Trax Records is seeking to dismiss the majority of the lawsuit brought by Larry Heard and Robert Owens alleging copyright infringement over the last four decades, according to court filings in the case.

Trax Records’ latest response to Heard and Owens’ lawsuit against Trax (originally filed in June 2020) says that “for over 34 years, Mssrs. Heard and Owens did not contest the validity of Trax Records’ copyright, sue for allegedly unpaid royalties or raise any other claims in Court.” Trax, now headed by Rachael Cain, alleges that Heard and Owens only brought the claim after founder Larry Sherman’s death “knowing that Mr. Sherman was no longer able to defend himself.”

The filing was made on behalf of Cain, Trax Records, Inc and Precision/Trax by attorney Richard Darke of Duane Morris.

Larry Heard and Robert Owens, formerly of Fingers, Inc., allege that Sherman and Trax Records committed fraud on the copyright office by falsely claiming that Heard and Owens had transferred rights to Trax for several of their groundbreaking songs. They alleged they had not received “a single accounting or payment from defendants for monies derived from the exploitations of [their] musical works” — an astonishing omission for several of the most popular house music tracks ever made.

In its argument to dismiss the fraud claim, Trax says that the facts behind the documents signed by Heard and Owens with Sherman represent “an alleged misstatement of law” which is not actionable as fraud:

Here, the Plaintiffs admit entering into written agreements with Trax Records that transferred or assigned specific rights to the Sound Recordings and Compositions. Whether the agreements assign or transfer rights in the Sound Recordings to Trax – which representations forms the basis of this claim — constitutes an alleged misstatement of law, not of statement of material fact, which is required to state a claim for fraud on the copyright office. G&G Closed Circuit Events, LLC v. Castillo, 327 F. Supp. 3d 1119, 1136 (N.D. Ill. 2018) (“It is well established … that misrepresentations of the law are not actionable as fraud, including under the mail and wire fraud statutes, because statements of the law are considered merely opinions and may not be relied upon absent special circumstances.” (quoting Sosa v. DIRECTV, Inc., 437 F.3d 923, 940 (9th Cir. 2006)); Vickers v. Henry County Savings & Loan Asso., 827 F.2d 228, 232 (7th Cir. 1987) (dismissing fraud claim because representations of the legal effect of a written agreement not actionable). Because the interpretation of the effect of the agreements at issue constitutes a statement of law, not fact, the Court should dismiss Count I.

 

Altogether, the filing seeks to dismiss seven of the eight counts raised in Heard & Owens’ complaint. The filing also seeks to separate Cain from the alleged behavior by Trax Records, arguing that she was not in any position of authority at the company in the 1980s when the alleged fraud took place. It does grant that she would “eventually marry Sherman and become his business partner” and “revived the Trax Record label in 2006.” The lawsuit also mentions (for some reason) that Cain has been “dubbed the ‘Queen of House Music.'”

Heard & Owens vs. Trax, et. al. is being heard by the Honorable Judge Sharon J. Coleman in the US District Court for the Northern District of Illinois. Law360.com was the first to report on the latest filing.

Artwork from Another Side, the Fingers Inc album released by Jack Trax (no relation).

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