Tower of Power's Lenny Williams denied class action lawsuit on streaming royalties against WMG

By Emmanuel Legrand

US artist Lenny Williams was denied by an appeals court the right for a class action suit he was pursuing against Warner Music Group for underpaying his streaming royalties.

  The Ninth Circuit appeals court in California affirmed a previous lower court ruling which did cast doubt as to whether Williams, from R&B band Tower of Power, was entitled to streaming royalties as per his original contract with Warner Bros. Records. 

  Williams and his company The Lenny Williams Production Company initially sued WMG in 2018, claiming that Warner "underpaid the putative class of recording artists by calculating their digital streaming royalty payments using only a portion of the company’s foreign streaming revenue."

Not eligible to receive royalties

  Williams asked the district court to certify one broad class with three subclasses: (1) artists whose contracts provide for streaming royalties at a 50% royalty rate of Warner Bros.’ net receipts; (2) artists whose contracts do not expressly provide for streaming royalties and contain a general licensing provision at a royalty rate of 50% of Warner Bros.’ net receipts; and (3) artists whose contracts do not provide for streaming royalties or contain a general licensing provision.

  However, the district court initially ruled that Williams, as well as an indeterminate number of other artists, fell only into Subclass 3. "In order to determine whether the artists in that subclass were entitled to streaming royalties, the district court would have needed to determine whether an implied contract to pay such royalties existed between all the members of that subclass and Warner Bros," reads the ruling. 

  It continues: The district court reasonably concluded that the more challenging question of implied contract, applicable only to contracts for Subclass 3, would overwhelm the straightforward interpretive questions applicable to the contracts for Subclasses 1 and 2.

  The appeals court found that even if the district court found that an implied contract to pay streaming royalties between Williams and Warner Bros. existed, Williams "would not have been eligible to receive any royalty payments of any kind because of the considerable unrecouped balance on their Warner Bros. account. Furthermore, it was very unlikely that Plaintiffs would recoup that outstanding balance and become eligible to receive royalties before the copyright protection for their musical compositions expired."