August 19, 2019

August 19, 2019

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Ski Manufacturer Chills Bode Miller's Comeback

World champion skier and six-time Olympic medalist Samuel "Bode" Miller had his eye on coming out of retirement for the 2016-17 season before a contract dispute with his former equipment sponsor, Head USA, put his hopes on ice.  For those readers who don't follow ski racing, Bode Miller is the most decorated male U.S. alpine ski racer of all time. In addition to his Olympic medals, Miller achieved 33 World Cup wins and world championship titles in various disciplines. Miller's successful career came to an abrupt hockey stop when, in his only race of the 2014-15 ski racing season at the 2015 World Championships in Colorado, he hit a gate during his super-G run and severely  injured his hamstring tendon.

Following the injury, Miller decided to explore industry opportunities outside of professional racing and ended his sponsorship relationship with Head USA by signing a termination agreement that contained a covenant that Miller would "not compete in World Cup or World Championship ski racing events for two full calendar years." After his relationship with Head USA ended, Miller began working with a competing ski equipment manufacturer, Bomber LLC ("Bomber"), in product development and as a brand ambassador.  However, apparently having quickly grown bored with his après-ski life, Miller and Bomber filed suit against Head USA in California district court in September 2016, seeking a declaratory judgment that the restrictive covenant included in his termination agreement with Head USA was void.  Miller, 39 years young, hoped that his suit would allow him to return to competition on Bomber skis, secure endorsements, and "protect his family's financial future."

Bomber is a Delaware limited liability company, based out of New York. Head USA is the U.S. distributor of a publicly traded company, Head N.V., which manufactures equipment for various sporting goods markets and is headquartered in the Netherlands.  Miller's sponsorship relationship with Head USA began in 2006 and would have extended through April 2016 if the parties had not mutually agreed to terminate the agreement early.

When Head USA learned of Miller's possible return, it quickly sent a cease and desist letter to Miller and Bomber, stating that, under the terms of the termination agreement, Miller could not compete unless it was on Head skis. Hitting this unexpected bump, Miller and Bomber filed their preemptive suit. In their suit, Miller and Bomber sought a declaratory ruling that the restrictive covenant in Miller's termination agreement with Head USA was not binding, was against public policy, and could not prevent Miller from competing under Bomber's sponsorship.  

In response, Head USA filed a motion to dismiss for lack of personal jurisdiction, arguing that Head USA is incorporated under Delaware law, with its principal place of business in Colorado, and does not have sufficient ties to California to satisfy the requirements for imposing either general or specific jurisdiction. Head USA argued Miller's status as a California resident was irrelevant to the signing and performance of the termination agreement, and, therefore, that Miller's claims did not arise from any activity by Head USA in California. Unfortunately for Miller and his fans, the California court agreed and recently dismissed Miller's action for lack of personal jurisdiction over Head USA, thereby sending Miller's suit off-piste. (See Miller v. Head USA, Inc., No. 16-1696 (C.D. Cal. Dec. 16, 2016)).

It is unclear what comes next for Miller, who issued a statement expressing his unhappiness with the outcome. Miller's attorney could refile in Colorado, but it remains to be seen whether the plaintiffs wish to expend resources litigating in the trails outside of California. Regardless, despite the disputed provision of his termination agreement with Head USA, Miller could put the avalanche of legal trouble behind him, and shock ski fans with a return to the packed powder on Bomber skis in the 2017-18 season—at the spry age of 40.

© 2019 Proskauer Rose LLP.

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L. Robert Batterman, Labor, Management, Sports, Attorney, Proskauer, Law Firm
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A partner since 1974, Bob Batterman has considerable experience representing both individual employers and multi-employer groups in union relations and collective bargaining. Much of Bob’s time is spent in day-to-day contact with clients, often in “crisis” situations where a rapid resolution of union-related problems is vital.

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Michael Cardozo, Commercial Litigation Attorney, Proskauer, Law Firm
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Michael A. Cardozo is a Partner in Proskauer’s Litigation Department and the former Corporation Counsel for the City of New York. As the city's 77th and longest serving Corporation Counsel, he was the city’s chief legal officer, headed the city's Law Department of more than 700 lawyers, and served from 2002 through 2013 as legal counsel to Mayor Michael Bloomberg, elected officials, the city and its agencies.

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