The $200-million lawsuit brought in a US federal court by Limp Bizkit and its frontman, Fred Durst, against Universal Music Group (UMG) will carry on – at least for now. And the matter could ultimately end up being resolved in a state court in New York or California.
In a court order on Monday (March 17), Judge Percy Anderson of the US District Court for the Central District of California denied UMG’s motions to dismiss the case – but also threw out 14 charges against UMG made by Limp Bizkit and Durst, on the grounds that they are a matter for state courts, and not the federal court.
The only remaining charges left before the federal court are Limp Bizkit’s allegations of copyright infringement. Judge Anderson gave UMG until April 7 to respond in writing to those.
If the judge rejects Limp Bizkit’s copyright infringement claims, the case is likely to be thrown out altogether – although much of the case could still end up being litigated in state court.
Limp Bizkit and Durst filed a complaint against UMG in October, alleging that UMG’s Interscope, which distributes Limp Bizkit’s music as well as the music of Durst’s label, Flawless Records, had failed to pay millions in royalties.
UMG “designed and implemented royalty software and systems that were deliberately designed to conceal artists’ (including Plaintiffs’) royalties and keep those profits for itself,” the complaint alleged.
The lawsuit alleged numerous charges including breach of contract, breach of fiduciary duty, fraudulent concealment, and promissory fraud.
These are matters of state law, but Limp Bizkit and Durst filed the case in federal law because the complaint also alleged copyright infringement, which is a federal matter.
Last year, Limp Bizkit reportedly informed UMG they were canceling three contracts between the band, Interscope, and Flawless Records over the alleged non-payment of royalties. Thus, the plaintiffs argued, Interscope’s continued distribution of Limp Bizkit and Flawless music amounts to copyright infringement.
Under US law, federal courts can rule on state court issues if the case involves a matter of federal law that is “dominant.”
In his order on Monday, Judge Anderson ruled that the copyright claims are not “dominant” over the other state law claims, and removed the 14 state law charges from the case, leaving only the copyright claims alive.
“The Court concludes that Plaintiffs’ state law claims substantially predominate over the federal claims asserted in this action,” Judge Anderson wrote in the order, which can be read in full here.
“The Court therefore determines, in an exercise of its discretion, that it will decline to exercise supplemental jurisdiction over the state law claims alleged in [Limp Bizkit and Durst’s first amended complaint], and dismisses the state law claims without prejudice.”
In November, UMG filed a motion to dismiss the case, arguing that “plaintiffs’ entire narrative that UMG tried to conceal royalties is a fiction.” UMG said that an executive in the Royalties Department had reached out to Limp Bizkit’s business manager a year before the disagreement began and advised the manager of the need to “set up a vendor profile for Limp Bizkit” so that the company could “start making royalty payments” to the band.
UMG said that in the summer of 2024, it paid out $1.04 million in back royalties to Limp Bizkit and $2.35 million in back profit participation to Flawless Records. However, Limp Bizkit and Durst maintain that they are still owed more.
UMG also argued that a California federal court was the wrong place to litigate the case because the agreements between Interscope, Flawless, and Limp Bizkit require disputes to be settled in a New York court.
The judge concluded that his decision not to hear the state law allegations made UMG’s motion on jurisdiction “moot,” and denied it. He also denied UMG’s motion to dismiss the copyright charges.
“Defendant shall file its answer to the copyright claims asserted in the [first amended complaint] by no later than April 7, 2025,” the judge ordered.
Given that the question of whether or not the contracts between Interscope, Limp Bizkit, and Flawless Records are still valid hasn’t been answered, Judge Anderson may choose to dismiss the copyright charges as well, following UMG’s expected response to those charges. That would effectively end the case in federal court.
It’s unknown at this time whether Limp Bizkit and Durst will pursue the non-copyright-related charges in a state court.Music Business Worldwide