http://www.copyright.gov/circs/circ14.pdf
Coulton notes that he has bought a license from the Harry Fox Agency giving him the right to perform and distribute his original arrangement of Sir Mix a Lot's work, so that is all proper and legal.
There is no doubt legally that Coulton holds a copyright to his arrangement and that Fox is engaging in copyright violation since it is obvious the Fox piece is a cover of the Coulton arrangement, given there are almost no differences between their cover and his original arrangement.
The opinions of the Fox lawyers who contacted him are predictable, but incorrect regarding law.