MEMORANDUM OPINION AND ORDER
- Plaintiffs Arthur and Barbara Sheridan own the master recordings of many hit songs from the 1950s and. 1960s. Defendant iHeartMedia plays these recordings on its internet and traditional broadcast radio stations without paying any sort of royalty or licensing fees to the Sheridans. The Sheridans sued on behalf of themselves and others like them, claiming iHeartMedia’s actions constitute common law copyright infringement, unfair competition, conversion, and unjust enrichment. iHeartMedia has moved to dismiss the complaint for failure to state a claim. For the reasons stated below, the motion is granted.
BACKGROUND
In the 1950s and 1960s, plaintiff Arthur Sheridan owned and operated “several re
Defendant iHeartMedia, operating under the name iHeartRadio, “offers internet radio services in the form of customizable music ‘stations’ that stream music to users on the internet” as well as owning “hundreds” of traditional AM and FM radio stations, whose broadcasts also can be streamed online. Id. at ¶24. Users who listen to customized stations hear advertisements at “periodic intervals between tracks” and can skip only a limited number of tracks per day. Id. at ¶ 26. iHeartMedia has over 70 million registered users as well as millions of other conventional radio listeners. Compl. ¶ 31. According to the complaint, iHeartMedia “regularly broadcasts to Illinois listeners” the recordings owned by the Sheridans. Id. at ¶ 33. When these recordings are transmitted, the recordings are reproduced for the purposes of buffering, streaming, and other uses .Id. at ¶ 28. iHeartMedia has not obtained any licenses from the Sheridans. Id. at ¶ 34.
This case concerns only recordings made before February 15, 1972 (“pre-1972 recordings”) because, as explained further below, sound recordings made on or after that date are subject to federal copyright law; to the extent that pre-1972 recordings have legal protection, it is provided by state law (statutory and common law) rather than federal law. The Sheridans filed this putative class action on behalf of themselves and other “owners of reproduction and public performance rights in Pre-1972 Recordings that have been publicly performed... by iHeartRadio ....” Id. at ¶37. They assert four state law claims: that -iHeartMedia infringed their common law state copyright (Count I), that iHeartMedia misappropriated their property under the Illinois Uniform Deceptive Trade Practices Act (“IUDTPA”) (815 ILCS 510/1 et seq.) (Count II), that iHeartMedia converted their property rights (Count III), and that iHeartMedia has been unjustly enriched (Count IV). iHeartRadio has moved to dismiss all of the claims (see Mot., ECF No. 22), which are discussed in more detail below.
DISCUSSION
A. Jurisdiction
The Sheridans assert this court has jurisdiction under the Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d), because at least one class member is a citizen of a different state than the defendant, there are more than 100 class members, and the aggregate amount in controversy exceeds $5,000,000. Compl. ¶ 8. iHeartMedia has not contested the sufficiency of the class allegations to confer subject matter jurisdiction, and given the large number of recordings that could, potentially be covered by a ruling on pre-1972 recordings, the Court finds the class allegations as to diversity and the amount in controversy to be .reasonable. See Back Doctors Ltd. v. Metro. Prop. & Cas. Ins. Co.,
B. Common Law Copyright
Federal copyright law extends to sound recordings created on or after February 15, 1972.: Copyright protection for sound recordings “fixed” (recorded) prior to February 15, 1972, however, is ,a matter of state law, rather .than federal law. See 17 U.S.C, § 301(c). Both parties offer, their own takes on the history of copyright law, but the basic undisputed fact is that for decades, the federal Copyright Act provided no protection for sound recordings (as distinct from protected lyrics and musical notes). Much lobbying was done on the subject, but there was little litigation. See Danielle Ely, Note, We Can Work It Out: Why Full Federalization of Pre-1972 Sound Recordings is Necessary to Clarify Ambiguous and Inconsistent State Copyright Laws, 23 Geo. Mason L. Rev, 737, 740-742 (2016). In.1971, Congress enacted the.Sound Recordings Act (“SRA”), which provided limited protection for. sound recordings fixed, after, it went into effect in 1972. See Pub. L. No. 92-140, sec. 1(a), § 1(f), 85 Stat. 391, 391 (1971). In 1976, Congress added the language currently found at § 301(c), which clarifies that state copyright law governs pre-1972 recordings.
Illinois has' no state copyright statute governing sound recordings, unlike some other states, such as California. See Cal. Civ. Code § 980(a)(2); see also Flo & Eddie Inc. v. Sirius XM Radio Inc., No. CV 13-5693 PSG RZX,
Illinois recognizes,a common law copyright in unpublished productions of “literature, [ ] drama, music, art, etc.” that allows authors to control the initial publication of their work. Frohman v. Ferris,
Whether the Sheridans can be said to have “dedicated to the public” their recordings has therefore been the principal sticking point for the parties, with the Sheridans arguing that “virtually no public domain” exists for sound recordings and that they have not “surrender[ed]” their copyright to the public. Pl.’s Resp. at 2, 7. Both the Illinois Supreme Court and the Seventh Circuit, however, have construed the concept of dedication to the public to include acts by which members of the public could access copies of the work — particularly through sales. See, e.g., Peltzer,
The Sheridans nevertheless argue that sound recordings 'Constitute a “special case” because they involve “captured performance.” Relying on Frohman, the Sher-idans argue that performance of a work does not constitute publication sufficient to divest them of their common law copyrights, but in so arguing, they confuse the conduct at issue. In Frohman, the question was whether the public performance of the composition (there, a play) divested the
In any event, and contrary to the Sheri-dans’ position, under Illinois law “it is eminently clear that the broadcast of the records manufactured by Plaintiff or the sale of those records constitutes a publication or public performance,” and therefore no common law copyright protection is available for those recordings. Columbia Broad. Sys., Inc. v. Spies, Doing Bus. as Tape-A-Tape Tape Sound Reprod. Co. (“Spies II”), No. 69-CH-3477,
The Sheridans invoke a number of out of state cases and treatises to support their position that sales of a sound recording do not divest an owner of their copyright (such as Capitol Records, Inc. v. Naxos of Am., Inc.,
The Sheridans maintain that this result is “draconian,” but of course such a judgment, even if deserved, would not authorize this Court to disregard the clear import of Illinois law. The Sheridan’s characterization, moreover, depends for its force on the premise that they are being unfairly denied compensation for their products, but why is that so? From the birth of sound recordings until the mid-1990’s, there has been scant evidence that anyone considered it to be an obvious injustice not to require broadcasters, or others who play recorded music publicly, to pay royalties to record companies as compensation for the use of their recordings. Flo & Eddie, 70 N.E.3d at 941 (if there is a right to control public performance of sound recordings, “the copyright holders have gone decades without acting to enforce that right.”). Private parties routinely order their transactions to adjust to legal rules, see R.H. Coase, The Problem of Social Cost, 3 J. L. & Econ. 1, 17 (1960), and here is a perfect example; an alternative compensation system evolved in which consumers paid prices to record companies high enough to incentivize continued artistic creation but low enough that public performance of the recordings fostered, rather than eliminated, the market for the recordings. As the Third Circuit has observed, “this state of affairs .... produced relatively high levels,of contentment for all parties. The recording industry and broadcasters .existed in a sort of symbiotic relationship wherein the recording industry recognized that radio airplay was free advertising that lured consumers to retail stores where they would purchase recordings. And in return, the broadcasters paid no fees, licensing or otherwise, to the recording industry for the performance of those recordings.” Bonneville Int’l Corp. v. Peters,
There is.no dispute that the Sheridans voluntarily sold their recordings. When they did so, the Sheridans lost their common law right to control the public performance of those recordings in Illinois (and pretty much everywhere else).
C. Deceptive Trade Practices Act
Count II of the complaint alleges that iHeartMedia has violated the Illinois Uniform Deceptive Trade Practices Act (“IUDTPA”), 815 ILCS 510/1 et seq. The purpose of the Deceptive Trade Practices Act is' to “enjoin[ ] ... trade practices which confuse or deceive the consumer.” Popp v. Cash Station, Inc.,
A person engages in a deceptive trade practice when, in the course- of his or. her business, vocation, or occupation, the person:
(2) causes likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of goods and services;
(3) causes likelihood of confusion or of misunderstanding as to affiliation, connection, or association with or certification by another ...
(5) represents that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection thát he or she does not have... [or]
(12) engages in any other conduct which similarly creates a likelihood of confusion or misunderstanding.
815 ILCS 510/2.
The complaint alleges that pre-1972 recordings have been used for commercial purposes, that this creates a likelihood of confusion (regarding whether or not the artists have agreed to the use of them recordings), and that iHeartMedia is a large and sophisticated company familiar with the law governing its'actions. Compl. ¶ 52-55, The Sheridans' therefore request an injunction and a constructive trust with any money iHeartMedia earned through its use of the pre-1972 songs. Id. at ¶ 44.
The IÜDTPA, however, expressly excludes from its coverage “broadcasters ... who publish, broadcast or reproduce material without knowledge of it's deceptive character.” 815 ILCS 510/4(2). The statute does not define, and -the Illinois courts have not had occasion to address,- what it means to be a “broadcaster” or engage in “broadcasting,” but there is no - dispute here about that question because the Sher-idans repeatedly acknowledge, in both the complaint and their response, that iHeartMedia’s conduct at issue in this case constitutes “broadcasting.” See e.g., Compl. ¶ 24 (“iHeartMedia ’ ... streams their broadcasts online”); ¶27 (“iHeartRadio’s .., broadcasts have included ... public performances of Pre-1972 Recordings”); ¶ 28-(“in the course of broadcasting”); ¶ 33 (“iHeartMedia regularly broadcasts”); Resp. at 1 (“common law of Illinois makes it illegal to broadcast sound recordings without paying royalties”); at 4 '(“Defendant iHeartMedia broadcasts music on traditional AM/FM stations”).
Thus, the Court must consider whether iHeartMedia falls within the broadcaster exemption of the IUDTPA. While the complaint alleges that iHeartMedia’s actions constitute “willful engagement in a deceptive trade practice,” it does not directly allege that iHeartMedia had knowledge of the deceptive character of its broadcasts. See Compl. ¶ 55. Rather, it alleges that iHeartMedia is “intimately familiar with the mechanics of the music industry and the law governing its actions,” thereby perhaps implying that iHeartMedia knew the broadcasts had a “deceptive character.” Id. The Court concludes, however, that iHeartMedia’s knowledge -of the industry generally and its knowledge that “not paying royalties for public performances of sound recordings was an accepted fact of life in the broadcasting industry for the last century,” Flo & Eddie, Inc. v. Sirius XM Radio, Inc.,
As iHeartMedia points out, and the Sheridans do not and cannot refute, “[n]o Illinois court has ever held that broadcasting a published sound recording .... is among the wrongful conduct proscribed by” the doctrine of unfair competition or misappropriation. Mem. in Supp. at 14. Rather, as noted in the discussion of the Sheridan’s common law copyright claim, supra, Illinois law has recognized that there is no common law right to limit public performance of a work that has been published. The theory undergirding that precept, as noted, is that in selling a recording otherwise subject to common law copyright protection, the .copyright
The Court acknowledges that in Spies I, the Illinois appellate court stated that the “taking and appropriating” of “the actual sounds recorded on the albums” constitutes a “form of unfair competition.” Capitol Records v. Spies,
None of this is to say that misappropriation and copyright infringement are necessarily co-extensive. See Chicago Bd. Options Exch., Inc. v. Int’l Sec. Exch., LLC,
Courts considering misappropriation claims, moreover, are obliged to consider the effects on future product development and innovation. See Board of Trade v. Dow Jones & Co.,
To the extent,’ then, that the Sheridans’ IUDTPA .claim-Is -premised on the unfairness of acknowledging the settled expectations of virtually an entire industry, the Court is not persuaded that there is a cause of- action under Illinois- law. The absence of any precedent even questioning the legitimacy of, much less imposing- sanctions on, the broadcast of published sound recordings suggests that neither the state legislature nor judiciary ever intended to recognize siích a tort in enacting or construing the IUDTPA. And given the uncertainty and-the myriad issues that recognizing such a cause of action would create, the task of balancing the competing interests is best left to the state’s legislature and courts. See Flo & Eddie, Inc. v. Sirius XM Radio, Inc.,
Recognizing a cause -.of action for misappropriation or deceptive practices- arising from the broadcast of published sound recordings would be a marked departure from the state of existing state law, inconsistent- with statutory exemptions, and would threaten to upset settled arrangements while forcing this Court to legislate out of whole-cloth. iHeartMedia could not have known that simple -broadcasting without paying royalties to rights holders (which had never been required under any law to date), as opposed to selling copies of pirated records, would render its broadcasts “deceptive.” The utter dearth of case
D. Conversion
Count III of the complaint alleges that iHeartMedia “wrongfully assumed control over Plaintiffs’ and Class Members’ property, and exercised that control in a manner inconsistent with Plaintiffs’ and - Class Members’ property rights” and thus committed the tort of conversion. Compl. ¶ 58. “[T]o recover for conversion in Illinois, a plaintiff must show: (1) a right to the property; (2) an absolute and unconditional right to the immediate possession of the property; (3) a demand for possession; and (4) that the defendant wrongfully and without authorization assumed control, dominion, or ownership over the property.” Van Diest Supply Co. v. Shelby Cty. State Bank,
The Sheridan’s conversion claim fails to clear the first hurdle: the plaintiff must have a property right. As discussed above, however, the Sheridans have no property right to preclude public perform-anee of sound recordings they have published by selling them to. the public;, there is no such right under Illinois common law and the Sheridans have identified no other source of such a right. Cf. Price v. Bd. of Educ. of City of Chicago,
Further, even , if the Sheridans had retained the right of public performance, their conversion claim would still fail because the Illinois Supreme Court has recognized that “an action for conversion lies only for personal property which is tangible, or at least represented by or connected with something tangible.” In re Thebus,
The Sheridans maintain that their interests in the recordings are represented by or connected to something tangible, as required; specifically, the recordings themselves. Resp. at 12. They invoke the facts of Bilut for support; there, the court found that plagiarism of ideas in a research paper could constitute conversion “because the printed copy of the research constituted tangible property.” Bilut,
Here, the Sheridans contend that iHeartMedia converted their property “[b]y duplicating the pre-1972 recordings without authorization.” Compl. ¶ 58. Thus, the Sheridans contend, there is something physical being converted — the physical files of the recordings, which are duplicated. Some states have found that, like a printed copy of research, a digital file can be converted. See, e.g., Thompson v. UBS Fin. Servs., Inc.,
Here, again, this Court has only “limited discretion to adopt untested
E. Unjust Enrichment
Finally, the Sheridans contend in Count IV that iHeartMedia has been unjustly enriched. Compl. ¶ 59-61. iHeartMe-dia contends that this claim is “derivative” of the common law copyright claim and therefore fails because the Sheridans lacked any rights in the recordings. Mem. in Supp. at 15; Reply at 14. The Sheridans appear to agree that this count rises or falls with the other substantive counts, arguing that iHeartMedia has been unjustly enriched “[t]o the extent that iHeartMedia has retained benefits from copyright infringement and unfair competition.” Resp. at 14. “Unjust enrichment is not an independent cause of action.” Gagnon v. Schickel,
⅝ ⅝ H*
No broadcaster has ever been held liable under any cause of action available under Illinois law for broadcasting a pre-1972 sound recording without authorization. Having published their recordings through decades of sales to the public, the Sheri-dans surrendered their common law copyright protection under Illinois law to bar public performance of those recordings. Neither the IUDTPA nor the Illinois common law tort of conversion provides a means of restoring that right. The former exempts broadcasters and the latter does not reach intangible property rights; neither provides a basis to regard as tortious .the growth of broadcast radio over the past century. With no substantive counts remaining, the unjust enrichment claim must fail as well. Thus, the motion to dismiss is granted. As the dismissal is based on the incurable lack of any state law cause of action, rather than curable pleading deficiencies, the dismissal is with prejudice.
Notes
. All facts are drawn from the complaint. On a motion to dismiss, all well-pleaded facts áre accepted as true and all inferences are drawn in the plaintiffs’ favor. See Cincinnati Life Ins. Co. v. Beyrer,
. For a survey of the reasons why Congress may have added this language, see Ely, 23 Geo. Mason. L. Rev. at 742-43. For this Court's purposes, all that matters is that Illinois law is the only applicable governing law. Although some scholars have objected that the Supremacy Clause may prevent the application of state copyright law to pre-1972 recordings, see, e.g„ Julie Ross, Unhappy TogetherWhy The Supremacy Clause Preempts State Law Digital Public Performance Rights in Radio-Like Streaming of Pre-1972 Sound Recordings, 62 J. Copyright Soc'y 545 (2015), the parties have not raised this concern and thus any argument to that effect has been waived,
. Both parties reference ,the first wave of litigation brought by Flo & Eddie, Inc., a company owned by several former members of the Turtles, a band whose heyday was in the 1960’s, regarding state copyright protection for pre-1972 recordings. As those decisions were made under the law of the states in which the cases were brought, the Court instead focuses its discussion on Illinois law as interpreted by Illinois state courts and the Seventh Circuit. The district court decisions in the Flo & Eddie litigation can be found at: Flo & Eddie, Inc. v. Sirius XM Radio, Inc.,
. The large volume of sales further defeats any argument that the Sheridans engaged in "limited publication,” which may preserve common law copyright where a work is distributed "to a definitely selected group and for a limited purpose, without the right of diffusion, reproduction, distribution or sale." Letter Edged in Black Press, Inc. v. Public Bldg. Comm’n,
.Spies II is a companion case to what will be referred to as Spies I, that is Capitol Records v. Spies,
. Spies I did not address the copyright issue because it had not been raised in the trial court. See Spies II,
. Remarkably, the Sheridans attempt to rely on Spies II for the proposition that sales of sound recordings do not constitute divestive publication. That effort is misplaced, if not disingenuous, conflating the court’s reasoning regarding the unfair competition claim it addressed with its resolution of the copyright issue.
. Even after extensive legislative consideration, and major amendments to the federal Copyright Act, sound recording owners today have a right- to control public performance only for public performances “by means of digital audio transmission.” 17 USC § 106[6], Under federal copyright law, Defendant iHeartMedia now must pay royalties for playing post-1972 performances by means of digital transmissions, but traditional broadcasters and other types of businesses that play music for the public by means other than digital transmission need not pay those royalties. And no one pays royalties for pre^-1972 recordings, regardless of how they are played for the public. Some states — notably, California — have enacted legislation providing exclusive ownership rights for sound recordings that owners could use to compel royalties, but Illinois has not. 'See Cal. Civ. Code § 980(a)(2).
. Since it is plain that the Sheridans have no copyright protection in the pre-1972 recordings under Illinois law, it is not necessary to consider iHeartMedia's "fair use” arguments.
. No case law has defined the limits of what constitutes broadcasting (for example, if it includes services such as cable television and satellite radio for which recipients must pay a fee or a restaurant that plays music over its dining room speakers). Without such guidance, the Court construes the term according to its common meaning — that broadcasters include, at least, all forms of radio and television. See 720 Ill. Comp. Stat. 5/16-7(g) (explicitly mentioning radio and television as broadcasters). Whether these broadcasts are sent by the transmission of analog or digital signals via transmitting towers, satellites, or cables does not alter the fundamental character of the conduct in question, namely the public playing of a sound recording that is unaccompanied by distribution of a copy of the recording itself.
. The parties dispute whether the IUDTPA codifies the common law tort of misappropriation. Compare Resp. at 11 & n.4 ("The. Act codifies common law misappropriation"), with Reply at 11 ("the IUDTPA did not codify the branch of common law unfair completion that the Sheridans assert”). Cases can be found to support both propositions. Compare, e.g., NFL Props., Inc. v. Consumer Enters.,
It is, however, unnecessary. to resolve the debate. There is no requirement that the Sheridans plead a misappropriation claim apart from their IUDTPA claim; indeed, they do not have to plead a misappropriation claim, or any other legal theory, in the complaint. See King v. Kramer,
. Record piracy, of course, may in this era also involve the creation of digital, rather than physical, copies of recordings. Obviously file sharing, in which users download digital copies of copyrighted material without paying for it, would constitute piracy regardless of what method is used to transmit the files. See Peter K. Yu, P2P and the Future of Private Copying, 76 U. Colo. L. Rev. 653, 660 (2005). There is no allegation in this case, however, that iHeartMedia allowed users to download files or even to request that the service play specific songs on demand.
. The distinction between piracy and broadcasting is patent in this case, but may be more difficult to discern in future cases involving new forms of music distribution, such as streaming on demand, that like broadcasting do not involve the distribution of a copy of the recording but nevertheless eliminate the need for purchase of the recording itself (in contrast to the purchase of the right to listen to the recording). The economic effect of on demand digital streaming is at present unclear. Recent research suggests that the contention that on demand streaming will leave licensing as the only means of compensation for sound recording rights holders' is potentially flawed. See, e.g., Godefroy Dang Nguyen, Sylvain Dejean, and Franqois Moreau, On the Complementarity Between Online and Offline Music Consumption: The Case of Free Streaming, 38 J, Cultural Econ. 315 (2014); Luis Aguiar and Joel Waldfogel, Streaming Reaches Flood Stage: Does Spotify Stimulate or Depress Music Sales (NBER, Working Paper No. 21653, 2015); but see R. Scott Hiller, Sales Displacement and Streaming Music: Evidence from YouTube, 34 Information Econ. & Pol’y 16 (2016) (finding most popular albums may suffer some displacement from online streaming). Thus, at least at the present time (and in any event in this case), the historical distinction between piracy and broadcasting endures.
. Still more questions would arise in addressing the scope of this proposed new application of misappropriation law. What forms of public performance constituted a deceptive practice or misappropriation? Does it include broadcasts by not-for-profit- college radio stations? Music played over the loudspeaker at your favorite .diner or during. "Bring Your Own Vinyl Night” at the Duck Inn? See Best Oldies Music Bars in Chicago, CBS Chicago, Aug. 25 2016, http://chicago.cbslocal.com/top-lists/best-oldies-music-bars-in-chicago/. Playing music in the backyard during an annual Fourth of July barbeque?
. The conversion claim falters on the third and fourth elements as well. As for the third, there is no allegation in the complaint that appears 'to indicate the Sheridans ever made a demand for possession. Cf. Van Diest Supply Co.,
. In Conant v. Karris,
. There are other courts that have similarly found less concrete digital property is not sufficient for conversion. See, e.g., CICCorp, Inc. v. Aimtech Corp.,
.The issue of the conversion of digital property has also been the subject of academic commentary. See, e.g., William Larsen, Comment, A Stem Look at the Property Status of Top-Level Domains, 82 U. Chi. L. Rev. 1457, 1477 (2105); Caitlin J. Atkins, Note, Conversion of Digital Property: Protecting Consumers in the Age of Technology, 23 Loy. Consumer L. Rev. 215 (2010); Courtney W. Franks, Com