Musicians' Union Opposes Labels' Bid to Dismiss AI Lawsuit

The American Federation of Musicians (AFM) has formally opposed motions by Universal Music Group, Warner Records, and Atlantic Recording Corp. To dismiss its lawsuit. The union alleges these record labels licensed its members' recordings to AI companies for commercial exploitation without paying the musicians.

In a filing submitted to a New York federal court on September 4, the AFM states the labels' deals allowed recordings to be "fed into AI systems for commercial exploitation." The union says its members have not been compensated for this use. The case centers on Article 21(a) of the Sound Recording Labor Agreement (SRLA), the collective bargaining contract between the union and the companies.

The Core Contractual Dispute

Article 21(a) governs what the contract terms a "new use" of a recording, meaning a purpose not otherwise covered by the agreement. The AFM first sued in June, filing an amended complaint on July 24. It alleges the companies breached the SRLA by licensing recordings to AI music companies Udio and Suno without payment or credit to the musicians who made them.

Universal asked the court to dismiss the case on August 5. It argued that Article 21(a) does not set its own payment rate but instead imports one from a separate AFM agreement governing the new use. Universal contended that since no such agreement covers AI use, no payment is owed. Warner Records and Atlantic filed their own motion to dismiss on August 14.

Historical Context and Legal Arguments

The AFM's opposition argues that Article 21(a) is "reasonably susceptible to more than one interpretation." The union states its reading is plausible, which it says is sufficient to survive a motion to dismiss. "The AFM does not ask the Court to rewrite the SRLA or supply terms the parties did not agree to," the union wrote. "It asks the Court to enforce what the parties wrote: a payment and notice regime when a signatory company uses a covered recording for a purpose not covered by the SRLA."

The brief also references copyright complaints filed by Universal, Warner, and other labels against Udio and Suno on June 24, 2024. "Defendants' position is especially untenable given what they told the courts in June 2024," the AFM wrote. Those complaints alleged the AI companies were replacing human artists' work with AI-created sounds, diluting royalty pools and risking an overrun of the market for human-made recordings.

The union further points to the labels' own public statements on their settlements with the AI firms. It says Universal and Warner presented the deals as proof of a commitment to artists and a victory for the creative community. The AFM alleges its represented musicians did not share in the proceeds from those settlements.

Judicial Scrutiny and Settlement Timeline

A transcript from a July 21 pre-motion conference is included in the filing. In it, US District Judge Edgardo Ramos questioned the labels' counsel. "You presumably now, based on what Mr." Judge Ramos said. "And so why shouldn't you pay the authors of that music?"

The filing details the known settlement timeline between the labels and the AI companies.

Another passage from the July hearing quotes counsel for Warner explaining how previous SRLA provisions for video games and foreign licensing were added after disputes. The AFM argues this history shows the parties have treated the reach of existing terms as disputed before bargaining specific rates.

Arguments on Sampling and Notice

The union also argues the SRLA's existing sampling provisions supply a payment reference for part of the conduct at issue. These provisions cover encoding part of a recording into a computer for playback in another song. The AFM wrote that, even under the labels' own contract interpretation, "the sampling provisions provide an existing contractual payment reference; at minimum, they make dismissal premature."

A separate section contends that Article 21(a)'s notice requirement is independent. The AFM argues the labels' reading would allow a company to avoid liability by simply never filing the required notice. "In other words, a company's own failure to provide notice would shield it from liability for that very failure," the union wrote.

The brief cites Udio's forthcoming licensed platform, reportedly called Starstruck. It is to offer modes named Cover, Reimagine, Remix, and Create, each built around specific opted-in artists and recordings. The AFM uses this to argue the licenses extend beyond mere AI model training. Sony Music, which has not settled with either AI company, is not a party to this AFM lawsuit.

The union and the labels are currently negotiating the next SRLA, with AI a central topic. Briefing on the dismissal motions is scheduled to conclude on September 11. In a statement to Music Business Worldwide this summer, a Universal Music Group spokesperson pointed to the company's AI licensing deals and bargaining history. The spokesperson said UMG has been at the forefront of protecting artists' rights in the AI age and expects to continue its strong working relationship with the AFM.