Doe v. Varsity Brands, LLC

Docket Number1:22-CV-02139
Decision Date02 August 2023
PartiesJOHN DOE 1, Plaintiff, v. VARSITY BRANDS, LLC, et al., Defendants.
CourtU.S. District Court — Northern District of Ohio


Plaintiff John Doe 1 filed a Complaint in this matter on November 28 2022 against 11 defendants. (Doc. No. 1.) Before the Court are three motions to dismiss pursuant to Fed.R.Civ.P 12(b)(2) and 12(b)(6) filed by three separate defendants in this case. The motions to dismiss presently before the Court are as follows: (1) Defendant Charlesbank Capital Partners LP's (“Charlesbank”) Motion (Doc No. 53); (2) Defendant Jeff Webb's (“Webb”) Motion (Doc No. 54); and (3) Defendant Bain Capital, LP's (“Bain”) Motion (Doc. No. 56). Doe filed Oppositions to all three Motions. (Doc. Nos. 75, 76, 77.) Webb, Charlesbank, and Bain filed Replies in Support of their Motions to Dismiss. (Doc. Nos. 85, 88, 89.) Charlesbank and Bain filed a joint Notice of Supplemental Authority on June 28, 2023. (Doc. No. 99.) Webb filed a Notice of Supplemental Authority on July 19, 2023. (Doc. No. 107.)

For the following reasons, Charlesbank's, Webb's, and Bain's Motions are GRANTED.

I. Factual Allegations

Plaintiff Doe is a former competitive cheerleader. (Doc. No. 1, ¶ 1.) Doe alleges that when he was 17 years old, he was sexually abused by two cheerleading choreographers, Defendants Brandon Hale and Taji Davis, who were allegedly affiliated with the Varsity Defendants. (Id. at ¶ 4.)

In addition to pursuing claims against Hale and Davis, Doe also seeks to hold the Varsity Defendants, Varsity Spirit founder Jeff Webb, Charlesbank Capital Partners, LP, Bain Capital, LP, USA Cheer, and USASF liable for misrepresenting the safety of Varsity-affiliated gyms and competitions, and for failing to adopt and/or enforce adequate policies to prevent and/or investigate sexual abuse of minor athletes by adults affiliated with various cheerleading organizations. (Id. at ¶ 3, 5-8.)

A. All-Star Cheerleading

This case involves myriad organizations and individuals associated with the sport of all-star cheerleading. (Doc. No. 1.) Private all-star cheerleading is a highly competitive and fast-paced sport that incorporates elements of cheer, dance, and tumbling. (Id. at ¶¶ 34-35.) All-star cheerleading demands that its young athletes and their families invest significant amounts of time and money. (Id. at ¶ 38.) Competitive cheerleading is not subject to traditional “seasonal” limitations but can take place year-round. (Id. at ¶ 36.) Doe alleges that athletes can expect to spend between $3,000 to $7,000 per season, and that some families may spend up to $20,000 per year for transportation, lodging, membership and entrance fees, merchandise, uniforms, and accessories related to training for, and competing in, multiple all-star competitions throughout the year. (Id. at ¶¶ 36-38.) According to Doe, the competitive cheer industry generates billions of dollars in annual revenue and may serve up to four million athletes. (Id. at ¶ 51.)

Doe alleges that Webb began his career in cheerleading in the early 1970s, and began monetizing the operation of cheerleading camps throughout the 1970s and 1980s. (Id. at ¶¶ 40-43.) In the 1980s, Webb founded an organization called the Universal Cheerleaders Association, which eventually became Varsity Spirit. (Id. at ¶ 42-43.) Initially, Varsity Spirit began as a cheer camp provider, but gradually expanded its operations to include hosting competitions, merchandising, branding, social media, and gym ownership and/or management. (Id. at ¶¶ 44-45.) By the early 2000s, Varsity Spirit's parent corporation, Varsity Brands, represented that it was the country's largest designer, marketer, and supplier of cheerleading and dance team uniforms and accessories, the largest operator of cheer and dance team training camps and clinics, a leading organizer of extracurricular activity special events, a major provider of studio dance conventions and competitions, and producer of studio dance apparel for studio dance competitions. (Id. at ¶ 46.) However, even as early as 2002, Varsity Brands' largest source of revenue allegedly came from its connection with all-star cheer, through its subsidiary Varsity Spirit. (Id. at ¶ 47.)

Doe alleges that from 2014 through 2018, Charlesbank, a private equity firm, wholly owned the Varsity Defendants. (Id. at ¶ 125.) Doe alleges that in 2018, Bain Capital, another PE firm, purchased the Varsity Defendants from Charlesbank for $2.8 billion, although Charlesbank retained a minority stake in the business. (Id. at ¶ 127.)

According to Doe, there are two non-profit organizations that oversee competitive cheerleading in the United States: USASF and USA Cheer. (Id. at ¶¶ 23, 24.) According to Doe, Webb and the Varsity Defendants were heavily involved in the creation of USASF and USA Cheer, and remain involved in the operation of both organizations. (Id.) For example, the Varsity Defendants allegedly created USASF through a $1.8 million interest-free loan, and the USASF's nonprofit charter certificate lists the Varsity Defendants' address as USASF's address. (Id. at ¶ 90.) Likewise, Doe alleges that in 2007, Webb and Varsity Spirit founded USA Cheer through another interest-free loan from the Varsity Defendants. (Id. at ¶ 99-100.) Allegedly, USA Cheer shared an address with the Varsity Defendants. (Id.) Doe further alleges that the Varsity Defendants submitted the original trademark application for the marks “U.S. All Star Federation” and “USASF.” (Id. at ¶ 103.)

Doe further alleges that for the first 15 years of USASF's existence, its offices were located at Varsity Spirit's corporate address, a Varsity representative answered USASF's phones, USASF employees were paid by Varsity, Varsity cashed checked issued to USASF, and Varsity Spirit was listed as the owner of USASF. (Id. at ¶ 104.) Doe alleges that the Varsity Defendants also exerted control over the USASF and USA Cheer by maintaining control over the organizations' respective boards of directors. (Id. at ¶¶ 106, 109-110.)

Due to Webb's and the Varsity Defendants' alleged total control over USASF and USA Cheer, Webb and the Varsity Defendants are able to control all aspects of all-star cheerleading, including the following alleged examples:

• All athletes cheering on behalf of Varsity-affiliated gyms are required to purchase USASF memberships to compete at Varsity-sponsored events;
• All gyms, coaches, and vendors who wish to compete at and/or attend and/or offer products/services at Varsity events must also become members of USASF and pay monthly and/or annual fees to USASF, USA Cheer, and the Varsity Defendants;
• The Varsity Defendants require gyms to sign multi-year supply contracts whereby the gyms are paid cash rebates from Varsity Spirit for buying Varsity-branded merchandise, participating in Varsity-sponsored events, and working with Varsity-approved vendors;
• All athletes must pay annual fees to the Varsity Defendants for music, training, competition attendance, uniforms, and accessories;
• Athletes who compete at one Varsity-affiliated gym are prohibited from transferring to another Varsity-affiliated gym without permission;
• Athletes and their families attending Varsity events are required to stay at Varsity-approved hotels (a policy Varsity has dubbed “stay to play”), allegedly at inflated rates, and any failure to comply with the stay-to-play policy could subject the entire team to disqualification;
• Webb has publicly stated that teams performing at Varsity competitions in full Varsity uniforms and accessories received higher scores; and • Following the highly publicized Jerry Harris sex abuse scandal in 2020[1], USASF and USA Cheer began offering risk and safety training to member gyms and personnel, but the Varsity Defendants required members to pay additional fees to access this USASF/USA Cheer safety training.

(Id. at ¶¶ 56, 59, 61, 62, 64, 68, 113, 174-75.)

B. Doe's Allegations of Abuse

Doe alleges that, at the time of the alleged abuse, he was a citizen and resident of Lorain County, Ohio. (Id. at ¶ 14.) In 2014, when Doe was 15 years old, Defendants Brandon Hale, Taji Davis, and ShowPro Choreography, contracted with Doe's gym in “Avondale, Ohio”[2]to provide choreography services to the gym's all-star cheerleading team. (Id. at ¶ 188.) Doe alleges that during this initial meeting, Hale and Davis accompanied Doe, his gym owners, and other minor athletes on a day trip to Cedar Point amusement park. (Id. at ¶ 189.)

In April 2015, Doe transferred to a new cheerleading gym in Brecksville, Ohio. (Id. at ¶ 190.) Doe alleges that his new gym would also contract with Hale, Davis, and ShowPro for choreography services. (Id.)

Doe alleges that, [b]eginning in 2016, Defendants Hale and Davis began to exchange messages with . . . Doe using an App.” (Id. at ¶ 191.) Doe alleges that on or around July 28, 2016, when Doe was 17 years old, Hale and Davis returned to Ohio to provide “cheer training and choreography services to [Doe's] former gym.” (Id. at ¶ 192.) Doe alleges that during this July 2016 trip to Ohio, “Davis and Hale once again exchanged messages with” Doe. (Id. at ¶ 193.) Doe alleges that, at that time, Hale and Davis knew that Doe was under 18 years old and a USASF member athlete. (Id.)

Doe alleges that, despite their knowledge of Doe's age and status as a USASF member, Hale and Davis “pressed” Doe to visit them at their hotel room in Westlake, Ohio. (Id. at ¶ 194.) Doe alleges that he “was hesitant and initially refused” their invitation. (Id. at ¶ 195.) However, Doe ultimately went to Hale's and Davis's hotel room. (Id.) Upon arrival, Doe learned that Hale and Davis were also going to provide a cheerleading skills...

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