TVT AWARDED $132 MIL IN IDJ SUIT

TVT’s Steve Gottlieb may well get a lot richer at the expense of Island Def Jam Music Group, though he’s not spending the money just yet.

An eight-person jury awarded the indie label $132 million in punitive and compensatory damages against IDJ, which was found liable for fraud "willful, vicarious and contributory" copyright infringement and wrongful interference with a recording contract.

But Gottlieb won’t get his hands on the cash until a lengthy appeals process that could take anywhere from two to five years.

Said Gottlieb: "I am obviously extremely pleased with today’s verdict. The significance of this verdict can only be fully understood if one were to read the transcripts of the court proceedings, which reveal the systematic pattern of wrongdoings by Def Jam executives.

"I see this verdict as vindication for independent businessmen in every field. The $108 million punitive award is a clear signal from the jury that corporate players in positions of overwhelming dominance will be held accountable for their misdeeds."

The decision came today after trial of a suit filed by TVT and Gottlieb against IDJ last August, seeking a reported $30 million in damages. The initial decision in TVT’s favor was rendered in March, with the amount of damages announced today.

The dispute revolves around TVT’s claim that IDJ interfered with a contract the label had with Murder Inc.’s Irv Gotti and Ja Rule to produce an album by Cash Murda (or Money) Click. Rule’s original group was signed to Gottlieb’s label in 1994, where Gotti was an A&R exec at the time. After initially agreeing to let TVT release the album, IDJ pushed back the date from its planned November 2002 release to complete a new record from Ja Rule, then used several of the tracks intended for the album on a DVD and compilation disc (see hitsdailydouble.com, 3/24).

The breakdown of the award includes $52 million in punitive damages and $24 million in compensatory damages against IDJ and $56 million in punitive damages against IDJ’s CEO Lyor Cohen, $14 million of which was ruled TVT’s lost revenue on the unreleased album.

IDJ legal rep Matthew Dontzin said: "We are disappointed with the jury’s verdict. We do not believe that it is supported by the facts or the law. We will immediately and vigorously appeal the verdict."

TVT’s trial lawyer, Peter Haviland of Akin, Gump, Strauss, Hauer & Feld LLP,
commented: "Justice was done. I hope the world’s largest record company has heard this
message. Def Jam and Lyor Cohen have been bullies for far too long. They finally got caught. Unless there are some radical changes over there, I doubt this will be the last time they are punished by a jury."

Prominent litigators feel the judgment is exorbitant and will ultimately be reduced. Will the indie label be allowed to borrow money against this award? The N.Y. Post reports the company is in dire financial straits and looking for buyers.

Most observers believe that Universal will stand behind Cohen and relieve him of personal liability in the decision, believing he was acting on behalf of the company in his dealings with TVT.