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Sammy Hagar has won a court order barring an allegedly unauthorized Hollywood location of his Cabo Wabo Cantina from continuing to use the chain’s name and branding while their dispute plays out before a judge.
In a preliminary injunction issued Tuesday (Mar. 5), a Los Angeles federal judge sided with Hagar’s company, Red Head Inc., and ruled franchisee Robert Azinian was prohibited from using “Cabo Wabo” trademarks for any purpose, including a new location on Hollywood Boulevard that sparked the rocker’s lawsuit.
When it comes to that particular eatery, Judge George H. Wu wrote that the injunction specifically bars Azinian from “representing to the public, in any way, that the Restaurant is an authorized Cabo Wabo Cantina restaurant.”
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Tuesday’s order came amid an escalating legal dispute between Hagar and his former business partner over Cabo Wabo Cantina — a brand of Mexican-themed eateries started by the Van Halen rocker in Cabo San Lucas, Mexico in 1990 and later franchised into locations in Las Vegas and Hollywood.
Azinian’s company, which operated the Hollywood outpost for years, sued Hagar in September, claiming the singer had repeatedly breached their agreements and then unfairly tried to terminate the deal. The lawsuit claimed that the two sides had been at odds for more than a year over Azinian’s concerns that Hagar’s company was failing to support the Hollywood franchise. His lawsuit noted one such grievance was that the rock star himself was “not visiting and entertaining” at that location.
Hagar’s company (Red Head) hit back in January, filing a separate lawsuit in federal court that accused Azinian of infringing the Cabo Wabo trademarks. The case claimed that the partnership had clearly and lawfully been terminated because of Azinian’s own actions, but that Azinian had chosen to “surreptitiously” open a new location in Hollywood anyway.
Last month, Red Head asked for an immediate injunction — warning that Azinian was using Hagar’s branding but that the company had no oversight over the business, including the quality of food: “Every day that the Cabo Wabo Cantina at the new Hollywood location continues to operate under the ‘Cabo Wabo’ brand, it soils the name, reputation, and goodwill that Red Head has developed.”
In Tuesday’s order, Judge Wu was seemingly swayed by those arguments. He said Hagar’s company was likely to eventually win the lawsuit, and that it would face so-called “irreparable harm” if Azinian was able to continue using the Cabo Wabo Cantina branding while the case played out.
“Red Head has shown that it has suffered, and will continue to suffer, irreparable harm in the absence of a preliminary injunction — including harm to Red Head’s reputation and loss of goodwill, both of which are not fully remediated by damages,” Judge Wu wrote.
Neither side’s attorneys immediately returned requests for comment on Tuesday.
This is The Legal Beat, a weekly newsletter about music law from Billboard Pro, offering you a one-stop cheat sheet of big new cases, important rulings and all the fun stuff in between.
This week: Earth, Wind & Fire wins its trademark lawsuit against a tribute band that used the group’s name without permission; Kanye West faces a copyright lawsuit from Donna Summer’s estate that claims he “shamelessly” copied her song; federal prosecutors accuse YoungBoy Never Broke Again of using drugs while under house arrest; and much more.
THE BIG STORY: Will The Real Earth Wind & Fire Please Stand Up?
After just a year of litigation, Earth, Wind & Fire prevailed in its trademark lawsuit against a tribute act that called itself “Earth, Wind & Fire Legacy Reunion” – a use of the legendary R&B group’s name that a federal judge called “deceptive and misleading.”
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Tribute acts — groups that exclusively cover the music of a particular band — are legally allowed to operate, and they often adopt names that allude to the original. But they must make clear that they are only a tribute band, and they can get into legal hot water if they make it appear that they are affiliated with or endorsed by the original.
The case against Legacy Reunion took that basic framework and added tricky questions. The tribute band really did feature musicians who had once performed with Earth, Wind & Fire, and they argued that they were legally allowed to tell that to fans. But Earth, Wind & Fire argued that those performers were just a few “side musicians” who had briefly played with the band, and that they had purposefully aimed to mislead consumers into thinking the primary players were also involved.
In a decision issued Monday, Judge Federico A. Moreno sided decisively with Earth, Wind & Fire, saying the evidence tipped “overwhelmingly” in the band’s favor. Go read why here.
Other top stories this week…
KANYE SUED OVER VULTURES 1 – The other shoe dropped. Two weeks after the estate of Donna Summer publicly accused Kanye West of illegally interpolating her 1977 hit “I Feel Love” in his “Good (Don’t Die),” the singer’s heirs filed a copyright lawsuit against the embattled rapper, accusing Ye of “arrogantly and unilaterally” using the song after he was explicitly refused a license. The track has already been pulled from streamers, but the estate said the lawsuit was about more than just that: “It is also about the rights of artists to decide how their works are used and presented to the public.”
HOUSE ARREST DRAMA – Federal prosecutors accused YoungBoy Never Broke Again (a.k.a. NBA YoungBoy) of violating the terms of his house arrest – a confinement that has now lasted more than two years while he awaits a trial on gun charges — by allegedly using unspecified drugs. More strangely, prosecutors specifically claimed that YoungBoy also told his supervising officers that he has “no intentions” of stopping doing so.
JAM MASTER JAY MURDER VERDICT – Following a three-week trial in Brooklyn, a federal jury found two New York City men guilty in the 2002 murder of Run-DMC‘s Jam Master Jay, finally resolving one of hip-hop’s long unsolved killings. After the convictions, Karl Jordan, Jr., 40, and Ronald Washington, 59, each face a minimum sentence of 20 years in prison.
I DON’T (MAL)PRACTICE SANTERIA … King Holmes Paterno & Soriano fired back at a legal malpractice lawsuit filed earlier this year against the top music law firm by the band Sublime, arguing that its former clients had chosen “falsely and maliciously” to accuse the firm of wrongdoing in an “obvious and pathetic” attempt to avoid an unpaid legal bill totaling more than $100,000.
DIDDY ACCUSER CAN’T STAY ANONYMOUS – A federal judge ruled that an unnamed woman suing Sean “Diddy” Combs over allegations that he sex trafficked and “gang raped” her must reveal her identity as the case moves forward. Her lawyers argued that unmasking her would expose her to potential harm, but the judge ruled that allowing cases to proceed under a pseudonym in the U.S. court system was “the exception and not the rule.”
‘JEEN-YUHS’ LIBEL CASE DISMISSED – Dismissing an unusual defamation lawsuit, a federal judge ruled that a woman who once appeared “obviously intoxicated” in a Kanye West music video could not sue Netflix after the footage was used in the Kanye-focused documentary jeen-yuhs — even if she later got sober and “turned her life around.”
SONY SETTLES TERMINATION CASE – Sony Music reached a settlement to resolve a lawsuit filed by New York Dolls singer David Johansen and other artists in an effort to regain control of their masters. Combined with settlements last year in a similar lawsuit against Universal Music Group, the agreement will mark the final conclusion of closely-watched class-action litigation that claimed the two music giants were refusing to honor copyright law’s termination right when it came to recording artists.
APPLE’S HUGE EU FINE – The European Union fined Apple nearly $2 billion, claiming the tech giant broke the bloc’s competition laws by unfairly favoring its own music streaming service over rivals like Spotify. Apple’s alleged actions – specifically, restricting how other music services tell their users about alternative pricing outside of an iOS app itself – led consumers to pay “significantly higher prices for music streaming subscriptions,” EU regulators said. Apple vowed to appeal the ruling, which was sparked by a complaint by Spotify.
Top music law firm King Holmes Paterno & Soriano is firing back at a legal malpractice lawsuit filed by the band Sublime, arguing that the group has “falsely and maliciously” sued to get out of paying their hefty legal bills.
A month after Sublime sued its former attorneys — Howard King, Peter Paterno and Joseph M. Carlone — over allegations of a “pattern of self-dealing,” the firm filed a scathing countersuit Monday (Mar. 4). In it, they argue that the band still owes the firm $100,000 in fees after abruptly ending a decades-long attorney-client relationship.
“While Sublime had the right to terminate its lawyers at any time, it has no right to sidestep its responsibility to pay fees it incurred,” the firm wrote. “Yet, in an obvious and pathetic attempt to do exactly that, plaintiffs, presumably at the prodding of reputationally challenged new advisors, have cynically elected to file a trumped-up preemptive malpractice suit falsely and maliciously accusing the law firm of conflicts of interest they claim caused them unspecified damages.”
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The filing from King Holmes aimed to rebut many of Sublime’s specific allegations, including the band’s accusation that the firm steered it into a merchandise deal without disclosing that the company was another one of the firm’s clients — a move Sublime claimed cost the band millions.
In Monday’s filing, the firm said it had disclosed that potential conflict of interest to the band members and that they had consented to the arrangement. King Holmes said it even invited the band members’ personal attorneys to be involved in the negotiations to avoid any doubt.
“At the request of Sublime and its partners, KHPS helped secure a state-of-the-art merchandising agreement with one of the world’s few most preeminent music merchandisers, which also was Sublime’s merchandiser of choice,” the firm wrote. “That merchandiser paid and continues to pay Sublime higher royalties on a much broader range of products and with other more favorable terms than its main competitor offered.”
King Holmes Paterno & Soriano touts an eye-popping list of music industry clients, from Dr. Dre to Pharrell Williams to Blink-182 to the Tupac Shakur estate. King famously represented Williams and Robin Thicke in the “Blurred Lines” copyright case; Paterno represented Metallica in its legal battles against Napster over internet piracy.
But in late January, Sublime boldly announced that it was no longer one of those clients by filing a malpractice lawsuit. In it, the band claimed that the firm had “failed in their ethical, fiduciary, and lawyerly obligations to protect the interests of their clients,” including by “playing both sides” on multiple occasions.
“Behind their façade as music industry power brokers, KHPS’ number one priority was not their client Sublime’s legal and business goals, but rather KHPS’ own financial and business interests,” the band’s new attorneys wrote. “Despite holding themselves out to the public as highly experienced in the business side of music, … defendants engaged in a pattern of self-dealing that was rife with potential and actual, conflicts of interest.”
The case was filed by Sublime’s surviving members, Eric Wilson and Bud Gaugh, as well as by the widow and son of Bradley Nowell, Sublime’s original lead singer who died of a drug overdose in 1996. The band’s corporate entities — Sublime Merchandising LLC and Jake And Troy Brand LLC — were also named as plaintiffs.
But in Monday’s countersuit, the firm said it had “diligently and loyally represented Sublime and its business interests” for decades, an arrangement from which the band “benefited greatly.” King Holmes said it had “successfully used its music industry knowledge and experience” to aid the band on a wide range of business ventures, from music deals to merchandising to film projects: “KHPS’ work empowered Sublime and its partners to preserve and capitalize on their most valuable assets, the band’s music and trademark.”
The firm went even further, suggesting that Sublime had perhaps been motivated by “predatory new advisors” to file baseless allegations in court.
“A cursory investigation done in good faith, had plaintiffs or their advisors cared to make the minimal effort needed to conduct one before pulling the litigation trigger, would have demonstrated what plaintiffs and their advisors already knew or should have known — that nothing could be further from the truth,” the firm wrote.
In technical terms, Monday’s filing accused Sublime and its surviving members of breach of contract and other related violations, saying they had violated their agreement by failing to pay the firm $108,852 in past-due legal bills. The case will be litigated alongside the original allegations filed in January.
An attorney for Sublime did not immediately return a request for comment.
Earth, Wind & Fire has won its trademark lawsuit against a tribute act that used the legendary R&B group’s name without permission, with a federal judge ruling that the evidence pointed “overwhelmingly” in the band’s favor.
In a decision released on Monday, a Miami federal judge ruled that the tribute group infringed Earth, Wind & Fire’s intellectual property rights by calling themselves “Earth, Wind & Fire Legacy Reunion.” He called the band’s marketing “deceptive and misleading.”
In particular, the judge cited angry social media posts and emails from fans who attended the “Reunion” shows because they thought it was the original band – proof of the kind of “actual confusion” that’s crucial evidence in a trademark lawsuit.
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“It is not a far cry to think that an average consumer looking for an Earth, Wind & Fire concert would believe that they could acquire that experience from either plaintiff or defendants,” Judge Federico A. Moreno wrote.
Earth, Wind & Fire has continued to tour since founder Maurice White died in 2016, led by longtime members Philip Bailey, Ralph Johnson and White’s brother, Verdine White. The band operates under a license from an entity called Earth Wind & Fire IP, a holding company controlled by Maurice White’s sons that formally owns the rights to the name.
Last year, that company filed the current lawsuit, accusing Legacy Reunion of trying to trick consumers into thinking it was the real Earth, Wind & Fire. Though it called itself a “Reunion,” the lawsuit said the tribute band contained only a few “side musicians” who had briefly played with Earth, Wind & Fire many years ago.
“Defendants did this to benefit from the commercial magnetism and immense goodwill the public has for plaintiff’s ‘Earth, Wind & Fire’ marks and logos, thereby misleading consumers and selling more tickets at higher prices,” the group’s lawyers wrote at the time.
Tribute acts — groups that exclusively cover the music of a particular band — are legally allowed to operate, and they often adopt names that allude to the original. But they must make clear that they are only a tribute band, and they can get into legal hot water if they make it appear that they are affiliated with or endorsed by the original.
In Monday’s decision, Judge Moreno ruled that Legacy Reunion had done exactly that – particularly with its references to a “Reunion” and claims that the performers were former members of Earth, Wind & Fire. The judge said the later addition of “Alumni” and other reformulations of the name were not enough.
“While the court understands there is dispute on how prominent of a role the musicians performing in [Legacy Reunion] played in the Earth, Wind & Fire group, defendants advertisements draw a close, unmistakable association with Earth, Wind & Fire to a degree unwarranted by the historical record,” the judge wrote.
“Regardless of if defendants’ musicians were technically sidemen or members, the advertisement and marketing were still deceptive and misleading as to whether the main (or most prominently known) members of the band would be performing,” Judge Moreno wrote.
The judge cited numerous complaints from Earth, Wind & Fire fans who had allegedly been confused by Legacy Reunion’s name. In one email, a fan said the name was “misleading” because they had attended the show “in the hopes of seeing Philip Bailey, Verdine White and others from the original band.” Another email complained that the tribute band was a ‘bait and switch.’ In a Facebook post, another fan said: “If the three remaining original members are not in this tour, this is basically a rip-off!”
In technical terms, Monday’s ruling decided that Legacy Reunion had violated Earth, Wind & Fire’s trademarks, but did not decide how much they must now pay in damages. That issue will be left for a future trial, which is currently scheduled for May. In the meantime, Judge Moreno said that Legacy Reunion would be barred from doing anything that would infringe Earth, Wind & Fire’s trademarks.
Neither side’s attorneys immediately returned request for comment on Monday.
Federal prosecutors are accusing NBA YoungBoy (a.k.a. YoungBoy Never Broke Again) of violating the terms of his house arrest by using unspecified drugs — and of telling his supervising officers that he has “no intentions” of stopping. In a filing Thursday (Feb. 29), prosecutors asked a Louisiana federal judge to set a hearing to deal […]
A federal judge ruled Thursday (Feb. 29) that an unnamed woman suing Sean “Diddy” Combs over allegations that he “sex trafficked” and “gang raped” her must reveal her identity as the case moves forward.
The judge acknowledged that disclosing the accuser’s identity “could have a significant impact on her” due to the “graphic and disturbing allegations in this case,” but said the woman had failed to prove that she could proceed anonymously.
“While the court does not take plaintiff’s concerns lightly, the Court cannot rely on generalized, uncorroborated claims that disclosure would harm plaintiff to justify her anonymity,” Judge Jessica G. L. Clarke wrote.
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The judge cited previous lawsuits against Kevin Spacey and Harvey Weinstein in which John Doe and Jane Doe accusers, respectively, had been denied anonymity and said that allowing cases to proceed under a pseudonym in the U.S. court system was “the exception and not the rule.”
The ruling will not take effect immediately; instead, the accuser will not be revealed until after the judge rules on Diddy’s pending motion to dismiss the lawsuit. It’s unclear when that ruling might come. If the case survives, the Jane Doe will be forced to reveal her name.
Thursday’s decision came in one of several abuse cases filed against the hip-hop mogul late last year. In the current case, the unnamed Jane Doe accuser claims that Combs and former Bad Boy Records president Harve Pierre “plied” her with drugs and alcohol before raping her in a Manhattan recording studio when she was a high school junior.
Combs has strongly denied those allegations, saying: “I did not do any of the awful things being alleged. I will fight for my name, my family and for the truth.” Last week, he formally responded to the lawsuit, arguing that that the allegations are “fictional” and violate his constitutional right to due process.
For months, the two sides have wrangled over whether the Jane Doe accuser could proceed anonymously. She argued that the media attention she would face would result in fresh trauma, adding to what she already allegedly suffered. Diddy’s attorneys argued strongly the other way, saying it would be unfair to let his accuser proceed under a pseudonym while his name was dragged through the mud.
On Thursday, the judge sided clearly with Diddy’s argument, ruling that she had failed to show the kind of “particularized harm or current vulnerabilities” that would necessitate such special status.
“Although this case involves highly sensitive allegations and Doe has not publicly revealed her identity, all other factors weigh against Plaintiff’s motion should this case survive Defendants’ dispositive motions,” the judge wrote.
A woman who once appeared “obviously intoxicated” in a Kanye West music video cannot sue for defamation after the footage was used in the Kanye-focused Netflix documentary jeen-yuhs, a federal judge says, even if she later got sober and “turned her life around.”
Cynthia Love sued last year, claiming jeen-yuhs filmmakers Coodie Simmons and Chike Ozah defamed her by including the footage in the 2022 Netflix series. The clip, which showed Love dancing and slurring her words at a Chicago barbecue spot, was originally shot for the 2003 music video for Kanye West’s debut single, “Through The Wire.”
Love’s argument was unusual. She admitted that the footage was authentic — normally the death knell for a libel lawsuit. But she argued that because she had later gotten sober, it had become false and defamatory to use it in the present day.
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In a ruling Tuesday (Feb. 27), Judge Steven Seeger sharply rejected that argument, ruling that the footage was “historically accurate” and shows a “a past truth,” even if it was a truth that Love did not want to remember.
“Holding up a mirror isn’t defamation. Holding up a 20-year-old picture isn’t defamation, either,” the judge wrote. “They both reflect reality, like it or not.”
It did not matter that Love had later “turned things around,” the judge wrote, or that the Netflix doc depicts her at her “darkest moments” years ago: “The ‘Jeen-yuhs’ video accurately portrays Love in a moment of time several decades ago. The video does not suggest that Love remains in an intoxicated state, or anything of that sort.”
Directed by Coodie & Chike (the moniker used by the filmmakers), jeen-yuhs depicted West’s career through unreleased archival footage, much of it filmed by Coodie over decades of working with the rapper. After landing at Netflix for a reported $30 million, the series was released in February 2022 — just months before West would receive widespread condemnation for a string of antisemitic statements.
Years earlier, Love had briefly appeared in the “Through The Wire” video, which was directed by Coodie & Chike in one of their first projects. The video showed Love drunkenly dancing in Chicago eater Original Leon’s Bar-B-Q. That footage, plus additional unused footage showing her interacting with West, later appeared in jeen-yuhs, making up about two minutes of footage total across two episodes.
Love sued last year, accusing Coodie & Chike and Netflix of defamation and a wide range of other wrongdoing. (West was not named or accused of any wrongdoing). She claimed they had “recklessly disregarded the truth” that she had made “an amazing transformation” since the ugly footage was filmed, hurting her reputation among present-day peers: “Neighbors, co-workers, and family cannot help but view and treat her as someone less worthy of their respect, esteem and trust,” her lawyers wrote.
But in Tuesday’s order dismissing those allegations, Judge Seeger pointedly noted that “sometimes the truth hurts, and when the truth hurts, it isn’t defamation.” Summarizing her argument as “the footage was true then, but it isn’t true now,” the judge told her that’s simply not how defamation law works.
“Plain and simple, any allegations about Love in the ‘Jeen-yuhs’ docuseries are true,” the judge wrote. “The docuseries includes real-world clips of Love, without doctoring the content or adding any false material. It shows true clips of a real event.”
Attorneys for both sides did not immediately return a request for comment.
Following the guilty verdicts handed down by a jury on Tuesday (Feb. 27) in the trial of the 2002 murder of hip-hop luminary Run-DMC’s Jam Master Jay, the fallen legend’s family issued a statement via his son TJ Mizell to Billboard on Wednesday, extending his appreciation to everyone involved in bringing justice and accountability.
“We extend our deepest gratitude to the prosecutors, law enforcement officials and all involved in bringing these individuals to justice. Their unwavering dedication has ensured a measure of accountability for the tragic loss of Jam Master Jay,” the family said. “As we pause to reflect, we are reminded of the profound impact and influence Jay had on countless lives. His legacy endures through his music, his spirit and the cherished memories we hold dear. We remain committed to honoring his memory and celebrating the enduring legacy he leaves behind.”
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“To all who have supported us throughout this challenging journey, we offer our heartfelt thanks. Your love, kindness, and steadfast support have been a source of strength during our darkest moments. We ask that you continue to honor Jay’s memory through his music and the positive impact he made on the world,” the statement continues. “While the pain of our loss will always remain, we find solace in the knowledge that justice has been served. Our family believes in God’s plan and that faith is what helped provide closure for us long ago. We thank all that continue to support Jay’s legacy by honoring his life’s achievements.”
The two men convicted of the murder, Karl Jordan, Jr., 40, and Ronald Washington, 59, each face a minimum of 20 years in prison. They’ll have the option of challenging the verdict with the judge as well as a federal appeals court.
Jay, a renowned member of the legendary rap group Run-DMC, was killed in October 2022 in Queens, NY. His death remained one of hip-hop’s most famous cold cases until 2020, when detectives generated sufficient leads that prompted prosecutors to launch a case against Jordan and Washington.
The three-week trial included more than 30 witnesses who testified against Jordan and Washington, accusing them of murdering the rap pioneer as payback after the DJ cut them out of a cocaine deal.
Following the guilty verdict, U.S. Attorney Breon Peace issued a statement: “More than two decades after they killed Jason Mizell in his recording studio, Jordan and Washington have finally been held accountable for their cold-blooded crime driven by greed and revenge.”
Washington’s attorney, Susan G. Kellman, had a different stance on the matter, as she believed her client wasn’t given the justice he deserved during his trial.
“They made up a motive and they rejected hard facts,” Kellman said to Billboard in a statement. “That they just didn’t give a d–n speaks volumes about where our country is — truth is no longer a consideration — we truly live in a world of ‘alternative facts.’ And that’s not justice.”
Sony Music has reached a settlement to resolve a lawsuit filed by New York Dolls singer David Johansen and other artists in an effort to regain control of their masters, finally ending years of closely-watched class-action litigation against major record labels over copyright law’s termination right.
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The tentative agreement, announced in court papers last week, will resolve a case in which artists claimed Sony had unfairly rejected their efforts to invoke termination – a federal law that’s supposed to let authors take back control of their works decades after they sold them away.
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The exact terms of the settlement, which attorneys for Sony called “an agreement in principle to settle all claims in this case,” were not disclosed. Neither side immediately returned request for comment on the agreement.
Johansen, along with fellow artists John Lyon and Paul Collins, filed the case against Sony in 2019, claiming the company had essentially refused to approve any termination requests from its recording artists. The case, filed as a proposed class action that aimed to represent hundreds of others in a similar situation, was lodged the same day as a closely-related case against Universal Music Group.
Taken together, the two lawsuits represented a sweeping critique of how the two music giants were allegedly approaching termination rights, which were created in the 1970s as a means of helping correct the imbalance of power between large entertainment companies and individual creators. In the case of the music business, if a musician sold away the rights to a song that later became a smash hit, termination theoretically allows them to get those lucrative copyrights back decades later — between 35 and 56 years later, depending on when the song was sold.
According to the lawsuits against Sony and UMG, the music companies had imposed an across-the-board rule that sound recordings (separate from the underlying musical compositions) were effectively never subject to the termination. The labels allegedly argued that most recordings were “works for hire,” in which the company simply hires artists to contribute to them; if true, that would mean the label was the legal author, and performers had no rights to win back in the first place.
But the lawsuits were dealt a serious blow last year, when a federal judge ruled that the UMG case could not proceed as a class action. Though he noted that the artists “raise issues of fairness in copyright law that undoubtedly extended beyond their own grievances,” the judge said that each of the individual musician’s circumstances were different, meaning each would need to file their own case against UMG.
That ruling did not decide the merits of the case, but it presented a severe logistical hurdle. Such lawsuits are extremely expensive, and artists typically lack the same kind of legal resources as the major labels who have allegedly denied their termination requests. A class action would have allowed the artists to pool their resources and secure a sweeping decision with only a single set of legal costs.
Following that ruling – and the judge’s subsequent rejection of the artists efforts to quickly appeal it – the two sides began moving toward a settlement. “Missing You” singer John Waite, one of the artists who filed the case against UMG, settled out in May; the remaining defendants in that case reached a settlement with UMG in December.
The UMG ruling was not directly binding on the lawsuit against Sony, which was being handled by a different judge in the same federal district court. But the two cases were filed by the same lawyers and were largely identical, meaning the UMG ruling certainly did not bode well for the Sony case’s chances to be approved as a class action.
Before last week, the Sony case had long been paused while the two sides worked on a settlement. In Friday’s motion announcing such an agreement, Sony asked to extend that pause until May, allowing them time to finalize the settlement in writing and submit it to the judge. The request was approved Monday, putting the case on track to be closed out this spring.
Attorneys for Sony and the plaintiffs both did not return requests for comment on Wednesday.
A U.S. District Court judge is allowing a shareholder lawsuit against Live Nation to move forward, denying the concert promotion giant’s motion to dismiss it in a decision handed down Friday (Feb. 27).
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The case involves how much the company should have to disclose about ongoing public pressure from federal authorities and how much of its financial success it should attribute to its dominant market share in the concert industry — as opposed to demand for concert tickets or the strength of its business.
Shareholders Brian Donley and Gene Gress are suing Live Nation over drops in its share price from February 2022 to November 2023 that they say were brought on by the company’s “false and misleading statements and omissions” within its annual earnings reports — specifically regarding the company’s alleged “anticompetitive behavior and cooperation with regulators.”
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The lawsuit did not reveal any new antitrust allegations against Live Nation, nor did it detail any new antitrust investigations into the company by regulators. Attorneys for the shareholders instead focused on boilerplate language within the company’s shareholder report and argued that it should have spent more time talking about the threat a federal antitrust investigation posed.
In siding with the shareholders, Judge Kenly Kiya Kato took issue with how the company described its success, noting in a 13-page ruling that she believed that Live Nation’s “failure to include specific facts and details about their presence and control of the live entertainment industry” in its annual report didn’t paint the full picture. Kato wrote in her ruling that the company’s claim that 2022 revenue growth “was a reflection of the quality of the Ticketmaster platform and its continued popularity with clients across the globe” was “misleading” because it failed to mention that “Ticketmaster controls ticket distribution for over 70% of major concert venues,” and “77% of the top 100 amphitheaters worldwide.”
Kato also wrote that Ticketmaster’s claims that its success was based on the superiority of its ticketing systems was in part a false claim because it omitted criticism from competitors who testified against the company in front of the U.S. Senate in early 2023.
Since it merged with Ticketmaster in 2010, Live Nation has faced antitrust complaints over the company’s size and market share from competitors, politicians including Senators Amy Klobuchar and Richard Blumenthal, and consumer advocates. Scrutiny of the company increased in 2019 when officials with the Department of Justice opted to extend a decade-old consent decree against it, and then ramped up again following the high-profile 2022 crash of Taylor Swift’s Ticketmaster sale for her Eras Tour.
Since 2022, Live Nation has not been notified that it’s the subject of any legal action by the Department of Justice and has written in its annual disclosures that it cooperates with all federal and state authorities, operates in a highly competitive marketplace and attributes its revenue growth at the end of 2021 to an increase “in events and higher ticket sales.”
Attorney Laurence M. Rosen, representing several shareholders in the class action lawsuit, said Live Nation’s answers contradict June 2023 reports from Politico and CNBC that the company was “allegedly stonewalling” a Senate subcommittee led by Senator Blumenthal that was seeking documents from the company about how it operated its concerts division.
Live Nation countered that Blumenthal was misrepresenting the dispute, that it had already handed over thousands of documents and was contesting demands for confidential information that included private details about how much artists earned from touring. In its response to the Senate committee, the company argued it would only hand over the documents if confidentiality protections were put in place. While Live Nation’s attorneys viewed the disagreement as insignificant, Rosen argued that the objection meant the company was “not cooperating fully with the ongoing DOJ and Senate Subcommittee investigations,” an attorney for the shareholders wrote.
Live Nation declined to comment for this story.