Jury Clears Jay-Z In $68M Cologne Contract Case

Law360, New York (November 10, 2021, 3:20 PM EST) -- A New York jury on Wednesday rejected a perfumer's $68 million contract suit alleging Jay-Z failed to promote his signature fragrance, ending a three-week trial that featured testimony from the hip-hop mogul himself.

After just two hours of deliberations, jurors found Jay-Z not liable for the $67.6 million in damages sought by Parlux Fragrances LLC for lost profits. The panel also rejected the global music icon's $6 million countersuit for alleged unpaid royalties.

"You failed to prove your case, and they failed to prove their case," New York State Supreme Court Justice Andrew Borrok said after hearing the verdict. "You're excused," he told the jury.

The verdict comes nearly six years after Parlux and its parent, Perfumania Holdings Inc., filed the case in state court. The company claimed that Jay-Z, whose name is Shawn Carter, and his company, S. Carter Enterprises LLC, breached a contract with Parlux by failing to make promotional appearances at the November 2013 launch of the fragrance or otherwise help keep the brand profitable.

In closing arguments Tuesday, Jay-Z's counsel framed the case as a misunderstanding exacerbated by dishonest deal brokers. But Parlux Fragrances LLC countered that the defense was "engaged in smoke and mirrors distraction," claiming Jay-Z simply "disapproved and disappeared" when he couldn't get what he wanted and destroyed evidence after Parlux sued.

Throughout the trial, former Parlux executives testified that Jay-Z's alleged failure to work with them to promote the product resulted in millions in lost profits. Parlux then called Jay-Z to the stand, where he sparred with Parlux counsel Anthony Viola of Mintz Levin Cohn Ferris Glovsky and Popeo PC, repeatedly correcting the attorney and suggesting that he was misleading the jury with his "little lawyer tricks," drawing laughter from the jury.

Jay-Z and his attorneys broadly argued that Parlux failed to understand how to properly market his luxury brand and protect his products from being sold "on the shelves of Walmart between hand sanitizer and Tic Tacs," as his attorney said in his opening statement. The perfumer's witnesses were unreliable, Jay-Z's attorney further argued, and the company had lied to the billionaire even as it sold unapproved follow-on products after Jay-Z rejected their "lazy" ideas.

The six jurors and three alternates appeared to struggle through much of the trial, with some sighing and shaking their heads as they were repeatedly excused for attorney arguments or extensive bench conferences. One juror briefly dozed off during summations and five jurors could be seen using cell phones, smartwatches or tablets during the final day in the courtroom — a violation of court rules.

The jury's apparent internet use took center stage in the midst of deliberations when Parlux counsel Anthony Viola accused Jay-Z's team of waging a misinformation campaign against the jury through online media outlets. Viola said Jay-Z had "planted" articles in the press that claimed the FBI told Jay-Z to delete his emails — a claim unsupported by any evidence in the case.

"I would like you to give a curative instruction," Viola fumed. "Call them in. Tell them the deletion in this case occurred in 2016. It was intentional. It was of their own free will. It was not at the urging of any government office, including the FBI."

The judge appeared concerned by the timing, given that journalists had reported the jurors were using their cell phones during the trial. He asked for the issue to be briefed and offered that the most he could say might be that "there was no evidence presented to the court that this was done because the feds had advised Mr. Carter to delete his emails."

About two hours into deliberations on Wednesday afternoon, the jury returned a note asking to see the license agreement — the contract at the center of the case — leading to speculation that the jury would need more time. But just 10 minutes after the judge read the first note, the jury returned a second: "We have a verdict."

Jurors dispensed with the various breach of contract claims from both sides, drawing a last-minute protest from Parlux counsel that the verdict was inconsistent and asked the jury to reconsider the verdict.

"The verdict is not inconsistent as it relates to the different burdens on each side," Justice Borrok said, rebuffing the request as he bluntly stated both sides had failed. "That's the outcome, counselor."

"Parlux believes it presented a strong case and is disappointed that the jury rendered a verdict today finding that neither side proved breach by the other," a Parlux spokesperson said in a statement. "Parlux plans to pursue all legal options available to it."

Jay-Z counsel Alex Spiro said "We're pleased with the verdict."

Parlux Fragrances is represented by Anthony J. Viola, Andre K. Cizmarik, Kara M. Cormier and Whitney M. Costin of Mintz Levin Cohn Ferris Glovsky and Popeo PC.

Jay-Z and his company are represented by Alex Spiro, Ellyde R. Thompson, Cory D. Struble, Allison L. McGuire and Phillip B. Jobe of Quinn Emanuel Urquhart & Sullivan LLP.

The case is Parlux Fragrances LLC et al. v. S. Carter Enterprises LLC et al., case number 650403/2016, in the Supreme Court of the State of New York, County of New York.

--Editing by Alyssa Miller.

Update: This story has been updated with more details from Wednesday's proceedings and comment from Parlux.

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