The United States District Court for the District of Columbia ruled today that a woman who appeared on an episode of MTV's "The Real World" may maintain her lawsuit in federal court and will not have to arbitrate her claims based on video footing the Defendants allegedly obtained without the Plaintiff's authorization while she was intoxicated. Although not an employment or benefits case, we think the case worth mentioning here as it involves the arbitrability of disputes in general, an issue that frequently arises in the employment law context (it is also worth mentioning because our firm represents the plaintiff in the case).
By way of background, the Plaintiff brought suit in the Superior Court of the District of Columbia alleging invasion of privacy, intentional infliction of emotional distress, and negligent infliction of emotional distress against Defendants Viacom, Inc., MTV Networks, and Bunim-Murray Productions, based on her allegedly unauthorized appearance on MTV's "The Real World" reality television show. Specifically, the Plaintiff alleged in Counts I and II of her Complaint, that Defendants invaded her privacy by portraying her in a false light and by disclosing private facts about her without her consent. In Count III, she alleged that Defendants intentionally caused her emotional distress by airing the episodes and outtakes and by continuing to disseminate the footage after she notified Defendants that the footage had caused her severe emotional distress. Lastly, in Count IV, the Plaintiff claimed that the Defendants negligently caused her emotional distress by airing the footage. With regards to Counts III and IV, the Plaintiff emphasized that Defendants knew or should have known that she was particularly susceptible to emotional distress because she stated in part of the footage Defendants obtained and aired on MTV's networks that she suffered from anxiety.
On May 12, 2010, the Defendants removed the action to the United States District Court for the District of Columbia pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. The Defendants then filed a Motion to Compel Arbitration, or in the Alternative, to Stay the Litigation. The Defendants argued that, prior to Defendants obtaining any video footage of Plaintiff, the Plaintiff had signed a release authorizing Defendants to use any video footage taken while Plaintiff was in the Real World house and that the Plaintiff agreed in the release to submit any disputes arising under the release to arbitration. The Defendants argued that the Federal Arbitration Act dictates that the dispute had to be decided in arbitration and not in federal court. The Plaintiff countered that the FAA also dictates that certain issues must be decided by the courts. The Plaintiff noted that Section 4 of the FAA, which was at issue in the case, provides that “[i]f the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof.” The Plaintiff argued that her intoxication placed the “making of the arbitration agreement” at issue and therefore the enforceability of the agreement was for the Court to decide (not surprisingly, the Defendants argued, on the other hand, that the case law compelled the conclusion that the intoxication challenge should be decided by the arbitrator in the first instance).
Ultimately, the Court agreed with the Plaintiff. The Court noted that the Plaintiff challenged the making of the Arbitration Agreement on the grounds of intoxication and that under relevant law, voluntary intoxication is a type of mental capacity defense that permits an individual to avoid a contract if she was so intoxicated at the time of formation that she could not understand the terms and conditions of the agreement. The Court concluded that because this mental capacity defense went to the formation, or the “making” of the Arbitration Agreement, under § 4 of the FAA it must be decided by this Court. Consequently, the Court denied Defendants’ Motion to Compel Arbitration.
By way of background, the Plaintiff brought suit in the Superior Court of the District of Columbia alleging invasion of privacy, intentional infliction of emotional distress, and negligent infliction of emotional distress against Defendants Viacom, Inc., MTV Networks, and Bunim-Murray Productions, based on her allegedly unauthorized appearance on MTV's "The Real World" reality television show. Specifically, the Plaintiff alleged in Counts I and II of her Complaint, that Defendants invaded her privacy by portraying her in a false light and by disclosing private facts about her without her consent. In Count III, she alleged that Defendants intentionally caused her emotional distress by airing the episodes and outtakes and by continuing to disseminate the footage after she notified Defendants that the footage had caused her severe emotional distress. Lastly, in Count IV, the Plaintiff claimed that the Defendants negligently caused her emotional distress by airing the footage. With regards to Counts III and IV, the Plaintiff emphasized that Defendants knew or should have known that she was particularly susceptible to emotional distress because she stated in part of the footage Defendants obtained and aired on MTV's networks that she suffered from anxiety.
On May 12, 2010, the Defendants removed the action to the United States District Court for the District of Columbia pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. The Defendants then filed a Motion to Compel Arbitration, or in the Alternative, to Stay the Litigation. The Defendants argued that, prior to Defendants obtaining any video footage of Plaintiff, the Plaintiff had signed a release authorizing Defendants to use any video footage taken while Plaintiff was in the Real World house and that the Plaintiff agreed in the release to submit any disputes arising under the release to arbitration. The Defendants argued that the Federal Arbitration Act dictates that the dispute had to be decided in arbitration and not in federal court. The Plaintiff countered that the FAA also dictates that certain issues must be decided by the courts. The Plaintiff noted that Section 4 of the FAA, which was at issue in the case, provides that “[i]f the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof.” The Plaintiff argued that her intoxication placed the “making of the arbitration agreement” at issue and therefore the enforceability of the agreement was for the Court to decide (not surprisingly, the Defendants argued, on the other hand, that the case law compelled the conclusion that the intoxication challenge should be decided by the arbitrator in the first instance).
Ultimately, the Court agreed with the Plaintiff. The Court noted that the Plaintiff challenged the making of the Arbitration Agreement on the grounds of intoxication and that under relevant law, voluntary intoxication is a type of mental capacity defense that permits an individual to avoid a contract if she was so intoxicated at the time of formation that she could not understand the terms and conditions of the agreement. The Court concluded that because this mental capacity defense went to the formation, or the “making” of the Arbitration Agreement, under § 4 of the FAA it must be decided by this Court. Consequently, the Court denied Defendants’ Motion to Compel Arbitration.
Finally, the Court noted that the Defendants also sought, through their motion to compel and stay, summary judgment on Plaintiff’s intoxication defense, arguing that Plaintiff cannot bear her burden of proof. The Court noted that the had offered evidence suggesting that she was inebriated when she signed the Agreement and that the issue of whether Plaintiff was so intoxicated on the night of September 11, 2009, that she was incapable of understanding the terms of the Arbitration Agreement was thus a genuine issue of material fact is in dispute. Consequently, the Court concluded that summary judgment is not appropriate.
Stay tuned for more about this case.
