WHAT’S HAPPENED?
2 Live Crew were among the most prominent, and controversial, rap acts of the 1980s and 1990s, known for their racy lyrics at a time when that was still a rarity in pop music. During their heyday, they found themselves charged with obscenity for performing their songs in public, and their 1989 album As Nasty As They Wanna Be was declared by a judge to be illegal in South Florida.
Eventually, the group was found not guilty, and the album ban was overturned by an appellate court.
Today, more than three decades later, the group’s frontman, Luther Campbell, and the heirs of two other members of 2 Live Crew are involved in another precedent-setting legal case.
This time it’s a civil case, one which will determine whether or not Campbell and the heirs have any rights to 2 Live Crew’s music.
A jury trial began on Monday (October 7) in a federal court in Florida, in which record label Lil’ Joe Records is arguing that the music of 2 Live Crew was “works for hire,” and its members – Campbell (aka Uncle Luke), Christopher Wong Won (aka Fresh Kid Ice), David Hobbs (aka Mr. Mixx) and Mark Ross (aka Brother Marquis) – along with their heirs don’t own any copyrights in the music.
Campbell and the heirs argue that 2 Live Crew’s music was not “works for hire,” that its members were not employees of their label at the time, Luke Records, and that they have the right under US law to take back their master recording copyrights.
Here’s how the case breaks down…
THE BACKGROUND
In 1996, Lil’ Joe Records, owned by Joseph Weinberger, bought all the master and publishing rights to 2 Live Crew’s albums, as well as the 2 Live Crew trademark, from Luther Campbell and his record label, Luke Records, to which 2 Live Crew was signed.
Campbell and Luke Records had been forced into bankruptcy court a year earlier over unpaid debts.
Twenty-four years later, in November 2020, 2 Live Crew members and heirs sent a “notice of termination” to Lil’ Joe Records, informing the company that they would be taking back their master copyrights in the music.
Under US copyright law, the original owners of a copyrighted work (i.e., the authors) can take back their rights to a work after 35 years, provided that a majority of the original owners agree to do so.
The notice stated that Campbell, Mark Ross and the heirs of Christopher Wong Won would be taking back the master rights to 2 Live Crew’s first three albums, The 2 Live Crew Is What We Are, Move Somethin’, and As Nasty As We Wanna Be. The termination dates were set in 2022, 2023, and 2024, the 35th anniversaries, respectively, of the albums’ release dates.
However, Lil’ Joe Records objected to the termination and sued the 2 Live Crew members and their heirs in 2021.
Lil’ Joe said that its 1996 contract with Campbell and Luke Records gave it rights to the music “free and clear of any and all liens, claims, encumbrances, charges, setoffs or recoupments of any kind,” and that Campbell agreed to receive “no royalties, whether as artist, producer, writer, publisher, or in any other capacity, on any of the masters or compositions.”
The record label asserted that this meant that, in the bankruptcy sale, it had taken over the authors’ termination rights as well.
Li’ Joe made another argument as well: Its complaint said that Campbell had made himself an “employee” of his record label, and he “conveyed all rights to the copyrights at issue in favor of Luke Records as an employee for hire.” The other members of 2 Live Crew were also employees of the label, which meant that 2 Live Crew’s recordings were, therefore, “works for hire.”
Under US copyright law, the owner of the rights to a “work for hire” is whoever commissioned the work, not whoever carried it out. So Lil’ Joe Records essentially argued that 2 Live Crew’s members never owned the works, and therefore have no right to take back the copyrights on them.
Additionally, the label argued that, even if the 2 Live Crew members and their heirs had the right to take back their copyrights, they don’t have the majority needed to do it.
That’s because Mark Ross (now deceased) had agreed that he “has no rights (master or publishing) to any previous recordings owned by Lil’ Joe Records” as part of a bankruptcy case in 2000, and Christopher Wong Won (also deceased) settled a lawsuit in 2002 against Lil’ Joe Records by agreeing that Lil Joe and Weinberger “own all right, title and interest to all copyrights and trademarks previously conveyed to them in the bankruptcy of Luke Records and Luther Campbell.”
Lil Joe Records’ original complaint can be read in full here.
The 2 Live Crew members and heirs responded to the lawsuit by filing a countersuit of their own, in which they argued that the group’s music was not a work for hire; rather, the three group members had sold their existing rights in the music to Campbell and Luke Records, and 35 years later, they are legally entitled to exercise their termination rights.
They asked the court to declare “that they own relevant rights, had the ability to terminate the relevant transfers, and have effectively served notices of termination.”
Their countersuit can be read in full here.
The case brought forward two key issues that needed resolving: One, whether or not termination rights can be sold to a third party in a bankruptcy sale, and two, whether or not 2 Live Crew’s members were indeed employees of Campbell’s Luke Records, and therefore artists for hire.
TERMINATION RIGHTS CAN’T TRANSFERRED IN BANKRUPTCY, JUDGE RULES
The first of the two key questions was settled by Judge Darrin P. Gayles of the US District Court for the Southern District of Florida earlier this year.
The judge presiding over the 2 Live Crew case ruled that the right to terminate a copyright sale to a third party is a personal right, not a property right, and therefore can’t be transferred to a third party, even in a bankruptcy reorganization, as was the case with 2 Live Crew’s music.
In his ruling, which can be read in full here, Judge Gayles cited the Copyright Act, Section 203, which states that termination “may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant.”
“By enacting this provision, Congress expressed a federal interest in protecting the personal rights of authors to terminate a transfer or license,” Judge Gayles wrote.
He also cited the 1976 House of Representatives report that accompanied the change to copyright law that introduced the right to terminate a transfer of copyright.
A “provision of this sort is needed because of the unequal bargaining position of authors, resulting in part from the impossibility of determining a work’s value until it has been exploited,” the House report stated.
WHAT THE JURY MUST DECIDE: WAS 2 LIVE CREW’S MUSIC A ‘WORK FOR HIRE’?
With the issue of termination rights settled, that left one key issue for the jury to decide: Whether or not 2 Live Crew’s music was indeed a “work for hire.”
If the jury determines that it was, the issue of termination rights won’t matter, because 2 Live Crew’s members were never legally the creators of the music – Luke Records was, and as Judge Gayles determined, termination rights are conferred only on people.
No one is disputing that Lil Joe Records bought the rights to 2 Live Crew’s music, compositions, and trademark in 1996.
And no one is disputing that that the 1996 sale agreement “did not mention future termination rights,” or that “Wong Won, Ross, and Hobbs did not file claims asserting that they owned or were entitled to any rights… to any of the 2 Live Crew copyrights transferred to Lil’ Joe,” in Judge Gayles’ words.
What’s at issue is what had happened before that.
According to Campbell and the heirs of Ross and Wong Won, sometime between 1986 and 1989, the 2 Live Crew members made an oral agreement to sell their rights to the group’s music to Campbell and his Luke Records (which at that time was known as Skyywalker Records – something that changed when George Lucas sued the label).
This oral agreement was apparently set down on paper in 1990. It included not only the copyrights, but name and likeness rights, and merchandising rights as well.
However, “it isn’t clear from the face of the 1990 agreement whether the members of 2 Live Crew intended to assign their copyrights to Skyywalker Records or for Skyywalker to own them from inception as employers of the group,” copyright lawyer Aaron Moss wrote on his blog in an analysis of the case.
The wording of that deal does suggest something of an employer-employee relationship, in that it “gave Skyywalker Records the right to designate times and places for recording sessions, the right to require the members of 2 Live Crew to re-record material until a sound recording acceptable to the label was obtained, and the sole authority to approve the results of the group’s recording sessions,” Moss noted.
Nevertheless, Campbell and his heirs maintain that they weren’t employees of Skyywalker and/or Luke Records.
In sworn affidavits, they claimed that “the group made its own artistic choices and had the freedom to set its own schedule, that the record label had no right to assign additional projects, and that the label didn’t provide the members with any health insurance, paid vacation time or other benefits. All of these factors weigh against an employer-for-hire relationship,” Moss wrote.
For its part, Lil’ Joe Records relies on a different agreement for its argument: A 1991 deal the group members signed, which states that 2 Live Crew’s recordings are, indeed, works for hire.
The catch is that the 1991 deal states that “the term of this agreement shall be for a period of one year commencing on the date hereof.” In other words, the deal took effect only in 1991— well after the three albums whose copyrights Campbell and the heirs are trying to take back.
So even if 2 Live Crew were indeed employees working on “works for hire” from 1991 on, they may not have been when they recorded the earlier albums that are in dispute in this case.
To put it simply, there are a lot of facts here that don’t match up.
The dispute includes “the nature of parties’ business relationships and how the 2 Live Crew members were paid. The parties further dispute where the [2 Live Crew] albums were recorded and whether Luke Records paid for the studio sessions to record them, whether Luke Records could assign additional projects outside 2 Live Crew’s obligation to create the… albums, the length of the parties’ working relationship, and whether 2 Live Crew members had the freedom to create their own work and personal schedule,” Judge Gayles wrote.
“Due to this underlying factual dispute as to which agreement is the operative grant of the copyright ownership, there is also a dispute as to whether the termination notice is valid.”
Somehow, from all this, a jury will have to decide who’s in the right.
WHAT HAPPENS NEXT?
Day one of the jury trial featured Lil’ Joe Records owner Joseph Weinberger taking the stand.
According to a report at Law360, Weinberger told the jury that he’s certain 2 Live Crew’s members were employees of Luke Records in the early 1990s, because he was the label’s general counsel and Chief Financial Officer at the time.
In the days to come, we can expect that those on the opposing team will take the stand, arguing just as forcefully that 2 Live Crew weren’t employees of Luke Records.
All of this is made murkier by the fact that everyone involved is trying to recall things that happened more than three decades ago – and in the case of the heirs, things they may have been told years ago.
To support their case, Campbell and the heirs have introduced into evidence whatever documentation they could muster from those long-ago days – including, for example, various copyright registrations from the 1980s and 90s listing the individual members of 2 Live Crew as song authors.
Will any of this prove to be the evidence that convinces the jury? It seems that in this case, more than in many others, it could come down to who performs best on the stand – who the jury finds most convincing.Music Business Worldwide