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Californian court dismisses Universal Music archive fire lawsuit

By | Published on Tuesday 7 April 2020

Universal Music

A judge in California yesterday dismissed the big lawsuit filed last year in relation to the 2008 fire at Universal Music’s Hollywood storage unit that resulted in a plethora of master tapes and other assets in the music company’s archives being destroyed.

That lawsuit followed a report in the New York Times last year which alleged that many more master tapes were lost in the 2008 fire than had been previously admitted. The newspaper provided a long list of artists who might have lost assets in the blaze and claimed that most of those artists were unaware of the possible losses.

Universal has denied most of the allegations in the NTY report, claiming that while lots of assets were destroyed in the fire, most of the items lost were not master tapes. And where master tapes were destroyed, in most cases back-up recordings have been found at other storage facilities used by the record company.

However, lawyers representing various potentially affected artists remained bullish as their lawsuit went through the motions. They mainly pointed out that when Universal was seeking an insurance pay-out and other compensation in the wake of the 2008 fire, the major claimed that the losses it had incurred were significant.

When first filed, the lawsuit was a class action with five named plaintiffs: Hole, Soundgarden, Steve Earle and the estates of Tupac Shakur and Tom Petty. But most of those claimants voluntarily dismissed their claims, mainly after becoming convinced that they were not negatively impacted by the fire, due to there being back-ups of any recordings lost. As a result, only Tom Petty’s widow Jane remained as a plaintiff by yesterday morning.

Universal’s lawyers presented various arguments as to why the company was not liable for breach of contract, negligence, reckless conduct or misrepresentation as a result of the fire and its response to it, as was claimed in the class action.

One argument was that the artists had simply left it too long to sue in relation to the 2008 blaze, which was bit cheeky given pretty much everyone agrees that the major’s communications with artists after the fire were pretty shoddy (aka non-existent).

The judge agreed that it was the NYT article that put the artists on notice about possible losses, and that they had therefore gone legal in a timely manner.

But the dispute that really mattered was whether or not Petty’s record contract – and the royalty commitments contained within it – gave the artist a contractual right to share in any insurance pay-out or other damages if and when master tapes were damaged.

That mainly depends on how you define the word “licence” as used in the musician’s recording agreement, but the judge concluded that the Petty side had not sufficiently demonstrated that they had any rights to share in any insurance money.

To that end the lawsuit was dismissed, albeit “without prejudice with leave to amend”, meaning Petty’s lawyers could as yet have another go.

Needless to say, Universal welcomed the judgement, though mainly by having another dig at the NYT. “As we have said all along”, it remarked, “the New York Times Magazine articles at the root of this litigation were stunning in their overstatement and inaccuracy”.

For its part the Times said yesterday that it stood by its reports and “this ruling does not refute or question the veracity of what we reported: that, contrary to UMG’s continued effort to downplay the event, thousands of recordings were lost in the 2008 fire”.

Meanwhile, back at Universal, its spokesperson was keen to stress that “as always, we remain focused on partnering with artists to release the world’s greatest music”. So that’s nice.