Music fans in Texas and around the country may be familiar with the 1990s rhythm and blues band Dru Hill. The Baltimore-based group's Top-40 hits include 'Never Make a Promise", 'How Deep is Your Love" and 'In My Bed", but the quartet's foray into civil litigation has not been as successful as their music. The band filed a lawsuit over unpaid royalties against Sony and EMI in 2015, but a federal judge in New York dismissed the case on Feb. 24.
The band says that they entered into an agreement with Red Music Publishing in 1996. The company subsequently entered into an agreement with EMI, which was acquired by Sony in 2012. The case revolves around $600,000 in Dru Hill royalties allegedly paid by EMI to 27 Red Music. The group filed an amended breach of contract lawsuit against Sony in June 2016, and it was this complaint that was dismissed in New York.
The judge involved said that the band's claim would not have been plausible even if the allegations contained in the complaint could be taken at face value. She also determined that any implied contract between the parties involved would have fallen afoul of New York law that renders unwritten agreements unenforceable when they cannot be completed within one year of their creation. A separate action against 27 Red Music was not resolved by the decision.
This case shows how complex contract disputes can become when the defendants are involved in a merger or acquisition. Attorneys with experience in this area may seek to avoid such disputes by ensuring that agreements are clear and that all of the parties involved understand their obligations. Attorneys may also urge their clients to consider settling out of court to avoid costly litigation.