Universal Music Group is now facing a fresh lawsuit that alleges the underpaying of royalties on digital downloads. Today, Chuck D of Public Enemy stepped up to bring his own class action against the major record label.
The lawsuit was filed in San Francisco federal court and alleges that UMG routinely miscalculates the royalties owed to artists for digital downloads, such as MP3s and ringtones, by treating them as “sales” of physical records rather than “licenses.”
Chuck D’s complaint follows on the heels of a federal judge’s decision on Tuesday to move forward on a similar consolidated class action brought by Rob Zombie and the estate of Rick James.
Here is our report from this morning, which explains why the lawsuit is a huge deal in the record business.
In announcing the lawsuit, Chuck D’s lawyers at Hausfeld LLP says that UMG has underpaid hundreds of millions of dollars in royalties and pointed to a decision in 2010 by the Ninth Circuit Court of Appeals that offers some precedent that digital downloads should be treated as “licenses.”
“Chuck D has been ‘fighting the power’ for over two decades and will continue to do so through this suit in order to help all musicians, including many legacy artists who are living on fixed incomes,” said James Pizzirusso, a partner at Hausfeld LLP involved in the case.
“This complaint suffers from serious flaws and weaknesses, not the least of which is that the claims asserted are not appropriate for class treatment,” a UMG spokesperson tells THR. “We will vigorously defend against it.”