Monday 3 March 2014, 12:19 | By

Steely Dan man sues over SoundExchange royalties

Business News Legal

Steely Dan

A different kind of digital royalties legal squabble for you now, with the news that David Palmer, an early member of Steely Dan, is suing his former bandmates over SoundExchange income.

Palmer only worked with the band for a couple of years, but contributed to their first two albums, providing lead vocals on two tracks on the debut. And he says that, according to a 1972 contract, he is due a sixth of any artist royalties generated by the recordings on which he appears.

But, Palmer seems to allege, his former band may have not been honouring that agreement when it comes to the royalties paid out by the American collective licensing body SoundExchange, which collects monies from Sirius XM and many of the Pandora-style streaming music services in the US, and pays it on to copyright owners and featured artists.

It seems Palmer only discovered he was due payments from SoundExchange last year, and until now the rights body has been paying the whole featured artist royalty on Palmer-featuring Steely Dan tracks to the band’s company SDI. But in these scenarios, it seems that SoundExchange would actually rather pay Palmer his cut directly, and that has now been set up for future royalties.

But Palmer is now seeking his cut of past SoundExchange monies. His lawsuit says that SDI has paid him around $8000 relating to 2012/2013 royalties, but he now wants accounts for all the band’s SoundExchange income since 2000 so he can claim what he thinks he is still due. He is also suing for breach of contract and breach of implied covenant of good faith.

Steely Dan are yet to respond to the litigation.

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