Federal judge George Wu said he would not dismiss the case, and would deliver a full ruling by the end of the month, according to Variety.
Leaving Neverland, made by British filmmaker Dan Reed, pivoted on claims from two men, James Safechuck and Wade Robson, that Jackson befriended them as children and later sexually abused them.
The Jackson estate had said that in broadcasting the film, it reneged on a non-disparagement clause that HBO signed when it aired a concert movie from Jackson's Dangerous tour in 1992.
In the contract, HBO agreed not to air disparaging material about the singer in future broadcasts, but it claims that the contract, now 26 years old, no longer applies.
An attorney for the Jackson estate, Bryan J. Freedman said: “HBO has tried everything possible to avoid having a trier of fact adjudicate their wrongdoing.
“If HBO believes its actions were proper then there is no reason for them to try and hide behind procedural technicalities to avoid an arbitration or a trial.
“Whether in an arbitration, federal court, state court or the court of appeal, the Estate of Michael Jackson will force HBO to be held accountable for its wrongful conduct. The Estate will never stop until justice has been obtained.”
The estate has previously slammed HBO for not including a denial of the claims made by Safechuck and Robson, who they are accusing of acting out of financial gain (Reed has maintained that neither were paid for their participation in the documentary).
In response to the early judgement HBO's attorney Theodore Boutrous said that the Jackson Estate had filed the lawsuit 'to chill speech'.
“It was filed to tell the world, ‘Don’t talk about child sex abuse.’… A company like HBO may be able to fight back and move forward. Others might not be able to do that,” he said.
The estate recently slammed the organisers of the Creative Arts Emmys after the film won its highest award for a documentary film on Sunday night.