Six weeks after the American Federation of Musicians filed its landmark lawsuit against UMG and Warner Music Group for cutting session musicians out of their Suno and Udio licensing deals, the case has reached its first significant procedural crossroads. On Friday (July 17), the AFM filed a letter with Judge Edgardo Ramos in the US District Court for the Southern District of New York urging the court to deny both labels’ separate requests for pre-motion conferences ahead of motions to dismiss. The union’s core argument is that the contract language at the center of the case, Article 21(a) of the Sound Recording Labor Agreement, is unambiguous in its obligation and broad enough to cover AI licensing, and that dismissal at this stage would be both legally wrong and practically harmful to the musicians whose livelihoods are at stake.
The dispute turns entirely on the interpretation of Article 21(a) of the SRLA, the collective bargaining agreement between the AFM and major record companies. That provision states that when a label puts recordings made by union members to a “new use,” it is required to notify the AFM and compensate the musicians involved. The AFM’s lawsuit argues that UMG’s October 2025 settlement with Udio and Warner’s November 2025 settlements with both Udio and Suno constituted exactly that: a new commercial use of session musicians’ recorded performances, one that has generated significant revenue for the labels without any payment flowing to the people who played on those recordings. As Billboard reported when the original complaint was filed, the union characterized the labels’ deals as protecting their own interests while leaving the musicians who created those recordings entirely behind.
UMG and Warner have each moved to have the case dismissed before it reaches discovery, arguing that Article 21(a) is not an independent payment obligation but a rate conversion mechanism that only applies when another AFM agreement already sets a rate for the use in question. Since no AFM agreement currently establishes a rate for AI licensing, they argue, the provision has “nothing to point to” and creates no entitlement to payment. Warner put its position most pointedly, telling the court the AFM “filed this lawsuit in an improper attempt to place a judicial thumb on the negotiation scales, asking this Court to impose contractual terms that only collective bargaining can create,” as Music Business Worldwide reported when Warner’s dismissal letter was filed. UMG’s letter argued that Article 21(a) “is a rate conversion provision, not an open-ended royalty provision,” and that reading it as the union does would transform a narrow procedural clause into a sweeping new rights framework.
The AFM’s July 17 response rejected that reading on multiple grounds. The union told Judge Ramos that Article 21(a) “is ambiguous and susceptible to more than a single interpretation,” which under established contract law means the question of its meaning cannot be resolved on a motion to dismiss without discovery and potentially a full hearing. The AFM argued that the provision imposes “an independent, mandatory payment obligation,” using the language “shall pay,” and that any reference to other AFM agreements in the provision goes to how much is owed, not whether payment is due at all. Reading the provision the way UMG and Warner do, the AFM argued, would “strip Article 21(a) of any meaning whatsoever.” The union also invoked a critical historical precedent: “When companies first licensed music for video games, no AFM agreement had set a rate for that use, yet the parties treated it as a new use for both notification and payment purposes.” That past practice, the AFM argued, directly undermines the labels’ position that a pre-existing rate is a prerequisite for triggering the provision.
The AFM also addressed a potential weakness in its own complaint head-on. In the original filing, the union stated that “the use of sound recordings in generative AI software models is not a purpose covered by the SRLA,” a line both labels seized on as a concession that their members have no claim. The union’s July 17 letter argued that line was taken out of context, noting that even if the SRLA does not currently cover AI as a defined category, the provision’s “all new uses” language is broad enough to capture it. The AFM also argued that many foreseeable AI uses, including AI-generated tracks released on streaming platforms, AI samples used in commercials, and AI music in video games, would fall squarely within rates the SRLA already establishes for those formats. Digital Music News noted that the video game precedent is emerging as the AFM’s most compelling argument, because it shows the parties have historically treated genuinely novel commercial uses as triggering the new use provision even without a pre-existing rate.
