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Judge dismisses UMG Vault fire lawsuit

$100 million suit dismissed

A judge has dismissed the lawsuit against Universal Music Group (UMG) over alleged damages sustained during a 2008 vault fire that contained master recordings for its artists at Universal Studios Hollywood. Rolling Stone has obtained the filing by Judge John A. Kronstadt that dismisses five of the six allegations, including breach of contract, negligence and reckless conduct claiming the company didn’t do enough to prevent the fire. It also claimed the label took settlement proceeds and insurance claims that valued at $150 million.

Soundgarden, the Tupac Shakur Estate, Steve Earle, Hole and the Tom Petty Estate were all initially involved in the $100 million suit. However, the Tom Petty Estate was the only plaintiff after the others had dropped out since news of the suit surfaced last summer. Petty’s contract with MCA, which was later acquired by UMG, effectively served as the basis for much of the decision, Rolling Stone says.

The judge dismissed the argument that UMG was obligated to pay Petty a portion of the recovery settlement the plaintiff tried to argue was a “license” that deserved royalties. Since UMG owns Petty’s masters, he also dismissed a bailment argument that the label failed to properly maintain a valuable placed in its possession.

The judge also noted that Petty’s contract with UMG didn’t contain any specific language granting him certain revenue from insurance claims and there was nothing “to support imposing a tort duty on UMG to exercise reasonable care to avoid economic loss in storing its own property — the Master Recordings.” Therefore, the negligence claim was dismissed as was a reckless conduct claim since it “fail[ed] to allege adequately that UMG owed Plaintiff a duty of care as to the safekeeping of Master Recordings.”

“Judge Kronstadt’s decision fully dismisses the Soundgarden litigation and entirely rejects the only remaining plaintiff’s arguments,” a UMG representative tells Rolling Stone. “As we have said all along, the New York Times Magazine articles at the root of this litigation were stunning in their overstatement and inaccuracy. As always, we remain focused on partnering with artists to release the world’s greatest music.” A lawyer for the class action suit plaintiffs, did not immediately reply to a request for Rolling Stone’s comment.

An initial investigation by the New York Times last summer revealed that more than 500 thousand masters of singles and albums from some of the most popular artists of the 20th and 21st Century were included in the blaze, despite the company assuring that losses were minimal. The report also stated that tens of thousands of masters by artists largely forgotten across gospel, blues, jazz, country, soul, disco, pop, easy listening, classical, comedy and spoken-word may also no longer exist.

The class action lawsuit stems from disputes with lawyers for the artists seeking to obtain a complete list of damaged or lost recordings after UMG initially claimed the fire included “17,000 unique artist names on the list of purportedly lost original music recordings.” However, UMG later said that list “identified myriad potentially lost assets,” including non original master recordings.

In February 2020, the label confirmed only 19 artists lost recordings during the blaze. Those artists include Elton John, Nirvana and Beck, to name a few. UMG claims it does have backup copies for …And You Know Us by the Trail of Dead, R.E.M. and Sheryl Crow and clones for digital master recordings belonging to Jimmy Eat World and White Zombie.

Author: Buddy Iahn

Buddy Iahn founded The Music Universe when he decided to juxtapose his love of web design and music. As a lifelong drummer, he decided to take a hiatus from playing music to report it. The website began as a fun project in 2013 to one of the top independent news sites.