On November 28, 2018, recording artist Shawn Carter, p/k/a “Jay-Z,” expressed his concerns about the arbitrators available through the American Arbitration Association (“AAA”) for their lack of diversity, in a New York state court filing.
The famed rapper called out the AAA for having very few African-American arbitrators, and as a result he has alleged that he can't get a fair adjudication of his intellectual property dispute with Iconix Brand Group Inc. (“Iconix”). That dispute arises out of $204 million licensing deal (involving Jay-Z's Roc Nation brand and Rocawear) that released a line of New Era caps in partnership with Major League Baseball without consulting the Roc Nation brand manager.
Jay-Z has asked the court to halt arbitration with Iconix arguing that the lack of African-American arbitrator candidates renders the arbitration provision in his contract void.
The filing states: “The AAA's arbitration procedures, and specifically its roster of neutrals for large and complex cases in New York, deprive black litigants like Mr. Carter and his companies of the equal protection of the laws, equal access to public accommodations, and mislead consumers into believing that they will receive a fair and impartial adjudication.” Carter further argued that when he and Iconix sat down to choose potential arbitrators from a list of 200 prospective neutrals, he could not identify a single African-American arbitrator on the “Large and Complex Cases” roster that had the background and experience to preside over the dispute. When Carter asked the AAA for a list of arbitrators "of color," the AAA purportedly provided six candidates: one who appeared to be Asian-American, another South Asian and a third Latino, and only three of the candidates were African-American, one of whom is a partner at the law firm representing Iconix in the underlying arbitration, “creating a blindingly obvious conflict of interest,” the filing states.
The filing also asserted that “the AAA has violated the New York Deceptive Practices Act because it ‘misleads prospective litigants into believing that it engages with a critical mass of diverse arbitrators,' when in reality, Mr. Carter was presented with only three African-American arbitrators to preside over his arbitration.”
Carter asked the court to stop the arbitration process “so that the parties may work with the AAA to include sufficient African-American candidates who are qualified to adjudicate complex commercial cases,” and if no suitable arbitrators can be found in 90 days, Carter asked that the court issue a permanent stay of the arbitration on the ground that the arbitration clause is void as against public policy.
Soon after this article was written (on December 11, 2018), the American Arbitration Association had agreed to work with Carter to ensure more African-American arbitrators would be available in the pool of potential people to hear his intellectual property dispute with Iconix Brand Group, Inc.
Carter and his businesses — S. Carter Enterprises, Marcy Media Holdings LLC and Marcy Media LLC — are represented by Alex Spiro, Andrew J. Rossman and Ellyde R. Thompson of Quinn Emanuel Urquhart & Sullivan LLP.
The case is Shawn C. Carter et al. v. Iconix Brand Group Inc. et al., case number 655894/2018, in the Supreme Court of the State of New York, County of New York.
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