Universal Music Group is now facing a fresh lawsuit that alleges the underpaying of royalties on digital downloads. Today, Chuck D of Public Enemy stepped up to bring his own class action against the major record label.
The lawsuit was filed in San Francisco federal court and alleges that UMG routinely miscalculates the royalties owed to artists for digital downloads, such as MP3s and ringtones, by treating them as "sales" of physical records rather than "licenses."
Chuck D's complaint follows on the heels of a federal judge's decision on Tuesday to move forward on a similar consolidated class action brought by Rob Zombie and the estate of Rick James.
In announcing the lawsuit, Chuck D's lawyers at Hausfeld LLP says that UMG has underpaid hundreds of millions of dollars in royalties and pointed to a decision in 2010 by the Ninth Circuit Court of Appeals that offers some precedent that digital downloads should be treated as "licenses."
"Chuck D has been 'fighting the power' for over two decades and will continue to do so through this suit in order to help all musicians, including many legacy artists who are living on fixed incomes," said James Pizzirusso, a partner at Hausfeld LLP involved in the case.
"This complaint suffers from serious flaws and weaknesses, not the least of which is that the claims asserted are not appropriate for class treatment," a UMG spokesperson tells THR. "We will vigorously defend against it."
The suit arrives as the digital marketplace continues to prove itself a key component of album and single sales. Coldplay's Billboard 200-topping "Mylo Xyloto" just moved over 500,000 copies worldwide in its first week, an iTunes record as well as a number that bested the band's overall domestic sales of 447,000 units.
Public Enemy's Chuck D Files $100M Lawsuit Against Universal Music Group
Lawsuit Alleges Adam Lambert Broke 'American Idol' Rules
new lawsuit suggests that Adam Lambert may have violated the rules of "American Idol" when he agreed to appear on the eighth season of the hit reality competition show.
The singer is now facing a lawsuit that alleges that he's still under a Music Services Agreement and a Co-publishing Agreement from a company he worked with prior to hitting it big on "Idol," and that he has violated the company's rights in his mega-selling post-Idol career.
The claims come from Colwel Platinum Entertainment, which has been marketing a new Lambert album entitled "Beg For Mercy." The appearance of the new album has generated such discussion among Lambert fans that on October 6, Lambert felt the need to tweet: "'Beg For Mercy' project is same as 'Take One'. some songs I worked on 5 yrs ago and never finished. This release comes as a surprise to me…"
Lambert's reps sent takedown notices to Amazon.com, which had the album up for sale, and on October 14, the album was removed for sale. Now Colwel Platinum is striking back in a lawsuit filed in California federal court on Tuesday. The complaint sets up the allegations by introducing Lambert as a relatively unknown artist who hit it big in 2009 when he finished as runner-up on the Fox competition show.
Lambert auditioned for the show in 2008. According to the complaint: "Upon further information and belief, the rules governing appearances on and participation in American Idol when Lambert was a contestant provided, among other things, that contestants were ineligible if 'as of the date of [the] audition, [they had]...a Music recording contract...or any other contractual arrangement that would prohibit [them] from entering into a...recording contract..." A violation of this provision was grounds for disqualification."
Lambert accepted these rules, but according to Colwel, Lambert had an operating agreement with one of its divisions, Welsford Music Productions.
According to the lawsuit, between April 2007 and September 2008, Lambert performed compositions that he had written, alone and with others, for Welsford.
On February 12, 2008, a few months before he attended auditions for Idol, Lambert is said to have executed a Music Services Agreement with Welsford. Around the same time, Lambert is alleged to have entered into a Co-Publishing Agreement with Wilshire Publishing Limited.
As a condition of these agreements, Lambert allegedly agreed to record Music and "without limitation...[render] all other services reasonably required."
Welsford says Lambert got paid for his work, agreed that the material would be "works made for hire," and that Welsford would have the right to use his name, nickname and biography in connection with advertising and promoting the recordings.
The company says it spent more than $200,000 to produce the recordings and advanced money to Lambert so he could make his living expenses at the time.
Lambert is said to have recorded 13 songs, including one that was ironically titled "MP3's Killed the Record Companies." Lambert allegedly uploaded four of those 13 songs to his MySpace page without authorization of the publishing company.
In July 2011, several years after the original recording session and when Lambert had suddenly become famous, Welsford says it began the final stages of preparing to release the album. Now, having put the album out only to see it taken down, Colwel Platinum is suing Lambert for making a false claim under the Digital Millennium Copyright Act:
"Upon information and belief, Lambert, through his authorized agent and representative, knowingly materially misrepresented to Amazon.com in the 'takedown notice' that Amazon's promotion and sale of the Album infringe Lambert's rights." The plaintiff also is seeking declaratory relief that it owns a 50% publishing share of the recordings, that it has an unconditional right to promote and sell the recordings, that neither the Music Services Agreement nor the Co-Publishing Agreement was validly rescinded, and that these agreements remain in effect.
Colwel is represented by Joseph Golden.