United States Court of Appeals For the First Circuit
No. 22-1859
RAFAEL ITHIER; EGC CORP., a/k/a El Gran Combo,
Plaintiffs, Appellees,
v.
CARLOS JUAN APONTE-CRUZ, a/k/a Charlie Aponte,
Defendant, Appellant,
JANE DOE; ABC INSURANCE COMPANY; COMPANY XYZ; RICHARD DOE; MARY ROE; CONJUGAL PARTNERSHIP APONTE-DOE; CONJUGAL PARTNERSHIP DOE–ROE,
Defendants.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO
[Hon. Jay A. García-Gregory, U.S. District Judge]
Before
Barron, Chief Judge, Montecalvo and Rikelman, Circuit Judges.
José A. Hernández Mayoral for appellant. Roberto Sueiro Del Valle for appellees. Tim Dadson, Brieanne Jackson, Matthew S. Hellman, Jennifer P. Garner, Jeffrey P. Bennett, Danielle S. Van Lier, Steven R. Englund, Eric E. Petry, SoundExchange, Inc., Jenner & Block LLP, American Federation of Musicians of the United States and Canada, and SAG-AFTRA were on brief for SoundExchange, Inc., the American Federation of Musicians of the United States and Canada, and Screen Actors Guild -- American Federation of Television and Radio Artists, amici curiae.
June 18, 2024 BARRON, Chief Judge. If you think that Paul, John,
George, and Ringo were "the recording artist[s] . . . featured" on
the White Album -- even though that iconic record's cover mentioned
none of The Beatles by name -- then you will not be surprised by
the analysis that follows. The prompt for our analysis, however,
is not a trivia question. It is an appeal from a judgment by the
United States District Court for the District of Puerto Rico in
connection with a dispute between the owners of El Gran
Combo -- one of the most popular Puerto Rican bands in
history -- and the band's former lead vocalist, Carlos Aponte-
Cruz. The dispute concerns the Digital Performance Right in Sound
Recordings Act of 1995 ("DPRA"), Pub. L. No. 104-39, 109 Stat.
336, which entitles the "recording artist or artists featured on
[a] sound recording" to a 45% share of certain royalties that the
recording generated. 17 U.S.C. § 114(g)(2)(D).
Aponte-Cruz contends that he is the
"artist . . . featured" on certain El Gran Combo sound recordings
for which he was the lead vocalist and so is entitled to his
portion of the 45% share of the statutory royalties for those
recordings. Id. The owners of El Gran Combo contend that the
band -- as an independent entity distinct from any of its
individual members -- is itself the "artist . . . featured" on
those recordings. Id. They thus contend that only the company
that owns the band, EGC Corp., and the company's sole owner, Rafael
- 3 - Ithier, have an entitlement to the 45% royalty share in the
recordings at issue. Id.
We conclude that even though the covers for the El Gran
Combo albums that contain the disputed recordings refer only to
the band itself and not to any of its individual members, the Paul
(or, if you prefer, the John) of El Gran Combo, Aponte-Cruz, is a
"recording artist . . . featured" on the recordings in dispute
and that neither EGC Corp. nor Ithier is. Id. Accordingly, we
reverse both the District Court's ruling granting summary judgment
to EGC Corp. and Ithier on their claims for declaratory relief
under § 114(g)(2)(D) and the District Court's ruling denying
summary judgment to Aponte-Cruz on his claims for that same kind
of relief.
I.
The following facts are not in dispute. Ithier founded
the musical group El Gran Combo in 1962 and created EGC Corp. to
administer his rights in the band. El Gran Combo typically has
fourteen members: three singers, two saxophonists, two trumpeters,
a trombonist, a bassist, a pianist, a timbalero, a conguero, a
bongosero, and a director.
Ithier selects the band's members. He also hires backup
vocalists or chorus members who are not members of the band but
who perform on some of the band's sound recordings.
- 4 - Carlos Aponte-Cruz was a member of El Gran Combo from
1973 to 2014. He was a lead vocalist in over 200 of the band's
sound recordings.
The section of the U.S. Code in question -- 17 U.S.C.
§ 114(g) -- was enacted as part of DPRA, which amended the
Copyright Act of 1976, Pub. L. No. 94-553, 90 Stat. 2541, to
establish an exclusive right to perform a copyrighted work publicly
by means of a digital audio transmission, 17 U.S.C. § 106(6), and
to provide a statutory framework for the payment of royalties from
those digital transmissions to the intended beneficiaries, id.
§ 114(g). See SoundExchange, Inc. v. Copyright Royalty Bd., 904
F.3d 41, 46 (D.C. Cir. 2018). Section 114(g) reads, in relevant
part, as follows:
(g) Proceeds from licensing of transmissions.--
(1) Except in the case of a transmission licensed under a statutory license in accordance with subsection (f) of this section--
(A) a featured recording artist who performs on a sound recording that has been licensed for a transmission shall be entitled to receive payments from the copyright owner of the sound recording in accordance with the terms of the artist's contract; and
(B) a nonfeatured recording artist who performs on a sound recording that has been licensed for a transmission shall be entitled to receive payments from the copyright owner of the sound recording in accordance with the terms of the nonfeatured recording artist's
- 5 - applicable contract or other applicable agreement.
(2) Except as provided for in paragraph (6), a nonprofit collective designated by the Copyright Royalty Judges to distribute receipts from the licensing of transmissions in accordance with subsection (f) shall distribute such receipts as follows:
(A) 50 percent of the receipts shall be paid to the copyright owner of the exclusive right under section 106(6) of this title to publicly perform a sound recording by means of a digital audio transmission.
(B) 2 ½ percent of the receipts shall be deposited in an escrow account managed by an independent administrator jointly appointed by copyright owners of sound recordings and the American Federation of Musicians (or any successor entity) to be distributed to nonfeatured musicians (whether or not members of the American Federation of Musicians) who have performed on sound recordings.
(C) 2 ½ percent of the receipts shall be deposited in an escrow account managed by an independent administrator jointly appointed by copyright owners of sound recordings and the American Federation of Television and Radio Artists (or any successor entity) to be distributed to nonfeatured vocalists (whether or not members of the American Federation of Television and Radio Artists) who have performed on sound recordings.
(D) 45 percent of the receipts shall be paid, on a per sound recording basis, to the recording artist or artists featured on such sound recording (or the persons conveying rights in the artists' performance in the sound recordings).
Until the passage of the Small Webcaster Settlement Act
of 2002 ("SWSA"), Pub. L. No. 107-321, 116 Stat. 2780, royalties
- 6 - for sound recordings were distributed by the owners of copyrights
in the recordings. SWSA amended § 114(g)(2) to establish "[a]n
agent designated to distribute receipts from the licensing of
transmissions."1 § 5(c). SoundExchange, Inc. ("SoundExchange"),
a nonprofit performance-rights organization, is the "nonprofit
collective designated by the Copyright Royalty Judges [pursuant to
SWSA's amendment to § 114(g)(2)] to distribute receipts from the
licensing of transmissions." 17 U.S.C. § 114(g)(2); see 37 C.F.R.
§ 380.4(d)(1); SoundExchange, Inc. v. Muzak LLC, 854 F.3d 713, 715
(D.C. Cir. 2017). Representing the owners of sound-recording
copyrights and the recording artists who performed on those
recordings, SoundExchange collects royalties paid pursuant to the
statutory license under § 114 of the Copyright Act of 1976, as
amended and codified, and accordingly distributes those royalties
to the artists who performed on the sound recordings as well as
the copyright owners of the sound recordings.
For years, SoundExchange had been remitting all El Gran
Combo statutory royalties to EGC Corp., although the company has
not distributed any of those royalties to the members of El Gran
Combo. In 2017, however, SoundExchange shifted course after
1 Congress has since amended 17 U.S.C. § 114(g)(2) to provide that it is "a nonprofit collective designated by the Copyright Royalty Judges" that is authorized to "distribute receipts from the licensing of transmissions." Orrin G. Hatch-Bob Goodlatte Music Modernization Act, Pub. L. No. 115-264, § 302(c), 132 Stat. 3676, 3740 (2018).
- 7 - Aponte-Cruz, having by then left El Gran Combo, made a formal
request to SoundExchange for the statutory royalties that he
claimed he was entitled to under § 114(g)(2)(D) for sound
recordings in which he had performed as the lead vocalist for El
Gran Combo. Aponte-Cruz based the request on his assertion that
he was a "recording artist . . . featured on [the] sound
recording[s]," id., and in response SoundExchange froze all
payments of royalties under § 114(g)(2)(D) that were related to
the sound recordings in which Aponte-Cruz appeared as lead singer
for El Gran Combo.
Thereafter, on November 8, 2019, Ithier and EGC Corp.
filed suit against Aponte-Cruz in the District of Puerto Rico for
a judgment declaring that (1) "Ithier is the sole owner of the
right to collect royalties as Artist from Sound Exchange as a
featured artist," (2) "during Aponte's Tenure in [El Gran Combo]
the defendant was an employee for hire for El Gran Combo making
Plaintiff the sole proprietor of any rights to collect royalties
from Sound Exchange," and (3) "Aponte[] is a non-featured artist
with a right to collect royalties as a non-featured Artist from
Sound Exchange." Aponte-Cruz filed an answer to Ithier and EGC
Corp.'s complaint on April 7, 2021, and he also filed at that time
a counterclaim for a declaratory judgment in favor of "defendant
Aponte ruling that he is entitled to collect royalties from Sound
Exchange as a performer in El Gran Combo sound recordings . . . and
- 8 - that plaintiffs must pay Aponte's share on royalties collected
from Sound Exchange that have not been distributed to the band's
performers."
Aponte-Cruz then moved for summary judgment on his
counterclaim for declaratory relief, requesting that the District
Court "rule that 'the recording artist or artists featured on such
sound recording' in [17 U.S.C. § 114(g)(2)(D)] are the members of
El Gran Combo that performed on each sound recording and that those
royalties are to be divided among them in the manner Sound Exchange
determines appropriate." Ithier and EGC Corp. filed a cross-
motion for summary judgment on their claims for declaratory relief.
The District Court referred the matter to a Magistrate
Judge for a Report and Recommendation ("R&R"). The R&R recommended
that the District Court grant the cross-motion for summary judgment
and deny Aponte-Cruz's motion.
Over Aponte-Cruz's objection to the R&R, the District
Court issued an Order adopting the R&R, and Judgment was entered
on the same day "granting declaratory relief in favor of Plaintiff
Rafael Ithier." The District Court ruled that
(i) El Gran Combo, a distinct legal entity organized as a corporation, is the group most prominently featured on the sound recordings and, thus, is entitled to collect the royalties as the featured artist; and (ii) Rafael Ithier, as the sole owner of El Gran Combo, is entitled to collect the featured artist royalties due to the corporation.
- 9 - Aponte-Cruz timely appealed. SoundExchange, the
American Federation of Musicians of the United States and Canada,
and the Screen Actors Guild -- American Federation of Television
and Radio Artists filed an amicus brief in support of Aponte-Cruz.
The amicus brief argues, among other things, that the District
Court's decision "that [Ithier as band owner is entitled to collect
the featured-artist royalties rather than El Gran Combo's band
members like Aponte-Cruz] is a radical departure from the
distribution policies and practices that SoundExchange has
implemented over the last 20 years based on Section 114(g)(2)(D)
and international recording industry norms." The brief elaborates
on this assertion by stating that "SoundExchange's distribution
policies and practices and the international system for
distributing performance royalties are all based on the premise
that a featured performing group is its members."
II.
We review the District Court's summary-judgment rulings
de novo and draw all inferences in favor of the party against whom
summary judgment was entered. Pleasantdale Condos., LLC v.
Wakefield, 37 F.4th 728, 732-33 (1st Cir. 2022). Summary judgment
is appropriate if, based on the record, there remains no dispute
of material fact -- that is, if, based on the record, there is no
factual determination which a "rational factfinder" could make as
to the "existence or nonexistence" of a fact that "has the
- 10 - potential to change the outcome of the suit" -- such that "the
moving party is entitled to judgment as a matter of law." Borges
ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 4-5 (1st Cir. 2010).
Although the parties have filed cross-motions for summary
judgment, we review each party's motion independently, viewing the
facts and drawing inferences as required by the applicable
standard, and we determine, for each side, the appropriate ruling.
See Wightman v. Springfield Terminal Ry. Co., 100 F.3d 228, 230
(1st Cir. 1996).
III.
The key issue turns on the following question about the
phrase "recording artist or artists featured on such sound
recording" in § 114(g)(2)(D). Does that phrase, with respect to
the sound recordings in question, refer to El Gran Combo as a
distinct entity independent of any of the band's individual members
or only to the individuals who make up the band, including Aponte-
Cruz as the lead vocalist? Before directly addressing that
question, however, we first must address whether Aponte-Cruz
failed to raise below the arguments that he is now making on appeal
-- namely, that he is the "artist . . . featured" on the recordings
in question because he appeared on those recordings as a member of
El Gran Combo. Id.; see Dávila v. Corporación de P.R. para la
Difusión Pública, 498 F.3d 9, 14 n.2 (1st Cir. 2007) ("A
- 11 - party . . . forfeits a right by failing to assert it in a timely
manner.").
Ithier and EGC Corp. intimate that Aponte-Cruz either
forfeited or waived the arguments he is making on appeal by failing
to raise them below, as Ithier and EGC Corp. contend that Aponte-
Cruz argued in the proceedings in the District Court only that he
"was an individual with a right to the featured artist's royalties"
and did not make a "claim for royalties as a[n El Gran Combo band]
member." But we disagree.
The record shows that Aponte-Cruz's arguments on behalf
of his position below mirror his arguments to us. For example, in
his motion for summary judgment, Aponte-Cruz stated, "The matter
for this Court to adjudicate is whether under [17 U.S.C.
§ 114(g)(2)(D)], 'the recording artist or artists featured on such
sound recording' is Ithier as the band owner, or the members of
the band within which Carlos Aponte is lead singer." Aponte-Cruz
went on to state his position that "the statutory framework [and]
the common meaning of the [statutory] terms . . . make clear that
'the recording artist or artists featured on such sound recording'
is a reference to the human beings performing and producing the
- 12 - sounds that are heard in the sound recording, not the owner of the
band." We thus move on to the merits.2
IV.
Ithier and EGC Corp. contend that we must affirm the
judgment below because the District Court was right to hold that:
(1) "El Gran Combo, a distinct legal entity organized as a
corporation, is the group most prominently featured on the sound
recordings and, thus, is entitled to collect the royalties as the
featured artist"; and (2) "Rafael Ithier, as the sole owner of El
Gran Combo, is entitled to collect the featured artist royalties
due to the corporation." In so arguing, Ithier and EGC Corp. do
not dispute that the construction of the statute that they propose
-- and that the District Court adopted -- would upset the way that
the statute has long been implemented.
As we have noted, SoundExchange, the American Federation
of Musicians of the United States and Canada, and the Screen Actors
Guild -- American Federation of Television and Radio Artists
explain in their amicus brief to us that SoundExchange has been
To fend off the suggestion of forfeiture and waiver, Aponte- 2
Cruz contends that the Magistrate Judge and the District Court misconstrued the basis for his request for declaratory relief. He argues that they failed to grasp that the basis for that request was that "'featured artist' in this context[] means the band as a whole whose members performed on the sound recording." We disagree, however. The Magistrate Judge specifically stated in her R&R that "Aponte argues that the members of the band El Gran Combo are all featured artists under the statute and are entitled to a share of 45% of the royalties."
- 13 - the "nonprofit collective designated by the Copyright Royalty
Judges to distribute receipts from the licensing of transmissions"
under § 114(g)(2) for the last two decades. See 37 C.F.R.
§ 380.4(d). And, although the record shows that, here,
SoundExchange distributed the relevant royalties to EGC Corp.
prior to the advent of this suit, the amicus brief notes -- without
dispute by Ithier or EGC Corp. -- that in its capacity as the
designated nonprofit collective, SoundExchange's longstanding
practice is to "distribute 45% of statutory royalties to the solo
artist, or members of a group of artists, featured on a recording"
and not to the owners of the band, regardless of whether the cover
of an album that contains a recording mentions only the band and
thus none of the band's members.
Ithier and EGC Corp. nonetheless contend that the
District Court's contrary construction is required by both the
text of the statutory provision at issue and, insofar as the text
alone is not dispositive, the relevant legislative history. We
cannot agree.
A.
With respect to the statute's text, see United States v.
Winczuk, 67 F.4th 11, 16 (1st Cir. 2023) ("[Using the normal tools
of statutory interpretation, w]e begin, as always, with the text
of the statute."), Ithier and EGC Corp. recognize that no statutory
provision defines either the phrase "the recording artist or
- 14 - artists featured on such sound recording" or any of that phrase's
constituent parts. 17 U.S.C. § 114(g)(2)(D). But they contend
the ordinary meaning of the word "featured" shows that their
position is right.
To make that case, Ithier and EGC Corp. point to a
dictionary definition of the word "featured": "displayed,
advertised, or presented as a special attraction." Featured,
Merriam-Webster (May 16, 2024), https://www.merriam-
webster.com/dictionary/featured [https://perma.cc/9NL7-7822].
They then contend that, because we generally presume that Congress
intends the words that it uses in statutes to have their ordinary
meaning, see Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd.
P'ship, 507 U.S. 380, 388 (1993), the statutory provision's use of
the word "featured" requires that we "focus on the sound recording
album covers" to determine which artist was "featured."3 After
all, they assert, there is no better place to look to determine
the "artist" that is "displayed, advertised, or presented as a
3 In support of their contention that we should "focus on the sound recording album covers" to determine which artist was "featured," Ithier and EGC Corp. also note that SoundExchange's "Key Terms for Creators" page on its website states that "[t]he term Artist refers [to] the group, band, or individual name as it appears on the release of a recording." Key Terms for Creators, SoundExchange, https://www.soundexchange.com/what-we- do/forartists-labels-and-producers/key-terms/ [https://perma.cc/RYE5-TH29]. But we do not find this definitional argument persuasive because such an argument "finds no support in the language of the statute [or] in precedent." United States v. Newton, 891 F.2d 944, 951 (1st Cir. 1989).
- 15 - special attraction" for a given sound recording than the cover of
the album that contains that recording. Featured, supra. And
from there, Ithier and EGC Corp. go on to assert that, because the
album covers for the sound recordings at issue refer solely to "El
Gran Combo" and not to any of the band's individual members, the
band as an independent entity is alone "displayed, advertised, or
presented as a special attraction." Id. Therefore, Ithier and
EGC Corp. contend, "the recording artist or artists featured on
such sound recording," 17 U.S.C. § 114(g)(2)(D), is the band as a
distinct entity and not any of its individual members. And so,
according to Ithier and EGC Corp., the corporation that owns the
band (EGC Corp.), and thus Ithier as the sole owner of that
corporation, is the "recording artist . . . featured" on the
recordings in question. Id.
Ithier and EGC Corp. also emphasize that this
construction of § 114(g)(2)(D) would not preclude Aponte-Cruz --
or any other member of El Gran Combo -- from collecting statutory
royalties. Aponte-Cruz would still be entitled on this reading to
his portion of the 2.5% of statutory royalties "distributed to
nonfeatured vocalists . . . who have performed on sound
recordings" for the recordings on which he was the lead vocalist,
just as (presumably) the individual members of The Beatles would
be under EGC Corp. and Ithier's construction of the provision for
- 16 - their work as "nonfeatured" artists on the White Album's sound
recordings. Id. § 114(g)(2)(C).
Indeed, Ithier and EGC Corp. contend that unless
§ 114(g)(2)(D) is read as they read it, §§ 114(g)(2)(B) and
114(g)(2)(C) -- which provide, respectively, for the payment of
statutory royalties to "nonfeatured musicians" and "nonfeatured
vocalists" -- would be rendered superfluous. For, they contend,
under Aponte-Cruz's contrary reading of § 114(g)(2), all members
of a band (be that band El Gran Combo or The Beatles) would be
considered "featured" artists under § 114(g)(2)(D) while no member
of the band would be considered a "nonfeatured" musician or
vocalist.
We are not persuaded. Ithier and EGC Corp. are, of
course, right that the statute's use of the word "featured"
distinguishes between "recording artist[s]" who are "featured" and
those who are "nonfeatured." Id. § 114(g). But the use of the
word "featured" does not in and of itself tell us that the
"recording artist or artists featured" on the sound recordings on
a band's album cannot be any of the individual members of that
band whenever the album cover refers only to the band itself and
not to any of the individual members. Id. § 114(g)(2)(D).
As Aponte-Cruz explains, the word "featured" could
simply require us -- when confronted with such an album cover --
to treat as "featured" the individual natural persons who are
- 17 - members of the band named on the cover and as "nonfeatured" any
session musicians, backup vocalists, or chorus members who also
appear on the sound recordings but are not members of the band.
After all, there is nothing strained about concluding that such
individual band members are "presented as a special attraction" on
the "sound recording[s]" through the album cover's reference to
the band itself, given that the band is, in the end, a collection
of individuals. Featured, supra; 17 U.S.C. § 114(g)(2)(D).
Moreover, although neither § 114(g) nor any other
section of the Copyright Act of 1976 specifically defines "the
recording artist or artists featured on such sound recording," id.
§ 114(g)(2)(D), § 114(g)(1)(A) does refer, in describing a
"featured recording artist," to "who performs on a sound recording"
(emphasis added). And the word "who," especially when used as the
subject of the subordinate clause that uses the verb "performs,"
is most comfortably read to be referring to a natural person rather
than an artificial entity.
Indeed, this conclusion comports with the "Definitions"
section of the Copyright Act of 1976 as amended and codified. That
section provides that "[t]o 'perform' a work means to recite,
render, play, dance, or act it, either directly or by means of any
device or process," and it is people, not artificial, nonphysical
entities like a corporation, that "recite, render, play, dance, or
act," id. § 101, even when those individuals do so collectively.
- 18 - We also note that, if the phrase "the recording artist
or artists featured on such sound recording," id. § 114(g)(2)(D),
were not construed to refer to the natural persons who "perform"
on the sound recordings, then the statute would contain a curious
ambiguity about who would be entitled to the 45% share of the
statutory royalties, id. § 101. To be sure, Ithier and EGC Corp.
contend that the "recording artist . . . featured" here clearly is
EGC Corp. (and thus Ithier as its owner), as that company owns El
Gran Combo. Id. § 114(g)(2)(D). But Ithier had no clear answer
at oral argument as to the meaning of "recording
artist . . . featured" in the case of an unincorporated band, id.,
as he variously described the featured artist in that case as the
person who determines who is in the band and the person who founded
the band. See In re Graves, 33 F.3d 242, 249 n.14 (3d Cir. 1994)
("When interpreting a statute a construction which would create
confusion should be avoided." (internal quotation marks and
citation omitted)).
Additionally, we note that, in construing "the recording
artist[s] . . . featured," 17 U.S.C. § 114(g)(2)(D), on El Gran
Combo's sound recordings to refer to each of the individual members
of that band, we do not thereby render either § 114(g)(2)(B) or
§ 114(g)(2)(C) superfluous in referring, respectively, to
"nonfeatured musicians" and "nonfeatured vocalists." Those
provisions would be fully applicable in the case of any band that
- 19 - hires session musicians, backup vocalists, or chorus members who
are not members of the band but who perform on some of the band's
sound recordings. And, we must say, there is some intuitive appeal
to the notion that Congress did not use the word "featured" to
equate a star like Lennon or McCartney with a session musician
like Frederick Alexander (who played the cello for "Martha My Dear"
on the White Album), such that each would be entitled to only equal
portions of the 5% share of royalties owed to "nonfeatured"
artists.4 Id. § 114(g)(2).
In sum, the statutory provision in question refers to a
"recording artist . . . featured" on a sound recording, id.
§ 114(g)(2)(D), and then elsewhere refers to such an "artist" as
one "who performs" -- and thus one who "recite[s], render[s],
play[s], dance[s], or act[s]," id. §§ 101, 114(g)(1)(A). As a
result, the statute's text is most naturally read to be referring
to an individual person -- and not a disembodied entity -- in
referring to an "artist." For that reason, the statutory text
points against the construction that Ithier and EGC Corp. favor
and toward the construction that Aponte-Cruz advances. And so, if
the statutory text were our only guide, we would see no reason to
4 We note that this reading of the word "featured" also appears
to accord with commonly understood and accepted terms of art in the music industry, including that "artists" are human beings and that the terms "nonfeatured" vocalist and musician refer to backup singers and session musicians, respectively.
- 20 - construe the provisions at issue as Ithier and EGC Corp. contend
that we must.
B.
Ithier and EGC Corp. do separately contend that even if
the statutory text does not compel their construction of
§ 114(g)(2)(D), the legislative history of the Copyright Act of
1976 and its amendments does. But we cannot agree, even assuming
that the text is not so clearly supportive of Aponte-Cruz's
position as to render the inquiry into the legislative history
unnecessary. See Telecomms. Regul. Bd. P.R. v. CTIA-Wireless
Ass'n, 752 F.3d 60, 66 (1st Cir. 2014) ("Where the text of a
statute is clear, as it is here, we need not go on to consider the
act's legislative history to divine Congress's
intent. . . . Nevertheless, in an abundance of caution, we will
proceed to consider . . . Appellants' argument that our
interpretation of the statute is contrary to congressional purpose
as evidenced by the [statute's] legislative history.").
For starters, much of the legislative history appears to
contemplate that "the recording artist or artists featured on such
sound recordings" would be natural persons and thus to support
Aponte-Cruz's natural-person-based reading of "recording
artist . . . featured." 17 U.S.C. § 114(g)(2)(D). For example,
in presenting the bill that eventually became DPRA to the Senate
Floor, Senator Orrin Hatch stated, "Mr. President, it is important
- 21 - that the creators of America's music -- whether they compose the
score, write the lyrics, sing the songs, or produce the recordings
-- be fairly and equitably compensated for the public performances
that result. For too long they have not been." 141 Cong. Rec.
S11949 (daily ed. Aug. 8, 1995) (statement of Sen. Orrin Hatch)
(emphasis added).
Indeed, while Congress initially envisioned statutory
royalties flowing through copyright owners like record companies,
in 2002 Congress amended § 114(g)(2) to provide even more
protection to recording artists by codifying arrangements to pay
them directly through a collective like SoundExchange, rather than
through record companies and other copyright owners. See SWSA,
Pub. L. No. 107-321, § 5, 116 Stat. 2780, 2784-85. As
Representative John Conyers, Jr. stated during House consideration
of SWSA:
This bill has several provisions that will make it easier for music to be performed online and for the creators to be compensated. . . . I am especially pleased that the final legislation includes a statutory direct payment provision. This provision ensures the musicians, vocalists, and artists receive their royalties from digital music directly from the collection agent instead of through other intermediaries.
148 Cong. Rec. H7047 (daily ed. Oct. 7, 2002) (statement of Rep.
John Conyers, Jr.) (emphasis added); see also, e.g., Copyright
Royalties: Where Is the Right Spot on the Dial for Webcasting?:
- 22 - Hearing on H.R. 5469 Before the S. Judiciary Comm., 107th Cong.
132 (2002) (statement of Dan Navarro, Member, Am. Fed'n of
Television & Radio Artists & the Am. Fed'n of Musicians of the
U.S. & Can.) ("Congress redressed a small part of the unfair
position to which American performers had been relegated when it
passed [DPRA]. For the first time, Congress required that at least
some public performances of recorded music require payment to the
creators of that music for the right to perform [their] work."
(emphasis added)).
In nonetheless arguing that the legislative history of
DPRA favors their position, Ithier and EGC Corp. rely chiefly on
the portion of the Senate Report that clarified the following with
respect to the term "featured recording artist" as used in another
provision of § 114 that does not itself pertain to royalties at
all. That passage reads as follows:
The term "featured recording artist" means the performing group or ensemble or, if not a group or ensemble, the individual performer, identified most prominently in print on, or otherwise in connection with, the phonorecord actually being performed. Except in the case of a sound recording consisting of a compilation of sound recordings by more than one performer or group or ensemble, there will ordinarily be only one "featured recording artist" per phonorecord. A vocalist or soloist performing along with a group or ensemble is not a "featured recording artist" unless that person is identified in connection with the phonorecord as the primary performer. For example, the Eagles would be the "featured recording artist" on a track from an Eagles
- 23 - album that does not feature Don Henley by name with equal prominence; but if the same sound recording were performed from "Don Henley's Greatest Hits," then Don Henley and not the Eagles would be the "featured recording artist." Where both the vocalist or soloist and the group or ensemble are identified as a single entity and with equal prominence (such as "Diana Ross and the Supremes"), both the individual and the group qualify as the "featured recording artist."
S. Rep. No. 104-128, at 36 (1995) (emphasis added).
Ithier and EGC Corp. contend that this passage reveals
that the featured recording artist is "the artist 'most prominently
included in print on, or otherwise in connection with, the
phonorecords performed.'" Id. And so, they contend, this passage
shows that the "featured recording artist" here is El Gran Combo
the entity and not any individual member of it. Id.
But, although the Senate Report states that "the Eagles
would be the 'featured recording artist' on a track from an Eagles
album that does not feature Don Henley by name with equal
prominence," id., when this portion of the Senate Report is read
in context, it provides no support to Ithier and EGC Corp.'s
position. The Senate Report is addressing the "sound recording
performance complement," see 17 U.S.C. §§ 114(d)(2)(B)(i), (C)(i),
(j)(13), which is a requirement that limits the number of times
within a three-hour period that a statutory licensee can play
recordings from the same album or "featured recording artist," S.
Rep. No. 104-128, at 36. The examples the Senate Report uses are
- 24 - thus directed to the practical problems that a radio station or
other service provider playing a recording from a physical album
in 1995, or more recently playing a digital file with limited
identifying metadata, has tracking compliance with the performance
complement. See id.
For that reason, the examples given in the Senate Report
are best read to be simply clarifying that a radio station or other
service provider playing a sound recording from an album on which
a person is performing as part of a band can play a sound recording
from another album on which that same person is performing in a
different capacity without necessarily running afoul of the "sound
recording performance complement." See 17 U.S.C.
§§ 114(d)(2)(B)(i), (C)(i), (j)(13). As the Senate Report
explains by way of example, a radio station or other service
provider could play a song from an Eagles album that does not
separately display the name of Don Henley -- one of the band's
members -- prominently on the album cover. See S. Rep. No. 104-
128, at 36. But playing that same song from a "Don Henley's
Greatest Hits" album within a three-hour period would not count
against the radio station or other service provider for purposes
of the performance complement because Don Henley is playing in his
capacity as a member of the band in one of the recordings and in
his capacity as an individual artist in the other. See id.
- 25 - Similarly, it is undisputed here that Aponte-Cruz was
once a member of El Gran Combo and, having left El Gran Combo in
2014, Aponte-Cruz now performs as a solo act and receives separate
payments as a featured artist from the albums he has released in
his solo-act capacity after he left El Gran Combo. But receiving
statutory royalties for being the featured artist on a solo album
is not in tension with also receiving statutory royalties as a
member of a band -- and thus also as one of the featured artists
-- on a band's album. We thus do not understand this passage in
the Senate Report to be weighing in on the point in dispute here
-- whether a "featured" artist in § 114(g)(2)(D) is the band as an
entity independent of its individual members or instead the
individual members of that band.
C.
In sum, Ithier and EGC Corp. ask us to reject the way
that 17 U.S.C. § 114(g) has been implemented for at least the past
twenty years. And they do so chiefly based on a textual assertion
that relies wholly on an argument about the word "featured" that
does not hold up when considered carefully. Insofar as they mean
to say that the legislative history also shows that their
understanding of the word "featured" is the correct one, moreover,
- 26 - that contention also fails, for all the reasons set forth above.5
See Am. Fuel & Petrochemical Mfrs. v. EPA, 3 F.4th 373, 383 (D.C.
Cir. 2021) ("[A]mbiguous [legislative] history hardly suffices to
overcome the plain text [of the statute in question], for courts
'do not resort to legislative history to cloud a statutory text
that is clear.'" (quoting Ratzlaf v. United States, 510 U.S. 135,
147-48 (1994))). As a result, we conclude that Aponte-Cruz is
"the recording artist . . . featured on such sound recording," 17
U.S.C. § 114(g)(2)(D), and so is entitled to the statutory
royalties he claims are his, notwithstanding the District Court's
conclusion to the contrary.6
5 Ithier and EGC Corp. also argue that "the internal contractual relationship between Aponte and Ithier should be the central focus of the featured artist's inquiry because it is the deciding factor and thus, dispositive of the featured artist issue." See Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730 (1989). But, even assuming that a contract between Aponte-Cruz and Ithier and EGC Corp. that renounced the statutory royalties at issue here would be valid, Ithier and EGC Corp. admitted at oral argument that there was no such contract entered into here. 6 Ithier did play as a member of El Gran Combo in some of the band's recordings as a pianist. Consistent with our holding here, he would be entitled to featured-artist statutory royalties generated by those recordings because he played on those recordings as a member of El Gran Combo. For the reasons we have explained, he would not, however, be entitled to featured-artist royalties for those recordings simply because he is the owner of EGC Corp.
- 27 - V.
The District Court's award of summary judgment to Ithier
and EGC Corp. and its denial of summary judgment to Aponte-Cruz
are both reversed. The parties shall bear their own costs.
- 28 -