Bit Parts

The U.S. District Court for the Northern District of California allowed an open book account claim by recording artists to proceed in class actions alleging agreements that the artists' record labels enter into with digital retailers are licenses, rather than normal retail channel sales that would yield the artists lower royalties. James v. UMG Recordings Inc., 11-01613. An open book account significantly extends the time within which the artists can go to back to recover royalties. In the suits by the estate of Rick James and such artists as Rob Zombie and Dave Mason, District Judge Susan Illston noted that UMG “contends that open book accounts cannot exist where they are balanced and 'closed' at various intervals, such as here where royalties were determined and paid out generally every six months. ' [But a]s neither side disputes that royalty payments to plaintiffs are ongoing, the Court cannot find that the accounts are 'closed' by virtue of the interval royalty payments.”