Spotify’s $112 million class-action settlement wins court approval

A US judge approved the $112 million settlement of a class-action lawsuit against Spotify.

The lawsuits were originally brought separately, in late 2015 by David Lowery of the band Camper Van Beethoven, and singer-songwriter Melissa Ferrick who runs her own publishing company.

They accused the Swedish streaming company of not licensing or paying them for use of their work.

In 2017, Spotify proposed to settle the combined suit for $112.5 million, with an immediate cash payment of $43.5 million to the songwriters who were members of the class action.

But the plan needed approval from a court.

Immediately after that settlement was announced, there was opposition from 500 songwriters and publishers who called it unfair because it would not allow rights holders “meaningful participation” and called the dollar offer too low.

Publishers Wixen, which collects royalties for acts as Neil Young and Tom Petty, filed a $1.6 billion lawsuit in January.

It demanded that damages should be $150,000 per song for more than 10,000 songs.

However this week, New York-based US District Court Judge Alison Nathan dismissed the objections.

“The combination of the immediate and future monetary relief, along with the non-monetary benefits provided, constitutes a significant recovery,” she found.

“Ultimately, the court is persuaded that determining how many infringements occurred or defining the exact size of the class at this stage would undermine the benefit of the settlement in reducing litigation burden.

“As noted, if Plaintiffs proceeded with litigation, it is far from clear that they would have been able to establish liability or damages – or damages as significant as the recovery established in the settlement.”

The judge also pointed out that the objections focussed on “the value of the immediate payment while largely ignoring the future royalty payment programme and the non-monetary benefits that the settlement provides.”

So in light of all the benefits, “the amount of the settlement is not unreasonable”.

Justice Nathan also cut down the fees of the attorneys who brought the class action – from the $15.86 million the lawyers sought, to $13 million.  

The agreement to its settlement has Spotify breathing a sigh of relief.

It will help with two other copyright infringement lawsuits it is facing, from Bob Gaudio of veteran harmony band The Four Seasons, and country music publisher Bluewater Music Services Corporation.