The U.S. Court of Appeals for the Ninth Circuit reversed the District Court’s dismissal of a suit brought by the sole beneficiary of the Ray Charles estate, the Ray Charles Foundation, concluding that the Foundation had standing to challenge Charles’s heirs in their attempt to reclaim several copyrights to the late singer’s works because the Foundation’s right to royalties from such works would be affected. Ray Charles Foundation v. Robinson et al., Case No. 13-55421 (9th Cir. July 31, 2015) (Christen, J.).
The case in question was initiated in 2012 by the Ray Charles Foundation against 7 of the musician’s 12 children, to block their attempted terminations of copyrights under §§ 203 and 304(c) of the Copyright Act in 51 of Charles’ songs, including “I Got A Woman” and “Hallelujah, I Love Her So.” to get the return of the copyrights. The charitable Foundation was Charles’ sole heir and received the entirety of his estate, including the rights to receive royalties for his songs. Charles’ children each got a trust worth $500,000 apiece shortly before his death and were required to sign written contracts effectively waiving their rights to any other inheritance. Regular readers will recall the termination right the children are attempting to assert is created under the U.S. Copyright Act of 1976 which allows an artist or his surviving heirs to terminate a copyright 35 years after it was granted. The Foundation asserted a federal claim for declaratory and injunctive relief, asking the District Court to determine whether the termination notices were valid, and to prevent the defendants from claiming ownership to, or the benefit of, the copyrights at issue. The District Court held that Foundation’s right to receive royalties from the compositions did not fall within the zone of interests protected by the copyright termination provisions and the Foundation did not have third party standing to assert rights on behalf of the copyright owner, Warner/Chappell Music. The Foundation appealed
At the outset, the 9th Circuit acknowledged that the Foundation met the requirements for Article III standing. While the 9th Circuit rejected the Foundation’s argument that it had standing to bring its claims as a beneficial owner of the Charles copyrights, the appellate court determined that the Foundation had standing to bring its claims as a “real party in interest.” The 9th Circuit reasoned that termination of the copyright grants would affect the Foundation’s right to royalties stemming from such grants, depriving the Foundation of the right to receive future royalty income: “Just as the termination notices affect Warner/Chappell’s ownership of copyrights, they also directly affect the foundation’s right to royalties” and “The foundation is the sole recipient of royalties flowing from Charles’s copyright grants and effective termination would deprive it of the right to receive prospective royalties. We thus have little difficulty concluding that the foundation is litigating its own stake in this controversy” and concluded that the Foundation’s alleged injury to its interest in the royalty stream generated by Charles’s works is one that Congress “contemplated, regulated, and protected in enacting the termination provisions,” as it is the same interest the heirs sought to acquire. The 9th Circuit continued that even if the Foundation’s interests were not among those Congress contemplated in enacting the termination statutes, the Foundation would still have standing to bring the subject action, as it was entitled to a declaration establishing when its right to receive royalties would revert to Charles’s heirs.