A state court judge in New York has delivered a mixed ruling to the PGA Tour, Inc. in a case in which it was sued by professional golfer Vijay Singh after the Tour found that Singh had committed an anti-doping violation.
Singh had accused the defendant of negligence, breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, intentional infliction of emotion distress, and conversion.
The Tour moved to dismiss and the court granted the motion on all counts, except the cause of action for breach of the implied covenant of good faith and fair dealing.
Background
Beginning in 2008, the PGA Tour implemented its Anti-Doping Program with a prohibited substances list essentially identical to that created by the World Anti-Doping Agency (WADA). On January 29, 2013, an article appeared on Sports Illustrated’s website describing the efforts of one company to create products which could legally assist athletes’ physical condition. The article listed PGA member and World Golf Hall of Fame player Vijay Singh as being a user of “deer antler spray.” Upon publication of the article, Singh immediately contacted the PGA Tour to discuss his use of deer antler spray and delivered a bottle of the product to the PGA Tour for testing. Analysis of the spray identified it as containing Insulin-Like Growth Factor-1 (IGF-1), but allegedly did not determine whether this IGF-1 was the same substance banned by WADA/PGA Tour. The PGA Tour subsequently suspended Singh for 90 days, a suspension that Singh immediately appealed.
After considerable research in connection with his appeal and arbitration proceeding, it was propounded by Singh on April 24 that the deer antler spray is incapable of having any physiological effect when taken as a spray (requiring, instead, injection into the body). As a result, WADA advised the PGA Tour on or about April 26 that it was removing the product from its banned substances list- information that the PGA Tour did not disclose to Singh for several days, despite knowledge that Singh and his advisors were diligently preparing for a May 7 arbitration. Finally, on April 30, the day the PGA Tour was required to submit a reply brief in the arbitration, the PGA Tour announced that it was dropping its case and would not seek to impose any discipline against Singh.
Singh sued the PGA Tour in New York state court on May 8 for three counts of negligence, breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, intentional infliction of emotional distress and conversion arising out of “the PGA Tour’s reckless administration and implementation of its Anti-Doping Program.”
The complaint alleged that the PGA Tour breached a duty to Singh to determine: (i) which substances were necessary to ban to protect the integrity of the sport of golf, (ii) whether the substance allegedly consumed by Singh was actually banned, and (iii) whether Singh “used” IGF-1 as necessary for the imposition of penalties under the Tour’s anti-doping program. The Complaint further alleged that the Tour: (iv) breached its implied covenant of good faith and fair dealing by failing to conduct a thorough and fair investigation before accusing Singh of a doping violation, (v) breached a fiduciary duty to Singh by failing to develop and administer its anti-doping program in a responsible manner, (vi) subjected Singh to severe emotional distress, and (vii) improperly converted Singh’s earnings, when it held $100,000 of Singh’s earnings in escrow pending his appeal.
The Tour, Inc. ultimately moved to dismiss, the disposition of which is addressed in this summary.
The court addressed the first, second, and third causes of action for negligence as a group, noting that, to win, “a plaintiff must demonstrate that the defendant owed him or her a duty of reasonable care, a breach of that duty, and a resulting injury proximately caused by the breach.” Elmaliach v. Bank of China Ltd., 110 AD3d 192, 199-200, 971 N.Y.S.2d 504 (1st Dep’t 2013)
The defendant successfully argued that Singh’s negligence claims fails as a matter of law “because they are premised upon duties imposed by contract. Under New York law, contractual duties, or breach thereof, cannot form the basis for a negligence claim.”
As for the breach of the implied covenant of good faith and fair dealing claim, the court recounted the plaintiff’s argument that the Tour “has inconsistently disciplined golfers who admitted using deer antler spray. Specifically, the plaintiff alleged that in 2011, golfer Mark Calcavecchia also admitted that he used deer antler spray and was not disciplined by the defendant. Rather, Calcavecchia was merely told to stop using the spray. In addition, the plaintiff alleged, “upon information and belief, that the defendant is aware of other golfers who have used the Spray but has not attempted to discipline those other golfers.
“The plaintiff also alleged that the defendant, prior to making the determination that the plaintiff committed an anti-doping violation, failed to fairly and thoroughly investigate the plaintiff’s use of the spray by, for example, analyzing the spray and the IGF-1 contained therein; that the defendant imposed discipline on the plaintiff via suspension and placing the plaintiff’s winnings in escrow without abiding by the procedural protections set forth in the Manual; and that the defendant delayed the discontinuance of its disciplinary action against the plaintiff despite knowing that WADA had removed deer antler spray from its list of banned substances.”
The court, in denying the defendant’s motion on this count, noted that it must accept the plaintiff’s allegations as true, and accord them “the benefit of every possible favorable inference.” Thus, it found that the plaintiff “has sufficiently pled a cause of action for breach of the implied covenant of good faith and fair dealing.” Leon v. Martinez, 84 NY2d 83, 87-88, 638 N.E.2d 511, 614 N.Y.S.2d 972 (1994)
Turning to the breach of fiduciary duty claim, the court found that Singh’s allegations regarding “the existence of a fiduciary relationship between the plaintiff and the defendant are insufficiently particularized to satisfy the requirements of CPLR 3016(b). Specifically, the nature of the parties’ relationship as set forth in the complaint, that of an individual member subject to the oversight of a governing body, does not support the conclusion that the defendant was “ under a duty to act for or to give advice for the benefit’ of the plaintiff upon matters within the scope of the relation.” EBC I, Inc. v. Goldman, Sachs & Co., 5 NY3d 11, 19, 832 N.E.2d 26, 799 N.Y.S.2d 170 (2005)
Regarding the sixth cause of action — intentional infliction of emotional distress — the court found that “the conduct alleged does not rise to the level of being ‘extreme and outrageous.’” Lau v. S & M Enters., 72 AD3d 497, 498, 898 N.Y.S.2d 42 (1st Dep’t 2010)
Finally, on the conversion claim, the court found that the requisite notice was given to the plaintiff “before a player’s prize money may be placed in escrow,” thus voiding that claim.
Vijay Singh v. PGA Tour, Inc.; Sup. Ct. N.Y., New York Co.; 651659/2013, 2014 N.Y. Misc. LEXIS 639; 2014 NY Slip Op 50191(U); 2/13/14
Attorneys of record: (for plaintiff) Peter R. Ginsberg, of Peter R. Ginsberg Law, LLC; Jeffrey S. Rosenblum, of Rosenblum & Reisman P.C. (for defendant) Jeffrey A. Mishkin, Anthony J. Dreyer, and Michael H. Menitove, of Skadden, Arps, Slate, Meagher & Flom LLP.
