Suit is the latest in a series of actions over digital royalties

A third major label group has been drawn into the fray over digital royalties, as Sister Sledge and Ronee Blakely have sued Warner Music Group, alleging they were shortchanged on payments.

The class action, field Feb. 2 in federal court in San Francisco, succeeds similar suits lodged last year against Universal Music Group by the Rick James estate, Rob Zombie, Dave Mason, Chuck D of Public Enemy and Peter Frampton, and against EMI Music’s Capitol Records by the estate of Knack drummer Bruce Gary (Daily Variety, Dec. 27).

The new suit contends that WMG violated royalty provisions of Sister Sledge’s and Blakely’s contract “in a wide-spread and calculated manner” by paying royalties on music downloads and ringtones calculated on the basis of sales, rather than licenses, which pay a much higher rate.

Like most of the other pending suits, the action specifically cites an appellate court decision in F.B.T. Productions’ suit against UMG and Aftermath Records.

That decision found that F.B.T., which produced Eminem’s earliest recordings, was entitled to much higher digital royalties based on rates for masters licensed to third parties (Daily Variety, Sept. 7, 2010).

Sister Sledge – siblings Debra and Joan Sledge, Kathy Sledge Lightfoot and Kim Sledge Allen – cut 19 R&B hits for the Atco, Atlantic and Cotillion labels, most notably the 1979 crossover smash “We Are Family.”

Singer-actress Blakely, who received an Oscar nomination as best supporting actress for her role in Robert Altman’s 1975 feature “Nashville,” was signed to Warner Bros. Records in 1975 and recorded the album “Welcome” for the label. She subsequently toured with Bob Dylan’s Rolling Thunder Revue.

According to the action, Sister Sledge was contractually entitled to 25% of net receipts for licensed recordings, while Blakely was entitled to 50% of the net. The Sledges’ contract specified a rate of 5-1/2% to 6-1/2% of net on sales over the course of three 1975-78 option periods; Blakely was to be paid 9% to 11% on sales over three option periods.

“Just as UMG in (the F.B.T. case), Warner has not properly accounted for the appropriate amount of royalties owed to plaintiffs and class members,” the suit alleges.

Suit seeks an accounting and an award of compensatory, exemplary and/or statutory damages to be proven at trial.

A WMG spokesman had no comment.

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