Island Def Jam Music Group and its former exec Lyor Cohen are no longer on the hook to TVT Records after an appeals court reversed an earlier ruling that found IDJ financially responsible for a failed joint venture involving producer Irv Gotti and rapper Ja Rule.
The Second Circuit U.S. Court of Appeals ruled Tuesday that there was insufficient evidence backing TVT’s claims of fraud, that the record label was not entitled to a copyright claim and that punitive damages were not recoverable.
A New York jury had awarded TVT $25 million in compensatory and $107 million in punitive damages, which the court remitted to $54 million. Case involved a contractual dispute between Universal Music’s IDJ and TVT over the rights to Cash Money Click, an unknown rap group with Ja Rule as one of its members.
In 1994 Cash Money Click signed with TVT, where Gotti was working. He left in 1996 for IDJ, and two years later, Ja Rule signed with IDJ. CMC never made a record. Gotti and IDJ formed a joint venture, Murder Inc., in 1999.
In early 2001, Cohen gave the thumbs up to a CMC project that Gotti would produce for TVT, which would own the master recordings and receive 50% of the profits. After further negotiations, they were given 40%.
TVT argued that IDJ allowed the recordings to smooth over Cohen’s attempt to resign Gotti and once that was accomplished, IDJ sabotaged efforts to promote the CMC disc. The jury found IDJ liable for breach of contract, fraudulent concealment and copyright infringement.
IDJ did not appeal the breach of contract award and remains liable for $126,720 in compensatory damages awarded to TVT.