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$100 million lawsuit filed over Universal’s 2008 warehouse fire

By | Published on Monday 24 June 2019

Universal Music

As expected, a lawsuit has been filed following recent revelations in the New York Times about the scale of a fire at an LA warehouse storing Universal Music owned master tapes all the way back in 2008. A legal filing made last week, which seeks class action status, says that the major breached its artist contracts by failing to keep the master tapes safe and then failing to inform said artists about the damage caused by the fire.

Citing internal Universal Music memos, the NYT article alleged that up to half a million master tapes containing recordings from the 1930s through to the 2000s were lost in the 2008 fire at the Universal Studios Hollywood. This contradicts statements made at the time of the blaze when the record company played down the extent of the losses.

The major has denied many of the claims in the NYT report. However, Universal Music chief Lucian Grainge said in a memo to staff last week that the company now had a duty to be super transparent with affected artists.

While insisting that lots of speculation that has followed the publication of the NYT article is without substance, Grainge wrote: “We owe our artists transparency. We owe them answers. I will ensure that the senior management of this company, starting with me, owns this”.

However, the artists participating in the new litigation – who include Soundgarden, Hole, Steve Earle, and the estates of Tom Petty and Tupac – want more than answers. The lawsuit is seeking compensatory damages “in excess of $100 million”, arguing that Universal failed in its obligation to keep the master tapes containing its artists’ recordings safe, and then instigated a cover-up which, the legal filing adds, basically continues to this day.

The lawsuit also notes that, while in public Universal played down the significance of the 2008 fire at the time, that didn’t stop it from suing the Universal film company over the blaze and making a significant insurance claim in relation to its losses.

Law360 reports that, in Universal Music’s largely sealed lawsuit against the other Universal company shortly after the fire, the former accused the latter of failing to keep sprinkler systems properly up to speed at the Hollywood site where the music company still stored its tapes. It also said that the Universal studio business had ignored safety recommendations made after an earlier fire in 1990.

But the music major itself should have been ensuring safety measures were up to scratch at the facility, the artists’ lawsuit argues. Not least because when the 1990 fire occurred, Universal Music and Universal Studios were still parts of the same company, so the former would have had access to the safety recommendations that were made. Moreover, the legal filing goes on, “at a minimum, these alleged dire [safety] conditions were observable to UMG on even the most cursory inspection of the warehouse and its location”.

As for the way Universal Music communicated the impact of the fire to its artists, the lawsuit lists various allegedly false statements the company’s executives made to the press back in 2008, all of which played down the scale of the damage.

And as for how the loss of the master tapes could in turn impact on the artists pursuing the litigation, the lawsuit adds: “Master recordings – the original sound recordings of songs – are the embodiment of a recording artist’s life’s work and musical legacy. They are the irreplaceable primary source of recorded music”.

Universal Music is yet to comment on the legal action. If it gets to court, there will be various questions to be asked. Firstly, exactly how many master tapes were actually lost? Then, how many recordings on those tapes don’t exist elsewhere? Then, has the artist still suffered a loss even if their recordings are stored in another format? And, perhaps most importantly of all, what are Universal’s contractual obligations to artists regarding tape storage?

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