HBO vs The Estate: Still on going!

HBO yesterday urged the Ninth Circuit appeals court in the US to overturn a lower court judgement that would force its ongoing dispute with the Michael Jackson Estate into arbitration. The whole case centres on a 1992 contract between HBO and Michael Jackson, with this particular element of the legal battle basically asking whether an arbitration clause in that contract means that only an arbitrator can decide whether or not that arbitration clause is still in effect.

The Michael Jackson Estate sued HBO in February last year over the broadcaster’s airing of ‘Leaving Neverland’.

The Estate claims that when HBO broadcast footage of Michael Jackson’s live shows all the way back in 1992 it signed a contract that included a promise to never “disparage” the star. The airing of ‘Leaving Neverland’ – and Robson and Safechuck’s allegations – constituted disparagement, the Estate said. HBO counters that the 1992 agreement is no longer in effect, adding that it would never have voluntarily given up its First Amendment free speech rights in perpetuity.

As the dispute progressed, the Estate filed a motion seeking to force the matter to arbitration, rather than a proper court hearing, citing an arbitration clause in the contract. HBO opposed that motion, mainly on free speech grounds. But the lower court judge George H Wu said that he couldn’t find any precedent to support HBO’s arguments for avoiding arbitration and, as a result, he granted the Estate’s motion.

However, Wu nevertheless conceded that this was a very unusual case that could probably do with the input of a higher court. And when HBO confirmed that it planned to take the matter to the Ninth Circuit, Wu put his arbitration order on hold. Which is why legal reps for both sides were presenting their arguments to the appeals court yesterday.

HBO’s lawyer Theodore J Boutrous Jr argued that the 1992 contract is completely irrelevant to the dispute over ‘Leaving Neverland’, which makes the arbitration clause in it as irrelevant as the non-disparagement clause HBO is accused of breaching.

Seeking to back up that argument, Boutrous insisted that there is no language in the 1992 contract to suggest clauses in it would be binding “in perpetuity”. He added: “There isn’t a perpetual right to arbitrate; there was no agreement to that. It’s unreasonable to assume that HBO would have given up its right to litigate in court”.

Needless to say, the Michael Jackson Estate did not concur. Its lawyer, Jonathan Steinsapir, argued that the non-disparagement clause in the 1992 contract isn’t limited in any way, meaning the agreement is still in force, which also includes the arbitration clause. And the only person who could dispute that would be the arbitrator brought into the case by the arbitration clause.

While Boutrous argued that it was “absurd” to suggest HBO would voluntarily give up its free speech rights in relation to Jackson forever, the estate’s legal reps countered that the musician was at the peak of his stardom at the time of the agreement and was therefore able to command a strong non-disparagement provision be included in it.

And, Steinsapir added, given the large amount of tabloid gossip about Michael that was circulating in the early 1990s, it wasn’t surprising that the King of Pop would want a provision of that kind included.

With both sides having presented their arguments, the Ninth Circuit judges are now deliberating.

SOURCE: Law360