A New York court has slashed the damages that Universal owned Island Def Jam will have to pay independent label TVT in a dramatic change of heart relating to the long running legal battle over a Ja Rule album.
Ja was originally signed to the independent as part of Cash Money Click, but entered into a solo deal with Def Jam when a fellow CMC member was jailed and the project went on hold. TVT argued that when they released Ja Rule from his CMC contract the label reserved the right to release certain records involving Ja Rule, but that when they tried to do so Def Jam unleashed a campaign to prevent the album's release. In the original hearing the courts sided with independent saying the major, and its then top man Lyor Cohen, were guilty of fraud, willful copyright infringement and wrongful interference with a contract.
The major was told to pay the independent a phenomenal $108 million in damages - a figure later reduced to $54 million by the trial judge. However Universal appealed the decision, and yesterday the appeals court overturned much of the original ruling on the basis there was insufficient evidence against IDJ.
In a long rambling statement the court explained: "That TVT's claims for tortious interference and for fraudulent concealment fail for lack of a legally sufficient evidentiary basis. We also conclude that TVT is not entitled to assert a claim for copyright infringement without having rescinded the licenses on which its infringement claim is based. Accordingly, we reverse the finding of liability and set aside the damages awarded on those claims. Finally, we set aside the award of punitive damages based on breach of the SLA because punitive damages are not recoverable for breach of contract where, as here, the wrongful conduct is not directed at the public at large."
The result of the latest decision is that the damages payment IDJ are expected to pay TVT has been slashed to just $126,720. Claiming the verdict vindicated both Lyor Cohen (now at Warners) and IDJ, a spokesman for the Universal label told reporters: "This is the result that we expected all along. We are pleased that the Second Circuit Court of Appeals viewed the case as we did."
TVT, however, remained upbeat. Their lawyer, Peter Haviland, told reporters: "We were forced to bring this action in part because Mr Cohen and Def Jam denied the existence of a contract critical to our business. This court has affirmed that we did have a contract and that the defendants broke it. This is not over and we look forward to the next round".