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Universal-MCA Music Publishing v. Bad Boy Entertainment, Inc.
New York Supreme Court
2003 WL 21497318 (2003)
Universal-MCA Music Publishing (MCA) (plaintiff) was a publishing company that owned exclusive rights to all musical compositions written by Todd Gaither, Kelly Price, and Jeremy Graham (MCA cowriters) (plaintiffs). Sean Combs (defendant) was a songwriter and co-owner of the recording company Bad Boy Entertainment, Inc. (Bad Boy) (defendant). In 1996, Combs, in his capacity as a songwriter, and Bad Boy entered into a recording agreement that included a controlled-composition clause, which limited the amount of royalties the record company must pay for compositions to less than the minimum rate set by law. In 1997, Combs and the MCA cowriters coauthored several songs and expressly agreed on each writer’s ownership percentage and royalty rate. The MCA cowriters and MCA alleged that they made numerous attempts to recover their royalties. Bad Boy asserted to MCA that none were due per the controlled-composition clause. MCA and the MCA cowriters filed suit, alleging that Combs and Bad Boy entered the recording agreement to intentionally deprive them of royalties, thereby breaching Combs’s fiduciary duty to them. They further alleged that, as the president and CEO of Bad Boy, Combs profited enormously from the recording agreement to the detriment of his cowriters on the songs. Combs and Bad Boy moved to dismiss the case for failure to state a claim and argued that no fiduciary relationship existed between Combs and the MCA cowriters.
Rule of Law
Holding and Reasoning (York, J.)
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