Rick James digital music downloads class action

Federal court praises firm, approves class settlement in digital download case

April 13, 2016 – Federal District Court Judge Susan Illston gave final approval today to the settlement reached last year in the Universal Music Group digital download class action.  Following an hour-long hearing in which she carefully considered the settlement agreement’s merits, Judge Illston entered an order approving it.  During the hearing, Judge Illston praised the firm’s “good work” and the resulting settlement as a “positive achievement” for the class of almost 1,700 recording artists, record producers and others who made successful claims and will therefore benefit from it.  Under the parties’ agreement as approved, no less than $2.5 million dollars will be paid or credited to class members in retrospective relief, with prospective relief in the form of a perpetual royalty adjustment expected to result in millions of dollars more over time.

Rick James, others ask for final approval of settlement in UMG download case

March 8, 2016 – Firm clients Rick James, Dave Mason, David Coverdale and others petitioned today for final approval of the settlement struck in the Universal Music Group digital download class action.  That settlement provides for an $11.5 million fund to settle claims over the amount of royalties paid for the digital download of recorded music.  It also provides for an across-the-board 10% increase in the royalty rate paid on those downloads in perpetuity and locks in certain other additional benefits in the calculation of that rate.  Almost 1,700 royalty participants – consisting of recording artists, music producers and others – will participate in the settlement and receive both past and future relief as a result.  A hearing on the clients’ motion for final approval is scheduled for April 13th.

Settlement reached in digital download case against UMG, Capitol Records

April 14, 2015 – Firm partner David Given joined other court-appointed lead counsel today in their motion for preliminary approval of an $11.5 million settlement reached on behalf of a group of recording artists and others in a class action case against UMG Recordings and Capitol Records over their treatment of income derived from digital downloads and ringtones. The settlement, which followed more than two years of negotiations and four years of hard-fought litigation, includes a fund for claims by class members for past due amounts as well as an increase of 10% in download and ringtone royalty rates. The firm’s clients include the Rick James Estate, David Coverdale (Deep Purple, Whitesnake, Coverdale/Page) and Rock and Roll Hall of Fame member Dave Mason (Traffic, Dave Mason Band), who served as class plaintiffs in the case. The court has set a hearing on the motion for April 28th.

UPDATE – April 28, 2015 – The court heard and granted plaintiffs’ motion for preliminary approval today.  At the hearing of the matter, Federal District Court Judge Susan Illston voiced praise for the “wonderful job” the firm and its co-lead counsel did in the case.  In her order entered later in the day, Judge Illston appointed the firm (together with others) class counsel with respect to all further proceedings and scheduled a final approval hearing for April of next year.  Notice to the class is expected to commence shortly.

Judge favorably inclined toward deal in Warner digital download case

January 8, 2015 – Partner David Given appeared today before Federal District Judge Richard Seeborg in support of the settlement made between a group of recording artists and Warner Music Group in a class case initiated over the treatment of monies derived from digital downloads and ringtones. The settlement, concluded following intense negotiations between a team of lawyers representing the record label and PEG&C and the other lead law firms representing the artists, provided an $11.5 million fund for pre-digital age artists to make a claim for past amounts based on their download activity together with an uplift in the royalty rate paid to artists by WMG on download income.  At the conclusion of the hearing, Judge Seeborg said he found the settlement fair, adequate and reasonable and indicated that he would approve it; an order is pending.

UPDATE – January 12, 2015 – Judge Seeborg entered his order today giving final approval to the settlement of this class action. In a related order entered the same day, Judge Seeborg approved the request for reimbursement of costs and payment of attorneys' fees to class counsel, complimenting the firm's "skillful handling of the difficult factual and legal issues presented...and the quality of the result achieved," in the case.

Federal Court gives preliminary approval to settlement with Warner Music in digital download case

January 23, 2014 – Federal District Court Judge Richard Seeborg today granted preliminary approval to a deal struck between a group of recording artists and Warner Music Group over the treatment of monies derived from digital downloads and ringtones. The settlement was concluded following a year of intense negotiations between a team of lawyers representing the record label and PE&G and the other lead law firms representing the artists. The deal provides an $11.5 million fund for pre-digital age artists to make a claim for past amounts based on their download activity together with an uplift in the royalty rate paid to artists by WMG on download income. Notice to the class and the period to make claims by class members has commenced. A final approval hearing is scheduled for October. For more information about the settlement, and what an artist may need to make a claim, click here.

Press seeks comment from firm on settlement of digital download case

October 30, 2012 – Both Variety Magazine and the New York Times recently featured prominent articles covering Universal Music Group's settlement of its long-running battle with the producers of Eminem over the treatment of digital download income in its royalty accounting to recording artists and others. Firm partner David Given, who is one of the attorneys leading wide-ranging class action litigation against UMG on the same issue, provided his views on the meaning of the settlement for that litigation as well as on its expected impact on the music industry. NPR later interviewed Mr. Given for a piece featured on its "Market Place" program on the same subject.

Variety Magazine reports on new complaint in Rick James case

October 11, 2012 – Variety Magazine featured an article on its website and daily edition by veteran music industry reporter Chris Morris describing recent developments in the firm's case against Universal Music Group in the case over UMG's treatment of digital download income in its royalty reporting to recording artists and others. The filing of a new complaint (which Morris characterized as "a scathing indictment of UMG's business practices in the digital era") adds two new plaintiffs to the case as well as additional claims, all of which have now been consolidated into one pleading, and expands upon previous factual allegations made by the plaintiffs based upon evidence adduced by the firm thus far in discovery in the case. The filing follows the court's order rejecting UMG's attempt to block the plaintiffs from amending their complaint.

New pleading seeks to sharpen focus in class action over download royalties

September 7, 2012 – Plaintiffs in the class action case against Universal Music Group moved today for permission from U.S. District Judge Susan Illston to file an amended complaint. The proposed amended complaint serves to consolidate the party plaintiffs (including two new ones - Bo Donaldson ["Billy Don't Be A Hero"] and The Black Sheep ["Strobelite Honey"]) and their various prior pleadings into one operative complaint and to conform the allegations of the complaint to the evidence adduced thus far in the case. That evidence includes, among other things, discovery of an internal memorandum authored by a highly-placed UMG executive in late 2002 setting the stage for treatment of UMG's licenses with its digital download providers as "resale" agreements, and apparently reversing UMG's prior course of conduct and course of performance in the customary accounting for licensing income, to the detriment of recording artists and producers. UMG has opposed plaintiffs' motion for leave to file this complaint on various grounds. The court has set a hearing for the motion on October 12th.

Firm appointed to lead counsel role in class action against Warner Music Group

June 1, 2012 – United States District Judge Richard Seeborg has chosen PE&G to help lead the class action brought on behalf of recording artists and others against Warner Music Group relating to that label's receipt and accounting of digital download income. This is the second case brought by the firm as a class action against a major record label over the issue of how income from the online distribution of digital music is accounted to and paid to recording artists and other royalty participants. The first, against Universal Music Group, has survived UMG's attempts to dismiss the case and various of its claims, and is currently set for class certification proceedings beginning later this year. With Judge Seeborg's order appointing lead counsel, the case against WMG can now get underway in earnest. The case's first case management conference is expected to be set soon, after which discovery will commence.

Court denies defendant's summary judgment motion in Rick James digital download class action

April 19, 2012 – PE&G partner David Given (together with attorneys from two other allied law firms) helped defeat Universal Music Group's motion for summary judgment in the ongoing class action on behalf of recording artists and other royalty participants concerning UMG's treatment of income derived from its licenses with download music providers. In her seven-page order dispensing of the matter without oral argument, Federal District Court Judge Susan Illston concluded that the class claims for violation of California's Unfair Competition Law and related open book account were still viable, allowing discovery to continue into UMG's policies and practices related thereto. Among other things, Judge Illston rejected UMG's arguments that the claims were either time-barred or otherwise legally unsound on various technical grounds. The decision sets the stage for plaintiffs' effort to certify a class of recording artists, producers and others entitled to an enhanced royalty from UMG's receipt of digital download income; the Court set a hearing on class certification in the case for early January of next year. The firm recently commenced another class action on the same subject against Warner Music Group; that case is just now underway in the same San Francisco court before a different judge.

Firm appointed to lead counsel role in class action against Universal Music Group

March 7, 2012 – Federal District Court Judge Susan Illston has appointed PE&G to serve as co-lead counsel in a class action on behalf of artists, producers and other royalty participants against the world's largest recorded music company, Universal Music Group, concerning UMG's treatment of income derived from its licenses with download music providers. The firm filed the first of several class cases against UMG on this issue following the decision of the Ninth Circuit Court of Appeals in F.B.T. Productions v. Aftermath Records. That case -- involving the Eminem catalog -- established the right of recording artists, music producers and other royalty participants of legacy music catalog to receive up to half (instead of a much reduced "record" royalty) of the income UMG and its affiliated record labels receive from their licenses with download music providers. In its role as co-lead counsel, the firm will be responsible for overseeing the conduct of the litigation, including directing discovery and motion practice in the matter, as well as supervising any settlement efforts on behalf of the class. Earlier, Judge Illston ordered UMG to produce all of its producer and artist agreements to plaintiffs' counsel by the end of this month. That production of documents continues. The court has set the next case management conference in the case for April 6th.

Firm scores series of victories in Rick James digital download case

November 1, 2011 – In a case likely to help determine the future of the digital music business, United States District Court Judge Susan Illston has sided with PE&G clients Rick James, Rob Zombie, Dave Mason and others and denied Universal Music Group's motions to dismiss or transfer the clients' action over UMG's treatment of income derived from its licensing to download music providers in its accounting to artists, producers and other royalty participants. In her nine-page order, Judge Illston ruled that the firm's clients properly stated a claim under California state statutory law arising from their allegations of a "broad scheme to underpay numerous royalty participants" in UMG's accounting for the licensing income it receives from digital music providers, and otherwise permitted the case to continue in San Francisco as a putative class action on behalf of the named plaintiffs and all other royalty participants similarly situated. The decision has prompted at least one other case brought by legendary Public Enemy front man, Chuck D, as well as a spate of publicity on this development and the subject of damages in a case involving Eminem's catalog of recorded music. Earlier, the judge allowed discovery to commence in the case, against the wishes of UMG. That discovery is now underway. 

Huffington Post covers Rick James case in major article on digital download royalties

July 7, 2011 – The Huffington Post recently reported on the ongoing controversy over the major record labels' accounting practices for income they receive from their dealings with download music providers like Apple/iTunes. In an article entitled "Detroit Shakes Up the Music Industry," writer Jason Schmitt predicted an "avalanche" of potentially "billions of dollars" in claims against the major labels on this subject following the U.S. Supreme Court's decision to let stand the opinion of a federal appellate court in F.B.T. Productions v. Aftermath Records, 621 F.3d 958 (9th Cir. Sept. 3, 2010). That case established the right of recording artists, music producers and other royalty participants of legacy music catalog to receive up to half (instead of a much reduced "record" royalty) of the income Universal Music Group and its affiliated record labels receive from their licenses with download music providers. Schmitt identified PE&G's recently-filed Rick James case as an example of the "larger-scale implications" for the music industry (and in particular, Universal Music Group) of the F.B.T. case. The firm is now representing several well-known recording artists in a class action against Universal Music over its policies and practices in accounting for the digital download income it receives on its recorded music catalog. As of the time of this writing, the case is in its initial stages; discovery into these policies and practices is expected to begin soon.

Daily Journal features front page coverage of firm's case for artist's royalties on digital music

May 31, 2011 – California's leading daily legal newspaper featured a prominent article on PE&G's recent court filings challenging the accounting practices of the world's largest recorded music company, Universal Music Group, in its treatment of artist royalties payable from the label's licenses with third party digital music providers. The Daily Journal's front page article, entitled "Artists Claim Record Labels Owe Them More for Digital Music," reported on two cases brought by the firm in the federal district court in San Francisco. The first case, brought on behalf of the Rick James estate, was followed soon after by a case on behalf of several rock artists, including Rob Zombie, Whitesnake and Dave Mason, whose recording careers collectively span over 30 years. All of the firm's clients (who are each platinum or multi-platinum acts) contend that UMG has systematically underpaid them and others for their share of this income, and that UMG intends to continue to underpay them in the future. Both cases seek class action status to redress the injury from what the complaints allege are the pernicious and unfair policies and practices of UMG, as well as compensation for potentially thousands of royalty participants for past and future monies. For a copy of the article, click here.

National Public Radio features program on firm's digital download case for Rick James estate

May 10, 2011 – National Public Radio featured a news segment on its May 4th broadcast devoted to the controversy over record company accountings to legacy recording artists and others for digital download income. Entitled "Download Sales: Will Money Stay with Labels or Go to Musicians," it included a reporter's interview with the manager of the Rick James Estate, Jeff Jampol, who discussed the issue as well as the case PE&G recently brought against Universal Music Group on the Estate's behalf. To listen to the radio broadcast, here. To read the related news article posted to the NPR website, click here

Summary

The Rick James case involves a claim by the late musician (through a trust) against UMG Recordings, Inc., the world's largest recorded music company, over that company's accounting to artists, producers and others for income it receives from internet music providers for digital downloads of recorded music. The case was brought on behalf of James's trust and as a class action on behalf of all those others similarly situated who are entitled to a much higher royalty on digital download income than UMG has paid them.

PE&G filed the complaint on April 1, 2011, in the Federal District Court in San Francisco. For a copy of the complaint in that case, click here. The firm later brought another case for Rob Zombie and several other rock acts on the same theory. The two actions were eventually consolidated into one case before the same judge, and litigation is ongoing.

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