Jay-Z, Quinn Emanuel Say AAA Offers Only 'Token' Black Arbitrators
The rapper and businessman says he can't find qualified arbitrators of color to preside in a proceeding launched by Iconix, which purchased his Rocawear brand in 2007 for $200 million.
November 28, 2018 at 03:40 PM
4 minute read
Jay-Z and his attorneys at Quinn Emanuel Urquhart & Sullivan are accusing the American Arbitration Association of lacking a slate of African-American arbitrators capable of handling “large and complex cases,” contradicting the organization's claims about its diversity.
On Wednesday, the rap artist and entrepreneur persuaded a New York State judge in Manhattan to pause an arbitration with the current owner of his Rocawear apparel brand, pointing to the lack of African-American arbitrators qualified to preside over the matter.
“The lack of African-American arbitrator candidates stands in stark contrast to the proclamation on the AAA's website that the AAA prioritizes engaging arbitrators from diverse backgrounds,” Quinn Emanuel attorney Alex Spiro said in the filing. “In reality, the AAA lacks any meaningful selection of minority arbitrators and, specifically, African-American arbitrators.”
Jay-Z, whose given name is Shawn Carter, sold Rocawear to Iconix, a major fashion brand company, in 2007. At the time, Iconix was expanding, and the $200 million purchase was the largest deal the company had ever done.
In 2016, Iconix said in a financial statement that it suffered a reduction in assets and income to its Rocawear-related assets of $169 million in 2015. In the following year's filing, the company announced another $34.6 million in losses related to the Rocawear brand.
Jay-Z says that the company's financial distress has prompted a stream of litigation against him, including a trademark lawsuit pending in the Southern District of New York, and an arbitration initiated Oct. 1. The U.S. Securities and Exchange Commission is also investigating the original 2007 sale of Rocawear.
After Iconix commenced the arbitration, Jay-Z and his attorneys began reviewing available arbitrators on the AAA's search platform, in order to name four selections to a panel of 12 that would ultimately be narrowed by all the parties. But he discovered that he was unable to identify a single African-American arbitrator on the “large and complex cases” roster qualified to preside over the arbitration.
According to the filing, Jay-Z then confronted the AAA about the lacuna, prompting the organization to respond with three names: two men, one of whom was a partner at Blank Rome, which is representing Iconix, and one woman.
“Thus, the AAA provided petitioners with one choice for an arbitrator from Mr. Carter's class—which, of course, is no choice at all,” the filing said. “The AAA's failure to provide a venire of arbitrators that includes more than a token number of African-Americans renders the arbitration provision in the contract void as against public policy,” the lawyers wrote in an accompanying memorandum.
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