Rule of Law Puts Hurt on Label
TVT Records might want to keep the Cristal on ice.
A New York-based federal appeals court on Tuesday drastically reduced a $132 million verdict in favor of the label in a dispute with Island Def Jam over rapper Ja Rule.
Three years ago, a jury backed TVT in the battle--which involved a Ja Rule side project--and issued one of the largest punitive awards in music industry history.
A U.S. District Court judge later reduced the punitive portion of the award to $54 million.
Now, the 2nd U.S. Circuit Court of Appeals in Manhattan struck down the rest of the punitive award and shrank the total to a paltry $126,720 in compensatory damages.
TVT's attorney, Peter Haviland, said in a statement that the company would appeal the ruling, which means the case could find its way to the Supreme Court.
The dust-up between the two labels and their high-ranking execs (TVT's president and founder Steve Gottlieb and Island Def Jam's former chairman, Lyor Cohen--who is currently president of Warner Music Group), which generated headlines because of the lottery-sized 2003 ruling, boils down to a breach-of-contract battle over a Ja Rule recording.
TVT Records filed the suit in 2002, contending Island Def Jam stymied an album that Ja Rule and two friends tried to make for TVT in 2001. Cohen objected, leaving Gottlieb "in ruins," TVT attorney Haviland said at the time.
A New York jury agreed with TVT's side of the story, handing Gottlieb the resounding win.
Island Def Jam's lawyers were shocked by the plus-sized punitive damage award. "We will immediately and vigorously appeal the verdict," attorney Matthew S. Dontzin promised. "We are confident the verdict will not withstand the scrutiny of an appellate court."
On Tuesday that Island Def Jam found, in the words of Dontzin, a "decisive victory, completely vindicating Mr. Cohen."
Conversely, TVT's Haviland found a silver lining in the loss. "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," the lawyer said in a statement.
Caught in the middle of the battle is Ja Rule, who is no longer the force in the rap game than he was five years ago.
The rapper, born Jeffrey Atkins, has had his own legal problems over the past few years--most notably an assault charge stemming from a nightclub altercation last year in Toronto.
But Rule, who struck a plea deal in March to avoid possible jail time in the assault case, has stayed mum on the executive clash--choosing instead to try and reclaim his past glory on the hip-hop charts.
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