Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Thursday, June 20, 2024 | Back issues
Courthouse News Service Courthouse News Service

Lil Wayne Sues Universal Music for $40 Million

LOS ANGELES (CN) - Rapper Lil Wayne sued Universal Music Group for $40 million on Monday, money he claims it diverted to repay itself for the $100 million it advanced to Cash Money Records, where he helped launch the careers of Drake, Nicki Minaj and Tyga.

Young Money Entertainment and Dwayne Carter Jr. (Lil Wayne) sued Universal Music Group and SoundExchange on Monday in Federal Court, demanding at least $40 million.

Carter claims that Universal and nonparty Cash Money entered into a series of agreements which, among other things, diverted his "substantial" profits to repay Cash Money's debts.

Carter says he agreed to an exclusive record agreement with Cash Money in 1998, and that in 2008 he was granted joint ownership, with Cash Money, to master recordings he helped deliver to the label, including recordings by Drake, Minaj and Tyga.

Carter "helped discover, develop, nurture and deliver to (the) joint venture" the "prolific and successful" artistic trio, the lawsuit states.

Drake, Minaj and Tyga and not parties to the lawsuit.

Universal distributed Cash Money's recordings, including those Carter delivered to Cash Money under the 1998 agreement, according to the complaint.

Co-defendant SoundExchange, an independent nonprofit performance rights organization, collects and distributes royalties on the behalf of copyright owners and artists for satellite, Internet radio and cable television music channel transmissions.

Under the Digital Millennium Copyright Act of 1998, 50 percent of such royalties are payable to or for the benefit of recording artists, and 50 percent payable to the owner of the recordings. Carter says he and Young Money contracted with SoundExchange to collect and pay shares of the so-called label performance royalties.

But he claims that Universal blocked the payments, diverted the money, and seized 100 percent of the profits owed to him, and that it did so to repay debts that he neither incurred nor were his obligations.

Universal claimed a right to "100 percent" of Carter's royalties in communications to SoundExchange, "based upon an alleged right of recoupment by Universal against certain advances previously made by Universal to Cash Money, pursuant to Universal's distribution agreement with Cash Money," the complaint states.

Carter claims that Universal advanced $100 million to Cash Money, of which $60 million is still outstanding. He claims that neither he nor Young Money was a party to Universal's distribution agreement with Cash Money, nor were they recipients of any portion of the $100 million advance.

Universal "refuses to provide plaintiffs with any documentation of such agreement," the complaint states.

And, it states, Cash Money "has acknowledged to Universal and SoundExchange that it has no right to or interest in the label performance royalties allocable to plaintiffs."

"Universal's contention that it is entitled to obtain 100 percent of profits earned on records owned by Carter, if it were to be accepted, would render illusory the rights of plaintiffs under the foregoing contracts," the lawsuit states. "Universal would be at liberty to keep funding Cash Money operations, yet deprive plaintiffs of any revenues, including label performance royalties, on the massively successful sales of YME [Young Money Entertainment] Records, and the option period records, claiming entitlement to apply all those proceeds to repay Cash Money's massive debt."

Representatives at Universal and SoundExchange did not immediately respond to requests for comment Tuesday.

Carter, of Florida, says he "has demonstrated for many years a remarkable talent for discovering and developing new recording artists." He won Grammy Awards in 2009 for his album "Tha Carter III."

Young Money owns the right to furnish Carter's services to third parties, and owns and controls an ownership interest in Young Money Entertainment, a joint venture, the lawsuit states.

Carter is listed as the sole member of Young Money.

Carter seeks $40 million and punitive damages for breach of contract and fiduciary duty.

He is represented by Howard King with King, Holmes, Paterno & Soriano.

King was out of the office and could not be reached for comment on Tuesday.

Categories / Uncategorized

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.