In August, New York Knicks big man Nerlens Noel initiated a lawsuit against NBA agent Rich Paul in Dallas, Texas, which named Paul and his agency, Klutch Sports Group, as defendants. Noel asked to be made whole for forfeiting what he said was $58 million in lost earnings after being led to leave his prior agent Happy Walters and pass up an offer from the Dallas Mavericks for $70 million over 4 years.
Paul shot back with a 22-page motion to dismiss after removing the case from state court to federal court. The basis of Paul’s motion to dismiss was that the Standard Player Agent Contract (“SPAC”) between him and Noel must control, which includes an agreement to arbitrate disputes by and between player and agent. The motion was supported with a declaration from Ron Klempner, who serves as Senior Counsel at the National Basketball Players Association (“NBPA”).
But Noel refuses to give up and has gone so far as to file a motion to strike the Klempner declaration, which was submitted to the federal court on November 15 along with a response and objection to Paul’s motion to dismiss as well as a motion for jurisdictional discovery.
Noel claims that Klempner’s declaration “offers little more than conclusory, self-serving assertions that amount to pure legal conclusions which, if considered, would usurp the role of the Court in deciding pure questions of law.” His biggest concern appears to revolve around a thirty-day limitation provision in the NBPA Regulations, which requires that a grievance must be filed within thirty days from the date of the occurrence of the event upon which the grievance is
based or within thirty days from the date on which the facts
of the matter become known or reasonably should have become known to the grievant, whichever is later.
“It is not the role of Mr. Klempner nor any other witness to determine whether the statute of limitations is valid or appropriate,” claims Noel. “Rather, it is the responsibility of a court to decide disputed
questions of law.” Noel wants the Klempner declaration to be stricken in its entirety based on it being nothing more than a series of improper and inadmissible legal conclusions.
Noel’s opposition to the motion to dismiss focuses largely on the thirty-day rule and that the court has authority to determine that the provision is enforceable, further arguing that it is unenforceable as a matter of law. Additionally, Noel says that many of his claims fall outside the scope of arbitration and that there is personal jurisdiction over Paul and Klutch Sports in Texas.
Noel alleges that the thirty-day statute of limitations within the NBPA Regulations violates Tex. Civil Practice & Remedies Code, § 16.070, which makes clear that parties cannot contract away statute of limitations periods if the limitation period is shortened to less than two years and that it also vioaltes the common law of Texas (and/or New York) in that it is unreasonable. He also states that much of the conduct giving rise to his claims arises from a business relationship that, when formed, involved a Texas citizen (Noel) performing services in Texas while working for a Texas organization (the Mavericks). Noel further believes that, if the court allows him to conduct jurisdictional discovery (Noel has now filed a motion for jurisdictional discovery), it will reveal that Paul and Klutch Sports have multiple clients who are either residents in and/or provide services in Texas and that they earn substantial revenue from activities in Texas.
Additionally, Noel takes issue with the fact that the NBPA Regulations do not govern Klutch Sports, yet the corporate entity seeks to obtain the benefits from the NBPA Regulations and the SPAC (which can only be signed by individuals and not corporate entities). To that end, Noel says that his allegations include claims against Klutch Sports independent of Paul and that the claims, while related, are not so integrally intertwined to justify equitable estoppel allowing a non-signatory to compel arbitration.