HBO Loses Appellate Bid to Avoid Arbitration With Michael Jackson Estate in ‘Leaving Neverland’ Dispute

“An arbitration clause can still bind the parties, even if the parties fully performed the contract years ago.”

HBO and the Michael Jackson estate are headed to arbitration to resolve the estate’s claims that the network violated a decades-old nondisparagement deal by producing Leaving Neverland after a federal appellate court on Monday found that contract’s arbitration provision is still valid, even 28 years later.

In February 2019, Optimum Productions and the two co-executors of the Jackson estate sued HBO in an effort to compel arbitration. They claim the network agreed not to besmirch Jackson in a deal for a 1992 concert film — a deal that contained an arbitration provision.

HBO described the filing as a “poorly disguised and legally barred posthumous defamation claim” and filed a motion to strike the complaint under California’s anti-SLAPP statute, which brings an early end to frivolous litigation arising from protected activity such as the exercise of free speech. U.S. District Judge George H. Wu sided with the estate, sending the matter to arbitration, and HBO appealed.

On Monday, the 9th U.S. Circuit Court of Appeals affirmed Wu’s decision.

“The parties do not dispute that the 1992 Live in Bucharest contract at issue was a product of mutual consent and included a broad arbitration provision,” states the decision, which also mentions the “detailed and stringent” confidentiality provisions. “An arbitration clause can still bind the parties, even if the parties fully performed the contract years ago. … HBO does not dispute the existence of a valid agreement, the included arbitration provision, or the incorporated confidentiality provision, but rather the ‘continuing validity’ of the agreement and the arbitration provision. Thus, a valid arbitration agreement exists.”

The court notes that it’s long been settled in the 9th Circuit that the arbitrator should decide whether a contract has expired if the arbitration clause itself is not disputed. In a footnote, the court explains that even if the estate’s arguments “are as frivolous as HBO claims” it’s not the court’s job to weigh the merits.

“The contract contained a broad arbitration clause that covers claims that HBO disparaged Jackson in violation of ongoing confidentiality obligations,” states the opinion. “We may only identify whether the parties agreed to arbitrate such claims; it is for the arbitrator to decide whether those claims are meritorious.”

Jackson’s estate is represented by Howard Weitzman and Jonathan Steinsapir of Kinsella Weitzman and Bryan Freedman of Freedman & Taitelman. On Monday, Weitzman and Steinsapir issued a statement lauding the decision that said, in part, “It’s time for HBO to answer for its violation of its obligations to Michael Jackson.”

HBO is represented by Ted Boutrous of Gibson Dunn and Daniel Petrocelli of O’Melveny & Myers. HBO has not yet commented on the ruling.

Optimum v HBO 9th Circuit O… by THROnline


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