On page 22 of a lengthy 26 page Order on Motions for Summary Judgment filed by Aaron Mintz/Creative Artists Agency (CAA) and Mark Bartelstein & Associates, Inc. d/b/a Priority Sports & Entertainment, U.S. District Judge Stephen V. Wilson wrote,
“This is not the first time in this Order that the Court has exposed clear misstatement of evidence by counsel for Priority Sports. Counsel are warned that further errors of such an egregious nature will be construed by the Court as indicative of bad faith, and may be grounds for sanctions.”
That statement provides a glimpse of the Court’s disposition in the case based on a dispute resulting from basketball agent Aaron Mintz’s decision to depart Priority Sports and join CAA in March 2012. Trial is set to begin on November 13, 2012 and the focus will be on the causes of actions that remain (Mintz’s claims for defamation, interference with prospective economic relations, and a violation of the California Unfair Business Practices Act), but the Judge’s recent Order may compel the parties to settle out of court.
The Court wiped out Priority Sports’ counterclaims and granted summary judgment to Aaron Mintz on his California Penal Code § 502 and Invasion of Privacy counts. In the discussion of those claims, Judge Wilson became noticeably irritated with some of Priority Sports’ arguments. Within the Invasion of Privacy decision, the Judge stated that the Defendants made a “frivolous” argument, and that the Defendants “baldly” assert an issue which also lacks merit.
Mintz did not prevail on all of his claims, but the fact that the Court found Priority Sports had unauthorized entry into his Gmail account could prove to be very damaging. The Court stated, “Defendants do not dispute that at the direction of Priority Sport’s senior counsel, a Priority Sports employee accessed Plaintiff’s Gmail account without permission, and viewed the contents of several emails, including Plaintiff’s employment agreement with CAA.” The Court went on to say that Priority Sports employee Brad Ames’ conduct was “so serious and offensive that the California legislature subjects the perpetrator to criminal liability under California Penal Code § 502…[and that] no reasonable jury could find that the invasion was not an egregious breach of social norms.”
The Motions for Summary Judgments have been ruled upon as follows:
Aaron Mintz’s Motion for Summary Judgment on His Claims
Aaron Mintz sought a declaratory judgment, which would invalidate two provisions in his employment contract with Priority Sports. Those two provisions are: (1) a two-year non-compete clause; and (2) the requirement for fourteen days’ written notice of termination.
No Controversy as to Non-Compete Provision
The Court concluded that Aaron Mintz did not meet his burden of demonstrating an actual controversy, because Priority Sports assured the Court that it had no intention of seeking to enforce the non-compete clause now or in the future. Mintz argued that Priority Sports refused to enter into a stipulation stating same; however, Priority Sports said it did not enter a stipulation because of its concerns with the “overbreadth” of the stipulation. The Court found declaratory judgment on this point moot.
No controversy as to Notice of Termination
Aaron Mintz contended that the two-week notice was unenforceable “to the extent Priority Sports asserts it prevented Mintz from competing for clients, after his resignation.” However, Priority Sports only argued that Mintz breached the notice provision by failing to give fourteen days’ notice of his resignation. Therefore, the Court held that because the parties’ positions are not opposed, there is no actual controversy of the notice provision.
Therefore, the Court GRANTED summary judgment for Priority Sports with respect to the claims for declaratory relief.
Computer Fraud and Abuse Act (“CFAA”)
In order to bring a civil action under CFAA, a person who suffers damage or loss must fall under five enumerated circumstances. The circumstance that Mintz brought suit under was “loss to 1 or more persons during any 1-year period…aggregating at least $5,000 in value.” Mintz submitted evidence that he incurred nearly $27,796.25 in attorney’s fees and costs. The Court found this evidence insufficient to satisfy the statutory threshold for two reasons. The first reason is the statute defines loss as to “any reasonable cost to any victim,” and because the legal fees were not paid by Mintz, but by CAA (whom is not a victim in the offense), the burden is not met by the Mintz. Also, the Court found that the litigation expenses incurred do not qualify as a “loss” under the CFAA.
Here, litigation costs in question were not essential to remedying the harm caused to Mintz. In fact, the Court stated, “it defies common sense to believe that Plaintiff’s subsequent legal efforts confirm Priority Sports’ involvement were ‘essential to remedying the harm’ of the unauthorized access.” Therefore, the Court GRANTED summary judgment for Priority Sports on the CFAA claim.
Electronic Communications and Privacy Act (“ECPA”)
Mintz alleged that Priority Sports intentionally intercepted electronic communication. The Court quickly dismissed this claim, because it fails as a matter of law based on the fact that there was no “interception.” The Court stated that for an email to be intercepted in violation of this statute, it must be acquired during transmission, not while in electronic storage. Priority Sports viewed Mintz’s emails while the emails were stored in Gmail. Therefore, the Court GRANTED summary judgment in favor of Priority Sports on the ECPA claim.
California Penal Code § 502
This statute imposes liability on whoever “knowingly accesses and without permission…uses any data in order to wrongfully control of obtain money, property, or data.” Here, Mintz alleged that Priority Sports’ unauthorized entry into his Gmail violated this Code. The Court found that Priority Sports did violate this Code by wrongfully obtaining the data, and that Mintz suffered sufficient damage. Therefore, the Court GRANTED Mintz’s summary judgment on this claim.
Invasion of Privacy
For an invasion of privacy claim, Mintz had to establish (1) a legally protected interest, (2) a reasonable expectation of privacy under the circumstances, and (3) a serious invasion of the privacy interest. The Court found that Mintz had a legally protected interest and a reasonable expectation of privacy as to his personal email account. Further, the Court held that Priority Sports’ acts were a serious invasion of Mintz’s privacy interest and that Priority Sports did not have any interest that would justify its actions. Therefore, the Court GRANTED Mintz’s summary judgment on this claim.
Unfair Competition Law
The Court quickly discussed this issue and DENIED Mintz’ motion on this claim, because he failed to show that he lost any money or property as a result of the violation, which is required under Proposition 64 of the California Unfair Competition Law.
Plaintiff and CAA’s MSJ as to Priority Sports Counterclaims
Breach of Contract against Aaron Mintz
Priority Sports alleged that Mintz breached his employment contract for several reasons, including soliciting players on CAA’s behalf and failing to provide fourteen days’ written notice. The Judge stated that Priority Sports “entirely neglected” to cite relevant facts to support this claim. There was no evidence presented to demonstrate that Mintz’s communication with players included solicitation, and to find otherwise without proper evidence would be mere speculation. Therefore, the Court GRANTED Mintz’s motion on the breach of contract counterclaim.
- Note: Next, the Court addressed the issue of the alleged Breach of Implied Covenant of Good Faith and Fair dealing against Mintz. The Court found that Priority Sports relied on the same acts in the Breach of Contract counterclaim, and therefore the Court GRANTED Mintz’s motion as to this claim as well.
Breach of Duty of Loyalty
Priority Sports alleged that Mintz did several things to establish a pattern of disloyal conduct, mainly preparing for his move to CAA while under employment at Priority Sports. The Court found that under California law, an employee does not breach his duty of loyalty merely by preparing to compete with his employer. Further, the Court stated that Priority Sports offered no evidence to show that Mintz’s preparatory steps harmed Priority Sports in any way. Therefore, the Court GRANTED Mintz’s motion on the duty of loyalty counterclaim.
- Note: On the Misappropriation of Trade Secrets claim against CAA, the Intentional Interference with Contractual Relations claim against CAA, and the Conversion claim against Mintz, the Court found that Priority Sports did not provide sufficient evidence to support its claims. Therefore, the Court GRANTED Mintz’s and CAA’s motion on those three claims.
Defamation and Trade Libel (against Mintz)
Priority Sports claimed that Mintz made several defamatory/libelous statements against Priority Sports. Mintz responded by stating that Priority Sports made no offering of such statements into evidence. Priority Sports replied that it “will prove at trial” that Mintz made those statements. The Judge did not take too kindly to this offering by Priority Sports. Judge Wilson responded, “Priority Sports misunderstands the purpose of summary judgment: now is the time to produce evidence.” Therefore, the Court GRANTED Mintz’s motion on the defamation and trade libel claims.
- Note: The Court did not believe there was enough evidence concerning the Conspiracy and Unfair Competition claims against CAA and GRANTED CAA’s motion on those two counts.
This article was written with much assistance from Benjamin Haynes, Esq.