People Aren’t Getting Paid After Spotify’s $43.5 Million Class Action Settlement — No Responses, No Payments

Two years ago, independent songwriters and publishers agreed to a $43.5 million settlement with Spotify over unpaid mechanical licenses. Now, the payout process doesn’t seem to be working.

Back in 2017, Digital Music News broke the story that Spotify had agreed to settle Ferrick, et al. v. Spotify USA Inc., a massive copyright infringement lawsuit with independent songwriters and publishers.  The out-of-court settlement allowed Spotify to close its case, avoid any claim of legal liability, and move on with its multi-billion-dollar public offering.

The settlement was officially signed by a federal judge in 2018. Now that the money is due in 2019, however, nobody seems to be getting paid.

According to information shared this week with DMN, the class action payout process is now riddled with problems. Those include flat-out non-responses, major errors in matching ISRCs with actual recordings, and other logistical problems. Jeff Price, founder of Audiam, part of SOCAN, told us that initial requests to match data and make claims were not receiving responses. Even worse, the assigned claims administrator, a company named Epiq, seemed largely unaware that the claims process was underway.

Don’t blame Spotify, however.  Once the matter was officially resolved, Spotify deposited $43.5 million into an interest-bearing escrow account, then walked away.  The rest was out of their hands.

So, who’s hands is the matter with now, exactly?

Interestingly, the plaintiff’s lawyers in Ferrick v. Spotify received more than $13 million in fees after the settlement. Subsequently, the court appointed Gradstein & Marzano, P.C. and Susman Godfrey L.L.P. as ‘Class Counsel’ to oversee the distribution process. Those same attorneys don’t seem to be coordinating any of the details, however.

Price told us neither were responding to inquiries or taking any noticeable interest in the distribution process. The claims seemed to going into a black hole.

The non-responses and frustrations forced Jeff Price to directly email presiding judge Alison Nathan on October 18th.

“We are having problems with the administrator hindering our ability to complete our submission as a member of the class and were hoping you could help,” Price wrote.

“It is ten days since submission and we still have received no verification that (1) our file was received, (2) that the file was valid (3) communication in regards to when to expect the return file back (i.e. if it takes more than 6 weeks we miss the Dec 11th, deadline).”

Price told us that the letter was mailed as a total last resort, after receiving zero response from the attorneys involved in the case.

“Please note, I am contacting you as a last resort,” the letter to judge Nathan continued.  “Prior to contacting you, I contacted all Plaintiff attorneys and all Defense attorneys about these issues via email. I also emailed the provided email listed on the settlement website (no response), called the phone number listed on the settlement website (a voice-mail recording that did not deal address these issues), and contacted the Administrator (a company called Epiq) directly via phone at three of their different office locations (they stated they did not know anything about the Spotify Track-IDs and had no one for me to speak with).”

Price told DMN that since firing off that letter, he’s been able to actually get responses.  “The plaintiff’s attorney responded to what I wrote,” he said.  But he’s only been able to match about 10% of the ISRCs in question.

Still, some improvements are taking place.  “New policies and procedures now seem to be in place with guaranteed response times, email confirmations and the December 11th deadline being more clearly defined as the deadline a class member must at least submit for Spotify Track IDs and not have to turn in the completed data,” Price later emailed.

So the s—t show continues — though people might now be getting responses and even some money.  Let’s see.

For those trying to make a claim for mechanical royalties owed between December 28, 2012 and June 29, 2017, you have until December 11th to make a claim.  The place to start is here — good luck, my friend.  

(top photo: Chris Panas)

10 Responses

  1. Make Me A Bird

    Let it be known for months I have been saying
    I’ve not received numbers for MONTHS AND MONTHS
    Same thing over and over 1 stream paid me 15 dollars
    Months of this
    I took my music off the site AND GUESS WHAT?!?!?

  2. Sam

    It has been this way since the advances and large legal payouts of the dot come boom of 1999/2000.

  3. Sammy

    Writers claim Spotify didn’t properly pay them.

    Spotify said we don’t have the data, there is no registry.

    Spotify gives the money to court-apptd group to distribute.

    Now they don’t have the data, there is no registry.

    Gee, maybe Spotify was correct in the first place.

    Writers: Build and support a registry.

    • Meat Head

      writers say spotify did not notify them via NOI’s
      spotify said they had incomplete data, there is no database
      US copyright office says it is a database, writers agree
      spotify agrees to settlement
      claimants claim, now they have the data
      gee, maybe spotify f**cked up in the first place
      writers pay and support US copyright registry

  4. King Shlomo

    Yup, you’re right. There’s no possible way to know if you’re owed money. None. You have to spend a lot of time submitting info, only to wait and not know if you’re one of the claimants. And even then maybe you get a few bucks. Not even sure how they won without all this incomplete data.

  5. Rabbi Shlomo Rubenstein the third

    Said this many many years ago, it’s would only get worse for writers and artists once streaming dominated. Well folks here we are.

  6. Lightening

    Do Not Despair
    Compounding Interest Is On It’s Way
    To Save Us By Pounding Our Enemies Into DUST
    A Nuke If You Will Decimating ALL Companies
    I Can Feel The Vibrations Now
    Every STEP The Beast Doubles Triples In Size
    It May Be Why They Haven’t Paid.
    They Simply Cant…

  7. Dean Hajas

    Exactly how is this any different Jeff Price then that if the Class Action settlement in Canada with Harrison Pensa who launched the action in the Chet Baker cause? It’s like a verbatim of scenarios listed, while in process of complying with time lines and proof of Copyright Ownership, Tim Hogan presented smoke screen stating” there’s no money here to be paid out, that’s coming from the CMRRA.
    Let’s face it, Orphan Royalties are part of the failings of the Performing Rights Organizations, the Copyright Process and independent creators / and sub- publishers are not required to authenticate Copyright Ownership.
    I ask that WIPO intervene, and establish wether Canada and the USA have complied with provisions in the Rome Treaty and Berne Convention.
    I find the truth in this matter pointing to what Jeff Price from SOCAN states he’s looking through “ISRC codes”.. what happened to the elusive ISWC codes that are provided by ASCAP and CISAC Jeff? Aren’t those traceable too?

  8. Dean Hajas

    Sammy.. you nailed it.
    There is a need for a one stop registry that merges ISWC / ISRC coding. These two haven’t played well together since inception.. and the failings of them are prevalent showing the cracks in Royalty collections and distributions. Sub- publishers have been abusing these facts while Performing Rights Organizations absorb the balance left over titled “Orphan Royalties”.
    Berkeley In Boston is addressing this with the cooperation of many of the same players
    With registry and authentication coming from the DAW source.
    Ironically, SOCAN who never took interest in authentication of Copyright Ownership prior, is first in line wanting to charge as a service to registry.

  9. Chrystal Bocast

    I have been sent an email saying my spreadsheet isn’t filled out correctly. I checked and it is letter-perfect (Excel 2011 Version 14.5.7). Is this a format issue or random blanket denial and obfuscation? Anyone else