Zion Williamson v. Prime Sports: Round Three
(Editor’s Note: Below is an article from the latest Sports Litigation Alert. Occasionally, we share full or partial articles from other sports law periodicals produced by Hackney Publications)
By Jeff Birren, Senior Writer
Sports Litigation Alert has previously reported on the litigation between NBA player Zion Williamson and his one-time marketing agent, Prime Sports Marketing. The first article discussed the factual background and the claim brought by Prime Sports against Williamson in Florida State Court. The Fl
orida Court of Appeal had recently reversed the trial court’s denial of Williamson’s motion to dismiss the case for lack of personal jurisdiction (SLA, “Court Favors NBA Star Williamson in Contract Dispute with Agent” Vol. 18, Issue 3 (2-12-21). The second article focused on Williamson’s declaratory judgment case filed in North Carolina Federal Court. The Court had granted his motion for Partial Judgment on the Pleadings (“Order”) and pursuant to a North Carolina statute, Williamson could void his short-lived contract with Prime Sports, (SLA, “Zion Williamson & Prime Sports: Round Two” Vol. 18, Issue 4 (2-26-21)). The Order must have caused consternation for Prime Sports and its owner because they filed four separate motions attacking that ruling. Judge Loretta C. Biggs denied all four motions (Williamson v. Prime Sports Marketing, LLC, Case No. 1:19-cv-593, 2021 U.S. Dist. LEXIS 175218 (9-15-21)).
The Court’s Introduction
The Court stated that the Defendants’ four motions “all appear to seek the same relief” (Id. at 1). The first motion requested “that this Court alter” the Order, and “specifically” to “reconsider and alter its position concerning the appropriateness of a court determining a student’s eligibility” under NCAA guidelines. The Defendants told the Court it had “committed a clear error of law by taking a position that is ‘contrary to all authority on the subject’” (Id. at 2). They asserted the Court was not bound by the NCAA’s determination of Williamson’s eligibility, and the Defendants “should be granted leave to amend their affirmative defenses to include the factual allegations” that could prove that Williamson was not in fact eligible.
A second motion sought to amend the Answer, Affirmative Defenses, and Counterclaims to prove that Williamson was not eligible to participate in NCAA athletics and therefore was unable to invoke the protections of the relevant North Carolina statute.
They also filed a motion to “Substitute Proposed Amended Answer, Amended Affirmative Defenses and Amended Counterclaims in Pending Motion for Leave to Amend” to “include information regarding” Williamson that the Court said, “was presented” to another federal court in an “unrelated matter … that has since been dismissed on the merits with prejudice and to which Plaintiff was not a party.”
The fourth motion was “captioned ‘Notice of Motion to Vacate January 20, 2021, Partial Judgment on the Pleadings Pursuant to FRCP 60(b)(2) based on newly discovered evidence.” This “Notice” was “fully briefed by the parties” and “appears to cover the same ground” as the motion to alter or amend the judgment “with minor exceptions.” The Court construed “this as a motion to vacate.” The Court noted that the Defendants again cited “information regarding Plaintiff that was presented in the unrelated, and now dismissed with prejudice” case.
The Motion to Alter or Amend Judgment
The first issue was the appropriate standard of review. The motion was procedurally improper because motions brought under FRCP 59 are only to be brought after a final judgment. Defense counsel admitted this, but thought this best preserved the right for appellate review. The Defendants therefore “knowingly and intentionally brought a procedurally improper motion.”
Although “concerning” the Court treated the motion as one for reconsideration under FRCP 54, the correct statute. That requires either an intervening change in the law; additional evidence that had not been available; or that the prior decision was either based on clear error or would work manifest injustice. The Court previously ruled that Williamson was not permanently ineligible, and the Defendants insisted that the Court’s ruling was in “clear error” because the Court “ceded” its authority to make such a determination to the NCAA (Id. at 3).
The Defendants did “not contend that there has been an intervening change in the controlling law or previously unavailable evidence.” Their sole argument was based on a theory of “clear error.” That requires showing that the prior decision was “dead wrong.” The Defendants, however, “merely rehash their previous arguments that have been rejected by this Court.”
In the prior motion the Court “considered the pleadings in the light most favorable” to the Defendants. Their pending motion did “not rely on material allegations of fact” but instead was “a conclusion of law that flies in the face of their own pleadings as well as attachments to their pleadings” (Id. at 4). They responded that the Court was not bound by the NCAA’s determination of eligibility, citing an older case. However, that court “was not faced with a defendant that contradicted its own pleadings.”
The Defendants next insisted that the Court had ceded its authority to the NCAA. The Court disagreed. It had “used its authority” to interpret the relevant North Carolina statute. That statute did not “define ‘permanently ineligible’” nor did it provide any criteria for making that determination. The NCAA had not found Williamson to be permanently ineligible and even the Defendants cited a case that stated that it was “well established that courts will not interfere with internal affairs of voluntary associations.” The Defendants “conclusory allegations” did not raise a “genuine issue.”
Their next argument was that the Order was “contrary” to prior decisions (Id. at 5). A case from Tennessee was irrelevant because unlike that case, the issue here was not whether the Defendants could raise eligibility as a defense “but whether Defendants plausibly alleged facts that called Plaintiff’s eligibility into question.” A Mississippi opinion was irrelevant because that agent failed to raise the issue in the trial court. The Defendants also cited cases wherein students who had been declared ineligible sued the NCAA on this issue. These were irrelevant because these Defendants “failed to plausibly allege facts that raised a question” of Williamson’s “eligibility status.” The Defendants cited a case released five days prior to the Order, but that was a wire fraud case (Id. at 6).
They “have still not provided any relevant case law that would suggest it is for this Court to exercise oversight on how private organizations enforce and investigate alleged violations of their rules.” The question was not whether Williamson could have been found to be permanently ineligible “but whether Defendants had sufficiently alleged that he was permanently ineligible” and this they “failed to do.”
Finally, the Defendants disputed the prior Order which stated that Williamson had “effectively terminated and voided” his agreement with the defendants by letter. The Court rejected this, because the relevant statute stated that an athletic agency agreement made in violation of the statute “is void” and the student shall return any consideration received under the contract. There was thus “no clear error or manifest injustice.”
The Motions to Amend the Pleadings
That motion “lies within the sound discretion of the District Court” and it should be denied when it would be prejudicial to the opposing party; if there has been bad faith by the moving party; or if it would be futile. The Defendants wished to allege “specific violations of NCAA rules” by Williamson or his representatives, insisting that any single such violation would have rendered him ineligible. This proposed amendment would be futile, however, because “they do not plausibly allege that Plaintiff was permanently ineligible to participate in intercollegiate basketball at the time he entered into the contract” with the Defendants (Id. at 7). The “Court is not tasked with undertaking an analysis of whether a student athlete engaged in activities that should have rendered him permanently ineligible” but only “if that individual is permanently ineligible (Id., emphasis in the original).
The Defendants sought to add allegations “enumerating alleged gifts of payments received” by Williamson and/or his family, but they had already alleged that he was not a student athlete as defined by NCAA rules, and thus “these arguments … have already been raised.” They further wished to amend their pleadings to include information presented in an unrelated case in South Carolina, including allegations of gifts received by Williamson’s family. However, the proposed amendment would be “futile” because it “would not change the analysis conducted by the Court in reaching its determination that Plaintiff was not ‘permanently ineligible’” under the North Carolina statute during the relevant time frame.
The Motion to Vacate
The final motion was to vacate the entire prior ruling “due to newly discovered evidence” pursuant to FRCP 60(b)(2) (Id. at 8). This motion applies to a final judgment, not an interim order. The Court was willing to set “aside” that issue “for the moment” and perform the analysis. The moving party must prove that the motion is timely; meritorious; has “a lack of unfair prejudice to the opposing party”; and that there are “exceptional circumstances.” This motion was based on the “same information” from the other case “discussed above.” Even “if taken as true” it would have “no bearing on the basis for the Court’s ruling.”
This claimed new evidence “does not provide a meritorious defense nor would it likely produce a new outcome.” It “appears” that the “Defendants are asking in multiple ways, that it change its mind on its finding that Defendants failed to plausibly allege that Plaintiff was permanently ineligible to be a student athlete despite his enrollment at Duke University and participation on its men’s basketball team.” A Fourth Circuit opinion held that a motion that is “nothing more than a request” to the court to “change its mind… is not authorized by Rule 60(b).”
The Court’s Conclusion.
The Defendants seemingly “wish to engage in a fishing expedition into the backgrounds of Plaintiff, his parents, and his associates.” They sought to “relitigate matters which have been addressed by the Court” or to “introduce evidence that could have been raised prior to” the earlier ruling. All four motions were denied.
Telling a court that it made significant errors can be risky. These Defendants filed four such motions. Enthusiasm does not excuse failing to file the correct motion at the correct time. From a distance it seems that the Defendants took careful aim and shot at both feet.