Sports In the Courts Blog : New York Attorneys & Lawyers Specializing in Sports Law & Legal Analysis

In the past few days, there has been some back and forth between the attorney representing Bryan Stow, and the attorney representing the Los Angeles Dodgers in connection with the lawsuit brought by Stow. Stow is seeking compensation for his pain and suffering and economic loss as a result of the beating that occurred on opening day earlier this year. According to Sports Illustrated, Stow was admitted to the hospital with a blood alcohol level of .176%, more than twice the legal limit if he were driving. Jerome Jackson, the Dodgers' attorney, believes that Stow may have been partially to blame for the attack. Jackson reportedly stated, “I’ve been doing these cases for 23 years and I have never seen one yet in which it didn’t take at least two people to tango."

I have not seen the papers, but apparently the Dodgers' attorney filed a separate lawsuit against the two attackers and also blamed Stow.  In New York or New Jersey, this is routinely done by filing a third-party complaint. The purpose of doing so is to allege that there may be other parties that are responsible for the injuries that the victim sustained. Strategically in cases like this, the plaintiff's attorney (such as Stow's attorney) usually will not name the attacker(s) involved as defendants, because an entity such as the Dodgers has "deep pockets," and the attorney representing the victim wants a jury to allocate as much blame as possible upon the entity with the financial capability to pay any judgment. Therefore, the attorney representing the main corporate defendant in a negligent security case will always name the assailants involved as third-party defendants, in order to reduce the percentage of fault that a jury may attribute to the corporate defendant. The attorney will also allege that the victim is guilty of comparative or contributory negligence.

It is important to keep in mind that these are just allegations that are commonly asserted at the outset of a lawsuit. The Dodgers' attorney has a responsibility to represent his client's interests. As bad as Dodger security may have been, the Dodgers did not beat Stow into a coma. Also, as unlikely as it seems at this point, discovery could potentially reveal that Stow incited the assault in some way, and therefore it is appropriate for the Dodgers' attorney to preserve this defense. In fact, it could be malpractice if the attorney did not. However, it appears that Jackson went too far in stating that it always "takes at least two people to tango." Without actual evidence that Stow was at fault, Jackson should not have said anything other than he is protecting the Dodgers' interests while discovery and investigation continue.  

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Philadelphia Eagles backup QB Vince Young was recently sued in a Dallas Court, arising out of an assault that allegedly took place in June of 2010. Creiton Joseph Kinchen, a Manager at Onyx Gentlemen's Club in Dallas, claims that Young punched him in the mouth, busting his lip and causing neck pain. The Complaint, courtesy of Courthouse News Service, alleges that Young wanted Kinchen to charge Young's credit card for $8,000 and provide Young with single dollar bills, so that Young and his friends could tip the dancers. Kinchen seeks damages for his pain and suffering and emotional distress.

Back in June when the incident occurred, Young said he had been angered by Kinchen making a "downward Longhorns sign" with his hands (Young is a University of Texas graduate) . A video camera at the club caught part of the fight and can be seen here.  Young was charged with misdemeanor assault, and will now have to defend himself from this civil lawsuit. 

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The last few days of the negotiations between the NBA players and owners have not gone particularly well. Early signs of some modest progress have been lost by differing positions by both sides on dividning the basketball revenue. Since then the negotiations have slowed and more games will surely be cancelled.

Now it seems that the players' union is hoping that the National Labor Relations Board ("NLRB") comes to the rescue. The union has filed a charge against the owners for alleged bad faith bargaining and an improper use of a lockout. The players want the NLRB to end the lockout as an unfair labor practice by the owners. The problem is there is absolutely no prohibition against the use of a lockout as a tool by an employer in a labor dispute.

There also seems to be consensus among legal commentators that bad faith really means "bad faith." The owners have not cut off all talks and they are certainly not naive enough to strike an "unbending posiition" with no room to give. In sum, as long as the owners keep meeting and talking with the players (even if it doens't go anywhere), they have little risk of being in bad faith.

The risk for both sides remains the same: a lost season with little public outcry. 

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Lenny Dykstra pled no contest to charges of motor vehicle theft and providing a false financial statement yesterday in Los Angeles. In exchange, a host of charges were dismissed, and Dykstra faces up to 4 years in prison when he is sentenced in January. Dykstra and friends allegedly leased high-end vehicles from several dealerships by submitting fraudulent information. 

Dykstra's problems are not over, however. In addition to the upcoming sentencing in January, he also faces federal bankruptcy fraud charges for allegedly selling sports memorabilia and other items belonging to his estate while his bankruptcy was pending.  Dykstra, a self-proclaimed stock and financial counseling star who was even endorsed by Jim Cramer as a stock picking "genius," may be providing financial advice to fellow prisoners soon. 

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Make no mistake about the NBA labor dispute, disregard whatever what both sides have said in the past, this moment in the stalemate is what both sides wanted.  Forget about "good faith" bargaining between the owners and the players' union or the use of a mediation. The truth is that both sides wanted regular season games to be cancelled. Maybe not all of the games, but just enough to draw financial blood.

It is quite clear that the owners believe that if the players start missing a few game checks, they will fold. Recent evidence shows that the owners may be making some gains. While it is disputed by the players' union head Derek Fisher, there were many reports that the Washington Wizards team is ready to cave in. Likewise, the players want the owners to lose out on some badly needed revenue and revenue sharing from games. Do you really think Mark Cuban wants his profitable Mavericks to miss games? Even the truly financially troubled owners can't make any money if none of the profitable teams (i.e. Lakers and Celtics) are playing.

So we are now at the financially bloody crossroad. The NBA situation is much different the NFL lockout. The NFL always had enough money to make everyone happy (some not as happy as they wanted to be but still enough), the NBA is in need of a rethinking of salaries, salary caps and revenue sharing. An agreement here will make many of the players and owners unhappy and will be quite complicated.

However, given the lack of public outcry over the loss of professional basketball, the players and owners better get something done soon.

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Mets Owner Fred Wilpon and his companies obtained a partial victory last week, after Judge Jed Rakoff dismissed a portion of Madoff Bankruptcy Trustee Irving Picard's "claw back" lawsuit against Wilpon/Katz/Sterling (collectively, "Sterling"). While the decision does significantly reduce Sterling's exposure, Judge Rakoff left some questions unanswered, and the Court's ruling is not as overly favorable as is being reported.

Judge Rakoff did dismiss all claims against Sterling that do not allege actual fraud or equitable subordination (a claim essentially seeking to subordinate any of Sterling's claims of lost profits to that of other victims based upon Sterling's alleged conduct). Picard alleges that Sterling knew or should have known that its withdrawals were the product of Madoff’s Ponzi scheme. Judge Rakoff held as a matter of law that the "safe harbor" provision of the Bankruptcy Code protected customers like Sterling - meaning that payments made by Madoff to its customers are considered "settlement payments" that a Bankruptcy Trustee such as Picard cannot "claw back" from the customer, unless there is evidence of actual fraud. This wiped away a substantial part of Picard's Complaint.

However, since the "safe harbor" provision does not protect against fraud, Judge Rakoff declined to dismiss the remainder of Picard's Complaint. For example, since Madoff transferred money to some customers to avoid paying other customers (the intent of a Ponzi scheme), those customers that benefited are subject to "claw back." Judge Rakoff determined that the Trustee can recover any of Sterling's profits, but can only seek principal that Sterling paid to Madoff by showing that Sterling "willfully blinded" itself to Madoff's fraud. It has been reported that the net result is that Sterling's exposure is now either $83 million or $295 million - the former being Sterling's alleged profits over a two year period prior to the bankruptcy filing, and the latter being Sterling's alleged profits over the course of the investment. In contrast to multiple articles and statements claiming that the Trustee's recovery is limited to a two year period preceding the bankruptcy filing, Judge Rakoff expressly declined to determine whether the Trustee is limited to that period, or whether profits earned over the course of Sterling's investment are recoverable. Moreover, Judge Rakoff permitted the Trustee to proceed with its claim that Sterling was "willfully blind" to Madoff's fraud, thereby subjecting principal paid by Sterling (not just profits) to recoupment by the Trustee. Thus, Sterling is still substantially exposed, and the Trustee will nevertheless appeal Judge Rakoff's decision to the Second Circuit Court of Appeals.

In sum, the decision is a win for Sterling as it narrows the Trustee's claims and reduces Sterling's financial exposure. On the other hand, a significant amount of money remains at stake, and Wilpon will have to continue his search for a minority partner to sell part of his share in the Mets.

Judge Rakoff's decision can be seen here. 

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