It was billed as the “Fight of the Century” – the match between world champion Manny Pacquiao and undefeated world champion Floyd Mayweather, Jr.  When every dime is accounted for, revenue from last Saturday’s fight at the MGM Grand in Las Vegas is expected to top $400 million. Unsurprisingly, that is a record.  Honest fans paid approximately $100 for pay-per-view access, and the fighters will ultimately split a purse worth more than $300 million.  In the end, Mayweather won by unanimous decision and, by every metric, the fight was a massive success for the athletes, their promoters, and the Vegas machine.  It was also a big letdown for fans who had waited for an epic match-up that arguably should have happened five years ago.

Reports subsequently revealed that Pacquiao injured his shoulder in the months leading up to the fight.  On Wednesday May 6, he underwent arthroscopic surgery in Los Angeles to repair a torn rotator cuff in his right shoulder.  Despite the preexisting nature of the injury, Pacquiao denied any “injury to [his] shoulders, elbows, or hands that needed evaluation or examination” on his pre-fight questionnaire submitted to the Nevada State Athletic Commission.  Pacquiao’s camp denied making any misrepresentation, stating that Pacquiao and his adviser, Michael Koncz, inadvertently “checked the wrong box” on the questionnaire.

Following the injury disclosure, boxing fans teamed up with a few entrepreneurially-minded class action litigators to flood the federal courts with lawsuits alleging fraud and conspiracy by the fighters, their promoters, the television networks, and television providers. See, e.g., here and here.

Of local interest, on Monday, two Philadelphia residents joined the fray with a class action matter filed in the United States District Court for the Eastern District of Pennsylvania.  Plaintiffs, Allan Gordon and Seth Lamb named Showtime and HBO, Mayweather Promotions, LLC, Pacquiao and his promoter, Top Rank, Inc., Top Rank’s CEO and President, Bob Arum and Todd Duboef, respectively, and Michael Koncz, alleging that the defendants conspired to conceal Pacquiao’s injury.  Protesting what they call a “sham fight,” Plaintiffs complain that Pacquiao injured his shoulder so severely that he could not train for a period of two weeks.  Plaintiffs suit is summarized in Paragraph 13:

Defendants each engaged in blatantly self-interested and wrongful conduct which violated the contractual expectations and rights of pay-per-view purchasers who fully anticipated and contracted for access to view and observe an honest and fair boxing match played in compliance with all laws, regulations, and [Nevada Athletic Commission] rules.

Gordon and Smith each paid $99.99 to watch the match – Gordon from his secondary home in Hallandale Beach, Florida, and Smith from his home in Philadelphia.  They assert statutory claims under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (the “UTPCPL”) and the Florida Deceptive and Unfair Trade Practices Act, both of which provide for remedies in addition to actual damages. In the case of the UTPCPL, for instance, a consumer can recover three times the amount of his or her actual damages and an award of attorneys’ fees for a proven violation of any provision of the UTPCPL.  In addition to their statutory claims, Plaintiffs assert common law claims for tortious interference with a contractual relationship, fraud, breach of contract, unjust enrichment, and civil conspiracy.

Plaintiffs ask the Court to certify the matter as a class action and to designate Plaintiffs as representatives of a class that Plaintiffs anticipate will exceed “hundreds of thousands” of pay-per-view subscribers.  In reality, the class of potential plaintiffs could exceed five million.

Given the number of actions and potential class members, it is likely that present and future actions arising from the fight will be consolidated by the United States Judicial Panel on Multidistrict Litigation for the purposes of reducing expense and the toll on judicial resources.  The MDL is a panel consisting of six federal judges from across the country (including Third Circuit Court of Appeals Judge and former First Lady of Pennsylvania, Marjorie Rendell), which serves to (1) determine whether civil actions pending in different federal districts involve one or more common questions of fact such that the actions should be transferred to one federal district for coordinated or consolidated pretrial proceedings; and (2) select the judge or judges and court assigned to conduct such proceedings.

In the interim, the chairman of the NSAC, Francisco Aguilar, has already promised an investigation by the state attorney general’s office, implying that Pacquiao might be facing perjury charges.

A Los Angeles resident has sued the National Football League, NFL Commissioner, Roger Goodell, and eight NFL employees in the United States District Court for the Central District of California alleging theft of intellectual property. Representing himself pro se, Plaintiff, Rickey B. Reed, claims that he developed the concept for an original production profiling the lives of aspiring young athletes who dream of playing in the NFL; an idea he claims is remarkably similar to a show aired on the NFL Network in late 2014.

Reed attaches a batch of emails addressed to numerous NFL employees dating back to August 2013 in which Reed describes his concept for an original show titled “NFL: The Next Generation”:

In any given year 100,000 guys may play high school football, 10,0000 guys may play at the colligate level, but after that the numbers take a dip that is steeper than a bungee jump down the side of Mount Everest when the selection committee only invites 332 players to participate in the 2013 NFL scouting combine. These figures translate into a great number of broken hearts and enough man tears to float a cruise ship from California to Czechoslovakia.

*          *          *

This is the football version of (American Idol) seated in the heart of an unofficial NFL combine that will give these rejected and neglected, hungry and thirsty young men a nationally televised platform to prove the experts wrong, and to show those who said that they can’t, that they can.

In his email pitch, Reed outlined the procedure for evaluating the athletes using NFL combine metrics. Reed envisioned that the show would feature a mixture of segments, including human interest stories and personal profiles. Further, the show would highlight the contestants’ physical attributes to appeal to… um… a wider audience:

People are interested in interesting people so our contestants will be personalized before our viewers. Of course we expect our contestants to be tough, but when they are sexy as well, we will exploit that quality to lock in female viewers, who are for the most part born with a dedicated spirit.

Five days later, Reed received a letter from the NFL’s legal department indicating that the NFL has a policy prohibiting unsolicited proposals. The letter further stated that the NFL had no interest in his production, and that all materials submitted would be returned to him unread.

Reed alleges that, in January 2015, he took his show idea to a local gym to discuss it with “a guy [he] knows who is a former NFL player.” After reviewing the concept, the unidentified player informed Reed that he had seen a similar show on the NFL Network, referring to a six-part original series produced by the NFL Network titled “Undrafted,” which the NFL Network describes as follows:

Every year, thousands of college football players leave school with dreams of achieving a career in the NFL. Of those, 256 players are selected in the NFL Draft. The remaining – the undrafted – are forced to overcome another obstacle to pursue their dream.

Reed alleges that the NFL took the concept without compensation, constituting a “great injustice that can only be effectively dealt with by imposing jail time and steep punitive damages.” Reed asserts causes of action for breach of implied-in-fact contract, breach of confidence,” and a statutory claim under California’s Business & Professions Code.

Reed seeks combined total damages of $25 million, representing “1.25% of the $2 billion in revenue gain by [the NFL] related to media income in 2014, and approximately 0.28% of the [NFL’s] total earnings for the same year which was $9 billion.” (Reed does not source his statistics – in fact, league revenue in 2014 was likely closer to $11 billion, with a significantly higher portion coming from broadcast rights/media.)

Reed further requests that the District Court enter an order restraining the NFL from using, broadcasting, advertising, selling, or distributing all content related to Reed’s alleged concept.  In his final prayer, Reed asks for relief that may or may not be within the District Court’s inherent equitable powers:

[O]rder any and all other favorable relief that should be granted to [Reed], as [Reed] has been victimized by the evil and deceptive method of robbery that has been practiced by industry giants for decades, as they have lusted after, lied, coveted and stolen from artist [sic], writers, inventors and creators of the fruit of their God given talent, oppressing the artist and denying him and his family the benefits that are a direct result of the use of his talents, and using the benefits of the artists to fill their own bank accounts, live in houses that the artist should be living in, driving cars that the artist should be driving, and stealing credit for successful products that rightfully belong to the artists. . . .

Reed only recently filed the suit and the docket does not contain an affidavit or waiver of service, meaning the NFL likely has not yet received a copy of the Complaint.  The NFL did, however, address the issue in a January 12, 2015 letter responding to numerous emails by Reed complaining of infringement, stating:

The NFL takes intellectual property concerns very seriously. However, a review of [the] matter indicates that there has not been any misappropriation or unauthorized use of [Reed’s] purported intellectual property.

On August 11, 2014, the ownership group for the Toronto Blue Jays, Rogers Blue Jays Partnership, filed a Notice of Opposition with the Trademark Trial and Appeal Board of the United States Patent and Trademark Office, opposing the registration of Creighton University’s redesigned Bluejay logo.

On September 18, 2013, Creighton filed a trademark application with the USPTO for the new logo, described as a “stylized capital C with the head of a bird placed over top of the letter C,” to appear on shirts, pants, jackets, footwear, hats and caps, and athletic uniforms. As depicted in the logo evolution below prepared by Creighton fan site, White and Blue Review, the new logo is quite a departure from 1972 iteration, which resembles a surly, hand-drawn Peanuts character:

 Jays

Toronto apparently believes that the new Creighton logo hits too close to home, with its “thick, clean lines and outline with no gradient or shading,” which “results in a bold, two-dimensional mark” that is substantially similar in design to the Toronto Blue Jays recently-refreshed logo:

Twin Jays

This isn’t the first time Toronto has sought to protect its trademark against a college/university.  In 2001 and 2002, Toronto opposed (or threatened to oppose) an attempt by my alma mater, Elizabethtown College, to register its flying jay and fighting jay marks, depicted below in all their black and white, pixelated glory:

Etown

(Elizabethtown has since adopted a much cooler and far-more aggressive representation of the otherwise harmless acorn-eating Corvidae.)

In fact, Toronto has filed or threatened approximately a dozen trademark oppositions since 2000, including a joint effort with the Tampa Bay Rays baseball club in 2010 to prevent a Virginia-based entertainment vendor known as “Ray Jay’s” from using this iconic mark for the following highly-specialized and succinctly-stated business purpose:

Amusement arcades; Arranging and conducting nightclub entertainment events; Arranging and conducting special events for social entertainment purposes; Arranging, organizing, conducting, and hosting social entertainment events; Booking of entertainment halls; Bowling alleys; Children’s entertainment and amusement centers, namely, interactive play areas; Entertainment in the nature of a bicycle park; Entertainment in the nature of baseball games; Entertainment in the nature of basketball games; Entertainment in the nature of hockey games; Entertainment in the nature of laser shows; Entertainment in the nature of light shows; Entertainment in the nature of roller skating competitions; Entertainment services in the nature of providing outdoor facilities for playing paintball; Entertainment services, namely, a video arcade housed in a mobile trailer; Entertainment services, namely, conducting contests; Entertainment services, namely, conducting parties; Ice skating instruction; Leasing of figure skating equipment; Movie theaters; Organisation and provision of sports installations for figure and speed skating championships; Organising and holding figure and speed skating championships and competitions; Organizing and conducting a bowling event the proceeds of which are donated to charity; Providing bowling alleys; Providing children’s party centers for the purpose of entertaining children and celebrating birthdays; Providing facilities for movies, shows, plays, music or educational training; Providing facilities for playing paintball games; Providing skating rinks; Rental of roller skates; Rental of skates; Roller skating instruction; Roller skating rinks; Video arcade services

Ray Jay’s abandoned the ship approximately two years after filing its application.

Yashin

The NHL’s illustrious New York Islanders:  winners of four consecutive Stanley Cups in the early 1980s.   Coached by the immortal Al Arbour and propelled by five future Hockey Hall of Famers, the Isles and their fans in Nassau and Suffolk Counties enjoyed one of the greatest runs in hockey history.  The names still resonate:  Bossy, Gillies, Potvin, Smith, and Trottier.

In 2000, businessman Charles Wang purchased a stake in the team.  Wang co-founded Computer Associates International, Inc. (now known as CA Technologies), and was integral in dictating the company’s direction until his sudden departure in 2002 under intense scrutiny.  In 2004, Wang obtained majority interest of the Islanders in a buy-out of his partner and convicted fraudster, Sanjay Kumar.

Since 2000, the Islanders have seen a dismal run of 431 wins in 1032 regular season games, five playoff appearances, and eight playoff wins.  The Islanders have watched numerous superstars come and go in deals that turned out to be complete laughers.  See, e.g., Bryan McCabe, Todd Bertuzzi, and a third round selection (Jarko Ruutu) for Trevor Linden; Zdeno Chara, Bill Muckalt, and a first round selection (Jason Spezza) for Alexei Yashin; Olli Jokinen and Roberto Luongo for Mark Parrish and Oleg Kvasha.  From a fan relationship standpoint, Wang’s ownership of the team has been troubled to say the least.  (To be fair, the 1990s were not exactly kind to the Islanders.)

Enter Andrew Barroway, a successful Philadelphia securities lawyer and co-founder of Merion Investment Management, LP.  Mr. Barroway has been linked to a purchase of the Islanders for months.  On August 11, 2014, Barroway’s entity, NY ICE, LLC, sued Wang and his various holding entities in the Supreme Court of New York, New York County (Manhattan), alleging that Wang reneged on a partially-consummated contract to sell the team to NY Ice for $420 million.

The lawsuit alleges that, after nine months of negotiations, Barroway and Wang memorialized their agreement in a 70-page Securities Purchase Agreement (the “SPA”).  The deal purportedly included a $100 million up-front payment, an $83 million promissory note, and assumption of $125 million in debt owed to Bank of America.  Wang’s ownership entities would, in turn, receive a 25% ownership interest in NY ICE.

Wang purportedly committed verbally and in writing to the deal, and the parties began the process of fulfilling the conditions of closing, including (a) seeking approval of the deal from the NHL, and (b) securing a $125 million credit facility to satisfy the Bank of America debt.

In June 2014, the parties met in New York City, at which time Wang allegedly pulled Barroway into a side room and expressed that he could command a much higher price for the team following Steve Ballmer’s $2 billion bid for the Los Angeles Clippers.  The parties met again in July, at which time Wang allegedly “blindsided” Barroway with a new $548 million demand.  Two days later, Wang announced his intention to sell the team to another investment group.

The seven-count Complaint sets forth claims for breach of contract (numerous grounds), promissory estoppel, and a permanent injunction.  The Complaint is aimed at compelling the sale of the franchise to NY Ice.  The lead count seeks specific performance in the form an order compelling a sale on the terms set forth in the SPA.  Further, the claim for injunction seeks to bar a sale to any other party.  In the alternative, NY Ice seeks liquidated damages under the SPA in the amount of $10 million, which it dubs a “break-up fee.”

Lost in the coverage of this dispute is the fact that Forbes recently valued the Islanders at $195 million.  Wang, who was purportedly to receive $183 million in cash for the team under the SPA, thinks the enterprise value of the New York Islanders is just shy of the NHL record $575 million paid by Molson for the iconic Montreal Canadiens in a 2009 leveraged buyout.  Putting all of this into perspective, Red Sox minority shareholder Jeffrey Vinik purchased the Tampa Bay Lightning in 2010 for $93 million – less than the up-front cash Barroway agreed to pay under the SPA.

 

Cristiano-Ronaldo8

Not many people know “fitness enthusiast” Christopher Renzi.  In 2008, the Rhode Islander registered the “CR7” trademark with the United States Patent and Trademark Office for use in his fashion line of jeans and t-shirts.  Mr. Renzi’s inspiration for the name allegedly comes from his initials and the date of his birth.  Unfortunately, Mr. Renzi has the same initials as larger-than-life Portugese international footballer, 2014 Ballon d’Or winner, and Real Madrid legend, Cristiano Ronaldo.  Ronaldo’s jersey number is 7, and he has built a brand identity using the same CR7 mark.

In late 2013, Ronaldo partnered with Danish clothing manufacturer, JBS Textile Group, to release a line of “fashion briefs” under the CR7 brand.  In May 2014, JBS’s stateside counsel, Dykema Gossett PLLC, sent Mr. Renzi a scathing letter accusing him of violating Section 2 of the Lanham Act.  Dykema alleged that Mr. Renzi registered the CR7 name with full knowledge of Ronaldo’s fame, reputation, and the significant commercial value of the CR7 mark, and that Mr. Renzi’s use of the mark falsely implies that his product line is endorsed by, affiliated with, or sponsored by Ronaldo.

As proof of its absolute dominion over the CR7 brand identity, Dykema cited Ronaldo’s 81,000,000 Facebook followers.  (Mr. Renzi, it appears, does not have a Facebook account, placing him approximately 81,000,000 Facebook followers behind Ronaldo.)

JBS filed a Petition to Cancel with the USPTO and demanded that Renzi voluntarily transfer all rights to and in the CR7 mark.  Dykema followed up with an email on June 10, 2014 offering an undisclosed sum to Mr. Renzi or the local sports club of his choice in exchange for an assignment of the CR7 mark and written assurances from Mr. Renzi that he would no longer use the mark.  On July 3, 2014, Dykema threatened a “more aggressive” legal course, prompting Mr. Renzi to file a single-count-complaint in the United States District Court for the District of Rhode Island.

In his Complaint, Mr. Renzi seeks relief under the Declaratory Judgment Act, which permits federal courts in the event of “an actual controversy” to “declare the rights and other legal relations of any interested party.”  See 28 U.S. Code § 2201.  Mr. Renzi asks the Court to declare, fully and finally, that (a) Mr. Renzi has not infringed upon any trademark right held by Ronaldo and JBS, and/or (b) that Mr. Renzi has not violated Rhode Island law by using the CR7 mark.

Fortunately, the chances of Ronaldo being deposed in the matter fall somewhere short of the USMNT’s chances of winning the 2014 World Cup.  The last time he was in the hot seat fielding questions in English, things didn’t go so well.

Mr. Renzi now “controls” the litigation, having filed in the court of his choosing, in his backyard, and with his counsel of choice.  According to its website, Dykema does not have any attorneys licensed to practice in Rhode Island, meaning local counsel and a pro hac motion will be required.  It is almost always better to go on the offensive than find yourself playing defense.

Alex Rodriguez

 

For a litigator and lifelong sports fan, nothing could be more exciting than the confluence of baseball and the law.  Even something as mundane as a simple collections matter takes on new meaning when it’s baseball’s erstwhile mega-star and youngest player to 500 home runs, Alex Rodriguez, refusing to pay a $380,000 tab.

In August 2013, Major League Baseball suspended Rodriguez for a total of 211 regular-season games for violating the league’s performance-enhancing drug policy.  Rodriguez retained sports lawyer, David Cornwell, and his firm, Gordon Rees Scully Mansukhani, LLP – commonly known as Gordon & Rees – to represent him in his appeal of the suspension.  Mr. Cornwell is known as the “go to” lawyer for athletes in trouble, having obtained a successful result for Ryan Braun of the Milwaukee Brewers in an arbitration involving elevated testosterone levels.

According to the twelve-page, five-count civil complaint filed by Gordon & Rees against Rodriguez in United States District Court for the Southern District of New York, Rodriguez entered into a fee agreement with Gordon & Rees in which he agreed to pay a standard hourly rate of $400 for partners, and $225-$375 for associates.  Gordon & Rees alleges that this is a “fraction” of the rates charged by other lawyers retained by Rodriguez in connection with his suspension.

Cornwell hit the ground running, staking out an aggressive and controversial position for his client.  Over the next eight months, Gordon & Rees purportedly spent thousands of attorney and staff hours on what it dubs “one of the most high-stakes sports litigations in history.”  The Complaint further alleges that, despite numerous oral and written promises from Rodriguez and his representatives that all legal accounts would be paid, Rodriguez failed to pay more than $380,000 in legal fees.  The services are purportedly detailed in “painstaking detail” in 128 pages of invoices provided to Rodriguez.  (The invoices are not, however, attached to the Complaint.)

The Complaint alleges that Rodriguez received instructions from his adviser, Desiree Perez of Roc Nation LLC, “not to pay the invoices, and to make Gordon & Rees sue” him.  Roc Nation is an entertainment company founded in 2008 by hip hop artist Jay-Z with a boutique sports division representing CC Sabathia, Robinson Cano, and Kevin Durant, among others.  Sports fans and followers of the Rodriguez saga may recognize Perez as an influential figure in Rodriguez’s decision to fight the suspension.

The Complaint asserts five counts against Rodriguez for breach of contract, quantum meruit, unjust enrichment, promissory estoppel, account stated, and specific performance.  Gordon & Rees seeks damages in the amount of $380,058.91, together with pre-judgment interest, costs, and attorneys’ fees.  Assuming the matter is not settled prior to trial, the final verdict or award could end up being substantially more expensive for A-Rod than anticipated.