‘Bones’ stars petition to confirm $179 million arbitration award

If an arbitrator's excoriating remarks directed at Twenty-First Century Fox Inc. executives for fraudulent self-dealing doesn't give studios dealing with mounting profit participation claims reason to worry, the $179 million award that accompanied them might.

The award, which includes $128 million in punitive damages, was issued against various Fox entities as part of a long-running dispute with two producers and two stars of the hit television series "Bones." While issued earlier this month, the award became public through a petition to confirm it filed by the plaintiffs in Los Angeles County Superior Court Wednesday.

They accused the company of massively underpaying its profit participants on the show through "sweetheart deals" with its own sister networks and affiliate platforms, like Hulu Inc., at prices radically lower than standard.

Fox successfully petitioned to have the case moved into arbitration in 2016. The case was handled by JAMS Inc. mediator Peter Lichtman, a retired Los Angeles County Superior Court judge, who in his ruling criticized Fox for fraudulent and deceptive conduct three years later.

Lichtman called out a number of Fox executives by name for offering false testimony, including Peter Liguori, Gary Newman Dana Walden, and Peter Rice.

"It can only be concluded that the Fox witnesses lacked credibility and at times appeared to intentionally deviate from the truth even in the face of clear and unequivocal controverting facts. A myriad of explanations by the Fox witnesses cannot account for their complete disregard for obvious and uncontroverted facts," Lichtman wrote.

Now represented by O'Melveny & Myers LLP partner Daniel Petrocelli, a statement from Fox indicates it intends to fight the $129 million punitive damage award. But arbitration awards are notoriously difficult to overturn, essentially requiring an arbitrator to either radically exceed their own authority or objectively disregard the law for a challenge to stand a chance.

John V. Berlinski, a Kasowitz Benson Torres partner who represented the plaintiffs, said he was extremely satisfied with the ruling.

"This case is going to profoundly change the way Hollywood does business," Berlinski said. "Our clients' creativity and hard work brought Fox its longest-running and most profitable drama ever. Now Fox needs to - at long last - do the right thing and pay them what they are owed."