(CN) — The Fourth Circuit Court of Appeals is gearing up to tackle NBA star Zion Williamson's contract lawsuit against a sports marketing agency, a case that hinges on whether an outside entity can challenge an athlete’s eligibility to participate in collegiate sports, even if the NCAA has already deemed that student eligible.
Prime Sports and its president Gina Ford are appealing a 2021 ruling in favor of the New Orleans Pelicans forward. Oral arguments are set for next week in the high-profile case over Williamson's decision to terminate his contract, which he signed at the end of his only season of collegiate basketball at Duke University.
The District Court for the Middle District of North Carolina found at the time that Prime Sports had not complied with North Carolina’s Uniform Athlete Agent Act, a law that aims to protect student-athletes. It was not registered as an athlete agency in North Carolina and Williamson's contract didn't include warning notices that are required for student-athletes.
Ford and her firm have argued that Williamson shouldn’t have been covered by the protections of the state law, and accused Williamson’s family of accepting improper benefits while he was still a student, and as a result he lost his student-athlete eligibility.
But those allegations were moot, the lower court ruled. The NCAA never investigated the claims and still considered Williamson to be eligible, and for the purposes of the contract, the NCAA’s opinion was the only one that mattered, the court ruled. Williamson was a student-athlete, and the contract violated North Carolina law.
Prime Sports disagrees, and hopes that a panel of Fourth Circuit judges will feel the same way when it hears oral arguments on Tuesday.
At issue, the sports marketing firm’s attorneys argue, is whether or not the court should be able to conduct its own review into Williamson’s alleged conduct and eligibility — rather than just defer to the NCAA.
“Ford alleged conduct by Williamson that indisputably violated NCAA rules and rendered him ineligible to play college basketball,” the firm argued in a 73-page brief. “The fact that he was not caught by the NCAA is irrelevant for determining whether or not he was entitled to the protection of the UAAA.”
Williamson’s attorneys called that notion “nonsense.” Their argument is straightforward: Williamson was playing basketball as a student at Duke University at the time Ford signed the contract; the NCAA considered him a student-athlete and the contract did not comply with laws meant to protect student-athletes.
Prime Sports is trying to shift blame to Williamson, his lawyers claim.
“They could still enjoy the fruits of their illicit conduct so long as they point a finger at Williamson, attack his reputation, and prove that he violated NCAA rules before Prime Sports illegally recruited him,” Williamson’s brief says.
It was in 2019 that Williamson signed a marketing contract with Ford and her agency, which has represented other high-caliber athletes like world record sprinter Usain Bolt. He had just finished his only year of collegiate basketball at Duke and was preparing to enter the NBA draft as a rookie in high demand.
The parties disagree over who initiated contact, but both sides acknowledge that Prime Sports was not in compliance with North Carolina’s Uniform Athlete Agent Act when it signed Williamson.
The dispute began after Williamson moved to void his agreement with Prime Sports and signed a contract with another firm, Creative Artists Agency, for both player and marketing representation. Williamson filed his June 2019 suit to void his contract with Prime Sports.
Williamson’s case won out, but not before Prime Sports leveled its own allegations. In 2020, Ford and Prime Sports filed a counterclaim against Williamson for more than $100 million in damages, claiming Williamson had taken Ford’s marketing plan to officials at Creative Artists, ultimately signing endorsement deals that Ford had already negotiated on Williamson’s behalf.
The court ruled in Williamson’s favor on that case, too, in part because it had already ruled Williamson’s contract with Ford and Prime Sports void under the Uniform Athlete Agent Act, but also because it found that Ford’s marketing information didn’t constitute “trade secrets.”
Williamson’s attorneys have maintained that the marketing materials were generic and not marked confidential and that his subsequent deals were with brands that frequently work with basketball players like him.
But Ford has also accused Williamson of getting improper benefits that should have rendered him ineligible as a student-athlete under NCAA rules, including that Williamson’s family had improperly received a North Carolina home valued at $950,000 and two vehicles in exchange for Williamson’s commitment to Duke University.
The lower court found Ford wasn't entitled to establish that Williamson had violated NCAA rules.
On Tuesday, Ford’s lawyers will hope to convince a panel of Fourth Circuit judges that caselaw supports the idea that agents, athletes and the courts can in fact challenge an athlete’s eligibility for protection under Uniform Athlete Agent Act.
A reversal, Prime Sports argues, would also trigger the reversal of the lower court decision on contract and fraud claims over the information shared with Creative Artists.
It’s possible that the Fourth Circuit could look to reverse the decision on procedural grounds, said Ed Edmonds, a professor for Notre Dame Law School. For instance, it could rule that the district court shouldn’t have made its decision in a declaratory judgment — and instead should have gone through a more thorough process to establish a robust record showing which entities truly have the ability to determine eligibility.
Outside of that, Edmonds said, precedent is on Williamson's side.
“I personally tend to agree that for most of the timeframe that the Uniform Athletes Agent Acts have been in existence, you would have deferred to the NCAA’s determination as to whether or not an athlete was eligible or ineligible,” Edmonds told Courthouse News.
“Association law is such that you give a fair degree of deference to the association to determine matters unless they have denied somebody due process, which isn’t alleged in this claim because they never looked into his eligibility.”
Attorneys for both Williamson and Prime Sports declined to comment.
Oral arguments are set for Oct. 24 at 10:15 a.m. in Richmond.
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