The class action suit, filed in the U.S. Disctrict Court in Northern Calif. on Tuesday (Nov. 1), accuses UMG of failing to provide proper accounting for digital royalties, alleging that the label has cheated its artists "hundreds of millions of dollars in royalties" owed on digital downloads and ringtones.
UMG recently lost a similar suit to Eminem's former producers FBT Productions, also known as the Bass Brothers, when the Supreme Court upheld a ruling granting them a 50% royalty rate for digital downloads and ringtones. UMG had previously been paying out 18%, making deductions for packaging, which is only utilized in physical product.
Despite the ruling in the FBT case, a spokesperson for UMG has denounced Chuck D's suit, claiming that his claims are without base.
"This complaint suffers from serious flaws and weaknesses, not the least of which is that the claims asserted are not appropriate for class treatment," a rep for UMG told TheWrap in a statement. "We will vigorously defend against it."
Chuck D is demanding a trial by jury.
The estate of deceased singer Rick James is currently involved in a similar suit against UMG, which the label has unsuccessfully attempted to have dismissed.