Court preserves Tidal user’s case against rap innovator

808s and Complaints

Protean and unpredictable, hip-hop legend Kanye West’s endless parade of artistic triumph and personal controversy doesn’t need to be rehashed for anyone’s benefit – he’s occupied center stage in American culture for several times longer than the average entertainer’s career.

His legal travails are less well-known, but are still spectacular in their own right: He was, for instance, once sued for copyright infringement by motorcycle stunt star “Evel” Knievel; in his “Touch the Sky” video, West dressed in a gaudy American flag throwback jumpsuit inspired by Knievel and rode a rocket over the Grand Canyon. But even his more pedestrian legal battles have flair.

Never Say Never Never Never

Consider a recent class action filed by Justin Baker-Rhett in the Northern District of California in April 2016. Baker-Rhett accused West and frequent collaborator Jay-Z’s Tidal music service of false advertising and unfair competition under California law, fraudulent inducement, and unjust enrichment. The case was moved only three months later to New York’s Southern District, where the charges were changed to violations of New York’s deceptive practices and false advertising laws and fraudulent inducement.

At the heart of the complaint was the Tidal service, which, shortly after its acquisition by Jay-Z in 2014, was hyped as a new “artist owned” streaming service featuring exclusive content from a coterie of huge names: Beyoncé, of course, and West – but also Madonna, Rihanna, Coldplay and Alicia Keys, among others. These artists all received a stake in the company in exchange for their exclusive engagement.

But Tidal didn’t catch fire and faced severe financial difficulties shortly after its launch. Enter West’s 2016 release of The Life of Pablo, eagerly anticipated by his fans (including his 22 million Twitter followers). According to the complaint, both Tidal and West promoted the album on Twitter, hoping it would revitalize the service; West even claimed that his new album would only be available on Tidal. “My album will never never never be on Apple,” he tweeted in February 2016. “And it will never be for sale …. You can only get it on Tidal.”

According to the complaint, The Life of Pablo streamed 250 million times in the first 10 days after its launch. Tidal subscriptions grew from 1 million to 3 million.

But within a month and a half of its release, Baker-Rhett alleged, West offered the album on his own website and on streaming services Spotify and – wait for it – Apple’s iTunes. This arrangement, he contended, was an intentionally fraudulent inducement for new subscriptions, the value of which he estimated to total between $60 billion and $84 billion. West and Tidal moved to dismiss the case in July 2017.

In June 2018, the district court threw a lifeline to Baker-Rhett’s class action by disposing of, in part, a motion to dismiss by West and Tidal. The court determined that Baker-Rhett did not have standing to sue under New York state law because “the alleged deceptive transaction involving [him] did not have a sufficient nexus” to the state. The result of this was that some New York state consumer law claims would be dismissed.

The fraudulent inducement charge remained standing, however. The judge found that the tweet in question, at least at the pleadings stage, showed sufficiently that West’s promise that the album would never be available off Tidal was incorrect. West argued in the motion that the tweet in question was “true when it was made.” The court had little patience for this argument. “The Life of Pablo was released on Apple Music just a month and a half later. How, then, was the statement true?” The court brushed aside West’s insistence that new mixes or versions of the album were exempt from the original “never never never” promise.

The Takeaway

The case is another example of how a personality and the company they represent are liable for statements on personal social media accounts. The court here allowed Tidal to be part of the suit because the plaintiff sufficiently alleged that West is Tidal’s agent and acting on its behalf.