US Supreme Court rules against Warner Music in copyright damages case

WASHINGTON, May 9 (Reuters) - The U.S. Supreme Court on Thursday ruled in favor of a Miami music producer in a legal fight with Warner Music (WMG.O) over a song by rapper Flo Rida, finding that there is no time limit for recovering monetary damages in copyright cases that have been filed before the expiration of a statue of limitations.

The 6-3 ruling, authored by liberal Justice Elena Kagan, affirmed a lower court's decision that favored producer Sherman Nealy, who sued a Warner subsidiary and others in Florida federal court in 2018.

Nealy has said that his label Music Specialist owns rights to the electronic dance song "Jam the Box" by Tony Butler, also known as Pretty Tony. Warner artist Flo Rida, whose given name is Tramar Dillard, incorporated elements of "Jam the Box" into his 2008 song "In the Ayer."

Nealy sued music publishing company Warner Chappell and others, arguing that they took an invalid license to "Jam the Box" from Butler, his former business partner, while Nealy was incarcerated for cocaine distribution. The producer requested damages for alleged copyright infringement dating back to 2008.

A federal judge decided that Nealy could recover damages only for infringement that happened during the three years before he filed the lawsuit, based on the U.S. statute of limitations for bringing a copyright-infringement case after discovering a claim. The Atlanta-based 11th U.S. Circuit Court of Appeals reversed that decision and said there was "no bar to damages in a timely action."

The Supreme Court upheld the 11th Circuit's ruling on Thursday.

"The Copyright Act entitles a copyright owner to recover damages for any timely claim," Kagan wrote, referring to the 1976 federal law at issue in the case.

"If Nealy's claims are thus timely, he may obtain damages for them," Kagan added.

Nealy's attorney Wes Earnhardt welcomed the decision.

"By holding that damages are available for all timely filed infringement claims, regardless of when the infringements occurred, the court's decision provides clarity on an important issue that had divided the circuit courts," Earnhardt said.

Warner declined comment.

During Supreme Court arguments in February, some of the justices indicated they could not decide the case before reconsidering the issue of statute of limitations in a separate dispute before them. The justices are currently deliberating whether to take up the "discovery rule" in a copyright dispute between Hearst Newspapers and photographer Antonio Martinelli.

"What concerns me is that we are being asked to decide a question that may be eliminated based on a subsequent decision" on whether the "discovery rule" applies, conservative Justice Samuel Alito said during the arguments.

Conservative Justice Neil Gorsuch echoed Alito's statements in a dissenting opinion on Thursday that was joined by Alito and Justice Clarence Thomas.