Jay Z's Streaming Service Tidal Is Being Sued For $5 Million

Here's another problem for Jay Z.

His new streaming service and Shawn Carter Enterprises are being sued for $5 million by rock band "The American Dollar."

In the class-action lawsuit, Yesh Music — the band's label — and drummer John Emanuele allege that TIDAL streamed 116 of the band's songs while neglecting to dole out proper royalties, according to court documents obtained by Entertainment Weekly.

In order for a streaming service like TIDAL to distribute music legally, it needs a Notice of Intent, which means the copyright owner has authorized "the distribution of a phonorecord of a nondramatic musical work by means of a digital transmission," according to the U.S. Copyright Office.

The plaintiffs argue that TIDAL did not obtain an NOI, and they claim that the streaming service "diluted the paid per-stream rate for royalty payments by up to 35 percent," according to EW. If true, this is especially jarring considering Jay Z's staunch statement that artists featured on TIDAL would receive a 75 percent royalty rate.

Representatives from the streaming service denied the allegations and said that they have paid Yesh Music and John Emanuele their due royalties.

"They are misinformed as to who, if anyone, owes royalty payments to them," TIDAL said in a statement. "TIDAL has the rights to the Master Recordings through its distributor Tunecore and have paid Tunecore in full for such exploitations."

"The American Dollar" songs streamed fewer than 13,000 times, according to the representative, and all of the band's music has been taken off the service.

The band features Emanuele and guitarist Richard Cupolo as its frontmen. They have released six studio albums, the first in 2006, and have contributed to notable soundtracks on CSI: Miami and the trailers for the films "Extremely Loud & Incredibly Close" and "Up in the Air."

No stranger to digging for lawsuits like this one, "American Dollar" sued a Houston Church in 2012 for using one of its songs beyond a one-year licensing agreement. A spokesman for the church said that Lakewood offered to renew the license upon realizing it had expired, but the band chose to sue anyway because they no longer wanted their music associated with a religious organization.

This isn't the first speedbump TIDAL has experienced since launching last spring. The company has seen turmoil in the higher ranks, cycling through three different CEOs already, and Kanye West's exclusive release of his highly-anticipated album, "The Life of Pablo," had been illegally downloaded more than half a million times days after it was distributed by the streaming service.

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