Jay-Z withdraws stay motion after AAA commits to more diversity
US rapper Jay-Z has withdrawn his motion to stay IP arbitration with Iconix Brand Group after the American Arbitration Association (AAA) agreed to increase its diversity.
In a letter dated Sunday, December 9, Jay-Z said the AAA had “indicated an openness” to alter its selection process to allow for better consideration of African-American arbitrators. It also said the AAA had agreed to introduce “measures intended to improve the diversity” of its roster for future arbitrations.
In 2007, Iconix acquired the ‘Roc Nation’ trademark in class 25 and IP rights from Rocawear Licensing, which was founded by Jay-Z, for $204 million.
Disputes arose between the parties over a series of transactions, leading to a settlement agreement in 2015 which stipulated that future claims would be addressed by arbitration, according to the petition.
The recent letter was sent to the Supreme Court of New York, where Jay-Z filed a petition, in November, claiming that there aren’t enough African-Americans to hear arbitration of the trademark dispute.
The court granted Jay-Z’s petition to stay the proceedings.
According to the letter, the AAA confirmed it “lacks an appreciable number of minority and particularly African-American” arbitrators and has now committed to work with Jay-Z to make African-American arbitrators available for consideration.
The AAA has now provided Jay-Z with a list of 18 individuals. But, the letter alleged, only one is based in the New York area. It also said that although this number exceeds the number of African-American arbitrators previously available for consideration, it is still only a fraction (2%) of more than 1,000 individuals on the AAA’s national Large Complex Case roster.
Before filing the petition, both Jay-Z and Iconix were instructed to select an arbitrator from an experienced group of individuals on the Large Complex Case list.
When Jay-Z began reviewing arbitrators on the AAA’s search platform, he was “confronted with a stark reality” that he couldn’t identify a single African-American arbitrator that had the background and experience to preside over the arbitration, the petition said.
When confronted, the AAA was allegedly only able to provide three African-American arbitrators, but one had already represented Iconix in related litigation.
“This blatant failure of the AAA to ensure a diverse slate of arbitrators is particularly shocking given the prevalence of mandatory arbitration provisions in commercial contracts across nearly all industries,” Jay-Z said.
Following the AAA’s identification of more diverse arbitrators outside New York, Jay-Z has also put forward the suggestion of an arbitrator panel of three people, which he said has been met with openness by the AAA.
However, the letter stated that Iconix has rejected the proposal to proceed with a three-arbitrator panel.
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