At the request of Kevin Spacey and “House of Cards” producer MRC, a judge has vacated a nearly $31 million arbitration award won by the company for alleged sexual misconduct by the actor behind the scenes of the Netflix show.
Spacey, now 66, played Frank Underwood on “House of Cards” and was cut from the Netflix series after allegations surfaced of him sexually preying on young men. The accusations, which included the alleged groping of a production assistant, caused MRC to conduct an investigation and ultimately terminate his acting and producing contracts.
In August 2022, Los Angeles Superior Court Judge Mel Red Recana confirmed an award previously handed down by an arbitrator in October 2020 in MRC’s favor consisting of some $29.5 million in damages and the remainder in costs and fees, all totaling $30.9 million. The arbitrator found that Spacey’s conduct constituted a material breach of his acting and executive producing agreements.
But on Tuesday, Judge Virginia Keeny, who inherited the case after Recana’s 2024 retirement, granted the request by both sides in the wake of a December 2023 settlement, the terms of which were not divulged in the parties’ court papers.
“(MRC) and (Spacey) in their settlement agreement agreed to vacate the judgment in this action under certain circumstances, which the parties and their counsel agree and stipulate have been met here,” the parties’ joint papers stated.
Each party will pay their own attorneys’ fees and neither side will be declared the prevailing or winning party, according to the attorneys’ joint pleadings.
In his 2022 ruling, Recana noted that a November 2017 article on CNN.com contained allegations that Spacey engaged in a pattern of sexually predatory behavior directed at young crew members on the set of “House of Cards” and that once MRC became aware of the accusations, it suspended the actor, investigated, wrote Spacey out of the show’s final season and ended his acting and executive producing contracts.
But Spacey attorney Jonathan Phillips argued at the time that the award should be vacated, alleging the arbitrator exceeded the scope of his powers when he considered external evidence in deciding damages.
The arbitrator concluded that Spacey breached the agreements through his interactions with five specific crew members, who only came forward as part of MRC’s solicitation of allegations against Spacey, including the internal investigation MRC initiated only after Netflix made the decision to exclude Spacey from season six, Phillips and Spacey’s other attorneys further alleged in their new court papers.
While Spacey disagrees with the arbitrator’s factual findings and maintains that he did not sexually harass anyone, he understands and accepts that the arbitrator’s findings on that issue “are entitled to deference,” Spacey’s lawyers stated in their court papers.
“However, because the arbitrator committed — namely, the damages awarded to (MRC) are not rationally related to the specific breaches found by the arbitrator — (Spacey) is entitled to an order from this court vacating the award,” according to Spacey’s attorneys’ court papers.
But Recana wrote that he was “not compelled to infer that the arbitrator’s award was not based on the breach of the parties’ agreements or that it was based on an (external) source.”