"We're going to revamp the policy," SEPTA spokesman Richard Maloney said, referring to transit police arrest standards.
In addition to paying $18,000 in damages and legal fees, SEPTA agreed to train its police in the new policy about dealing with musicians on transit property.
Specifically, the settlement says SEPTA police may not arrest any street musician unless there is probable cause to show the musician is obstructing a highway, being disorderly, or violating a noise ordinance or other criminal statute.
"Under no circumstances shall a street musician be arrested or told to leave a location merely because that individual is playing a musical instrument or singing," the agreement reads.
Lancaster, whom City Council has declared a "cultural treasure," could not be reached for comment. Council has also affirmed his right to perform on the street.
Lancaster's attorney, Paul Messing, said his client was "gratified that all the parties recognize that First Amendment rights apply to everybody and recognize the cultural importance of street musicians."
Though best known as a sax player who regularly performs at local clubs, Lancaster also plays other reeds, flute, trumpet and piano. He also sings and composes.
Lancaster tours often around the United States and abroad but always returns to Philadelphia. He has said he loves to practice in the city's subway concourses for the acoustics and the chance to earn some extra money.
Lancaster was first arrested for disorderly conduct by city police in November 2000 while playing flute at 17th and Arch Streets. The public outcry was so great that police dropped the charges and issued a citywide police directive not to act against street musicians.
SEPTA, however, has taken a tough view of vendors, proselytizers and musicians on transit property. Lancaster successfully sued after SEPTA officers first arrested him for obstructing a public way.
But on July 26 - just weeks after his case was settled - SEPTA police arrested him for "producing noise" as he practiced at the transit concourse below 15th Street and John F. Kennedy Boulevard.
A Municipal Court judge dismissed the charge, and Lancaster and Messing went back to federal court with a second lawsuit, this time seeking additional training for SEPTA's police.
Contact staff writer Joseph A. Slobodzian at 215-854-2658 or firstname.lastname@example.org.