Legal
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A Chicago federal judge has rejected R. Kelly’s bid to overturn his conviction last year on child pornography charges, clearing the way for sentencing which is scheduled for next week.
Denying motions filed by Kelly’s lawyers seeking either a new trial or an outright acquittal, Judge Harry D. Leinenweber ruled Thursday (Feb. 16) that federal prosecutors provided jurors with “enough evidence to sustain a guilty verdict on all six counts Kelly was convicted of.”
Among other arguments, Kelly’s lawyers had argued that one of his victims (known as “Jane”) gave false testimony on the witness stand about whether she planned to seek monetary restitution from Kelly if he was ultimately convicted. They said the incident suggested Jane had “motivation to share her story in ways that were not entirely honest.”
But Judge Leinenweber saw things differently: “Simply because Jane and her attorney considered the possibility of restitution, does not mean she lied during her testimony,” the judge wrote.
Following a four-week trial in Chicago federal court, Kelly was found guilty in September on three counts of child pornography and three counts of enticing a minor. He was acquitted of other charges that accused him of fixing a 2008 state-court trial over the same child pornography accusations.
That conviction came after a federal judge in New York previously sentenced Kelly to 30 years in prison in June on separate racketeering and sex trafficking convictions.
Kelly is set for sentencing on Feb. 23 on the Chicago charges. He faces as many as 90 additional years in prison on those convictions.
In seeking to overturn the conviction, Kelly’s lawyers made a number of arguments, including that the government had failed to show conclusively that the singer “enticed” Jane into making child pornography. But Judge Leinenweber ruled instead that there was “ample” evidence to support the charge.
“Jane testified about how Kelly gradually persuaded her into sexual activity with him,” the judge wrote. “Jane described how Kelly induced her into making Videos One through Three and that Kelly positioned the camera and told Jane exactly what to do and say while having sex with him.”
Thursday’s ruling is not the final decision on Kelly’s conviction. His attorneys can still challenge the outcome to a federal appeals court and eventually to the U.S. Supreme Court, though they face long odds in overturning a jury’s verdict.
Kelly’s attorney, Jennifer Bonjean, did not immediately return a request for comment on Thursday’s order.
Read the judge’s entire ruling here:
A federal jury has issued a verdict mostly clearing Damon Dash in a lawsuit that accused the Roc-A-Fella Records co-founder of sexually assaulting a photographer, Billboard has confirmed.
Monique Bunn sued Dash in 2019, claiming he had inappropriately touched her while she was sleeping at his house during a video project. She then tacked on defamation charges to the case, after Dash accused her on social media of charging thousands of dollars to a credit card without permission.
But following a four-day trial, the jury found that Dash was not liable for sexual assault, seemingly swayed by Dash’s testimony that the allegation was “ridiculous.” The jurors did find him liable for defamation but awarded Bunn just $15,000 in damages. A hearing on additional “punitive” damages is set for Thursday.
Bunn had sought tens of millions of dollars from the lawsuit, including for accusations that Dash failed to give her back a huge trove of her photos. But despite an earlier ruling by the judge that said Dash was liable on that claim, the jurors awarded Bunn no damages over the unreturned property.
The verdict was first reported by Law360 and confirmed to Billboard by attorneys for Dash. Attorneys for Bunn did not return a request for comment on Thursday (Feb. 16).
As reported in detail by Law360, Bunn testified last week at trial that the one-time hip-hop mogul had groped her during a 2019 video shoot at his house. While sleeping in his daughter’s room, she said she awoke to feel “something on the left side of my like lower back onto my butt, down my thigh.”
Bunn then also reportedly testified that Dash’s response to her allegations — a social media post and a radio interview in which he claimed she had stolen money from him — had destroyed her career. “I lost everything, I have nothing,” she said.
In his own testimony earlier this week, Dash reportedly called the allegations “ridiculous,” flatly denying any misconduct and calling Bunn a “con artist” who was making false accusations against him.
Following the verdict for Dash, either side can appeal the outcome — first by asking the judge to overturn the verdict against them, then by taking the case to a federal appeals court.
Utopia Music is facing a lawsuit that claims the Swiss company has bailed on a $26.5 million deal to buy a U.S. music technology company called SourceAudio — and now owes more than $37 million.
In a complaint filed Monday (Feb. 13) in Delaware court, lawyers for California-based SourceAudio — a tech platform for digital asset management and monetization — claimed that the company had struck a deal in March 2022 to sell itself to Utopia, a buzzy music fintech firm that has reached a number of such deals over the past two years.
But SourceAudio’s lawsuit says that since striking the deal on March 14 — which could have closed as soon as May 9 — the bigger company has continually balked at actually completing the deal, informing them it was “not prepared to close the transaction.”
“Despite repeated assurances that Utopia would be able to close…, Utopia engaged in a pattern of discontinuing discussions for an extended period of time, only to resurface immediately before the next intended closing date to indicate that it was unable to close by such date,” the complaint reads.
To account for the delays, SourceAudio claims that Utopia agreed to increase the sale price by $334,000 for every calendar week after Nov. 1 that the deal didn’t close. More than three months later, the lawsuit claims those escalators mean that Utopia now owes $37.265 million.
SourceAudio says it’s “ready, willing, and able” to finalize the deal, and that Utopia is legally bound to do so. “SourceAudio requests that Utopia be ordered to specifically perform its obligations,” the smaller company wrote. “In the alternative, SourceAudio has been damaged by Utopia’s breach in an amount to be determined at trial, but no less than $37.265 million.”
In a statement to Billboard, a spokesperson for Utopia refuted the lawsuit’s allegations but provided little additional detail: “Utopia Music rejects the claims made by the plaintiff. As the legal proceedings are ongoing, we will not comment further.”
Utopia, a Swiss-based tech company that delivers financial services for labels, publishers and distributors, has been on a buying spree over the past two years. The company has acquired at least 15 companies, including music tech company Musimap, U.K. physical distributor Cinram Novum and Lyric Financial, a provider of royalty-backed cash advances.
But in November, news broke that Utopia would restructure operations and lay off 20% of its workforce. As first reported by Music Week, CEO Markku Mäkeläinen told staffers in an internal email that the company had “grown via acquisitions tremendously quickly” and would now need to “realise synergies” and “remove overlaps.”
A Florida judge says Drake won’t need to sit for a deposition over the murder of XXXtentacion, seemingly swayed by the star’s arguments that he has no connection to the case.
Defense attorneys for one of XXX’s alleged killers have been trying to question Drake over his alleged beef with the late rapper prior to his 2018 shooting death. But Drake’s lawyers have argued that dragging him into the case without any evidence linking him to the crime is “unreasonable and oppressive.”
In a ruling issued Tuesday (Feb. 14), Judge Michael Usan sided with Drake’s attorneys, according to a person with knowledge of the proceedings, signing off on an order voiding a subpoena that would have required the star to sit for such a deposition. TMZ was first to report the news on Tuesday.
Neither a rep for Drake nor the defense attorney who sought to depose him returned a request for comment.
Prosecutors have never claimed that Drake (real name Aubrey Graham) was involved in the 2018 murder of XXX (real name Jahseh Onfroy). Instead, they’ve charged four Florida men — Dedrick Williams, Trayvon Newsome, Michael Boatwright and Robert Allen — who they allege killed XXX during a robbery that escalated into deadly violence.
But defense attorney Mauricio Padilla, who represents Williams, listed Drake on a star-studded witness list last year. And in his opening statements at trial last week, Padilla suggested that the police had not sufficiently investigated a possible connection to Drake, who allegedly had an existing feud with XXX before his death. Such speculation has been fueled by a 2018 social media post — later deleted — in which XXX said: “If anyone tries to kill me it was @champagnepapi,” referring to Drake by his Instagram name.
With plans to make those arguments at trial, Padilla attempted to force Drake to sit for a Jan. 27 deposition but later claimed the star didn’t show up for the hearing. Last week, Judge Usan ordered Drake to appear for a deposition via Zoom on Feb. 24 or risk being held in contempt.
But Drake’s lawyers quickly moved to overturn that ruling. In a filing Sunday (Feb. 12), they said it was unreasonable to demand a deposition when “no evidence has been provided to substantiate the assertion that the [Drake] in any way contributed to, had knowledge of, or participated in the alleged incident.”
Instead, they cited that headline-grabbing December witness list — which also listed Quavo, Offset, Tekashi 6ix9ine, Joe Budden and even late Migos rapper Takeoff after he had already been killed — and argued that the defense attorneys were merely trying to pull unrelated big names into the case.
“It would appear, based on the names mentioned on the witness list filed by defendant’s counsel, that the intent to subpoena [Drake] is less for the purpose of discovering relevant evidence and testimony, but instead add more layers of celebrity and notoriety to a tragic and unfortunate event,” the star’s lawyers wrote.
Tuesday’s order granted the motion from Drake’s attorneys and tossed out last week’s ruling. It’s unclear if Padilla can try to depose Drake at a future point in the case.
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: Ed Sheeran’s lawyers move to ban a “misleading” concert clip from his upcoming copyright trial, Justin Bieber is sued over a 2022 shooting the occurred after his concert, Drake fights back against efforts to drag him into the XXXtentacion murder trial, and much more.
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THE BIG STORY: Ed Sheeran’s Lawyers Want Concert Footage Banned From Trial
Ed Sheeran is headed to trial in a few months over allegations that his smash hit “Thinking Out Loud” infringed Marvin Gaye‘s iconic “Let’s Get It On.” And unfortunately for Ed, there’s a video floating around on YouTube of him playfully switching back and forth between the two songs at a 2014 concert.
Unsurprisingly, Sheeran’s accusers (the heirs of Gaye’s co-writer Ed Townsend) want to play that video at the trial. They point to an earlier ruling in the case when the judge specifically noted that a clip of Sheeran “seamlessly transitioning” between the two songs might serve as key evidence in a jury trial.
But in a new filing last week, Sheeran’s lawyers asked that same judge to block the plaintiff’s from citing the video. The problem? They say the video is falsely incriminating – that it might look to jurors like damning evidence, but only actually shows that both songs contain a common chord progression.
“There are dozens if not hundreds of songs that predate and postdate [Let’s Get It On] utilizing the same or similar chord progression,” Sheeran’s lawyers wrote. “These medleys are irrelevant to any issue in the case and would be misleading [and] confuse the jury.”
For a full breakdown of Sheeran’s arguments – including their claim that the dispute could have a broader “chilling effect” on how artists perform at concerts – go read our story here.
Other top stories this week…
2022 SHOOTING LAWSUIT – Justin Bieber and Kodak Black were hit with a lawsuit over a shooting that occurred last year outside a pre-Super Bowl party that followed Bieber concert, filed by two men who say they were hit in the crossfire.
DRAKE’S DEPOSITION DRAMA – A Florida judge ordered Drake to sit for a deposition over the murder of XXXtentacion, but the superstar’s lawyers quickly fired back that he has no connection at all to the crime and that defense attorneys are merely trying to “add more layers of celebrity and notoriety” to the case.
ANTITRUST ANTICLIMAX – A federal appeals court rejected an antitrust lawsuit accusing Ticketmaster and Live Nation of exploiting its “impregnable market power” to foist inflated prices on hundreds of thousands of fans. Upholding an earlier ruling, the court said concertgoers forfeited their right to sue in court when they bought their tickets.
DEATH PENALTY SHOWDOWN – Lawyers for YNW Melly launched an appeal to the Florida Supreme Court, seeking to overturn a ruling last year that said the rapper could face the death penalty if convicted in his upcoming murder trial. They say the state violated strict procedural requirements for seeking the death penalty.
MOFI SCANDAL SETTLED. OR IS IT? – Vinyl producer Mobile Fidelity reached a settlement that could be worth as much as $25 million to resolve allegations that the company’s pricey “all analog” records were secretly created using digital methods. But some customers are already objecting to the deal, saying it’s “tainted by the stink of collusion.”
YOUTUBE SCAMMER PLEADS GUILTY – Jose Teran, one of two men accused of orchestrating a $23 million scam to steal YouTube royalties from artists, pleaded guilty to fraud and money laundering charges on the eve of a looming trial. Along with business partner Webster Batista Fernandez (who already pleaded guilty), Teran stole millions from Latin artists under the name “MediaMuv” in what amounts to one of the largest royalty scams in history.
Two men who were allegedly shot outside a pre-Super Bowl party that followed a Justin Bieber concert last year have filed a wide-ranging lawsuit Bieber and Kodak Black, among a host of other defendants.
Plaintiffs Mark Schaefer and Adam Rahman are alleging negligence, battery, assault and intentional infliction of emotional distress in claims brought by lawyer Gloria Allred over injuries they say they suffered during the Feb. 11, 2022, incident, which occurred outside Los Angeles restaurant The Nice Guy where the party was being held. Filed Thursday (Feb. 9) and obtained by Billboard, the suit claims that the defendants “negligently breached the duties owed to Plaintiffs” by “failing to provide adequate security; failing to warn Plaintiffs of the danger; increasing the likelihood of violence; and/or instigating, escalating, and exacerbating the impact of the violence.”
Kodak Black is solely named on a total of three counts — assault, battery and intentional infliction of emotional distress — with the plaintiffs singling out his conduct as a “substantial factor” in causing them harm.
The complaint goes on to claim that both plaintiffs suffered “physical pain, mental suffering, loss of enjoyment of life, disfigurement, physical impairment, inconvenience, grief, anxiety, humiliation, and severe emotional distress,” along with financial harm including medical expenses and lost earnings. Schaefer and Rahman are asking for general, special and punitive/exemplary damages in amounts to be determined at trial.
Reps for Kodak Black and Bieber did not immediately respond to requests for comment.
On the night of the party, which was held on Feb. 11, 2022, the LAPD reported that four men, reportedly including Kodak Black, were shot outside The Nice Guy. Videos posted to TMZ and social media showed Black posing for photos with a group of people outside the restaurant when a fight broke out. Black was among several people involved in the scuffle when shots rang out, sending everyone at the scene running for cover.
The party followed Bieber’s private concert at the Pacific Design Center in West Hollywood, Calif., which was held as part of “Homecoming Weekend” — a series of events held in advance of that year’s Super Bowl. Guests at the bash also reportedly included Jeff Bezos, Hamilton actor Anthony Ramos, NFL Hall-of-Famer Tony Gonzalez, Drake, Khloe Kardashian, Tobey Maguire and Bieber’s wife Hailey Bieber.
A federal appeals court on Monday (Feb. 13) rejected an antitrust lawsuit accusing Ticketmaster and Live Nation of exploiting its “impregnable market power” to foist inflated prices on hundreds of thousands of fans, ruling that concertgoers forfeited their right to sue when they bought their tickets.
In a 24-page ruling, the U.S. Court of Appeals for the Ninth Circuit upheld an earlier ruling that dismissed the proposed class action, saying that when the fans purchased their tickets, they had agreed to settle any disputes with Ticketmaster via private arbitration rather than in open court.
On appeal, attorneys for the plaintiffs had challenged the validity of that agreement, arguing it had not been presented clearly enough to customers. But in Monday’s decision, the appeals court was unswayed.
“At three independent stages — when creating an account, signing into an account, and completing a purchase — Ticketmaster and Live Nation webpage users are presented with a confirmation button above which text informs the user that, by clicking on this button, ‘you agree to our Terms of Use,’” Judge Danny J. Boggs wrote for a panel of three judges. “A reasonable user would have seen the notice and been able to locate the terms via hyperlink.”
The ruling came as Live Nation and Ticketmaster are facing heightened scrutiny over their market power in the wake of a disastrous November rollout of tickets to Taylor Swift’s Eras Tour.
The incident, which saw widespread service delays and website crashes, has prompted calls from lawmakers in Washington D.C. to break up Live Nation and Ticketmaster, which merged to create their current structure in 2010. It has also spawned investigations from attorneys general around the country and at least two antitrust class actions. The DOJ is also reportedly investigating Live Nation for antitrust violations, though the probe predated the Swift tour debacle.
The case decided on Monday was filed back in 2020 but raised similar accusations to critics who have spoken out in the wake of the Swift incident. Aiming to represent “hundreds of thousands if not millions” of customers, the proposed class action alleged that Live Nation’s dominance allowed it to increase prices for consumers and perform other “predatory acts” — calling it a “monster” that “must be stopped.”
“Defendants’ anticompetitive scheme has been wildly successful and today threatens to put nearly all ticketing services for major concert venues (primary and secondary) in the United States under Ticketmaster’s monopolistic thumb,” the accusers wrote in their April 2020 complaint.
But the case was quickly tossed out. A federal judge ruled in 2021 that Live Nation and Ticketmaster users had clearly assented to a form of so-called clickwrap agreement — a common online tool that presents users with terms of service before proceeding — that required them to resolve any such claims against Live Nation via a private arbitration process.
Monday’s ruling upheld that decision for Live Nation. The appeals court said the company’s agreement was not the kind of “pure clickwrap” that offers users the clearest presentation of terms of service, but the court said it also was not “browsewrap” — a less effective form of user agreement where terms are “hidden in links located at the bottom of webpages.” Whatever the format, the appeals court said Live Nation’s version “did enough” to pass legal muster.
“Appellees’ notice is conspicuously displayed directly above or below the action button at each of three independent stages that a user must complete before purchasing tickets,” Judge Boggs wrote for the court. “Crucially, the ‘Terms of Use’ hyperlink is conspicuously distinguished from the surrounding text in bright blue font, making its presence readily apparent.”
The ruling will effectively end the current case, but a second similar lawsuit against Live Nation (filed by the same team of attorneys from the law firm Quinn Emmanuel) based on slightly tweaked allegations is still pending in a lower federal court.
Both a representative for Live Nation and an attorney for the plaintiffs did not immediately return a request for comment on the Ninth Circuit’s ruling.
Drake’s lawyers are firing back at efforts to force the superstar to sit for a deposition over the murder of XXXtentacion, claiming he has no connection at all to the crime and that defense attorneys are merely trying to “add more layers of celebrity and notoriety” to the case.
Just days after a Florida judge ordered Drake to appear for such a deposition by Feb. 24, the rapper’s lawyers argued in a new motion filed on Sunday that there is no evidence suggesting that he was in any way connected to XXXTentacion’s 2018 shooting death.
“It is both unreasonable and oppressive to subpoena an out of state party who has not been mentioned in any reports, any investigation, or referenced to have any involvement in this matter,” Drake’s attorney Bradford M. Cohen wrote in the response filing. “To mandate that he appear for deposition for something that he very clearly has no relevant knowledge of is unreasonable.”
Prosecutors have never claimed that Drake (real name Aubrey Graham) was involved in the death of XXXTentacion (real name Jahseh Onfroy). Instead, they charged four Florida men — Dedrick Williams, Trayvon Newsome, Michael Boatwright and Robert Allen – who they allege killed XXX during a robbery that escalated into deadly violence.
But defense attorney Mauricio Padilla, who represents Williams in the case, listed Drake on a star-studded witness list in December. And at opening arguments last week, Padilla suggested that the police had not sufficiently investigated a possible connection to Drake, who allegedly had an existing feud with XXX before his death. Such speculation has been fueled by a 2018 social media post – later deleted – in which XXX said: “If anyone tries to kill me it was @champagnepapi,” referring to Drake by his Instagram name.
Planning to make those arguments at trial, Padilla attempted to force Drake to sit for a Jan. 27 deposition, but he’s claimed in court filings that the star didn’t show up for the hearing. So last week, the judge overseeing the case ordered Drake to either appear for a deposition via Zoom on Feb. 24, or risk being held in contempt of court.
In Sunday’s filing, Drake’s lawyers pushed to set that order aside. They said the subpoena was not properly served on the superstar, meaning he had been under no procedural obligation to show up. And even if it had been, they argued that he has no connection to the case that requires a deposition in the first place: “No evidence has been provided to substantiate the assertion that the Non-Party in any way contributed to, had knowledge of, or participated in the alleged incident.”
Instead, Drake’s lawyers pointed to the fact that prosecutors plan to show jurors video evidence of the defendants committing the crime. And they cited that headline-grabbing December witness list — which also listed Quavo, Offset, Tekashi 6ix9ine, Joe Budden and even the late Migos rapper Takeoff after he had already been killed – as evidence that defense attorneys were merely trying to pull unrelated big names into the case.
“It would appear, based on the names mentioned on the witness list filed by defendant’s counsel, that the intent to subpoena [Drake] is less for the purpose of discovering relevant evidence and testimony, but instead add more layers of celebrity and notoriety to a tragic and unfortunate event,” the star’s lawyers wrote.
Padilla, the defense attorney who is seeking to depose Drake, did not immediately return a request for comment Monday on Drake’s response filing.
Less than two months after the defense team for Dedrick Williams — one of the three suspects on trial for the murder of XXXtentacion — listed a slew of artists as potential witnesses in December, one of those artists is now being ordered to appear in court.
Due to a feud between Drake and the late rapper born Jahseh Onfroy, who was shot and killed in 2018, defense attorney Mauricio Padilla believes the Certified Lover Boy superstar is connected to XXX’s death — and in an effort to solidify that claim, he tried to subpoena the Certified Lover Boy rapper last month. But according to a court document obtained by Billboard, Drake failed to appear on his scheduled deposition date of Jan. 27 and is now being ordered to appear for a deposition on Feb. 24 via Zoom video. If he fails to appear again, he may be held in contempt.
A representative for Drake did not immediately respond to a request for comment.
Drake’s alleged involvement in the murder stems from unsubstantiated rumors that swirled following XXXtentacion’s death, connected with a 2017 beef over what XXX believed to be a rip-off by Drake of his flows from breakout track “Look at Me!” on Drake’s “KMT.” A year after the drama, a story was posted to XXX’s Instagram page that read, “If anyone tries to kill me it was @champagnepapi,” tagging Drake’s Instagram handle. Afterward, XXXtentacion claimed his account was hacked; he was killed four months later in Deerfield Beach, Fla.
According to a December court filing, “Onfroy relentlessly taunted Graham on social media making statements about his mother and even posting a picture of a Drake look alike with semen on his face,” following frustrations that Drake didn’t lend him a hand during his time behind bars in 2016-17. Tensions continued to escalate, with XXX allegedly involving DJ Akademiks by asking the media personality to repost the photo. The filing went on to accuse Drake of having ties to “gang related activities” while naming Somali Canadian rapper Hassan Ali, a “suspected member of the Jungle Bloods Street Gang,” as a possible associate (Drake has publicly been connected to Ali via his own Instagram posts). In an interview, Ali also told Akademiks that he’s “Drake’s shooter.”
In the December filing, Padilla also listed Quavo, Offset, late Migos rapper Takeoff, Tekashi 6ix9ine and Joe Budden as potential witnesses, but at a subsequent hearing reported on by the Miami Herald, prosecutors called the move a stunt. “It is apparent from the deliberate, late disclosure of the defendant’s witnesses and comments made between the parties that [the] defendant intended to ‘surprise’ the state and create a trial by ambush,” wrote prosecutor Pascale Achille, as reported by the Herald. Broward Country Circuit Judge Michael Usan then demanded answers from Padilla in writing as to why the superstars were relevant to the case.
“They are high-profile people. And it’s not easy for me to subpoena,” Padilla answered. “I don’t have numbers, but it doesn’t mean I won’t be able to. Trying to subpoena Drake is not easy — you need a drone.”
Vinyl producer Mobile Fidelity has reached a settlement that could be worth as much as $25 million to resolve allegations that the company’s pricey “all analog” records were secretly created using digital methods. But some customers strongly object to the deal, saying it’s “tainted by the stink of collusion.”
The proposed agreement, first publicly filed in court last month, would allow tens of thousands of MoFi customers to secure a full refund for any eligible records that they purchased. Alternatively, it would also allow them to keep their albums and instead take a 5% cash refund or a 10% refund in credit.
The final monetary total depends on how many consumers utilize the settlement and which options they choose, but court filings say the money available under the deal is “expected to be over $25 million.” Under the settlement, MoFi will continue to deny any wrongdoing.
But the deal is not final, and it’s already facing stiff objections from attorneys who filed similar lawsuits against MoFi. They say the settlement was struck without their input, by “ineffectual” lawyers who took a bad deal: “Despite this clear abdication of their duties to class members, counsel … are now trying to ram an inadequate, collusive settlement through this court.”
The scandal at MoFi first erupted last summer, after Phoenix-area record store owner Mike Esposito posted a pair of videos to YouTube alleging that the company’s “all-analog” and “triple analog” records were in fact partially created using so-called direct stream digital technology. In one of the videos, MoFi’s engineers appeared to confirm that some digital tech had in fact been used in production.
As reported by the Washington Post, the digital revelations created “something of an existential crisis” in the analog-obsessed vinyl community. In a statement in late July, MoFi apologized for using “vague language” and for “taking for granted the goodwill and trust” of its customers: “We recognize our conduct has resulted in both anger and confusion in the marketplace. Moving forward, we are adopting a policy of 100% transparency regarding the provenance of our audio products.”
But the apology wasn’t enough to avoid litigation. In early August, a pair MoFi customers named Stephen J. Tuttle and Dustin Collman filed a proposed class action in Washington federal court, claiming the company’s analog branding had been “deceptive and misleading” and had duped them into paying premium prices.
Later, at least four more similar cases over the analog scandal were filed in federal courts around the country, including a class action filed in Illinois on behalf of a MoFi buyer named Adam Stiles, who claimed the company had “intentionally hid this fact from consumers.”
“When defendant began using a digital mastering process in its records as opposed to purely analog, it inherently produced less valuable records — because the records were no longer of limited quantity and were not as close to the studio recording — yet still charged the higher price,” the lawyers for Stiles wrote at the time.
The proposed settlement, first filed on Jan. 15 in the lawsuit filed by Tuttle and Collman, is expected to cover at least 40,000 consumers who purchased records marketed as analog. The “total gross value” of the refunds and credits available to consumers is over $25 million, according to the agreement; the lawyers who filed the case will be paid $290,000 for their services.
Seeking approval of the settlement, attorneys for both sides argued the deal was reached through “arm’s-length negotiations” and represents “a fair compromise in light of potential risks of continued litigation.” They warned that if the case continued, MoFi might have success in defending itself by arguing that the customers didn’t actually suffer any real harm by buying the digitally-processed records.
In a statement to Billboard in response to a request for comment on the proposed settlement, MoFi lead counsel Joseph J. Madonia said: “Unfortunately, we can’t comment on pending litigation, but MoFi stands behind its records and is offering anyone who is not satisfied a refund.”
While the new settlement was filed solely in one case (the case filed by Tuttle and Collman), it would cover all applicable MoFi buyers nationwide — including those who filed the separate cases in other courts and weren’t involved in negotiating the deal. If the agreement is approved, those other customers would be eligible for the same refunds, but they would also be barred from continuing to bring their own claims against MoFi.
Faced with that scenario, the attorneys who filed those other cases are none-too-pleased about the deal.
In a Jan. 27 filing, the lawyers who filed the Illinois case on behalf of Stiles decried the agreement as a “reverse auction” settlement, alleging that MoFi essentially shopped around between the various lawsuits and picked the most “ineffectual” lawyers it could find in order to get the cheapest nationwide settlement possible. They claimed MoFi’s lawyer had directly stated that he would “pick the lowest bidder” from the five class actions.
“There is no doubt that the [settling] plaintiffs have inadequately represented the class,” they wrote, saying that the settlement will be “perpetually tainted by the stink of collusion.”
An attorney for the settling customers declined to comment on the allegations of “collusion” and “reverse auctions.” A representative for MoFi declined to comment directly on those claims, but in a court document filed this week in the Stiles case, the company’s attorneys flatly rejected those allegations, arguing that the proposed settlement would “afford the best possible representation for the class.”
Attorneys for the objecting customers did not immediately return a request for comment on Thursday (Feb. 9).