Universal Music Faces $100M Class Action Over Fire

Universal Music Group has been hit with a class action lawsuit alleging they concealed from their artists that certain master recordings were lost during a fire in June 2008.

The UMG Recordings class action lawsuit was filed by numerous recording artists including Soundgarden, Hole, Steve Earle and the estates of Tom Petty and Tupac over claims that they were not notified that their recordings were lost in the fire.

“UMG stored the Master Recordings embodying Plaintiffs’ musical works in an inadequate, substandard storage warehouse located on the backlot of Universal Studios that was a known firetrap,” the UMG class action states.

The plaintiffs allege that UMG did not “speak up” about the fire that destroyed the recordings nor did it apprise the artists that the master recordings were lost in the fire.

According to Variety, the company collected $150 million in insurance money for the value of the master recordings, but did not notify the artists of this recoupment.

The plaintiffs allege that, “Most importantly, UMG did not share any of its recovery with Plaintiffs, the artists whose life works were destroyed in the Fire—even though, by the terms of their recording contracts, Plaintiffs are entitled to 50% of those proceeds and payments.”

According to the UMG Recordings class action lawsuit, the company should have known the proper standard of storing the master recordings, from the way the discs should be stored on the shelves to making sure the facility was fire safe.

“Immediately after the Fire, UMG embarked on a systematic and fraudulent scheme of misrepresentation and misdirection designed to conceal the loss of the Master recordings destroyed in the Fire,” the UMG Recordings class action lawsuit states.

The plaintiffs claim that, “to this day, UMG has not informed Plaintiffs that any Master Recordings embodying musical works owned by them were destroyed in the fire, and has refused to disclose or account to Plaintiffs for settlement proceeds and insurance payments received by UMG for the loss of the Master Recordings.”

The lawsuit cites numerous press accounts of the 2008 fire, with statements from the company who claimed that there was minimal loss to the master recordings.  

For example, a New York Times article noted that a spokesman for the company said “that a small number of tapes from ‘obscure artists from the 1940s and ‘50s,’ including the pop singers Lenny Dee and Georgie Shaw, had been damaged [and] that all recording tapes had been duplicated digitally.”

However, the UMG Recordings class action lawsuit mentions a New York Times Magazine article from June 2019 which exposed the extent of the fire and loss of master recordings.

The Class Members include, “All persons or entities, and their heirs, successors and assigns, who entered into recording agreements with UMG providing for a 50/50 sharing of revenues from furnishing, licensing or authorizing the use by others of Master Recordings embodying their musical works, which Master Recordings were stored in a warehouse leased by UMG at the Universal Studios backlot and destroyed in a fire on or about June 1, 2008.”

The plaintiffs are represented by Howard E. King, Henry D. Gradstein, and Andres Monserrate of King Holmes Paterno & Soriano; Edwin F. McPherson and Pierre B. Pine of McPherson LLP; and Steven G. Sklaver, Kalpana D. Srinivasan and Stephen Morrissey of Susman Godfrey LLP.

The UMG Recordings Class Action Lawsuit is Soundgarden, et al. v. UMG Recordings Inc. Case No. 2:19-cv-05449, in the U.S. District Court for the Central District of California.

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