Controversy from Talent Lawyer's Article on JAMS

“This is something that we don't need to take sides on,” says Richard Chernick, the vice president and managing director of JAMS's arbitration practice. “We are respected by everybody in the field. And we don't regard this as a fight between us and the few people who think we are anything other than neutral. [Nessim] was a litigant in an arbitration I did a long time ago, and I think that may have influenced his views on the subject.”

In the article, Nessim and associate Scott Goldman argued that neutrals are disinclined to rule against studios and risk losing their business. Nessim collected the dispute resolution provisions from 26 contracts between major television studios and talent from 2011 and 2013. Of these, 22 required mandatory arbitration, and 21 of those designated JAMS as the provider, according to Nessim's article. Nessim acknowledged the piece was inspired by his own experience representing talent in a recent matter before JAMS.

Other Hollywood lawyers tended to agree. “The whole issue sounds like sour grapes,” says Martin Katz, a Century City, CA, partner at Sheppard, Mullin, Richter & Hampton who oversees the firm's entertainment litigation practice and has represented studios. And, Katz says, as a litigator who regularly appears before JAMS neutrals, Nessim himself would stand to benefit from any repeat-player bias. “If there were a bias toward those who bring repeat business, it would be to make the lawyers pleased, because that's who picks the arbitrators,” Katz says. “And Ron Nessim and the other talent lawyers are in just as repeat a position as the studios.”

Nessim disagrees, citing clients that have included author Danielle Steel and NCIS creator Donald Bellisario. “They may be in court once in their lifetime and in arbitration once in their lifetime. They're not repeat players,” he says.

Nessim's article argues that the talent-studio relationship is often more akin to an employment relationship. He proposes that JAMS voluntarily treat studio-talent arbitrations as employer-employee arbitrations, where different rules are designed to equalize the power differential. He also proposes that generalist arbitrators be randomly assigned to these disputes, rather than allowing arbitrators to specialize in the entertainment industry.

Questions of fairness in private arbitration are as old as private arbitration itself, and have been raised regarding JAMS and the entertainment industry before, Hollywood litigators say.

Nessim, a Hollywood litigator with more than 30 years of experience, may be putting a lot on the line to make his case, as he publicly takes a stance that may alienate JAMS neutrals he and his clients may have to appear before. Chernick, who described Nessim as an old friend, says not to worry. “There is no question in my mind that Ron is going to get a fair hearing at JAMS.”

But Nessim notes: “Many on the talent side share my concerns, and the facts discussed in my article speak for themselves. I suggest that people read my article and draw their own conclusions. I also suggest concrete ways that the system can be improved in the last section of the article and suggest a dialogue on the merits rather than dismissing the talent side concern as 'sour grapes '.'”

Patience Haggin reports for The Recorder, an ALM sibling of Entertainment Law & Finance.

Arbitration provider JAMS is staying neutral, sort of, on an entertainment litigator's claim that it favors big studios in arbitrations and mediations. The claim, made by Bird Marella partner Ronald Nessim in a law review this summer, is essentially that JAMS has a lock on studio business, with the overwhelming majority of studio contracts reviewed by Nessim naming JAMS as the dispute resolution provider. See, “Mandatory Arbitration Provisions Involving Talent and Studios and Proposed Areas for Improvement,” UCLA Entertainment Law Review, Vol. 22, Issue 2 (2015).

That gives JAMS neutrals an incentive to favor the studios ' a repeat-player bias. “I have a lot of respect for JAMS and JAMS arbitrators,” Nessim, who typically represents talent in disputes, said recently. “They're no different than anybody else in the world. They make money if people designate them.”

JAMS had declined to give Nessim data on how its neutrals ruled in talent-studio cases. After considering a formal response, a JAMS official said it would leave the matter alone. JAMS has 27 locations.

“This is something that we don't need to take sides on,” says Richard Chernick, the vice president and managing director of JAMS's arbitration practice. “We are respected by everybody in the field. And we don't regard this as a fight between us and the few people who think we are anything other than neutral. [Nessim] was a litigant in an arbitration I did a long time ago, and I think that may have influenced his views on the subject.”

In the article, Nessim and associate Scott Goldman argued that neutrals are disinclined to rule against studios and risk losing their business. Nessim collected the dispute resolution provisions from 26 contracts between major television studios and talent from 2011 and 2013. Of these, 22 required mandatory arbitration, and 21 of those designated JAMS as the provider, according to Nessim's article. Nessim acknowledged the piece was inspired by his own experience representing talent in a recent matter before JAMS.

Other Hollywood lawyers tended to agree. “The whole issue sounds like sour grapes,” says Martin Katz, a Century City, CA, partner at Sheppard, Mullin, Richter & Hampton who oversees the firm's entertainment litigation practice and has represented studios. And, Katz says, as a litigator who regularly appears before JAMS neutrals, Nessim himself would stand to benefit from any repeat-player bias. “If there were a bias toward those who bring repeat business, it would be to make the lawyers pleased, because that's who picks the arbitrators,” Katz says. “And Ron Nessim and the other talent lawyers are in just as repeat a position as the studios.”

Nessim disagrees, citing clients that have included author Danielle Steel and NCIS creator Donald Bellisario. “They may be in court once in their lifetime and in arbitration once in their lifetime. They're not repeat players,” he says.

Nessim's article argues that the talent-studio relationship is often more akin to an employment relationship. He proposes that JAMS voluntarily treat studio-talent arbitrations as employer-employee arbitrations, where different rules are designed to equalize the power differential. He also proposes that generalist arbitrators be randomly assigned to these disputes, rather than allowing arbitrators to specialize in the entertainment industry.

Questions of fairness in private arbitration are as old as private arbitration itself, and have been raised regarding JAMS and the entertainment industry before, Hollywood litigators say.

Nessim, a Hollywood litigator with more than 30 years of experience, may be putting a lot on the line to make his case, as he publicly takes a stance that may alienate JAMS neutrals he and his clients may have to appear before. Chernick, who described Nessim as an old friend, says not to worry. “There is no question in my mind that Ron is going to get a fair hearing at JAMS.”

But Nessim notes: “Many on the talent side share my concerns, and the facts discussed in my article speak for themselves. I suggest that people read my article and draw their own conclusions. I also suggest concrete ways that the system can be improved in the last section of the article and suggest a dialogue on the merits rather than dismissing the talent side concern as 'sour grapes '.'”

Patience Haggin reports for The Recorder, an ALM sibling of Entertainment Law & Finance.