By: David “G” Kreluer
Hip-Hop Business • Legal, financial, and strategic intelligence for music industry professionals.

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A court filing submitted May 5, 2026 to the U.S. Court of Appeals for the Second Circuit by Universal Music Group has introduced a two-track legal argument that, if sustained on appeal, would effectively eliminate the Section 203 copyright termination right for any artist who signed an early-career recording deal through a producer-controlled entity — and would separately ensure that the most commercially valuable recordings in any recovered catalog could still remain permanently beyond an artist’s reach.

What the Record Shows

The case is Cheryl James and Sandra Denton v. Universal Music Group, currently pending before the U.S. Court of Appeals for the Second Circuit.

Salt-N-Pepa filed Notices of Termination under Section 203 of the Copyright Act of 1976 in March 2022, seeking to reclaim their masters from UMG. UMG issued counter-notices rejecting the terminations. Salt-N-Pepa filed suit against UMG in the U.S. District Court for the Southern District of New York in May 2025. On January 8, 2026, U.S. District Judge Denise Cote granted UMG’s motion to dismiss. Salt-N-Pepa filed their notice of appeal in February 2026. Their opening appellate brief was filed approximately April 1, 2026. UMG filed its response brief on Tuesday, May 5, 2026 with the Second Circuit.

The catalog at issue comprises Salt-N-Pepa’s first four albums: Hot, Cool & Vicious (1986), A Salt With a Deadly Pepa (1988), Blacks’ Magic (1990), and Very Necessary (1993). All four remain unavailable on U.S. streaming platforms as of today. According to AllHipHop’s reporting on May 6, the catalog was generating approximately $1 million in synchronization license revenue in a single five-month period prior to the filing of the lawsuit.

The ownership structure at dispute traces to three agreements signed on May 15, 1986. Salt-N-Pepa entered a recording deal with Noise In The Attic Productions, Inc. (NITA), a company controlled by their producer Hurby “Luv Bug” Azor. Azor simultaneously signed a separate distribution agreement with Next Plateau Records — which was subsequently absorbed into what is now UMG. Salt-N-Pepa signed an inducement letter addressed to Next Plateau Records on the same date. Under the recording agreement, NITA held sole and exclusive ownership of the masters and their copyrights. Azor then transferred those rights directly to Next Plateau. Next Plateau’s rights eventually passed to UMG through corporate succession.

Judge Cote’s January dismissal concluded that Salt-N-Pepa never executed a copyright grant — only Azor’s NITA did — and therefore Section 203 provides them no termination right. Salt-N-Pepa’s opening appellate brief, filed with support from amicus briefs submitted by Irving Azoff’s Music Artists Coalition and the National Society of Entertainment and Arts Lawyers, argued that the district court’s ruling was “riddled with error” and contradicts Congress’s stated intent in crafting termination rights. Salt-N-Pepa is represented on appeal by Richard Busch, the attorney who won the “Blurred Lines” verdict for Marvin Gaye’s estate.

UMG’s May 5 response brief urged the Second Circuit to uphold Judge Cote’s dismissal, arguing that Salt-N-Pepa’s lawsuit suffers from a “foundational deficiency”: the duo cannot terminate a copyright transfer they did not execute. UMG’s brief further argued that the inducement letter Salt-N-Pepa signed “does not contain or refer to any grant of copyright rights.” Salt-N-Pepa is entitled to file a reply brief before oral arguments are scheduled before a panel of Second Circuit judges.

What This Actually Means

Every outlet covering this case has framed it as a Salt-N-Pepa story. It is not. It is a structural story about whether the legal architecture of early hip-hop recording deals permanently extinguished an entire generation of artists’ statutory termination rights — and UMG’s brief is written precisely to ensure that the Second Circuit treats it that way.

Here is what the original coverage missed. The producer-controlled entity structure that UMG is relying on in this case — artist signs to producer’s company, producer’s company transfers rights to label, artists are not parties to the transfer — was not a Salt-N-Pepa-specific arrangement. It was the standard operating structure of hip-hop and R&B recording deals in the 1980s and early 1990s. Producers like Hurby Azor, Larry Smith, DJ Jazzy Jeff, Marley Marl, and countless others maintained their own production companies that served as the contractual intermediary between artists and labels. Artists signed to the producer. The producer signed to the label. The label got the masters. The artist got a check.

If the Second Circuit affirms Judge Cote’s dismissal on UMG’s terms, every artist who signed under that structure — and there are hundreds, a significant percentage of them hip-hop acts — will have been retroactively stripped of their termination rights not by a court ruling against them directly, but by a chain-of-title analysis that concludes they were never the executing party to a copyright grant in the first place.

Entertainment attorneys face the most immediate practice impact. Any attorney currently advising an artist on a Section 203 termination notice for recordings made in the 1985–1995 window should perform a complete chain-of-title analysis before the notice goes out. The question is no longer simply “was this work created more than 35 years ago?” The question is “was the copyright grant executed by my client, or by a production company that my client contracted through?” If it was the latter, Judge Cote’s ruling — and UMG’s brief — suggest the termination notice is invalid on its face.

Music managers whose clients hold legacy hip-hop catalog claims need to understand that the derivative works argument UMG raised in this brief is the sleeper issue in the entire case. A successful Second Circuit ruling for Salt-N-Pepa on the primary termination question would not automatically return the “Push It” remix — UMG’s brief specifically argues that the commercially dominant version of the song is a derivative work prepared under an authorized license and therefore can continue to be exploited by UMG even after termination. The version that moves the majority of the sync revenue may not be recoverable under any outcome.

Independent label operators need to understand that this case does not exist in isolation. UMG, WMG, Sony Music Entertainment, and BMG separately and jointly purchased a disputed copyright in a different termination rights case for the express purpose of creating a vehicle to petition the U.S. Supreme Court for review of a landmark ruling that expanded termination rights beyond U.S. borders. These major labels are running a coordinated, multi-front legal strategy to limit Section 203’s reach. Independent operators whose business models depend on acquiring or administering legacy catalog are watching the foundation of those valuations being contested in real time.

The Legal or Financial Mechanics

Section 203 of the Copyright Act of 1976 grants authors the right to terminate a transfer or license of copyright after 35 years, regardless of what the original contract says. It is a statutory right, meaning parties cannot contract around it. Congress designed it specifically to address the power imbalance at the moment of signing — an artist who had no leverage in 1986 gets a second bite at the economic apple in 2021.

The mechanism has a structural limitation that UMG’s brief exploits: Section 203 specifies that only the author — or certain of their heirs — can execute a termination. The grant being terminated must itself have been executed by the author. If the author never executed a grant, there is nothing to terminate.

UMG’s argument is that Salt-N-Pepa were never the executing parties to any copyright grant. NITA — Azor’s company — made the only operative copyright transfer. The inducement letter Salt-N-Pepa signed was a contractual acknowledgment of NITA’s deal, not an independent grant. Under this reading, Section 203 simply has no hook to attach to. Salt-N-Pepa cannot terminate a grant they never made.

Salt-N-Pepa’s counter-argument is that the inducement letter — in which they agreed to be bound by the distribution deal between NITA and Next Plateau — functionally constituted a grant of their rights. UMG’s brief rejects this directly: the letter “does not contain or refer to any grant of copyright rights.” If the Second Circuit agrees with UMG, the structural playbook for defeating termination claims in legacy hip-hop catalog deals is confirmed and exportable to every case involving a similar chain-of-title.

The derivative works wrinkle is analytically distinct and potentially more damaging for the artists. Under Section 203(b)(1) of the Copyright Act, a derivative work prepared under authority of the terminated grant can continue to be utilized under the terms of the grant after termination. UMG argues that the most commercially significant version of “Push It” — the remix that drives sync revenue — is a derivative work prepared under the original authorized license. Salt-N-Pepa’s brief characterized the remixes as insufficiently original to qualify as independently copyrightable derivative works. UMG’s response called that argument legally unsupported, pointing out that the duo pled it on “information and belief” without alleging that the remixes don’t alter the sounds of the originals — the statutory threshold under the Copyright Act.

If the derivative works argument holds, Salt-N-Pepa could win the appeal on the primary question and still be unable to touch the version of their most valuable song that generates the most money.

What Independent Operators Need to Know

1. Run a chain-of-title audit on every legacy catalog you own, administer, or are currently acquiring. The operative question in every early hip-hop recording deal from 1980–1995 is now: who executed the copyright grant? If it was a production company rather than the artist directly, UMG’s brief has given every major label a litigation template for defeating that artist’s termination notice. This affects your asset valuations if you hold catalog that artists may attempt to reclaim, and it affects your acquisition price if you are buying catalog the seller believes is insulated from termination claims.

2. If your client has already filed a Section 203 termination notice, get the full contract history — including any producer agreements and inducement letters — in front of counsel immediately. The standard pre-notice checklist did not previously require a full production company chain-of-title analysis. After Judge Cote’s ruling and UMG’s appellate brief, it does.

3. Separately identify which recordings in any catalog you are pursuing or administering are remixes or derivative works. Under UMG’s derivative works argument, those versions exist in a separate legal category from the original masters. A catalog that appears recoverable under Section 203 may produce a set of original recordings far less commercially valuable than the derivative versions that remain under label control.

Bottom Line

For entertainment attorneys: UMG’s May 5 Second Circuit brief has established a dual-track litigation framework for defeating Section 203 termination claims in legacy hip-hop deals: first, challenge whether your client ever executed a copyright grant at all; second, reserve the derivative works argument to protect the most commercially significant recordings even if the first track fails. Before any termination notice goes out for pre-1995 hip-hop recordings, the chain of title from artist to producer to label must be fully mapped and each contract reviewed for who signed what.

For music managers: The Salt-N-Pepa catalog generates approximately $1 million in sync fees over five months and remains completely off streaming platforms. That is the financial cost of a termination dispute in progress. If your client has unresolved catalog ownership questions, understand that the major label litigation posture — as demonstrated by UMG’s brief — is to fight on multiple legal fronts simultaneously, including on derivative works that you may assume are inseparable from the primary recordings. They are not, legally speaking.

For independent label operators: The four major labels — UMG, WMG, Sony, and BMG — have jointly purchased a copyright in a separate case to create a vehicle for a Supreme Court petition that would further constrain termination rights globally. This is not passive litigation defense. It is an active, coordinated, multi-front strategy to limit the legal foundation on which artists can reclaim catalog. Every independent operator whose acquisition model depends on acquiring artist-controlled legacy catalog should treat this development as a material risk factor in their deal underwriting.