US Federal Court’s Ruling on UMG Case
The US Federal Court awarded Universal Music Group (UMG) a partial victory in a closely monitored lawsuit initiated by Limp Bizkit and its frontman Fred Durst.
In his decision on Friday (January 17), the US District Court in the Central District of California rejected the part of the lawsuit that sought to cancel three contracts signed in the 1990s and 2000s between Limp Bizkit members, Label Durst, Impeccable Records, and the UMG Interscope label.
He also dismissed Limp Bizkit’s claims of copyright violations against UMG.
Contractual Obligations and Jurisdiction
To cancel contracts, a “complete failure to fulfill obligations” by UMG is required while fulfilling these contracts. The delay in UMG in some fees due to Limp Bizkit and Flawless Records does not meet this standard, particularly because Interscope “paid millions” in advances to Limp Bizkit and invested significantly in their music. Judge Percy Anderson wrote in his order, which can be read in full here.
Judge Anderson concluded that since the contracts are still valid, there is no basis to claim that UMG violated the copyright of Limp Bizkit or Flawless Records.
Copyright claims are necessary for the jurisdiction of the US Federal Court on this matter, as copyright is governed by federal law. The remaining accusations against UMG—contract violations, breach of fiduciary duties, fraudulent concealment, debt fraud, and other allegations—fall under state law.
Without copyright claims, the Federal Court cannot adjudicate the case. Judge Anderson has given Limp Bizkit’s lawyers until February 3 to amend the complaint to include copyright claims; otherwise, he stated he would dismiss the remainder of the case.
However, Limp Bizkit may still pursue the remaining allegations in state court.
Background of the Lawsuit
Durst, Limp Bizkit, and Flawless Records filed the lawsuit against UMG in October of last year, seeking 200 million dollars based on allegations that UMG failed to pay Durst and Limp Bizkit fees, despite the group selling over 45 million records since signing a contract in the 1990s with California Indie Companion Turn the Plates, distributed by Interscope UMG.
The lawsuit called for the “termination” (i.e., annulment) of contracts between Interscope, Flawless, and Limp Bizkit, as well as compensation for other artists who worked with UMG through Flawless Records.
Among other claims, Derst’s lawyers alleged that UMG “developed and implemented software and systems designed to conceal artists’ fees (including plaintiffs) and retain this profit for themselves,” adding that this could impact “potentially hundreds of other artists who have unjustly been deprived of fees for many years.”
According to the complaint, in April 2024, Limp Bizkit’s business manager reached out to UMG, asserting that fees were owed to other group members and requested access to the UMG portal for fee reports. The manager discovered over 1 million dollars in unpaid fees to the group, prompting UMG to request payment information and transfer funds to the group, along with 2.4 million dollars owed to Flawless Records.
In the termination petition submitted in November last year, UMG contested this claim, asserting that the head of the Royalty department had contacted the business manager a year prior, informing him of the need to “create a supplier’s profile for Limp Bizkit” to facilitate the payment of royalties to the group.
UMG contended that this “underscores the assertion” that the company did not remain silent about Limp Bizkit’s fees until the business manager commenced an investigation into the issue.
Court rejects crucial part of Limp Bizkit’s claim in $200m lawsuit against Universal Music Group
