Wow, Rick James Is Really Sticking It to Universal Music…

05 Nov Wow, Rick James Is Really Sticking It to Universal Music…
November 2, 2011

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.

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.