A group of musicians has lost its bid in Waite v. UMG Recordings, No. 1:19-cv-01091-LAK (S.D.N.Y. 2019), to assert copyright infringement claims on a classwide basis against the record labels holding copyrights in the musicians’ sound recordings.

Seeking to reclaim the copyrights, the plaintiffs had issued notices of termination pursuant to Section 203 of the Copyright Act of 1976, which allows creators to reclaim previously transferred copyrights under certain conditions.  The defendants allegedly refused to honor the terminations, prompting the musicians to file suit.

The defendants argued, among other things, that each of the sound recordings at issue was made for hire, or was specially ordered or commissioned, such that the defendants were the original copyright owners and there was no transfer to terminate under Section 203.  Despite the common legal theories asserted by both sides, the district court concluded that class certification would be improper given the need for individualized proof on fact-intensive questions, including whether each musician was an employee who produced the work at issue while acting within the scope of employment, whether the circumstances of production and release for each sound recording indicated that it was specially ordered or commissioned for use in a collective work or compilation, and whether each termination notice suffered from any defects that could compromise its validity.  These individualized inquiries, the district court ruled, defeated both predominance under Rule 23(b)(3) and cohesion under Rule 23(b)(2).

The decision illustrates both how intellectual property disputes may unfold in the class action context, and how seemingly unifying legal theories can turn on fact-intensive and individualized inquiries that may present obstacles to class certification.