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The members of the 70’s R&B group Sister Sledge have filed a class action lawsuit against Warner Music Group alleging they have been cheated out of millions of dollars based on improper calculations of revenue from digital music sales.

Debra Sledge, Joan Sledge, Kathy Sledge Lightfoot and Kim Sledge Allen filed suit in federal court on Thursday claiming that Warner Music’s method for calculating digital music purchases as “sales” rather than “licenses” on songs (such as the band’s chart-topping “We Are Family”) cheats artists out of money due to them under recording contracts, many of them signed decades before music was sold digitally via iTunes, Amazon, ringtones and other outlets.

“Rather than paying its recording artists and producers the percentage of net receipts it received–and continues to receive–from digital content providers for ‘licenses,’ Warner wrongfully treats each digital download as a ‘sale’ of a physical phonorecord…which are governed by much lower royalty provisions than ‘licenses’ in Warner’s standard recording agreements.”

If that claim sounds familiar, it’s one of the most hotly-disputed issues in the music business. Songwriters typically make much less money when an album is “sold” than they do when their music is “licensed”. But record labels have taken the position that music sold through digital stores, such as iTunes, should be counted as “sales” rather than licenses.

The difference in revenue can be significant. The Sister Sledge members claim their record deal promises 25% of revenue from licenses but much less from sales.

Rapper/Actor Eminem brought a nearly identical claim against Universal Music Group and won a fairly important decision at the 9th Circuit Court of Appeals in 2010. At the time, UMG downplayed the ruling as specific to Eminem’s contract, but music lawyers believe more of these cases are going to be filed by legacy artists (newer contracts have specific language precluding such suits).

Sister Sledge has a 35-page class action lawsuit seeking to bring together many artists in one proceeding, calling Warner Music’s actions “wide-spread and calculated.” Hundreds of millions of dollars in revenue is at stake, the complaint alleges.

It should be interesting to see which artists come forward.