TVT Beats Island Def Jam in Court

Manhattan civil court jury awards indie label TVT $132 million in damages against the Island Def Jam Music Group and Lyor Cohen, its chairman and chief executive:

[The award] followed a federal trial that ended in March, when Mr. Cohen and his company, a large and profitable record label, were found liable for copyright infringement, breach of contract and fraud against the independent label, TVT Records, which is based in New York, court records show.

TVT officials sued Mr. Cohen and Island Def Jam, a unit of Vivendi Universal, last year in Federal District Court, asserting that Mr. Cohen tried in 2002 to prevent the release of an album by the relatively unknown hip-hop group Cash Money Click. Steven Gottlieb, the founder of TVT, accused Mr. Cohen of blocking the release because a group member, Ja Rule, had become a huge star for Def Jam since the album was recorded.

The federal jury also found that Island Def Jam tried to block TVT’s contract with Ja Rule to appear on the album. TVT Records sought $360 million in punitive damages and $30 million in compensatory damages, officials said. But the breakdown of the award given yesterday was about $108 million for punitive damages and $24 million for compensatory damages. Mr. Cohen must pay a $52 million share of the punitive damages, and he and Island Def Jam are jointly responsible for the compensatory damages.

….The verdict is the latest blow to Def Jam. Federal investigators are looking into one of its most popular hip-hop labels, Murder Inc., for possible links to a Queens drug dealer, Kenneth McGriff. Investigators are trying to determine if Mr. McGriff used his drug profits to help his childhood friend, Irv Gotti, start Murder Inc. [NY Times]

This is TVT’s biggest hit since Nine Inch Nails, and just another in an endless example of major labels using whatever tactics necessary to block competition. I like the part about personal liability for Cohen.