Young Bloods Sony Settlement

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  • 8/2/2019 Young Bloods Sony Settlement



    Plaintiff,-against-SONY M USIC ENTERTAINM ENT, a DelawareGeneral Partnership,


    06 Civ. 3252 (GBD ) (KNF)ECF CASE


    BMG MU SIC,Defendant.

    "THE Y OUN GBLO ODS" (Perry Miller p/k/a JesseColin Young ; Lowell Levinger; Jerry Corbitt; MinaBauer, the widow of Joe Bauer; and manager StuartKutchins), On B ehalf Of Itself And All Others SimilarlySituated,

    07 Civ. 2394 (GBD ) (KNF)ECF CASE

    DECLARATION OF BRIAN CAPLAN IN SUPPORT OF M OTION FORPRELIMINARY APPROVAL OF SETTLEMENTSBRIAN CAPLAN makes the following d eclaration, under penalty of perjury, pursuant to

    28 U.S.C. 1746:1. I am member of Caplan & Ross LLP, co-counsel of record together with

    the law firms of Milberg LL P and Probstein, Weiner, and Bu tler for Plaintiff Elmo S hropshire inShropshire v. Sony Music Entertainment, 06 Civ. 3252 (GBD) (KN F) (the "SME Action") andco-counsel of record together with the law firms of Milberg LLP and Law Offices of Thomas A.

    Case 1:07-cv-02394-GBD -KNF Document 121 Filed 03/07/12 Page 1 of 12

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    Cohen for Plaintiff The Youngbloods in Youngbloods v. BMG Music, 07 Civ. 2394 (GBD )(KNF) (the "BMG Action"). I make this declaration in support of plaintiff's motion forpreliminary approval of the proposed settlements with Defendan t Sony M usic Entertainment("SME") and BMG Music ("BMG" now known as Arista Music ("Arista")).

    2. I make this declaration based upon p ersonal knowledge o f the facts setforth herein and upon m y review of the C ourt's docket and the papers filed in these actions. Ifcalled as a witness I could and w ould testify competently to these facts under oath.

    3. The p arties to the above captioned A ctions, after extensive arm's lengthnegotiations between all counsel, who are experienced and qualified in this type of comp lexlitigation and the issues covered by the instant litigation, have reached proposed settlements ofthe Actions wh ich are memo rialized in each action in a Stipulation and Agreem ent of Settlement(the "Stipulations"), attached hereto as Exhibits 1 and 2, w hich each have the following attachedexhibits:

    Exhibit A: Preliminary Order for Notice and Hearing In Con nection WithSettlement ProceedingsExhibit A-1: Notice of Pendency of C lass Actions, Proposed Settlements ofClass Actions, Mo tions for Attorneys' Fees and Expenses, and SettlementHearingsExhibit A-2: Claim FormExhibit A-3: Publication NoticeExhibit B: Order and Final Judgment4. Attached hereto as Exhibit 3 is the resume of Caplan & Ros s, LLP.5. Attached hereto as Exhibit 4 is the resume of M ilberg LLP.


    Case 1:07-cv-02394-GBD -KNF Document 121 Filed 03/07/12 Page 2 of 12

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    6. Attached hereto as Exhibit 5 is the resume of Probstein, Weiner & Butler.7. Attached hereto as Exhibit 6 is the resume of the Law Offices of Thom as

    A. Cohen.8. Plaintiffs make this m otion seeking entry of a proposed Preliminary Order

    for Notice and H earing In Connection W ith Settlement Proceedings, in each of the actions inaccordance with the terms of the Stipulations between and among Plaintiffs and D efendantsSME and Arista.

    9. Plaintiffs have aggressively litigated these class actions brought o n behalfof classes of persons w ho entered into recording or production agreements w ith labels affiliatedwith, or subsidiaries of, SM E and BMG. After engaging in discovery and vigorous, arms'-lengthnegotiations with the assistance of mediator Eric Van Loon of JAM S, the parties reached anagreement regarding the settlement of the Actions, set forth initially in a C onfidential SummaryTerm S heet ("Term Sheet"), entered into and dated August 11, 2011, and then m emorialized inthe Stipulations attached hereto as Exhibits 1 and 2 .

    10. Before reaching the p roposed settlements with defense counsel, Plaintiffs'Counsel cond ucted a thorough investigation of the underlying events and transactions as allegedin the complaints in the actions, including a review of docum ents produced by D efendants,interrogatory responses provided by D efendants, depositions, witness interviews, andconfirmatory discovery provided by Defendan ts pursuant to the Term Sheet, and have researchedthe applicable law with respect to the claims alleged and the potential defenses thereto.

    11. This declaration sets forth the history and scop e of this litigation in orderto demonstrate why the proposed Settlements of these A ctions on the terms agreed to is fair,reasonable and adequate and p reliminary approval should be granted. The facts recited


    Case 1:07-cv-02394-GBD -KNF Document 121 Filed 03/07/12 Page 3 of 12

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    concerning the history of these Actions, Plaintiffs' claims, and the efforts of Co-Counsel inobtaining the Settlements are not, and are not intended to be, all inclusive, but are set forth toprovide the Court w ith a brief but meaningful description of the history, scope, risks, andcomplexity of these Actions. W e respectfully submit that they demonstrate that: (i) the proposedSettlements should be preliminarily approved; (ii) notice should be issued in accordance w ith theterms and provisions set forth at 10-13 of the Stipulations; and (iii) a final approval hearingshould be schedu led for final determinations as to the fairness, reasonableness, and adequacy ofthe proposed Settlements and to consider Class Counsel's motions for attorneys' fees andexpenses and service awards to the Plaintiffs Elmo Shropshire and The Youngbloods.Settlements

    12. The prop osed Settlements (1) make $ 7.95 million available to all ClassMembers based on their downloads sold on Apple's iTunes Store before December 31, 2010("Past Settlement Relief' or "Compensation For Prior Years") and (2) provide for a prospective3% increase in the royalty rate for certain Class Mem bers (as described below) for perm anentdigital downloads and ringtones sold in the U .S. after January 1, 2011 ("Prospective SettlementRelief').

    13. Mo re specifically, Past S ettlement R elief includes:$7.65 million, less Plaintiffs' attorneys' fees and expenses as may be approved bythe Court, for Class Memb ers (1) who had at least 28,500 total downloads ofrecordings attributable to Class Contracts and sold in the U nited States by SM E orBMG (n/k/a Arista) on Apple's iTunes Store from inception through December31, 2010 and (2) who submit a valid Claim Form. These funds would be paid orcredited, as applicable, pro rata to the royalty accounts of q ualifying ClassMembers.$300,000 cash, w ithout any deduction of fees or expenses, which will be paid toall Class Mem bers, regardless of their royalty account balance, for those ClassMembers (1) who had fewer than 28,500 total downloads of recordingsattributable to Class Contracts and sold in the United States by SM E or BM G(n/k/a Arista) on Ap ple's iTunes S tore from inception through December 31, 201 0


    Case 1:07-cv-02394-GBD -KNF Document 121 Filed 03/07/12 Page 4 of 12

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    and (2) who submit a valid Claim Form. The cash would be paid equally percapita among qualifying Class Memb ers.The propo sed settlement allocates the $7.65 m illion and $ 300,000 P ast SettlementRelief amounts between the SME Action and the BMG Action based on therelative proportion of sales by SME to sales by BM G (n/k/a Arista) in the U.S. onApple's iTunes Store through December 31, 2010.Based on the respective sales data, 54.86% is attributed to the settlement withSME ($4,196,790 of the $7.65 million fund and $164,580 of the $300,000 fund)and 45.14% is attributed to the settlement with BMG (n/k/a Arista) ($3,453,210 ofthe $7.65 million fund and $135,420 of the $300 ,000 fund).

    14. Prospective Settlement Relief:SME and Arista have agreed to modify the Class Contracts of Class Memberswho sub mit a valid Claim Form and w ho qualify for Prospective SettlementRelief to provide that SME and Arista will calculate royalties on Sales / in theUnited States of permanen t digital down loads and ringtones of recordingsattributable to C lass Contracts under the royalty provisions that it currentlyapplies to such Sales, and shall add an add itional royalty equal to 3% o f the grossamount paid or credited to SME or Arista with respect to each such U .S.permanent digital download or ringtone, with no deductions of any kind and noreserves held (the "Ad ditional Royalty").The A dditional Royalty is available to Class Members w ith:

    (i) at least 28,500 total downloads o f recordings attributable to ClassContracts and sold in the United States by SME or BM G (n/k/a Arista) onApple's iTunes Store from inception through December 31, 2010 (suchAdditional Royalty to be applied to all Sales after January 1, 2011); or(ii) with fewer than 28,500 total downloads of recordings attributable toClass Contracts and sold in the United States by SME or BMG (n/k/aArista) on Apple's iTunes Store from inception through Decem ber 31,2010, but (x) w ho have at least $18,000 of roy alty earnings attributable toSales in the United States of any such recordings on Apple's iTunes Storewithin any two co nsecutive royalty accounting periods after January 1,2011, and (y) w ho thereafter assert their right to such Additional Royaltywithin the period within which such Class M ember, under the terms of theapplicable Class Contract, may o bject to royalty accountings for the later

    For purposes of these settlements, "Sales" means any distribution in the U