Universal settles Calif. lawsuit with performers

By | January 17, 2002 at 12:00 AM

A Los Angeles judge has tentatively approved a deal requiring record giant Universal Music to pay $4.75 million in back royalties to as many as 300 performers to settle a class-action lawsuit led by torch singer Peggy Lee, court papers showed Wednesday.

Lee, 81, was the lead plaintiff in the two-year court case that claimed that Universal, a unit of Vivendi Universal, failed to pay her and other artists – many of whom are now dead – millions of dollars by underreporting sales figures and overcharging for services.

Legal experts said this was the first class-action lawsuit on behalf of recording artists to accuse a record company of employing questionable accounting tactics to avoid payment of royalties dating as far back as the 1940s.

Other music legends included in the class are Pearl Bailey, Louis Armstrong, Billie Holiday, Patsy Cline, Ella Fitzgerald, the Andrews Sisters and Bill Haley and the Comets.

Universal officials declined comment on the case, citing terms of the settlement which prohibits either side from discussing the case with the media unless the other side is present or has approved a prepared statement.

On Monday, Los Angeles Superior Court Judge Victoria Gerrard Chaney conditionally certified the suit a class action for the purposes of the settlement, expanding the number of potential plaintiffs to nearly 300 artists who recorded with the Decca label before Jan. 1, 1962.

A hearing is scheduled for early May to determine a final settlement.


In court papers prepared by Lee’s lawyers, Cyrus Godfrey and David Axelrod, the musicians claim Universal short-changed them by paying royalties based on incorrect prices relating to their CD sales.

Many of these artists had signed contract amendments in the 1980s for the sale of CDs as the format was beginning to catch on with consumers, but the court papers contend that Universal did not properly follow the terms of those amendments.

Universal, the world’s biggest record company, acquired Lee’s contract through a series of mergers. Decca merged with MCA Inc. in 1966, which was then bought by Seagram Co. in 1995. Vivendi bought Seagram in 2000.

The lawsuit also alleged the company was underpaying royalties on record-club sales, and overcharged artists for album packaging and other services.

The proposed settlement comes as several big stars like Courtney Love and Don Henley have banded together to attack recording companies for their business practices.

Excluded from the proposed settlement are artists who are suing Decca individually over royalties, including country music star Loretta Lynn and the heirs of the late Bing Crosby and Buddy Holly.

Lawyers have until March 8 to notify potential plaintiffs so they can decide whether to join the action, drop out, or object.

Under terms of the proposed settlement, a $700,000 trust will be set aside for those who can’t immediately be located and contacted, he said.

Lee, who is 81 and in ill health since a stroke in 1998, was unavailable for comment.

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