By Lisa Shuchman, from Corporate Counsel

Lawyers for The Turtles fail to stop a settlement between Sirius XM and record labels.

Attorneys for the founders of the 1960s rock group The Turtles have failed to stop a $210 million settlement between Sirius XM and major record companies from going forward.

U.S. District Court Judge Philip Gutierrez on Wednesday denied a request by Flo & Eddie, the founders of The Turtles, to enjoin the satellite radio giant from paying the record labels until the settlement can be investigated further through discovery.

The Turtles’ lawyers at Gradstein & Marzano made the request earlier this month after alleging that the settlement improperly sidelined The Turtles’ copyright claims, ignored the class that the band’s founders represent and neglected to include attorney fees for class counsel.

Gutierrez, however, said that granting the request is not necessary to avoid irreparable harm to Flo & Eddie, the class or to their lawyers.

Flo & Eddie have been engaged in a nasty copyright fight since 2013, when they sued Sirius for allegedly violating their public performance rights to their pre-1972 recordings. Federal copyright law doesn’t protect recordings made prior to 1972, but last September Gutierrez ruled that the recordings were protected under California law. Flo & Eddie won a similar ruling in a parallel case in New York. Sirius defeated similar claims in Florida federal court.

In May, Gutierrez certified the California case as a class action.

The class includes all artists that own pre-1972 sound recordings broadcast by Sirius without authorization on or after Aug. 21, 2009. Sirius has appealed the class certification order to the U.S. Court of Appeals for the Ninth Circuit.

Meanwhile, shortly after Flo & Eddie filed their lawsuit against Sirius in 2013, the Recording Industry Association of America (RIAA) and member record labels, including ABKCO Music & Records, Capitol Records, Sony Music Entertainment, UMG Recordings and Warner Music Group, filed their own suit against Sirius. The parties in that suit settled in June for $210 million. Gradstein & Marzano said Sirius refused to allow its attorneys, who represent the class, to attend the discussions.

Gutierrez said in his ruling this week that The Turtles’ attorneys’ “dilatory conduct” is to blame for the parties reaching the settlement. They knew discussions were taking place, but rather than take action immediately, they challenged the settlement only after they learned of the amount through SEC filings. The judge said if the attorneys took issue with Sirius XM communicating with the record companies after the Flo & Eddie case had been granted class status, they should have moved to restrict such communication right after the court certified the class. And if the attorneys believed they were entitled to recover fees out of the settlement fund, they should have filed a motion immediately after learning that the parties had reached a settlement.

He also agreed with Sirius’ attorneys at O’Melveny & Myers, who said the contention that the record companies improperly settled claims on behalf of other class members is a “straw man” argument.

Gutierrez did not fault The Turtles’ attorneys for failing to make a timely claim that they had been excluded from receiving their portion of attorney fees because this could not have been done before they learned of the settlement. And by then the court’s motion calendar was closed. But the judge ruled nevertheless that Gradstein & Marzano would not suffer irreparable harm if the settlement were to go forward because they could later recover their fees directly from the major record companies.

Flo & Eddie attorney Henry Gradstein said his firm will pursue those fees from the major labels directly.

For more on this story go to: http://www.corpcounsel.com/id=1202732914577/Rock-Groups-legal-Argument-Falls-on-Deaf-Ears#ixzz3govf2v00