Universal Music Group Hit With Class Action Lawsuit

Fire at Universal  - 2008

A group of artists, their heirs and representatives of their estates filed a putative class action lawsuit against Universal Music Group (UMG) on Friday over a 2008 fire that destroyed up to 500,000 master recordings in the record company's archive vaults, according to an earlier New York Times article investigative report.

According to Billboard, the lawsuit was filed by Soundgarden, Tom Whalley on behalf of the Afeni Shakur Trust that oversees Tupac Shakur's estate, Tom Petty's ex-wife Jane Petty, Hole and Steve Earle. They are seeking to recover half of any settlement proceeds and insurance payments received by UMG and half of any remaining loss of value not compensated by such settlement proceeds and insurance payments. According to the lawsuit, UMG's litigation and insurance claims following the fire were reportedly valued at $150 million to recoup the value of the master recordings -- none of which was directly shared with artists.

"UMG concealed its massive recovery from Plaintiffs, apparently hoping it could keep it all to itself by burying the truth in sealed court filings and a confidential settlement agreement," reads the complaint. "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."

The lawsuit also charges UMG breached a duty of care to artists "through its negligence in storing the Master Recordings in the firetrap that was the Universal Studios backlot warehouse" where in 1990 "a similar fire in 1990 destroyed a similar area on the back lot." Ironically, in UMG's lawsuit against the backlot's leaser NBCUniversal (which was settled in 2013), the company made similar claims of negligence that led to such severe damage from the fire. 

Universal Music Group declined to comment.