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Courtney Love Sues UMG Recordings Charging Violation of California Labor Code

 Courtney Love
Courtney Love at the 57th Annual Golden Globe Awards
January 23, 2000
February 28, 2001 – Singer Courtney Love has filed a cross-complaint against UMG Recordings for violating California Labor Code Section 2855, which allows the termination of contracts between creative artists and entertainment companies after seven years, according to A. Barry Cappello, attorney for Love. (Courtney Love v. Geffen Records, Inc., UMG Recordings, Inc. et al., Case No. BC 223364, Los Angeles Superior Court, February 28, 2001). Superior Court Judge Fumiko Wasserman granted the motion for the cross-complaint in a hearing this morning in Los Angeles.

The cross-complaint was the result of a complaint filed by UMG Recordings against Love when she attempted to end her contractual relationship with the recording company.

"The Labor Code (known as the "De Haviland Law") was created in 1945 to end the oppressive studio contract system that was standard at the time," says Cappello, managing partner in the Santa Barbara law firm of Cappello & McCann. "Film studios literally held in their hands the artistic and financial futures of its under-contract actors. It was a servitude existence that the state legislature corrected 56 years ago. Labor Code Section 2855 prevents any contract between a creative artist and an entertainment company to extend past seven years, essentially giving artists the opportunity to obtain their freedom if they are experiencing repressive or unfair working conditions. Unfortunately, while today's film actors enjoy the equitable compensation and creative freedom intended by Section 2855, music artists do not."

In 1987, the record companies lobbied the state legislature to pass an amendment to Section 2855 that applies only to recording artists. The amendment allows record companies to sue recording artists for damages if the artists do not fulfill their original contract. "But after seven years, this amendment in no longer relevant. The Section clearly states that artists have the legal right to terminate a contract with a recording company after seven years without repercussions," says Cappello. "Despite this, the recording industry continues to intimidate artists who try to terminate their contracts after seven years by suing them for future damages in the form of lost profits. We're out to prove that this is patently inconsistent with the provisions allowed by state law. When we do, it will shake the very core of the way business is conducted in the music industry, and it will give countless musicians the financial and artistic freedom they do not currently enjoy."

Furthermore, the complaint alleges that major record companies force unconscionable, impossible-to-perform contracts upon recording artists with the full knowledge that the artists have no choice except to sign them if they want access to the marketing campaigns that only a major label can provide. Artists who hope to hear their music on the radio, see their videos on MTV and have a chance to sell millions of records must sign one of these unfair contracts, since they span the entire industry. Standard recording agreements require artists to bear so many of their own production and marketing costs that it virtually guarantees little or no financial return for almost every recording artist.

"Story after story gets told about artists like the Chambers Brothers who wrote and recorded 'Time Has Come Today' and have never been paid a dime in royalties. Legendary blues singer Howlin' Wolf was broke when he died. Many of the most popular hard rock bands of the '80s like Skid Row, Slaughter, Warrant, Ratt and Poison sold tens of millions of records but still found themselves broke by the end of the '90s with no health care or benefits from their oppressive recording contracts. Florence Ballard from the Supremes died on welfare. Ronnie Spector and the Ronettes were paid no royalties for over 35 years until they prevailed in a lawsuit in 2000. Their $2 million judgment comes to less than $60,000 a year and that money had to be split three ways. And this is from the millions generated by hits like 'Baby I Love You' and 'Be My Baby.' Corrupt recording agreements forced the heirs of Jimi Hendrix to work menial jobs while they received none of the millions that Jimi's catalog earned each year. Even Elvis Presley, the biggest-selling recording artist of all time, died with an estate valued at not even $3 million, "says Courtney Love. "Many famous artists from the '50s and '60s live in absolute poverty with no access to even basic health care or even Social Security. Artists who have generated billions of dollars for the music industry die broke and un-cared for by the business they made wealthy."

Says Love, "record companies lied in 1987 to convince the California Legislature that recording artists should be indentured servants at no pay for their entire careers, even though writers, directors, actors, athletes and anyone else in the arts is able to exercise their rights under the 'De Haviland Law.' They said that it takes 'seven albums in seven years' to make money from an artist. As any artist will tell you, a record company won't let you make seven albums in seven years. They force you into touring and video cycles that make that schedule impossible. And any artist who isn't making huge profits for the company by their second album will be summarily dropped."

Love studied the legislative intent with her attorneys and found that the source of the misinformation to the California Legislature was the Recording Industry Association of America (RIAA), the trade organization that represents the record companies. "In all other fields of artistic endeavor (costumers, makeup artists, actors, writers, directors), there exists a guild or union," says Love. "The RIAA has made sure that recording artists have no union and are not represented in any way, shape or form in Congress or the state legislatures." With the help of the Screen Actors Guild and other labor organizations, Love and other recording artists plan to form a recording artists guild.

According to the cross-complaint, one of the reasons Love canceled her contract with UMG Recordings was that Universal closed Geffen Records, which originally signed Love and her band Hole in 1992. The complaint alleges that Geffen Records provided special and unique services to its artists and that Universal's closure of Geffen renders Love's contract void.

The cross-complaint pays particular attention to the royalties not paid on record club sales. "Record club sales amount to more than $1 billion annually for record companies," says Cappello. "The record clubs pay hundreds of millions of dollars in up-front fees to record companies in order to sell their artists' CDs, but the record companies do not disclose these fees to their artists when calculating royalties. The end result is that artists receive little or no royalties for record club sales while the record companies pocket hundreds of millions of dollars from these relationships.

"We're really just trying to follow the trend of the law and create the same kind of business opportunities for the musicians and record companies that the end of the studio system created for the film business and that free agency created in baseball," continues Cappello. "Both of those industries got much bigger once they ended their oppressive employment systems. Economic freedom for creative people is just good business."

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