Nike USA, Inc. v. Berian

Filing 1

Complaint. Filing fee in the amount of $400 collected. Agency Tracking ID: 0979-4588414 Filer is subject to the requirements of Fed. R. Civ. P. 7.1. Jury Trial Requested: Yes. Filed by Nike USA, Inc. against Nike USA, Inc. (Attachments: # 1 Civil Cover Sheet, # 2 Proposed Summons). (Ramfjord, Per)

Per A. Ramfjord, OSB No. 934024
[e-mail]
Kennon Scott, OSB No. 144280
[e-mail]
STOEL RIVES LLP
900 SW Fifth Avenue, Suite 2600
Portland, OR 97204
Telephone: [phone]
Facsimile: [phone]
Attorneys for Plaintiff Nike, Inc.

UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
PORTLAND DIVISION

NIKE USA, INC., an Oregon corporation,

Case No.: _____________

Plaintiff,
COMPLAINT
v.
JURY TRIAL DEMANDED
BORIS BERIAN, an individual California
resident,
Defendant.

Plaintiff Nike USA, Inc. (“Nike”) brings this action against Defendant Boris Berian, and
alleges as follows:
INTRODUCTION
1.

This is an action for breach of contract, and declaratory and injunctive relief

brought by Nike against Defendant Boris Berian (“Defendant” or “Berian”). Nike and
Defendant are parties to an exclusive endorsement agreement. This agreement was initiated
when Defendant began endorsing Nike pursuant to a written endorsement contract. Under the

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terms of this initial contract, Nike had the right to match specific written terms of any bona fide
third-party offer presented to Defendant during a specified matching period of the agreement.
2.

Shortly after the expiration of the initial agreement—but during the period in

which Nike was entitled to match any third-party offer—Defendant presented Nike with a
proposal from New Balance Athletics, Inc. (“New Balance”) for an individual endorsement
agreement, creating an option contract for Nike to consider. Nike timely matched New
Balance’s offer, forming a new agreement between Nike and Defendant. Defendant now refuses
to recognize an agreement with Nike and has refused to perform under its terms.
3.

In this action, Nike seeks a declaratory judgment that it properly exercised its right

of first refusal and that a new agreement was formed as a result or, alternatively, that Defendant is
obligated to execute an agreement with Nike on the same terms as those contained in Nike’s
match of the New Balance offer. Nike also seeks injunctive relief prohibiting Defendant from
entering into any other endorsement deal that would violate his agreement with Nike.
THE PARTIES
4.

Nike is an Oregon corporation with its principal place of business in Washington

County, Oregon. Nike is the world’s leading innovator in athletic footwear, apparel, equipment
and accessories.
5.

Defendant is an individual resident of the State of California. He is a professional

middle distance runner.
JURISDICTION AND VENUE
6.

This Court has jurisdiction over this matter under 28 U.S.C. § 1332(a) because it

is a civil action between citizens of different states, and the amount in controversy, exclusive of
interest and costs, exceeds the sum or value of $75,000.

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7.

Venue is proper in this District under 28 U.S.C. § 1391(b)(2) because a

substantial part of the events giving rise to the claim occurred in this District and because
Defendant is subject to personal jurisdiction in this District.
8.

Defendant has engaged in sustained and significant business in Oregon, including

traveling to Oregon to compete, and he is party to two contracts at issue in this action in which
he consented to the personal jurisdiction within the State of Oregon.
GENERAL ALLEGATIONS
9.

Nike is the world’s leading innovator in athletic footwear, apparel, and

equipment. Nike’s ability to succeed in this highly competitive environment is, in part,
contingent on its ability to establish deep brand connections to consumers through a sports
category lens, reinforced by forming endorsement relationships with high-profile athletes across
the sporting spectrum.
The 2015 Contract Between Nike and Defendant
10.

Nike’s contractual relationship with Defendant began on June 17, 2015, when

Nike and Defendant entered into a Track & Field Contract (the “2015 Contract”). The 2015
Contract had a nearly seven-month term, ending on December 31, 2015, and it gave Nike the
exclusive right to Defendant’s endorsement of athletic footwear and apparel throughout the term.
11.

Defendant has proven to be a very valuable member of Nike’s track and field

roster. During the term of the 2015 Contract, Defendant Boris Berian finished fourth in the
Monaco Diamond League 800 meter event with the fifth-fastest American mark of all-time. His
reputation as one of the fastest runners in the world was confirmed recently, when he won the
800 meter event at the IAAF World Indoor Championships held in Portland, Oregon in March.

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12.

From the outset, the parties contemplated a potential renewal of the 2015

Contract. To that end, the 2015 Contract includes several mechanisms for the parties to
negotiate a renewal.
13.

First, the 2015 Contract provides for an exclusive negotiating period during the

Contract Period to 60 days prior to the expiration of the Contract, during which Defendant and
his agents and attorneys are allowed to negotiate a renewal with Nike but are prohibited from
negotiating with third parties with respect to the products Defendant endorses for Nike.
14.

Second, the 2015 Contract also includes a right of first refusal provision that

applies in the event Defendant chooses to negotiate with third parties after the expiration of the
exclusive negotiating period. Under that provision, Defendant “shall submit to Nike” (in a
contractually specified format) offers he receives “and desires to accept” during the Contract
Period and in the 180 days after the expiration of the 2015 Contract. Under the 2015 Contract,
after Defendant submits such an offer to Nike, Nike then has ten business days to decide whether
to enter into an agreement with Defendant on terms no less favorable than the “material,
measurable and matchable terms” contained in that third-party offer.
Nike’s Exercise of Its Right of First Refusal and the Formation of the 2016 Contract
15.

On January 20, 2016, Defendant’s agent, Merhawi Keflezighi (“Keflezighi”),

emailed Nike an offer received by Defendant from New Balance (the “New Balance Offer”). In
his email, Keflezighi noted that Defendant found the offer “agreeable.” Presenting this offer to
Nike converted Nike’s right of first refusal into an option to enter into a contract on the same
terms as the New Balance Offer. At that point, Nike could accept or decline to match the New
Balance Offer, but acceptance would bind both parties to the material terms of the New Balance
Offer.
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16.

On January 22, 2016, Nike sent a letter to Keflezighi stating that “NIKE matches

the New Balance Offer,” the written terms of which were included as an attachment to the letter.
By sending this letter, Nike exercised its right of first refusal and created a binding contract
between Defendant and Nike (the “2016 Contract”).
17.

Nonetheless, on February 15, 2016, after receiving a long-form written agreement

that was presented to memorialize the terms of the 2016 Contract, Keflezighi contacted Nike
purportedly on behalf of Berian. In an email to Ben Cesar, Nike’s Sports Marketing Manager,
Running/Track & Field, Keflezighi stated that Defendant “has expressed an interest not to
resume a relationship with Nike,” but nevertheless offered to provide Nike with a “revised
offer.” In sending this letter, Defendant, by and through his agent, ignored that Defendant was
already bound under the 2016 Contract to the terms initially presented to Nike on January 20,
2016. Neither Defendant nor his agent was free to go back to New Balance to try to get a
different or better offer to present to Nike.
18.

Nike responded with letters to both Defendant and Keflezighi, insisting that

Defendant was bound by the 2016 Contract. In addition, on April 12, 2016, Nike wired
Defendant payment for all amounts due to Defendant under the 2016 Contract. Nike has also
otherwise performed all of its obligations under the 2016 Contract, including, among other
things, providing Defendant with access to an online site for ordering Nike product as permitted
for product allowance under the 2016 Contract.
19.

Upon information and belief, Defendant is receiving payment and/or product from

New Balance either directly or indirectly through his track club, the Big Bear Track Club. In
March, despite being bound to compete exclusively in Nike product, when Defendant won the
800 meters at the IAAF World Indoor Championships, he competed in New Balance footwear.
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Defendant also competed in New Balance apparel and footwear during the term of the 2016
Contract on (1) January 29, 2016 at the House of Track event in Portland, Oregon, (2) February
14, 2016 at the New Balance Indoor Games in Boston, Massachusetts, and (3) March 11 and 12,
2016 at the USATF Indoor Track & Field Championships in Portland, Oregon.
20.

Despite Defendant’s violation of the 2016 Contract, Nike has made continual

attempts to reach Defendant through his agent to discuss a way forward. However, such efforts
have been rebuffed by Defendant’s agent.
21.

Two of the most important 2016 events in the track and field world are

approaching in the coming months. In July, Defendant is set to compete at the U.S. Olympic
Team Trials in Eugene, Oregon. If successful there, Defendant will presumably have an
opportunity to compete at the 2016 Olympics in Rio de Janeiro, Brazil in August. Unfortunately,
without court intervention, it now appears that Defendant will continue to wear competitor
product when competing at these events, in violation of his obligations under the 2016 Contract.
Indeed, on February 14, 2016, Berian erroneously claimed to be “unsponsored” and happy to be
sponsored by New Balance or “anybody that wants to support [him].”
22.

Defendant’s repudiation of the 2016 Contract, if allowed, will cause irreparable

harm to Nike. The Olympics and Olympic Trials are only held once every four years, and there
is no guarantee that Berian will continue to be top contender that he is today in 2020. Therefore,
Berian’s endorsement of Nike in 2016, is a unique marketing and promotional opportunity, the
value of which is unquantifiable and irreplaceable if Berian competes in a competitor’s product.
For these reasons, damages are impossible to measure, (although they clearly exceed the $75,000
jurisdictional limit of this Court) and no adequate remedy at law exists.

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FIRST CLAIM FOR RELIEF
(Declaratory Judgment)
23.

Nike incorporates all preceding paragraphs above as if fully set forth herein.

24.

The 2016 Contract between Nike and Defendant is a valid and enforceable

contract.
25.

Nike has fully performed its obligations under the 2016 Contract.

26.

An actual and justiciable controversy exists between Nike and Defendant relating

to the parties’ respective rights, duties, and obligations under the 2015 Contract and 2016
Contract under Oregon law, and the parties have adverse legal interests of sufficient immediacy
and reality to warrant the issuance of a declaratory judgment.
27.

Nike will be irreparably damaged if Defendant continues to breach the 2016

Contract. Declaratory relief is necessary to preclude further harm to Nike.
28.

Through its request for declaratory relief, Nike requests that this Court adjudicate

and declare the parties’ legal rights, duties, and obligations under the 2015 Contract and 2016
Contract. In particular, Nike seeks a declaratory judgment holding that:
a.

Nike properly exercised its right of first refusal under the 2015 Contract,

thereby forming the 2016 Contract, which constitutes an agreement, binding upon and
enforceable against the parties during its term; and
b.

Under the 2016 Contract, Defendant may not endorse, or be sponsored by,

athletic apparel and footwear companies including New Balance during the term of the
2016 Contract, or take any further actions inconsistent with the terms of the 2016
Contract without being in breach thereof.
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29.

Alternatively, if it is determined that a new agreement was not formed by virtue

of Nike’s match, Nike seeks a declaration that, pursuant to the right of first refusal in the 2015
Contract, Defendant is obligated to enter into an agreement on the terms contained in Nike’s
match of the New Balance Offer, and that the long-form contract sent by Nike to Defendant on
February 15, 2016, contains such terms.
SECOND CLAIM FOR RELIEF
(Preliminary and Permanent Injunctive Relief)
30.

Nike incorporates all preceding paragraphs above as if fully set forth herein.

31.

Nike has fully performed under the 2016 Contract, and satisfied all covenants and

conditions required of it under the 2016 Contract, both up to and after Defendant’s repudiation of
the 2016 Contract on or about February 15, 2016 and breach of the 2016 Contract on or about
January 29, February 14, and March 11 and 12, 2016 when he competed in competitor footwear
and apparel and on or about March 18 and 19, 2016 when he competed in competitor footwear.
32.

Defendant’s and Keflezighi’s statements and conduct evince a positive and

unequivocal intention without justification to refuse to perform under the 2016 Contract.
Defendant’s and Keflezighi’s statements and conduct are wholly inconsistent with Defendant’s
obligations and duties under the 2016 Contract.
33.

Nike would suffer serious, substantial and irreparable harm if Defendant endorsed

the products of a competitor, including New Balance for the reasons stated above. Nike has no
adequate remedy at law. Therefore, Nike is entitled to preliminary and permanent injunctive
relief barring Defendant from entering into an endorsement relationship with a Nike competitor
(including New Balance) and from endorsing any product of any of Nike’s competitors for the
remaining term of the 2016 Contract.
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PRAYER FOR RELIEF
WHEREFORE, Nike prays for the following relief:
A.

On Nike’s First Claim for Relief, a declaration that Defendant is contractually

bound to the terms of the 2016 Contract. Or, alternatively, a declaration that Defendant is
contractually obligated to enter into an agreement Nike on the terms contained in Nike’s match
of the New Balance Offer, and that the long-form contract sent by Nike to Defendant on
February 15, 2016, contained such terms.
B.

On Nike’s Second Claim for Relief, a preliminary and permanent injunction

enjoining Defendant from
1. Entering into an endorsement relationship or agreement with any Nike
competitor, including New Balance, or participating in the creation,
development, or production of any promotional material of any medium for
the remaining term of 2016 Contract; and
2. Competing in or otherwise endorsing any Nike competitor’s product
(including, but not limited to, footwear and apparel).
C.

An award to Nike of its costs and disbursements herein.

D.

Any other relief the Court deems to be appropriate.

DATED: April 29, 2016.
STOEL RIVES LLP
/s/ Per A. Ramfjord
PER A. RAMFJORD, OSB No. 934024
[e-mail]
KENNON SCOTT, OSB No. 144280
[e-mail]
Attorneys for Plaintiff Nike, Inc.
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