each individual case will be the deciding factor.  Although Justice Alito concurred (agreed) with the majority opinion, I think the majority's ruling ignores a very cogent observation made in Alito's concurring decision.  That is, Justice Alito states "[m]any local officials, puzzled by our often puzzling Establishment Clause jurisprudence and terrified of the legal fees that may result from a lawsuit claiming a constitutional violation, already think that the safest course is to ensure that local government is a religion-free zone." (Alito, at p. 7).  The majority's opinion in this case does nothing to dispel government officials' bewilderment by saying that mostly-Christian opening prayers (that were ostensibly available to all faiths to give) were in accord with Marsh and not violative of the Establishment Clause ... but a more "proselytizing" or "denigrating" series of sectarian opening prayers might be.

The End of Oldies? (Or, Why You Might Not Hear Bob Dylan on Internet Radio Until 2067)

Today’s post looks at the intersection of new technology and our somewhat antique laws.  It has recently been reported that major music labels (Sony, Universal, Warner Music, and ABKCO) filed suit against the internet music service Pandora on April 17^th, alleging copyright infringement for essentially “playing old songs without licenses.”  What makes this case most interesting is that these multi-national music industry conglomerates are suing the California-based Pandora in New York State Supreme Court in Manhattan (for those not familiar with our special court-naming preferences in NY, that’s the regular civil trial court).  Without getting into any jurisdictional issues, I wondered why these plaintiffs would sue in state court for what is a predominantly federal cause of action (copyrights).

The answer lies in a strange quirk of history, most clearly articulated by the New York State Court of Appeals (that’s our highest court … I know, it’s confusing), in their answer of certified questions in Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 830 N.E.2d 250 (2005).  Under federal law (17U.S.C. §302) copyrights generally last for the life of the author/creator, plus 70 years.  However, the U.S. Copyright law never squarely addressed musical recordings, which remained unprotected on the federal level until amendments were made to the Copyright Act in 1972.   At the same time, most states had a body of common law rules concerning copyright in creative works (including musical recordings) which were often more expansive than the federal rights, and allowed a nearly unlimited term of protection.  During the drafting of the 1972 amendments to the Copyright Act, the House and Senate reached a compromise regarding protection of pre-1972 musical recordings: existing state common-law copyright protection for them would not be preempted by the new federal statute until February 15, 2067.  See Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 555-56, 830 N.E.2d 250, 260-61 (2005).  Thus, “[p]ursuant to 17 U.S.C. § 301(c), ‘[f]ederal copyright law does not cover sound recordings made prior to [February 15,] 1972. Rather, these recordings are protected by state common law on copyright infringement.’”  Capitol Records, LLC v. Harrison Greenwich, LLC, 652249/2012, 2014 WL 1492299 (N.Y. Sup. Ct. Apr. 14, 2014). 

But don’t federal statutes concerning something usually preclude inconsistent state law?  How can a state like New York say that, under our common law, all music recordings are entitled to permanent, perpetual copyright protection, when the federal law may protect the same recording for as little as 71 years?

Shortly after passage of the Copyright Act amendments, the U.S. Supreme Court addressed these concerns in Goldstein v. California, 412 U.S. 546, 93 S.Ct. 2303, 37 L.Ed.2d 163 (1973). The defendant in that case was convicted of criminal music piracy based on a California copyright law, which he challenged on the grounds that it conflicted with the U.S. Constitution’s “Copyright Clause, the Supremacy Clause and the federal Copyright Act by ‘establish[ing] a state copyright of unlimited duration.’” Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 556-57, 830 N.E.2d 250, 261 (2005) (quoting Goldstein).  The majority on the Court rejected the defendant's arguments, noting that

“[a]lthough the Copyright Clause ... recognizes the potential benefits of a national system, it does not indicate that … state legislation is, in all cases, unnecessary or precluded,” … the states did not relinquish all power to provide copyright protection … the states were free to act with regard to sound recordings precisely because Congress had not, and, in the absence of conflict between federal and state law, the Supremacy Clause was not a barrier to a state's provision of copyright protection to a work not covered under federal copyright law.

Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 556-57, 830 N.E.2d 250, 261 (2005) (quoting Goldstein).  Therefore, turning back to New York, the federal Copyright Act precludes and supercedes New York common-law protection of sound recordings only in two respects.

First, [New York] common law does not apply to any sound recording fixed, within the meaning of the federal act, after February 15, 1972, because recordings made after that date are eligible for federal statutory copyright protection. Second, state common-law copyright protection is no longer perpetual for sound recordings not covered by the federal act (those fixed before February 15, 1972), because the federal act mandates that any state common-law rights will cease on February 15, 2067.  The musical recordings … created before February 15, 1972, are therefore entitled to copyright protection under New York common law until the effective date of federal preemption—February 15, 2067.

Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 559-60, 830 N.E.2d 250, 263 (2005).

Goodnight, Irene

Therefore, if Sony and the other labels want to extract licensing fees from Pandora for the “performance” of pre-1972 musical recordings (or prohibit altogether Pandora’s playing them), it appears that New York’s common law of copyright might be their best shot.  I haven’t had the opportunity to review the actual text of the complaint in this case, but my gut says that Pandora (and those of us who enjoy online listening to anything recorded before Houses of the Holy) might have a problem.  Under New York’s common law, proof of copyright infringement only requires: (1) the existence of a valid copyright; and (2) unauthorized reproduction of the work protected by the copyright. Capitol Records, LLC v. Harrison Greenwich, LLC, 652249/2012, 2014 WL 1492299 (N.Y. Sup. Ct. Apr. 14, 2014).  As recently articulated by the federal Southern District of New York, “[c]ourts have consistently held that the unauthorized duplication of digital music files over the Internet infringes a copyright owner's exclusive right to reproduce.” Capitol Records, LLC v. ReDigi Inc., 934 F.Supp.2d 640, 648 (SDNY 2013).  Additionally, Pandora most likely won’t be able to argue that "unpopular" older music (perhaps some obscure Leadbelly tunes?) are exempt from New York’s protection either: “the ability to enforce copyright protections provided by New York common law is not diminished due to the size of the market and, therefore, the popularity of a product does not affect a state common-law copyright infringement claim.” Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 564, 830 N.E.2d 250, 266 (2005).

It will be interesting to see how this case turns out.  Most likely, I foresee it resulting in an out-of-court settlement involving additional licensing fees on Pandora for use of pre-1972 songs.  But if nothing else, the filing of this suit in New York illustrates the creativity and tenacity of the music industry in monetizing their copyrightable works – via any available legal means.