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Universal asks court to make Jane Petty and her lawyers pay their legal fees in relation to warehouse fire litigation

By | Published on Tuesday 6 April 2021

Tom Petty

Universal Music last week urged a court in California to sanction Tom Petty’s ex-wife and her legal team in relation to their unsuccessful legal action over a fire at the major’s LA storage facility all the way back in 2008.

Various artists were initially involved in that legal action, which was instigated after a 2019 New York Times article accused Universal of covering up the scale of the 2008 fire, and of failing to inform artists whose master recordings were destroyed in the blaze. The impact of the fire was played down at the time, the NYT article added, but that didn’t stop the music company from securing damages and an insurance payout for itself.

Hole, Soundgarden, Steve Earle and the estate of Tupac Shakur all joined Jane Petty as plaintiffs in the initial class action lawsuit, seeking a cut of the damages and insurance payout Universal had received a decade earlier. However, the other claimants subsequently dropped out, mainly after it became clear Universal had back-ups of any recordings by those artists that had been lost in the fire.

That meant that in court it was Tom Petty’s 1984 record deal – from which Jane Petty was a beneficiary – that fell under the spotlight. The key question was whether Petty’s royalty rights as defined in that deal also gave him a right to share in any damages or insurance payments resulting from the destruction of the master tapes created under the deal.

In April last year, a judge ruled that Petty’s lawyers had not presented a sufficiently strong case that that deal provided any right to share in the damages and insurance money. However, she was told that she could resubmit an amended lawsuit. Which she then did.

Although it was originally widely reported that it was the Petty estate that was involved in this lawsuit, Jane Petty was actually suing in her own right because she was directly due a cut of 50% of the royalties generated by that 1984 record deal. That was as a result of a separate agreement between the couple signed in 1988, which still applied even though they subsequently divorced in 1996.

After Petty re-filed her litigation, attention shifted from the 1984 record deal to that 1988 agreement between Tom and Jane Petty. Having gained access to said agreement, Universal discovered a clause which said that – while Jane Petty got 50% of the royalties stemming from her ex-husband’s record deal – only Tom Petty himself could pursue legal action in relation to the record contract.

Jane Petty argued that it was “implied” that she had been granted the rights to pursue legal action on her late ex-husband’s behalf. But last month the judge overseeing the case rejected that argument and dismissed the newer lawsuit with prejudice.

Now Universal is arguing that Petty and her lawyers should have been aware of this limitation from the very start and should therefore have never filed either lawsuit. And, as a result, they should now cover the major’s legal costs associated with fighting the litigation.

The paperwork regarding the specifics of the 1988 agreement “was in plaintiff’s counsel Laurie Soriano’s own files all along”, Universal says in a new legal filing submitted last week, “which plaintiff’s litigation counsel were required to search as part of their pre-filing diligence, but [which] was not disclosed to UMG for more than eleven months, during which time plaintiff falsely maintained her right to sue and UMG incurred substantial attorneys’ fees refuting the same”.

“Unquestionably, the [King, Holmes, Paterno & Soriano LLP] law firm, of which Ms Soriano is a partner, had reason to know that Tom Petty had not assigned Ms Petty the right to ‘prosecute, defend and settle’ claims relating to the Petty contract. By failing to conduct a reasonable inquiry into their own files, let alone with relevant third parties and representatives, plaintiff’s counsel has baselessly and unnecessarily pursued and extended this litigation by relying upon factually groundless allegations about plaintiff’s assignment”.

Universal adds: “Counsel has now signed and filed three iterations of the complaint containing false allegations of assignment and standing. Counsel made those allegations without ever meeting with, speaking to, or discussing the claims with Ms Petty, and without seeking to obtain and review her divorce files. And, had Plaintiff’s counsel bothered to look in their own files, the falsity of Plaintiff’s assignment allegations would have been apparent before they signed the original complaint on 21 Jun 2019”.

With all that in mind, Universal asks the court to direct “plaintiff and her counsel (and their respective law firms) to pay all of UMG’s reasonable attorneys’ fees and costs incurred in defending itself in this action as a result of plaintiff’s claims and assignment allegations”, and to also impose “any other sanctions sufficient to deter repetition of plaintiff’s and her counsel’s improper conduct”.

We await to see how Petty and her legal team respond.