Wide World of Sports Risk: Electronic Discovery Has Become a Major Legal Issue for All Organizations. as We See through the NFL's Spygate Scandal and the NBA's Relocation of the SuperSonics from Seattle to Oklahoma City, Professional Sports Leagues Face Unique Challenges
Griver, Yoav M., Garrie, Daniel B., Risk Management
One important feature of professional sports is the interdependence between the player, the team and the league. This interdependence helps make professional team sports wildly successful, but also creates a number of unique legal issues.
One that has come up multiple times in recent years is the extent to which these interdependent entities must police and preserve each other's documents and information. This issue is not academic. To the contrary, the question of who legally controls which document has become increasingly important for various reasons.
The first is the sheer amount of information created every day in this electronic age. Complicating that is the ongoing expansion of the rules governing legal discovery and information. And lastly is the fact that courts are demonstrating an increasing willingness to police these laws and punish, with monetary and other sanctions, the destruction or failure to preserve and produce information--even if such destruction is unintentional.
The League and Its Teams
There may be situations where the sports league, in exercising its power to enforce league rules, becomes responsible for preserving and producing information it receives from its teams or players.
In 2007, for example, the New England Patriots and team head coach Bill Belichick were caught violating league rules by videotaping the defensive plays of the New York Jets and other teams. As part of the NFL's internal investigation into what has become known as "Spygate," the NFL demanded, reviewed, and then destroyed all copies of the Patriots' tapes, including from years the Patriots won Super Bowls.
The NFL's decision to first demand and then destroy the videotapes raised the possibility of severe consequences for both the Patriots and the NFL. The "duty to preserve attache[s] at the time that litigation [is] reasonably anticipated," later ruled a court. Here, it is hard to argue that the NFL did not "reasonably anticipate" some kind of litigation.
Indeed, less than two weeks after the NFL destroyed the tapes, a putative class action lawsuit was filed against Belichick and the New England Patriots on behalf of all New York Jets season ticket holders requesting at least $184 million in damages. In Mayer v. Belichick, the plaintiffs included a direct contract claim against the NFL for destroying the videotapes. Luckily for the NFL, the court dismissed all claims, holding that Jets ticket holders suffered no injury. Even if the quality or "honesty" of the games were less than anticipated, ticket holders were still able to watch them, ruled the court.
Had the claims not been dismissed and the case went to discovery and trial, the NFL would likely have been placed in an unwinnable situation. In demanding that the Patriots turn over the tapes, the NFL assumed responsibility for those tapes, including the duty to preserve evidence responsive to anticipated litigation. Because the NFL destroyed all copies of the tapes, and the tapes were so fundamental to any Spygate-related lawsuit, a judge would have little choice but to sanction all the defendants for the "spoliation" of evidence, particularly if NFL Commissioner Roger Goodell's decision to destroy the tapes violated the NFL's written record retention policies or past practices.
The Team and Its Owners
Just as an agent is a fiduciary to its clients, the owners of a team may well have fiduciary duties to the team itself, including the duty to produce personal emails involving team issues. In a case resulting from the relocation of the NBA's Seattle SuperSonics from Seattle to Oklahoma City, the city of Seattle alleged that it had the right to compel the Sonics to remain in Seattle during the term of its lease. As part of the litigation, Seattle officials issued requests for electronic discovery directed at both the team and six of its eight-member ownership group Professional Basketball Club, LLC (PBC). …