Much has changed since April 2020, when former XFL commissioner Oliver Luck sued Alpha Entertainment and its chairman and CEO, Vince McMahon, in a Connecticut federal court for more than $23.8 million.
But the litigation is finally moving toward resolution. Last Friday, Judge Victor Bolden narrowed the lawsuit’s scope through more than a dozen pretrial rulings. He also set a jury trial date of March 7, 2022, which previously had been set for Oct. 8, 2021.
The case was set in motion when Alpha, which owned the XFL until its August 2020 bankruptcy sale, fired Luck for cause on April 9, 2020. Four days later, the XFL filed for Chapter 11 bankruptcy, and three days after that, Luck sued.
Arguably the most significant of Judge Bolden’s Friday rulings was the dismissal of a claim against McMahon, whom Luck contends made a personal guarantee that Alpha would honor the five-year, $35 million contract Luck signed in 2018. Luck, 61, has sued McMahon and Alpha for breach of contract as well as for breach of the implied covenant of good faith and fair dealing. The claims against McMahon are premised on Luck’s contention that the 76-year-old billionaire reneged on what court documents describe as an “absolute, unconditional, continuing and irrevocable” pledge to pay.
Judge Bolden was unpersuaded by Luck’s implied covenant argument concerning McMahon. The main reason: Luck signed his employment contract with Alpha, not McMahon. “Because Mr. McMahon is not a signatory to the employment contract,” Judge Bolden reasoned, “he cannot be held liable for breach of the implied duty of good faith with respect to that agreement.”
Yet Judge Bolden refused to dismiss Luck’s implied covenant claim against Alpha. The judge stressed that McMahon and Alpha haven’t moved to dismiss Luck’s breach of contract claim. Until that time, the judge will reserve judgment on whether Alpha acted in bad faith in firing Luck “for cause.”
To that end, Alpha contends that Luck violated his employment contract by allegedly engaging in gross negligence and willful disregard of duties. Alpha blames Luck for, among other things, (1) signing former Cleveland Browns wide receiver Antonio Callaway in contravention of an XFL requirement that players have “good character;” (2) using his company-issued iPhone for personal matters and “unauthorized communications;” and (3) relocating, without permission, from Connecticut, where the XFL was headquartered, to Indiana at the start of the pandemic.
Luck, who previously served as president of NFL Europe and the NCAA’s executive vice president for external affairs, insists those rationales are untrue, wildly exaggerated or pretextual. Luck has described his firing as reflecting a “sinister purpose.” He maintains that Alpha, and by extension McMahon, designating his firing as “for cause” constituted a thinly veiled scam.
In other pretrial rulings, Judge Bolden mostly sided with Alpha regarding XFL emails that Alpha insists are confidential under the attorney-client privilege. Luck insists that some of the emails, such as those between Alpha human resources staff and other XFL employees, don’t involve communications with an attorney while others concern discussion of “facts surrounding the Callaway matter” instead of legal advice. Judge Bolden, however, stressed that the privilege is expansive and comprehensive and applies to emails where an attorney is at least copied.
Judge Bolden also granted in part and denied in part Luck’s motion for a protective order regarding the much-discussed iPhone. Luck petitioned the judge to prohibit McMahon and Alpha from “disclosing personal information gleaned from the contents of the iPhone” and mandate that court filings related to the iPhone’s contents be made under seal (thus inaccessible to the public and media).
Judge Bolden determined that information “gleaned” from the iPhone is not protected, provided the usage was directly relevant to Luck’s alleged violation of the XFL’s technology policy. Luck’s supposed misuse of the iPhone is central to one of Alpha’s defense arguments. Nonetheless, Judge Bolden agreed to keep certain filings sealed until the judge gains a better understanding as to how the iPhone’s contents relate to McMahon and the XFL’s defenses.
The judge also granted Luck’s request that Alpha identify employees who used iPhones for personal matters or matters unrelated to Alpha/XFL. Luck’s attorneys likely want to establish that it was typical for employees to use their iPhones for a mixture of business and personal dealings and thus Luck doing so shouldn’t warrant a for-cause firing. On the other hand, Judge Bolden issued several additional rulings against Luck, including Luck’s motion to further amend his complaint (a move that would have extended the litigation’s timeline).
At any point, the parties could reach a settlement wherein McMahon/Alpha agree to pay Luck some portion of the amount he demands in exchange for Luck agreeing to drop the lawsuit and both sides agreeing to confidentiality/non-disparagement provisions. Oftentimes settlement talks pick up as a trial date nears and as litigants grapple with the reality that they’ll soon have to appear on the witness stand and could lose the case.
If a settlement doesn’t arise and the parties go to trial, the trial would feature testimony of McMahon, Luck and other key figures from the previous XFL (the new XFL, bought by a group headlined by Gerry Cardinale’s RedBird Capital, Dwayne “The Rock” Johnson and businesswoman Dany Garcia, plans to launch in 2023). If Luck prevails against Alpha, but not against McMahon, Luck would need to enforce a civil order against a bankrupt entity. The loser of a trial would also have the right to appeal to the U.S. Court of Appeals for the Second Circuit.