Plaintiffs in two related cases filed putative nationwide class actions against UMG Recordings, Inc. Plaintiffs seek to represent a class of recording artists, music producers, and other royalty participants. The complaints allege that UMG has failed to properly account for and pay its recording artists and music producers for income it has received, and continues to receive, from the licensees of its recorded music catalog for the sale of digital downloads and ringtones.
Defendants moved to dismiss for improper venue. The Court concluded that under the circumstances, it would be unreasonable to transfer the action based on the forum selection clause contained in a 1977 contract. "Assuming arguendo that the forum selection clause is valid and enforceable, that clause only governs the claims brought under the 1977 agreement. In analogous circumstances, courts have found it unreasonable to enforce a forum selection clause that applied to some but not all of the plaintiff’s claims."
Alternatively, defendant moved to transfer venue pursuant to 28 U.S.C. § 1404(a), contending
that the Central District of California is a more convenient venue. The primary dispute was whether transfer will serve the convenience of the parties and witnesses. The Court concluded that defendant had not met its burden that the case should be transferred.
Defendant also moved to dismiss plaintiffs’ claims under California Business & Professions Code
§ 17200. In both cases, plaintiffs allege that UMG knowingly breached its contracts with recording artists and music producers, and that “UMG either knew, recklessly disregarded, or should have known that its collection of income from Music Download Services and Mastertone Providers was in connection with a license agreement and the royalties payable to Plaintiff and the Class should have been accounted for and paid on that basis.” The Court concluded that plaintiffs stated a claim under § 17200, and that the questions raised by defendants’ motions are better suited for determination on a full factual record (i.e., at summary judgment).
Lastly, a third-party ("The Tubes") sought to intervene. The Court denied the motion because the proposed intervenors assert claims “parallel” to those already pending before the Court, and thus their interest are already represented. "If plaintiffs in these cases, who the Court notes are represented by the same counsel as The Tubes, believe that The Tubes should be added
as a class representative, plaintiffs may seek to amend the complaints."
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