Opinion ID: 179935
Heading Depth: 4
Heading Rank: 1

Heading: Plaintiffs’ negligence claims

Text: Plaintiffs’ first state-law claim alleged that both Defendants negligently investigated Wright, Bond and IMA. To state a cause of action for negligence in Georgia, the following elements are essential: (1) A legal duty to conform to a standard of conduct raised by the law for the protection of others against unreasonable risks of harm; (2) a breach of this standard; (3) a legally attributable causal connection between the conduct and the resulting injury; and (4) some loss or damage flowing to the plaintiff’s legally protected interest as a result of the alleged breach of the legal duty. Dixie Grp., Inc. v. Shaw Indus. Grp., Inc., 693 S.E.2d 888, 895 (Ga. Ct. App. 2010) (quoting Bradley Ctr., Inc. v. Wessner, 296 S.E.2d 693, 695 (Ga. 1982)). We focus here solely on the first element, the existence of a legal duty.
14 As part of the NFLPA’s Financial Advisors Program, the NFLPA created a list of registered financial advisors. To be included on this list, an advisor had to apply with the NFLPA, pay a fee and meet the NFLPA’s eligibility requirements. The NFLPA would deny an application if the financial advisor failed to meet all of the eligibility requirements or if a background check indicated that specific judicial or regulatory actions had been taken against the advisor or revealed “[a]ny misrepresentation, material omission, or other evidence of misfeasance or malfeasance,” which “may also cause the NFLPA, in its sole discretion, to deem an Applicant unqualified to be a Registered Player Financial Advisor.” (Doc. 180, ex. 2 at 14-15.) In support of their negligence claim, Plaintiffs specifically alleged that the NFLPA owed them a “duty to exercise reasonable care while performing due diligence background checks on Wright, Bond [and] IMA,” a duty to exercise reasonable care in the evaluation and approval of Wright’s and Bond’s applications as Registered Financial Advisors under the Program requirements and [a] duty to exercise reasonable care in the monitoring of Wright’s and Bond’s compliance with the Program requirements while they continued to be registered in the Program. (Doc. 10 at 27.) 15 These duties arose directly from the CBA’s mandate that “[t]he parties will use best efforts to establish an in-depth, comprehensive Career Planning Program,” which would include “provid[ing] information to players on handling their personal finances.” (Doc. 180, ex. 1 at 80 (2002 CBA Art. LV § 12).) Undisputed evidence connected the NFLPA’s Financial Advisors Program to the NFLPA’s efforts to meet its obligations under the CBA to provide such a program. For example, Richard Berthelsen, the NFLPA’s general counsel and senior manager, stated that “[t]he Financial Advisors Program is part of the Career Planning Program mandated by the CBA and part of the NFLPA’s effort to comply with the CBA’s requirement that the NFLPA ‘provide information to players on handling their personal finances.’” (Doc. 180, ex. 4 ¶ 14.) NFLPA Director of Player Development Stacy Robinson also indicated that the Financial Advisors Program was part of the Career Planning Program. On appeal, Plaintiffs unsuccessfully attempt to dispute this evidence linking the NFLPA’s Financial Advisors Program to the CBA-mandated Career Planning Program in three ways. First, Plaintiffs point to an assertion that the NFLPA made to the Securities and Exchange Commission (“SEC”) when the NFLPA was seeking an opinion from the 16 SEC that its Financial Advisors Program would not be subject to SEC regulations pertaining to financial advisors. In distinguishing its Financial Advisors Program, in which participation by both players and advisors is voluntary, from the CBA’s mandate that all player agents must be certified by the NFLPA, the NFLPA noted that “financial advisors are not covered by this framework” that applies to contract agents. (Doc. 180, ex. 4, attach. K at 10.) Contrary to Plaintiffs’ argument, this statement to the SEC does not address whether the Financial Advisors Program itself arises from the CBA. Second, Plaintiffs point out that when the NFLPA’s Board of Representatives approved the Financial Advisors Program, there was never any mention that it was part of the CBA-mandated Career Planning Program. But that also does not contradict the NFLPA’s undisputed evidence linking the Financial Advisors Program to its compliance with the CBA’s provision mandating a Career Planning Program. Finally, Plaintiffs assert that there is no evidence that there is any Career Planning Program at all. But undisputed evidence in the record established that there is. Stacy Robinson stated that “[t]he NFLPA and the NFL have collaborated and jointly developed a host of Career Planning 17 programs and activities,” including the coaches intern program for NFL Europe; a “Broadcast Bootcamp” for current and retired players interested in a second career in broadcasting; officiating clinics for current and former players interested in officiating as a second career; a networking program; a pilot program for NFL players transitioning to second careers; an exit symposium for players who have applied for severance benefits, which includes information for players on how to manage their lives after their football careers have ended; and a business and management entrepreneurial program at the business schools of Harvard, Stanford, Penn and Northwestern Universities. (Doc. 180, ex. 7 ¶¶ 7-14.) In an effort to dispute Robinson’s declaration, Plaintiffs presented only the affidavits of Plaintiffs Crockett and Smith stating that they had never heard of the “Career Planning Program.” That is not enough to create a factual dispute sufficient to preclude summary judgment. See Holifield v. Reno, 115 F.3d 1555, 1564 n.6 (11th Cir. 1997) (holding non-movant’s “conclusory assertions” made “in the absence of supporting evidence” are insufficient to withstand summary judgment in face of movant’s undisputed relevant evidence). 18 The district court, therefore, properly held that § 301 preempted Plaintiffs’ negligence claim against the NFLPA because the duties underlying that claim arose directly from the CBA. See United Steelworkers v. Rawson, 495 U.S. 362, 369-71(1990) (recognizing “that a state-law tort action . . . may be pre-empted by § 301 if the duty” underlying the tort claim “is created by a [CBA]”); see also Clarke v. Laborers’ Int’l Union, 916 F.2d 1539, 1541-42 (11th Cir. 1990); cf. Brown v. Nat’l Football League, 219 F. Supp. 2d 372, 379-83 (S.D.N.Y. 2002) (holding NFL’s duty to train its employees properly did not arise from CBA but instead was a duty owed to any member of the public and, therefore, § 301 did not preempt state-law tort claim based upon that duty). Even if the NFLPA’s duty to conduct an adequate background investigation before including an applicant on its list of vetted financial advisors did not arise directly from the CBA’s Career Planning Program provision, which it clearly did, a court would still have to consider the CBA’s Career Planning Program provision in determining the scope of any duty the NFLPA owed Plaintiffs. Specifically, a court would have to consider the effect of that provision’s language, “that players shall be 19 solely responsible for their personal finances,” (Doc. 180, ex. 1 at 80), in determining the legal relationship that existed between the parties and their expectations stemming from that relationship. See Williams, 582 F.3d at 880-81; see also Stringer, 474 F. Supp. 2d at 908-11; Holmes v. Nat’l Football League, 939 F. Supp. 517, 527-28 (N.D. Tex. 1996). 14
14 The district court treated this language as pertaining to Defendants’ defense to Plaintiffs’ state-law claims. Circuits are split as to whether a defense, as opposed to a claim, that is substantially dependent on the terms of a CBA compels § 301 preemption. Compare Fry v. Airline Pilots Ass’n, 88 F.3d 831, 838 n.8 (10th Cir. 1996) (“[I]f a CBA must be interpreted to resolve the claim, even if the CBA interpretation is initiated by the defense, the federal or state court must hold the claim preempted by § 301.”), Smith v. Colgate-Palmolive Co., 943 F.2d 764, 770-71 (7th Cir. 1991) (noting that, in deciding whether the district court properly entered summary judgment for defendant on § 301 preemption grounds, court can inquire whether plaintiffs’ state-law claim is substantially dependent on analysis of a CBA and in doing so is “free to resolve this question by looking beyond the plaintiffs’ complaint to the defenses [the defendant] asserts”), and Hanks v. Gen. Motors Corp., 859 F.2d 67, 70 (8th Cir. 1988) (in denying motion to dismiss and remanding for further record development, noting that “[s]hould affirmative defenses attempt to implicate the [CBA], the district court should carefully analyze whether in actuality construction or interpretation of the [CBA] is required in considering such defenses”), with Williams v. Nat’l Football League, 582 F.3d 863, 872-73, 879 & n.1 (8th Cir. 2009) (in addressing summary judgment decisions on merits of § 301 preemption, holding a defendant’s defenses are not relevant to determining whether § 301 preempts a state-law cause of action), cert. denied, 2010 WL 1940794 (U.S. Nov. 8, 2010); Ward v. Circus Circus Casinos, Inc., 473 F.3d 994, 996-98 (9th Cir. 2007) (in reversing summary judgment for defendant on plaintiffs’ state-law tort claims, holding “[a] defense based on the CBA is alone insufficient to require preemption”). See generally Williams, 582 F.3d at 879 n.13 (noting that, in the Eighth Circuit, “[w]hen faced with conflicting precedents . . ., [a panel of the Eighth Circuit is] free to choose which line of cases to follow”). We need not address this question here, however, because the language of the Career Planning Program provision of the CBA implicates the necessary elements of Plaintiffs’ claims. See id. at 881 (holding § 301 preempted state-law claims alleging negligence and breach of fiduciary duty where CBA’s language was relevant to the duty underlying those claims). 20 It is undisputed that the NFL will, at a player’s or former player’s request, conduct a background check on a potential financial advisor or any other individual or entity with whom a player might do business. In light of that, Plaintiffs alleged that the NFL owed them a “duty to exercise reasonable care while performing due diligence background checks on Wright, Bond [and] IMA.” (Doc. 10 at 27.) The NFL acknowledged in its pleadings before the district court that it performed these background checks as part of the CBA-mandated Career Planning Program.15 Thus, any duty the NFL owed Plaintiffs to conduct these investigations with reasonable care arose directly from the CBA. Even if it did not, in determining the scope of any duty the NFL owed Plaintiffs (which is part of Plaintiffs’ affirmative case), we would, again, still have to consult the CBA to determine the scope of the legal relationship between Plaintiffs and the NFL and their expectations based 15 (See Doc. 185-2 at ¶ 5 (“The broad scope of the protection for which the NFLMC bargained included, but was not limited to, activities conducted, supported by, or promoted through the Career Planning Program, such as background checks by NFL security representatives.” (citing to the Declaration of Dennis Curran, NFL Sr. vice president and NFLMC general counsel)); Doc. 185-3 ¶ 6 (“The NFLMC intended for activities supported by or promoted through the Career Planning Program, such as background checks by NFL Security Representatives, to be within the scope of the protection for which it had bargained in Article LV, Section 12” of the CBA (citing Curran’s Declaration)); Doc. 185-5 ¶ 9 (“The business inquiries conducted by NFL security representatives are promoted and supported by the Career Planning Program.” (Curran Declaration.)).) 21 upon that relationship, especially in light of the Career Planning Program’s language indicating that players were “solely responsible for their personal finances.” (Doc. 180, ex. 1 at 80.) 2. Plaintiffs’ negligent misrepresentation claims Plaintiffs’ second claim against both the NFL and the NFLPA was one for negligent misrepresentation; these claims may be considered together. Under Georgia law, “[t]he essential elements of a claim of negligent misrepresentation are . . . ‘(1) the defendant’s negligent supply of false information to foreseeable persons, known or unknown; (2) such persons’ reasonable reliance upon that false information; and (3) economic injury proximately resulting from such reliance.’” Futch v. Lowndes Cnty., 676 S.E.2d 892, 896 (Ga. Ct. App. 2009) (quoting Hardaway Co. v. Parsons, Brinckerhoff, Quade & Douglas, Inc., 479 S.E.2d 727, 729 (Ga. 1997)). 22 a. Negligent supply of false information The element requiring proof that Defendants negligently supplied Plaintiffs with false information encompasses a claim of negligence which, again, requires proof, among other things, that Defendants owed Plaintiffs a duty. See Newitt v. First Union Nat’l Bank, 607 S.E.2d 188, 196 (Ga. Ct. App. 2004). In support of their negligent misrepresentation claim, Plaintiffs alleged that both Defendants “owed the duty to Plaintiffs to act reasonably and competently in the provision of information to Plaintiffs concerning the background of Wright, Bond, [and] IMA.” (Doc. 10 ¶ 93.) In addition, Plaintiffs alleged that the “NFLPA further owed the duty to Plaintiffs to act reasonably and competently in the listing of Wright, Bond[,] and IMA as Registered Financial Advisors in the Program because such information reflected that Wright, Bond[,] and IMA met all program requirements, including that they had adequate insurance coverage.” (Id. ¶ 94.) For the same reasons set forth above, each of these duties arose directly from the CBA’s mandate that both the NFL and the NFLPA use “best efforts to establish [the] Career Planning program.” (Doc. 180, ex. 1 at 80.) And once again, even if that was not the case, the determination of 23 any duty Defendants owed Plaintiffs to provide information about Wright, Bond and IMA was substantially dependent on, and the scope of the duty will be sculptured by, the language of the Career Planning Program provision of the CBA, and its indication that players were “solely responsible for their personal finances.” (Id.) b. Plaintiffs’ reasonable reliance Even if Plaintiffs established that Defendants owed them a duty independent of the CBA, which they have not, to recover under a negligent misrepresentation claim, Plaintiffs also had to “show they actually and justifiably relied on the representations” Defendants made regarding Wright, Bond and IMA. Benefit Support, Inc. v. Hall Cnty., 637 S.E.2d 763, 773 (Ga. Ct. App. 2006) (quotation, emphasis, alteration omitted). But here again the determination of whether Plaintiffs reasonably relied on Defendants’ alleged misrepresentations is substantially dependent on the CBA’s language indicating that the Career Planning Program “will . . . provide information to players on handling their personal finances, it being understood that players shall be solely responsible for their personal finances.” (Doc. 180, ex. 1 at 80 (emphasis added).) That is because, under Georgia law, “the mere presence of [a] 24 disclaimer,” regardless of whether or not the plaintiff saw it, can “render [the plaintiffs’] alleged reliance unreasonable.” Mitchell v. Ga. Dep’t of Cmty. Health, 635 S.E.2d 798, 804 (Ga. Ct. App. 2006) (addressing representations made on website that also contained disclaimers); see also Marquis Towers, Inc. v. Highland Grp., 593 S.E.2d 903, 907 (Ga. Ct. App. 2004) (noting the question of justifiable reliance “depends upon the circumstances under which the report was made”). Therefore, because the court would have to address the disclaimer language in the CBA in order to resolve the reasonable-reliance element of Plaintiffs’ negligent misrepresentation claims, § 301 preempts these claims for that reason as well. Cf. Trustees of the Twin City Bricklayers Fringe Benefit Funds v. Superior Waterproofing, Inc., 450 F.3d 324, 331-32 (8th Cir. 2006) (holding § 301 preempted Minnesota claims for fraudulent or negligent misrepresentation because court would have to refer to language of CBA to determine whether Plaintiff was justified in relying on Defendant’s alleged misleading statements that may have contradicted CBA’s language). 3. Plaintiffs’ breach of fiduciary duty claims 25 Plaintiffs’ third state-law claim alleged that both Defendants breached fiduciary duties owed to Plaintiffs. Under Georgia law, “[e]stablishing a claim for breach of fiduciary duty requires proof of three elements: (1) the existence of a fiduciary duty; (2) breach of that duty; and (3) damage proximately caused by the breach.” Paschal v. Fulton-DeKalb Hosp. Auth. Emp. Ret. Plan, 699 S.E.2d 357, 362 (Ga. Ct. App. 2010) (citation and quotation omitted). Again we focus on the first element, the existence of a fiduciary duty. Georgia law provides that [a] fiduciary or confidential relationship arises where one party is so situated as to exercise a controlling influence over the will, conduct, and interest of another or where, from a similar relationship of mutual confidence, the law requires the utmost good faith, such as the relationship between partners, principal and agent, etc. The party asserting the existence of a fiduciary or confidential relationship bears the burden of establishing its existence. When a fiduciary or confidential relationship is not created by law or contract, we must examine the facts of a particular case to determine if such a relationship exists. Savu v. SunTrust Bank, 668 S.E.2d 276, 282 (Ga. Ct. App. 2008) (quotation omitted). In support of this claim, Plaintiffs alleged only that “Defendants have maintained a close and special relationship with each of the Plaintiffs such that Defendants were in a position to, and did, exercise a controlling influence over the will, conduct, and/or interest of Plaintiffs.” (Doc. 10 26 ¶ 101.) Plaintiffs also alleged that “Defendants knew or should have known that Plaintiffs placed confidence and trust in them to exercise the highest standard of care and competence while performing due diligence background checks on Wright, Bond [and] IMA . . . in order to ensure their integrity and fitness as financial advisors to the Plaintiffs.” (Id. ¶ 102.) Specifically as to the NFLPA’s operation of its Financial Advisors Program, Plaintiffs further alleged that the NFLPA also knew or should have known that Plaintiffs placed confidence and trust in them to exercise the highest standard of care and competence in approving the applications of Wright, Bond and IMA for registration as financial advisors under the NFLPA’s Program and in monitoring Wright’s, Bond’s and IMA’s continuing compliance with Program requirements for purposes of renewing and/or maintaining Wright’s, Bond’s and IMA’s registration in the Program. (Id. ¶ 103.) The fiduciary-duty claims supported by these allegations directly arise from the CBA’s mandate that Defendants “use best efforts to establish [the] Career Planning Program,” which includes the provision of “information to players on handling their personal finances,” (Doc. 180, ex. 1 at 80). Further, resolution of these claims is substantially dependent on the interpretation of the CBA’s language providing that “players shall be solely responsible for their personal finances.” (Id.) Cf. Schuver v. 27 MidAm. Energy Co., 154 F.3d 795, 799 (8th Cir. 1998) (holding § 301 preempted claim for breach of fiduciary duty because court had to determine whether alleged oral contracts underlying that claim were superseded or contradicted by terms of CBA). 4. The status of some of Plaintiffs as retirees does not change this analysis Lastly, some of the Player-Plaintiffs argue that, because they were retired at the time they made their ill-fated investments with IMA and thus were not at that time members of the NFLPA’s bargaining unit, § 301 cannot preempt their claims, nor the claims of the other investment-entity Plaintiffs which are derived from duties Defendants owed the Player-Plaintiffs.16 Although these Player-Plaintiffs remained members of the NFLPA after their retirement, the NFLPA’s bargaining unit does not include retired NFL players. 17 (It appears, furthermore, that Player-Plaintiffs were members of the bargaining unit when the 1993 CBA 16 Because Plaintiff Carlos Emmons was an active NFL player at the time he invested with IMA, Plaintiffs do not make this argument as to him. 17 The NFLPA bargaining unit is limited to players currently employed by an NFL club, those who have previously been employed by an NFL club and “who are seeking employment with an NFL Club,” all rookie players after they are selected in the draft, and all undrafted rookies once they begin negotiating with an NFL club for employment. (Doc. 180, ex. 1 (2002 CBA Preamble) at 5.) 28 first containing the Career Planning Program was agreed to or was extended.) Membership in the bargaining unit, however, is not dispositive of whether § 301 preempts Plaintiffs’ state-law claims. Even when retirees are not part of the recognized bargaining unit and thus the union has no continuing obligation to bargain on their behalf, the union and employer can still choose to negotiate benefits for retirees. See Allied Chem. & Alkali Workers of Am., Local Union No. 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157, 171 n.11, 181 n.20 (1971). And where they do so, retirees can enforce under §301 a provision in the collective bargaining agreement to provide them with retirement benefits. See id. at 181 n.20; see also Stewart v. KHD Deutz of Am., Corp., 980 F.2d 698, 699-700, 702 (11th Cir. 1993) (recognizing § 301 governed retired employees’ claim that CBA precluded employer from modifying their health insurance benefits). In this case, the NFLPA negotiated with the NFL for the CBA’s clause providing for the Career Planning Program. And no one disputes that the benefits from that program are available to retired as well as current 29 players.18 Thus, it appears that Plaintiffs could seek to enforce their rights in the Career Planning Program under § 301. The relevant question, for § 301 preemption is, again, whether the court will be required to interpret or apply the CBA to resolve the retirees’ claims. And, as explained above, Plaintiffs’ state-law claims arise from the CBA, or are substantially dependent upon the court’s interpretation of the CBA. Therefore, § 301 preempts those claims. 19 5. Conclusion as to preemption For these reasons, we uphold the district court’s determination that § 301 preempts Plaintiffs’ state-law claims. We, therefore, affirm the district court’s decision granting the NFL and NFLPA summary judgment on those claims. In light of that determination, we need not consider Plaintiffs’ challenge on appeal to the alternate basis on which the district court granted the NFLPA summary judgment—that the disclaimer 18 No one disputes that the Career Planning Program’s services in general, and the Financial Advisors Program and the NFL’s background checks in particular, were available to retired NFL players such as these Plaintiffs. These services were among a number of benefits that the CBA provides for former players, including “post-career” medical and dental insurance, an annuity plan, and a retirement plan. 19 The cases on which Plaintiffs rely to argue to the contrary are inapposite. Most of them involve claims that do not arise out of, and are not dependent upon, a collective bargaining agreement. As we have pointed out previously, Plaintiffs’ claims here are dependent upon language in the CBA. 30 contained in the NFLPA’s Financial Advisors Program regulations precluded Plaintiffs’ claims against it. IV. Summary judgment for Plaintiffs on the NFLPA’s counterclaims The district court granted Plaintiffs summary judgment on the NFLPA’s four counterclaims. On appeal, the NFLPA challenges the denial of relief on its second, third and fourth counterclaims. A. NFLPA’s second and fourth counterclaims In its second counterclaim, the NFLPA sought indemnification from Plaintiffs Stephen Atwater and Blaine Bishop for the NFLPA’s costs in defending this action. This claim was based on allegations both that Atwater and Bishop, during their employment with IMA, became aware of the wrongdoing at IMA but never disclosed that wrongdoing to the other Plaintiffs, and that Atwater and Bishop implicitly agreed to indemnify the NFLPA because they “were contractually bound not to sue or impose any liability on the NFLPA for its operation of the Player Financial Advisors Program,” in light of the NFLPA’s disclaimers of liability for any acts of the financial advisors listed in its Financial Advisors Program. (Doc. 47 at 47-48.) In its fourth counterclaim, the NFLPA sought contribution from 31 Atwater and Bishop “[t]o the extent that the NFLPA is held liable to any of the” Plaintiffs. (Id. at 49.) After granting Defendants summary judgment on all of Plaintiffs’ claims, the district court held that Plaintiffs Atwater and Bishop were entitled to summary judgment on these counterclaims: Under Georgia law, liability must be imposed before a right to indemnity or contribution will arise. Because the Court has granted summary judgment in favor of the NFLPA on all of Plaintiffs’ claims against it, no liability has been established, and no rights to contribution, indemnity, or attorneys’ fees have arisen. (Doc. 265 at 33 (citations omitted).) On appeal, the NFLPA only argues, without any supporting authority, that the district court should have dismissed these indemnity and contribution claims as moot rather than granting Plaintiffs summary judgment. The district court, however, did not err in granting Atwater and Bishop summary judgment under these circumstances. See Perling v. Citizens & S. Nat’l Bank, 300 S.E.2d 649, 678 (Ga. 1983) (affirming grant of summary judgment on indemnification claim because underlying claim failed); Emergency Prof’ls of Atlanta, P.C. v. Watson, 654 S.E.2d 434, 435 (Ga. Ct. App. 2007) (granting summary judgment to defendants named in contribution and indemnification claims after holding that no 32 contribution or indemnity claim “exist[ed]” because the party seeking to recover was not legally obligated to make the payment for which he sought indemnification and/or contribution); cf. Greenhorne & O’Mara, Inc. v. City of Atlanta, 679 S.E.2d 818, 819, 820 (Ga. Ct. App. 2009) (holding that, where purported joint tortfeasor’s liability had been rejected in a previous action, contribution claim failed to state a claim upon which relief can be granted). But see Ga. Power Co. v. Franco Remodeling Co., 525 S.E.2d 152, 153 (Ga. Ct. App. 1999) (holding that, because plaintiff’s claims against power company were barred, power company’s counterclaim for indemnification was moot).