Nike USA, Inc. v. Berian

Filing 13

Motion to Expedite or Accelerate Preliminary Injunction Hearing and Related Discovery. Expedited Hearing requested. Filed by Nike USA, Inc.. (Attachments: # 1 Exhibit 1) (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. 3:16-cv-00743-SB

Plaintiff,
v.
BORIS BERIAN, an individual California
resident,
Defendant.

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PLAINTIFF NIKE USA, INC.’S
MOTION FOR EXPEDITED
PRELIMINARY INJUNCTION
HEARING AND RELATED
DISCOVERY
EXPEDITED CONSIDERATION
REQUESTED

LR 7-1(A) CONFERRAL CERTIFICATION
Pursuant to Local Rule 7-1(a), the undersigned counsel certifies that he has attempted in
good faith to confer with counsel for all parties to resolve the dispute and has been unable to do
so.
REQUEST FOR EXPEDITED CONSIDERATION
Plaintiff Nike USA, Inc. (“Nike”) requests expedited consideration of this motion, which
involves a pending request for preliminary injunctive relief. By its nature, the relief sought in
this motion is time sensitive and good cause exists for considering this motion on an expedited
basis.
MOTION FOR EXPEDITED PRELIMINARY INJUNCTION HEARING AND
RELATED DISCOVERY
On June 1, 2016, Nike filed a Motion for Temporary Restraining Order and Order to
Show Cause Why Preliminary Injunction Should Not Issue (“TRO Motion”)[ Dkt. No. 6],
seeking to enjoin Defendant Boris Berian (“Defendant”), from competing in New Balance
footwear and apparel in violation of his contractual obligations to Nike. Nike’s request for
injunctive relief is time sensitive for two reasons:
•

Defendant is slated to compete in the U.S. Olympic Team Trials in July and is a
favorite to qualify for and compete at the 2016 Olympics in Rio de Janeiro, Brazil in
August. Absent injunctive relief in advance of those events, Nike will suffer
irreparable harm.

•

Under Nike’s 2015 Track & Field Contract with Defendant, Nike has 180 days in
which to exercise its right of first refusal. That 180 day period expires on June 28,
2016. Absent resolution of Nike’s request for injunctive relief in advance of that

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date, Defendant will no doubt attempt to argue that Nike’s claims are moot. While
Nike disagrees with any such arguments, it will necessarily be prejudiced by having
to rebut them.
Based on these considerations, Nike is now moving for an Order setting a hearing on its
pending request for preliminary injunctive relief in advance of June 28, 2016 and allowing
limited and targeted discovery to allow it to support its claims for injunctive relief on the
following schedule:
•

By 5:00 PM on June 8, 2016, the parties shall exchange any narrow and focused
document requests, and any initial Fed. R. Civ. P. 30(b)(6) deposition notices, which
shall be strictly limited to issues likely to be disputed at the preliminary injunction
hearing. All documents referenced herein should be served by email, in addition to
any other means of service. The parties’ document requests shall be tailored to a
sufficiently narrow universe of documents and custodians such that production can
reasonably be completed in the expedited schedule requested herein. Nike’s proposed
document requests are attached hereto as Exhibit 1.

•

By 5:00 PM on June 10, 2016, the parties shall serve any additional deposition
notices relating to the preliminary injunction motion.

•

By 5:00 PM on June 13, 2016, the parties shall serve written responses to document
requests; shall serve written objections and designations of witnesses in response to
Fed. R. Civ. P. 30(b)(6) deposition notices; and shall produce documents in response
to document requests to the extent reasonably possible.

•

Each party may take depositions, including one Fed. R. Civ. P. 30(b)(6) deposition, as
applicable, of each other party to this action. In total, each party shall be limited to a

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total of no more than two deponents and eight hours of deposition time prior to the
preliminary injunction hearing. Depositions shall be conducted by telephone on or
before June 17, 2016, or as otherwise agreed by the parties. Each party’s document
production shall be completed prior to any deposition of it or its representative
pursuant to Fed. R. Civ. P. 30(b)(6).
In making this motion, Nike is mindful that it has already moved for a Temporary
Restraining Order, but even assuming this Court grants such relief without a hearing, the
resulting injunction cannot exceed 14 days, after which a preliminary injunction hearing would
have to be held. Fed. R. Civ. P. (b)(2). Because of the time sensitive nature of its claims, Nike is
merely seeking to assure that the preliminary injunction hearing itself is scheduled early enough
and with adequate discovery to avoid the irreparable harm Nike is seeking to prevent.
MEMORANDUM IN SUPPORT
A.

Factual and Procedural Background
In this action for declaratory and injunctive relief, Nike seeks to preclude Defendant, a

highly successful runner who is a favorite to qualify for the 2016 Olympic Games, from
continuing to violate his contractual obligations to Nike. Although Defendant is currently under
an exclusive endorsement contract with Nike, he has chosen to compete in the footwear and
apparel of one of Nike’s competitors, New Balance Athletics, Inc. (“New Balance”). See TRO
Motion at 4-6.
Nike initially agreed to endorse Defendant pursuant to a 2015 Track & Field Contract,
dated June 17, 2015 (the “2015 Contract”). Declaration of Ben Cesar [Dkt. No. 8] (“Cesar
Decl.”) ¶ 5; id. Ex. 1. The 2015 Contract included a right of first refusal under which Nike had

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the right to enter a new agreement with Defendant on terms no less favorable than those offered
by any competitor. Id. ¶ 6. Specifically, Section 5 of the 2015 Contract provides that:
During the Contract Period and for a 180-day period thereafter,
NIKE shall have a right of first refusal with regard to any bona fide
third-party offer received by ATHLETE and which ATHLETE
desires to accept. ATHLETE shall submit in writing to NIKE (on
the third-party’s letterhead) the specific terms of any such offer.
NIKE shall have ten (10) business days from the date of its receipt
of such third-party offer to notify ATHLETE in writing if it will
enter into a new contract with ATHLETE on terms no less
favorable to ATHLETE than the material, measurable and
matchable terms of such third-party offer.
Id.; id. Ex. 1 at 1 (emphasis added).
Pursuant to that section of the 2015 Contract, on January 20, 2016, Defendant submitted
an offer he had received from New Balance (the “New Balance Offer”) to Nike. Id. ¶ 7;
id. Ex. 3. Three days later, on January 22, 2016, Nike unequivocally matched the New Balance
Offer, thereby exercising its right of first refusal and creating a binding contract between
Defendant and Nike (the “2016 Contract”). Id. ¶ 8; id. Ex. 4; TRO Motion at 4-5, 9-12.
Despite the fact that Nike clearly matched the New Balance Offer, which consisted only
of a term sheet and was not a full written contract, Defendants has suggested that Nike did not
match the New Balance Offer because it did not agree to a proposed contract without any
reductions, which are standard in the industry. 1 Moreover, since January 22, Defendant has
competed in New Balance footwear and/or apparel at multiple events and promoted New
Balance via his social media accounts. Cesar Decl. ¶¶ 12-13; id. Exs. 7-8. Although Defendant
claims he is currently without an apparel and footwear sponsor, these actions clearly suggest that

1

Standard “reductions” provide for a reduction of an athlete’s compensation if the athlete
fails to perform his or her obligations under the contract or perform consistent with expectations.
Cesar Decl. ¶ 8.
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he has been promised compensation and/or is being compensated by New Balance either directly
or through his track club, Big Bear Track Club, pending expiration of the 180-day right of first
refusal period in the 2015 Contract. See id. ¶ 13. That 180-day period ends on June 28, 2016,
just days before Defendant is set to compete in the Olympic Trials, which start on July 1, 2016.
See id. ¶ 14. Because these dates are fast approaching, Nike filed its TRO Motion on June 1,
2016, and seeks a preliminary injunction hearing prior to June 28, 2016.
B.

Argument
The Federal Rules grant this Court wide discretion to expedite discovery. See, e.g.,

FRBP 7026, FRCP 26(d)(1) (court may order discovery to occur before Rule 26(f) conference);
FTC v. NAFSO VLM, Inc., 2012 U.S. Dist. LEXIS 44244, at *4 (E.D. Cal. Mar. 29, 2012)
(district courts may grant requests for expedited discovery when good cause is shown and
especially when preliminary injunction is pending).
Here, good cause exists for an order allowing the proposed expedited discovery. Under
standard discovery procedure, the discovery sought by Nike would not be available until after the
proposed preliminary injunction hearing date or even after the July Olympic Trials. Moreover,
the limited discovery requested is necessary to the proper resolution of Nike’s request for a
preliminary injunction. To secure a preliminary injunction, Nike will have to establish the
likelihood that it will prevail at trial. Winter v. Natural Resources Defense Council, Inc., 555
U.S. 7, 23, 129 S.Ct. 365, 374 (2008).
In this regard, Nike’s claims turn on whether it properly exercised its right of first refusal
under the 2015 Contract, forming the 2016 Contract (and precluding Defendant from endorsing
or negotiating further with any of Nike’s competitors). Defendant has suggested that Nike did
not match the New Balance Offer because it did not agree to a proposed contract without any

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standard industry reductions. Nike’s position is that it unequivocally agreed to match the seven
terms offered by New Balance, regardless of whether they included reductions (which were not
mentioned in the term sheet provided to Nike). See TRO Motion at 4-5. At the same time,
however, Nike firmly believes that any New Balance contract actually offered to Defendant
included reductions, given that they are such a standard provision of endorsement contracts.
Given that Defendant has commenced competing in New Balance footwear and apparel as well
as promoting New Balance product on social media, Nike also has reason to believe that
Defendant is being compensated by New Balance either directly or through his track club, Big
Bear Track Club, pending expiration of the 180-day right of first refusal period in the 2015
Contract.
Under these circumstances, Nike should be permitted to take limited discovery of the
communications between Defendant, his agent, and New Balance relating to the terms of the
New Balance Offer and/or any form contracts actually proposed by New Balance, all of which
Defendant has refused to produce on a voluntary basis. Such communications would not only
reveal the true nature of the New Balance offer, but also potential admissions by Defendant
regarding the fact that Nike has in fact matched the New Balance offer. In addition, Nike should
be permitted to take discovery regarding any payments received by Defendant from New
Balance, either directly or indirectly, which would confirm his violation of his contractual
obligations with Nike. Such expedited discovery is plainly justified. See, e.g., Ellsworth
Associates, Inc. v. United States, 917 F. Supp. 841, 844 (D.D.C. 1996) (“Expedited discovery is
particularly appropriate when a plaintiff seeks injunctive relief because of the expedited nature of
injunctive proceedings.”); Revlon Consumer Prods. Corp. v. Jennifer Leather Broadway, Inc.,
858 F. Supp. 1268, 1269 (S.D.N.Y. 1994) (expedited discovery granted in connection with
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motion for injunctive relief); Optic-Electronic Corp. v. U.S., 683 F. Supp. 269, 271 (D.D.C.
1987) (in case involving motion for injunction relief, court granted motion for expedited
discovery finding that “[i]t is in the best interest of all parties to have this case resolved as soon
as possible.”).
Finally, expedited discovery will not prejudice the defendant. The requested discovery is
narrowly tailored to the issues that will be presented at the preliminary injunction hearing, and is
not overly burdensome. (Nike’s proposed Requests for Production are attached hereto as
Exhibit 1.) Moreover, the materials being sought are relevant to the core issues that will be
litigated in this case regardless of the outcome of Nike’s request for preliminary injunctive relief.
For the forgoing reasons, Nike respectfully requests that this Court enter an order
permitting it to conduct expedited discovery in advance of the preliminary injunction hearing and
setting that hearing on a date prior to June 28, 2016.

DATED: June 3, 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 USA, Inc.

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CERTIFICATE OF SERVICE
I hereby certify that I served the foregoing PLAINTIFF NIKE USA, INC.’S MOTION
FOR EXPEDITED PRELIMINARY INJUNCTION HEARING AND RELATED
DISCOVERY on the following named persons on the date indicated below by

 mailing with postage prepaid
 hand delivery
 facsimile transmission
 overnight delivery
 email
 notice of electronic filing using the CM/ECF system

to said persons a true copy thereof, contained in a sealed envelope, addressed to said persons at
his or her last-known addresses indicated below.
William P. Ferranti
The Ferranti Firm LLC
1819 SW 5th Ave. #403
Portland, Oregon 97201
Email: [e-mail]

Mr. Vincent C. Ewing
Alvarez-Glasman & Colvin
Suite 400 - West Tower
13181 Crossroads Parkway North
City of Industry, CA 91746
Email: [e-mail]

DATED: June 3, 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 USA, Inc.

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