“Bizarre Dispute” Between Soccer Gear Company and Nike Ends at the Ninth Circuit

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On June 7, 2018, Johnnie B. Rawlinson, a Ninth Circuit judge, denied Havensight Capital LLC’s appeal. In September 2014, Havensight Capital LLC, a soccer gear company and competitor of Nike, Inc., filed a lawsuit against Nike, claiming intentional interference with prospective economic relations; unfair competition and trade practices; commercial misappropriation; intentional interference with contractual relations; negligence; and invasion of privacy. According to Judge Rawlinson, the “appeal is the latest in an ongoing and bizarre dispute” where Havensight has portrayed its lawsuit as a battle between David and Goliath.

Havensight’s lawsuit was dismissed on November 19, 2014. The next day, Havensight filed the tortious interference action and six days after that, filed an amended complaint, alleging intentional interference with contractual relations; intentional interference with prospective economic relations; negligence; vertical and horizontal price fixing; civil RICO under California law; and unfair competition and trade practices. In response, Nike filed a motion to dismiss. According to Judge Rawlinson, “[a]t this juncture, Havensight departed sharply from ordinary procedure, filing multiple motions for default on the basis that Nike’s motion to dismiss was untimely [and] [b]efore the district court could rule on the motions, Havensight filed a writ of execution . . . claiming a default judgment.” However, Nike had timely filed and default judgment was not warranted.

Nike then filed a motion for relief regarding Havensight’s ethical violations. “Undeterred,” Havensight moved to remove the assigned judge from the November and September actions. The judge denied Havensight’s motions and, in response, Nike sought Rule 11 sanctions for “false and frivolous filings.” On February 18, 2015, the court granted Nike’s motion to dismiss the amended complaint and imposed sanctions against Havensight. The following day, Havensight filed a motion to vacate the dismissal and the sanctions, also, Havensight filed another motion to remove the judge. “Although the judge had previously requested that Havensight refrain from filing further recusal motions, Havensight decided to Just Do It.” The court, once again, denied the motion and also issued an order which required Havensight to show cause on why additional sanctions should not be imposed. The additional sanctions were imposed in March 2015.

Later, the court entered a separate order declaring Havensight to be a “vexatious litigant,” and Nike moved for, and was granted, attorneys’ fees and costs pursuant to the February 18 order. Havensight filed its notice of appeal to the Ninth Circuit on October 15, 2015. According to Judge Rawlinson, “Havensight referenced only the dismissal of the amended complaint and . . . the Rule 11sanctions [and] now seeks to expand the scope of rulings of its appeal to include the additional sanctions, … the vexatious litigant order, the denial of [the] motion to strike ‘Nike’s alleged illegal deposition and felonious entry of a confidential customer communication into the public record,’ and denial of [its] application for default.” In her opinion, Judge Rawlinson ruled that she could not rule on other rulings that were not named in the appeal, as such, Judge Rawlinson affirmed the sanctions against Havensight as the “court’s findings were amply supported by the record” and she ruled that Havensight’s appeal was filed too late.

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