Upper Deck International Bankruptcy Slows Case vs Upper Deck

Upper Deck International Bankruptcy Slows Case vs Upper Deck

When we last checked in on the Upper Deck v. Upper Deck case, Upper Deck International (UDI) had scored the first major victory by persuading the court to dismiss all of the different American Upper Decks' counterclaims. The case was now focused solely on UDI's claims against the American Upper Decks, without any potential side-issue distractions.

Riding high on this momentum, UDI made a strong move yesterday -- by requesting a six-month stay of the action.

Legal translation: UDI asked for a six-month timeout.

What?!?! That's like icing your own field goal kicker!

Given this case already was littered with numerous bizarre plot lines (hey, it did get the judicial seal of approval on calling this case a Jerry Springer episode), why not add another?

UDI's brief sheds light on this unexpected request: UDI is going through bankruptcy proceedings.

Legal sidebar: It's important to emphasize that UDI is going through bankruptcy and not any of the American Upper Deck companies.

These Netherlands bankruptcy proceedings are what gave rise to this seeming brain freeze. You see, in the Netherlands, the court appoints a "bankruptcy representative" who basically drives what happens to UDI during the bankruptcy process and also gets to decide how UDI spends its money. Apparently, the bankruptcy representative told UDI that, for now, it's not going to pay for any more of the Upper Deck v. Upper Deck case:

"Until the Netherlands court-appointed bankruptcy representative concludes the assessment of UDI’s assets, claims and potential claims as well as how, financially, UDI will pursue any of those claims, the bankruptcy representative has indicated that, at this moment, it cannot continue to pay UDI’s legal fees associated with this litigation and has also requested that UDI’s current counsel of record request that the litigation be temporarily stayed."

While this language makes it seem like it might be a temporary move, UDI's motion starts off more ominously and, I think, indicates that this action may be over sooner than we thought:

"PLEASE TAKE NOTICE that Plaintiff Upper Deck International B.V., ("UDI") hereby applies ex parte to request that the Court exercise its discretion to issue an order staying this litigation for six months to allow UDI to focus its attention on now-pending bankruptcy proceedings in the Netherlands and to determine whether and how it will continue to litigate UDI's claims in this litigation."

Yeah, I added that emphasis because once lawyers hint around that an action may be heading to some type of resolution, that's likely where it's going.

Now, this motion is not necessarily all gloom and doom for UDI. Maybe its bankruptcy representative will green light the lawsuit after a stay. Or maybe UDI can work out a deal with its attorneys to proceed on a contingent fee basis (since it seems the representative just doesn't want to pay attorneys' fees). But, with this misstep, UDI is no longer the front-runner in this case.

And I'm going out on a limb here, but I think this motion may tick the judge off. I mean, this was a case filed that UDI brought to the judge. The judge then waded through hundreds of pages of court documents and wrote a 25-page opinion in UDI's favor. And now UDI hints around that it might all have been for nothing?

Most likely the judge will still grant the motion to stay (especially if the American Upper Decks agree to it), but it would not shock me if the court feels a little bit spurned here and denies UDI's motion. This would force the case to continue, and, by doing so (since UDI is not authorized to pay its attorneys any more), would knock it off the court's calendar.

Legal translation: Judges are graded by how quickly they resolve cases and this is an easy way to remove one of them.

Now, before the judge gets to rule, the American Upper Decks get the opportunity to file a response. They can consent to UDI's motion or they can oppose it. And they'll likely oppose it (given that a few weeks ago they filed a motion to make the case move faster).

Either way, UDI's motion seems to foretell a premature end to a case that was fun to follow. It would have been great to have a court rule on the merits of this case, or to have another season or so of Jerry Springer-style action just to see how far towards the bottom both sides would race. Instead, it looks like UDI may have to let this case die on the vine.

If this happens, it will be another closed case for Upper Deck, who appear to be having a good legal year. Four settlements (with Endurance, Blowout Cards, MLB and Kareem Abdul-Jabbar), and maybe the disposal of another case? Unless I'm missing something, this leaves only the NFL v. Upper Deck case as the only large lawsuit in its path.

Jeez, if this keeps up, Upper Deck may no longer appear in Law of Cards articles, which would just be bizarre in and of itself.

The information provided in Paul Lesko's "Law of Cards" column is not intended to be legal advice, but merely conveys general information related to legal issues commonly encountered in the sports industry. This information is not intended to create any legal relationship between Paul Lesko, the Simmons Browder Gianaris Angelides & Barnerd LLC or any attorney and the user. Neither the transmission nor receipt of these website materials will create an attorney-client relationship between the author and the readers.

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Paul Lesko is a shareholder at Simmons Hanly Conroy and the chair of its Intellectual Property Department (http://www.simmonsfirm.com). Don’t hold the fact that Paul is a lawyer against him, he’s also a rabid baseball and college basketball fan, and an avid baseball card collector. Paul can be found on Twitter @Paul_Lesko and Google+.

User Comments

  1. Paul,
    I think Upper Deck is cleaning up their messes in order to sell the company. Why else would a company change it’s legal philosophy and settle all of these lawsuits if something else wasn’t up?
    It just isn’t in Richard McWilliam’s DNA to settle lawsuits without an extended fight.

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