Eric B. & Rakim Sue Label, Claim They Weren't Paid In Full

Influential hip-hop duo say they're still owed for their 1987 debut LP.

The guys who bragged about being "paid in full" now say they weren't.

The legendary duo of Eric B. & Rakim filed a lawsuit Wednesday in New York against Russell Simmons, Lyor Cohen, Island Records, Def Jam Records, Universal Music Enterprises and others for a yet-to-be-determined amount of money, alleging they haven't received their fair share from the 1987 classic Paid in Full.

"It's not a royalty issue," Eric B. said Thursday (January 15). "It's a bigger issue than the royalties. We own the masters. We own 100 percent of it. That's where everybody is confused. It's a master-use issue."

Eric B. & Rakim originally signed a deal with indie Zakia Records to release to singles "Eric B. Is President" and "My Melody." An arrangement was worked out between Zakia and Island subsidiary 4th & Broadway to release Paid in Full in 1987. Eric B. claims that was unlawful because the duo technically didn't have a contract with 4th & Broadway or Zakia for an album.

"Zakia, PolyGram, Island, the same thing," Eric said. "We never had no contract with them. That's what the problem was. The option [for an album] had ran out and they didn't file the proper paperwork in time. [In 1988] the judge said, 'You don't have no contract with them.' That's why we were able to go onto Uni [and put out our second album]. The judge came in and said, 'Your contract is invalid. They're putting out the record illegally.' The master belonged to us. It was a mess, but it didn't matter to us at the time. We just liked recording music. We didn't understand that part. We was just making records."

And while they were busy making records, their business matters were entrusted to Simmons and Cohen at Rush Management. Eric B. said he and Rakim asked their managers to stop their original label from selling Paid in Full, but "like anything in life, they dragged their feet. 'Yeah, yeah, yeah, we're going to handle it.' "

"I talk to Russell all the time," added the DJ, who insists there isn't any bad blood between him and his former managers. "He says, 'Eric, whatever money is owed to you, I'mma make sure you get.' But it's conversation. I can go the legal way and get it done. I told him, 'It's not personal, it's business.' Russell cashed out of Def Jam and Phat Farm. I told him me and Rakim are trying to do the same thing. We've had ongoing communication about trying to make it right."

Simmons and Cohen, who in 1999 became execs at Universal when Def Jam merged with Island, were unavailable for comment.

Eric B. estimates that Paid in Full — in its initial incarnation, re-releases and special editions — has sold close to 10 million copies and has probably raked in more than $100 million from sales and licensing. A special "platinum edition" version was issued by 4th & Broadway in 1998, and Island released a two-disc "deluxe edition" featuring bonus remixes in 2003.

The lawsuit calls for the books to be opened and damages awarded based on accounting and sales of Paid in Full and the singles "Eric B. Is President" and "My Melody."

Eric B. & Rakim are widely recognized as one of the most potent combinations in rap, and Paid in Full has been heralded as a trailblazing effort and one of the top 10 hip-hop opuses of all time. Their last album together was 1992's Don't Sweat the Technique.

Rakim has since forged a solo career, putting out two albums on Universal before signing with Dr. Dre's Aftermath Records in late 2000 (see "Rakim Signs With Dr. Dre's Aftermath Records"). A Dre-produced LP was abandoned before it was finished, and last year he left the imprint. The MC has not yet signed a new deal.

Meanwhile, Eric B. has been working behind the scenes and said he has several ventures on the horizon, including a television project.

[This story was updated on 01.15.04 at 2:04 p.m. ET]