- Lester Munson, Legal Analyst
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Hmmm, only one shopping day left 'til Bunsen Burner Day. (Hey, it's real. It's celebrated March 31. Read all about it right here.) What to get the football fan who has everything? Oh, oh, oh! Courtside Seat knows! A New York Jets/Tim Tebow jersey -- perfect! Only question is, will you be able to buy your favorite football fan and Bunsen Burner Day gift recipient that brand-spanking-new Tebow/Jets jersey in time? Apparently not. We'll get to Scottie Pippen and Notre Dame a little later, but today, we start with
Do clothes (manufacturers) make the man?
Here's what they might have been saying earlier this week at Nike headquarters in Oregon: Reebok is making thousands of dollars off Tim Tebow shirts and all we got is this lousy lawsuit.
There is a reason the Nike folks were unhappy enough about Reebok's Tebow paraphernalia to file a lawsuit demanding an end to the sale of it. They paid a reported $1.1 billion to the NFL for what they thought would be the exclusive right to manufacture and sell NFL gear like Jets jerseys carrying Tebow's name and number (15). But instead of enjoying the profits from the latest retail manifestation of Tebowmania, Nike was watching Reebok enjoy a bonanza in the nation's largest market.
The problem for Nike is that its deal with the league doesn't officially kick in until April 1. On Sunday. Reebok's decade-long exclusive on NFL paraphernalia with player names and numbers expired a few weeks ago. The timing gap left a good chunk of the month of March in a kind of limbo, what Deadspin called "no-brands land."
Reebok was ready to compete in March's open market, and flooded it with Tebow-Jets jerseys moments after the quarterback was traded from Denver to New York last week while Nike was waiting to launch a marketing campaign around its new deal with the NFL next week, after April 1. Instead of selling shirts over the last week and a half, Nike produced a lawsuit in a federal court in New York and demanded a court order to stop Reebok from selling Tebow jerseys and to require Reebok to destroy its inventory.
Moving quickly in the lawsuit if not in the sale of shirts, Nike managed to persuade a federal judge on Wednesday night to grant a temporary restraining order (TRO) that halted Reebok's sales of Tebow/Jets shirts. But it is a triumph that might not last. A hearing on a preliminary injunction is set for next Wednesday (April 4), when Nike will face more difficult legal requirements.
Nike and its lawyers are relying on legal doctrines known as "tortious interference" and "unjust enrichment." The theories suggest that Reebok cheated when it began selling the Tebow shirts and that the cheating will interfere with Nike's efforts to profit from the Tebow phenomenon, and that it's somehow unjust that Reebok is making money that Nike wanted to make.
These two legal theories are always signs of desperation. If a lawyer tells you that you are the victim of tortious interference and that your competitor is enjoying unjust enrichment, you should know that you are in a bad position. The theories rarely result in courtroom triumphs and are usually evidence that a company was caught in a losing situation and wanted to try something to correct it.
If the judge issues the preliminary injunction on Wednesday, then Nike has everything it needs. But there is a serious possibility that the judge could dissolve the TRO and refuse the injunction. The TRO was issued solely on Nike's statements, without considering what Reebok will offer in response. When Reebok responds, it likely will contend that it should have been permitted to sell shirts until the Nike contract became effective, and the judge might buy that argument. In that case, Reebok would not face the possibility of paying punitive damages to Nike, would not face the possibility of having to destroy inventory and would be able to keep its profits on the shirts it has sold since the Tebow trade.
Neither Nike nor Reebok will talk about the court case, but it is possible they are working together to find a solution to the dispute. Tebow jerseys are second only to Aaron Rodgers jerseys in sales of NFL gear, and there ought to be sufficient profits to satisfy both Nike and Reebok. This is the kind of dispute that should settle as the lawyers gather in court next week for the hearing on Nike's demand for an injunction that would stop Reebok from selling Tebow/Jets shirts and require Reebok to destroy its inventory. Rather than risk a drastic setback, they'll find a way to share the market.
See you in (ethical) bankruptcy court
Responding to Scottie Pippen's charge that they falsely accused him of being "bankrupt" (Courtside Seat chronicled the case here; several months ago), five news and financial reporting organizations, through their lawyers, are making all sorts of statements about Pippen.
In court papers, the lawyers label him a "serial litigator." They accuse him of "pleading poverty both in the judicial system and in the press." And they blame him for a "steady drumbeat of press coverage of his ongoing and increasingly dire financial circumstances."
Working in unison, lawyers from seven law firms in Chicago, Washington and Silicon Valley go so far as to suggest that Pippen -- in the face of problems with his financial advisers, his own lawyers and his accountant -- should have "notified them that, despite his self-described financial losses, he had not sought protection in bankruptcy."
NBC, CBS and three investment services broadcast or published reports during the last two years that Pippen was bankrupt. Those inaccurate media reports that Pippen was bankrupt are the basis of a libel lawsuit Pippen filed in December, the suit now spawning the countercharges catalogued above.
Neither the organizations nor their lawyers now suggest that even one of them called Pippen to ask him anything, much less whether he was in bankruptcy. None of them suggest that they invested the four minutes it would take to determine in the official federal bankruptcy reporting system whether Pippen had filed for bankruptcy. And now, their lawyers suggest that it was Pippen's duty to tell them that he was not bankrupt.
How was Pippen to know that any of these supposed reporters were planning to describe his financial difficulties? Even if he somehow knew they were preparing a story on him (and his lawyers say he didn't know), when did it become his obligation to find them and tell them anything?
If anyone from the media had called Pippen to ask him anything, he could have told them that yes, he had suffered some financial setbacks. But he would have also told them what he is now saying in his lawsuit: His net worth never sank below $40 million, he was paying his bills and he was nowhere near bankruptcy.
And if any of these media organizations had looked one step further, they would have learned that Pippen's only trip to bankruptcy court was to make a claim against an investment adviser who worked himself into bankruptcy with some bizarre real estate deals.
These accounts of Pippen's supposed bankruptcy are apparently the result of attempts by news site aggregators to repackage a story and, without any additional reporting, to make it fresh and dramatic, something that will draw readers. They see reports that Pippen has lost millions of dollars on investments and $5 million in a lawsuit over an airplane, and they jump to the conclusion that he must be bankrupt, which is a word that is handy in a headline and brings drama to their presentation. A man who made $120 million playing basketball is now bankrupt!
But it is one thing to suffer some financial reverses and quite another to be in bankruptcy. If you haven't suffered some reverses, you are either the most fortunate of investors or you aren't investing at all. But bankruptcy carries with it a stigma that cannot be erased. The bankrupt person has nothing left, is unable to pay his or her bills and has gone to court to stiff the creditors.
The reports of his bankruptcy put Pippen in a bad spot as he seeks marketing and endorsement deals. It puts him in a group that includes Mike Tyson, Antoine Walker, Derrick Coleman, Kenny Anderson, Dan Issel (all of whom have declared bankruptcy) and many others who have squandered millions. It leaves him in a position of minimal leverage and it forces him to explain that he is not the bankrupt deadbeat described in these reports.
It's difficult for journalists to support anyone who claims to have been defamed in a news report. We instinctively gravitate to the side of the reporter and want the reporter to stand by his story. But in the view from Courtside Seat of this case, these reporters were wrong in what they said about Pippen. And their lawyers compound the mistake when they try to gloss over the difference between financial difficulty and bankruptcy.
The reporters, the media organizations and their lawyers want U.S. District Judge Sharon Johnson Coleman to dismiss the case, but it isn't likely that she will. In another year or so, a jury in Chicago should decide whether payment must be made for the damage they did when they charged that Pippen was bankrupt.
An alum's alarming look at Notre Dame
Writer Melinda Henneberger returned a few months ago to Notre Dame, her alma mater, wanting to know what the university had learned from the death of Lizzy Seeberg, who took her own life in September 2010, a week and a half after she reported that a football player had raped her.
Henneberger was stunned by what she uncovered. She described her findings in a remarkable feature story published this week in the National Catholic Reporter, a feisty and independent Catholic publication that for years has led the coverage of sexual abuse in the church.
"If someone had told me what Notre Dame did to Lizzy, I am not sure I would have believed it," Henneberger, a Washington Post reporter, told ESPN.com.
"The university feels that it has done absolutely nothing wrong and handled everything perfectly," she added. "How do you learn anything when you think that all went well?"
After an investigation by Notre Dame's police force that included a detailed report from Seeberg before she died, disciplinary officials conducted a hearing in February 2011 and concluded that the player she accused of assaulting her was "not responsible."
With prodigious reporting and using waivers from the Seeberg family that allowed her to view investigative and medical records, Henneberger reached some startling conclusions:
• Notre Dame deliberately painted a "false and despicable" portrait of Lizzy Seeberg and relied on the brilliant Chicago trial lawyer and Notre Dame alumnus Joe Power to "rough up a 19-year-old dead girl." Henneberger quotes Power as describing Lizzy as an "aggressor" in the encounter; he also suggested that Henneberger was out "to destroy a black man falsely accused by a white woman."
• Athletes and children of big donors do not receive special treatment in investigations of sexual abuse. The university does "a poor job in general," a former Notre Dame administrator told Henneberger.
• After studying what she called the "bleak social universe" on campus, Henneberger wondered "whether sexual assault on this very Catholic campus has somehow become more morally acceptable under cover of drunkenness, than sober consensual sex."
• On the campus, there was a total "lack of [any] sisterhood mentality," despite numerous women telling Henneberger about sexual attacks by Notre Dame men. There was little support for Seeberg among students, Henneberger wrote, and they "tended to be very protective of the institution and its image." Henneberger concluded that Notre Dame women are "not eager to look too closely at anything that might raise questions."
• One alumna told Henneberger that she feels she "needs to warn women who are considering Notre Dame because so many daughters of Notre Dame friends have been raped on campus." The tipping point, Henneberger wrote, came when the alum realized that "two friends who'd been roommates both had daughters who had reported being raped at Notre Dame -- and one of the accused was the son of yet another friend and alumna."
Disturbed and disappointed with her findings, Henneberger arranged an encounter with the Rev. John Jenkins, the university's president, a kind of ambush after Jenkins spoke at a pro-life rally at a church in Washington. It was, Henneberger told ESPN.com, "something I have never done as a reporter."
In his homily, Henneberger wrote, Jenkins had discussed the "moral courage required to protect the most vulnerable among us in an indifferent world."
Henneberger waited on the church steps to be the last person to greet Jenkins, then asked him why he had refused even to meet with the Seeberg family after Lizzy's death.
"His answer was off the record," she wrote, "but anyone walking by could have seen a man in a collar shaking with anger, and the tears in his eyes were most certainly not for Lizzy."
For Henneberger, whose father and two uncles are also Notre Dame alums, it was "the hardest story I ever wrote." She had expected the best from Notre Dame, and she learned the worst. She wanted know what her alma mater had learned, and instead she learned things about her alma mater that she did not want to know.
1hEthan Sherwood Strauss