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[Original] Answer and Cross-Petition

[Original] Answer and Cross-Petition

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Published by: yahoosports on Jun 09, 2014
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02/01/2015

 
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 ANSWER ANDCROSS-PETITION
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MORGAN, LEWIS & BOCKIUS LLPKATHLEEN A. WATERS, SBN 194892BRIAN M. HOM, SBN 240055300 South Grand Avenue, 22nd Floor Los Angeles, CA 90071-3132Tel: 213.612.2500Fax: 213.612.2501kwaters@morganlewis.com bhom@morganlewis.comMORGAN, LEWIS & BOCKIUS LLPWILLIAM P. QUINN,
 pro hac vice
1701 Market StreetPhiladelphia, PA 19103-2921Tel: 215.963.5000Fax: 215.963.5601wquinn@morganlewis.comMORGAN, LEWIS & BOCKIUS LLPDAVID W. MARSTON,
 pro hac vice
200 South Biscayne Boulevard, Suite 5300Miami, FL 33131-2339Tel: 305.415.3000Fax: 305.415.3001dmarston@morganlewis.comAttorneys for Respondent & Cross-Petitioner,DESEAN JACKSON
UNITED STATES DISTRICT COURTCENTRAL DISTRICT OF CALIFORNIA
DREW ROSENHAUS, an individual,Petitioner,vs.DESEAN JACKSON, an individual,Respondent.Case No. 2:14-cv-03154 MWF (JCGx)
RESPONDENT’S ANSWER TOPETITION TO CONFIRMARBITRATION AWARD ANDCROSS-PETITION TO VACATEARBITRATION AWARD
DESEAN JACKSON, an individual,Cross-Petitioner,vs.DREW ROSENHAUS, an individual,JASON ROSENHAUS, an individual,ROSENHAUS SPORTSREPRESENTATION, INC., a FloridaCorporation,Cross-Respondents.
Case 2:14-cv-03154-MWF-JCG Document 19 Filed 06/05/14 Page 1 of 52 Page ID #:159
 
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ANSWER ANDCROSS-PETITION
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Pursuant to the Federal Arbitration Act, Respondent/Cross-Petitioner DESEAN JACKSON (“Jackson”), by his undersigned counsel, hereby (a) opposesPetitioner Drew Rosenhaus’ Petition to Confirm the April 10, 2014 ArbitrationAward Rendered by Roger P. Kaplan in favor of Rosenhaus and Cross-RespondentJason Rosenhaus and against Jackson (“Arbitration Award”), and (b) cross-petitionsthe Court for an Order vacating the Arbitration Award.
Nature of the Proceeding
This proceeding arises out of an arbitration (the “Arbitration”) conducted before Arbitrator Roger Kaplan (“Arbitrator Kaplan”) under the auspices of the National Football League Players Association (“NFLPA”). In the Arbitration,sports agent Drew Rosenhaus (“Rosenhaus”) and his brother, Jason Rosenhaus,asserted claims against DeSean Jackson, a professional football player, for feesallegedly earned by Rosenhaus under a sports representation contract (known as an“SRA”) pursuant to which Rosenhaus negotiated a 2012 contract with thePhiladelphia Eagles on Jackson’s behalf. The Rosenhauses also sought repaymentof amounts advanced to Jackson by their sports management agency, RosenhausSports Representation, Inc. (“RSR”), pursuant to three side agreements.Jackson defended the Arbitration primarily on the ground that Rosenhaus andRSR had forfeited the right to the payments being sought by violating NFLPAregulations prohibiting inducements intended to lure players into signing contractswith agents. Specifically, in exchange for Jackson’s agreement to retain Rosenhausas his agent, Rosenhaus agreed to enter into a confidential side agreement withJackson. The side agreement provided that Rosenhaus would give Jackson$175,000 and a $200,000 loan. It further provided that, if Jackson allowedRosenhaus to negotiate Jackson’s next NFL contract, Jackson would have noobligation to either repay the $175,000 or pay any interest on the $200,000 loan.
 
Case 2:14-cv-03154-MWF-JCG Document 19 Filed 06/05/14 Page 2 of 52 Page ID #:160
 
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By offering this side agreement, Rosenhaus violated an NFLPA prohibitionagainst “[p]roviding or offering money or any other thing of value to any player or  prospective player to induce or encourage that player to utilize his/her services.” AsRosenhaus himself has publicly admitted, this prohibition is unqualified. Theregulations contain no exception for 
 de minimis
 inducements or inducements thatone might characterize as “proper” or “customary.” An NFL agent found to haveviolated this regulation forfeits, among other things, the right to fees the player would otherwise owe the agent and must disgorge any fees already paid by the player.During the arbitration hearing before Arbitrator Kaplan, Jackson presenteduncontradicted evidence that Jackson’s agreement to sign the Rosenhaus SRA andRosenhaus’ agreement to enter into the side agreement were inextricablyintertwined and that each represented consideration for the other. He also presenteduncontested evidence that Rosenhaus improperly withheld the side agreement fromthe NFLPA, apparently to avoid detection of his violation of the anti-inducementrule. Nevertheless, Arbitrator Kaplan rejected Jackson’s defense, finding that themeans through which Rosenhaus compensated Jackson for using his services didnot, in Arbitrator Kaplan’s opinion, amount to an “
improper 
” inducement.Arbitrator Kaplan thus effectively modified the NFLPA’s prohibition against
 al
inducements by engrafting on it an exception for inducements that he regards as“proper.”In doing so, Arbitrator Kaplan exceeded his authority as an arbitrator. TheRegulations governing NFLPA arbitrations explicitly state that an NFLPAarbitrator lacks “the jurisdiction or authority to add to, subtract from, or alter in anyway the provisions of these Regulations or any other applicable document.” For that reason, Jackson respectfully requests that the Court vacate the Arbitration
Case 2:14-cv-03154-MWF-JCG Document 19 Filed 06/05/14 Page 3 of 52 Page ID #:161

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