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§ § § § § § § § IN THE DISTRICT COURT
Filed 12 September 7 P4:41 Amalia Rodriguez-Mendoza District Clerk Travis District D-1-GN-12-002781
OF TRAVIS COUNTY, TEXAS
___ JUDICIAL DISTRICT
PLAINTIFF’S ORIGINAL PETITION TO THE HONORABLE COURT, Plaintiff 3fourTexasMGP, LLC (“3four”) files this its Original Petition (the “Petition”) against Defendants Circuit of the Americas, LLC (“COTA”) and Steve Sexton. Plaintiff alleges as follows: I. 1. DISCOVERY CONTROL PLAN
Plaintiff intends to conduct discovery under Level 3 of Texas Rule of Civil
Procedure 190.4. II. 2. INTRODUCTION
Plaintiff 3four acquired the exclusive rights to promote an annual MotoGP race in
Texas for the next decade from Dorna Sports, S.L. (“Dorna”). Defendants COTA and Steve Sexton (COTA’s President) wanted the MotoGP race, but did not want to have to pay 3four as the promoter. So, while purportedly negotiating with 3four, COTA was actually scheming to side-step 3four and deal directly with Dorna so it could pay less by cutting 3four out of the picture. Through tortious interference and fraud, COTA and Sexton encouraged Dorna to breach and purportedly terminate 3four’s agreement to avoid the obligation to pay 3four. 3four sues for what it is owed as the exclusive promoter of MotoGP in Texas. 3. MotoGP is the world’s highest class of motorcycle racing. 3four obtained the
exclusive rights to promote MotoGP racing in Texas for a ten-year period through its relationship 1
and agreements with Dorna, the Spanish entity currently responsible for promoting MotoGP worldwide. 4. 3four desired to promote the annual Texas MotoGP Grand Prix in Austin. As
such, 3four undertook significant efforts to reach an agreement with COTA to promote MotoGP races at COTA’s new Austin racing circuit. Instead of fairly negotiating with 3four in good faith, COTA and Sexton unlawfully went behind 3four’s back and interfered with 3four’s exclusive rights to promote MotoGP in Texas. Indeed, Defendants’ actions caused Dorna to breach and purportedly terminate its agreements with 3four. Moreover, according to the CEO of Dorna, COTA is “just organising the final details” of a contract directly with Dorna—a contract which will violate 3four’s rights as the sole and exclusive rights holder to MotoGP in Texas. 5. 3four files this action seeking an order of the Court awarding it damages for
Defendants’ tortious interference and fraudulent misrepresentations. III. 6. PARTIES
Plaintiff 3fourTexasMGP, LLC is a Texas limited liability company doing
business as 3fourTexasMGP in Travis County, Texas. 7. Defendant Circuit of the Americas, LLC is a Delaware limited liability company
with its principal place of business in Austin, Texas. Defendant may be served with process by serving its registered agent, Dan Allen, at 301 Congress Avenue, Suite 220, Austin, Travis County, Texas 78701. 8. Defendant Steve Sexton, an individual, may be served with process at his usual
place of business: 301 Congress Avenue, Suite 220, Austin, Travis County, Texas 78701.
The Court has jurisdiction over the lawsuit because the amount in controversy
exceeds this court’s minimum jurisdictional requirements. 10. The Court has jurisdiction over Defendant COTA because its principal place of
business is in Texas. 11. The Court has jurisdiction over Defendant Sexton because he resides in Texas and
regularly conducts business in Texas. V. 12. VENUE
Venue is proper in Travis County under Texas Civil Practice & Remedies Code
§ 15.002 because all or a substantial part of the events or omissions giving rise to the claim occurred in Travis County. VI. A. FACTS
3four Obtained the Sole and Exclusive Rights to Promote MotoGP in Texas 13. MotoGP is the world’s premier form of motorcycle racing. Dorna, pursuant to an
agreement with the Fédération Internationale Motocycliste, possesses the right to negotiate and enter into agreements regulating the worldwide promotion of official MotoGP Grands Prix. As such, 3four discussed with Dorna the opportunity of promoting MotoGP in Texas. Kevin Schwantz, the owner and president of 3four, is the 1993 MotoGP World Champion and a native Texan. Thus, 3four possessed tremendous knowledge of and goodwill in MotoGP and Texas, and the parties agreed 3four should act as the MotoGP promoter in Texas for a ten-year period. On February 2, 2011, Dorna affirmed its agreement with 3four in writing, stating: “3fourTexasMGP, LLC is the sole rights holder for MotoGP in the state of Texas for the years 2013–2022.” (emphasis added). Thus, 3four became the sole promoter for MotoGP races in
Texas under this “Sole Rights Holder Agreement.” As the Texas promoter, 3four would promote an annual MotoGP Grand Prix at a location in Texas from 2013 to 2022, and Dorna would provide, inter alia, the teams and riders necessary to compete in the Grand Prix events. 14. Initially, 3four planned to promote MotoGP in Austin. At the time 3four obtained
the MotoGP rights, Defendant COTA had begun construction of a state-of-the-art racing circuit in Austin, which was designed in part by 3four. 3four recognized the benefits that MotoGP would bring to Austin. As such, 3four solidified a second written agreement with Dorna with specific terms for promoting a Grand Prix at COTA’s circuit (the “Austin Agreement”). The Austin Agreement specified, inter alia, that 3four would contribute annual fees and Dorna would provide the riders and teams to compete in the races. Other specific terms included safety regulations, certain advertising, timekeeping and other regulations related to a Grand Prix. 15. At this time, 3four and Dorna maintained a close working relationship. 3four and
Dorna routinely discussed the upcoming event, worked together to garner support from the Texas government for MotoGP, and promoted their arrangement in the press. For example, within a few months of entering the Austin Agreement, the CEO of Dorna, Carmelo Ezpeleta, visited Texas State Comptroller Susan Combs with Schwantz. Mr. Ezpeleta expressed to the
Comptroller how excited Dorna was about promoting MotoGP in Texas with 3four. Shortly thereafter, Mr. Ezpeleta wrote a letter to the Comptroller thanking her for the visit and, inter alia, confirming that “both Kevin (Schwantz) and I are positive that the measured success of our events in Texas will be fantastic[.]” Similarly, Mr. Ezpeleta described Dorna’s relationship with Schwantz and 3four to the press stating: “We have had a wonderful and special relationship with Kevin for 20 years[.]”
Defendants Interfered with 3four’s Rights to Promote MotoGP in Texas 16. Having obtained the MotoGP rights, 3four repeatedly attempted to negotiate a
contract with COTA to host an annual Grand Prix at its Austin circuit. As such, Defendants were well aware of 3four’s agreement and relationship with Dorna as the sole and exclusive promoter of MotoGP in Texas from 2013 to 2022. 17. Moreover, Defendants always intended for COTA to obtain the rights to host an
annual Texas MotoGP Grand Prix. COTA desired to host the race so much that it even held a press conference in April 2011 announcing that it would host MotoGP. Dorna, likewise, stated that COTA’s circuit was already on the MotoGP calendar for 2013. Defendants then hatched a scheme to side-step 3four and cut it out of MotoGP. 18. On numerous occasions, 3four engaged in substantive discussions with COTA to For example, Sexton repeatedly engaged in oral and email
host a MotoGP Grand Prix.
discussions with Schwantz about the details of hosting MotoGP in Austin. The discussions included topics such as the annual costs of promoting the event, rights to alcoholic beverage sales, and quality control issues. During these discussions, Sexton repeatedly acknowledged 3four’s exclusive rights to promote MotoGP in Texas. For example, on June 12, 2012 Sexton acknowledged in an email that should 3four promote the race elsewhere in Texas, “We fully understand that option and will not stand in the way[.]” (emphasis added). 19. COTA officials consistently represented to 3four that COTA was interested in
contracting with 3four. For example, in May 2012, 3four delivered one of multiple proposed contracts to COTA for MotoGP. Sexton told Schwantz that he would “sign this agreement today if [ownership] would let me.” Sexton did not sign the agreement, but COTA officials continued to represent that COTA was interested in contracting with 3four as recently as June 22.
However, COTA always refused to execute an agreement. Indeed, on June 22, COTA officials canceled a meeting to discuss a contract with 3four at the last minute. Nevertheless, 3four relied on COTA’s and Sexton’s representations and continued to make efforts to negotiate MotoGP promotion terms with COTA officials. 20. At the same time, however, Defendants were surreptitiously negotiating directly
with Dorna and encouraging Dorna to breach and terminate its agreements and relationship with 3four. COTA contacted Dorna officials and Bridgepoint (Dorna’s parent entity) multiple times with false accusations about 3four. COTA and Sexton accused 3four of attempting to
overcharge COTA for the right to host MotoGP and made outrageous and false claims to Dorna about the amounts of offers that it supposedly extended for the promotion rights to MotoGP, including amounts ranging from $4 to $10 million. COTA never made any such offers to 3four. Moreover, COTA and Sexton accused 3four of trying to make too much money, attempting to enrich itself, and blocking COTA from reaching an agreement. In reality, 3four had repeatedly offered a promoter-friendly contract to COTA (and one of the cheapest MotoGP contracts in the world) that it could have signed on multiple occasions. However, through these backdoor efforts, COTA sought to obtain a cheaper contract directly with Dorna by causing Dorna to breach and purport to terminate its agreements with 3four. 21. Still hoping to reach an agreement with COTA, 3four twice requested help from
Dorna. 3four requested that Dorna inform COTA that it must deal with 3four to host MotoGP. Until this time, 3four and Dorna had always maintained a good relationship. After Defendants’ interference, however, Dorna refused to provide any aid to 3four, including twice refusing to provide the requested statements to COTA that it must negotiate with 3four for MotoGP.
On July 2, after months of Defendants’ interference, Dorna breached and
purported to terminate the Austin Agreement and Sole Rights Holder Agreement. At least seven days prior to this purported termination, Dorna’s CEO conceded that Dorna and COTA were directly negotiating with one another. Mr. Ezpeleta told the press that Dorna was “just
organising the final details” for MotoGP in Austin. This announcement came as quite a shock to 3four (the exclusive rights holder to MotoGP in Texas), which was not privy to or otherwise involved in the finalization of any details and had been negotiating (so it thought) a promotion contract directly with COTA. 23. Had Defendants not interfered, 3four would have either promoted MotoGP in
Austin under the Austin Agreement or elsewhere in Texas under the Sole Rights Holder Agreement. 24. In addition to the Austin Agreement and Sole Rights Holder Agreement,
Defendants’ interference has hampered 3four’s prospective business relationships in the promotion of MotoGP elsewhere in Texas. The Sole Rights Holder Agreement states: “This letter hereby confirms our agreement that 3fourTexasMGP, LLC is the sole rights holder for MotoGP in the state of Texas for the years 2013–22.” Had Defendants not interfered, there is a reasonable probability that 3four would have contracted with another Texas entity that it considered for MotoGP, including the Texas World Speedway. 3four engaged in site visits and discussions with representatives of Texas World Speedway, something Sexton acknowledged 3four had every right to do under its agreements with Dorna. As Defendants were well aware of this fact, they unlawfully interfered with 3four’s rights and prospective relationships with other Texas racetracks so that COTA could steal the MotoGP rights. After Defendants’ interference,
Dorna openly refused to work with 3four to promote the race at Texas World Speedway in breach of the Sole Rights Holder Agreement. 25. have occurred. VII. Count 1 – Tortious Interference 26. Plaintiff hereby incorporates by reference all paragraphs of this Petition as if fully CLAIMS All conditions precedent to Plaintiff’s claims for relief have been performed or
set forth herein. 27. Plaintiff entered into the Sole Rights Holder Agreement with Dorna for the sole
and exclusive rights to promote MotoGP in Texas for 2013–22. This was a valid contract. 28. Plaintiff also entered into the Austin Agreement with Dorna specifically for the
promotion of MotoGP in Austin for 2013–22. This was a valid contract. 29. Defendants were well aware of Plaintiff’s agreements with Dorna. Defendants
had already engaged in substantial prior negotiations and discussions with Plaintiff for promoting MotoGP in Austin. Defendants knew that Plaintiff possessed the sole and exclusive rights to promote MotoGP in both Austin and elsewhere in Texas. Had Plaintiff not promoted MotoGP in Austin, Defendants knew that there was a reasonable probability that Plaintiff would have entered into a contract to promote MotoGP elsewhere in Texas. 30. Nevertheless, Defendants willfully and intentionally interfered with Plaintiff’s
agreements with Dorna by negotiating directly with Dorna behind Plaintiff’s back, making false accusations about Plaintiff to Dorna, misrepresenting its intentions to Plaintiff, and encouraging Dorna to breach and terminate its agreements with Plaintiff.
Defendants intentionally interfered with Plaintiff’s agreements with Dorna to
obtain a cheaper contract directly from Dorna in violation of Plaintiff’s rights. Because of COTA’s interference, Dorna breached and purported to terminate its agreements with Plaintiff and is now allegedly “organising the final details” of a contract with COTA. 32. Defendants’ actions interfered with Plaintiff’s ability to promote MotoGP in
Austin under the Austin Agreement and Plaintiff’s prospective business relationships in the promotion of MotoGP elsewhere in Texas. Had Defendants not interfered, Dorna would not have breached and purported to terminate the Austin Agreement and the Sole Rights Holder Agreement. Had Plaintiff promoted MotoGP to another Texas entity, there was a reasonable probability that Plaintiff would have entered into an agreement with said entity. As set forth herein, Defendants interfered with that prospective relationship, including through their fraudulent statements to Plaintiff and Dorna. 33. Defendants’ interference proximately caused injury to Plaintiff. Plaintiff seeks all
actual damages it has incurred from this injury and such other and further relief to which it may be justly entitled. Count 2 – Fraud 34. Plaintiff hereby incorporates by reference all paragraphs of this Petition as if fully
set forth herein. 35. Defendants repeatedly made material and fraudulent statements and
misrepresentations to Plaintiff. 36. COTA officials, including Sexton, Bobby Epstein, and Rad Weaver, represented
to Plaintiff that COTA desired and intended to negotiate an agreement in good faith with Plaintiff for the promotion of MotoGP in Austin for the years 2013–22.
Defendants knew these representations were false because Defendants did not
desire or intend to negotiate an agreement with Plaintiff in good faith. Instead, Defendants were simultaneously conducting secret negotiations directly with Dorna for the promotion of MotoGP, at the expense and exclusion of Plaintiff. 38. Defendants knowingly made these false representations as part of a scheme to
deceive Plaintiff into continuing a ruse of “negotiations” with Defendants until Defendants could successfully cause Dorna to breach and terminate its agreements with Plaintiff, in an effort to achieve Defendants’ goal of cutting Plaintiff out of MotoGP. 39. Defendants’ misrepresentations were material. Plaintiff relied on Defendants’
representations because it desired to promote MotoGP in Austin under the Austin Agreement. Given the parties’ extensive discussions and history of negotiations related to promoting MotoGP in Austin, Plaintiff’s reliance was reasonable and justifiable. 40. Defendants intended to induce Plaintiff to rely on this misrepresentation to stall
the process by dissuading Plaintiff from promoting MotoGP to another Texas track, until Dorna could breach and purport to terminate the Austin Agreement and Sole Rights Holder Agreement and enter into a similar arrangement directly with COTA. Thus, Defendants sought to eliminate Plaintiff from the equation and obtain a contract with Dorna for less than COTA would have paid Plaintiff, thereby also denying Plaintiff any value for its sole and exclusive rights to promote MotoGP in Texas. 41. By reason of Plaintiff’s reliance on the above-described misrepresentations of
material fact, Plaintiff has been damaged. Dorna breached and purported to terminate the Austin Agreement and the Sole Rights Holder Agreement. Further, Defendants’ actions interfered with Plaintiff promoting MotoGP elsewhere in Texas.
Plaintiff seeks all actual damages suffered as a result of Defendants’ fraud. Because Defendants knew that the representations described above were false at
the time they were made, the representations constitute conduct for which the law allows the imposition of exemplary damages. Plaintiff will show that it has incurred significant expenses, including attorney’s fees, in the investigation and prosecution of this action. Accordingly, Plaintiff requests that exemplary damages be awarded against Defendants in a sum within the jurisdictional limits of the Court. VIII. JURY DEMAND 44. Plaintiff demands a jury trial and has tendered the appropriate fee. IX. 45. REQUEST FOR DISCLOSURE
Under Texas Rule of Civil Procedure 194, Plaintiff requests that Defendants
disclose, within 50 days of the service of this request, the information or material described in Rule 194.2. X. PRAYER
WHEREFORE, Plaintiff requests that Defendants be cited to appear and answer and that Plaintiff be awarded the following: (1) actual damages caused by Defendants’ tortious interference and fraud; (2) exemplary damages; (3) prejudgment interest as provided by law; (4) postjudgment interest as provided by law; (5) costs of suit; (6) such other and further relief to which Plaintiff may be justly entitled.
Dated: September 7, 2012 FEAZELL & TIGHE, LLP /s/ Austin Tighe Austin Tighe Texas Bar No. 20023900 firstname.lastname@example.org Vic Feazell Texas Bar No. 06872280 6618 Sitio Del Rio Boulevard Building C-101 Austin, TX 78730 (512) 372-8100 Phone (512) 372-8140 Fax NIX, PATTERSON & ROACH, LLP Brad E. Seidel Texas Bar No. 24008008 email@example.com 3600 N. Capital of Texas Hwy. Building B, Ste. 350 Austin, TX 78746 Telephone: (512) 328-5333 Facsimile: (512) 328-5335 Andrew G. Pate Texas Bar No. 24079111 firstname.lastname@example.org 205 Linda Drive Daingerfield, TX 75638 Telephone: (903) 645-7333 Facsimile: (903) 645-4415 Counsel for Plaintiff
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