Sports Marketing Agents’ Defense Counsel Sanctioned

Sep 24, 2021

By Jeff Birren, Senior Writer

Sports agents often have a competitive existence, and so it is with Clarity Sports.  Clarity Sports sued Redland Sports (“Redland”), a sports memorabilia company, in 2019, and recently two defense lawyers were sanctioned by the U. S. District Court in Philadelphia for their behavior during a deposition (Clarity Sports International LLC and Jason Bernstein v. Redland Sports et al, (“Clarity Sports”), M. D. Penn., Case No. 1:19-CV-00305, Order, (7-15-21)).

Clarity Sports International LLC (“Clarity”) is “a full-service sports management company” that provides “strategic management and advisory services to professional athletes” according to its website.  Clarity represents NFL players in contract negotiations and marketing.  It is based in Maryland and has been in business for over 50 years.  Jason Bernstein is the majority owner and a certified NFL agent.  Bernstein and Clarity were formerly wide receiver Kenny Golladay’s exclusive contract, marketing, and endorsement representatives. 

Redland procures and sells autographed sports memorabilia.  It is owned by Gerry Ochs and is based in Pennsylvania.  Redland advertises and sells its products through Facebook.  In January 2019, Redland arranged for a private autograph signing with Golladay.  Clarity emailed Redland that it was his exclusive marketing agent, but Redland proceeded with its event.  Redland also worked with Todd France, a registered NFL agent at CAA Sports LLC (“CAA”), and France handled the negotiations for Golladay’s contract with Redland.   Golladay then terminated his contract with Clarity on January 24, 2019, and signed with France. 

Clarity Sues

Clarity sued Redland and Ochs on February 22, 2019.  The thirteen-page complaint had a cause of action for tortious interference with existing marketing relationships for endorsement and marketing agreements and a cause of action for tortious interference with the representation agreement.  It sought damages “in excess of $75,000” for each claim, plus further relief as “this Court deems just and proper.”   Litigation, however, is often a moving target.

Clarity filed an amended complaint on March 15, 2019, that added MVP Authentics and its owner Daryl Eisenhour, and Boone Enterprises and its owner Craig Boone (“Boone”) as defendants.  Both enterprises are sports memorabilia companies.  Redland and Boone moved to dismiss the amended complaint in April 2019, and to stay the complaint.  The District Court granted the motion to dismiss “without prejudice to Plaintiffs’ ability to file a second amended complaint consistent with the Court’s discussion” (400 F. Supp. 3d 161 (2019).  The Court denied the motion to dismiss for lack of personal jurisdiction.  It also denied the motion to stay the case pending the outcome of the NFLPA arbitration between France and Bernstein, and it denied the motion to bifurcate discovery pending the defendants’ motions to dismiss (Id.).

A Third Amended Complaint followed, after “the resolution of many discovery motions” (Clarity Sports at 2).  That complaint added CAA as a defendant.  This time, the motions to dismiss were denied and the defendants were ordered to answer.  They did so in January 2020. The same firm represents all the defendants except Redland and Ochs. 

While this was going on, France initiated NFLPA arbitration with Bernstein in July 2019, pursuant to NFLPA requirements.  France prevailed and filed a complaint in Virginia federal court to affirm the arbitration award.  Bernstein filed an opposition and a competing motion to set aside the award.  The case was transferred to Philadelphia.  After briefing and various rulings, the Court granted France’s motion to confirm the arbitration award and denied Bernstein’s motion (France v. Bernstein, M.D. Penn., Case No. 1:20-cv-01443 (10-30-20)).  For a more complete discussion, see Sports Litigation Alert, Gary Chester, “France V. Bernstein Illustrates the Competitive Nature of Sports Agency and the Limits of Arbitration” (1-15-21).  Bernstein subsequently filed a notice of appeal in the Third Circuit in December.  2020 also saw France leave CAA for Athletes First, keeping Golladay as a client.

Clarity Sports Continues

Discovery continued, and.  Due to COVID-19, the process server was not allowed to approach Golladay, so the subpoena was served on the Lions’ general counsel.  Clarity then filed a motion to enforce the subpoena, or for alternative service of process.  The Court denied the first part of the motion because counsel “unambiguously stated that he is not generally authorized to accept service on Mr. Golladay’s behalf, or specifically to accept service of the subpoena.”  The Court granted to the motion for alternative service of the subpoena (Clarity Sports, Order Denying Motion to Enforce Subpoena …” (1-22-21)).  In March 2021 Golladay signed a four-year, $72M contract with the Giants.

On March 3, 2021, Clarity and Bernstein deposed CAA corporate representative Nicofar Shepherd.  The deposition was so contentious that the plaintiffs filed a motion for sanctions, insisting that counsels’ behavior “prevented Plaintiffs from having a fair opportunity to depose Shepherd (Clarity Sports at 2).  Clarity asserted that defense counsel spoke for 33% of the of time, made “speaking objections,” coached the witness and added “argument and commentary.”  This included labeling a question as “stupid” and telling plaintiffs’ counsel to “shut up.”  “[M]ore examples of this behavior are littered throughout the deposition transcript.”  They sought their costs and attorneys’ fees for the deposition, for the sanctions’ motion, and for an order “directing Defense Counsel to comply with the Federal Rules of Civil Procedure in depositions to be conducted in the future.”  In its opposition, CAA’s counsel claimed its behavior was “necessitated by the conduct of plaintiffs’ counsel” and that “no competent lawyers” would allow their clients to be “subjected to the tactics” employed by plaintiffs’ counsel.  

The Court’s Legal Standard

F.R.C.P. §30 states that objections “must be stated concisely in a nonargumentative and nonsuggestive manner.” Case law adds that “lawyers are strictly prohibited from making comments, either on or off the record, which might suggest or limit a witness’s answer to an unobjectionable question” (Clarity Sports at 3).  The Court may impose sanctions where appropriate on a person “who impedes, delays, or frustrates the fair examination of the deponent.” 

The Court’s Analysis

The Court “reviewed the transcript” and concluded “that Defense Counsel impeded, delayed, and frustrated the fair examination of Shepherd.  Thus, sanctions are warranted.”  It found “an abundance of improper interruptions and objections” and although it was “unnecessary and redundant to identify” all the improper acts, “some examples of Defense Counsel’s obstructionist conduct should be noted.”  Defense counsel “engaged in a plethora of ‘speaking objections, at times appearing to coach Shepherd’” (Id. at 4).   It gave examples wherein counsel would jump in with statements right after the question and prior to Shepherd’s response.  The motion “also demonstrated a pattern of adding to Shepherd’s answers.”  This included adding names to the list of names Shepherd had provided in his answer.  Defense counsel additionally “restated or reframed” plaintiffs’ counsel’s questions.

Moreover, in “addition to Defense Counsel’s numerous improper speaking objections and additions there is cause for concern about the unprofessional nature” of their comments.  The Court included some examples, including: “not these idiotic innuendos that you’re trying to explore” or “[Y]ou’re are not working to the Naval Investigative Service or whatever you did when you were in the Navy…”, “[B]e quiet”, “stupid questions” and “shut up” (Id.).  There were “numerous other instances when Defense Counsel interrupted the deposition, answered for the witness, and was disrespectful and professional” and counsel “impeded, delayed, and frustrated the fair examination of Shepherd” and consequently, “sanctions are appropriate.”  The required cooperation “was entirely lacking here.” 

Awarding sanctions “is appropriate to redress the expense and inconvenience” incurred in the deposition.  The only remaining questions were “who should be sanctioned and what sanctions are appropriate.”  Prior cases held that when counsel was at fault, the sanction should target the culpable attorney and not the client. 

Due process was satisfied because that motion was fully briefed, and counsel’s conduct was the focus of the motion. 

The Court had “no difficulty finding” that “an award of expenses and attorney’s fees are warranted pursuant to Fed. R. Civ. P, 30(d)(2)” (Id. at 5).  Such monetary sanctions “should be specifically related to expenses incurred as a result of the violation.”   After “assessing the transcript” “we find it appropriate to award Plaintiffs 20% of their costs and reasonable attorney’s fees for the deposition.” 

The Court also gave Plaintiffs an “award for their costs and reasonable attorney’s fees in bringing this motion.”  Finally, it granted the motion “directing Defense Counsel to comply” with the F.R.C.P.  “All counsel are admonished that sanctions for any future misconduct in this litigation may reflect the effectiveness, or lack thereof, of the present corrective action.”  The two defense attorneys “shall pay 20% of the reasonable expenses and attorney’s fees” in connection with the deposition.  They were also ordered to pay “100% of the reasonable expenses and attorneys fees” incurred in “filing and briefing the motion for sanctions” split equally among them.  The Court gave the parties thirty days to resolve the dispute or return to court.  The Court reminded counsel that the F.R.C.P. requires “that they shall be courteous, respectful and professional” (Id. at 6). 

In August, the Magistrate denied a defense motion to reconsider a discovery order.  The Court said that one defense argument “strains credulity.” Another argument “strains credulity beyond the breaking point.”  A final set of contentions “belie the litigation experience of counsel in this matter” (Order at 5, FN 1, (8-12-21)).

Conclusion

The case continues, and the sanctions order likely increased antagonism between counsel.  These rulings are a sad commentary on modern legal practice.  Ironically, CAA remains a defendant even though it no longer represents Golladay or employs France. 

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