Clarity Sports Int'l LLC v. Redland Sports

• Decision Date: 04 September 2019
• Docket Number: No. 1:19-cv-00305,1:19-cv-00305
• Citation: 400 F.Supp.3d 161
• Parties: CLARITY SPORTS INTERNATIONAL LLC and Jason Bernstein, Plaintiffs v. REDLAND SPORTS, et al., Defendants
• Court: U.S. District Court — Middle District of Pennsylvania

400 F.Supp.3d 161

CLARITY SPORTS INTERNATIONAL LLC and Jason Bernstein, Plaintiffs

v.REDLAND SPORTS, et al., Defendants

No. 1:19-cv-00305

United States District Court, M.D. Pennsylvania.

Filed September 4, 2019

Scott L. Grenoble, Buzgon Davis Law Offices, Lebanon, PA, James B. Martin, Pro Hac Vice, John D Comerford, Pro Hac Vice, Dowd Bennett LLP, St. Louis, MO, for Plaintiffs.

Iles Cooper, Williamson, Friedberg & Jones, Pottsville, PA, Michael A. Iaconelli, Monica Clarke Platt, William J. Clements, Klehr Harrison Harvey Branzburg LLP, Philadelphia, PA, for Defendants.

MEMORANDUM

(Judge Kane )

Before the Court are Defendants' motions to dismiss Plaintiffs' amended complaint (Doc. Nos. 10, 11), and motion to bifurcate discovery (Doc. No. 29). For the reasons that follow, the Court will grant the motions to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) and dismiss the amended complaint without prejudice to Plaintiffs' ability to file a second amended complaint consistent with the Court's discussion infra. The Court will deny the Boone Defendants' motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), deny Defendants' request to stay this case, and deny Defendants' motion to bifurcate discovery.

I. BACKGROUND¹

Plaintiff Clarity Sports International LLC ("Plaintiff Clarity Sports") is a Maryland limited liability company with a principal place of business in Potomac, Maryland (Doc. No. 7 ¶ 1), and Plaintiff Jason Bernstein ("Plaintiff Bernstein") – a Maryland resident – is its majority owner (id. ¶ 2). Defendant Redland Sports ("Defendant Redland") conducts business in Pennsylvania, has a principal place of business in York, Pennsylvania, and is owned by Defendant Gerry Ochs ("Defendant Ochs"), who is a resident of Pennsylvania. (Id. ¶¶ 3-4.)² Defendant MVP Authentics, LLC ("Defendant MVP Authentics") also conducts business in the Commonwealth of Pennsylvania, with a principal place of business in Dauphin County, Pennsylvania, and is owned by Defendant Daryl Eisenhour ("Defendant Eisenhour"), a Pennsylvania resident, and Defendant Jason Smith ("Defendant Smith"), a New Jersey resident. (Id. ¶¶ 5-7.) Defendant Boone Enterprises, Inc., d/b/a Boone Enterprises Authentic Autographs ("Defendant Boone Enterprises") has a principal place of business in Pompton Plains, New Jersey and, according to the complaint, regularly conducts business in Pennsylvania. (Id. ¶¶ 8-9.)³ Defendant Craig Boone ("Defendant Boone"), a New Jersey resident, is the owner and/or manager of Defendant Boone Enterprises. (Id. ¶ 10.)⁴

Plaintiff Bernstein is "a National Football League Players' Association (‘NFLPA’) certified contract advisor" who "represents several players in the National Football League (‘NFL’) as their agent." (Id. ¶ 16.) Plaintiff Bernstein is the owner of Plaintiff Clarity Sports, "a full-service sports management company with a focus on providing management and advisory services to professional athletes." (Id. ¶ 17.) Plaintiff Clarity Sports "represents NFL players in their contractual negotiations and dealings with the NFL, and in other matters to which the parties agree, including the representation of players in those players' marketing and endorsement contract negotiations." (Id. ¶ 18.) In this capacity, Plaintiff Bernstein previously represented Kenny Golladay ("Golladay"), an NFL player who is currently under contract with the Detroit Lions. (Id. ¶ 19.)

Defendants Redland Sports, MVP Authentics, and Boone Enterprises are sports memorabilia companies, and, as such, "are each in the business of procuring and selling autographed sports memorabilia." (Id. ¶¶ 20-21.) In connection with its line of business, Defendant Redland Sports "arranges and ... presents autograph signings with NFL players and then markets and sells the items signed[,]" and in so doing, advertises the signed memorabilia on its Facebook page. (Id. ¶ 22.) Defendants MVP Authentics and Boone Enterprises also arrange autograph signings with NFL players and market the signed memorabilia on various social media platforms. (Id. ¶¶ 23-24.) In connection with these autograph signings, "Defendants contract with NFL players to pay those players for their appearance and autographs, typically on a per-autograph or per-appearance basis[,]" and "typically negotiate the contracts for NFL players' autograph signings with those NFL players' agents." (Id. ¶¶ 25-26.) In addition, "Defendants are and were aware that in the NFL, NFLPA registered agents are often in exclusive marketing arrangements with their player-clients." (Id. ¶ 27.)

On December 23, 2016, Plaintiff Bernstein and Golladay "executed an NFLPA Standard Representation Agreement" ("SRA"), under which Plaintiff Bernstein "agreed to represent, advise, counsel, and assist Golladay in the negotiation and execution of Golladay's playing contracts in the NFL." (Id. ¶ 28) (internal quotation marks omitted).⁵ Pursuant to the SRA, Plaintiff Bernstein "was the exclusive representative of Golladay for the purpose of negotiating playing contracts for Golladay[,]" and "[i]n return, Golladay agreed to pay [Plaintiff] Bernstein three percent of the compensation Golladay earned under the playing contracts [Plaintiff] Bernstein negotiated for him." (Id. ¶¶ 29-30) (internal quotation marks omitted).⁶ The SRA provides, in pertinent part, that as Golladay's agent, Plaintiff Bernstein was to receive 3% of "the compensation received by [Golladay] for each playing season covered by the [SRA]." (Doc. No. 29-1 at 13.)

Plaintiff Clarity Sports and Golladay also entered into an "Endorsement and Marketing Agreement" ("EMA") on the same date, which Plaintiff Bernstein signed on behalf of Plaintiff Clarity Sports, and under which Plaintiff Clarity Sports "agreed to ‘procure, negotiate, and manage Endorsement Opportunities’ for Golladay." (Id. ¶¶ 32-34) (second set of internal quotation marks omitted). Such endorsement opportunities consisted of "contracts for the endorsement of commercial products and services, paid personal services, and other opportunities related to the commercial exploitation of Golladay's status as an NFL player, including but not limited to autograph-signing appearances." (Id. ¶ 35.) As consideration, "Golladay agreed to pay [Plaintiff Clarity Sports] fifteen percent of the endorsement monies he earned" in connection with the EMA, which established "an exclusive agreement" between the parties as to "opportunities such as autograph signings and other paid appearances available to Golladay." (Id. ¶ 37.) As stated in the amended complaint, "[i]n other words, as under the SRA," Plaintiffs "were Golladay's exclusive representatives in the endorsement and marketing arena." (Id. ¶ 38.) Accordingly, pursuant to the EMA, Plaintiff Clarity Sports "contracted for, arranged, and helped execute multiple autograph signings and similar appearances for Golladay." (Id. ¶ 39.)

On January 2, 2019, Defendant Redland Sports "announced on its Facebook page ... that it would host, ‘in conjunction with Boone Enterprises and MVP Authentics,’ a private autograph signing with Golladay on January 21, 2019." (Id. ¶ 40.) Plaintiffs neither "arrange[d] for Golladay's appearance at this event," nor were they "aware of the then-upcoming signing until [Defendant] Redland Sports announced it on its Facebook page[,]" and "[i]n fact, Plaintiffs at that time were in the process of negotiating for Golladay a contract for a different signing, pursuant to the terms of their exclusive [EMA]." (Id. ¶¶ 41-42.) After becoming aware of the Facebook post and autograph signing, Plaintiff Bernstein emailed Defendant Ochs on January 7, 2019 "to inform him that [Plaintiff Clarity Sports] had an exclusive marketing agreement in place with Golladay[,]" specifying that the agreement "includes handling all signings" and also sending Defendant Ochs a text message to that effect. (Id. ¶¶ 43-45.) Through both the email and text message, Plaintiff Bernstein "asked [Defendant] Ochs to remove the Facebook post advertising the January 21, 2019 signing" and "asked that [Defendant] Ochs contact him by telephone" (id. ¶ 46) (internal quotation marks omitted), but Defendant Ochs did not respond to either the email or text message (id. ¶ 47).

As stated by Plaintiffs, "Defendants ignored Plaintiffs' exclusive arrangement with Golladay and did not negotiate the contract for Golladay's appearance with Plaintiffs[,]" but rather, worked "with Todd France (‘France’), a different NFLPA registered agent, on the contract for Golladay to appear at the January 21, 2019 signing." (Id. ¶¶ 48-49.) Defendants also "worked with other representatives from and employees of France's employer, CAA Sports LLC (‘CAA Sports’)[,]" which is affiliated with Creative Artists' Agency ("CAA"), a California-based talent agency. (Id. ¶ 49.) Per this arrangement, which Plaintiffs allege "Defendants negotiated with France and CAA Sports, Golladay was paid to appear and was paid for a number of his autographs signed at the January 21, 2019 appearance." (Id. ¶ 50.)

In addition, on January 24, 2019, Defendant Redland Sports advertised through its Facebook page various autographed items for sale from the signing involving Golladay, which it described as its "#Massive #PrivateSigning." (Id. ¶ 52.) Also on this date, Defendant Boone Enterprises posted an announcement on its Facebook page that advertised autographed items and noted that they were "from [its] private signing" with Golladay. (Id. ¶ 53.) According to Plaintiffs, "Defendants worked and negotiated with France and/or others at CAA Sports to arrange the signing, despite Defendants' full knowledge and awareness that France was not Golladay's NFLPA certified contract advisor or marketing agent." (Id. ¶ 54.) Further, while "Defendants have negotiated numerous autograph signing and appearance deals for NFL player-clients of France and CAA Sports in the past ... [i]n this instance, however, Defendants were...