Dixie Chicks Sue Record Label For Fraud

By | August 29, 2001 at 12:00 AM

Country pop trio the Dixie Chicks are suing Sony Music Entertainment, seeking to terminate their contract and accusing the Japanese recording giant of cheating the singers out of more than $4 million.

The lawsuit, filed Monday in U.S. District Court in New York and made public Tuesday, charges that Sony engaged in “systematic thievery” to underpay royalties owed the Grammy-winning act since 1998 for two multiplatinum albums released by Sony’s Monument imprint.

The Dixie Chicks – Natalie Maines and sisters Martie Seidel and Emily Robison – are the latest in a growing list of recording stars to rebel against the record industry over business practices they say are manipulative and unfair.

“This is about people keeping their word,” the trio said in a statement announcing the lawsuit. “We were dumbfounded to hear that Sony recently publicly stated that they ‘respect’ us, after they have gone to such extremes not to pay us what they contractually owe us.”

A spokesman for the music company, a unit of Japanese electronics conglomerate Sony Corp., declined comment on the litigation.

But in court documents filed last month, Sony accused the singers of making a “sham” attempt to escape from their recording pact after twice failing to renegotiate their deal for more money. Sony signed the group in 1995.

The Dixie Chicks’ complaint answers a suit brought against them by the music giant in July after the trio stated in a letter to Sony that they intended to cease recording for the label. In its suit, Sony said it stands to lose at least $100 million unless the Chicks make good on five more albums they are obligated to deliver under the contract.

According to their lawsuit, the Chicks’ two Sony-released albums – “Wide Open Spaces” and “Fly” – have together sold more than 19 million copies in the United States, generating more than $175 million in revenues for Sony.

The lawsuit claims Sony underpaid the three performers at least $4.1 million over the past three years through a variety of allegedly fraudulent accounting practices.

The suit says Sony held back an excessive share of royalties as “reserves” against potential album returns; undercalculated royalty payments; deducted excessive producer charges; created a “phony deficit” in album sales; and denied the group its fair share of Sony’s MP3.com settlement.

In all, the suit counts 30 separate instances in which Sony allegedly failed to properly account for or pay the group what they were owed.

They also said Sony’s recording contract is structured in such a way as to virtually enslave its talent, “obligating its artists to continue to record for Sony no matter how repeatedly and blatantly Sony breaches its payment obligations.”

Under its contract with the Chicks, Sony cannot be considered in breach of the deal unless a claim against the company “is reduced to a final judgment by a court… and Sony fails to pay you the amount within 30 days” of the judgment.

The lawsuit comes less than two weeks before such recording stars as Courtney Love and Don Henley bring their battle against major record labels to the California state Senate for hearings on music industry practices.

In February, Love filed suit against her label, Universal Music, a unit of Vivendi Universal,aiming to get out of her contract and spotlight what she describes as “repressive and unfair working conditions” faced by many recording artists.

Hailing from Dallas, the Dixie Chicks burst onto the scene in January 1998 with their major-label debut, “Wide Open Spaces,” mixing a modern pop sensibility with such traditional country instrumentals as fiddle, banjo and steel guitar.

They followed up in 1999 with their second multiplatinum release, “Fly.” Both discs earned the Chicks a clutch of country music awards and a pair of Grammys, including back-to-back Grammys for best country album.

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