Sports Law

Court Rules Arbitration Award Was Procured By NFL Agent’s Fraud

You never want a court to conclude that you committed fraud. But that is exactly what is said about a prominent NFL agent in the middle of a newly released decision by the United States Court of Appeals for the Third Circuit. According to the Court, perhaps the “easiest conclusion” in the case, “even under a clear-and-convincing-evidence standard, is that [Todd] France committed fraud.”

Why was the Court even writing about France? It has to do with his representation of NFL player Kenny Golladay and an ongoing dispute with Golladay’s former agent for on and off-field endeavors.

A little more than a year ago, I wrote about Todd France scoring a win in an arbitration matter concerning Golladay. At the time, France was an employee of Creative Artists Agency (CAA). Today, he is a part of Athletes First’s football practice.

France had prevailed in a National Football League Players Association (NFLPA) arbitration proceeding against Jason Bernstein, who previously represented Golladay. Bernstein alleged violations of the NFLPA’s Regulations Governing Contract Advisors, specifically arguing that France violated Sections 3(B)(2), prohibiting agents from providing or offering money or any other thing of value to a player to induce or encourage that player to utilize his/her services, and Section 3(B)(21)(a), which prohibits agents from initiating communication with a player under contract with another Contract Advisor with the intention of causing that player to make a change of representation.

Specifically, Bernstein had complained, upon information and belief, that France was involved with Golladay’s private autograph signing of sports memorabilia and that France took part in the event while Golladay was signed with Bernstein. But France had convinced the arbitrator that his relationship with Golladay began well before that autograph signing when Golladay approached France at a charity event and suggested that he wanted to switch agents.

Importantly, France denied having any involvement with the autograph signing.

As I wrote in April 2020,

With regard to the improper inducement claim, France testified that he did not arrange the signing event, he did not attend the event, he was unaware of the event when it actually took place and never communicated with Golladay about the event, nor did he earn any compensation related to the event.

I added,

Perhaps the arbitrator’s opinion would have been different had important testimony been provided in support of Bernstein’s claims. However, per the order, many witnesses whom Bernstein subpoenaed simply failed to show for the hearing.

The United States Court of Appeals for the Third Circuit seemed to agree with my assessment and further found that France’s testimony was not truthful. The Court noted that arbitration awards will only be disturbed in a limited number of circumstances, fraud being one and that, because the arbitration award “was procured by France’s fraud,” it decided to reverse the lower court’s order confirming the award, remanding with the instruction to vacate it.

The result is that the case will likely go back to the NFLPA for a new hearing and probably in front of a different arbitrator.

The Court reviewed France’s deposition transcript from November 2019 where he repeatedly denied having any involvement in Golladay’s participation at the autograph signing. He also denied having any documents responsive to requests about Golladay’s appearance. “France repeatedly and consistently denied that he had anything to do with the autograph-signing event,” wrote the Court.

However, the Court said that it turns out that France did indeed have crucial evidence that should have been available to Bernstein in the arbitration, which was discovered in a separate lawsuit that Bernstein filed against CAA and the three sports memorabilia dealers involved in the signing event. This evidence, discovered after the arbitrator’s decision denying the grievance, showed that France was involved in the autograph signing event. Additionally, the Court’s opinion includes,

In a subsequent deposition, the dealer admitted that Silver said that someone named Todd would be joining Golladay at the signing event. No one has suggested who else “Todd” from CAA could be except for Todd France. In fact, Bernstein received other evidence showing that France was scheduled to fly to Chicago the day before the event.

CAA also produced an email from Jake Silver, a former CAA employee whose job was to obtain marketing opportunities for CAA’s NFL clients, to France, which attached a contract for the autograph signing for Golladay’s signature. This went directly against France’s pre-arbitration hearing deposition testimony where he said he had no knowledge of or involvement in the signing event. However, it is possible that France never saw the email from Silver.

The Court did not seem to address certain other factual information from the separate lawsuit that Bernstein filed against CAA, such as that Golladay testified during a deposition that he had already made up his mind that he was going to fire Bernstein well before the autograph signing event and that, by December 2018, Golladay told France he would hire him as his new agent. Golladay testified that he did not inform Bernstein of his decision right away because he did not want it to become a distraction to Golladay or his team, so he played the rest of the year out before making the switch.

Another point that the Court may have overlooked is that Silver testified, during a deposition in the Bernstein v. CAA case, that France did not attend the autograph signing. Silver further testified that he prepared the Golladay agreement, thinking that Golladay was already a CAA client and that he served as the sole point of contact at CAA for the event. If true, and Silver really handled the entire autograph signing, then it is possible that France was not aware of what was occurring at the time, which would put the Court’s conclusion of fraud in question.

As the Court noted, it is a steep climb to vacate an arbitration award. But the Court believed that such a decision was necessary for this circumstance. It found that “the fraud was material, and obviously so.” It does not mean that Bernstein will prevail in the second round of arbitration, and given Golladay’s testimony under oath, it is perhaps unlikely that Bernstein does ultimately win his case, but it does mean that Bernstein will at least be given another chance to be heard.

By Darren Heitner

Darren Heitner created Sports Agent Blog as a New Year's Resolution on December 31, 2005. Originally titled, "I Want To Be A Sports Agent," the website was founded with the intention of causing Heitner to learn more about the profession that he wanted to join, meet reputable individuals in the space and force himself to stay on top of the latest news and trends.

Heitner now runs Heitner Legal, P.L.L.C., which is a law firm with many practice areas, including sports law and contract law. Heitner has represented numerous athletes and sports agents as legal counsel. He has also served as an Adjunct Professor at Indiana University Bloomington from 2011-2014, where he created and taught a course titled, Sport Agency Management, which included subjects ranging from NCAA regulations to athlete agent certification and the rules governing the profession. Heitner serves as an Adjunct Professor at the University of Florida Levin College of Law, where he teaches a Sports Law class that includes case law surrounding athlete agents and the NCAA rules.