Limp Bizkit has suffered a setback in its $200 million lawsuit against Universal Music Group, with a federal judge ruling that the band cannot legally void its contracts of “nearly 30 years” over accusations of underpaid royalties.
The blockbuster case, filed last year in Los Angeles federal court, claims that frontman Fred Durst and the band have “not seen a dime in royalties” over the years. Among other claims, the lawsuit argued that the band is therefore entitled to a ruling of “rescission” that terminates its deals with UMG.
But in a decision Friday (Jan. 17), Judge Percy Anderson ruled that the band had in fact been “paid millions in advances” and that UMG had fronted “substantial sums” to record and distribute Limp Bizkit’s albums – meaning the band doesn’t deserve the drastic remedy of terminating the decades-old deals.
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“Plaintiffs seek rescission of contracts that have governed the parties’ relationship beginning in 1996 – nearly 30 years – because the agreements should be rescinded as fraudulently induced,” the judge wrote. “Plaintiffs have not plausibly alleged the type of ‘substantial’ or ‘total failure’ in the performance of the contracts that could support rescission of the parties’ agreements.”
The ruling isn’t a total defeat. Judge Anderson didn’t reach many of the lawsuit’s other legal claims, including fraudulent concealment and intentional misrepresentation, and gave Limp Bizkit’s lawyers a chance to fix the rescission claim. But the judge’s wording suggested he will be skeptical of revoking a contract when “millions in royalties were advanced and paid under decades-old agreements.”
If finalized, the decision is something of a double blow for Durst’s lawsuit. It would not only reject his efforts to rescind the contracts, but would sink one of his other core allegations: that UMG has infringed Limp Bizkit’s copyrights. Such a claim — which could carry a huge damages award — can only succeed if the band’s contracts are voided and it legally regains its ownership of the copyrights, the judge wrote.
That could also mean the case is headed to another court entirely. If Limp Bizkit’s lawsuit no longer contains federal copyright claims, a federal court would no longer have jurisdiction over the case, meaning the lawsuit’s remaining accusations against UMG would need to be refiled in a state court.
In a statement to Billboard on Wednesday, attorneys for Durst and Limp Bizkit downplayed the impact of the ruling, noting that the court had “upheld a majority of our claims” and given them a second shot at the rejected claims.
“The facts speak for themselves,” said Frank Seddigh, the band’s lead attorney. “Universal will be held accountable for its actions and will not get away with its conduct at the expense of artists.”
A spokesman for UMG declined to comment.
Durst and Limp Bizkit sued in October, claiming the band had “never received any royalties from UMG,” despite its huge success over the years: “The band had still not been paid a single cent by UMG in any royalties until taking action.”
That claim was something of a stunner. How had one of the biggest bands of its era, which sold millions of records during the music industry’s MTV-fueled, turn-of-the-century glory days, still never have been paid any royalties nearly three decades later?
According to Durst, the answer was an “appalling and unsettling” scheme to conceal royalties from artists and “keep those profits for itself.” He claimed UMG had essentially kept Limp Bizkit in the red with shady bookkeeping, allowing the label to falsely claim the band remained unrecouped — meaning its royalties still had not surpassed the amount paid in upfront advances.
UMG hit back a month later, calling the allegations “fiction” and demanding they be thrown out of court. The music giant’s attorneys argued that Limp Bizkit’s own legal filings contradicted the accusation that the band had not been paid: “Plaintiffs concede thereafter receiving millions of dollars in payments.”
Following Friday’s decision, Limp Bizkit has until early next month to refile an amended version of the lawsuit.
