DJ Khaled Sues Former Record Label Over Unpaid Royalties

DJ Khaled PR 2013 P
Clay Patrick McBride

DJ Khaled, via his DJ Khaled Productions, Inc., has filed a lawsuit against his former record label Entertainment One, also known as eOne, alleging breach of contract, accounting and unjust enrichment. Khaled is accusing eOne of failure to properly account and pay record and mechanical royalties, alleging lost royalties amounting to at least $1 million across four records released between 2006 and 2010. 

In the initial lawsuit summons, filed in May, Khaled's counsel accuses eOne — and the Koch Entertainment label that it purchased in 2005 and absorbed in 2009 — of failing to accurately account for royalties owed, as well as incorrectly characterizing and reporting the products it sold or licensed, and refusing to permit an audit of their accounting to determine exact losses.

Over the time in question, Khaled released four full-length studio albums: 2006's Listennn...the Album, 2007's We the Best, 2008's We Global and 2010's Victory, as well as DJ Khaled / E Class: Live from the 305 in 2009. (The latter of which is in dispute, as eOne claims that album was released under a separate deal with another entity called Poe Boy Music Group, and was not delivered by Khaled or through his contract with the label).

Throughout those releases, Khaled collaborated with notables Rick Ross, Pitbull, Kanye West, Lil Wayne, Ludacris and a long list of others, achieving Billboard chart dominance and RIAA certified Platinum status for singles "I'm So Hood" from We the Best and "All I Do Is Win" off Victory.

However, in a motion filed by eOne on Wednesday, the international music, film and television distribution and publishing company claims it is exempt from the bulk of claims Khaled alleges. Most notably, it states it did in fact release the accounting in question, referencing its contract with Khaled and a clause limiting Khaled's audit rights over the preceding two year period beginning upon delivery of the accounting statement, as well as a clause limiting the right to pursue litigation to one year after that "objection period." Under this clause, the scope of Khaled's suit would be "contractually barred from asserting the claims set forth in the complaint for the periods 2006 through 2010."

As well, eOne states that Khaled's claim for failure to pay mechanical royalties is invalid, as those rights were assigned by Khaled to another entity in 2007, when Khaled's publishing royalties were placed under exclusive control by The Knotting Hill Music Group, which subsequently contracted with Universal Music Publishing Group, to whom eOne says it has been reporting to since that time.

As well, eOne claims it allowed an audit of its accounting records in April 2014 for the appropriate review period per their contract, but Khaled's accountant did not show up.

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