Legal News
Live Nation has agreed to pay $20 million to settle a lawsuit claiming the company failed to warn investors about the kind of anticompetitive behavior that ultimately led to the Justice Department’s sweeping antitrust case.
In a filing Friday (March 21) in California federal court, attorneys for the plaintiffs said the deal with Live Nation would provide a “fair, reasonable, and adequate result” for thousands of investors who could be covered by the settlement. Live Nation continues to deny any wrongdoing, according to the court filings.
The case, filed in August 2023 as a proposed class action, claimed that Live Nation had failed to disclose to investors that it had engaged in anticompetitive conduct that was “likely to incur regulatory scrutiny and face fines, penalties, and reputational harm.”
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“Defendants made materially false and/or misleading statements and omissions of material fact about the company’s compliance with antitrust laws, its cooperation with governmental investigations, and the regulatory risks it was currently facing,” attorneys for the investors wrote.
As the government’s antitrust investigation was slowly revealed in the press — and then the blockbuster case was finally filed in May — Live Nation’s share price dropped, allegedly causing investors to face “significant” losses.
“The gradual revelation of the truth about the company’s anticompetitive conduct in violation of antitrust laws, refusal to fully cooperate with investigators, and undisclosed risks of regulatory action caused precipitous declines in the market value of the company’s stock,” attorneys for the investors wrote.
The DOJ and dozens of states filed their case in May, with the aim of breaking up Live Nation and Ticketmaster over accusations that they form an illegal monopoly in the live music industry. The case, which remains pending, accuses the company of a wide range of wrongdoing, including coercing artists into using the company’s promotion services and retaliating against venues that opted not to use Ticketmaster.
According to the lawsuit filed by the investors, Live Nation’s stock dropped $7.92 per share, or 7.8 percent, when the feds filed their case. Even before the lawsuit was formally filed, media reports about the investigation — including that Live Nation had “stonewalled” a Senate probe — had caused similar decreases in price.
According to settlement papers submitted on Friday, experts for the investors estimated that a best-case scenario might net them a whopping $743 million in damages at the end of the lawsuit. But their lawyers said that continuing to litigate the case also posed “significant” downside risk.
“The settlement provides a favorable, immediate and guaranteed recovery and eliminates the risk, delay, and expense of continued litigation,” plaintiff’s lawyers wrote. “While a greater recovery might be a theoretical possibility, evaluating the benefits of settlement must be tempered by recognizing that any compromise involves concessions on the part of all parties.”
Under the terms of the deal, the attorneys who represented the plaintiffs will be able to seek as much as 33 percent of the settlement, meaning up to $6.6 million. The two named plaintiffs, shareholders Brian Donley and Gene Gress, will get an extra $5,000 each.
A spokeswoman for Live Nation and an attorney for the plaintiffs did not immediately return requests for comment on the settlement.
Showtime has won a ruling dismissing a lawsuit that claimed George & Tammy – a television series about country music legends George Jones and Tammy Wynette – unfairly turned her late husband into “the villain.”
The case, filed last year, alleged that Showtime’s series conveyed a “negative and disparaging portrayal” of the late George Richey, a songwriter and producer to whom Wynette was married for decades after her split from Jones.
But in a decision Tuesday, a federal judge ruled that Richey’s widow (Sheila Slaughter Richey) lacked the grounds to file the case. The show might have been “unflattering” to him, the judge said, but it did not meet the legal requirements for her to sue Showtime for “unjust enrichment.”
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“Normally, a plaintiff who cries unjust enrichment must have actually enriched somebody,” Judge Stephanos Bibas wrote.
In his ruling, the judge said Sheila’s dispute was really with Wynette’s daughter, Georgette Jones, who had licensed her memoir to Showtime as the basis for the series. But he suggested she had instead sued the network because of the potential for a larger judgment.
“Sheila could have sued Georgette for breaking their agreement,” Bibas wrote. “But George & Tammy had been a hit, and Showtime had presumably profited handsomely from Georgette’s breach. So instead of going after Georgette for whatever damages her breach caused, Sheila set out for bigger game.”
Released in December 2022, George & Tammy was well-received by critics — particularly Michael Shannon and Jessica Chastain’s respective portrayals of Jones and Wynette. Both were later nominated for Emmy Awards for their performances.
Sheila filed her case in January 2024, claiming the show had depicted Richey as a “devious husband” who engaged in physical abuse, facilitated Wynette’s drug addiction, and committed “financial and managerial manipulation” of the late country icon.
Accusations about a harmful depiction of a real-world person would typically be filed as a defamation lawsuit, but Sheila didn’t sue Showtime for defamation. And that’s likely because she couldn’t: Under U.S. law, defamation cases can only be filed by living people, not on behalf of the deceased.
Instead, Sheila claimed the show indirectly violated a 2019 legal settlement in which Georgette promised to not make disparaging statements about Richey. Since George & Tammy was based on Georgette’s 2011 memoir about her parents, the lawsuit alleged that Showtime had been unjustly enriched by Georgette’s decision to violate her agreement with Sheila.
In Tuesday’s decision, Judge Bibas rejected that legal workaround. He ruled that Sheila had simply not met the strict requirements to sue the networek for unjust enrichment — saying that Showtime might have profited from the show, but not at Sheila’s expense.
“The crux of Sheila’s claim is that Georgette wronged her by breaching the non-disparagement agreement and Showtime profited from that wrong,” the judge wrote. “But that is not enough for unjust enrichment. Instead, a plaintiff must usually allege that she is the one who enriched the defendant.”
Sheila didn’t hand over any money to the network, Bibas said, or perform any uncompensated services. And he stressed that Showtime had also not violated any of her intellectual property rights, since she did not “own the story that Showtime used.”
“The network’s right to turn George and Tammy’s story into a TV show came from the First Amendment and from buying the rights to dramatize Georgette’s book,” the judge wrote. “So Showtime did not exploit Sheila’s property rights by making the series.”
Though he rejected the current lawsuit, the judge gave Sheila a chance to refile an updated version next month, suggesting that additional evidence might help show that the network facilitated Georgette’s decision to breach her agreement. He gave her until April 18 to file the new complaint against Showtime.
Attorneys for both sides did not immediately return requests for comment on Monday.
Jason Derulo must face a jury trial over allegations that he improperly failed to credit or pay a co-writer of his chart-topping viral TikTok song “Savage Love,” a federal judge says.
Producer Matthew Spatola sued the singer in 2023, claiming he had been unfairly cut out of the credits and royalties after he made important contributions to Derulo’s hit song, which spent a week atop the Hot 100 in 2020.
Derulo had pushed to have the case dismissed, arguing that Spatola wasn’t entitled to a stake in the copyright just because he was present for a few studio sessions. But in a ruling Thursday, Judge Michael W. Fitzgerald said that question would need to be decided by a jury of his peers.
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“While defendants may have established by undisputed evidence that Derulo controlled the sessions, there are genuine disputes of material fact regarding whether [Spatola] is a joint author,” the judge wrote. “It is for the jury to decide how to weigh the factors.”
The ruling was hardly a slam dunk victory for Spatola, who played guitar during two of the nine sessions that led to “Savage Love.” Judge Fitzgerald repeatedly noted that it was Derulo, not Spatola, who was ultimately in charge of the creative choices behind the song.
“The uncontroverted evidence is that plaintiff made certain contributions—perhaps very important contributions—but that ultimately, Derulo accepted them or rejected them as he saw fit, and plaintiff did not have the same standing,” the judge wrote.
But the judge said creative control was only one part of the legal analysis, and that jurors could potentially by swayed by other factors – like screenshots of an Instagram conversation in which Derulo used the “prayer hands emoji” after Spatola posted about his work on the song.
“A reasonable jury could find that in this post, plaintiff publicly held himself out as a producer of Savage Love and that, instead of disputing the characterization publicly or privately, Derulo let the characterization stand,” the judge said. “Of course, a jury may also find that this is not strong evidence.”
An attorney for Derulo did not immediately return a request for comment on the ruling.
Spatola’s case is hardly the first credit controversy over “Savage Love.” Fully entitled “Savage Love (Laxed – Siren Beat),” the song is a remix of an earlier instrumental called “Laxed (Siren Beat)” – a viral sensation on TikTok that was released by a New Zealand teen using the name Jawsh 685.
According to a report by Variety, Derulo initially engaged in talks about partnering with Jawsh, but later “went rogue” and teased his version in May 2020 before fully reaching any kind of agreement. That move sparked public backlash and private threats of legal action from Sony Music, which had by then signed Jawsh to a record deal.
The situation was seemingly resolved by late June 2020, when the song was formally released with the credits reading “Jawsh 685 x Jason Derulo.” It ultimately spent 31 weeks on the Hot 100, and another remix featuring BTS helped push the song to No. 1 in October 2020.
Spatola, a producer and musician who says he’s worked with Drake, DJ Khaled, Juice WRLD and others, filed his lawsuit in 2023 — claiming he had played a key role in creating the song but hadn’t been properly compensated.
“Derulo … unilaterally released ‘Savage Love,’ without providing any credit whatsoever to Spatola for the work they jointly created together,” his lawyers wrote. “This lawsuit is filed to right that wrong.”
Following Thursday’s decision, those accusations will now be decided by a jury. A trial, expected to run roughly 10 days, is tentatively scheduled for May.
In a statement to Billboard on Friday, Spatola’s attorneys (Thomas Werge of the Werge & Corbin Law Group and Christopher Frost of Frost LLP) praised the ruling and said they “look forward to vindicating Mr. Spatola’s rights” at the upcoming trial.
“For us it represents a resounding rejection of an attempt, through legal maneuvers, to avoid having to face trial for not providing our client with the credit he deserves,” the lawyers said. “The ruling acknowledges that the evidence supports Mr. Spatola’s claim of joint ownership, which will now be heard by a jury.”
Drake’s lawyers are quickly firing back after Universal Music Group’s recent attacks on the rapper’s defamation lawsuit over Kendrick Lamar’s diss track “Not Like Us,” arguing that “millions of people” around the world think the song was literally claiming Drake is a pedophile.
In a motion filed in federal court Thursday (March 20), Drake’s team hit back at UMG’s core defense against the star’s libel lawsuit: That scathing lyrics are par for the course in diss tracks and that most listeners wouldn’t take such “outrageous insults” as statements of fact.
That argument is “doomed to fail,” Drake’s lawyers say in the new filing, because many people really did come away from Lamar’s song believing that he was — as a matter of fact — calling Drake a pedophile.
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“UMG completely ignores the complaint’s allegations that millions of people, all over the world, did understand the defamatory material as a factual assertion that plaintiff is a pedophile,” Drake’s attorneys write. “UMG also ignores [the lawsuit’s claim] that the statements in question (and surrounding context) implied that the allegations were based on undisclosed evidence and the audience understood as much.”
Thursday’s filing came in response to a motion from UMG, filed earlier this week, that seeks to halt all discovery in the case. In it, the music giant argued that Drake’s case was almost certain to be dismissed, meaning that handing over evidence would be a waste of time — particularly since his lawyers are allegedly demanding a vast swath of sensitive materials, including Lamar’s record deal.
But in the new response, Drake’s lawyers say that motion “does not come close” to showing that the discovery in the case is the kind of “undue burden” that must be halted: “UMG has not stated how long it expects discovery to take, the costs associated with discovery, or any other indicator that might demonstrate why discovery will be overly burdensome.”
Lamar released “Not Like Us” last May amid a high-profile beef with Drake that saw the two stars release a series of bruising diss tracks. The song, a knockout punch that blasted Drake as a “certified pedophile” over an infectious beat, eventually became a chart-topping hit in its own right and was the centerpiece of Lamar’s Super Bowl halftime show.
In January, Drake took the unusual step of suing UMG over the song, claiming his label had defamed him by boosting the track’s popularity. The lawsuit, which doesn’t name Lamar himself as a defendant, alleges that UMG “waged a campaign” against its own artist to spread a “malicious narrative” about pedophilia that it knew to be false.
This week has seen UMG mount its first formal counterattack — first by filing a motion to dismiss the case on Monday (March 17), then seeking the halt discovery on Tuesday (March 18). In the strongly-worded request to toss the case out, UMG argued not only that the lawsuit was “meritless,” but that the star filed it simply because he was embarrassed: “Instead of accepting the loss like the unbothered rap artist he often claims to be, he has sued his own record label in a misguided attempt to salve his wounds.”
Drake’s attorneys have said in public statements that the label’s motion to dismiss the case is a “desperate ploy by UMG to avoid accountability” and that it will be denied. They will file a formal response in opposition to that motion in the weeks ahead.
Regional Mexican superstar Gerardo Ortiz testified against Ángel del Villar, the CEO of his former label Del Records, on Wednesday (March 19) in a downtown Los Angeles federal courtroom. The West Coast-based executive’s criminal trial began on Tuesday where he is accused of doing business with a concert promoter linked to Mexican drug cartels.
The trial follows a 2022 criminal complaint that charged Del Villar, among other defendants, with conspiring to violate the Foreign Narcotics Kingpin Designation Act. The complaint also alleged that on April 19, 2018, FBI agents approached Ortiz in Phoenix to inform him about Jesus “Chucho” Pérez Alvear’s designation under the Kingpin Act. Mexican concert promoter Pérez Alvear — who was killed in 2024 — ran a company called Gallistica Diamente (Ticket Premier) and until March 2019, promoted concerts in Mexico for DEL Entertainment.
The designation prohibited Ortiz from conducting business with Pérez and performing concerts that Pérez promoted. Prosecutors claim that the música mexicna hitmaker went on to perform concerts organized by Pérez after Del Villar “convinced” Ortiz to “ignore the FBI warning.”
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Ortiz — who pleaded guilty to a conspiracy charge in the case and is cooperating with the FBI — took the stand and told the jury he saw Pérez Alvear with Del Villar at the Del Records office in Los Angeles two or three times, according to Univision Noticias. He added that Pérez Alvear was at the office to hire bands and artists to perform at his shows in Mexico. He went on to confess that he had performed at Feria de San Marcos in Aguascalientes, Mexico in April 2018, promoted by Pérez Alvear, even after he had already been designated under the Kingpin Act and FBI agents had alerted him that if he performed at the Feria, he could face up to 10 years in prison and pay a fine of $1 million — which is why he was charged initially.
The “Dámaso” singer — who signed to Del Records in 2009 and parted ways with the company in 2019 amid a contract dispute — testified a day after the trial began where Del Villar’s lawyers argued in the opening statements that the Latin music executive was allegedly “manipulated” by former Del Records employee Brian Gutiérrez who “convinced” Del Villar that “everything” the company was doing was “legally acceptable,” according to reports by Rolling Stone.
“There is something deeply wrong and manipulative about how this case was created and investigated,” Del Villar’s defense lawyer Marissa Goldberg said on Tuesday. “The ones who actually created this crime, who manufactured it, are not sitting as defendants, which is even more deeply wrong.”
Founded by Del Villar in 2008, Del Records is considered a powerhouse in regional Mexican music. The label has been música mexicana giants including Ortiz, Ariel Camacho and Eslabon Armado, whose global hit, “Ella Baila Sola” with Peso Pluma, became one of the biggest songs of 2023.
Passed in 1999, the Kingpin Act allows the U.S. to impose targeted sanctions on foreign individuals involved in the illegal drug trade and ban U.S. residents from doing business with them. If convicted of violating the law, Del Villar would face a statutory maximum sentence of 30 years in prison.
Mariah Carey has won a federal court ruling dismissing a copyright lawsuit over her perennial holiday classic “All I Want for Christmas is You” – a decision that cited an expert who said the songs mostly just shared “Christmas song clichés.”
In a ruling issued Wednesday, Judge Mónica Ramírez Almadani rejected allegations from songwriter Vince Vance that Carey and others had stolen key elements of her Christmas blockbuster from his 1989 song of the same name.
Ruling that Vance had failed to show that the songs were similar enough to violate copyright law, the judge cited analysis by a musicologist who said the two tracks were “very different songs” that shared only “commonplace Christmas song clichés” that had been used in many earlier tracks.
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“Plaintiffs have not met their burden of showing that [the songs by] Carey and Vance are substantially similar under the extrinsic test,” Ramírez Almadani wrote, using the legal term for how courts assess such allegations.
The judge not only tossed out Vance’s case, but also ruled that he and his lawyers should be punished for filing “frivolous” arguments. Calling it “egregious” conduct that aimed to “cause unnecessary delay and needlessly increase the costs of litigation,” the judge ordered that Vance and his lawyers to repay the legal bills Carey incurred defending those arguments.
Vance (real name Andy Stone) first sued Carey in 2022, claiming “All I Want” infringed the copyrights to a 1989 song of the exact same name recorded by his Vince Vance and the Valiants. Vance claimed that the earlier track received “extensive airplay” during the 1993 holiday season — a year before Carey released her now-better-known hit.
“Carey has … palmed off these works with her incredulous origin story, as if those works were her own,” Vance wrote in his latest complaint. “Her hubris knowing no bounds, even her co-credited songwriter doesn’t believe the story she has spun.”
Vance’s allegations were a big deal because Carey’s song is big business. The 1994 blockbuster, which became even more popular after it was featured in the 2003 holiday rom-com Love Actually, has re-taken the top spot on the Hot 100 for six straight years and earned a whopping $8.5 million in global revenue in 2022.
Carey’s attorneys asked the judge to end the case last year, arguing that the two songs shared only generic similarities that are firmly in the public domain – including basic Christmas terminology and a simple message that’s been used in “legions of Christmas songs.”
“The claimed similarities are an unprotectable jumble of elements: a title and hook phrase used by many earlier Christmas songs, other commonplace words, phrases, and Christmas tropes like ‘Santa Claus’ and ‘mistletoe,’ and a few unprotectable pitches and chords randomly scattered throughout these completely different songs,” Carey’s attorneys wrote at the time.
In Wednesday’s ruling, Ramírez Almadani granted that motion by endorsing two reports from musicologists hired by Carey’s lawyers that strongly rejected Vance’s allegations. In one report, New York University professor Lawrence Ferrara testified that he had found “at least 19 songs” that incorporated the same lyrical idea as “All I Want” that had been released prior to Vance’s track.
“[Vance] and [Carey] in their entirety are very different songs and the only element of similarity is the use of a common lyrical idea and Christmas song clichés that were in common use prior to [Vance],” Ferrara wrote in the report that the judge cited.
Vance’s attorneys submitted their own expert reports supporting his allegations, but the judge rejected them as evidence – saying that one was “not based on sufficient facts or data” and was “not the product of reliable principles and methods” as required by existing legal precedents.
Neither side immediately returned requests for comment.
A former employee of Eminem (Marshall Mathers) has been criminally charged in connection with the sale of unreleased music by the rap superstar, it was announced by Acting U.S. Attorney Julie Beck on Wednesday (March 19). According to the criminal complaint, the FBI was contacted by employees of Eminem’s music studio in Ferndale, Michigan, to […]
Alleged Rollin’ 60s Los Angeles Crips gang leader and music executive Eugene “Big U” Henley Jr. has been charged as part of a 107-page sprawling indictment that compares his “Big U Enterprise” to a “mafia-like organization,” the Department of Justice announced on Wednesday (March 19).
According to the DOJ, Henley, 58, remains at large and is considered a fugitive as he faces conspiracy charges related to the Racketeer Influenced and Corrupt Organizations (RICO) Act. He and his associates are accused of racketeering, extortion, human trafficking, fraud and the murder of a 21-year-old aspiring rapper who signed to his Uneek Music label, among other charges.
Henley is credited with helping launch the career of rapper Nipsey Hussle, who was a member of the Rollin’ 60s in South Central Los Angeles prior to his death in 2019.
Two others named in the indictment, Sylvester “Vey” Robinson and Mark “Bear Claw” Martin, have been arrested on the same criminal complaint in which Henley was charged; both were expected to appear in U.S. District Court in L.A. on Wednesday afternoon. Overall, 10 Rollin’ 60s members have been arrested in the past 24 hours, while another four were already in custody. Law enforcement is currently tracking down five other defendants, “three of whom are expected to be in custody shortly,” according to the DOJ press release. In addition to Henley, one other unnamed defendant is considered a fugitive.
“The allegations in the complaint unsealed today reveal a criminal enterprise that engaged in murder, extortion, human trafficking, and fraud — all led by a supposed anti-gang activist and purported music entrepreneur who was nothing more than a violent street criminal,” said acting U.S. Attorney Joseph McNally in a statement.
McNally continued: “Eliminating gangs and organized crime is the Department of Justice’s top priority. Today’s charges and arrests target the leadership of this criminal outfit and will make the neighborhoods of Los Angeles safer. I am grateful for the work of our prosecutors and law enforcement partners.”
According to the DOJ, Henley was involved in the murder of rapper “R.W.” — the victim’s initials — who signed to his Uneek Music label in January 2021. While recording at a studio in Las Vegas, R.W. allegedly recorded a diss track taking shots at Henley. According to the DOJ, Henley and Robinson then confronted R.W. in Vegas, with Henley allegedly later shooting R.W. in the head and leaving his body in a ditch off Interstate 15. He also allegedly had the studio’s security camera footage scrubbed and ordered any witnesses not to speak with authorities following the murder.
The indictment states that Henley rose to prominence with the Crips gang in the 1980s and has remained a leader within the organization. The feds accuse him of leveraging his relationships with the Rollin’ 60s to the benefit of his Big U Enterprise, which allegedly used violence, fear and intimidation tactics to increase its power.
While associated with the Rollin’ 60s, Big U Enterprise is being treated as an independent organization tied to various crimes also including robbery, exploiting sex workers and illegal gambling.
Per the Los Angeles Times, athletes, celebrities and musicians were among Henley’s extortion victims, who were required to “check-in” for “protection” when visiting Los Angeles. He allegedly defrauded companies, donors, athletes and celebrities, including former NBA star Shaquille O’Neal and Golden State Warriors forward Draymond Green. Henley allegedly took donations from both men that were meant for charity and transferred the funds to his personal bank account.
Attorney Tony Buzbee is withdrawing from more than a dozen sexual abuse lawsuits against Sean “Diddy” Combs in New York federal court two days after telling a judge he had “made an error in judgment” by failing to disclose that he was not admitted to practice law in that court.
Buzbee, who’s filed more than 20 cases against Combs and has fought an acrimonious battle with Jay-Z after filing a lawsuit by a woman who briefly accused him of rape, filed motions Wednesday (March 19) to withdraw across 15 different civil lawsuits in the Southern District of New York, the federal court district covering Manhattan.
The moves came two days after Buzbee told Judge Ronnie Abrams in one of those cases that he’d “made an error in judgment by failing to inform you that I was not admitted to the Southern District” and would “remedy this error by withdrawing my representation” until he was admitted.
In the same filing, Buzbee stressed that he was “in good standing of the New York State Bar” and would still be “eminently qualified” to continue handling the case, but said he would step away “as I sort these issues out.”
“My admission status has become a distraction that has shifted the focus of the matter away from where it should be, which is securing justice for the plaintiff,” Buzbee told Judge Abrams in the Monday letter.
The lawsuits against Combs will proceed with other attorneys at the helm, and Buzbee will remain in cases filed in New York state courts or other jurisdictions. Buzbee did not return a request for comment from Billboard, but in a Tuesday statement to the Houston Chronicle, he said: “Until that administrative issue is sorted out, my colleagues who are formally admitted in the SDNY will continue to push those cases while I continue to march forward in the New York State cases.”
Combs is facing a flood of abuse accusations, including dozens of civil lawsuits and a sweeping criminal indictment from federal prosecutors. He faces a jury trial on those charges in May; if convicted, he’s looking at a potential life prison sentence.
Buzbee, a well-known plaintiffs’ attorney in the Houston area, announced in October that was representing 120 individuals who had been victimized by Combs and would soon begin filing civil lawsuits on their behalf. He’s since filed more than 20 such cases, mostly repping anonymous Doe accusers who say the star sexually assaulted or raped them.
In December, Buzbee added Jay-Z as a defendant to one of those cases, accusing the star of joining Combs in raping an unnamed 13-year-old girl in 2000. The star vehemently denied the shocking allegations and has subsequently sued Buzbee and the accuser for defamation. In February, Buzbee’s client voluntarily dropped the case against Jay-Z without a settlement.
A federal judge is shaking up Limp Bizkit’s $200 million lawsuit against Universal Music Group (UMG), issuing a procedural ruling that sends much of the contentious legal battle to state court but allows copyright claims to move ahead toward trial.
In a decision issued Tuesday (March 19), Judge Percy Anderson said he would decline to exercise jurisdiction over the majority of the lawsuit’s accusations against UMG, including its core claim that the band is entitled to a ruling of “rescission” that voids its deals with the label and allows it to take back copyrights to its music.
Citing concerns about “economy, convenience [and] fairness,” the judge ruled that those claims must instead be handled by state courts in New York or California. But he denied UMG’s motion to dismiss the band’s claim of copyright infringement, allowing those claims to proceed in his court.
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Though hardly a slam dunk, the ruling is a positive development for Limp Bizkit. In an earlier ruling, Judge Anderson had outright rejected the rescission claim — a holding that also meant the band couldn’t sue the label for copyright infringement. In the new decision, the judge left the question of rescission open for a future ruling by a state court, meaning that claim — and the lucrative copyright claims — are back in play.
Though the copyright claims will now move forward in his court, the judge has repeatedly stressed that those allegations can only succeed if the band’s contracts with UMG are rescinded and it regains its ownership of the copyrights. The judge could potentially pause the case while the rescission issue is litigated in state court, but he gave no indication that he would do so in Tuesday’s decision.
Frontman Fred 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.” The band argued that the damages total owed by UMG would “easily surpass $200 million” when the case was over.
But in January, Judge Anderson sided with UMG on the core question of rescission. He 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 didn’t deserve the drastic remedy of terminating the decades-old deals in their entirety.
“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.”
Following that ruling, Limp Bizkit responded by filing an updated version of the lawsuit. In it, the band added new factual allegations to support their demand for rescission, including that its former manager had fraudulently induced them to sign agreements, engaging in “wrongful self-dealing” while the band was “paid nothing.”
In Tuesday’s decision, Judge Anderson said those new allegations would require the kind of detailed analysis of novel state-law issues that a state-level court was better suited to address.
“The rescission claims, on which the copyright claims depend, … require an analysis of state law of both New York and California law involving facts and law that are distinct from those necessary to adjudicate the copyright claim,” the judge wrote. “Plaintiffs’ effort to rescind the agreements as a result of the alleged fraud committed by their former business manager appears to also raise complex and novel theories for which there is limited controlling legal precedent.”