A federal judge is refusing to wade into whether Jay-Z can use copyright termination to retake control of the rights to his debut album Reasonable Doubt — meaning that the complex issue won’t be resolved before a court-ordered auction of Damon Dash’s one-third stake in the company that owns the album.
The judge had been asked to decide that tricky question because of allegations that Jay-Z was using “false” threats of a looming termination to drive down the auction price for Dash’s stake in Roc-A-Fella Records Inc., which controls the rights to the famous album.
But in a ruling Monday (Sept. 30), Judge Robert W. Lehrburger flatly refused to do so — saying he had no legal power to add complicated questions of copyright law to the already-messy fight over Dash’s stake.
“The asset that is the subject of the auction is Dash’s one-third interest in RAF [Roc-A-Fella] itself, not the work owned by RAF,” the judge wrote. “The Court does not presently have jurisdiction over the validity of Carter’s copyright termination notice.”
As early as next month, the U.S. Marshals Service will sell off Dash’s 33.3% interest in Roc-A-Fella Inc., an entity whose only real asset is the sound recording copyright to Reasonable Doubt. The rest of the storied label, which Dash co-founded with Jay-Z in 1994, is not involved.
Though the court-ordered auction was originally intended to pay off an $823,000 judgment in a civil lawsuit, it has since expanded to include other Dash creditors. New York City’s child services agency wants some of the proceeds to go toward more than $193,000 that Dash owes in unpaid child support; New York state says they must pay down roughly $8.7 million that Dash owes in back taxes and penalties.
The owners of the other two-thirds of Roc-A-Fella — label co-founders Jay-Z (Shawn Carter) and Kareem “Biggs” Burke — have already attempted to stop the auction, including making changes to the company’s bylaws and intervening in the lawsuit. But a federal judge rejected such opposition in February, and the sale could take place as early as this month.
As the auction has approached, one major unresolved question for any potential buyer is just how long Roc-A-Fella will continue to own its only real valuable asset.
The so-called termination right, a provision created by Congress in the 1970s, empowers authors to reclaim ownership of copyrighted works decades after they sold them away. If Jay-Z is eligible for it, termination would allow him to take back the rights to his sound recording of Reasonable Doubt roughly 35 years after he released the album, meaning 2031. That would set a clear time limit on the amount of revenue a Roc-A-Fella buyer would derive from their investment.
But last month, attorneys for New York City filed court papers arguing that Jay-Z was not, in fact, eligible for termination — and that he and others were using “false” threats of an approaching termination to drive down the price of Dash’s stake in his company.
“Jay-Z’s statements to the press have poisoned the environment for the auction,” wrote Gerald Singleton, an attorney for the city, asking the judge to halt the auction and issue a ruling on whether or not Jay-Z could use termination to win back control of Reasonable Doubt.
Days later, Jay-Z lawyer Alex Spiro responded that there was “no merit to NYC’s accusations,” and that the Dash case was not the proper place to decide Jay-Z’s rights to the album: “Put simply, this is not the appropriate time, forum, or case to litigate any issues relating to Jay-Z’s notice of termination.”
In Monday’s ruling, Judge Lehrburger agreed with Spiro and Jay-Z: “[NYC]’s motion to stay the auction for purposes of having this court determine the validity of the copyright termination notice filed by Shawn Carter a/k/a Jay-Z in connection with the work Reasonable Doubt, an asset owned by RAF, is denied.”
The judge also rejected New York City’s attempt to conduct discovery into Roc-A-Fella’s holdings, saying that kind of investigation was also beyond the scope of the current litigation. An attorney for the city declined to comment on the order.
The auction is currently scheduled for Oct. 21, but it has been postponed multiple times and could be delayed again. A minimum purchase price has been set at $3 million.
