Artists One Step Closer to Payments for Downloads

SAN FRANCISCO (CN) - A federal judge preliminarily approved an $11.5 million settlement of a class action brought by the Estate of Rick James, Public Enemy's Chuck D and other musicians over royalties from digital music downloads.

The agreement endorsed by U.S. District judge Susan Illston on April 28 also includes a 10 percent bump in royalties for class members who submit claims. As many as 7,500 artists could be considered class members under the deal.

In addition, the defendant in the case, Universal Music Group, has agreement to pay $2.9 million in attorneys fees, $450,000 in legal costs, and additional compensation to expert witnesses who testified in the case.

In a complaint filed in the San Francisco Federal Court on April 1, 2011, the plaintiff musicians claimed UMG stiffed them by calling digital downloads "sales" instead of "licensing agreements" when people bought permanent downloads and ringtones for cell phones. Sales royalties are less than those for licensing.

In giving her preliminary approval to the settlement, Judge Illston scheduled a fairness hearing on the deal for April 13, 2016.

At that time, she said, the court will determine whether the proposed settlement "is Fair, reasonable and adequate," and whether all claims made against the defendant should be dismissed.

She also ordered that a claims administrator publish notice for potential claimants in such publications as "Billboard," "Rolling Stone" and "The New York Times."

Attorneys for the parties were not immediately available for comment following Judge Illston's ruling.

However, on April 15, 2015, shortly after the settlement was originally announced, Len Simon, one the plaintiffs' attorneys, told the Hollywood Reporter he was pleased with the deal.

"This settlement is a fair resolution of this controversy over how to compensate artists for their valuable work in a new medium which we believe was not contemplated by their contracts, many drafted in the 1970s and 1980s," Simon said. "And it compensates these artists now, rather than after additional years of litigation and uncertainty."

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