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Ninth Circuit agrees that the Leaving Neverland dispute should go to arbitration

By | Published on Tuesday 15 December 2020

Michael Jackson

An appeals court in the US has upheld a lower court ruling that said a dispute between broadcaster HBO and the Michael Jackson estate should go to arbitration. It was the estate that sought to enforce an arbitration clause in a 1992 contract between the two parties as a dispute over the ‘Leaving Neverland’ documentary went through the motions.

The estate sued HBO in February last year over the latter’s decision to air the headline-grabbing documentary that put the spotlight back on allegations of child abuse made against the Jackson by Wade Robson and James Safechuck.

Legal reps for the estate claimed that, by broadcasting ‘Leaving Neverland’, HBO was in breach of a contract the media firm entered into with Jackson all the way back in 1992 when it aired one of the musician’s concerts. That contract included a commitment by HBO to never “disparage” Jackson, and the estate argued that broadcasting Robson and Safechuck’s allegations against the late musician constituted disparagement.

As the dispute progressed, the estate filed a motion seeking to force the matter to arbitration, rather than a proper court hearing, citing the arbitration clause in the 1992 contract. HBO opposed that motion, mainly on free speech grounds. But 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.

HBO appealed, arguing in the Ninth Circuit appeals court that there was no language in the 1992 contract to suggest clauses in it would be binding “in perpetuity”. But the estate countered that the arbitration clause in that agreement was wide-ranging and in no way limited to any specific time period. Meaning that only an arbitrator could decide if the contract was still in force, including – somewhat ironically – the arbitration clause.

Judges in the Ninth Circuit yesterday sided with the estate by upholding Wu’s original ruling, stating: “An arbitration clause can still bind the parties, even if the parties fully performed the contract years ago”.

The Ninth Circuit judges noted that HBO does not dispute that the 1992 contract was valid nor that it contained an arbitration clause. Its argument is simply that the arbitration obligation is no longer in play, but the appeal judges concluded that that argument doesn’t hold.

Therefore it is now for an arbitrator to decide on the actual dispute here, ie whether the other contract term covering disparagement is still in play, and if so whether the airing of ‘Leaving Neverland’ breached that term, and possibly whether the broadcaster’s free speech rights are a valid defence.