As Universal Music Group plots an initial public offering, a move invariably meaning making all sorts of representations to investors about the financial health of its business, the company continues to find itself on the defensive over a 2008 backlot fire that resulted in substantial damages to its vault. That fire became the subject of renewed attention this past June when The New York Times shined a spotlight on what it called "the biggest disaster in the history of the music business." The story revealed old court records as well as an assessment by UMG at the time that more than 118,000 original music recordings had been destroyed. UMG chairman Lucian Grainge said that artists were owed "transparency," but on Thursday, a group of suing artists say they've got anything but transparency; instead, they claim, the company is engaged in "gamesmanship."
These artists, including Soundgarden and Steve Earle, allege in a putative class action that UMG has a duty to pass along some of the money it collected from litigation and insurance claims. In December, a federal judge refused to stop discovery, meaning UMG had to identity all artists who had any master recordings damaged or lost as a result of the 2008 fire.
Now, UMG has responded, and the plaintiffs are blasting UMG's identification of just 19 artists affected by the fire.
"UMG told prior litigation adversaries that nearly 17,000 artists’ original music recordings were lost," states a new motion to compel. "If UMG is unwilling to live with its prior representations — by listing in response to Interrogatory No. 1 all the artists from the prior list whose listed works included 'original master recordings' — then it must respond fully to Interrogatory No. 1, rather than undertaking only a selective review of past conclusions and cabin the answers with meritless objections."
According to the latest court papers, UMG acknowledges that the burned list of recordings include those by ...And You Will Know Us by the Trail of Dead, Beck, Bryan Adams, David Baerwald, Elton John, Jimmy Eat World, Les Paul, Michael McDonald, Nirvana, Peter Frampton, R.E.M., Sheryl Crow, Slayer, Sonic Youth, Soundgarden, Suzanne Vega, Surfaris, White Zombie, and Yesterday & Today.
Missing are other artists once identified to the insurers, including Al Green, Elvis Presley, George Harrison, Janet Jackson, Run-DMC, and The Police, among dozens of other big names. (See the court filing here.)
Part of the explanation may be attributable to a lack of effort on UMG's part. The company argues that litigation rules only require it to turn over any available information that won't result in undue labor and expense. UMG says that it already has 19 full-time individuals making an assessment in response to 392 artists who have inquired about what was lost. This effort has cost more than $1.4 million to date, it says.
"UMG remains committed to providing transparency to inquiring artists," states the company's lawyers. "But Plaintiffs’ demand that the effort be broadened to nearly 17,000 artists would impose an extraordinary and impermissible burden on UMG."
That would "require a substantial diversion of UMG’s workforce" and would "ultimately take years to complete," adds UMG.
As for what insurers were told about a decade ago, UMG explains that those lists were really potentially lost assets.
"And, given that much of the contemporaneous record of the NBCUniversal vault’s assets at the time of the fire was itself destroyed in the fire, UMG’s post-fire working lists were essentially well-informed estimates of what overall assets might have been destroyed," continues UMG's lawyers. "Indeed, UMG knows today that those post-fire working lists were definitively wrong, as UMG has found many of the very assets contained on those lists on the shelves of UMG’s archives."
A UMG spokesperson adds, "The plaintiffs’ lawyers have already been informed that none of the masters for four of their five clients were affected by the fire — and the one other client was alerted years earlier and UMG and the artist, working together, were still able to locate a high-quality source for a reissue project. Recognizing the lack of merit of their original claims, plaintiffs’ attorneys are now willfully and irresponsibly conflating lost assets (everything from safeties and videos to artwork) with original album masters, in a desperate attempt to inject substance into their meritless legal case. Over the last eight months, UMG’s archive team has diligently and transparently responded to artist inquiries, and we will not be distracted from completing our work, even as the plaintiffs’ attorneys pursue these baseless claims.”
