Boris Berian Lawsuit Update: One Week To Go Until Both Sides Square Off In Court; Nike’s Proposed Contract That Reportedly Had 2 Pages Of Reductions In It Has Not Been Publicly Filed Yet

June 14, 2016

Since we reported last week that the judge had granted Nike a Temporary Restraining Order (TRO) in its lawsuit versus US 800m star Boris Berian, preventing Berian “from endorsing or competing while wearing any competitor’s products” for 14 days, two things have occurred:

1) The full text of the Temporary Restraining Order has been published (before only the minute (shortened) order had been issued). (The full text of the TRO is here or at bottom of this article)

2) Both sides agreed that Berian’s side could delay until June 24th filing its response to the initial lawsuit which was originally due by June 10th.

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We’ll quickly discuss the two things above with the help of an anonymous visitor who it is fair to say is a “legal expert” – one that needs to stay anonymous due to their employment in the legal industry.

To a non-lawyer, the full text of the TRO appears to be very favorable to Nike. It says in point #1:

Nike is likely to succeed on the merits that a contract existed between Nike and Defendant Boris Berian (“Defendant”) as of January 22, 2016. In this case, Nike argues that it properly matched an offer from New Balance Athletics, Inc. (“New Balance”) to Defendant, thereby creating a new contract pursuant to Section 5 of the parties’ 2015 Track & Field Contract. Nike has shown that it is likely that when, on January 22, 2016, Nike notified Defendant that it agreed to match the terms of the New Balance offer, a contract was formed. Based on the record currently before the Court, it is likely that the resulting contract between Nike and Defendant does not include reductions because the New Balance offer did not include reductions.

We asked our legal expert if this meant the judge was siding with Nike, they said no it does not as Nike’s lawyers wrote the Temporary Restraining Order. Our expert wrote, “This order was drafted by Nike’s counsel. This is typical — when a judge grants a motion, he or she will ask the moving party to draft and submit the proposed order. Of course, Nike’s counsel is going to draft it as favorably for Nike as possible without straying from the substance of what was ordered.”

Berian will wear Nike at Team USA events no matter what Berian will wear Nike at Team USA events no matter what

As for point #2 above, Berian’s team still has not filed its initial response to the lawsuit and now has an additional 14 days to do so. (However, there is a preliminary injunction hearing before then on June 21st that could decide the outcome of the case. More on that below). Berian’s team said it needed the extra time because a) it has been busy responding to Nike’s temporary restraining order b) it has been busy preparing for the preliminary injunction hearing and c) it wants to file publicly Nike’s full proposed contract with Berian as part of its response and Nike wants this contract to be kept confidential, so both parties need time to work this out.

If the full contract is filed in the public record, it would be a rare public glimpse to see how “reduction clauses” work in track and field endorsement contracts. A key point of contention in this lawsuit is Berian’s team says Nike did not match New Balance’s contract offer because Nike submitted a contract that was not guaranteed and had material “reduction clauses” in it.

Last week Berian’s agent Merhawi Keflezighi told the Daniel Petty of the Denver Post Berian’s Nike contract “contains two pages of reductions, including demands that Berian participate in a minimum number of races and reach a certain world ranking in his event.”

While Berian’s team now has until June 24th to file its initial response to the actual lawsuit, before then, something more significant will take place. A week from today on June 21st there will be hearing on Nike’s request for a preliminary injunction. The hearing on June 21 will almost certainly determine what Berian wears at the Olympic Trials and for all intents and purposes could be the end of the matter. Our “legal expert” wrote this about hearing, “If Nike win at the PI stage, it’s pretty much game over as it will have proven itself likely to succeed on the merits at trial under greater scrutiny than it endured at the TRO stage. The case could still go to trial, but that won’t occur prior to the Olympics and after that, who cares?” and “Getting a preliminary injunction is much more difficult than getting a TRO and is very much like prevailing at trial. It certainly serves as a strong indicator as to where things are likely to wind up after trial.”

A key date before the hearing on June 21 is this Friday, June 17th, as depositions are scheduled and Berian will likely be questioned by Nike lawyers as both sides prepare for the hearing next week.

Below we’re including more from an email on the TRO from our “legal expert”:

A couple of things to keep in mind . . .
1. This order was drafted by Nike’s counsel.  This is typical — when a judge grants a motion, he or she will ask the moving party to draft and submit the proposed order.  Of course, Nike’s counsel is going to draft it as favorably for Nike as possible without straying from the substance of what was ordered.
2. Any TRO must set forth with particularity the grounds on which relief was granted, so I was not surprised to see that the order made a finding that Nike had proven that it was likely to succeed on the merits at trial.  The judge had to conclude exactly that in order to issue the TRO.  The TRO also made appropriate, perfunctory findings on the other factors the judge considered, too.
3. It’s hard to know what kind of evidence — if any — was submitted in support of the parties’ respective positions during the hearing in addition to the declarations submitted in writing.  It’s unlikely that the judge called witnesses and heard testimony at the hearing on the TRO, as TRO’s are heard on very short notice and it’s very difficult to round up witnesses, prepare them for testifying, etc. The judge probably decided this on the papers, meaning that he considered only the motion, supporting legal memorandum, and declarations submitted by both sides.
4. Nike had the strategic advantage at the TRO stage, too.  Nike commenced this lawsuit and therefore, had a chance to marshall its evidence before springing it on Berian.  He had just a few days to respond to Nike’s request for a TRO, so chances are the proof he managed to get together was weaker or less focused for that reason, too.
Keeping these points in mind, I really would not read too much in to the findings made in the TRO.  And I would most definitely not draw the conclusion that the judge is “siding” with one party or another once and for all.  The finding is based on the likely scant evidence presented by both sides.  As I mentioned when we first began corresponding, consideration of a request for injunctive relief involves application of a balancing test that skews in favor of the Plaintiff at the TRO stage and in favor of the Defendant at the preliminary injunction stage.  TRO’s cannot last longer than 14 days absent a damn good reason.  Given that a 14-day injunction — which also must be as narrowly tailored as possible — most often will not cause Deft much harm, or certainly not as much as Plaintiff alleges it would suffer, as long as a Plaintiff makes reasonably sound arguments, the court likely will issue the TRO.
I did look at the attached request for an extension of time to file an answer.  This request has no bearing on whether or not the court will enter a preliminary injunction.  Essentially, Berian is asking for more time to respond to the complaint (the very first pleading filed by Nike) because he and his counsel want to focus their time and energy on the preliminary injunction battle.  What’s interesting is what this request hints about the evidence Berian might have to support his argument that Nike’s offer wasn’t a perfect match to NB’s terms.  He claims to have a draft contract that Nike sent on Feb. 22 and he wants to introduce that draft into evidence and into the public record; Nike wants that contract and perhaps other evidence to be kept out of the public record.  The extension suggests that the lawyers are trying to work out an agreement on this point.

Temporary Restraining Order:

Download (PDF, 102KB)

14-Day Delay for Berian’s Response:

Download (PDF, 114KB)

For all the Nike-Boris Berian contract news you can click here.

Discuss: MB: Official Discussion Thread For Boris Berian’s Contract Dispute

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