Judge Cuts Record Company’s Award

A federal judge slashed an independent record company’s damages award against Vivendi Universal Inc.’s Island Def Jam record label and a top executive, but condemned their conduct as “egregious misdeeds.”

U.S. District Judge Victor Marrero ordered Island Def Jam and its chairman, Lyor Cohen, to pay $53 million to independent TVT Records, cutting a jury-imposed verdict by more than half. Jurors had hit the label and Cohen with $132 million in damages after finding them liable for reneging on a deal that would have allowed TVT to release a potentially lucrative album featuring rap star Ja Rule.

But Marrero sided with lawyers for Def Jam and Cohen, who argued that the huge award -- one of the biggest against an entertainment company -- exceeded the effect of the company’s wrongdoing. Def Jam must post a bond covering the damages in order to appeal and is expected to cover Cohen’s share of the costs, sources said.

The remaining judgment includes $24 million in compensatory damages imposed jointly against Def Jam and Cohen, $26 million in punitive damages against Def Jam and $3 million against Cohen personally. The initial award included $56 million in punitive damages against the executive.

Matthew Dontzin, an attorney for Cohen, said, “We of course take satisfaction in the court’s decision today to massively reduce the judgment against Lyor Cohen.... Nonetheless we remain convinced that the balance of the judgment cannot withstand review by the Court of Appeals.”

But Peter Haviland, an attorney for TVT, said the judge’s order affirms his client’s verdict.

“What the judge has done has given us a $53-million judgment that’s pretty bulletproof on appeal,” Haviland said. It’s “still a big number.” The judge also ordered the defendants to pay interest on the award from March, and is expected to award TVT the cost of its attorneys’ fees.

“Def Jam and Cohen must now post bond for [the judgment] within 10 days,” TVT said in a statement, “and Vivendi Universal investors must decide if this is an appropriate use of Vivendi resources.”