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Universal Music Group Backlot Fire Class Action Lawsuit Dismissed by Judge

universal music group fire
GABRIEL BOUYS/AFP/Getty Images

Smoke rises over burning structures at Universal Studios on June 1, 2008 in Universal City, Calif.

Tom Petty's ex-wife, Jane Petty, was the sole plaintiff left before it was ruled she had failed to present enough evidence to the court.

A federal judge has dismissed a class action lawsuit against Universal Music Group over a 2008 warehouse fire that a New York Times Magazine report last year claimed destroyed up to 500,000 master recordings in the the record company's archive vaults.

The class action lawsuit was initially filed June 21, 2019, in California with claims by Soundgarden, Steve Earle, Hole, the estate of Tupac Shakur and by Jane Petty, Tom Petty's ex-wife and heir to 50% of his recording agreements. The plaintiffs were seeking to recover half of any settlement proceeds and insurance payments, reportedly valued at $150 million, that UMG received due to the 2008 fire on the Universal Studios backlot in a confidential settlement, according to court papers. The artists were suing UMG for breach of contract, negligence, reckless conduct and misrepresentation, as well as other causes of action claiming that they suffered irreparable losses to their master recordings.

But over a nine month period all the plaintiffs except for Jane Petty voluntarily dropped their claims against UMG when it was demonstrated that they suffered no losses due to the fire. Hole dropped out of the lawsuit shortly after it was filed after accepting that the band's masters were not affected by the 2008 fire. Subsequently, Soundgarden, the Tupac estate and Earle all also voluntarily dismissed their claims against UMG leaving Jane Petty as the sole plaintiff.

On Monday (April 6), U.S. District Judge John Kronstadt moved in his 28-page written ruling to dismiss Jane Petty's remaining six claims against UMG deciding that she had failed to present enough evidence to the court.

A key dispute in the case centered over whether Tom Petty's contract with UMG required the label to share the insurance settlement funds. UMG argued that Tom Petty's artist contract signed in 1984 with MCA, a predecessor in interest to UMG, only required the company to share money generated when the artist's works were licensed. The legal team for Jane Petty argued that "to license" in the contract meant "to give officials permission to do or use something." Jane Petty's legal team argued that when "UMG entered agreements with warehouse owners and insurance companies, it retroactively permitted a specific and otherwise prohibition 'use' of the masters -- their destruction -- in exchange for flat free payments."

UMG told the court, however, that the term "license" in Tom Petty's contract has a meaning that is specific to the music industry. They argued that to license means "granting a right to manufacture, distribute, sell and/or perform recordings." Ultimately, Kronstadt sided with UMG finding that Jane Petty failed to show the master recordings were licensed on a flat-fee basis, a requirement to insure revenue shares per the contract.

"Judge Kronstadt's decision fully dismisses the Soundgarden litigation and entirely rejects the only remaining plaintiff's arguments," according to a statement released by UMG. "As we have said all along, the New York Times Magazine articles at the root of this litigation were stunning in their overstatement and inaccuracy. As always, we remain focused on partnering with artists to release the world's greatest music."

Jane Petty's attorneys did not respond to Billboard's request for comment at time of publishing.

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