Did Aroldis Chapman switch agents because of Tortious Interference?

An interesting lawsuit has been filed in a Massachusetts state court by the former agents of 21-year-old Cuban defector Aroldis Chapman --whom the Boston Red Sox have reportedly offered a $15.5 million contract--against his new agents for "stealing" Chapman as a client.

If Athletes Premier International v. Hendricks Sports Management goes to trial, it could pose significant ramifications for agents who encourage baseball players to switch agents (which traditionally has not received legal scrutiny, though the MLPBA, which licenses agents with players on teams' 40 man rosters, regulates that practice). Jimmy Golen of the Associated Press has the story on this lawsuit -- here are several excerpts:

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Chapman's original representative sued his current agent in Massachusetts state court on Tuesday, claiming that Hendricks Sports Management illegally lured him away from Athletes Premier International and agent Edwin Mejia. The lawsuit accuses Hendricks of tortious interference and unjust enrichment, claiming that Athletes Premier "invested substantial time and hundreds of thousands of dollars" on Chapman's behalf to help him defect, establish residency in Andorra and begin negotiating with major league teams.

Citing text messages and call logs from a cell phone Mejia provided to the Cuban left-hander, the suit claims that "Hendricks and its employees made material false and disparaging statements to Chapman concerning Athletes Premier and Mejia as well as provided improper enticements to Chapman in order to cause Chapman to terminate his contract with Athletes Premier and sign a contract with Hendricks."

In a statement e-mailed to The Associated Press, the Hendricks agency described its representation of Chapman as "an unexpected and unsolicited opportunity" and called the lawsuit "pure fiction and self delusion."

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The statement said Mejia brought his complaint to the players association "and the union didn't buy it." It also noted that the suit was filed on the same day that Chapman was scheduled to work out for major league clubs in Houston, where the Hendricks brothers are based.

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Stealing clients is a longtime and lucrative practice among some sports agents, who can earn up to 5 percent of salaries reaching into the hundreds of millions of dollars. Inducing someone to break a valid contract — called tortious interference — is illegal, but it depends on what the agreement was between Mejia and the former star of the Cuban national team.

"Generally speaking, players can change agents at their discretion," said Michael McCann, a sports law professor at the Vermont Law School. "There is certainly evidence of agents poaching clients (in cases) that don't result in litigation. Maybe it's unethical; maybe it's wrong; but it happens."

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To read the rest of Golen's story, click here. For the lawsuit, click here. This lawsuit might make for an interesting law review/journal note for a law student looking for a topic to write about.

Update 12/16/2009: A lawyer who has represented several prominent MLB players e-mailed me and offers these thoughts:

I am a little surprised that they didn't try to bring it in Florida (where Chapman's agent Rodney Fernandez of Hendricks Brothers is based) - Florida has a "tortuous interference with prospective business opportunity" cause of action that I would find more advantageous in this type of case, rather than a straight tortuous interference with contract. Reasoning being is that per MLBPA regs, all player/agent contracts can be terminable at will (and have a maximum length of 1 year). I would have brought it in Florida - there are enough connections there.

I don't see how this claim, as currently posited, is much different from Speakers of Sport v. Proserv (involving Ivan Rodriguez), which was argued in federal court on a similar theory, and plaintiff agent did not prevail on the basis that the court found that it's a high risk/high reward business (agency), and that statements to the player that are "puffery" do not rise to the level of tortuous interference.

Likewise, there have been a number of agent/agent cases argued in the MLBPA arbitration forum that have held essentially the same thing.

Illegal Motion?

My wife loves this clip and it has grown on me. But I must ask: Is this Illegal Motion?

Utah's Attorney General Planning an Antitrust Suit against the BCS

Following a Congressional subcommittee voting to prevent the BCS from declaring its culminating game the "national championship," as Howard discussed on Wednesday, it appears that another legal challenge to the BCS may be brewing. ESPN.com's Lester Munson reported on Friday that Utah Attorney General Mark Shurtleff is prepared to file an antitrust lawsuit against the BCS as soon as early 2010. The suit would presumably be premised on the BCS' exclusion of an undefeated Utah team from the national championship game last year. AG Shurtleff has scheduled a meeting with Christine Varney, the head of the U.S. Department of Justice's antitrust division, to ascertain whether the federal government would be interested in participating in the suit.

With or without federal assistance, Utah's proposed suit strikes me as a much more serious threat to the BCS than the Congressional measure discussed this week.

Bill Belichick and Punishing Players Who Are Late for Meetings during Snow Storms

Yesterday morning four Patriots players -- including Randy Moss and Adalius Thomas -- were between 10 and 20 minutes late for an 8 a.m. meeting. It was snowing that morning in Massachusetts (which weather forecasts had predicted, so the snow was foreseeable to anyone with access to a forecast). Thomas had called the team to let them know that he would be late due to the weather; it's unclear whether the other players did as well.

In response to the players' tardiness, coach Bill Belichick sent them home. While the players were not fined, they felt embarrassed by the punishment. As a contextual point, the 7-5 Patriots, though in first place in the middling AFC East, have lost two in a row and many commentators have opined that the team has not played up to its potential. Thomas, in particular, has been cited as an under-performing player.

Thomas is now speaking out against Belichick's decision. Here are excerpts to what Thomas had to say to ESPN's Mike Reiss:

Reiss: What can you tell us about yesterday?

Thomas: “I got sent home. That’s pretty much it, for being late.”

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Reiss: Can you add more context to that; maybe a reason behind it?

Thomas: “I think everyone woke up to the snow yesterday. I didn’t know it was going to snow. There was traffic. I can’t run people over getting to work. I don’t do that. I actually almost had a car accident. It is what it is. He did what he thought was best for him. That’s what he did.”

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Reiss: Do you feel compelled to say something to them – an apology or what have you?

Thomas: “I don’t know. That’s one thing about Mother Nature. You can’t control that. You can’t run people over getting to work. There is nothing to really apologize about. I didn’t try to be late. That’s basically it, though. I don’t know what else to say. You leave home, you have people there, cars sitting in the road, you’re sitting there, what do you do? It’s not the Jetsons, I can’t jump up and just fly. What the heck am I supposed to do?”

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Reiss: Can what happened yesterday serve as motivation?

Thomas: : “Motivation is for Kindergarteners. I’m not a Kindergartner. Sending somebody home, that’s like ‘He’s expelled, come back and make good grades.’ Get that [expletive] out of here. That’s ridiculous. Motivation?”

Should players be punished -- and I think being sent home is a punishment, even if it does not financially harm a player -- for showing up late when it's snowing or there is some other dangerous weather condition? Are they supposed to leave earlier for work? Who's right here?

Congress and the BCS

Yesterday, a subcommittee of the House Committee on Energy and Commerce passed H.R. 390, which prohibits the "promot[ion], market[ing], or advertis[ing]" of a post-season Division I college football game as a national championship game unless it is the final game of a single-elimination post-season playoff tournament rather than the current BCS system. It also prohibits the sale, marketing, or advertising of merchandise related to a national-championship game unless it is for the final game of a single-elimination playoff tournament. The Federal Trade Commission is given enforcement jurisdiction, with the practices prohibited in the act treated as unfair or deceptive trade practices.

The obvious reaction is to wonder whether Congress has anything better to do. Not because Congress cannot do many things at once--as co-sponsor Bobby Rush said, "We can walk and chew gum at the same time"--but because I am not sure why there is a sufficient national public interest to warrant congressional action.

My broader reaction is to wonder whether there is a First Amendment problem here. The bill clearly tries to limit itself to commercial speech--selling, marketing, advertising--that receives less (although still significant) First Amendment protection. Commercial speech can be restricted if it is untruthful or misleading and then is essentially subject to intermediate scrutiny--it must directly serve a substantial government interest and must regulate no more extensively than necessary to serve that interest. But is it "untruthful" or "misleading" to call the upcoming BCS Championship Game between Alabama and Texas a "championship" game (or to call the winner of that game "National Champion" simply because Congress or the FTC does not like the process used to decide the game's participants? This is not like the FTC prohibiting Tylenol from saying it cures cancer or prohibiting OxyClean from saying one use and you'll never have to clean your whites again or prohibiting Nike from directly stating that these new sneakers will enable you to run a two-hour marathon--empirically dubious claims, all. Plus, I am not sure what substantial government interest is at stake here; it does not appear to be public health, safety, or welfare--unless you happen to be a fan of TCU or Boise State.

Plus, this may come close to regulating fully-protected non-commercial speech. The prohibition on sales of merchandise "related to" a non-playoff national championship game would reach, for example, selling hats and t-shirts that say "Alabama/Texas 2009 National Champion." But the fact that something expressive (in this case the hat with the National Champion message) is sold does not make it commercial speech; the seller in this example is engaged in the sale of non-commercial expressive material and the attempt to regulate that sale should be subject to regular First Amendment scrutiny. And obviously the FTC cannot prohibit people from wearing merchandise pronouncing Texas/Alabama as National Champion based on victory in a BCS-based game. Nor can it prohibit the University of Alabama from, say, introducing its team as National Champions, hanging a National Champion banner on its stadium, or wearing special jerseys that say "National Champions." Any such effort would, it seems to me, plainly violate the First Amendment.

All of which calls into question why the bill takes the approach it does. Given the strong interstate commerce connections of collegiate sports, it seems that Congress could directly compel the NCAA and its members to adopt a playoff. It also could have attached a playoff system as a condition on federal funds (which every NCAA member school receives). So it seems odd to incentivize the NCAA into adopting a playoff by going after expression. Seems like what the First Amendment is designed to prevent.

Roundup of Interesting Links

The Sports Law Professor, Just so We're Clear, the NFL Steroid Policy is Dead

TaxProf Blog, Tax Consequences of Tiger Woods' Marital Troubles

Wall Street Journal Law Blog, The Fights and Suits over the Fighting Sioux

Title IX Blog, Article Examines Shortcomings in Title IX's Pregnancy Regulations

Cincinnati vs. Notre Dame

Yesterday, the New York Times reported that Notre Dame is interviewing Cincinnati's Brian Kelly today to see if he is interested in their coaching vacancy. Tell it like it is. Notre Dame is soliciting Kelly to breach his contract with Cincinnati. Here you have a university that has made a substantial investment in a coach based upon his express contractual commitment to stay for a period of years in order to develop a successful program, and a coach who is going to speak to another school about leaving at a time his players are preparing for the biggest game of their lives in a few weeks.

It is mind-boggling that the NCAA and its members allow this tampering to occur. If it is in fact true that 85% of bowl-subdivision university presidents feel that coaches' compensation is "excessive" as well as "a key contributor to the (fiscal) 'arms race' in intercollegiate athletics" and "the greatest impediment to sustainability," then they should seriously consider adopting a no tampering policy similar to the NFL's policy. In the meantime, Cincinnati owes all of the current and prospective student-athletes, as well as the taxpayers (because Kelly's salary is funded by tax exempt revenue), to enforce its contract and prevent Kelly from going to work for a competitor.

In my law review article that was just published, I discuss how college head coaches today meet the "unique skill" element for a negative injunction to prevent the coach from working for a competitor school. Indeed, there are striking similarities between today's college head coaches and professional athletes applying the court's rationale in the seminal case of Philadelphia Ball Club v. Lajoie:

The court below finds from the testimony that “the defendant is an expert baseball player in any position; that he has a great reputation as a second baseman; that his place would be hard to fill with as good a player; that his withdrawal from the team would weaken it, as would the withdrawal of any good player, and would probably make a difference in the size of the audiences attending the game.”….He has been for several years in the service of the plaintiff club, and has been re-engaged from season to season at a constantly increasing salary. He has become thoroughly familiar with the action and methods of the other players in the club, and his own work is peculiarly meritorious as an integral part of the team work which is so essential. In addition to these features which render his services of peculiar and special value to the plaintiff, and not easily replaced, Lajoie is well known, and has great reputation among the patrons of the sport, for ability in the position which he filled, and was thus a most attractive drawing card for the public.

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We have the further fact that the contract has been partially executed by services rendered, and payment made therefor, so that the situation is not now the same as when the contract was wholly executory. The relation between the parties has been so far changed as to give to the plaintiff an equity, arising out of the part performance, to insist upon the completion of the agreement according to its terms by the defendant….The plaintiff has so far performed its part of the contract in entire good faith, in every detail, and it would therefore be inequitable to permit the defendant to withdraw from the agreement at this late day.

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The defendant sold to the plaintiff, for a valuable consideration, the exclusive right to his professional services for a stipulated period, unless sooner surrendered by the plaintiff, which could only be after due and reasonable notice and payment of salary and expenses until the expiration. Why should not a court of equity protect such an agreement until it is terminated? The court cannot compel the defendant to play for the plaintiff, but it can restrain him from playing for another club in violation of his agreement.