A federal judge in the US has told Fred Durst that his legal battle with Universal Music over allegedly unpaid and unreported royalties will mainly have to be fought out in state courts in California and New York, rather than through the federal courts.
The Limp Bizkit frontman accuses the major of both breach of contract, under state law, and copyright infringement, under federal law, but hoped to pursue the entire matter in the federal courts. That can happen through a process known as ‘supplemental jurisdiction’, which aims to make court proceedings more efficient, but Judge Percy Anderson concluded this week that that’s not appropriate in this case.
Which means that juicy new allegations that were added to an amended version of Durst’s lawsuit will now need to be reviewed in the state courts. Those allegations include that a “former business manager” who worked for Limp Bizkit, but “later became an executive” at Universal, had“misrepresented aspects of the agreements involved in this action” in order to “procure Durst’s signatures on those agreements”.
In his ruling earlier this week, Anderson states that there “may well be complicated accounting issues” involved in assessing Durst’s contract dispute with Universal. Those accounting issues also relate to a different time period than the copyright claims.
Meanwhile the wider breach of contract claims will require “an analysis of state law of both New York and California, involving facts and law that are distinct from those necessary to adjudicate the copyright claim”.
On top of that, “the alleged fraud committed by the former business manager” - which relates to the claims under state law - “appears to also raise complex and novel theories for which there is limited controlling legal precedent”.
Taking all of those complexities into account, concludes Anderson, it’s “unlikely that this court could preside over all of the claims asserted” in Durst's amended lawsuit, even if the court was “inclined to exercise supplemental jurisdiction over the state law claims”.
Durst claims that Universal failed to provide all the royalty reporting that was required under three separate contracts he signed with the major, and then failed to pay millions in royalties that were due after he and his band finally paid off past advances and other recoupable expenses in 2019.
Universal did make payment once Durst’s people were in touch with the record company. However, those payments came too late, Durst’s team argues, and Universal’s conduct in handling the royalty issues mean the old contracts can be rescinded, so basically cancelled.
Needless to say, Universal has hit back at the allegations it tried to hide money that was due to Durst, and strongly denies that its conduct justifies tearing up the old deals.
Earlier this year Anderson agreed that Durst had not made a sufficiently strong claim for scrapping those deals, but said the musician could submit an amended complaint, which he then did. In his latest ruling, Anderson notes that the amended complaint is twice as long as the original, coming in at 120 pages compared to the original 60 pages.
If - and only if - Durst wins the argument that his old Universal contracts can be rescinded - then Universal would potentially have to answer the allegations of copyright infringement. Pending the decision of the state courts, the copyright claims, which are made under federal copyright law, can stay in his court, Anderson says, despite Universal’s bid to get those dismissed too.