Editing Steely Dan (section)

===''Gaucho'' and breakup (1978–1981)===
{{BLP sources section|date=June 2018}}
Becker and Fagen took a break from songwriting for most of 1978 before starting work on ''[[Gaucho (album)|Gaucho]]''. The project would not go smoothly: technical, legal, and personal setbacks delayed the album's release and subsequently led Becker and Fagen to suspend their partnership for over a decade.<ref>James L. Kelley, "Steely Dan's Donald Fagen: A case of mistaken self-identity, corrected by self-reformulation." In: E. Vanderheiden, & C.-H. Mayer (Eds.), ''Mistakes, errors and failures across cultures: Navigating potentials'' (pp. 91-107). Cham, Switzerland: Springer, 2019, p. 100.</ref>

Misfortune struck early when an assistant engineer accidentally erased most of "The Second Arrangement", a favorite track of Katz and Nichols,<ref name="reelin137">{{Cite book |last=Sweet |first=Brian |url={{google books |plainurl=y |id=olM4BEGfjmgC|page=137}} |title=Steely Dan: Reelin' in the Years |date=2000 |publisher=Omnibus Press |isbn=9780711982796 |pages=137–147 |language=en}}</ref> which remained lost until a recording was discovered in 2020.<ref>{{cite news |url=https://www.theguardian.com/music/2023/jun/26/the-most-important-cassette-on-the-planet-how-steely-dan-fans-uncovered-their-holy-grail |title='The most important cassette on the planet': how Steely Dan fans uncovered their holy grail |first=Joe |last=Koning|date= June 25, 2023 |work=The Guardian }}</ref><ref>{{cite web |url=https://expandingdan.substack.com/p/second-arrangement-steely-dan-roger-nichols-tape |title= Tale of the Tape |first=Jake |last=Malooley |work=Expanding Dan |date= June 24, 2023}}</ref> More trouble—this time legal—followed. In March 1979, [[MCA Records]] bought ABC, and for much of the next two years Steely Dan could not release an album. Becker and Fagen had planned on leaving ABC for [[Warner Bros. Records]], but MCA claimed ownership of their music, preventing them from changing labels.<ref name="reelin137" />

Turmoil in Becker's personal life also interfered. His girlfriend died of a drug overdose in their [[Upper West Side]] apartment, and he was [[Wrongful death claim|sued]] for $17 million. Becker settled out of court, but he was shocked by the accusations and by the [[tabloid press]] coverage that followed. Soon after, Becker was struck by a taxi while crossing a Manhattan street, shattering his right leg in several places. He was left hospitalized as work on the album's final mix was just beginning, and he was only able to collaborate with Fagen and Katz via telephone.<ref name="reelin137" />

More legal trouble were to come. Jazz composer [[Keith Jarrett]] sued Steely Dan for [[copyright infringement]], claiming that they had based ''Gaucho''<nowiki/>'s title track on one of his compositions, "[[Belonging (album)#Controversy and legal dispute|Long As You Know You're Living Yours]]". Fagen later admitted that he'd loved the song and that it had been a strong influence.<ref name="granatino">{{cite web|url= http://www.granatino.com/sdresource/music1.htm|title= Steely Dan (Interview)|access-date= December 21, 2006|last= Breskin|first= David|year= c. 1980|work= [[Musician (magazine)|Musician Magazine]]|url-status= dead|archive-url= https://web.archive.org/web/20070310152459/http://www.granatino.com/sdresource/music1.htm|archive-date= March 10, 2007|df= mdy-all}}</ref>

''Gaucho'' was finally released in November 1980. Despite its tortured history, it was another major success. The album's first single, "[[Hey Nineteen]]", reached No. 10 on the US charts in early 1981, and "[[Time Out of Mind (Steely Dan song)|Time Out of Mind]]" (featuring guitarist [[Mark Knopfler]] of [[Dire Straits]]) was a moderate hit in the spring. "My Rival" was featured in [[John Huston|John Huston]]'s 1980 film ''[[Phobia (1980 film)|Phobia]]''. Roger Nichols won a third engineering Grammy award for his work on the album.