A Texas state appeals court has affirmed a ruling that the National Football League did not violate the law when it prevented some of its players from participating in the National Fantasy Football Convention because such participation would have violated the league’s gambling policy. In short, the trial court, and appellate court by affirming, recognized the NFL’s justification defense.
In early 2015, Fan Expo was formed to create the National Fantasy Football Convention (NFFC), whose mission was to facilitate NFL fan and player interaction at an event that would feature current and former NFL players, media personalities, and football experts. The NFFC’s inaugural event was planned to take place on July 10-12, 2015, at the Venetian Resort Hotel Casino in Las Vegas. Between March and May, the NFFC signed appearance agreements with approximately 60 NFL players and entered into verbal agreements with approximately 30 NFL players.
In late May 2015, a representative of an NFL team contacted Brook Gardiner, Senior Labor Relations Counsel for the NFL, to inquire whether NFL players’ participation in the event would violate the NFL’s gambling policy. After an investigation that included speaking with Fan Expo’s Executive Director Andy Alberth and reviewing the event’s advertising materials, Gardiner concluded that NFL player participation in the event would violate the gambling policy because of the location of the event at the Venetian. He then contacted Sean Sansiveri, Vice President of Business and Legal Affairs for the National Football League Players’ Association (NFLPA), to inform him that NFL players planned to participate in the event and that such participation would violate the NFL’s gambling policy. Based on his own investigation, Sansiveri believed “it was reasonable to say that NFL players’ participating in the event was a violation of the gambling policy.” Dexter Santos, the NFLPA’s Vice President of Player Services, then called several agents and player representatives to alert them that the NFL considered NFL players’ participation in the event to be a violation of the gambling policy and that the players could be subject to discipline by the NFL.
In July 2015, Fan Expo filed suit against the NFL, claiming tortious interference with contract and tortious interference with prospective business relationships. Its original petition alleged, among other things, that the NFL caused the cancellation of the event by falsely representing to players and NFL personnel that participation in the event would violate the NFL’s gambling policy. The NFL answered and asserted multiple defenses, including justification, on which it later moved for summary judgment against Fan Expo on all of its claims. That motion for summary judgment included as an attachment an affidavit from Gardiner and a copy of the gambling policy.
On Feb. 8, 2016, the NFL amended its motion with additional evidence, including the testimony of Sansiveri. It argued in part that its gambling policy prohibited participating at events held at casinos or other gambling-related establishment and that the gambling policy applies to all NFL players pursuant to the Collective Bargaining Agreement (CBA) between the NFLPA and the NFL. Two weeks later, Fan Expo amended its petition to add claims for business disparagement, fraud, breach of contract, promissory estoppel, equitable estoppel, and quasi-estoppel. Fan Expo also responded to the amended motion, asserting that the NFL’s motion failed to establish the NFL’s legal right to interfere with Fan Expo’s relationships with professional football players. According to Fan Expo, the NFL relied on the existence of the CBA to establish its authority to discipline NFL players but had not offered the CBA into evidence. Four days prior to the hearing on the amended motion, the NFL filed a reply, to which it attached a copy of the CBA.
After conducting a hearing at which the NFL was granted leave to file its supplemental summary judgment evidence, the trial court granted the amended motion on Fan Expo’s claims of tortious interference with contract and tortious interference with prospective business relationships and signed orders sustaining the NFL’s objections and overruling Fan Expo’s objections to the evidence. Fan Expo later amended its petition to assert claims against the other NFL entities and to assert claims based on its agreements with NFL Network personalities and its discussions with the Fantasy Live team. The NFL and the NFL entities moved for and were granted summary judgment on Fan Expo’s claims not disposed of by the order on the amended motion. The trial court signed a final judgment ordering that Fan Expo take nothing from the NFL entities.
On appeal, Fan Expo argued that “the NFL failed to conclusively prove its justification defense because it failed to explain how or why it had the authority to enforce the Gambling Policy.”
Relying on Cmty. Health Sys. Prof’l Servs. Corp. v. Hansen, 525 S.W.3d 671, 680 (Tex. 2017), the appeals court noted that “the affirmative defense of justification can be based on the exercise of one’s own legal rights or a good-faith claim to a colorable legal right, even though that claim ultimately proves to be mistaken. A defendant generally establishes justification as a matter of law when the acts the plaintiff complains of as tortious interference are merely the defendant’s exercise of its own contractual rights. If a trial court finds that a defendant has conclusively established the justification defense by proving a legal right to interfere with a contract, the defendant’s motive or good faith underlying the interference is irrelevant.”
Fan Expo’s first argument sought to undermine the NFL’s defense because the league initially did not attach the CBA, which provided the only “support (for) the NFL’s justification defense. …”
According to Fan Expo, “because the NFL referred to the CBA as the mechanism through which its Gambling Policy was enforceable against NFL players, and because the CBA was not attached as an exhibit to the amended motion, it did not in fact conclusively prove the NFL’s justification defense.
“However, the foregoing argument ignores the text of the Gambling Policy itself and the unobjected-to summary judgment evidence the NFL attached to the amended motion, including Sansiveri’s deposition testimony as counsel for the NFLPA as to his understanding that the players were bound by the Gambling Policy.” The court also disagreed with Fan Expo that “the trial court abused its discretion by admitting the CBA and other evidence filed four days before the summary judgment hearing. A trial court, however, enjoys broad discretion to allow evidence to be filed after the hearing on the motion and before summary judgment is rendered. See DMC Valley Ranch, L.L.C. v. HPSC, Inc., 315 S.W.3d 898, 902 (Tex. App.—Dallas 2010, no pet.).”
Next, Fan Expo argued that “the only way the NFL could exercise any rights related to the Gambling Policy would be to wait until it was violated and then only after the Commissioner made the decision to take enforcement action. However, we need not follow Fan Expo’s argument to its logical conclusion because the provision in question, Article 46, addresses the procedures for disciplining players for violations. In this instance, while the NFL had concluded that participation in the event would constitute a violation of the Gambling Policy, its communications with the NFLPA was not an effort to discipline players but to avoid the need to do so.” The appeals court added that the lower court has “broad discretion” to allow in evidence.
“Finally, we address Fan Expo’s argument that the evidence established the Event was not going to be held at a casino, and alternatively that the Gambling Policy is ambiguous… .”
No dice on this argument either. “Regardless of whether the Event was scheduled to be held at a casino, the evidence clearly established the event was to take place at the Venetian. The Venetian Resort Hotel Casino is clearly a ‘gambling-related establishment.’
After overruling Fan Expo’s first set of issues, the court turned to the second in which it claimed the NFL “engaged in independently tortious conduct.”
It first addressed “Fan Expo’s complaint that the order granting the amended motion could not bar its claims for business disparagement and fraud because those two claims were not specifically addressed in the motion. Generally, summary judgment cannot be granted on a cause of action not raised in the summary judgment motion. Burt v. Harwell, 369 S.W.3d 623, 625 (Tex. App.—Dallas 2012, no pet.). However, summary judgment may be proper on claims not addressed in the summary judgment proceeding, if the grounds asserted in the original motion nevertheless show that the plaintiff could not recover from the defendant on causes of action pleaded after the original motion for summary judgment was filed. Id. The conduct Fan Expo asserted as the basis for its fraud and business disparagement claims was that the NFL published and represented that (a) the event was being held at a casino or gambling-related establishment, (b) the event was sponsored by a casino or a gambling-related establishment, (c) the event violated the NFL’s gambling policy, and (d) the NFL players making an appearance at the event would be disciplined. Both fraud and business disparagement claims require a finding of a false statement. See Zorrilla v. Aypco Constr. II, LLC, 469 S.W.3d 143, 153 (Tex. 2015); In re Lipsky, 460 S.W.3d 579, 591 (Tex. 2015). In its Amended MSJ, the NFL argued Fan Expo had failed to allege an independently tortious act by the NFL, that the complained of statements were true, and that true statements could not support any allegation of an independently tortious act by the NFL. We conclude the Amended MSJ was sufficiently broad to cover the claims of fraud and business disparagement so as to pretermit the granting of the subsequent motion. See Burt, 369 S.W.3d at 625.”
Next, the court turned to Fan Expo’s assertions that “it established a fact-issue as to whether the NFL had engaged in independently tortious conduct and that independently tortious conduct cannot ever be the basis for a justification affirmative defense … .
“Fan Expo has not identified any evidence to establish the NFL communicated that the event would be sponsored by the Venetian consistent with the second allegedly false statement. And, the Gambling Policy itself provides that players who violate the Gambling Policy are subject to discipline, thus establishing the truth of the fourth allegedly false statement. Based on the foregoing, we conclude Fan Expo failed to establish that the NFL’s conduct was independently tortious so as to preclude the NFL from establishing its affirmative defense of justification.”
On the remaining arguments, the court also sided with the league, thus consigning the litigation to the sideline, permanently.
Attorneys of Record: (for plaintiff) David S. Coale, Michael Kalis, Retained Attorneys, Michael K. Hurst, Lead Counsel, Lynn Pinker Cox & Hurst, LLP, Dallas, TX; David Urteago, Julie Pettit, Retained Attorneys, The Pettit Law Firm, Dallas, TX; John Franklin Guild, Retained Attorney, Financial Industry Regulatory Authority, Dallas, TX. (for defendants) Andrew Guthrie, Charles Jones II, Jamee Cotton, Richard Thaddeus Behrens, Retained Attorneys, Anne McGowan Johnson, Lead Counsel, Haynes and Boone. LLP, Dallas, TX.
