Judge Says Sports Agency Can’t Add to Penalties

A judge told sports agent Leigh Steinberg: No piling on.

Capping the first round of a bitter legal fight, Los Angeles federal Judge Ronald S.W. Lew on Friday denied a request from Steinberg’s Newport Beach sports agency to essentially shut down his former protege David Dunn’s rival firm, Athletes First.

Lew also denied a motion to sock Dunn and his company with an additional $23.5 million in penalties for “unjust enrichment.”

Steinberg & Moorad had asked for those measures on top of a nearly $45-million jury award it won Nov. 15 against Dunn and Athletes First for unfair competition, breach of contract and interference with economic advantage.

Dunn plans to appeal.

The suit accused Dunn, a former partner, of leading an office cabal that ransacked the company’s databases, stole away its football player clientele and then threatened to blackmail Steinberg into silence with embarrassing personal information. The six-week trial not only dwelt on the character of Steinberg, whose career helped inspire the hit movie “Jerry Maguire,” but also lifted the veil on the highly competitive field of sports agents.

In a ruling Friday, Lew said the jury award -- $4.66 million against Dunn personally and $40 million against his upstart firm -- already compensated Steinberg’s agency for its loss.

Lew also rejected Steinberg & Moorad’s request for a permanent injunction barring Dunn, considered one of the best contract negotiators in pro football, from representing the dozens of players who switched to Athletes First.

Doing so, Lew said, would “prevent Dunn from earning a living in a profession of his choice and prevent the athletes from enjoying the representation of their choice.”

Lew also said granting the injunction would “impermissibly usurp” the federal authority of the NFL Players Assn. to regulate the conduct of agents, who are certified by the labor group.

Lee Hutton, Dunn’s attorney, said the motion for an injunction and the extra penalty was a “piggish request.” He said Lew’s ruling bolstered his claims that Steinberg’s firm wasn’t out for justice but was out to annihilate Dunn’s business.

Franklin Brockway “Brock” Gowdy, lead attorney for Steinberg’s firm, said he believes Lew’s “determination was that we got enough.”

Dunn and his firm have continued to operate and have signed a bumper crop of college football players going to the pros, including USC quarterback and Heisman Trophy winner Carson Palmer.

But Dunn’s woes are far from over. On Jan. 3, the NFL Players Assn. filed a complaint against Dunn and another agent at Athletes First based on testimony during the Steinberg trial. Discipline could include revocation of their right to represent athletes, essentially what Steinberg’s firm sought with the permanent injunction.