A small record label has filed a class action lawsuit against Apple and other digital music stores as well as the major record labels that carry its catalog of tracks. Dawg Music, which is run by bluegrass musician David Grisman and his partner Craig Miller, claims that entities carrying Grisman's musical tracks are knowingly selling his works with poor or nonexistent compensation without his consent. Represented by Strange and Carpenter from the Law Offices of Jeffry L. Graubart, the suit makes a two-part complaint implicating both labels and their online digital retail partners. The complaint states that Universal and Warner have neglected Daw Music's copyrights and royalties when signing deals with online stores -- including Apple's iTunes service.

The two large record companies agreed to online distribution of Grisman's library without first acquiring permission from Dawg Music, according to AppleInsider, and by doing so both labels made unauthorized hard copies of the music while also usurping control of royalties due for each album. That lack of communication resulted in "gross underpayments," claims Dawg Music, and online retail efforts such as the iTunes Store are guilty by association because they agreed to host and sell the unsanctioned tracks.

The suit claims that AOL Music Now, Buy.com, Apple's iTunes, MSN.com, Napster, RealNetworks' Rhapsody, Wal-Mart.com, and Yahoo Music are guilty of trading songs without genuine consent because they send money to the intermediate labels but not the copyright holders.

Dawg Music also states that this evasion of copyrights has caused "irreparable injury" to the music label, and that the agreements will continue to damage the company as long as the present contracts for online music remain. All defendants named in the suit would be forced to pay Dawg Music for damages if the small label manages to prove its case in a central California court hearing.

Additionally, the court could order each defendant to pay $150,000 for each work whose copyright was violated if the case finds the labels and online music retailers guilty, adding up to millions of dollars in payments to Dawg Music.

Strange and Carpenter on behalf of Dawg Music will need to prove that none of the existing clauses in Dawg Music's contracts with Universal and Warner already cover the online distribution of their content if they are to win the case and recieve damages.