What happens if you go to a recording studio, leave your master tapes there, and then, several weeks or months later, you return only to find that the studio says that they do not have the master tapes? Is the studio liable? And, if so, for how much?

In a recent case I was involved in an artist claimed that a recording studio had lost its master tapes and the damages were alleged to be $10,000,000 (because the artist said that the lost recordings would have been hit records).

The artist in this case had been re-mixing several songs and claimed that it had left its masters with the studio between sessions. The studio had a policy of permitting artists to store their tapes at the studio between sessions but had no record of having kept this particular artist's master tape. In fact, since this particular artist had started its recordings at another studio the studio manager had a specific recollection that the artist brought the tape to the studio and took it home after each session. The artist claimed that, in addition to having spent tens of thousands of dollars on the prior recording sessions, even though they had only spent about $500 at the studio remixing the loss of expected revenues from record sales would have been upwards of $10,000,000.

Notwithstanding the speculative damages issue as it pertains to expected but unknown record sales, the legal answer is that under the law of most states when there is a "gratuitous bailment" (although the studio charged by the hour for studio time it did not specifically charge for tape storage), the bailee (the artist) must prove "gross negligence" or intentional conversion by the bailor (the studio) in order to recover any damages.

If a studio has just a few simple procedures such as a log book to record when tapes were checked in and checked out and a locked storage room to hold stored tapes, the issue of gross negligence becomes a very difficult threshold for the artist to clear. Since the studio in my case had these simple safeguards in place and the evidence showed that the missing master tape did not appear in the log and was not found in the storage room, the judge granted a directed verdict in favor of the plaintiff studio. The studio was not liable for the master tapes left behind and the court denied the artist any compensation.

Wallace Collins is an entertainment lawyer . He was a recording artist for Epic Records before attending Fordham Law School. 

Specializing in Entertainment Law & Intellectual Property Matters

Wallace E. J. Collins III, Esq.
250 East 39th St. (Suite 9K)
New York, New York 10016
Tel: 212 661-3656

Email: Wallace Collins

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