1. Chuck D Is Suing Universal Music Group for "Hundreds of Millions..."
Wednesday, November 02, 2011
by paul
And we thought Rick James was bringing the heat. On Wednesday, Chuck D filed a massive
class action lawsuit against Universal Music Group, one loosely valued in the 'hundreds of
millions'. The suit, filed in the US District Court for Northern California, alleges that UMG is
paying a fraction of what is owed on various digital formats like downloads and ringtones, just
like the James lawsuit. "The exact amount... will be determined at trial, but which likely equates
to hundreds of millions of dollars if not more," the aggressive filing estimates.
Chuck D attorneys Hausfeld LLP are putting out the call to "all Universal Music Group artists,"
starting the wheels on a potentially monstrous class action. And this could be the beginning of
an anticipated flood of big-artist lawsuits, all based on the assertion that labels should be
categorizing digital formats as licenses instead of sales. The former nets a far higher return - as
much as 50 percent - while the latter delivers a more modest percentage.
Obviously, D - whose 'government' is Carlton Douglas Ridenhour - wants his famous releases
re-categorized as licenses, with appropriate back-payments attached. "As digital downloads
have emerged as the primary method by which many consumers acquire music, UMG has
systematically failed to pay appropriate royalties to musicians for these downloads," argued
James Pizzirusso, a partner at Hausfeld involved in the case.
A chunk of D's recordings got roped into the UMG umbrella with the acquisition of Def Jam
Recordings in the 90s. Universal has promised to "vigorously defend" against the "flawed" case.
The full filing is here.
Wow, Rick James Is Really Sticking It to Universal Music...
Wednesday, November 02, 2011
by paul
Don't mess with Rick James, dead or alive! And on that note, a federal judge has just denied a
motion by Universal Music Group to toss a class action royalty lawsuit driven by the James
estate. The decision means that UMG may still be forced to pay a sizable ransom on digital
formats for legacy artists.
The James estate - with help from Rob Zombie - stamped this as a class action, meaning
scores of other legacy artists can join. Separately, Chuck D has also started a similar class
action of his own, though it remains unclear if these actions will be consolidated. If triumphant,
the James estate would get 50 percent of all digital payouts, instead of something closer to 12
percent (or whatever the specific contract stipulates on sales). And, so would other artists inked
to UMG (and other majors, for that matter).
This all started with Eminem publisher FBT Productions, who secured a serious victory in this
area late last year. It may have been the trigger for an avalanche: back in April, the James
estate filed federal paperwork to recategorize all digital sales as licenses, instead of sales, and
invited others to join the fun. "If downloads are the way of the future, this is going to have
massive implications," attorney Gary Stiffelman of Ziffren, Brittenham LLP remarked after the
initial Eminem victory in the US 9th Circuit Court of Appeals.

2. Meanwhile, the judiciary climate now seems increasingly hostile towards major labels. Just
recently, older artists started circling the majors on 'termination rights,' or clauses in contracts
that would return masters after a certain period of time. A full-blown court battle could end
poorly given the backdrop, and Congress is also taking notice.