The FBI recently charged 10 people, including four college basketball assistant coaches at prominent Division I universities and a head executive at Adidas inter alios, with corruption and bribery crimes for federally-prohibited payments and other financial inducements to former, current, and prospective collegiate athletes.1 One of the schools identified in the criminal complaint was the University of Louisville. In response to these allegations, University of Louisville head men’s basketball coach Richard Pitino was suspended and subsequently fired.
On October 17, 2017, Coach Pitino filed suit in federal court in the Western District of Kentucky against Adidas America. This lawsuit was filed mere hours after Adidas terminated Coach Pitino from a personal services contract2, where it has been reported that he has received annual compensation in excess of $1.5 million.3
In his lawsuit, Coach Pitino alleges that:
…Adidas outrageously conspired to funnel money to the family of a recruit of the University of Louisville basketball team – all without Coach Pitino’s knowledge, participation, or acquiescence. The public disclosure of Adidas’ outrageous and unlawful conspiracy has made it appear, and Adidas knew or recklessly avoided knowing that it would make it appear, that Coach Pitino had known about, participated in, acquiesced in, or otherwise condoned these outrageous practices…
And for these reasons, Pitino is seeking compensatory and punitive damages (independent of any claim against Adidas for his recent involuntary termination of employment) under the tort of outrage.
But like an underdog in the first weekend of NCAA men's basketball tournament, the former coach faces long odds to prevail in his lawsuit because there are many factors working against his claims. First, Adidas paid Pitino millions of dollars during the period he claims Adidas was acting outrageously making it hard to prove he suffered severe emotional distress. Second, federal courts are hesitant to label conduct, even intentional criminal conduct, outrageous. Time and again, courts have preferred instead to allow for freedom to express an opinion — even an unflattering one.
In his lawsuit, Coach Pitino claims by way of the FBI complaints referenced above that from May 2017 to September 2017, James Gatto and Merl Code (both affiliated with Adidas) conspired with others to illegally funnel more than $100,000 to the family of a potential Louisville recruit – Brian Bowen.4 The $100,000 was distributed in four separate installments and kept secret through a third-party intermediary. The payments to Bowen were made not only to entice the athlete to attend Louisville, but to also ensure that Bowen retained certain sports agents and financial advisors also involved in the alleged conspiracy, and to ultimately sign with Adidas upon entering the NBA. Payments were also made to one or more college coaches at Louisville to secure the recruit’s commitment to play basketball at Louisville.
This purported conduct by Adidas was also occurring at that the same time that Coach Pitino was appealing a separate suspension issued by the NCAA for his involvement in a situation where one of his graduate assistant coaches (and a former player) arranged to provide exotic dancers and prostitutes to University of Louisville players, recruits, and recruits’ parents.5 The NCAA infractions committee concluded that Coach Pitino did not participate in, nor have knowledge about, the provision of improper benefits, but nevertheless concluded that Coach Pitino failed to properly monitor his staff. Since Adidas knew or should have known about the NCAA violations, Coach Pitino’s suspension, and his pending appeal, Adidas’ conduct pertaining to paying recruits and coaches was so outrageous and damaging to Coach Pitino’s public and private standing and reputation to be considered a tort of outrage.
In Kentucky, the courts have adopted Restatement (Second) of Torts § 46(1)6 for a claim of intentional infliction of emotional distress (i.e. outrage), which provides:
One who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distress to another is subject to liability for such emotional distress, and if bodily harm to the other results from it, for such bodily harm.
A prima facie case of outrage requires that: (1) the wrongdoer’s conduct must be intentional or reckless; (2) the conduct must be outrageous and intolerable in that it offends against the generally accepted standards of decency and morality; (3) there must be a causal connection between the wrongdoer’s conduct and the emotional distress; and (4) the emotional distress must be severe. Humana of Kentucky, Inc. v. Seitz, 796 S.W.2d 1, 2-3 (Ky. 1990). Kentucky appellate courts have observed that “not every upset plaintiff can recover for emotional distress” and that “not every bad act gives rise to a cause of action for the intentional infliction of emotional distress.”7 Outrageous conduct to one person may not be the same to another person. The mere fact that the actor knows that the other will regard the conduct as insulting, or will have his feelings hurt, is not enough.8 Therefore, Kentucky courts have turned to the commentary of § 46 for guidance in assessing whether conduct is actionably extreme and outrageous:
Extreme and outrageous conduct. The cases thus far decided have found liability only where the defendant’s conduct has been extreme and outrageous. It has not been enough that the defendant has acted with an intent which is tortious or even criminal, or that he has intended to inflict emotional distress, or even that his conduct has been characterized by “malice,” or a degree of aggravation which would entitle the plaintiff to punitive damages for another tort. Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. Generally, the case is one in which the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him to exclaim, “Outrageous!”
The liability clearly does not extend to mere insults, indignities, threats, annoyances, petty oppression, or other trivialities. The rough edges of our society are still in need of a good deal of filing down, and in the meantime, plaintiffs will necessarily be expected and required to be hardened to a certain amount of rough language, and to occasional acts that are definitely inconsiderate and unkind. There is no reason for the law to intervene in every case where some one’s feelings are hurt. There must still be freedom to express an unflattering opinion, and some safety valve must be left through which irascible tempers may blow off relatively harmless steam…9
Applying that standard to the facts alleged in the complaint against Adidas, Coach Pitino will have an uphill battle to prove his claim of outrage. First, Adidas alleged conduct may not be so outrageous and intolerable that it offends the generally accepted standards of decency and morality. This is not the first and probably not the last collegiate scandal where illegal benefits are paid to recruits, players or coaches. Any outrageousness is further diminished by the fact that this FBI investigation is one of two serious cases made against the University of Louisville and Coach Pitino in the last year. And for those same reasons, the emotional distress may also not be seen as severe in the eyes of the court.
Coach Pitino is also the highest paid coach in all of college basketball. Moreover, Pitino was being paid millions of dollars by Adidas under his professional services contract while the claimed outrageous conduct was occurring. Some would argue that Pitino under these circumstances was a financial beneficiary to Adidas’ conduct which may run counter to any claimed, let alone severe emotional distress.
Finally, it has been reported that under a recently released federal indictment that Coach Pitino knew about and agreed to ask Adidas to give money to the family of Bowen. More specifically, NBA agent Christian Dawkins asked Pitino to call James Gatto to request that Adidas provide the money requested by Bowen’s family. If such allegations are true, Coach Pitino’s lawsuit will most likely be dismissed. To make matters worse, he may also be required to pay attorneys’ fees as courts in Kentucky have permitted an award of attorneys’ fees if the suit was filed in bad faith or for an improper purpose such as harassing the opposing party, delaying or disrupting the litigation.10
1U.S. v. Gatto, et al., Crim. No. 17-MJ-7120 (S.D.N.Y.); U.S. v. Evans, et al., 17-MJ-7119 (S.D.N.Y.); U.S. v. Person, et al., 17-MJ-7118 (S.D.N.Y.).
2 The contract with Pitino was most likely terminated immediately under a “morality clause” which is fairly standard in sports-related sponsorship and service agreements.
3 In August 2017, the University of Louisville signed a 10-year, $160 million contract with Adidas.
4 Notwithstanding the alleged violations of federal law, NCAA bylaw 13.2.1 prohibits colleges and its athletic representatives from making arrangements for or giving or offering any financial aid or other benefits to athletes, their families, or on their behalf, as an inducement to attend a particular school.
5 Coincidentally, Kyle Hornback, a Louisville student and Miss Kentucky USA, filed suit against Katina Powell, author of Breaking Cardinal Rules which disclosed escort scandal at Louisville, under the tort of outrage (similar to Pitino). Hornback, et al. v. Powell, et al., No. 15-CI-005391 (Jefferson Co., Ky. Cir. Nov. 9. 2015).
The University of Louisville self-imposed sanctions for providing escorts to team players and recruits in 2016 including a post-season attendance ban. Further sanctions were issued by the NCAA in June 2017, including a suspension of Pitino for the first five ACC games in the 2017-18 season and four years under probation with areduction of four scholarships. Louisville must also vacate win-loss records due to three student-athletes that competed while ineligible from December 2010 and July 2014, which may also include the Cardinals’ 2013 national championship (the first potentially vacated national title in men’s college basketball history).
6Craft v. Rice, 671 S.W.2d 247 (1984).
7First and Farmer’s Bank of Somerset, Inc. v. Henderson, 763 S.W.2d 137, 143 (Ky. App. 1988).
8 David J. Leibson, 13 Ky. Prac. Tort Law § 5:3 (2016 ed.).
9See Stringer v. Wal-Mart Stores, Inc., 151 S.W.3d 781, 789 (Ky. 2005)(citing Restatement (Second) of Torts § 46(1), cmt. d (1965)).
10 “[A] court may assess attorney fees against a party under the court’s inherent powers when a party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.” BDT Prods., Inc. v. Lexmark Int’l, Inc., 602 F.3d 742, 752 (6th Cir. 2010)(citing Chambers v. NASCO, Inc., 501 U.S. 32, 45 (1991)).