AFM calls the majors' 'new use' reading nonsensical, urges court to keep its AI pay lawsuit alive

The American Federation of Musicians has fired back at Universal and Warner. In a response filed on July 17, 2026, the union asked Judge Edgardo Ramos to reject the majors’ bid to dismiss its lawsuit over their Suno and Udio deals, and it did not soften the language. The labels’ reading of the contract, the AFM said, is “nonsensical.”

The fight is over one clause. The AFM says Article 21(a) of the Sound Recording Labor Agreement forces the labels to pay session musicians when their recordings get used in a new way. The AI licensing deals, the union argues, are exactly that.

What the AFM told Judge Edgardo Ramos

The union’s core move is to call the clause ambiguous, which is enough to survive a motion to dismiss. Article 21(a) “is ambiguous and susceptible to more than a single interpretation,” the AFM wrote to the court.

From there it presses the plain-language read. The clause imposes “an independent, mandatory payment obligation,” the union argued, because the company “shall pay.” Any mention of other AFM agreements goes to how much is owed, not whether payment is owed at all.

The provision covers “all new uses,” the AFM said, “not simply those with a rate already established in another AFM agreement.” Reading it the majors’ way would “swallow” a bargain the union and the labels struck back in 1999.

The video game precedent the union leans on

The AFM’s sharpest point is a history lesson. It says the labels have already treated a brand-new use as a payable one, long before any rate existed for it.

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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.

Even if Article 21(a) does require a rate to already exist, the union added, the likely AI uses fall under rates the SRLA already covers. So the clause has something to point to either way.

What Universal and Warner argued

Both majors moved to dismiss earlier this month, telling the court the AFM is the one misreading the contract. Their position is that Article 21 “merely points to other agreements” and “does not itself confer legal rights.”

Because no AFM agreement sets a rate for AI licensing, the labels say, the clause “has nothing to point to, and there is no entitlement to payment.” Warner also accused the union of suing “in an improper attempt to place a judicial thumb on the negotiation scales,” a reference to the fresh SRLA the two sides are negotiating right now.

The AFM also pushed back on procedure. It opposed the majors’ request to freeze discovery, telling the court a stay is “the exception and not the rule” in the district, and said it would refile to name Warner Records, Inc. as the defendant.

Why this AFM case matters for session players

The money already moved. Universal and Warner settled with the AI companies and banked the proceeds, and the session musicians who played on the recordings used to train those models have seen none of it.

That is the whole case in one line. A win for the AFM would attach a payment duty to every AI licensing deal the majors sign, from Klay Vision to Spotify’s AI remix product. A loss leaves the money with the labels, as MBW reported the union is fighting to prevent.

Full status, parties, and the running timeline live in the AFM v. Universal and Warner case tracker.