SAG-AFTRA Is Trying to Dismiss a Songwriter Lawsuit Dealing with a Questionable 3% Fee

Should performers’ unions have the right to apply for a 3% fee to non-member songwriters and producers just to compensate themselves for their work?

Late last June, Kevin Risto, an award-winning songwriter and record producer, filed a class-action lawsuit against SAG-AFTRA, the American Federation of Musicians, and the trustees of the Intellectual Property Rights Distribution Fund.

According to Risto, the American performers unions had violated their fiduciary duty.  The unions had taken a 3% fee on royalties owed to sessions musicians and backup singers.  SAG-AFTRA, in particular, unfairly collected $1.7 million in service fees in 2016.  He has written songs for Justin Bieber, Jennifer Lopez, and 50 Cent.

In the lawsuit, Risto stated that federal law grants copyright owners the right to perform and reproduce their sound recordings via a digital audio transmission.  Only SoundExchange can collect royalties from these songs, not other unions.  The rest is turned over to the Intellectual Property Rights Distribution Fund.

Yet, after SAG acquired AFTRA – the American Federation of Television and Radio Artists – in 2012, the union’s trustees approved the 3% fee.  AFTRA hadn’t collected a service fee prior to this vote.  Risto doesn’t belong to either union.

Lambasting the agreement, Risto wrote that the Fund’s trustees had acted in deep conflicts of interest to the benefit of the unions, who had employed them.

This service fee reduces the amount of capital in the Fund and therefore reduces the amount of money available to the beneficiaries of the Fund.

Now, SAG-AFTRA and the American Federation of Musicians have sought to scuttle the lawsuit.

You don’t belong to me.  But, yes, I have to right to take away your money.

SAG-AFTRA and the American Federation of Musicians have asked a California judge to dismiss Risto’s lawsuit.

According to both unions, they added the 3% fee to help them identify and pay non-featured musicians.  After the Fund’s establishment 15 years ago, the unions now ‘need’ to take the extra amount to compensate themselves for the work.  They hadn’t needed to do so before.

[In] 2013 the trustees agreed to pay each union 1.5 percent of the receipts distributed in a given distribution cycle in return for the information and services provided by the union.

Indeed, the fund’s governing document specifically authorizes the trustees to compensate the unions for the information and services they provide.

As Risto has yet to prove what they’ve done wrong, writes the union, US District Judge Christina Snyder should completely throw out the lawsuit.

Judge Snyder said SAG-AFTRA’s motion to dismiss would be decided in a summary judgment at a later date.


Featured image by SAG-AFTRA.