Case 2:19-cv-02137-KHV-GEB Document 54 Filed 12/06/19 Page 1 of 6
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS DAVID BEATY and DB SPORTS, LLC, ) ) ) Case No. 2:19-CV-02137 v. ) ) KANSAS ATHLETICS, INC., )
PLAINTIFFS’ MOTION TO COMPEL
Plaintiffs need discovery to evaluate and challenge Kansas Athletics, Inc.’s (KAI) investigation and purported interpretation of what is and is not an NCAA violation for which it would terminate a coach for cause. This discovery will tend to show whether KAI would have terminated Coach Beaty for cause, in good faith, for alleged NCAA rule infractions.
At the conclusion of a telephonic conference on December 4, 2019, this Court ruled
Plaintiffs sought discoverable information that KAI needed to provide. This Court then ordered
Plaintiffs to submit a 5-page motion to compel and KAI to file a 5-page response. (ECF No. 52)
This briefing cannot contain any argument that was not presented in the parties’ pre-conference summaries or during the telephonic conference. (Id.)1
BACKGROUND
A. The claims and defenses at issue in this case put KAI’s motives in play.
On November 4, 2018, KAI’s CEO, Jeff Long, told Coach Beaty in person that KAI was terminating his contract without cause and that KAI would honor its obligation to pay out the remaining $3 million left on the contract per its terms. Mr. Long then released a statement to the media and held a press conference confirming KAI’s commitment publicly. For the stability of
Kansas’ football program, KAI asked David Beaty to coach out the rest of the season, and in
1 For the Court’s convenience, Plaintiffs’ summary of the dispute is attached as Exhibit 1 to this Motion. KAI’s summary of the dispute is attached as Exhibit 2 to this Motion.
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reliance on KAI’s promises to pay him, David Beaty agreed. At the end of the season, KAI wrote a memo confirming it had terminated him without cause and would pay out the $3 million it owed.
Under David Beaty’s Employment Agreement with KAI (the “Agreement”), a “without cause” termination entitled Plaintiffs to receive $3 million paid in installments. A “for cause” termination did not. In view of the forfeiture, the Agreement contained a detailed procedure for
KAI to terminate Coach Beaty “for cause.” (Ex. 3 – The Agreement at Attachment A.) KAI failed to follow this procedure with Coach Beaty.
On December 13, 2018, the General Counsel for the University of Kansas wrote a letter to
David Beaty informing him that KAI would not make the first payment it owed while KAI
“investigated” whether a NCAA rule violation involving a staff member may have occurred.
After multiple attempts to have KAI make the payments it promised, Plaintiffs filed this suit. Plaintiffs currently assert two claims: (1) breach of contract and (2) violations of the Kansas
Wage Payment Act (“KWPA”) on behalf of David Beaty only. A willful violation of the KWPA entitles David Beaty to statutory penalties. K.S.A. § 44-315(b).2
KAI has asserted several defenses, including the after acquired evidence defense, and various claims that David Beaty committed a prior material breach of the Agreement. (ECF No.
34 at 14, ¶¶ 4-7)
B. KAI won’t provide insight into why it hasn’t fired coaches for cause when they were accused of or found to have committed more serious NCAA violations.
David Beaty denies that he participated in or had direct knowledge of any alleged NCAA rules violations while he was employed by KAI, and the NCAA has not reached any conclusions as to violations by the football program under Coach Beaty. Regarding David Beaty, the NCAA
2 During the telephonic hearing, KAI argued that if discovery is permitted solely under the KWPA claim, then the Court should stay discovery so it could file a dispositive motion on the KWPA claim. But KAI’s first dispositive motion on the KWPA was heard and failed because the Court determined fact questions exist. (ECF No. 30.)
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alleges that an analyst on the Kansas football staff may have provided instruction to players on a handful of occasions during Coach Beaty’s tenure.
KAI’s handling of Coach Beaty is different than its apparent handling of any other coach in KU history. It does not appear that KAI has ever terminated a coach for cause (including David
Beaty) nor suspended pay based on alleged NCAA rules violations. As such, David Beaty seeks to develop information relating to KAI’s disparate treatment and selective enforcement of its contractual rights with similarly situated coaches, and determine whether KAI’s actions are willful.
This discovery mostly falls into three main categories of inquiry:
KAI’s actions and employment decisions in the wake of the NCAA alleging multiple Level 1 violations against Kansas basketball that relate to a federal criminal conviction secured in the Southern District of New York that featured references to multiple Kansas basketball coaches—who are still employed by KAI—during the trial; KAI’s actions and employment decisions in the wake of the Kansas City Star publishing a detailed account of Kansas football having multiple analysts engaging in impermissible coaching activities in 2019 under Les Miles;3 and KAI’s actions and employment decisions in the wake of the NCAA alleging and then determining that Kansas football had engaged in academic fraud under Mark Mangino leading to Kansas being placed on probation and losing multiple scholarships between 2007 and 2009.
Requests and interrogatories along these lines seek communications concerning these events, any investigations they spawned, contracts for the relevant coaches, and the information exchanged by and between KAI and the Big 12 Conference and/or the NCAA relating to these events.4 Some requests expanded the scope of this inquiry to determine whether KAI has ever terminated a coach
3 Violations that KU Said Justified Withholding Beaty’s $3M Pay Are Ongoing, Experts Say, Kansas City Star, Sept. 27, 2019, https://www.kansascity.com/sports/college/big-12/university-of-kansas/article235530772.html 4 For the Les Miles category, an abundance of videographic footage exists showing how Kansas football analysts are being utilized, and Plaintiffs have requested it.
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for cause or suspended their pay and, if so, the reason why. KAI refused to respond to this discovery on the grounds it isn’t relevant to any claim or defense at issue in this case.
ARGUMENT
“Parties may obtain discovery regarding any non-privileged matter that is relevant to any party’s claim or defense…. Information within this scope of discovery need not be admissible in evidence to be discoverable.” FED. R. CIV. P. 26(b). This Court has “broad discretion in the resolution of non-dispositive discovery disputes.” Comeau v. Rupp, 142 F.R.D. 683, 684-85 (D.
Kan. 1992) (holding the clearly erroneous or contrary to law standard applies).
KAI’s defenses in this case put the disputed discovery into play. Under the after-acquired evidence defense, “[KAI] must first establish that the wrongdoing was of such severity that [David
Beaty] in fact would have been terminated on those grounds alone if the [KAI] had known of it at the time of the discharge.” McKennon v. Nashville Banner Pub. Co., 513 U.S. 352, 362–63 (1995)
(emphasis added). KAI’s answer cited Gassmann—a wrongful termination case that did not involve a protected class—which holds “[t]here is no reason why the after-acquired evidence doctrine should not apply if the three-prong test of McKennon can be satisfied.” (ECF No. 34 at
14, ¶ 4 (citing Gassmann v. Evangelical Lutheran Good Samaritan Soc., Inc., 261 Kan. 725, 933
P.2d 743 (1997)). Yet, during our recent hearing, KAI argued Gassman somehow does not require it to satisfy McKennon. But Gassman explicitly requires all three prongs of McKennon to be satisfied. As this Court pointed out, by invoking Gassman, KAI put its state of mind at issue.
Further, KAI alleges that Coach Beaty breached provisions of the Agreement. But “[t]o warrant rescission, the breach must be material and the failure to perform so substantial as to defeat the object of the parties in making the agreement.” In re Johnson’s Estate, 202 Kan. 684, 691, 452
P.2d 286, 292 (1969)(emphasis added). That is a fact-based inquiry. Thus, based on KAI’s own
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defenses, if KAI has repeatedly and contemporaneously continued to employ and pay coaches accused of committing the same or more serious offenses, Coach Beaty should be able to gain insight into KAI’s decisions and uncover evidence tending to show that KAI’s supposed retroactive termination lacks good faith.5 Accord FED. R. CIV. P. 26(b).
Finally, Coach Beaty’s claim under the KWPA requests penalties for a “willful” violation.
K.S.A. 44-§315(b). As such, KAI’s state of mind and intent are at issue, and discovery into KAI’s handling of similar situations is relevant to showing what they were.
Under Gasman, McKennon, Johnson, and the KWPA, the disputed discovery is reasonably calculated to lead to the discovery of admissible evidence. Accord FED. R. CIV. P. 26(b). KAI’s argument to the contrary elides the reality of how the parties got here and assumes that KAI can resurrect the Agreement it terminated without cause in November of 2018 yet still be relieved of the bargained for protections in the Agreement. (Ex. 3 – The Agreement at Attachment A). Neither
Kansas law nor the Agreement permit KAI to just point to an alleged NCAA violation and a year later retroactively terminate for cause.
CONCLUSION
The claims and defenses at issue in this case make the disputed discovery reasonably calculated to lead to admissible evidence. Therefore, Plaintiffs respectfully request that the Court enter an order consistent with its ruling at the conclusion of the telephonic hearing (ECF No. 51), overrule Defendant’s relevancy objections, and order KAI to amend its responses, produce responsive documents, answer interrogatories, and respond to requests for admissions.
5 KAI argued that disparate treatment of Coach Bill Self is not an “apples to apples” comparison because Coach Self has “won more Big 12 Conference titles than Coach Beaty won football games.” As this Court noted, KAI says it withholds Coach Beaty’s pay because of an alleged NCAA rule violation, yet a rule violation is a rule violation—regardless of on the field performance. If a coach’s win/loss record is part of KAI’s determination of how “serious” an alleged NCAA violation is or isn’t, then KAI’s motive and state of mind are clearly in play.
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Respectfully submitted,
/s/ Brent N. Coverdale
James D. Griffin KS # 12545 Brent N. Coverdale KS # 18798 Scharnhorst Ast Kennard Griffin PC 1100 Walnut, Suite 1950 Kansas City, MO 64106 Tel: (816) 268-9419 Fax: (816) 268-9409 E-mail: [email protected] [email protected]
and
Michael P. Lyons (pro hac vice) Christopher J. Simmons (pro hac vice) Stephen Higdon (pro hac vice) Deans & Lyons, LLP 325 N. Saint Paul St., Suite 1500 Dallas, Texas 75201-3891 Tel: (214) 965-8500 Fax: (214) 965-8505 E-mail: [email protected] [email protected] [email protected] Counsel for Plaintiffs
CERTIFICATE OF SERVICE
The undersigned hereby certifies that on December 6, 2019, a true and correct copy of the foregoing document was filed via the Court’s electronic filing system, which will generate notice to all counsel of record.
/s/ Brent N. Coverdale
Attorney for Plaintiffs
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