LOS ANGELES (CN) – A state court judge delivered a blow Wednesday to sports agent Dan Fegan’s $30 million lawsuit by ruling that an arbitrator should decide claims that sports and entertainment executive Hank Ratner poached several of Fegan’s NBA clients.
In June, Fegan sued Ratner in Los Angeles County Superior Court on fraud and intentional interference with contractual relations, claiming that the executive and his company Independent Sports & Entertainment also destroyed his reputation and usurped his sports agency.
ISE filed a motion to compel arbitration of the dispute. Los Angeles County Superior Court Judge Michael Stern said he intended to grant the motion on Wednesday morning, but gave Fegan’s attorneys Howard Weitzman and Zachary Elsea the chance to make their case during a brief hearing in downtown LA.
Elsea said the misconduct Fegan had alleged, including the poaching of his clients, had occurred after his contract with ISE terminated and was not related to his employment with the company.
“Our position is that it absolutely cannot be arbitrated,” the Kinsella Weitzman attorney told the court.
But Gibson Dunn partner James Fogelman said there was no ambiguity in Fegan’s contract about whether disputes should be arbitrated. He urged Stern to make his tentative order final.
“This is all covered,” Fogelman said. “All of it.”
Stern granted the motion to arbitrate but stayed the action to retain jurisdiction if any disputes arise. He told the parties that if any of Fegan’s claims cannot be arbitrated, the parties could return to his courtroom. He scheduled a status hearing for Sept. 12, 2018, and ordered a status report for Aug. 30 of the same year.
After the hearing both sides claimed bragging rights, with Fogelman calling the judge’s decision a “complete victory.”
“The only thing the court ordered was that the claims have to be arbitrated and that if there’s anything left to talk about after arbitration we’ll have a status conference in about a year,” Fogelman said outside the courtroom.
Weitzman told reporters Fegan would have his day in court because the arbitrator would not have jurisdiction to consider a claim of intentional interference with contractual relations. He noted that if ISE had prevailed, it would have won a dismissal rather than a stay.
“Clearly the intentional interference and all of that is not going to be taken up in the arbitration. So what he basically did was put this case over first, allow the arbitration and those issues to go forward, then come back to him on the intentional interference, misconduct and stealing Mr. Fegan’s clients,” Weitzman said.
Weitzman declined to name any of the players that Ratner is alleged to have poached. He said the player’s union, National Basketball Players Association, is aware of the case.
When asked about Fogelman’s claims of a “complete victory,” Weitzman responded: “He’s a lawyer and he’s speaking like a lawyer.”
Fegan has represented the LA Clippers’ DeAndre Jordan and former LA Laker Dwight Howard. The sports agent says in his lawsuit that he sold his agency to Relativity Sports and became president of the basketball division.
When Relativity Sports faced bankruptcy, Fegan says he funneled $1 million of his own money into the failing business, then recommended that Relativity Sports hire Ratner to revive its fortunes. Relativity was relaunched as ISE.
Ratner then took over the day-to-day running of Fegan’s basketball division, according to his suit, though he had no experience representing players and had promised that Fegan would maintain full control. The company later fired him and took his clients, Fegan says.
ISE meanwhile sued Fegan in March, claiming he’s set up a competing business on the side to divert clients, employees, and other business interests.