One of the biggest advantages to settling a lawsuit outside of court is that it removes the uncertainty of going to trial. The plaintiffs are sure to get some financial benefit, rather than risking it all at trial, and the defendants often pay a lower amount than they would have had to pay if they had left it up to a jury. Both parties get to avoid the time, expense, and hassle involved in pursuing a legal dispute that has the potential to drag on in the courts for months or even years. This is why most class action lawsuits settle before ever reaching court.
But if the parties reach a settlement agreement and one or more of the plaintiffs don’t agree with the terms of the agreement, they can choose to opt out of the class. Plaintiffs who decide not to opt out, and take the settlement, are usually prevented from filing similar lawsuits against the defendant in the future as part of the settlement agreement. It’s for this reason that, when someone decides to opt out of a class, it’s often because they want to reserve their right to sue the defendant. In most cases, they think they can get better terms, either by pursuing a lawsuit all the way through a trial or pushing for a more favorable settlement agreement.
This is the case with the recent class action copyright lawsuit against Spotify. The music streaming company recently reached a settlement agreement worth $112.55 million with a class of more than 535,000 plaintiffs. After the class members were notified of the settlement and its terms, about 1,200 members opted out of the class.
Wixen Publishing Group, which represents such songwriters as Tom Petty and Dan Auerbach, not only opted out of the class, but also filed a motion listing his reasons for believing the settlement is unfair to the class of plaintiffs.
According to Wixen, statutory damages for a case involving willful copyright infringement can be as much as $30,000 per violation, with willful violations incurring as much as $150,000 per violation. Because the original copyright lawsuit involves so many thousands of incidents of copyright infringement, Wixen alleges the settlement agreement gives Spotify a discount of almost 99% if the violations were not willful. If the violations were willful, then Wixen claims the discount comes close enough to 100% as to effectively give Spotify a free pass for willfully committing thousands of copyright infringement violations.
But U.S. District Court Judge Alison Nathan disagreed with Wixen’s objections to the terms of the settlement agreement. First, she determined that the certainty of receiving a payout, a portion of which will be paid out immediately, plus a commitment to paying ongoing royalties, is enough to consider the settlement agreement fair to both parties. Second, she pointed out that, since Wixen had opted out of the class, it was not in a position to object to a settlement which it had opted out of receiving, so she certified the settlement.
In the meantime, Wixen has filed its own copyright infringement lawsuit against Spotify, alleging $1.6 billion in damages. Bob Gaudio and Bluewater Music Services Corporation have also recently filed their own copyright infringement lawsuits against the music streaming company.Super Lawyers named Illinois commercial law trial attorney Peter Lubin a Super Lawyer and Illinois business dispute attorneys Patrick Austermuehle and Andrew Murphy Rising Stars in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Lubin Austermuehle’s Illinois business trial lawyers have over thirty years of experience in litigating complex class action, copyright, noncompete agreement, trademark and libel suits, consumer rights and many different types of business and commercial litigation disputes. Our Schaumburg and Naperville business dispute lawyers, civil litigation lawyers and copyright attorneys handle emergency business lawsuits involving copyrights, trademarks, injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist Chicago and Oak Brook area businesses and business owners who are victims of fraud. You can contact us by calling at 630-333-0333. You can also contact us online here.