Larry Heard and Robert Owens‘ lawsuit against Trax Records over unpaid royalties could largely be dismissed if a filing by the defense holds any weight. Richard Darke of Philadelphia law firm Duane Morris has argued that the alleged discrepancy at the root of the matter constitutes a misstatement of law not punishable as fraud.
With the help of Tap Music Publishing, Heard and Owens (of Mr. Fingers fame) filed the complaint in June – two months after Trax Records Founder Larry Sherman‘s death. According to 5 Magazine, they allege that Sherman falsely claimed they had transferred rights for several of their definitive releases to him when he registered with the U.S. Copyright Office. Because of that, they claim they haven’t received “a single accounting or payment from defendants for monies derived from the exploitations of [their] musical works.”
Rachael Cain, who now runs Trax, has asserted that Heard and Owens purposefully waited until after Sherman passed away “knowing that [he] was no longer able to defend himself.” The filing goes on to say that because the “Can You Feel It” producers admit to entering into written contracts with Sherman, the label owner had merely misstated the law in his dealings with them. Citing case law from decisions in G&G Closed Circuit Events, LLC v. Castillo and Sosa v. DIRECTV, Inc., among others, it asserts that misstatement of material fact must have taken place for the incident to constitute fraud.
If correct, the motion would dismiss seven of the eight counts of fraud raised in the suit. The defense also seeks to absolve Cain herself from responsibility as she was not yet involved with Trax at the time Heard and Owens’ songs were signed.
Having provided a platform for artists like Frankie Knuckles, Jesse Saunders, Marshall Jefferson and Phuture, Trax Records is widely regarded as the original Chicago house label. Among more informed dance music enthusiasts, its legacy is often overshadowed by Sherman’s alleged unsavory business practices. In the same month that Heard and Owens filed their complaint, for instance, a fundraiser was launched to offset royalties the label allegedly owes Chicago house artist Adonis for his 1985 single “No Way Back.”
Hearings for Larry Heard and Robert Owens’ lawsuit against Trax Records will proceed in US District Court for the Northern District of Illinois. More information on the filing is available via Law360.