04/09/03: Dead Kennedys Fact Sheet

Statement of Facts

Alerted to discrepancies in accounting practices by a then current employee at Alternative Tentacles (AT) in the late Summer of 1998, the Dead Kennedys (DKs) requested to see the AT books for a full accounting of their recorded catalogue as handled by AT. The lawsuit was a last resort by the three members of the Dead Kennedys (East Bay Ray, Klaus Flouride and D.H. Peligro). They saw no other recourse to resolving the stonewalling tactics of Jello Biafra to prevent the other three members access to accounting practices at AT.

Before the lawsuit was filed, the band - Ray, Klaus and D.H - repeatedly asked that Jello meet to discuss the royalty discrepancy and general accounting practices dating from as early as 1988 onward to 1998. Jello refused to meet with his former band members.

A band meeting was called in September 1998 to decide what course of action could/should is taken. Leaving AT was a last and unthinkable resort as Alternative Tentacles was essentially the Dead Kennedys. The band gave Jello two weeks notice before the meeting and offered him six alternative dates. As one-fourth of the DKs partnership the other three members desired him to be present at the meeting. Jello did not attend the meeting and the remaining members voted to sever ties with the label that was ironically a label they created.

History of DKs relationship with Alternative Tentacles

The DKs formed in San Francisco in 1978 when Ray placed an ad in a music paper that vocalist Biafra responded to. Bassist Klaus and drummer Ted joined them. D.H. replaced Ted at the end of 1980. Their first gig was at the Mabuhay Gardens in July 1978.

In 1979, the DKs first used the name Alternative Tentacles as their record label to release their first recording, “California Uber Alles” / “Man with the Dogs.” The band owns the label with the income being split equally 4 ways.

In July 1981, the four members of the Dead Kennedys formally organize as Decay Music, a California general partnership, to handle Dead Kennedys’ licensing and business endeavors. The partnership is comprised of Jello Biafra, East Bay Ray, Klaus Flouride and DH Peligro. The four-band members vote upon business conducted on behalf of the Dead Kennedys and Decay Music. Decay exists and continues to this day as Dead Kennedys’ sole and exclusive business entity.

1983, AT is formally organized as an independent record label with distribution by Mordam Records.

From 1982 to 1986, AT was jointly administered by Jello Biafra and East Bay Ray to the benefit of all four members as well as the other bands on the label.

From 1982 to 1986, Ray was responsible for the financial and business administration of the label. As such, Ray set up the financial and business terms under which Dead Kennedys material was distributed by AT.

In late 1983, Biafra brings in Richard F. Stott, a close friend, to advise the band and act as the band’s attorney. Stott and Biafra did not inform Ray, Klaus and D.H. that Stott was also Biafra’s personal attorney.

In Jan. 1986 the DK’s decide to stop performing live. Their final studio album, Bedtime for Democracy is released Nov 1986.

Also in early 1986, ownership of AT was transferred from the band to Biafra individually. Biafra agreed to continue the relationship with AT and DKs. Previous to this, Ray had previously administered the relationship.

1988, DK’s catalog is released on CD’s.

Jan 1996, AT raises the wholesale price it receives on CD’s.

Dec 1997 - a meeting was held about AT having raised the wholesale price but not sharing any of the increased income with the artists on the label as required by the original agreement. At the meeting were band members Jello Biafra, East Bay Ray and Klaus Flouride along with the former general manager of AT, Greg Werckman, the then current label manager Kristin Von Till, and attorney Richard Stott. Nothing results from the meeting. In late summer of 1998, the band was alerted by then general manager of AT (Kristin Von Till) to years of deliberate accounting discrepancies within the DK catalogue. The new issue was that Alternative Tentacles had been deliberately underpaying DKs’ royalties by calculating them at a lesser rate per CD than other artists on the label. This was a violation of the original agreement for the DKs to receive the same as the other artists on the label (most-favored-nation status). . Jello knew about this discrepancy, and deliberately did not inform the other three members of the band that DKs royalties were being underpaid.

September 30, 1998 - a band meeting was held after Biafra denied he was underpaying Dead Kennedys. Ray, Klaus and D.H voted to officially sever ties with AT. Biafra still refused to pay any amount owed to the band members without a court order.

On October 29, 1998 Decay Music and three band members - East Bay Ray, Klaus Flouride and DH Peligro filed suit in the Superior Court of the State of California for the city and county of San Francisco against Jello Biafra and Alternative Tentacles Records.

The complaint sought a declaration that the license agreement between Decay Music and AT had been terminated; that the rights to the band’s intellectual property were exclusively with the Decay Music partnership; and that partnership matters were subject to majority vote. The complaint also sought compensatory and punitive damages against Biafra relating to his breaches of contractual and fiduciary duties to the Decay Music partnership and the other partners as well as an injunction prohibiting Biafra from exploiting DEAD KENNEDYS intellectual property without majority consent.

The case was tried in May 2000 over a three-week period.

Five issues addressed in the lawsuit were:
1. Most Favored Nation status - The DK catalogue had from the beginning “most favored nation” status which meant that royalty rates received by DKs from AT would always be at least as high as the highest royalty rates paid by AT to any other act. This was in recognition by AT that DK recordings historically account for 50% to 80% of AT total sales.
2. That Biafra and AT committed fraud by hiding the fact that DKs were NOT being treated on a “most favored nation” basis.
3. Statutory Mechanical Royalty Rates - While Ray was running the label, Ray used the rates dictated by Congress to determine mechanical royalty rates paid by AT to songwriters whose songs were recorded by AT artists.
4 Wholesale prices of the albums - DK catalogue was essentially assured that should wholesale prices charged by AT to its distributors increase, DK royalties would be calculated on the bases of that increased price.
5. Promotional efforts - AT guaranteed that DK recordings would receive promotion relative to its sales the same as the other bands.

May 19, 2000, the jury returned Special Verdicts in favor of Dead Kennedys, Decay Music, Ray, Klaus and DH. The verdict stated that:
1. Biafra breached his fiduciary duties to his partners in regard to the five issues listed above and committed fraud against his partners. Decay Music was awarded $179,284 in compensatory damages. Biafra was also guilty of “malice, oppression and fraud” and was found liable for additional $20,000 punitive damages to his partners.
2. The jury also found that: a) Decay Music partners agreed in writing that Decay Music owned the rights to the band’s creative works. b) The band did not have to operate on the basis of unanimous consent, that is, the band functioned by majority vote. c) Biafra received reasonable notice of the September 30, 1998 of the Decay Music partnership meeting, at which the partnership voted to terminate its license agreement with AT.
More than the number of jurors required by law agreed on these verdicts. The law requires a minimum of 9 out of 12 for civil cases. That is Biafra only had to convince 4 out if 12 to prevail, but didn’t.

On November 20, 2000 the court entered its Statement of Decision upholding the jury’s findings and entered Judgment against Biafra on December 22, 2000

March 14, 2001 Jello Biafra files Appeal in State Court in San Francisco, CA

June 21, 2001 - Decay Music partners’ licenses the Dead Kennedys music to Los Angeles based independent label Manifesto Records to distribute their catalog. The catalog was remastered from the original tapes and the first live CD put out by the band, “Mutiny On the Bay’ was released Sept 11. 2002.

top of page

Contact: info@deadkennedysnews.com

last updated 07/14/04