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The Kardashian sisters’ $11.5 million judgment in a legal battle over the Kardashian Beauty cosmetics line has been affirmed by a California appeals court.
Kim, Khloe and Kourtney have been engaged in a legal battle with Haven Beauty and Hillair Capital since 2016. The dispute stems from a five-year license agreement the sisters made in 2012 with the now defunct Boldface Licensing + Branding, which hit financial trouble the next year and that resulted in Hillair buying its assets — including its licensing rights — and forming Haven to hold them.
Under the original deal, the Kardashians gave permission to use their trademarks, images and likenesses for the line, as long as all uses were approved in writing in advance. In exchange, they’d receive a $1 million advance and royalties from the sales of Kardashian Beauty products. (The line was originally dubbed Khroma Beauty, but that led to a separate trademark fight and ultimately the name was changed.) As of February 2016, they hadn’t received any royalties. They notified Hillair it was in breach of the agreement, and the legal battle followed. Hillair maintained the Kardashians were the ones who breached the deal by failing to promote the cosmetics line.
The dispute made its way to arbitration, where a panel sided with the Kardashians following a nine-day hearing in early 2018. Hillair challenged the award, but L.A. County Superior Court Judge Richard L. Fruin sided with the sisters and entered a judgment of about $11.5 million in their favor.
In the matter’s second trip to an appeals court — the first being when Hillair tried and failed in federal court to defeat an injunction that barred it from using the Kardashian Beauty name — the famous family has again emerged victorious.
Hillair challenged the order compelling arbitration and the one confirming the arbitration award. California’s Second Appellate District on Tuesday found a contract between the parties required arbitration, and the arbitrator appropriately decided arbitration was the right forum for the dispute. It also held that California precedent limits the situations under which an arbitration award can be overturned, and with narrow exceptions they can’t be reviewed for errors of fact or law. (Though the panel made no finding of error here.)
“There are some federal courts that will find that an arbitrator exceeded his or her powers when the arbitration award evinces a manifest disregard of the law,” states the opinion, which is embedded below. “Appellants request that we apply that standard. But precedent establishes that an ‘arbitrator’s [alleged] manifest disregard of the law is not a ground for vacatur under California law.’ … When California courts refrain from reviewing arbitration awards for errors of law, that logically leads to confirmation of those awards out of deference. A rule that leads to confirmation of arbitration awards helps to enforce arbitration agreements. There is no basis to find preemption.”
In addition to the $11.5 million they were already awarded, the sisters will be able to collect their costs on appeal — plus at least $2 million in post-judgment interest.
In a statement to The Hollywood Reporter, the Kardashians’ attorney Michael Kump of Kinsella Weitzman Iser Kump Holley lauded the win for his clients.
“Kim, Khloe and Kourtney are thrilled with this important victory in the California Court of Appeal,” Kump said. “It’s been a long road since 2012 when they signed the license agreement allowing the use of their names and likenesses in the sale of color cosmetics. In order to get what they were promised, they have been forced to litigate in state and federal court, and in JAMS arbitration – winning at every stage. They deserve to be paid what they are owed.”
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