Judge Slashes Napster Class Action Settlement That Paid Songwriters 30x Less Than Lawyers

Two years after an appeals court overturned a “measly” class action settlement for songwriters that netted their lawyers a huge payout, a judge has now awarded those attorneys just a tiny fraction of their original fee.

The scathing 2023 ruling rejected a deal struck with Napster that secured just $53,000 for songwriters but paid their lawyers a whopping $1.7 million. The appeals court said it was very clearly “unreasonable” to pay attorneys more than 30 times the amount they actually won for their clients.

On Wednesday, a lower court judge heeded that warning and sharply reduced the amount paid to those lawyers under the settlement — all the way down to $86,022.

“The difference between the settlement value … and the [legal fees] figure … is staggering,” Judge Jeffrey S. White wrote in the ruling, obtained by Billboard. “The court therefore finds it appropriate to substantially reduce the [legal fees] figure.”

The ruling came in a class action filed in 2016 against Rhapsody, which has since rebranded as Napster. It was one of several such copyright cases filed in the mid-2010s over the failure of streaming services like Spotify to properly pay mechanical royalties to songwriters.

But the lawsuit — and its prospects for a large payout — were sharply reduced by a competing class action organized by the National Music Publishers’ Association, which eventually drained roughly 98% of the possible class members. The passage of the Music Modernization Act, which largely fixed the problems that led to the litigation, further reduced the scope of the case.

When Napster finally settled in 2019, it agreed to pay as much as $20 million. But because NMPA’s competing lawsuit had decimated the earlier case, Napster ended up paying only $52,841 to the actual songwriters who chose to participate.

When it came time to figure out how much to pay the lawyers who represented the songwriters, their fees were calculated as a percentage of that hypothetical $20 million cap, not the actual payout — resulting in the outsized $1.7 million award.

That outcome shocked the U.S. Court of Appeals for the Ninth Circuit, which ruled in 2023 that the “meager” payout to songwriters didn’t come close to warranting the massive reward to their attorneys: “This case will likely make the average person shake her head in disbelief,” U.S. Circuit Judge Kenneth K. Lee wrote at the time.

Back at the trial court, the plaintiff’s lawyers (from the law firm Michelman & Robinson LLP) once again asked for a big award, offering a revised request of $1.2 million. Even if the direct monetary payout was small, they argued their lawsuit had provided “significant benefits” to songwriters, including aiding the larger NMPA case and even helping the passage of the MMA.

But in Wednesday’s decision, Judge White said he was required to award the lawyers no more than 25 percent of the total benefit they had won for their clients. Under a revised calculation, the judge put that figure at $358,903 — meaning he would award just $86,022 to the attorneys. That figure will be supplemented by an award of legal “costs” (separate from attorney’s fees) of just over $13,000.

One silver lining for the plaintiffs’ attorneys? The judge also rejected arguments from Napster’s attorney, who had urged him to award the attorneys no more than 25 percent of the original $52,841 — meaning just $13,210 in legal fees.

The plaintiffs’ attorneys at issue in the ruling did not immediately return a request for comment.