Champion Pro Consulting Group, Inc. v. Impact Sports Football, LLC
2016 U.S. App. LEXIS 23056
| 4th Cir. | 2016Background
- In Dec. 2010 Robert Quinn signed a Standard Representation Agreement (SRA) with agent Carl Carey and a separate Financial Assistance Agreement (FAA) that provided $125,000 in staged payments.
- During the 2011 NFL lockout, Impact Sports (Fleming et al.) contacted Quinn; Quinn terminated Carey’s SRA in July 2011 and signed with Impact Sports; Impact advanced Quinn $100,000 via a Marketing Advance and Quinn signed an NFL contract with the Rams in August 2011.
- Carey pursued an NFLPA arbitration and recovered $17,500 for 70 hours of advisor work; Plaintiffs then sued Impact Sports and associates in North Carolina federal court asserting UDTPA and civil conspiracy claims (other claims were dismissed earlier).
- Defendants moved for summary judgment and Plaintiffs sought sanctions for alleged spoliation (deleted text messages); district court denied some sanctions requests but granted summary judgment for Defendants on all remaining claims.
- On appeal the Fourth Circuit reviewed de novo and affirmed, holding the alleged recruitment conduct and Marketing Advance did not constitute unfair or deceptive practices under North Carolina’s UDTPA and therefore conspiracy claim failed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Impact’s recruitment practices (use of “runners”) and communications violated the UDTPA | Impact used intermediaries (runners) to secretly solicit Quinn and poison him against Carey, which is unfair/deceptive | Industry recruiting tactics, including intermediaries, are regulated by NFLPA and are not inherently unfair or deceptive under UDTPA | Court held UDTPA does not reach these industry recruitment practices given the NFLPA’s regulatory scheme; no UDTPA violation |
| Whether a $100,000 Marketing Advance constituted an unfair or deceptive inducement under UDTPA | The Marketing Advance was a disguised, non-repayable payment intended to induce breach of Carey’s SRA and was deceptive | Marketing advances are common industry practice (Carey made similar payments); this advance was disclosed to and approved by the NFLPA | Court held Marketing Advance falls within accepted industry practice and does not amount to UDTPA conduct |
| Whether alleged retaliatory motive by Defendants brings conduct within UDTPA | Defendants acted out of retaliatory animus toward Carey, making conduct egregious and unfair | No direct evidence of retaliation; conduct has legitimate business explanations | Court found evidence was speculative and, even if retaliatory, not egregious enough to invoke UDTPA |
| Whether civil conspiracy claim survives absent an underlying UDTPA violation | Conspiracy premised on UDTPA violation | No underlying unlawful UDTPA conduct occurred | Court held civil conspiracy claim fails because it requires an underlying unlawful act (UDTPA) |
Key Cases Cited
- Askew v. HRFC, LLC, 810 F.3d 263 (4th Cir. 2016) (summary judgment review standard in diversity cases)
- Jackson v. Kimel, 992 F.2d 1318 (4th Cir. 1993) (appellate affirmance may rest on any legal ground supported by record)
- Dalton v. Camp, 353 N.C. 647 (2001) (defines deceptive and unfair conduct under UDTPA)
- Skinner v. E.F. Hutton & Co., Inc., 314 N.C. 267 (1985) (UDTPA should not duplicate regulation where pervasive regulatory scheme exists)
- Gilbane Bldg. Co. v. Fed. Reserve Bank, 80 F.3d 895 (4th Cir. 1996) (UDTPA requires immoral, unethical, or substantially injurious conduct)
- Food Lion, Inc. v. Capital Cities/ABC, Inc., 194 F.3d 505 (4th Cir. 1999) (UDTPA’s consumer-protective purpose limits its application)