Jay-Z Sues To Delay $204M Trademark Case Against Him Over Lack Of Black Arbitrators
Investor, entrepreneur, music mogul and activist Jay-Z won an injunction in the Manhattan Supreme Court to delay a private arbitration with clothing company Iconix Brand Group Inc. until the American Arbitration Association can provide a larger pool of Black arbitrators.
The American Arbitration Association was set to arbitrate a trademark case against him, but Jay-Z filed a petition Wednesday to stop the arbitration because the association’s pool of arbitratorsis is too white to be fair, Page Six reported.
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In the petition, Jay-Z, 48, said that the lack of racial diversity among arbitrators at the American Arbitration Association was discriminatory under New York’s state constitution and a New York City human rights law, according to NBC.
The American Arbitration Association is a nonprofit in the field of alternative dispute resolution, providing services to people and organizations who want to resolve conflicts out of court. Its role is to administer cases from filing to closing.
“It would stand to reason that prospective litigants — which undoubtedly include minority owned and operated businesses — expect there to be the possibility that the person who stands in the shoes of both judge and jury reflects the diverse population,” Jay-Z’s petition said.
This is the latest in a series of legal proceedings since Jay-Z sold his Rocawear clothing brand to Iconix in 2007 for about $204 million. Iconix has since written off almost the entire value of the brand. In 2015, Jay-Z and Iconix settled some disputes and agreed to address future claims in private arbitration, according to Jay-Z’s lawsuit.
In 2017, Iconix sued Jay-Z in Manhattan federal court over trademark rights after Jay-Z started selling New Era baseball caps with a paper airplane logo from his new company, Roc Nation. Iconix said that violated the Rocawear sales agreement. After Jay-Z counter-sued, the two parties entered arbitration. That case is pending.
In May, the U.S. Securities and Exchange Commission subpoened Jay-Z to respond about the Rocawear sale. The SEC said it was investigating potential securities violations related to the financial reporting of Iconix, and wanted to ask Jay-Z about his personal involvement with the brand.
In October, Iconix accused Jay-Z of breaching the 2015 settlement and demanded an AAA arbitration. But Jay-Z said the AAA had only three potential African-American arbitrators for his case out of the hundreds it uses, and one had already represented Iconix in related litigation.
A judge in the State Supreme Court in Manhattan allowed a delay on the arbitration until a Dec. 11 hearing, temporarily stopping the proceedings.
Jay-Z and Iconix were supposed to each pick four arbitrators from AAA’s “Large and Complex Cases” database, including the four supplied from the association, and narrow down the list together until both sides agreed, The Hill reported.
But Jay-Z said in his lawsuit that when he looked at the list, he was “confronted with a stark reality” that he could not identify a single African-American arbitrator.
The AAA has only three potential African-American arbitrators — two men and one woman — that could hear the case, and one was already involved with Iconix in related litigation.
Jay-Z argued that the lack of “more than a token number of African-Americans” made the arbitration contract void.
The American Arbitration Association says its membership is “composed of 24 percent women and minorities,” but it has just one Asian-American, one South Asian and one Latino representative, according to court papers, Page Six reported.
Minority business owners should be able to select from a group that ‘reflects the diverse population,” Jay-Z argued. Without that diversity, Black litigants like Jay-Z don’t get “the equal protection of the laws,” the filing said.
— Daymond John (@TheSharkDaymond) November 29, 2018
A court sided with rapper and business mogul #JayZ, who argued in a lawsuit between his company #RocNation and clothing makers Iconix that a lack of African American arbitrators made him vulnerable to unconscious racial bias — an #arbitration precedent …? https://t.co/rRcaB71Scv
— CounterCorp (@CounterCorp) November 29, 2018