Jay-Z’s $204 million arbitration case halted over lack of black arbitrators

Nov. 29, 2018 / 1:12 AM GMT

By Reuters

Jay-Z on Wednesday sued to halt his private arbitration with clothing company Iconix Brand Group Inc, saying the company’s inability to find an African-American arbitrator to hear the trademark dispute was unfair.

The multimillionaire rapper said in a petition filed in Manhattan Supreme Court that the lack of racial diversity among arbitrators at the American Arbitration Association (AAA) was discriminatory under New York’s state constitution and a New York City human rights law.

Iconix could not immediately be reached for comment, and a spokeswoman for the AAA declined to comment.

The dispute is the latest in a series of legal wranglings arising from Jay-Z’s 2007 sale of his Rocawear clothing brand to Iconix for about $204 million. Iconix has since written off almost the entire value of the brand, and in 2017 sued Jay-Z in Manhattan federal court over trademark rights. That case remains pending.

In 2015, Jay-Z, whose real name is Shawn Carter, and Iconix settled some disputes, and agreed to address future claims in private arbitration, according to Jay-Z’s petition.

Last month, Iconix accused Jay-Z of breaching the 2015 settlement and demanded an AAA arbitration.

But Jay-Z said the AAA found only three potential African-American arbitrators, out of the hundreds it uses, for his case, and one already represented Iconix in related litigation.

He argued that the lack of “more than a token number of African-Americans” made the arbitration contract void.

“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,” the petition said.

Jay-Z, 48, is famous for songs including “Hard Knock Life,” “99 Problems” and “Big Pimpin’.”

The Brooklyn native has won 21 Grammy Awards, most recently in 2015 for Best R&B Song and Best R&B Performance for “Drunk in Love” with his wife, pop star Beyonce.

In May, a federal judge ordered him to respond to a U.S. Securities and Exchange Commission subpoena related to the Rocawear sale.

The SEC said it was looking in to writedowns by Iconix, and wanted to ask Jay-Z about his personal involvement with the brand. (Reporting by Brendan Pierson in New York Editing by Matthew Lewis)