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The Fan Expo, LLC v. NationaL Football League

Court of Appeals of Texas, Fifth District, Dallas

May 22, 2019

THE FAN EXPO, LLC, Appellant
v.
NATIONAL FOOTBALL LEAGUE, Appellee

          On Appeal from the 44th Judicial District Court Dallas County, Texas Trial Court Cause No. DC-16-04875

          Before Justices Myers, Osborne, and Nowell

          MEMORANDUM OPINION

          LANA MYERS JUSTICE.

         The Fan Expo, LLC sued the National Football League (NFL) for tortious interference with a contract. The trial court granted the NFL's motions for summary judgment. Appellant, The Fan Expo, brings three issues on appeal contending the trial court erred by granting the NFL's motion for summary judgment because the evidence established a genuine issue of material fact concerning (1) intentional interference and (2) causation and damages, and because (3) the NFL did not conclusively establish its defense of justification. We affirm the trial court's judgment.

         BACKGROUND

         Appellant was formed in 2015 for the purpose of hosting the National Fantasy Football Convention.[1] The first convention was to be held in 2015 at a casino resort in Las Vegas. Appellant invited numerous active NFL players to attend. However, the NFL warned the players that attendance at the event would violate the NFL's gambling policy and that the players could be subject to discipline. Appellant canceled the 2015 convention and sued the NFL.[2] The litigation was ongoing during the events in this case, which involved appellant's planning and preparation for the 2016 convention.

         The 2016 convention was going to be a three-day event in July in California. According to Andy Alberth, appellant's executive director, the centerpiece attraction at the 2016 convention was going to be the EA Sports Madden NFL 17 video game, where attendees could play the game against NFL players.

         On March 22, 2016, [3] Electronic Arts, Inc. (EA), the owner of the Madden NFL video game series, signed a "Sponsor Agreement" with appellant. The agreement provided that EA would be a "Participating sponsor" of the convention and pay appellant a sponsorship fee. The agreement did not state that EA would be a "partner." EA also promised to provide "artwork, assets and/or copy as is needed for [the Convention's] use solely in connection with this agreement." Appellant promised it would submit to EA any materials using EA's intellectual property for approval by EA before displaying them. EA sent appellant its logo for the Madden NFL 17 video game, which included the NFL's shield logo. However, appellant displayed the Madden NFL 17 logo on its webpage without first submitting the display to EA for approval. Appellant's webpage stated EA was a sponsor and partner for the convention.

         The licensing agreement between EA and the NFL required EA to obtain the NFL's approval for all "promotion, publicity or display materials depicting the Licensed Marks," which included the NFL's shield logo. Because appellant did not send the proposed display to EA for EA's approval, EA could not obtain the NFL's approval before appellant displayed the logo.

         On April 18, Michael Buchwald, counsel for the NFL, viewed appellant's website and saw the Madden NFL 17 logo. On Friday, April 22, Buchwald and Allison Villafane, the NFL's senior counsel based in New York City, held a telephone call with EA's vice president of business affairs, Lee Rawles. During the phone call, either Villafane or Buchwald told Rawles that the NFL was in litigation with appellant. They also discussed appellant's display of the Madden NFL 17 logo without the NFL's authorization. Rawles said he did not know whether EA was involved in the convention, and he told Villafane and Buchwald he would investigate the matter. After the phone call, there were numerous e-mails among EA's personnel. The following Monday, April 25, EA's product manager, Moya Dacey, e-mailed appellant stating EA would not be participating in the convention.

         The next day, April 26, appellant's lawyers sent an e-mail to the NFL's Dallas lawyers. The e-mail demanded that the NFL cease and desist from contacting sponsors of the convention, "demanding that they [the sponsors] withdraw from the event or intimidating them with the intent to make them withdraw from the event."

         Several hours after the cease-and-desist e-mail, Villafane sent a "follow-up" e-mail to Buchwald and Rawles discussing the April 22 telephone call. The e-mail stated that during the telephone call, the NFL said it did not approve of appellant's promotional use of the NFL shield logo and requested "that EA take steps to have the NFL shield removed from the display." The e-mail also stated the NFL would not object to the "EA Sports Madden 2017" logo remaining on appellant's website as long as the NFL shield was removed. The follow-up e-mail also stated, "We [the NFL] reiterate that we have no issue with EA sponsoring or partnering with the NFFC [National Fantasy Football Convention] event. Our concern is with the NFFC's promotional use of the NFL Shield, which may falsely give the impression that the NFFC is sponsored by, endorsed by, or otherwise affiliated with, the NFL, when it is not." Despite the NFL's assurance to EA that it had "no issue" with EA's involvement in the convention, EA did not immediately return to being a sponsor and participant in the convention.

         On April 27, the day after appellant's cease-and-desist e-mail and the NFL's follow-up e-mail, appellant filed suit against the NFL for tortious interference with contract.

         On June 14, appellant decided to cancel the convention. A week later, on June 21, EA's events manager sent an e-mail to appellant stating EA wanted to participate in the convention, but appellant told her the convention had already been canceled. In July, appellant amended its petition, adding EA as a defendant and suing it for breach of contract and, in subsequent amendments, fraud and other torts. In August, EA paid appellant the sponsorship fee.

         Both the NFL and EA filed motions for summary judgment. Following multiple hearings, the trial court granted both the NFL's and EA's motions for summary judgment and ordered that appellant take nothing on its claims. Appellant appeals the summary judgment in favor of the NFL, but appellant does not appeal the summary judgment in favor of EA.[4]

         STANDARD OF REVIEW

         The standard for reviewing a traditional summary judgment is well established. See McAfee, Inc. v. Agilysys, Inc., 316 S.W.3d 820, 825 (Tex. App.-Dallas 2010, no pet.). The movant has the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c). In deciding whether a disputed material fact issue exists precluding summary judgment, evidence favorable to the nonmovant will be taken as true. In re Estate of Berry, 280 S.W.3d 478, 480 (Tex. App.-Dallas 2009, no pet.). Every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved against the motion. City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005).

         Rule 166a(i) provides that a party "may move for summary judgment on the ground that there is no evidence of one or more essential elements of a claim or defense on which an adverse party would have the burden of proof at trial." We review a no-evidence summary judgment under the same legal sufficiency standard used to review a directed verdict. See Tex. R. Civ. P. 166a(i); Flood v. Katz, 294 S.W.3d 756, 762 (Tex. App.-Dallas 2009, pet. denied). Thus, we must determine whether the nonmovant produced more than a scintilla of probative evidence to raise a fact issue on the material questions presented. See Flood, 294 S.W.3d at 762. When analyzing a no-evidence summary judgment, "we examine the entire record in the light most favorable to the nonmovant, indulging every reasonable inference and resolving any doubts against the motion." Sudan v. Sudan, 199 S.W.3d 291, 292 (Tex. 2006) (per curiam) (quoting City of Keller, 168 S.W.3d at 823). A no-evidence summary judgment is improperly granted if the nonmovant presented more than a scintilla of probative evidence to raise a genuine issue of material fact. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003). "More than a scintilla of evidence exists when the evidence rises to a level that would enable reasonable, fair-minded persons to differ in their conclusions." Id. (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). "Less than a scintilla of evidence exists when the evidence is 'so weak as to do no more than create a mere surmise or suspicion' of a fact." Id. (quoting Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)).

         Under both standards, evidence favorable to the nonmovant will be taken as true. In re Estate of Berry, 280 S.W.3d at 480. The court indulges every reasonable inference in favor of the nonmovant and resolves all doubts in favor of the nonmovant. City of Keller, 168 S.W.3d at 824. We review a summary judgment de novo to determine whether a party's right to prevail is established as a matter of law. Tex. Workforce Comm'n v. Wichita Cty., 548 S.W.3d 489, 492 (Tex. 2018).

         A summary judgment may be based on the testimony of interested witnesses if the evidence is "clear, positive and direct, otherwise credible and free from contradictions and inconsistencies, and could have been readily controverted." Tex.R.Civ.P. 166a(c). The phrase, "could have been readily controverted," does not mean that the movant's proof could have been easily and conveniently rebutted.

Rather, it means that testimony at issue is of a nature which can be effectively countered by opposing evidence. If the credibility of the affiant or deponent is likely to be a dispositive factor in the resolution of the case, then summary judgment is inappropriate. On the other hand, if the non-movant must, in all likelihood, come forth with independent evidence to prevail, then summary judgment may well be proper in the absence of such controverting proof.

Casso v. Brand, 776 S.W.2d 551, 558 (Tex. 1989).

         TORTIOUS INTERFERENCE WITH CONTRACT

         Appellant's three issues contend the trial court erred by granting the NFL's motion for summary judgment on appellant's claim for tortious interference with contract. The elements of a claim of tortious interference with an existing contract are: (1) an existing contract subject to interference; (2) a willful and intentional act of interference with the contract; (3) that proximately caused the plaintiff's injury; and (4) caused actual damages or loss. Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000); Tex. Integrated Conveyor Sys., Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 367 (Tex. App.-Dallas 2009, pet. denied). To establish the element of a willful and intentional act of interference, a plaintiff must produce some evidence that the defendant knowingly induced one of the contracting parties to breach its obligations under a contract. Funes v. Villatoro, 352 S.W.3d 200, 213 (Tex. App.-Houston [14th Dist.] 2011, pet. denied); COC Servs. Ltd. v. CompUSA, Inc., 150 S.W.3d 654, 671 (Tex. App.- Dallas 2004, pet. denied).

         Intentional Interference by the NFL

         In its first issue, appellant contends it established a genuine issue of material fact on the element of intentional interference. The NFL asserted in its motions for summary judgment that it did not intentionally interfere with the contract between appellant and any sponsor of the convention, which would include EA, and that appellant had no evidence the NFL intentionally interfered with a contract between appellant and a sponsor of the convention. Under the NFL's no-evidence motion for summary judgment, appellant had the burden of coming forward with some evidence that the NFL intentionally interfered with the contract. We must determine whether appellant presented some evidence the NFL knowingly induced EA to breach its contract to participate in the 2016 convention. See COC Servs., 150 S.W.3d at 671.

         Because a defendant accused of tortious interference rarely admits its guilt, a plaintiff usually must use circumstantial evidence to prove its cause of action. Dagley v. Haag Eng'g Co., 18 S.W.3d 787, 794 (Tex. App.-Houston [14th Dist.] 2000, no pet.); Meza v. Serv. Merchandise Co., 951 S.W.2d 149, 152 (Tex. App.-Corpus Christi-Edinburg 1997, pet. denied). A fact issue is raised by circumstantial evidence if a reasonable person would conclude from the evidence that the existence of the fact is more reasonable than its nonexistence. Guthrie v. Suiter, 934 S.W.2d 820, 831-32 (Tex. App.-Houston [1st Dist.] 1996, no writ).

         In this case, the NFL did not admit it intentionally interfered with the contract, nor did EA state it withdrew from the convention due to pressure from the NFL. Rawles, Villafane, and Buchwald, the participants in the phone call, testified that the NFL did not discourage EA from participating in the convention. They testified that Villafane and Buchwald told Rawles repeatedly that the NFL did not have a problem with EA participating in the convention. They also testified that Villafane or Buchwald said that the NFL was in litigation with appellant. They denied that the NFL coerced EA to withdraw from the convention.

         Appellant argues that the e-mails by EA personnel after the phone call present some evidence that the NFL knowingly induced EA to breach the Sponsor Agreement and withdraw from the convention.

         On Friday, April 22, after the phone call with Villafane and Buchwald, Rawles sent an e-mail to several people at EA, including Joss Price, with the subject line "Madden and the National Fantasy Football Convention." Rawles asked the recipients:

Does this ring a bell for anybody? Did we do a deal with these guys? NFL is in litigation with them and it is an issue.
Thanks,
Lee

         Price forwarded Rawles's e-mail to Randy Chase (EA's senior director of North American marketing) who responded:

We had planned to have a booth at the show to promote MUT and Draft Champions. We were participating as a trade show, not partnering with them.
Didn't know about the litigation. We can pull out of the show if it's an issue.

         Rawles replied to Chase and numerous other EA employees including Moya Dacey (EA's product manager):

At a minimum, we need to ask them to remove the logo. We didn't give them permission to reference us and we aren't their partner.

         Rawles also said:

Probably wouldn't hurt to avoid altogether if we don't already have significant sunk costs but the logo removal is a must.

         Chase replied to Rawles, copying Dacey:

         Will do. Will get status on Monday and work to remove ourselves completely. Dacey then e-mailed Sara Sprinkles (EA's events manager):

FYI. We need to completely remove ourselves from the Fantasy Football Convention. I'll work with legal to see if there's anything from our end that has us covered. Worst ...

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