Law of Cards: Leaf Sues the Industry Summit
We're not half way through January, but the first trading card lawsuit of 2014 has been filed. Fifteen days into the New Year, Leaf Trading cards sued Kevin Isaacson and the Industry Summit for breach of contract and John Does 1-10 for tortious interference.
Legal translation: There's a lot to translate here. I'll need a whole article to do this. So let's go!
The breach of contract action: The focus of this lawsuit is Leaf's attendance at the Industry Summit. Isaacson started the Summit in 2010 as "an annual conference for industry professionals in the trading card and collectible business." As its website states, the Summit is the event for "anyone invested in the trading card and sports collectible business."
Leaf attended the Summit from 2010-2013, and its CEO, Brian Gray, was even the featured presenter at the 2013 Summit.
Now, the Summit is not a free event. Attendees need to register and pay to attend and/or have booth space. According to its complaint, Leaf registered and paid online for attendance and booth space. Soon thereafter, however, Leaf allegedly was informed by the Summit that it was "banned…from attending, participating or exhibiting at the Summit."
Leaf claims its "banning" from the Summit was a breach of contract. A breach of contract action is, generally, an easy claim to understand. All that is required is 1) an offer, 2) acceptance and 3) consideration (i.e., payment). Here, Leaf contends 1) it was offered the opportunity to attend and have a booth at the Summit, 2) it accepted by registering and 3) it paid.
Leaf's breach of contract action is basically a, "Hey, I paid, you accepted, so I'm showing up," claim.
Open and shut? Not yet.
The reason behind Leaf's "banning" is that the Summit allegedly rebranded from an entire industry event, to a licensor/licensee event. Following from this, since Leaf is not licensed by the MLB, NFL, NHL, etc, it might not qualify as a licensee, and therefore is not a proper participant. Because of this, the Summit will allege there was never an offer to Leaf, and therefore, there could not be acceptance or consideration.
The analysis for the breach of contract claim will focus on the timing of the alleged rebranding of the Summit. If the Summit properly and fully rebranded prior to Leaf's registration (and therefore allegedly Leaf wasn't invited), it might have properly denied Leaf's attendance. However, if the rebranding occurred after Leaf was invited, Leaf's arguments are stronger.
Of note, the complaint also requests an injunction from the court ordering the Summit to allow Leaf to attend. This begs the question, why does Leaf want to force itself to attend to an event it's allegedly no longer invited to? As the complaint states:
Leaf's absence will be patently obvious to its competitors, customers and other industry professionals. The damage to Leaf's reputation and standing in the trading card and collectibles industries will be significant and immeasurable.
This is a good argument. The harms from not attending a trade show are difficult to quantify. For example, trade shows are where retailers decide what products they will carry. Quite often, retailers will meet with manufacturers for whom they don't currently carry product. If the meetings go well, the retailers could decide to carry their products in the future. Similarly, as could happen here, if a well-known manufacturer does not attend a trade show, current retailers could wonder why it's absent. This could result in those retailers dropping manufacturers for others.
Did I mention that breach of contract actions are also boring? Well, the next claim is not so boring, so let's jump into that one.
The tortious interference claims against John Does 1-10: Leaf's complaint also alleges that John Does 1-10 allegedly "influenced, threatened, induced, or directed the Summit Defendants to breach Leaf's registration contract for the Summit and exclude Leaf from the Summit." Basically, it's a claim that some as-of-yet-unidentified-people/entities (a licensor, a licensee, multiple licensors, multiple licensees or some combination thereof presumably) pressured the Summit to breach its contract with Leaf, and did so out of spite.
I like the tortious interference claim for two reasons. First, it alleges a conspiracy of types. Who doesn't love a good conspiracy?
The second reason I like this claim is more personal. I like Leaf and Brian Gray. I like Kevin Isaacson too. And I love the Summit. I've been lucky enough to attend and speak at the Summit for the last two years, and am looking forward to attending and speaking at it this year. It's my favorite trading card event of the year. And this claim lets Leaf and the Summit be the good guys because they were allegedly thwarted by a conspiracy.
Basically, it gives rise to the possibility that Isaacson wanted the Summit to be open to the entire industry again, but potentially improper pressures from others forced him to make a decision to either breach the contract with Leaf or some collection of licensors/licensees wouldn't attend.
The focus of this claim again will turn to the timing of the rebranding. If the rebranding was brought about only due to potential undue pressure by others, well, this is a fun claim, and as Brian Gray alluded to in his recent appearance on Cardboard Connection Radio, the depositions will be fun to read. But there'll be fights over whether the deposition transcripts can be released to the public (and that'll be the cause for another article at a later date).
Really, the Summit is Isaacson's baby, so he likely could have rebranded it any time and excluded unlicensed manufacturers. I think a decision like that stinks because it excludes a segment of the industry. But if done correctly, it's his choice. I just like to think that maybe, he had a gun to his head, and that's why he did it.
But only time will tell with this claim because, keep in mind, this portion of the lawsuit is currently against John Does. There are no parties named, and, at this point, it's pled upon information and belief.
Why I might hate this lawsuit: While I love all lawsuits in the trading card industry, here's why I potentially could grow to hate this one. It's possible that if this lawsuit doesn't end quickly, it could bring about the end of the Summit. There's not much money in running trade shows, and lawsuits are not cheap. If this lawsuit exceeds the expected profits of the Summit, I could see a chance that it will be cancelled. Now and forever.
And that would suck for everyone in the industry.
But, hopefully there are ways to wrap this lawsuit up quickly. And selfishly, I hope it somehow keeps the Summit as I remember it.
Here's a copy of the entire complaint if you'd like to check it out.
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