Daily Dicta: We May Not Have Sports, But At Least We've Got Sports Litigation
This is the third pending suit that revolves around who has dibs on representing NBA star rookie Zion Williamson for marketing and branding deals.
April 19, 2020 at 10:11 PM
7 minute read
Remember when we had sports? That was fun, wasn't it?
Personally, I was saddest about missing the NCAA basketball tournament this year. My husband went to Duke, and for the sake of marital harmony, I've been an avid Blue Devils fan ever since I said "I do" 22 years ago. "March Madness" is a favorite family event.
Zion Williamson—who played for Duke for the 2018-2019 season—was one of the team's more memorable members. The forward was the consensus National Player of the Year, averaging 22.6 points per game, as well as 8.0+ rebounds and 2.0+ steals.
He only played a year of college basketball before going pro, snapped up by the New Orleans Pelicans as the first pick in the 2019 NBA draft.
It seems there was something of a feeding frenzy among agents to represent Williamson—which allegedly started while he was still at Duke (uh-oh), and before he declared for the NBA draft, according to a new lawsuit filed earlier this month in Miami-Dade County, Florida circuit court.
It's the third pending suit that revolves around who has dibs on representing Williamson for marketing and branding deals.
The litigation began when Williamson himself—represented by Jeffrey Klein, head of Weil, Gotshal & Manges' employment litigation practice, as well as North Carolina's Robinson, Bradshaw & Hinson—sued Prime Sports Marketing and its president Gina Ford in U.S. District Court for the Middle District of North Carolina last summer.
Williamson wants the court to declare that a five-year contract he signed on April 20, 2019 with Prime Sports to represent him is void, alleging that it violates North Carolina's Uniform Athlete Agent Act.
"Mr. Williamson seeks only to be freed from the draconian agreement defendants induced him to sign in total disregard of his legal rights," his complaint states. "Mr. Williamson contends that the agreement is void due to defendants' failure to register as an athlete agent in North Carolina and voidable due to defendants' failure to include the required notice provision in the agreement."
Williamson subsequently struck a deal to be represented by entertainment industry giant Creative Artists Agency, or CAA.
Prime Sports, in turn, sued Williamson and CAA for $100 million in Miami-Dade County Circuit Court, asserting claims including breach of contract, fraud and civil conspiracy.
"Defendant Zion Williamson breached express terms of the April 20, 2019 contract/agreement with plaintiffs and did so with the intent for defendants to usurp and misappropriate plaintiffs trade/business secrets/business plans/work product and to usurp and misappropriate the due compensation owed to plaintiffs," wrote Stephen Drummond of New York-based Drummond & Squillace.
Drummond asserted that CAA induced Williamson to break his contract by "intentionally, wrongfully and unlawfully" telling Williamson and his parents that Prime Sports was not capable of serving as his agent, and that CAA would "provide him with more, better and/or more financially lucrative marketing, branding and/or endorsement deals."
According the complaint, Prime Sports had deals in the works for Williamson with Puma, General Mills (Wheaties), Beats by Dre, Chase Bank, Harper Collins, Monster Hydro, Burger King, Mercedes-Benz, T-Mobile, Kraft Heinz, Powerade, Biosteel and others for a 15% cut of his compensation. The basketball star terminated their agreement on May 31, 2019.
Now, a third claimant has jumped into the mix—Cedriquze Johnson, who has sued Prime Sports (but not Williamson) in Miami-Dade Circuit Court.
The complaint, which was filed by Joshua Alper of Morgan & Morgan in Miami, offers another window into the wooing of a promising athlete.
Johnson, a former collegiate basketball player, said he established a friendship with Williamson and his family when Williamson was a junior in high school, attending his summer league games and other events, as well as his games at Duke.
According to Johnson, he "helped facilitate a relationship" between Prime Sports and Williamson's family. In exchange, he was supposed to get 5% of the money Prime Sports earned from representing Williamson.
In January of 2019, Johnson's complaint states that he and Prime Sports president Gina Ford had a meeting with Williamson's mother and step-father "to discuss potential marketing, branding and endorsement capabilities of Prime Sports, as well as Ford's business contacts."
To Wallach Legal's Daniel Wallach, an expert in sports betting, the timing of the meeting—months before Williamson declared for the NBA draft—is a red flag, and could invalidate Ford's contract with Williamson under North Carolina's Uniform Athlete Agent Act, which was enacted by the state in 2003 to protect student-athletes.
"This is a big no-no under the Uniform Athlete Agents Act, which forbids agents from initiating contact with a student-athlete unless the agent is registered," Wallach tweeted on April 16. "The UAAA defines 'contact' as also including 'indirect' communications, which would cover the meeting with the parents."
"An unforced litigation error," Wallach continued. "By admitting that he arranged a meeting with Zion's parents while he was still a student-athlete (and before he declared for the NBA Draft), the plaintiff may have negated his own lawsuit (as well as Gina Ford's) by pleading a violation of the UAAA."
Alper in an interview countered that Wallach is focusing on one sentence in the complaint. "Our position is that at all times, both Ms. Ford and Mr. Johnson complied with all applicable state laws and NCAA" rules, he said.
He argues that Ford deserves to get paid for her work on behalf of Williamson, "and for that matter, my client deserves to get paid too," Alper said. "Without his efforts, Ms. Ford wouldn't have been able to sign" Williamson.
For all the cases, forum may be key. Prime Sports lawyers in their suit against Williamson argue that the litigation belongs in Florida, where the company is based, that the North Carolina suit should be dismissed.
Williamson, who is from South Carolina, was never a North Carolina resident, Prime Sports argues—he was only a "non-permanent and temporary transient student" who lived in the state for less than a year. Moreover, they say the contract in dispute contains a Florida choice-of-law provision.
The argument held sway in Florida. In December, a Florida judge denied Williamson's motion to dismiss for lack of personal jurisdiction. "The pockets that are being picked are here [in Florida]," said Florida Circuit Court Judge David Miller, according to Sports Illustrated.
Williamson has appealed the decision.
Meanwhile, in North Carolina, Williamson's lawyers argue in a pending motion that the case belongs there. "Defendants' motion to dismiss is principally based on the mistaken belief that diversity jurisdiction requires one party to be a resident of the forum state, which is not true," they wrote in court papers filed last month.
"Defendants ignore that the void agreement does not specify venue in any particular court, all conduct central to Mr. Williamson's claims occurred in North Carolina, and that defendants travelled to North Carolina on multiple occasions for the specific purpose of recruiting Mr. Williamson and signing the agreement at issue," they argued. "In such circumstances, North Carolina public policy strongly favors adjudicating violations of its Uniform Athlete Agents Act in this state."
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