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AFAIK, EMI is suing Grooveshark because they DID make a deal, but didn't get any money anyway

Yeah that's right. It's a little over-reported. It's also EMI publishing not the label.

The original lawsuit brought by Universal is quite a bit more serious: http://news.cnet.com/8301-31001_3-57332246-261/grooveshark-e...