Case Number: BC462891 Hearing Date: March 22, 2018 Dept: 46

Case Number: BC462891
TODD MCNAIR VS THE NATIONAL COLLEGIATE ATHLETIC ASSOC ET AL

Filing Date: 06/03/2011
Case Type: Defamation (Slander/Libel)

03/22/2018
Motion for Summary Adjudication
Motion for Protective Order
Motion to Compel Deposition

TENTATIVE RULING

MOTION #1: Motion for Summary Adjudication is DENIED.

MOTION #2: Motion for Protective Order Re Mark Emmert is DENIED.

MOTION #3: Motion to Compel Deposition of Mark Emmert is GRANTED. The court was previously informed that the parties had reached contingency plans for the deposition should the court require Emmert to be deposed. The court shall order that Emmert be deposed at the time and place agreed to by the parties.

See discussion.

DISCUSSION

NCAA seeks summary adjudication as to the following issues:

Issue No. 1: There are no triable issues of material fact on McNair’s breach of contract claim because there is no evidence that any contract between the NCAA and the University of Southern California (“USC”) was expressly intended to benefit McNair.

Issue No. 2: There are no triable issues of material fact on McNair’s claim for declaratory relief because the one-year show-cause penalty imposed upon McNair expired years ago and a declaration from this Court invalidating the show-cause penalty would be a retrospective, advisory opinion.

Issue No. 1: Breach of Contract

“’A cause of action for damages for breach of contract is comprised of the following elements: (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to plaintiff.’ (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 C.A.3d 1371, 1388).” Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 C.A.4th 221, 228.

“A third party may enforce a contract made for his or her benefit or made for the benefit of a class of which he or she is a member. Civil Code section 1559 states, “A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it.” The contract need not expressly state that it is intended to benefit a third party as long as such an intent is apparent through the ordinary means of contract interpretation. A person need not be the sole or even the primary beneficiary to be a third party beneficiary. A person whose benefit is only incidental or remote, however, is not an intended beneficiary and therefore cannot be a third party beneficiary. For purposes of determining whether a third party is an intended beneficiary, the relevant intent is that of the promisee, and it is sufficient if the promisor understood that the promisee had that intent. Thus, a third party will qualify as an intended beneficiary where the circumstances indicate that the promise intends to give the beneficiary the benefit of the promised performance.” Service Employees Inter. Union, Local 99 v. Options–A Child Care and Human Services Agency (2011) 200 C.A.4th 869, 878-879 (internal quotations and citations omitted).

Burden of Production

The Defendant NCAA has submitted to this court is whether Plaintiff is a third-party beneficiary of the NCAA manual? But NCAA has given the court little evidence to go on, in an inquiry that must of necessity involve extrinsic evidence. NCAA has presented this court with a four-fact Separate Statement. Two of those facts are unsupported by evidence (in violation of CRC Rule 3.1350) and are essentially legal conclusions. (Defendant’s Separate Statement [hereinafter “DUMF”] Nos. 1-2). The third fact simply points out that Plaintiff was not expressly identified as a third-party beneficiary of the manual. (Id. No. 3). And the fourth fact asserts a legal conclusion that the NCAA manual does not create any contractual benefits for college coaches. (Id. No. 4).

In this motion, NCAA has the burden to produce evidence “showing the nonexistence of any triable issue of material fact.” Aguilar v. Atlantic Richfield Co. (2001) 25 C.4th 826, 850. In such a motion NCAA’s productions are strictly construed in order to resolve all doubts or ambiguities in Plaintiff’s favor. Johnson v. American Standard, Inc. (2008) 43 C.4th 56, 64. D NCAA has not carried that burden. It is not enough for a defendant simply to point out that one particularly easy avenue to proving Plaintiff’s case is closed. NCAA is not obliged to affirmatively foreclose any avenue of proof that could possibly be imagined, but it must at least address the main possibilities. And in this case, it must have been clear to NCAA that the third-party beneficiary question would turn on extrinsic evidence; Plaintiff is not going to argue an express provision where one did not exist. NCAA is therefore obliged to present at least some evidence regarding the circumstances surrounding the creation, adoption, and application of the manual. It has not done so. The motion is DENIED on this ground alone.

Merits

Even if NCAA had carried its initial burden, the result would be the same. Plaintiff has presented evidence that, as a coach, he was integrated into the manual because his contract with USC expressly subjected him to NCAA regulation according to the provisions of the manual. (Plaintiff’s Separate Statement No. 1; Plaintiff’s Response to Defendant’s Separate Statement [hereinafter “RSS”] No. 4). Because Plaintiff was both subjected to the disciplinary authority of the NCAA and entitled to avail himself of the manual’s procedural protections, an inference can be drawn that the protections were put in place for his benefit. That is sufficient to create a triable issue of material fact in this case.

NCAA cites to two federal cases in support of its position that coaches are not third-party beneficiaries of the NCAA manual: Hairston v. Pacific 10 Conference (9th Cir. 1996) 101 F.3d 1315 and Knelman v. Middlebury College (D. Vt. 2012) 898 F.Supp.2d 697. Both cases involved student athletes (rather than coaches) in different states, and neither is persuasive here.

In Hairston, the University of Washington had been investigated by the Pacific 10 Conference for rules violations committed by its football program; the university was found in violation and banned from bowl games and television revenue, along with other sanctions. Hairston, supra, 101 F.3d at 1317. The football players filed suit, alleging that the sanctions were unreasonable and anti-competitive. Id. The Ninth Circuit, applying Washington law, held that the “vague, hortatory” language of the Pacific 10 Conference’s constitution did not support a finding that the Conference intended to assume a contractual obligation to every player on every team. Id. at 1320. Even the players’ standing was called into question due to the indirect nature of the injury: “[n]o one alleges that the Pac–10 was out to punish the athletes… The biggest flaw in the plaintiffs’ case, however, is that another, more appropriate plaintiff exists: the University of Washington.” Id. at 1322 (Judge Trott, concurring).

In Knelman, a hockey player sued his college over his suspension from the team. Knelman, supra 898 F.Supp.2d at 702-707. The player argued that the NCAA manual imposed a standard of fairness on the college, of which the players were the intended beneficiaries. Id. at 713-714. The federal district court, after a discussion of assorted nationwide precedents, concluded that it need not decide the issue because the relevant portion of the NCAA manual wasn’t even a contract under Vermont law. Id. at 715-716. “[T]he “fairness” provisions of the NCAA’s Manual on which Mr. Knelman relies create general ethical responsibilities and aspirations rather than “specific and concrete” promises required by Vermont law for a breach of contract claim.” Id. at 715.

This case is widely different from either Hairston or Knelman. Neither of those cases was decided under California law, neither involved a coach, and neither involved direct discipline from the NCAA. Hairston involved the Pac-10, and the parties filing the suit were not the parties who had been disciplined. Knelman avoided deciding the issue entirely, adverting instead to a particular rule of Vermont law which rendered the question a moot point.

For the foregoing reasons, NCAA’s motion is DENIED as to Issue 1.

Issue No. 2: Declaratory Relief

CCP § 1060 provides in relevant part as follows:

“Any person interested under a written instrument, excluding a will or a trust, or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property…may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties…including a determination of any question of construction or validity arising under the instrument or contract. He or she may ask for a declaration of rights or duties, either alone or with other relief; and the court may make a binding declaration of these rights or duties, whether or not further relief is or could be claimed at the time. The declaration may be either affirmative or negative in form and effect, and the declaration shall have the force of a final judgment. The declaration may be had before there has been any breach of the obligation in respect to which said declaration is sought.”

CCP § 1061 states that “[t]he court may refuse to exercise the power granted by this chapter in any case where its declaration or determination is not necessary or proper at the time under all the circumstances.”

Declaratory relief is ordinarily unavailable when the rights of the complaining party have crystallized into a cause of action for past wrongs, all relationship between the parties has ceased and there is no conduct of the parties subject to regulation by the Court. Osseous Technologies of America v. Discovery Ortho Partners (2010) 191 C.A.4th 357, 367.

On 6/10/10, NCAA imposed a disciplinary sanction on Plaintiff, preventing him from participating in the athlete recruitment process. (RSS Nos. 5-6). The sanction was a one-year sanction, and went into formal effect on 4/29/11. (Id. Nos. 6-7). As of 4/28/12, the sanction has expired, and Plaintiff is no longer formally prohibited from engaging in any aspect of coaching at an NCAA member institution. (Id. Nos. 8-9). NCAA argues that the declaratory relief COA seeks to redress what has become a past harm, and is therefore improper. Plaintiff counters that this cause of action falls into the category of cases capable of repetition yet evading review. Plaintiff is incorrect.

Plaintiff appeals to the various principles of mootness. Three exceptions may permit the decision of a case that has technically become moot: (1) where the case poses an issue of broad public interest that is likely to recur, (2) where there is a distinct possibility that the controversy between the parties may occur, and (3) where a material question remains for the court’s determination. Bullis Charter School v. Los Altos School Dist. (2011) 200 C.A.4th 1022, 1033-34 (citing cases). None of these shoes fits particularly well here.

The first exception generally applies in situations requiring the resolution of some broad point of law. See e.g. Konig v. Fair Employment and Housing Com’n (2002) 28 C.4th 743, 745 fn.3 (deciding whether the California Constitution permitted the Fair Employment and Housing Commission to award emotional distress damages). The application of NCAA sanctions as restraints of trade is not quite in the same category. There is no reason to suppose that Plaintiff and the NCAA are likely to find themselves in a similar situation in the future, so the second exception does not apply. And the third exception is designed for the odd case in which the present controversy might be mooted, but a decision on a certain point is critical to a different action. See e.g. Viejo Bancorp, Inc. v. Wood (1989) 217 C.A.3d 200, 205 (even though the terms of a void judgment had been fulfilled, rendering an appeal moot, the judgment was precluding litigation of liability questions in a separate but related action). That is plainly not the situation here.

That said, the applicability of a declaratory relief claim does not necessarily turn on mootness considerations. The argument that the controversy has crystallized into a disagreement over past wrongs is not an argument about mootness, it is an argument about whether Plaintiff has the correct cause of action. (By contrast, a declaratory relief claim is mooted when one side of the controversy capitulates, as when a defendant reinstates the plaintiff partway through a suspension. See Bullis, supra, 200 C.A.4th at 1033 (quoting Eye Dog Foundation v. State Bd. of Guide Dogs for the Blind (1967) 67 C.2d 536, 541).) Put another way, the fact that a plaintiff’s claims could be fully stated as a cause of action for past wrongs does not render the declaratory relief action moot, it renders the action improper. CCP §1061 vests the court with wide discretion in making this determination.

Plaintiff’s declaratory relief action seeks a declaration that NCAA’s sanction is an improper restraint of trade in violation of Bus. & Prof. Code §16600. Where an issue of constitutional or statutory interpretation and application has been raised by a declaratory relief claim, the question should not be shunted to a different cause of action, unless one already exists which raises the same issue. “[T]he court must do complete justice once jurisdiction has been assumed,” and there is a present legal right in judicial assurance that certain advantages will be enjoyed or liabilities escaped in future. Eye Dog Foundation v. State Bd. of Guide Dogs for the Blind (1967) 67 C.2d 536, 541-542 & fn.2. There would be no point in dismissing a plaintiff out of court only to have him refile a breach of contract action and start all over. Requiring an amendment would be a similar, albeit lesser, waste of time and judicial economy.

In this case, an additional concern militates in favor of keeping the action alive: Plaintiff has no other theory on which he could cleanly raise this argument. A third-party beneficiary theory would not support a suit to void the NCAA manual. Perhaps Plaintiff could sue USC on a rescission theory to void the portion of his contract subjecting him to NCAA discipline, but such an action could also run into mootness problems as well as throw off the contractual balance between the NCAA and its member institutions. This kind of a claim is the only way this question can be properly addressed.

Since Plaintiff’s declaratory relief action addresses an issue of statutory interpretation and application, no other cause of action exists in this case which addresses the same issue, and no other proper vehicle appears for the raising of this claim, declaratory relief remains proper. The parties have a present legal right in judicial assurances regarding the viability of NCAA sanctions.

Therefore, Defendant’s motion for summary adjudication is DENIED as to Issue 2.

MOTION #2—PROTECTIVE ORDER RE EMMERT DEPOSITION

On 1/11/18, Plaintiff’s counsel informed Defendant’s counsel that he wished to depose Emmert. (Declaration of Kosta S. Stojilkovic [hereinafter “Stojilkovic Dec.”], ¶ 24). On 1/14/18, Defendant’s counsel informed Plaintiff’s counsel that he did not believe Plaintiff had a basis to do so. (Id. ¶ 25). On 1/25/18, Plaintiff formally noticed Emmert’s deposition. (Id. Exhibit 5). On 1/30/18, Defendant’s counsel sent a letter to Plaintiff’s counsel informing them of the bases of Defendant’s opposition to the deposition and expressing his intent to move for a protective order. (Id. Exhibit 6). On 2/6/18, Plaintiff’s counsel sent another meet and confer letter, which apparently Defendant’s counsel did not receive. (Declaration of Christian T.F. Nickerson ¶ 3, Exhibit 3). The instant motion followed on 2/8/18.

CCP § 2025.420 reads in relevant part as follows:

“(a) Before, during, or after a deposition, any party, any deponent, or any other affected natural person or organization may promptly move for a protective order. The motion shall be accompanied by a meet and confer declaration under Section 2016.040.

(b) The court, for good cause shown, may make any order that justice requires to protect any party, deponent, or other natural person or organization from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense. This protective order may include, but is not limited to, one or more of the following directions:

(1) That the deposition not be taken at all.

…

(5) That the deposition be taken only on certain specified terms and conditions.

…

(9) That certain matters not be inquired into.

(10) That the scope of the examination be limited to certain matters.

(11) That all or certain of the writings or tangible things designated in the deposition notice not be produced, inspected, copied, tested, or sampled, or that conditions be set for the production of electronically stored information designated in the deposition notice.

…

(g) If the motion for a protective order is denied in whole or in part, the court may order that the deponent provide or permit the discovery against which protection was sought on those terms and conditions that are just.

(h) The court shall impose a monetary sanction under Chapter 7 (commencing with Section 2023.010) against any party, person, or attorney who unsuccessfully makes or opposes a motion for a protective order, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.”

CCP §2016.040 states: “[a] meet and confer declaration in support of a motion shall state facts showing a reasonable and good faith attempt at an informal resolution of each issue presented by the motion.”

At the outset, it should be noted that the meet and confer attempts were somewhat unorthodox. Counsel represent that they discussed this issue before the deposition was formally noticed, which is commendable; unfortunately, neither party presents the court with evidence as to what was said in that exchange. What the court is presented with is evidence that Defendant thought the deposition had been noticed so that a motion could be made and the issue brought to the court. (Stojilkovic Dec. ¶ 27). As a result, the letter sent by Defendant’s counsel is not an attempt to meet and confer so much as a courtesy preview of D’s arguments.

NCAA’s letter contains the statement that “[i]t appears that you are intent on proceeding with your request and that the NCAA has no option but to involve the court. Please be advised that the NCAA…will wait until the issue is briefed and decided by the court. I trust you have no objection to proceeding in this fashion, since [counsel] indicated to me in our call last Thursday that you…issued the notice in order to prompt briefing on the matter.” (Id. Exhibit 6). The fact that counsel were in ongoing discussions before this, and that Plaintiff attempted to continue the conversation after, is sufficient to satisfy the meet and confer requirement. But counsel are reminded that the meet and confer requirement is mandatory, and they are not permitted to stipulate around it.

NCAA objects to the deposition of Emmert on the grounds that it would be an improper “apex” deposition. The rules governing apex depositions are set forth in Liberty Mutual Ins. Co. v. Superior Court (1992) 10 C.A.4th 1282, 1287, 1289:

“At the outset it would seem sensible to prevent a plaintiff from leap-frogging to the apex of the corporate hierarchy in the first instance, without the intermediate steps of seeking discovery from lower level employees more involved in everyday corporate operations. The head of a large national corporation will generally not have knowledge of a specific incident or case handled several levels down the corporate pyramid. Surely an insurance company’s chief executive will seldom, if at all, be involved in the day-to-day processing of claims. Indeed, in this case not only does [deponent] declare a lack of knowledge or involvement, but his administrative assistant establishes that individual case material or correspondence is habitually rerouted away from [deponent] and to a lower level official.

Furthermore, “apex” depositions such as the one in this case, when conducted before less intrusive discovery methods are exhausted, raise a tremendous potential for discovery abuse and harassment. Vast numbers of personal injury claims could result in the deposition of the president of a national or international company whose product was somehow involved. It would be unreasonable to permit a plaintiff to begin discovery by deposing, for instance, the chief executive officer of a major automobile manufacturer when suing over a design flaw in a brake shoe-especially if we were to accept real party’s argument that the mere act of copying the chief executive officer with a few pieces of correspondence creates “constructive notice” justifying the deposition.

…

[W]e hold that when a plaintiff seeks to depose a corporate president or other official at the highest level of corporate management, and that official moves for a protective order to prohibit the deposition, the trial court should first determine whether the plaintiff has shown good cause that the official has unique or superior personal knowledge of discoverable information. If not, as will presumably often be the case in the instance of a large national or international corporation, the trial court should issue the protective order and first require the plaintiff to obtain the necessary discovery through less intrusive methods. These would include interrogatories directed to the high-level official to explore the state of his or her knowledge or involvement in plaintiff’s case; the deposition of lower level employees with appropriate knowledge and involvement in the subject matter of the litigation; and the organizational deposition of the corporation itself, which will require the corporation to produce for deposition the most qualified officer or employee to testify on its behalf as to the specified matters to be raised at the deposition. (§ 2025, subd. (d)(6).) Should these avenues be exhausted, and the plaintiff make a colorable showing of good cause that the high-level official possesses necessary information to the case, the trial court may then lift the protective order and allow the deposition to proceed.”

NCAA argues that Emmert has no special knowledge of the investigation that led to the sanctions against Plaintiff, and was not even involved in the process. Therefore, there is no reason to depose him about that process. Plaintiff’s response is that Emmert has made public comments on the investigation, at least one of which forms part of the basis for Plaintiff’s defamation theory. Plaintiff reasons that if Emmert can comment on the investigation, he must know something about it. Neither party’s arguments are entirely persuasive.

The fact that a person comments on something does not necessarily imply that they know anything special about it. Emmert’s endorsement, if endorsement it was, of the investigation and its results may simply have been part and parcel of his job as President. Corporate executives are expected to endorse the products and activities of their companies; it simply does not follow from these endorsements that the executives have special knowledge about the relevant aspects of those products and activities.

However, this case is very different from Liberty Mutual because Plaintiff is alleging that the endorsement itself caused part of his harm. In other words, unlike the usual apex deposition, in this case Emmert is an active player in and percipient witness to the alleged harm. For that reason, Plaintiff is entitled to depose him. NCAA argues that Emmert’s comments are not actionable; that may be, but it is an evidentiary question for trial. Defamation claims turn largely on the knowledge and internal mental state of the person who made the statement in issue (in this case, Emmert). No one has more direct evidence on that point than Emmert himself.

The policy behind the Liberty Mutual decision was a prophylactic one: the Court of Appeal did not want to allow plaintiffs to paralyze companies by dragging their senior officers into repeated depositions involving incidents of which they had no personal knowledge. Those preventative policies do not apply where the executive to be deposed is alleged to have taken active part in causing the harm, and is the closest percipient witness to a portion of the charges. Such closeness to the events amounts to “unique or superior knowledge,” and Plaintiff’s right to depose parties and percipient witnesses overcomes in large measure the requirement that he exhaust other discovery methods. Liberty Mutual was meant to prevent harassment of defendants, not tie the hands of plaintiffs.

For all these reasons, NCAA’s motion is DENIED.

MOTION #3 – MOTION TO COMPEL EMMERT Deposition

CCP §2025.450 states in relevant part as follows:

“(a) If, after service of a deposition notice, a party to the action or an officer, director, managing agent, or employee of a party, or a person designated by an organization that is a party under Section 2025.230, without having served a valid objection under Section 2025.410, fails to appear for examination, or to proceed with it, or to produce for inspection any document, electronically stored information, or tangible thing described in the deposition notice, the party giving the notice may move for an order compelling the deponent’s attendance and testimony, and the production for inspection of any document, electronically stored information, or tangible thing described in the deposition notice.

(b) A motion under subdivision (a) shall comply with both of the following:

(1) The motion shall set forth specific facts showing good cause justifying the production for inspection of any document, electronically stored information, or tangible thing described in the deposition notice.

(2) The motion shall be accompanied by a meet and confer declaration under Section 2016.040, or, when the deponent fails to attend the deposition and produce the documents, electronically stored information, or things described in the deposition notice, by a declaration stating that the petitioner has contacted the deponent to inquire about the nonappearance.”

The issues raised on this motion are identical to the issues raised in the previous motion, and the result is the same. Plaintiff needs, and has the right, to depose Emmert in order to investigate the intent and knowledge behind one of the statements Plaintiff alleges to be defamatory. The policies behind Liberty Mutual, as discussed above, are satisfied since the apex deponent allegedly actively created the harm and was the closest percipient witness to some portion of it. Plaintiff is not required navigate around Emmert or scrutinize every bit of circumstantial evidence in order to divine Emmert’s intentions.

Plaintiff’s motion is GRANTED.

Emmert ordered to submit to deposition.

IT IS SO ORDERED:

___________________________
Frederick C. Shaller, Judge