Zion Williamson v. Prime Sports Marketing, LLC
USCA4 Appeal: 22-1946 Doc: 52 (May 6, 2024) (2024)
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Rule of Law:
An individual actively engaged in an intercollegiate sport is a 'student-athlete' under the North Carolina Uniform Athlete Agents Act (NCUAAA). An agency contract with such an athlete is void if the agent fails to comply with the Act's registration and disclosure requirements, and a court will not retroactively find the athlete 'permanently ineligible' based on alleged but unadjudicated violations of athletic association rules.
Facts:
- Zion Williamson was a prominent freshman basketball player for Duke University.
- During his freshman year, Williamson and his family began communicating with Gina Ford, president of Prime Sports Marketing, LLC, about potential future marketing representation.
- After playing his final game for Duke but before being drafted into the NBA, Williamson signed a five-year marketing agreement with Prime Sports Marketing.
- Gina Ford was not registered as an athlete agent with the North Carolina Secretary of State, as required by the NCUAAA.
- The contract Williamson signed did not contain the specific, bold-faced warning notice to the student-athlete required by the NCUAAA.
- Shortly after signing, Williamson's parents informed Ford he was terminating the contract and then forwarded Prime's marketing strategy documents to agents at a competitor agency, Creative Artists Agency (CAA).
- Williamson formally terminated the Prime contract via email and, on the same day, signed a new marketing contract with CAA.
Procedural Posture:
- Zion Williamson sued Prime Sports Marketing and Gina Ford in the U.S. District Court for the Middle District of North Carolina, seeking a declaratory judgment that their marketing contract was void.
- Prime filed counterclaims against Williamson for breach of contract, misappropriation of trade secrets, and fraud.
- The district court denied Prime's motion to dismiss Williamson's complaint.
- The district court granted Williamson's motion for partial judgment on the pleadings, declaring the contract void under the NCUAAA because Williamson was a student-athlete and Prime had not complied with the Act.
- After discovery, the district court granted Williamson's motion for summary judgment on all of Prime's counterclaims.
- Prime Sports Marketing and Gina Ford, as appellants, appealed the district court's judgments to the U.S. Court of Appeals for the Fourth Circuit, with Zion Williamson as the appellee.
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Issue:
Does an individual who is actively engaged in an intercollegiate sport qualify as a 'student-athlete' under the North Carolina Uniform Athlete Agents Act, thereby voiding an agency contract that fails to comply with the Act's registration and disclosure requirements, even if the athlete allegedly committed acts that could have rendered him 'permanently ineligible' under NCAA rules?
Opinions:
Majority - Chief Judge Diaz
Yes, an individual actively engaged in an intercollegiate sport is a 'student-athlete' whose agency contract is subject to the NCUAAA. The plain language of the Act defines a student-athlete as an individual who 'engages in' an intercollegiate sport. The statutory clause regarding an individual who is 'permanently ineligible' does not create an exception for someone actively playing; rather, it clarifies the status of multi-sport athletes. Crucially, a determination of permanent ineligibility must be made by the relevant athletic association, such as the NCAA, and cannot be hypothesized or retroactively decided by a court based on allegations of rule violations. Because Williamson was engaged in an intercollegiate sport, he was a student-athlete protected by the Act. Prime's undisputed failure to register its agent in North Carolina and to include the statutorily required warning in the contract rendered the agreement void. Consequently, Prime's claims for breach of contract must fail, and its tort claims are also unsupported as they arise from a relationship predicated on a void contract.
Analysis:
This decision reinforces the protective purpose of the Uniform Athlete Agents Act by establishing a clear, bright-line rule for who qualifies as a 'student-athlete.' It significantly limits the ability of agents to evade statutory requirements by making collateral attacks on an athlete's eligibility based on unadjudicated allegations. The ruling solidifies that eligibility status is determined by the governing athletic bodies (like the NCAA), not by courts in subsequent contract disputes. This precedent provides greater certainty for student-athletes and holds agents to strict compliance with state regulations, preventing them from using an athlete's alleged misconduct as a defense for their own statutory violations.
