DNA Sports Performance Lab, Inc. v. Major League Baseball

District Court, N.D. California·Decided October 27, 2020·No. 3:20-cv-00546·Unknown

Opinion

NORTHERN DISTRICT OF CALIFORNIA

INC. and NEIMAN NIX, No. C 20-00546 WHA Plaintiffs,

v.

ORDER GRANTING MOTION MAJOR LEAGUE BASEBALL; FOR ATTORNEY’S FEES MLB ADVANCED MEDIA LP; MAJOR LEAGUE BASEBALL PLAYERS ASSOCIATION; and MAJOR LEAGUE BASEBALL ENTERPRISES, INC, Defendants.

Following plaintiffs’ voluntary dismissal in this false-advertising and unfair competition action, defendants baseball league and players union move for attorney’s fees under FRCP 11 and the Court’s inherent authority. To the following extent, the motions for fees are GRANTED. Plaintiffs, Neiman Nix and his company DNA Sports Performance Lab, Inc. (together “DNA Sports”), sell health supplements “extracted from the shed tissue of elk antlers,” which contain a “naturally occurring, bio-identical form of IGF-1,” a performance-enhancing substance. Major League Baseball (“the league”) and the Major League Baseball Players under their Joint Drug Prevention and Treatment Program. Following the banning of its supplements, DNA Sports sued seriatum in several federal and state courts against the league and its affiliates, loosely defined (Compl. ¶¶ 3–4, 16, 18, 25; Dkt. No. 19 at 3). DNA Sports’ string of suits against the league and others is characterized by a dismissal followed by a new suit in a different venue with a slightly new cause of action challenging the ban (Dkt. No. 53). DNA Sports eventually made its way to our district. Though this was its first actual suit against the union, the union had followed DNA Sports’ litigation history and, promptly upon being served, filed this motion for sanctions seeking fees and dismissal. The league did likewise. A prior order dismissed the complaint. No amendment was sought. Now, the union and the league renew their requests for sanctions. On a Rule 11 motion, we consider all the circumstances, not just the allegations in the complaint. See Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 401 (1990). 1. DNA SPORTS’ HARASSMENT OF THE BASEBALL LEAGUE. As detailed in the league’s motion for sanctions, DNA Sports and its attorneys have pursued the league, well before the instant suit, for the past nine years (Dkt. No. 42 at 4–5). Our tale begins with an October 2012 shakedown letter. Following two league investigations into DNA Sports’ former business venture, DNA Sports sent the letter accusing the league of character defamation, alleged $30,000,000 in damages, and threatened to sue unless the league promptly paid $6,000,000. DNA Sports, though, conceded that its products contained a banned substance under the Joint Drug Prevention and Treatment Program (Dkt. 42-2, Exh. A at 3). In 2013, the league launched another investigation into the illegal sale of performance- enhancing drugs to players. Investigators targeted “anti-aging” clinics in Florida, including DNA Sports (Dkt. No. 19 at 5; Compl. ¶¶ 19–20). In February 2014, DNA Sports sued the league in Florida state court, challenging the league’s investigation as unfair and discriminatory. But plaintiff missed several case management conferences and failed to perfect service until October, resulting in a November 2014 dismissal for failure to prosecute. Nix and DNA Sports Performance Lab, Inc. v. Major League Baseball, etc., et al., No. 3D14-2967, 2015 WL 1930327 (Fla. 3d Dist. Ct. App. Apr. 27, 2015). In July 2016, following the league’s rejection of another letter, this time demanding $40,000,000, DNA Sports sued the Office of the Commissioner of Baseball and several league employees in the Southern District of New York challenging the same league investigation, alleging tortious interference with prospective economic advantage (Dkt. 42-2, Exh. D). After a pre-motion conference to discuss the league’s intent to file motions for dismissal under Rule 12(b)(1) and for sanctions, DNA Sports voluntarily dismissed that action in November 2016. Nix and DNA Sports Performance Lab, Inc. v. Office of Comm’r of Baseball, No. 16-CV-5604 (S.D.N.Y. July 14, 2016). In late November 2016, less than a month after the dismissal, DNA Sports sued the league, the commissioner, and several league employees in New York state court for hacking DNA Sports’ social media accounts, tortious interference with economic advantage, and defamation of Nix –– all in the course of the league investigation. Defendants removed to federal district court based on the hacking claim. Rather than move to remand or amend its complaint to satisfy federal pleading standards, DNA Sports voluntarily dismissed its federal hacking claim and proceeded with the state suit. The New York state court then dismissed the complaint in June 2018 as res judicata under FRCP 41’s two-dismissal rule, barred by statute of limitations issues, and for failure to state a claim. In December 2018, the state court denied DNA Sports’ motion to reargue the dismissal as frivolous and imposed attorney’s fees against DNA Sports and its counsel — fees which remained outstanding as of briefing here. Nix and DNA Sports Performance Lab, Inc. v. Major League Baseball, et al., No. 159953/2016, 2018 WL 2739433 (N.Y. Sup. Ct. June 7, 2018). In April 2018, while litigating the third action, Neiman Nix –– acting pro se –– sued Kobre & Kim LLP and three attorneys (the league’s counsel), several MLB coaches and general managers, and over a dozen MLB clubs in Florida state court, alleging RICO, trade secret, and computer abuse violations. In December 2018, Mr. Nix voluntarily dismissed claims against remains pending, however, against two remaining clubs and league personnel. Nix v. Luhnow, et al., No. 2018CA003920 (15th Fla. Cir. Ct., Palm Beach Cnty.). In January 2019, DNA Sports sued the Office of the Commissioner of Baseball, current and former MLB commissioners, and several MLB employees in Florida state court for unlawful hacking and computer abuse violations in the course of the 2013 MLB investigation. After DNA Sports amended its complaint in response to a motion to dismiss, the court dismissed the claims against the commissioners but allowed DNA Sports to proceed with the remaining claims. Though that case pertained to the leagues’ alleged hacking of DNA Sports’ social media accounts during the 2013 investigation, DNA Sports sought discovery on the league’s stance and communications regarding IGF-1. Neiman Nix and DNA Sports Performance Lab, Inc. v. Major League Baseball, et al., No. 2019CA002611 (11th Fla. Cir. Ct., Miami-Dade Cnty.). In March 2018, DNA Sports also sued ESPN, the Associated Press, and USA Today in the Southern District of Florida in March 2018, alleging that each had defamed plaintiffs by publishing or republishing a statement from the league that DNA Sports’ July 2016 tortious interference lawsuit “admit[ed] Nix and his company used bioidentical insulin-like growth factor (IGF-1), which is derived from elk antlers and is on baseball’s list of banned substances.” Nix and DNA Sports Performance Lab, Inc. v. ESPN, Inc., et al., No. 1:18-CV-22208-UU, 2018 WL 8802885, at *1-2 (S.D. Fla. Aug. 30, 2018). Plaintiff called the statement defamatory because it did not differentiate between natural and synthetic IGF-1, giving readers the impression that DNA Sports had engaged in illegal or legal-but-banned drug sales. The Southern District of Florida, however, held that the statement at issue was substantially correct and the omission did not render the report untrue, thus it was not defamatory. The district court dismissed the complaint with prejudice in August 2018. The Eleventh Circuit affirmed, ruling that league regulations banned all forms of IGF-1 –– whether synthetic or natural. Nix and DNA Sports Performance Lab, Inc. v. ESPN, Inc., et al., 772 Fe

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