'Fast & Furious' Spinoff Fight to Remain in L.A. Court

Fast & Furious Presents- Hobbs & Shaw Still 7 - Publicity - H 2019
Universal Pictures

Fast & Furious Presents: Hobbs & Shaw

Universal has lost another bid to move its dispute with Fast & Furious producer Neal Moritz to arbitration as a California appeals court has affirmed an L.A. judge's decision that the fight belongs in his courtroom.

Moritz in October 2018 sued Universal Studios for breach of contract claiming he began working on the Dwayne Johnson- and Jason Statham-led spinoff Hobbs & Shaw after an oral agreement with president Jimmy Horowitz that the company later backtracked on. The producer's complaint says he received fixed compensation, bonuses, backend participation and pay-or-play protection for the first eight films of the franchise, and his last written agreement entitled him to participate in sequels or remakes. Moritz says Horowitz orally promised him a first-dollar-gross deal for Hobbs & Shaw, but after the parties began exchanging written drafts of their deal, Universal tried to change it so the producer's profit participation would only kick in after the film recouped its expenses.

Universal argued that because Moritz's Fast & Furious agreements contained arbitration provisions (as did the unsigned written deal for Hobbs & Shaw), the fight should be put before an arbitrator. But L.A. County Superior Court Judge Craig D. Karlan in July 2019 sided with Moritz, finding the arbitration clause in the unsigned agreement never became operative and the previous contracts weren't relevant to the deal for the spinoff. He found, "Had the parties wished to have any and all disputes 'arising out of or relating' to the entire Fast and Furious franchise be arbitrated, they could have easily drafted such an expansive arbitration provision; they chose not to."

The appellate panel notes that Moritz signed seven separate contracts in connection with his work on the franchise, the last of which covered the eighth, ninth and tenth installments (only one of which, The Fate of the Furious, has been made so far) as well as any "sequel" or "remake" of the earlier films. Six of those contained explicit arbitration provisions, the most recent being the one that covered the seventh film.

"We conclude not only is it not clear and unmistakable here that the parties agreed to delegate arbitrability questions concerning Hobbs & Shaw to an arbitrator, no reasonable person in their position would have understood the F6 and F7 arbitration provisions to require arbitration of any future claim of whatever nature or type, no matter how unrelated to the agreements nor how distant in the future the claim arose," writes associate justice Victoria Gerrard Chaney in the published opinion, which is posted below.

The panel notes Universal's reading of the agreement flouts the Federal Arbitration Act and case law that holds arbitrating a claim is only appropriate "where the court is satisfied that the parties agreed to arbitrate that dispute."

"The FAA requires no enforcement of an arbitration provision with respect to disputes unrelated to the contract in which the provision appears," writes Chaney. "Appellants’ argument that an arbitration provision creates a perpetual obligation to arbitrate any conceivable claim that Moritz might ever have against them is plainly inconsistent with the FAA’s explicit relatedness requirement."

With that, the panel affirmed Karlan's decision. A status conference is set for Friday.