Hip-hop musician Jay-Z has formally withdrawn his request for a preliminary injunction and stay of arbitration after the American Arbitration Association (“AAA”) pledged to expand the organization’s roster of African-American arbitrators. As described in a recent Disputing blog post, the case was referred to arbitration in New York before the AAA after a $200 million merchandising dispute arose:
Unsatisfied with the number of qualified African-American arbitrators included on the AAA’s Large and Complex Cases roster, Jay-Z sought a temporary restraining order (“TRO”) to stay the arbitral proceedings. Although neither party disputed that a valid agreement to arbitrate existed, Jay-Z claimed that portion of the agreement requiring arbitration before the AAA was void because the lack of diversity on the AAA’s Large and Complex Cases arbitrator roster violates New York’s public policy against discrimination.
In his petition to stay arbitration, Jay-Z also asked the New York court to issue a 90-day preliminary injunction “so that the parties may work with the AAA to include sufficient African-American candidates who are qualified to adjudicate complex commercial cases.” Finally, Jay-Z asked the court to issue a permanent stay in the case if the AAA is unable to cure the arbitrator diversity issue.
A New York judge issued a TRO in late November and was scheduled to consider Jay-Z’s preliminary injunction request to stay arbitration proceedings for 90 days on December 11th. According to a December 9th letter to the judge, however, counsel for Jay-Z wrote:
Following the Court’s grant of the temporary restraining order, AAA confirmed it would stay the arbitration and offered assistance to the parties, including offering to provide additional information to the parties. While the information AAA provided has confirmed that AAA lacks an appreciable number of minority (and particularly, African-American) arbitrators, AAA has indicated an openness both to an arbitrator selection process in this Arbitration that will allow for meaningful consideration of African-American arbitrators and to broader remedial measures intended to improve the diversity of the arbitrator roster for future arbitrations.
The letter also stated the “AAA now has provided Petitioners with a list of African-American arbitrators qualified to hear large commercial cases and committed to work with Petitioners to expand the roster of diverse arbitrators.”
Despite Jay-Z’s request to withdraw his motion, his counsel asked the New York court to hold a status conference in 90 days:
As a result of AAA’s attention to Petitioners’ complaints about the lack of diverse arbitrator candidates following the filing of the Petition, Petitioners now believe they can work with AAA to resolve their concerns and engage in an arbitrator selection process that complies with New York public policy. Petitioners, however, do not believe dismissal of the Petition is appropriate at this time. Despite the good-faith efforts of Petitioners and AAA to resolve this issue without the need for further court intervention, Respondents unfortunately have indicated they may stand as a roadblock to such a process. Respondents have declined to agree to any process that would preserve even one non-conflicted African-American members of the 12- person arbitrator pool. Respondents also have rejected Petitioners’ proposal to proceed with a three-arbitrator panel, as the underlying contract allows, to avoid the problems inherent in the restrained selection process.
Accordingly, at this time, Petitioners only withdraw their motion for a preliminary injunction and request that the Court lift the temporary stay of arbitration. Petitioners propose that the Court exercise its discretion under CPLR § 2201 to stay proceedings on the Article 75 Petition and schedule a status conference in ninety (90) days.
The judge in the case accepted Jay-Z’s request to withdraw his motion and scheduled a status conference for March 2019.
A copy of Jay-Z’s Petition to Stay Arbitration is available from the American Lawyer.
A copy of the letter requesting to withdraw Jay-Z’s motion for a preliminary injunction is available from the Hollywood Reporter.
Photo by: Spencer Imbrock on Unsplash
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