February 27, 2019

Arbitrator awards $128 million in punitive damages against 21st Century Fox

The Hollywood Reporter reports that an arbitrator has awarded $179 million, including $128 million in punitive damages, against 21st Century Fox in a lawsuit over profits from the television show Bones.

The plaintiffs are the two stars of the show (Emily Deschanel and David Boreanaz), the show's executive producer (Barry Josephson) and the author whose works inspired the show (Kathy Reichs).  At the core of the dispute is the plaintiffs' claim that Fox cheated them out of a share of the profits from the show by undercharging licensing fees to its sister companies, including Hulu, in which Fox had a 30 percent stake.

The plaintiffs have filed a petition to have the arbitration award confirmed by the California superior court.  Fox has hired Dan Petrocelli, who is no stranger to cases involving high-profile punitive damages awards, to oppose the petition.

A decade ago we expressed our view that the due process restrictions on excessive punitive damages should apply to arbitration awards, notwithstanding the limitations on judicial review of arbitration awards.  Division Eight of the Second Appellate District disagreed in Shahinian v. Cedars-Sinai.  Perhaps Fox will take another run at that issue in this case.