Judgment to Sports Agent Is Blocked
A jury award of almost $45 million to sports agent Leigh Steinberg was thrown out Wednesday by an appeals court that ordered a new trial in Steinberg’s long-running dispute with a former partner.
The decision by the U.S. 9th Circuit Court of Appeals in San Francisco was the latest twist in the case pitting Steinberg, whose career helped inspire the 1996 movie “Jerry Maguire,” against David L. Dunn, considered one of professional football’s most effective contract negotiators.
Steinberg’s lawsuit claims that when Dunn left Steinberg’s Newport Beach firm in 2001 to set up rival agency Athletes First, Dunn plundered Steinberg’s computer records and other confidential information and stole away with many pro football clients, including quarterback Drew Bledsoe.
In overturning the verdict, the appeals court said the trial judge in the case, U.S. District Judge Ronald S.W. Lew, “erred in failing to instruct the jury that the non-competition clause in Dunn’s employment contract was invalid under California law” and wrongly prevented Dunn from testifying about certain issues.
In addition, an unfair-competition claim was submitted to the jury in violation of a pretrial conference order, the court found.
Steinberg said after the ruling Wednesday that he had “no idea what comes next.”
“I know that in our case, the jury, after hearing the evidence, clearly repudiated the conduct in this case in the most definitive way,” he said. “No judge’s ruling today on a technicality is going to change that.”
Joanne Frasca, an attorney for Dunn, said the $45-million award was “based on claims that never should have been presented to the jury” and that there were “clear problems” with the original trial.
The trial in federal court in Los Angeles featured testimony from star athletes such as Bledsoe and Warrick Dunn, a running back with the Atlanta Falcons.
The jury ordered Dunn to personally pay $4.66 million of the damage award and millions more in attorney fees. None of the judgment was paid, given the appeal, Dunn’s lawyer said.
But Dunn filed for Chapter 11 bankruptcy protection in early 2003 and his Newport Beach firm, on the hook for the rest of the jury award, followed suit four months later.
Despite the legal cloud, Dunn has been able to continue working, recruiting top athletes as clients, including former USC quarterback and Heisman Trophy winner Carson Palmer and Jake Plummer, a quarterback for the Denver Broncos.
After the verdict, Dunn faced possible sanctions from the National Football League Players Assn., which could have suspended his agent’s license, but never did.
Steinberg’s agency, called Steinberg & Moorad at the time of the trial, is now called Steinberg, Tollner & Moon. It represents such clients as Ben Roethlisberger, a quarterback for the Pittsburgh Steelers.