UPDATE: Tidal just issued a statement to Complex about the lawsuit and said that they are up to date on all royalties owed to Yesh Music, LLC.

Statement from TIDAL

TIDAL is up to date on all royalties for the rights to the music stated in Yesh Music, LLC and John Emanuele’s claim and they are misinformed as to who, if anyone, owes royalty payments to them. As Yesh Music, LLC admits in their claim, TIDAL has the rights to the Master Recordings through its distributor Tunecore and have paid Tunecore in full for such exploitations. Their dispute appears to be over the mechanical licenses, which we are also up to date on payments via Harry Fox Agency our administrator of mechanical royalties.

The entire catalogue in question streamed fewer than 13,000 times on TIDAL and its predecessor over the past year. We have now removed all music associated with Yesh Music, LLC and John Emanuele from the service. This is the first we have heard of this dispute and Yesh Music, LLC should be engaging Harry Fox Agency if they believe they are owed the royalties claimed. They especially should not be naming S Carter Enterprises, LLC, which has nothing to do with Tidal. This claim serves as nothing other than a perfect example of why America needs Tort reform.

Read the original story below.

When Jay Z launched Tidal last year, he did so on the idea that the streaming service would be the first of its kind to take care of artists with higher royalty payouts. After the official launch event, Jay even tweeted that Tidal was going to pay every artist, writer, and producer featured on the service a 75 percent royalty rate, which was higher than any other streaming service in the industry, at least according to Hov. Now, it appears that Hov and Tidal are in some serious hot water over their royalty system, as they're reportedly facing a $5 million class-action lawsuit from Yesh Music, LLC and John Emanuele​ from the band, the American Dollar.

The lawsuit, which was uploaded online to the site Scribd here, claims that Tidal streamed 116 of the band's copyrighted songs without paying back any royalty payments in the process. The firm Garbarini Fitzgerald P.C. reportedly filed the lawsuit in the United States District Court Southern District of New York over the weekend, according to the uploaded documents. As of now, neither Jay, Tidal, or Tidal's parent company, Aspiro, which is also named in the suit, have responded to the case.

We spoke with the lawyer in the case, Richard Garbarini, on the phone, and he confirmed that the suit was filed over the weekend. Over the phone, Garbarini said that the band received no royalties for their work until this past Nov., and that the group asked months ago to have their music removed from Tidal. As of today, the band's music is currently still available to stream on Tidal. "I find it fairly amazing an organization that claims it was going to pay the artists, systematically does not pay the artists," Garbarini said.

Tidal reportedly used faulty numbers to make payments to artists and may have undercut the money they owed to artists by as much as 35 percent, according to the filed documents. The band claims that they were expecting monthly reports on royalty payments and usage of every song on the service, but nothing was ever sent, according to the lawsuit.

The news of this lawsuit comes just days after a report surfaced that Samsung is in talks to buy Tidal, though nothing has been confirmed as of now. Tidal's success has been a true rollercoaster over the past year, but recently saw a bump in subscribers when Kanye West exclusively released his new album, The Life of Pablo, on the streaming service. We've reached out to Tidal for comment on the lawsuit and will continue to update when more details surrounding this story come out.