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The Technicality That Could Derail Zion Williamson's Lawsuit
The New Orleans Pelicans’ 2019 training camp will tip off on Sept. 30 with media day. Most of the media’s attention will be on one player: rookie phenom Zion Williamson.
The No. 1 pick from the 2019 NBA Draft is the most anticipated new player to enter the league since an 18-year-old LeBron James arrived at the Cleveland Cavaliers’ training camp 16 years ago. Armed with a lucrative shoe deal with Jordan Brand and endorsement deals with Panini, NBA 2K and Gatorade, Williamson will be the most hyped—and scrutinized—player in his class.
Williamson also enters the NBA with an unusual and unwanted distinction: he is embroiled in federal and state lawsuits that raise questions about whether he betrayed his word and complied with NCAA amateurism rules. As detailed below, Williamson’s nexus to the state of North Carolina while a student at Duke University last year is now a key issue in the litigation.
Recapping the litigation
There are two competing narratives surrounding the Williamson dispute.
The first narrative was raised on June 13 by Williamson and his legal team, which is led by Jeffrey Klein of the New York-based law firm Weil, Gotshal & Manges. On that date, Williamson filed a civil complaint against Gina Ford, the president of Prime Sports Marketing, in the U.S. District Court for the Middle District of North Carolina. He insists that Ford violated several North Carolina laws, including the state’s North Carolina’s Uniform Athlete Agent Act (UAAA) and Unfair and Deceptive Trade Practices Act.
Seven days later, Williamson and Ford swapped roles. Ford sued Williamson, along with CAA, for at least $100 million in Miami-Dade County Circuit Court. Williamson is accused of violating several Florida laws, including the Florida Uniform Trade Secrets Act and state laws prohibiting fraud and bad faith in dealings. Ford is represented by attorneys Stephen Drummond and JoAnn Squillace of the New York-based law firm Drummond & Squillace and Willie Gary of the Florida-based law firm Gary, Williams, Parenti, Watson & Gary.
The two lawsuits center on one basic question: Did Williamson sign an enforceable five-year contract with Prime Sports on April 20?
On that date, Williamson was a freshman at Duke. His basketball season had ended 21 days earlier when the Michigan State Spartans upset the Blue Devils in the Elite Eight. Sixteen days after the game, Williamson declared for the 2019 NBA draft. This was not a surprise in any way. For over a year, Williamson was expected to be a “one-and-done” player. It also became apparent in late 2018 and early 2019 that Williamson was the presumptive No. 1 pick. As he morphed into a national sensation, Williamson’s one-and-done status became only more certain.
The contract called for Ford, who has represented Usain Bolt and other athletes in marketing matters, to serve as Williamson’s exclusive representative for endorsement deals. Ford acted in this capacity for Williamson from April 20 until the latter half of May, when Williamson severed ties with Ford and then signed with CAA.
During the brief time when she represented Williamson, Ford engaged in negotiations on his behalf with major brands. They included EA Sports, 2K Sports, Activision Publishing, General Mills, Burger King, Mercedes Benz and Harper Collins. Per the contract, Williamson agreed to pay a 15% commission to Ford on any negotiated deal. No deals were finalized.
The contract also prohibited either side from dropping the other in the absence of “cause”, a term that generally refers to misconduct so egregious that it undermines the essence of the contract. Ford maintains that no such “cause” occurred and, therefore, Williamson unlawfully breached the contract by cutting ties with her. To that end, Ford contends that Williamson owes her massive monetary damages—including a nine-figure dollar amount that would encompass what Ford would have earned on a 15% agent cut over the next five years.
Williamson and his attorneys, meanwhile, assert that the five-year contract was unenforceable from the moment both parties signed it. While Williamson had already declared for the NBA draft and was the presumptive No. 1 pick, he could have obtained a limited chance to sign with an agent and yet still withdraw from draft consideration and return to Duke for a sophomore season. Under NCAA rules, this right-to-return to school was available until May 29 for declared underclassmen—even those who hired agents, provided the agents were certified by the National Basketball Players’ Association (NBPA). Ford, who only represents athletes in marketing and endorsement deals, was not NBPA-certified.
Williamson, therefore, forfeited his NCAA eligibility on April 20 by signing with Prime Sports. Whether this forfeiture practically mattered is a separate question. Williamson only gave up what he had no intention of keeping: the chance to play a sophomore season at Duke. His attorneys nonetheless insist that Ford broke North Carolina’s Uniform Athlete Agent Act (UAAA). This state law requires that representation contracts, including endorsement deals, contain written warnings about the impact of the player signing a contract on his or her NCAA eligibility. The contract Williamson signed contained no such warning.
Williamson’s attorneys also depict Ford as exploiting Williamson’s youthful naiveté. Ford, as portrayed by Williamson’s side, aggressively courted him and his family during the spring of 2019. She also, allegedly, urged him to sign the contract. It should be noted that Williamson was 18—an adult—when he signed. Also, his stepfather and close advisor, Lee Anderson, is a former college basketball player. In addition, attorney Michael Avenatti, who has been accused of attempting to extort Nike, has argued that Williamson’s family was in communication with Nike officials while Williamson played in high school. In other words, Williamson may have been sufficiently seasoned about his professional choices.
Did Williamson reside in North Carolina?
New court filings obtained by Sports Illustrated show that the dispute between Williamson and Ford continues to raise questions about Williamson’s status at Duke. Attorneys for Ford recently filed a memorandum of law in support of their motion to dismiss Williamson’s lawsuit from federal court. U.S. District Judge Loretta Biggs will review it.
Ford’s attorneys insist that Williamson lacked the requisite ties to North Carolina to file a federal lawsuit in that state. They argue that that he is not now, nor previously was, a citizen of North Carolina or domiciled in the Tar Heel state. In addition, per Section 2 of Article III of the U.S. Constitution and a federal statute, federal courts are only authorized to hear certain types of disputes. The two main types of disputes are those that (1) raise questions about the U.S. Constitution or federal laws or (2) involve “diversity jurisdiction”, which refers to disputes between citizens of different states where the amount in controversy exceeds $75,000. If either is present, then the federal court generally has “subject matter” jurisdiction over the case.
Williamson’s lawsuit in North Carolina does not involve federal law—only the laws of North Carolina are implicated. Although not bearing on the North Carolina case, Ford’s Florida lawsuit only pertains to the laws of Florida. In other words, there are no federal questions in either parts of the litigation.
The relevant issue is whether a federal court in North Carolina is authorized to hear a dispute involving Ford and Williamson based on where they are citizens and domiciled. There is no dispute that Ford is a citizen of Florida and is domiciled there. Whether Williamson’s ties to North Carolina are sufficient for him to claim to be a citizen of North Carolina is a matter of debate. In court filings, Williamson’s attorneys have insisted that he is a citizen of North Carolina and is domiciled there. Ford’s attorneys contend this is untrue. They maintain that Williamson is a citizen of South Carolina, would still provide for diversity jurisdiction (since whether Williamson is domiciled in North Carolina or South Carolina, it is a different state than Ford’s Florida). The alleged problem, Ford’s attorneys argue, is that Williamson claims to be domiciled in a state in which he isn’t domiciled. They maintain that his lawsuit should thus be dismissed “on the grounds of lack of subject matter based upon a lack of diversity of citizenship.”
Ford insists that Williamson is ineligible to file a federal lawsuit in North Carolina
Ford’s attorneys charge that while Williamson attended two semesters of college in North Carolina, he remained a citizen of South Carolina during that time and made no attempt to claim any intention to stay in North Carolina beyond his Duke experience.
For instance, they note that Williamson remained a registered voter in the County of Spartanburg, South Carolina while he attended Duke. They even point out his voting precinct (Hendrix Elementary School in Boiling Springs, South Carolina). Williamson, according to Ford’s attorneys, also never attempted to register to vote in North Carolina.
Ford’s attorneys obtained a copy of Williamson’s driver’s license. It is from the state of South Carolina, with an expiration date in 2027. Williamson does not have a driver’s license from North Carolina and it appears he never sought one.
North Carolina residency laws also appear to favor Ford. Per state law, a person must maintain a residence in North Carolina for at least 12 consecutive months before the beginning of a college term and must intend to make North Carolina a permanent home for an indefinite period of time—meaning not just the time it takes to complete college.
The contract Williamson signed with Prime Sports was also governed by the laws of Florida. This fact, Ford’s attorneys insist, further suggests the dispute ought not to be litigated in a North Carolina federal court.
Ford’s attorneys also emphasize the “one-and-done” nature of Williamson’s time at Duke. They assert that Duke recruited him out of Spartanburg Day High School “for the sole purpose of playing collegiate basketball en route to achieving his childhood dream of playing in the NBA.” This recruitment arguably contemplated only one academic year, the 2018-19 year, since Williamson had been widely expected to enter the 2019 NBA draft long before he arrived at Duke.
Williamson’s own words are arguably consistent with this account. When he announced that he would attend Duke, Williamson still described South Carolina as his state. “I would like to thank South Carolina and Clemson for even taking the time to recruit me . . . I still have a lot of love for my state . . I don’t want to let my state down . . I love my state to death . . .”
Ford’s attorneys also highlight public remarks by Anderson and Williamson’s mother, Sharonda Simpson where they stressed that Williamson would not return to school. In a May 16 interview on ESPN’s Off The Bench radio show, Anderson attempted to squash any doubt that Williamson, who reportedly hoped that the New York Knicks or Los Angeles Lakers would win the draft lottery, would return to Duke instead of play for the Pelicans. Anderson stressed that a return to Duke was, “not something that we haven even considered.”
In short, Ford’s attorneys maintain that Williamson’s time in North Carolina was essentially a pit stop to satisfy the NBA’s eligibly rule. Under Article X of the collective bargaining agreement, an American player must be at least 19 years old and at least one NBA season must have elapsed since when he graduated from high school or, if he didn’t graduate, when he would have graduated. Williamson’s time in North Carolina, Ford’s attorneys insist, was merely for the short-term purpose of spending the fall semester and part of the spring semester to lead the Blue Devils and hone his NBA skills.
Some court decisions appear to support Ford’s reasoning. A federal court in New York, for instance, has ruled that a college student “retains the domicile of his parents” unless he or she takes unambiguous steps to alter their domicile. Even when out-of-state college students obtain driver’s license in the state of their college, and even when they set up local bank accounts and pay taxes in their college’s state, courts have found they lack a sufficient connection to that state for purposes of diversity jurisdiction. The presumption with the typical college student, as a federal court in Alabama recently observed, is that he or she maintains the residence of their parents. Given that Williamson’s college experience was merely a quarter of what the typical student experiences, he might have a harder time claiming domicile in North Carolina than would his (now former) classmates from Duke’s class of 2022.
Williamson will counter these arguments
Williamson’s attorneys will have an opportunity to counter Ford’s pleading. In the weeks ahead they will file a memorandum of law that tries to rebut Ford. In previous court pleadings, those attorneys have insisted that Williamson was “at all times relevant herein a citizen and resident of the State of North Carolina, residing in Durham County, since August 2018.” It will be interesting to see if they have evidence, such as an attempt to obtain a North Carolina driver’s license or an inquiry into buying a house in North Carolina, that suggests Williamson planned on staying in the state for an indefinite period.
Williamson's attorneys will likely stress that their client clearly resided in housing provided by Duke and did not live in South Carolina while he attended Duke. Williamson also arguably spent more time at Duke than would a typical college student. Division I men’s or women’s basketball players have much more arduous schedules than do their classmates who don’t play sports. In addition to taking a full schedule of courses, basketball players and other student athletes are thought to spend in the ballpark of 40 to 50 hours per week on athletic related activities (in spite of NCAA rules generally limiting their time to 20 hours per week). They practice, attend team meetings, work out, play games and travel to games, among other activities that are time-consuming and controlled by coaches.
Williamson’s attorneys will also assert that the key facts in the case transpired in North Carolina. Williamson played in 33 games for Duke, 19 of which were played in North Carolina (15 home games at Cameron Indoor Stadium, plus one game at Wake Forest’s Lawrence Joel Coliseum, plus three NCAA tournament games in Charlotte’s Spectrum Stadium). With that in mind, Williamson’s basketball career was the genesis of his business relationship with Ford. Most of that career occurred in North Carolina.
Also, Williamson’s complaint against Ford claims that she “physically travelled to Durham, North Carolina on approximately four separate occasions during the Spring of 2019 to meet with Mr. Williamson and/or his family.” This again indicates that Ford travelled to North Carolina because Williamson was—his attorneys will contend—domiciled there. Ford’s attorneys will likely counter that there is a legal distinction between domicile and residence, namely that the former requires an intention to make a state a permanent home. Unless there is evidence that Williamson plans to spend his NBA off seasons in North Carolina, he might struggle to show a desire to make North Carolina his domicile. After all, he was soon about to enter the NBA draft where he would be drafted by a team in another state.
As a separate argument, Williamson’s attorneys will stress that he physically signed the contract with Prime Sports in Durham. He also continued to use Duke’s athletic facilities in the period between his declaration for the NBA draft and the draft itself. By all accounts, Durham was Williamson’s “home base” as he prepared for the NBA between April and June.
There are still other possible arguments by Williamson’s attorneys. One relates to Williamson as a one-and-done player at Duke. In hindsight, it was certain that Williamson would play only season at Duke because that is exactly what happened. But the path to the NBA sometimes has unexpected hurdles.
During a game in February, Williamson suffered a mild knee injury when his left Nike sneaker stunningly tore apart. Williamson was fortunate in that he quickly and fully recovered. However, if he had been more seriously hurt, or badly injured during some other play during his freshman season, Williamson might have remained at Duke for a sophomore season and perhaps additional ones. From that lens, Williamson was not necessarily a “transient student.” He could have stuck around had different circumstances transpired.
Both sides are forum shopping while a possibility of a settlement looms
Williamson would prefer to litigate the dispute in North Carolina in part because the state’s UAAA explicitly contemplates endorsement contracts—meaning both sports agents and marketing representatives must, in writing, warn college athletes that they would be forfeiting their eligibility by signing a representation contract or the contract becomes voidable at the player’s choice—and in part because prospective jurors might be inclined to like the former Duke star. Ford would rather litigate in Florida in part because the state’s laws do not explicitly impose the same requirements on marketing representatives, in part because it would be a more convenient and less costly forum for the Florida-based Ford and in part because prospective jurors are less likely to be inclined to favor Williamson than those who watched him play in college.
The trajectory of the litigation is also uncertain. Even if Ford succeeds in having Williamson’s case tossed from federal court, it’s possible that Williamson could attempt to file essentially the same complaint in a North Carolina state court. It’s also possible that Williamson could file another federal lawsuit except with his citizenship listed as from South Carolina (as noted above, that would achieve diversity jurisdiction since Ford is from Florida). Any scenario along those lines would delay the proceedings.
In some ways it’s surprising that Williamson has not already reached a financial settlement with Ford. He is about to start his NBA career and has lined up a series of lucrative endorsement deals. If his litigation with Ford advances to the pretrial discovery stage, he would be required to answer questions under oath. Those questions would concern his activities at Duke and possibly those while he suited up for Spartanburg Day School and the Sumter Falcons in AAU basketball. Williamson would also be compelled to turn over potentially sensitive emails and texts.
If Williamson or his family engaged in the kind of misconduct alleged by Avenatti, Williamson’s litigation with Ford could become problematic for both Duke and Nike. Duke recently announced that an internal investigation found no NCAA violations concerning the university’s relationship with Williamson. Avenatti clearly disagrees. Time will tell if Avenatti’s litigation provides answers or if Williamson’s dispute with Ford does.
Michael McCann is SI’s Legal Analyst. He is also an attorney and Director of the Sports and Entertainment Law Institute at the University of New Hampshire Franklin Pierce School of Law.
