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iHeartMedia, Inc. v. Sheridan

Supreme Court of Georgia

March 20, 2017

iHEARTMEDIA, INC.
v.
SHERIDAN et al.

          MELTON, Presiding Justice.

         In this case regarding the interpretation of Georgia's Criminal Reproduction and Sale of Recorded Material statute, OGCA § 16-8-60, the United States District Court for the Middle District of Georgia has certified the following question for our consideration:

Whether the exemption to OCGA §16-8-60, set forth in § 16-8-60 (c) (1), applies such that internet radio services are exempt from application of § 16-8-60?

         For the reasons set forth below, we find that the type of internet radio services being offered by iHeartMedia, Inc. in this case do fall under the exemption set forth in OCGA § 16-8-60 (c) (1).

         The underlying facts of this case, as set forth by the District Court, show that Arthur and Barbara Sheridan are the owners of several pre-1972 master sound recordings of certain popular songs, as well as the associated intellectual property and contract rights.[1] iHeartMedia is an operator of AM/FM radio stations, sometimes referred to as terrestrial stations, as well as internet radio services. These latter services allow listeners to access and listen to a song through an internet-connected device such as a tablet, computer, or smartphone. It is undisputed that iHeartMedia streamed the Sheridans' recordings to listeners over its internet radio platform, iHeartRadio.[2] It is also undisputed that iHeartMedia has no license, authority, or consent from the Sheridans to stream the recordings, and iHeartMedia has not compensated the Sheridans for the use of their recordings.

         On September 29, 2015, the Sheridans filed a complaint against iHeartMedia alleging violations of OCGA § 16-8-60, [3] which prohibits the transfer of sound recordings without permission and provides criminal sanctions for violators.[4] The Sheridans claim that iHeartMedia needed their consent to transfer their master sound recordings to iHeartRadio listeners, and that iHeartMedia engaged in racketeering activity by making unauthorized transfers. See OGCA § 16-14-1. iHeartMedia moved to dismiss the Sheridans' complaint under the radio broadcast exemption in OCGA § 16-8-60 (c) (1), which states that OCGA § 16-8-60 does not apply to "any person who transfers or causes to be transferred any such sounds or visual images intended for or in connection with radio or television broadcast transmission or related uses." This motion prompted the District Court to certify the question now before us.

Our well established rules of statutory interpretation presume
that the General Assembly meant what it said and said what it meant. To that end, we must afford the statutory text its plain and ordinary meaning, we must view the statutory text in the context in which it appears, and we must read the statutory text in its most natural and reasonable way, as an ordinary speaker of the English language would . . . [and] if the statutory text is clear and unambiguous, we attribute to the statute its plain meaning, and our search for statutory meaning is at an end.

(Citations and punctuation omitted.) Deal v. Coleman, 294 Ga. 170, 173 (1) (a) (751 S.E.2d 337) (2013). On its face, OCGA § 16-8-60 (c) (1) provides an exemption for both radio broadcast transmissions and related uses. If iHeartMedia's internet radio services fall under either of these categories, the prohibitions of OCGA § 16-8-60 do not apply to iHeartRadio.

         The services provided by iHeartRadio do qualify, at the least, as a related use to a radio broadcast transmission[5] for two main reasons: (1) the user experiences offered by iHeartMedia and terrestrial AM/FM radio are substantially similar and (2) the nature of the streaming of sound recordings by iHeartRadio and the nature of the broadcast by terrestrial AM/FM radio are qualitatively the same.[6]

         First, with regard to user experience, iHeartRadio is nearly identical to terrestrial AM/FM radio. For example, one of iHeartMedia's internet services, "simulcast, " concurrently broadcasts the exact programming offered by its terrestrial radio stations over the internet. The only difference for the listener is that the music would be accessed through an internet-connected device such as a smartphone or computer, rather than a traditional radio receiver. iHeartMedia's other radio service, which allows users to "build" their own station around a particular song, band, genre, etc., provides for more user input, but is not an on demand service, and ultimately resembles someone selecting a terrestrial AM/FM station based on the station's advertised genre of music. Therefore, from the perspective of the listener, a shift from an AM/FM radio to an internet radio service would mean only minor changes to the user's experience.

         Second, with regard to the nature of the sound transmission, internet radio services provide sound recordings in a very similar way as terrestrial AM/FM radio, though some technological differences exist. iHeartRadio digitally broadcasts a track to the listener for a single use, and then the track disappears from the listener's device. Practically, this is identical to the manner in which a listener experiences AM/FM radio broadcast sound recordings - the song is only temporarily played by the user's radio.[7] In either format, the listener may enjoy the recording, but the transmission of the recording is not stored for replaying.

         Therefore, because there is no significant difference in either the user experience or the nature of the broadcast of sound recordings between terrestrial AM/FM and internet transmissions of the type offered by iHeartMedia in this case, the latter is a related use of the former. Accordingly, we answer the certified question as follows: The exemption to OCGA §16-8-60, set forth in § 16-8-60 (c) (1), applies such that internet radio services of the type offered by iHeartMedia are exempt from application of OCGA §16-8-60.

         Question answered. All ...


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