F.B.T. Productions, LLC v. Aftermath Records
United States District Court for the Central District of California
827 F. Supp. 2d 1092, 2011 U.S. Dist. LEXIS 126159 (2011)
- Written by Eric Miller, JD
Facts
F.B.T. Productions, LLC (F.B.T.) (plaintiff) entered a contract with Aftermath Records (Aftermath) pertaining to recordings by the rap artist Eminem. The contract provided that F.B.T. would receive royalties of 12 to 20 percent on records sold and 50 percent of Aftermath’s net receipts on masters licensed to third parties. Later, F.B.T. learned that Aftermath had been categorizing digital downloads and ringtone sales as records sold rather than masters licensed for the purpose of calculating royalties. F.B.T. brought suit. The district court ruled in favor of Aftermath. F.B.T. appealed. The United States Court of Appeals for the Ninth Circuit reversed the order of the district court and remanded the case. Litigation continued, with the focus shifting to the meaning of net receipts in the masters-licensed clause. Aftermath argued that net receipts entailed the subtraction of direct costs, including mechanical royalties and distribution fees—an argument rejected by F.B.T. However, other provisions in the contract used the word net in conjunction with stated reductions from gross receipts.
Rule of Law
Issue
Holding and Reasoning (Gutierrez, J.)
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