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Case 2:19-cv-01862-GW-PJW Document 30 Filed 06/04/19 Page 1 of 9 Page ID #:524

1 DANIEL M. PETROCELLI (S.B. #97802)


dpetrocelli@omm.com
2 DREW E. BREUDER (S.B. #198466)
dbreuder@omm.com
3 O’MELVENY & MYERS LLP
1999 Avenue of the Stars, 8th Floor
4 Los Angeles, CA 90067-6035
Telephone: (310) 553-6700
5 Facsimile: (310) 246-6779
6 THEODORE J. BOUTROUS JR. (S.B. #132099)
tboutrous@gibsondunn.com
7 NATHANIEL L. BACH (S.B. #246518)
nbach@gibsondunn.com
8 GIBSON, DUNN & CRUTCHER LLP
333 South Grand Avenue
9 Los Angeles, CA 90071-3197
Telephone: (213) 229-7804
10 Facsimile: (213) 229-6804
11 Attorneys for Defendant Home Box Office, Inc.
12 UNITED STATES DISTRICT COURT
13 CENTRAL DISTRICT OF CALIFORNIA
14 OPTIMUM PRODUCTIONS, a Case No. 2:19-cv-01862-GW-PJW
California corporation; and JOHN
15 BRANCA and JOHN MCCLAIN, in Hon. George H. Wu
the respective capacities as CO-
16 EXECUTORS OF THE ESTATE OF DEFENDANT HOME BOX
MICHAEL J. JACKSON, OFFICE, INC.’S SUPPLEMENTAL
17 MEMORANDUM OF POINTS AND
AUTHORITIES IN OPPOSITION
18 Plaintiffs, TO PLAINTIFFS’ MOTION TO
COMPEL ARBITRATION
19 v.
[Declaration of Drew E. Breuder and
20 HOME BOX OFFICE, a Division of Notice of Lodging filed concurrently
TIME WARNER ENTERTAINMENT, herewith]
21 L.P., a Delaware Limited Partnership;
HOME BOX OFFICE, INC., a Hearing Date: June 24, 2019
22 Delaware corporation; DOES 1 through Hearing Time: 8:30 a.m.
5, business entities unknown; and
23 DOES 6 through 10, individuals
unknown,
24
Defendants.
25

26

27

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HBO’S SUPP. BRIEFING RE: MOT. TO COMPEL


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1 Pursuant to the Court’s May 24, 2019 order, Home Box Office, Inc. (“HBO”)
2 hereby submits this supplemental memorandum of points and authorities in
3 opposition to Plaintiffs’ motion to compel arbitration (the “Motion,” Dkt. 18).
4 I. THE COURT SHOULD DENY PLAINTIFFS’ MOTION TO COMPEL
BECAUSE THERE IS NO VALID AGREEMENT TO ARBITRATE
5 THE CONFIDENTIALITY PROVISIONS.
6 To compel arbitration, Plaintiffs must first demonstrate that “a valid
7 agreement to arbitrate exists.” Cox v. Ocean View Hotel Corp., 533 F.3d 1114,
8 1119 (9th Cir. 2008); Henry Schein v. Archer and White Sales, Inc., 139 S. Ct. 524,
9 530 (2019) (“before referring a dispute to an arbitrator, the court determines
10 whether a valid arbitration agreement exists”). “As the party moving to compel
11 arbitration,” Plaintiffs bear the burden of “proving by a preponderance of the
12 evidence the existence of a valid arbitration agreement.” See Christensen v. CLP
13 Res., Inc., 2015 WL 13762936, at *3 (C.D. Cal. June 22, 2015) (Wu, J.). To
14 determine whether a valid arbitration agreement exists, the Court “resort[s] to state
15 contract law.” ISTA Pharm., Inc. v. Senju Pharm. Co., 2010 WL 11601183, at *3
16 (C.D. Cal. Aug. 26, 2010) (Wu, J.). Contrary to Plaintiffs’ assertion, there is no
17 federal policy “favoring” arbitration on the issue of validity (Dkt. 18 at 6-7), as that
18 policy is “inapposite” to determining “whether … a valid agreement to arbitrate”
19 exists. Comer v. Micor, Inc., 436 F.3d 1098, 1104 n.11 (9th Cir. 2006).
20 In this case, Plaintiffs cannot satisfy their burden of proving that a valid
21 agreement to arbitrate exists because the very provision on which their Motion rests
22 makes clear that any disputes must be resolved by “the court,” not an arbitrator.
23 Plaintiffs allege that HBO’s 2019 exhibition of Leaving Neverland violates a non-
24 disparagement sentence in an exhibit to an agreement (the “1992 Agreement”)
25 concerning the 1992 concert special Michael Jackson: Live in Bucharest (“Live in
26 Bucharest”). Dkt. 18 at 5. While the body of the 1992 Agreement contains an
27 arbitration provision, the document that contains the non-disparagement sentence
28 contains a different, more specific clause requiring judicial resolution of disputes:

1 HBO’S SUPP. BRIEFING RE: MOT. TO COMPEL


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1 In the event that either party to this agreement brings an action to


enforce the terms of these confidentiality provisions or to declare rights
2 with respect to such provisions, the prevailing party in such action shall
be entitled to an award of costs of litigation … in such amount as may
3 be determined by the court having jurisdiction in such action.
4 Id., Ex. B at 40 (emphases added). As this provision makes clear, where, as here,
5 Plaintiffs seek to “enforce” the Confidentiality Provisions, including the non-
6 disparagement sentence, the “court”—not an arbitrator—resolves the dispute.
7 At the May 23, 2019 hearing, Plaintiffs asserted this provision is limited to
8 instances in which injunctive relief is sought. See Declaration of Drew E. Breuder
9 (“Breuder Decl.”) Ex. C (5/23/19 Tr.) at 20:11-21:5 (J. Steinsapir: the
10 Confidentiality Provisions “allow[] for injunctive relief … in [which] case you
11 would need to go to a Court, not an arbitrator, most likely.”). That interpretation is
12 mere fantasy. Plaintiffs’ position is not supported by anything in the 1992
13 Agreement itself and contradicts the plain language. There is no mention anywhere
14 of injunctive relief in the relevant sentence, and no language requiring different fora
15 for actions for injunctive or monetary relief. Established case law also
16 demonstrates that Plaintiffs’ position—that an action to “enforce” the agreement is
17 limited to injunctive relief—is just plain wrong. See, e.g., Chee v. Amanda Goldt
18 Prop. Mgmt., 143 Cal. App. 4th 1360, 1381 (2006) (“An action for damages arising
19 out of a breach of contract is an action to ‘enforce’ the contract.”); Heidt v. Heating
20 & Air Conditioning Co., 271 Cal. App. 2d 135, 136-38 (1969) (holding that
21 plaintiff’s action for monetary damages was “a suit to enforce the contract”).
22 Plaintiffs also claim that because the Confidentiality Provisions were
23 “incorporated” into the body of the 1992 Agreement, the arbitration provision
24 trumps the “court” provision in the confidentiality exhibit. Breuder Decl., Ex. C at
25 20:17-23. Not so. Plaintiffs’ construction renders the dispute-resolution clause in
26 the Confidentiality Provisions superfluous and violates fundamental principles of
27 contract interpretation—including that more specific provisions govern over
28 general provisions, Cal. Code Civ. Proc. § 1859, and requiring that courts interpret

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1 agreements “so as to give effect to every part,” Cal. Civ. Code § 1641. See also
2 MacDonald & Kruse, Inc. v. San Jose Steel Co., 29 Cal. App. 3d 413, 421 (1972)
3 (acknowledging “well recognized rule … that where a general and a particular
4 provision … are inconsistent, the particular controls the general”); United Farmers
5 Agents Assn., Inc. v. Farmers Grp., Inc., 32 Cal. App. 5th 478, 495 (2019) (courts
6 must “give effect to all of a contract’s terms, and to avoid interpretations that render
7 any portion superfluous, void or inexplicable”); Katz v. Feinberg, 290 F.3d 95, 97–
8 98 (2d Cir. 2002) (“[U]nder normal circumstances, when an agreement includes
9 two dispute resolution provisions, one specific … and one general … the specific
10 provision will govern those claims that fall within it.”); Cf. Lamps Plus, Inc. v.
11 Varela, 139 S. Ct. 1407, 1415 (2019) (refusing to order class arbitration where
12 arbitration agreement was ambiguous because “arbitration is a matter of consent,
13 not coercion”) (internal quotations omitted).
14 Plaintiffs’ failure to demonstrate the existence of a valid agreement to
15 arbitrate disputes regarding the Confidentiality Provisions dooms their Motion. See
16 Knutson v. Sirius XM Radio Inc., 771 F.3d 559, 564 (9th Cir. 2014) (denying
17 motion to compel arbitration where “no valid agreement to arbitrate exist[ed]”).
18 II. THE COURT SHOULD DENY PLAINTIFFS’ MOTION TO COMPEL
BECAUSE THE ARBITRATION PROVISION DOES NOT
19 ENCOMPASS THIS DISPUTE.
20 Plaintiffs’ Motion must be denied for a second, independent reason: even
21 assuming the 1992 Agreement’s arbitration provision controls (and it does not), that
22 provision does not “encompass[] the dispute at issue.” Cox, 533 F.3d at 1119.
23 A. The Arbitration Provision Does Not Encompass This Dispute
Because Leaving Neverland Has Nothing to Do with Live in
24 Bucharest.
25 The subject of the 1992 Agreement was a live concert performance by
26 Michael Jackson in Bucharest, Romania, on October 1, 1992, as part of the
27 worldwide tour for Mr. Jackson’s 1991 Dangerous album. See Dkt. 22-1 (Abrutyn
28

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1 Decl.) ¶¶ 2, 5; Breuder Decl. ¶¶ 4-5.1 Under the 1992 Agreement, TTC (on behalf
2 of Mr. Jackson) granted a one-time license to HBO to exhibit Live in Bucharest on
3 October 10, 1992. Dkt. 22-1 (Abrutyn Decl.) ¶ 5; Dkt. 18, Ex. B at 26. The 2019
4 Leaving Neverland documentary—the subject of Plaintiffs’ complaints—simply
5 has nothing whatsoever to do with Live in Bucharest—the subject of the 1992
6 Agreement. For example, Leaving Neverland:
7 • does not mention or discuss Live In Bucharest, the Bucharest concert
8 itself, or HBO’s exhibition of the Live in Bucharest concert special;
9 • contains no concert footage or other content from Live in Bucharest;
10 • contains no “confidential information” (as that term is defined in the
11 Confidentiality Provisions (Dkt. 18, Ex. B at 38)) that may have been
12 disclosed to HBO in connection with Live in Bucharest; and
13 • neither mentions nor discusses the 1992 Agreement.
14 Breuder Decl. ¶¶ 4-5; see also HBO’s Notice of Lodging, Exs. A-B (copies of Live
15 in Bucharest and Leaving Neverland, respectively).
16 In fact, the only connection Plaintiffs identify between the 1992 Agreement
17 and Live in Bucharest, on the one hand, and Leaving Neverland, on the other hand,
18 is their assertion that Leaving Neverland “alleges that Jackson was abusing children
19 in connection with and on the Dangerous World Tour.” Dkt. 1-1 at 13, ¶ 40
20 (emphasis in original); see also Dkt. 17 at 6. But the Bucharest concert was only
21 one of nearly 70 concerts that took place between June 1992 and November 1993
22 on the Dangerous tour. Breuder Decl. ¶ 4. And the Dangerous tour is only
23 mentioned once in Leaving Neverland, in the following excerpt:
24 Joy Robson: “During that Dangerous tour when Michael [Jackson]
25 took Brett Barnes on the tour with him, Wade [Robson] had asked to
go on the tour. And Michael had told him no, he couldn’t go because
26
he wasn’t allowed to take children on this tour. And then he saw Brett
27 1
In deciding a motion to compel arbitration, the Court “may consider the pleadings,
28 documents of uncontested validity, and affidavits submitted by either party.” QED
Hold., LLC v. Block, 2015 WL 12659935, at *3 (C.D. Cal. June 11, 2015) (Wu, J.).
4 HBO’S SUPP. BRIEFING RE: MOT. TO COMPEL
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1 Barnes with him on television.”


2 Breuder Decl. ¶ 6; Notice of Lodging, Ex. B (Leaving Neverland, Part I) at
3 1:58:38–1:58:59 (showing photograph and video of Mr. Jackson with Brett Barnes).
4 Plaintiffs’ Motion identifies no basis for this Court to stretch the 1992 Agreement’s
5 arbitration provision to compel arbitration of claims involving an unrelated
6 documentary produced more than 25 years later by an independent third party and
7 licensed to HBO. See Dkt. 22-1 (Abrutyn Decl.) ¶ 3 (Leaving Neverland “was
8 developed and is owned by Amos Pictures Ltd., and was licensed to HBO for
9 distribution in the United States and Canada (as well as Bermuda).”).
10 Plaintiffs also assert that this dispute is encompassed by the 1992
11 Agreement’s arbitration provision because Leaving Neverland shows a clip from
12 one of the same music videos—of Mr. Jackson’s Black or White—that appears in
13 Live in Bucharest. See Dkt. 17 at 6; id. at 18, ¶ 7. But the Black or White music
14 video was independently created months before the Bucharest concert, and is
15 available for anyone to purchase today. Breuder Decl. ¶¶ 7-9. That both Mr.
16 Jackson and the producers of Leaving Neverland chose to show a clip from part of
17 the same music video to their viewers is not a sufficient basis to compel arbitration.
18 B. The Arbitration Provision Does Not Encompass This Dispute
Because the 1992 Agreement Has Expired.
19

20 The arbitration clause also does not “encompass” this dispute, even if it could
21 be read to apply to an unrelated documentary, because the 1992 Agreement has
22 been fully performed and is expired. Under California law, where, as here, a
23 contract has been fully performed by both parties, it is deemed to be expired. Cal.
24 Civ. Code § 1473 (“Full performance of an obligation, by the party whose duty it is
25 to perform it . . . extinguishes it.”); Giles v. Horn, 100 Cal. App. 4th 206, 228
26 (2002) (holding plaintiffs’ claim that county breached contracts was moot because
27 “the contracts [had] been fully performed and [had] expired”). The parties to the
28 1992 Agreement (who are not the same parties to this action), fully performed their

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1 obligations more than 25 years ago, after the conclusion of the Holdback Period
2 ended, on or about October 10, 1993 (one year after exhibition of the concert
3 special). See Dkt. 22 at 3; Dkt. 18, Ex. B at 26, 29-30; Dkt. 22-1 ¶ 5. HBO
4 exhibited the concert special just one time, on October 10, 1992, and paid TTC a
5 license fee. See Dkt. 18, Ex. B at 26; Dkt. 22-1 ¶ 5. The parties’ obligations have
6 thus long been fulfilled, and the 1992 Agreement is expired.
7 The law is clear that where the complained-of conduct occurs after the
8 expiration of the contract containing an arbitration clause, the dispute is not
9 encompassed by that arbitration clause unless the right has vested or survived
10 expiration. See Just Film, Inc. v. Merchant Servs., Inc., 2011 WL 2433044, at *4
11 (N.D. Cal. June 13, 2011), quoting Operating Eng’rs Local Union No. 3 v.
12 Newmont Mining Corp., 476 F.3d 690, 693-94 (9th Cir. 2007) (holding that an
13 arbitration clause encompasses a dispute when the “facts and occurrences”
14 underlying the dispute “arose before expiration”). A contrary rule would allow
15 “[t]he dead hand of a long-expired arbitration clause [to] govern forever.” Id., 2011
16 WL 2433044, at *4; see also Litton Fin. Printing Div. v. N.L.R.B., 501 U.S. 190,
17 209 (1991) (courts must “refuse” to apply any presumption in favor of arbitration to
18 an expired … agreement, for to do so would make limitless the contractual duty to
19 arbitrate”). Here, the complained-of conduct—HBO’s exhibition of Leaving
20 Neverland—occurred more than 25 years after the termination of the 1992
21 Agreement and long past any reasonable period of time thereafter. Dkt. 22 at 3;
22 Dkt. 18, Ex. B at 26, 29-30; Dkt. 22-1 ¶ 5. Plaintiffs’ claims are thus not
23 encompassed by the 1992 Agreement’s arbitration clause. See Just Film, 2011 WL
24 2433044, at *5 (denying a motion to compel arbitration because the claims “do not
25 arise under [defendant’s] lease agreement, which has expired”).
26 III. THE FIRST AMENDMENT AND CALIFORNIA PUBLIC POLICY
MANDATE DENIAL OF THE MOTION TO COMPEL.
27

28 As HBO explains in its Opposition, the Motion also should be denied

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1 because the arbitration provision, as applied here, is unenforceable as a matter of


2 the First Amendment, due process, and California public policy. Dkt. 22 at 16–22.
3 Plaintiffs argue that the arbitration provision lasts forever and sweeps in any
4 supposedly “disparaging” content about Mr. Jackson exhibited by HBO until the
5 end of time, including speech that is unquestionably of public concern, like the
6 statements made in Leaving Neverland. In so doing, Plaintiffs claim that the
7 arbitration provision provides a perpetual forum for them to police what are clearly
8 defamation-after-death claims in disguise, in violation of the First Amendment and
9 California law and public policy. Kelly v. Johnson Publishing Co., 160 Cal. App.
10 2d 718, 723 (1958) (“Defamation of a deceased person does not give rise to a civil
11 right of action[.]”). Avoiding these constitutional issues is all more reason to reject
12 Plaintiffs’ broad interpretation of the arbitration clause and deny the motion to
13 compel. Elonis v. U.S., 135 S. Ct. 2001, 2012 (2015); Center for Bio-Ethical Ref.,
14 Inc. v. Los Angeles Cnty. Sheriff Dept., 533 F.3d 780, 790-92 (9th Cir. 2008).
15 In making this argument, HBO is squarely attacking the enforceability of
16 arbitration provision itself, not arguing the merits as Plaintiffs have wrongly
17 claimed. By filing an action in court and asking this Court to use its judicial power
18 to enforce the arbitration agreement, Plaintiffs are enmeshing this Court in the kind
19 of “state action” that can violate the First Amendment, due process, and California
20 law and policy. See N.Y. Times v. Sullivan, 376 U.S. 254, 278 (1964) (civil libel
21 actions and judgments for damages can violate the First Amendment, because of the
22 chilling effect they can have on freedom of speech). HBO did not institute these
23 court proceedings; Plaintiffs did. Plaintiffs are asking this Court to use its power to
24 force HBO into arbitration over a film about a matter of public concern by citing to
25 an unrelated, 26-year-old provision. This is a classic attempt to chill and punish
26 speech, and the arbitration agreement is unenforceable under these circumstances.
27 IV. CONCLUSION
28 For the foregoing reasons, the Court should deny Plaintiffs’ Motion.

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1 Dated: June 4, 2019 O’MELVENY & MYERS LLP


GIBSON, DUNN & CRUTCHER LLP
2

3 By: /s/ Daniel M. Petrocelli


Daniel M. Petrocelli
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5 By: /s/ Theodore J. Boutrous Jr.


Theodore J. Boutrous Jr.
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7 Attorneys for Defendant Home Box


Office, Inc.
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