Big Money Claim Slips Away On Summary Judgment

To understand this case, you need to first consider a summary judgment ruling on February 26th from U.S. District Judge Michelle Williams Court that knocked out the biggest claim of the case.

Due to a flaw in the transfer of rights, the court found the plaintiff lacked standing to sue Ye for a much bigger payday than the jury handed down last week.

It’s important to understand that the plaintiff is not comprised of the musicians who created the music at issue. Rather, the plaintiff is an entity called Artist Revenue Advocates, LLC (ARA), which Martorell said his research indicates may have been funded by a Texas-based private equity company. ARA subsequently bought rights from the musicians and then sought to make a killing in the case against Ye, in what a spokesperson for his company Yeezy LLC called a “failed shakedown.”

Irene Lee, the plaintiff’s attorney, declined to comment for this article. But the complaint, drafted by another law firm that preceded Lee, states: “For nearly three years, Artists unsuccessfully attempted to collect their share of the proceeds from these songs. Unable to do so, and with nowhere left to turn, the Artists assigned their rights to ARA, which now brings this suit to collect their fair share of the profits."

The problem for ARA was that they didn’t properly assign those rights. More on that later.

Cozy “Listening Party” For 42,000 Fans

In a nutshell, the case involves Ye’s admitted use of the recording “MSD PT2” in a demo recording played to a sold-out “listening party” at Mercedes Benz Stadium in Atlanta in 2021.

While a normal listening party might take place in a cozy recording studio with a select group of guests, this one went big. If it had stayed small, it likely would not have drawn a lawsuit. Yet Ye apparently can’t think small.

“Ye is a very successful musician and therefore he had a listening party with 40,000 people, that’s true," Martorell says, "but he was only playing a demo. But it’s just that he has orders of magnitude more attention on his draft works, on his demo versions of his music, and that’s what this case was really all about: playing a demo for people at a listening party.”

While the complaint describes four public "listening parties" at packed stadiums in Atlanta, Chicago and New Orleans, ARA only presented evidence that the recording with “MSD PT2” in it was only played at one of them and only one time along with 14 other songs to be included on the upcoming Donda album, Martorell said.

The four musicians who created the track – Khalil Abdul-Rahman (DJ Khalil), Sam Barsh, Dan Seeff and Josh Mease – were unable to reach a written agreement with Ye for his use of their song, Martorell said. So Ye pulled their recording from the mix and, according to the plaintiff, created a final version with other musicians playing the same chord progression.

The four musicians claimed songwriting credit on the final version of Hurricane with their performing rights societies, which collect and pay out songwriter and publishing royalties.

“Ye did not object to that action [by the songwriters]” Martorell said. “And the four musicians received royalties on the song until the lawsuit was filed, which created a legal hold (though the royalties continue to accrue in their favor).”

Ye also “argued co-authorship applied” to the final version, Martorell says, adding that such co-authorship would bar a copyright infringement claim. He says that will be an issue on appeal.

That final version, where Ye is joined by The Weeknd and Lil Baby, went on to win a Grammy in the “Best Melodic Rap Performance” category in 2022.

Last week’s jury award is modest considering ARA’s claim in its complaint that Ye “earned approximately $14 million from inperson merchandise sales during the [listening] events at Mercedes-Benz Stadium,” and that Apple live streamed the event to 5.4 million viewers, “setting a new record to become Apple’s largest live stream.”

Both parties are likely to appeal, with ARA seeking a better return on its investment if it can reverse Judge Court’s ruling that threw out the composition claim involving the Grammy-released version of the song.

Judge Court left ARA only with the smaller “listening party” claim to try to a jury, because of a licensing glitch. She found that a publishing administrator, Pen Music, failed to assign in writing the copyrights to ARA, a necessary step to bringing suit.

A verbal agreement was not enough, Judge Court held. It had to be in writing.

In her summary judgment ruling on February 26, 2026, Judge Court wrote "Because federal law prohibits the oral transfer of a copyright, Plaintiff does not have a stake in the musical composition of MSD PT2. … Since there is no writing showing that Plaintiff received the copyrights to the musical composition of MSD PT2, Plaintiff has no ownership of that musical composition. Without ownership of the relevant copyright, Plaintiff lacks standing to sue.”

A Dance Of Negotiation Gets Tripped Up

Before that summary judgment ruling, at the outset of the case, ARA was highly aggressive, which is par for the course in cases like this against a superstar.

"They weren’t just after music royalties from the alleged infringement, but they were trying to jump into Ye’s apparel business, ticket revenues, basically it was like a 360 deal that they would have never in practice been able to negotiate, and which the US Copyright Act doesn’t justify,” said Martorell.

A 360 deal is a multiple-rights agreement in which a record label participates in all of an artist’s entertainment revenue streams, rather than only from music sales, licensing and streaming.

This is just the kind of deal that Ye railed against in 2020, when he tweeted out over 100 pages of his confidential recording contracts with Universal Music Group, stating that he wanted to warn others of how major labels can lock talent into complex, multi-album webs that are hard, if not impossible, to escape.

At that time, he called the music industry a “modern day slave ship,” perhaps in a nod to Prince, who famously painted the word “SLAVE” on his face during a public battle with Warner Music Group in the 1990s.

While Ye apparently cast ARA and its investors in the same light as label executives he has publicly castigated, he was interested in discussing settlement, Martorell said. “Obviously we wanted to know how much to just make it go away."

But ARA and Ye were too far apart.

Although an appeal has not yet been filed, one of the issues will likely be whether the four musicians granted Ye an implied license to use their music, Martorell said, adding that at the same time Ye does not concede that their music, a fairly basic chord progression, even requires a license. This latter issue was at the heart of recent copyright cases where juries found for defendants Ed Sheeran ("Thinking Out Loud"), Led Zeppelin ("Stairway to Heaven") and others.

How Many Songwriters Does It Take?

"Ye is very honest and fair with musicians,” Martorell claims, noting that his client credited the four songwriters, along with almost two dozen others, for a total of 27 songwriters, on the Grammy-winning song.

And then Ye curiously also credited DJ Khalil as a producer on the final version, even though the “MSD PT2’" recording (although not the chord progression) was removed from the mix.

Typically, the creators of a composition split shares of a song either per capita or based on a 50-50 split between the group of musicians, on the one hand, and the lyricist (or rapper) on the other.

Yet Ye added 22 songwriters besides the four musicians on MSD PT2 and himself, which is curious as the chord progression is fairly simple. In any event, 27 songwriters, even in today’s era of collaborator bloat in pop and rap hit-writing, seems remarkable.

Gone are the days of “Bohemian Rhapsody” with only one writer: Freddie Mercury.

Hear more from Martorell in conversation with the author on the Shmoozic Biz podcast.