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Backed by TaP Music, Chicago house pioneers sue Trax Records

By | Published on Friday 26 June 2020

Trax Records

Two prominent players from the 1980s Chicago house scene have sued a label that also played a key role in the evolution of that genre over allegations of copyright infringement, unjust enrichment and fraudulent copyright registrations. Larry Heard and Robert Owens are seeking at least a million dollars in damages from Trax Records.

According to the lawsuit filed with the courts in Illinois, “this case involves an all-too familiar story of the early days of the music industry. Talented, but unrepresented, musicians hungry for their first break were lulled into a business relationship with an unscrupulous record company that made promises it never intended to keep and masqueraded as paternalistic benefactors for those artists – like a wolf in sheep’s clothing”.

“The musicians sometimes signed away valuable rights to their music for consideration that was not merely inadequate, but it was never paid”, it goes on. “Even worse, the record company exploited the artists’ other musical works with neither permission nor licence to further reap the fruits of their creative output”.

It concludes: “Eventually, the artists were relegated to mere commodities whose professional names were slapped onto vinyl records or other goods exploited by the record company to lure consumers who understood that the artist’s professional name was a sign of great value”.

Chicago-based Trax Records was co-founded in 1984 by Larry Sherman, who died in April this year. When reporting on his death, the Chicago Sun-Times noted that while Sherman and his label were “instrumental in developing house music”, he also “left a complex legacy within Chicago’s house music community”. Over the years multiple artists signed to the label had complained about their treatment and unpaid royalties.

Rachael Cain – who, after signing to the label as an artist, was involved in various business ventures with Sherman, later becoming President of Trax – acknowledged some of those controversies at the time of his death, telling the Sun-Times “he’s a controversial figure”. But she insisted that in recent years Sherman had been trying to sort out the payment of past royalties, partly via litigation with a former distribution partner.

Heard – aka Mr Fingers – worked with Trax in the mid-1980s. Along the way he signed a number of agreements with the label on the back of which Trax exploited various songs and recordings he had made, some of which were collaborations with Owens. The label also registered some of those works with the US Copyright Office.

However, the lawsuit argues, those agreements didn’t cover all the tracks that the label has been exploiting, they only talked about the song copyrights and not any accompanying recording rights, and – although the documents were titled ‘Assignment Of Copyright (Musical Composition) – at least two of them were in fact mechanical licensing agreements rather than contracts that transferred the ownership of any copyright.

Therefore, the lawsuit argues, not only has the label failed to pay Heard and Owens the royalties they are due, it never had to rights to exploit any of the recordings, nor many of the songs, nor to register itself as the owner of some of those works with the Copyright Office.

“At best, [these] documents were ambiguous”, the lawsuit adds. “At worst, they constituted unconscionable contracts of adhesion which would result in decades of revenue streams flowing only to Trax (or other entities formed and operated by Sherman and Cain), with Heard deriving virtually no economic benefit from their exploitation by defendants”.

Both Heard and Owens are now signed to the publishing division of London-based music firm TaP, who are supporting them in pursuing this somewhat late-in-the-day legal action against Trax.

Commenting on that support, TaP Music boss Ben Mawson says that he and his company’s co-founder Ed Millett “have always been passionate about electronic music and signing two pioneers of house music, Larry and Robert, to TaP Music Publishing, is a source of great pride to us”.

“We are delighted to be able to support their claim against Trax Records”, he goes on, “who have behaved abominably over the years to many artists signed to them. We would ask any such affected artists to reach out to us and we will endeavour to support them however we can. Hopefully those in control at Trax now decide to do the right thing, after many years of shocking disregard for their artists”.

Heard himself says of the litigation: “After doing several releases independently, it was so disappointing that my earliest ventures into the music business was with a label in the community that turned out to be dishonest, like with many other artists that we hear about all too often. We are simply seeking justice and fairness. Maybe our efforts will shed light on the many predatory practices that have been in place for a long time in this industry”.

The aforementioned Cain is a defendant in the lawsuit. Asked about the litigation by Law360, her legal rep blamed the lost royalties on a Canadian company called Casablanca Trax Inc, which previously had a licensing and distribution deal with Trax Records.

There had been a long-running legal battle between those two companies, Cain’s rep said. His client ultimately won that legal battle, but Casablanca is yet to pay up. “Rachael Cain has been fighting for a long time to get these artists paid”, her lawyer argued. “She just hasn’t received the monies from the parties responsible in order to pay them”.

However, the lawyer leading on Heard and Owens’ litigation dubbed that response “feeble”. Robert Maloni of law firm Meloni & McCaffrey told CMU: “Rachael Cain’s response to the damning allegations of this lawsuit is not unlike her saying the ‘dog ate my homework’. Her feeble excuses just will not fly in the context of a federal litigation where Trax, for the first time in its history, will be forced to face the harsh light of truth. In the end, the facts – and Larry Heard and Robert Owens – will prevail”.