NYC tri v NYC club: a cautionary tale

An item appeared on our Reader Forum yesterday and, pursuant to it, I think a cautionary tale is in order.

Triathlon is an Olympic sport requiring, by federal law, a governing body. In America it is USA Triathlon. It has a set of bylaws but, because this organization started out as a race director's cooperative and not a daughter federation of the US Olympic Committee, those bylaws once lacked the polish and specificity they might have had.

Elections to USAT's Board of Directors during 2002 and 2003 were in my view shabby-to-scandalous. I wrote a series of features and OpEds at the time, in an attempt to shine sunlight on unseemly behavior.

Chief among the problems was the habit of allowing a candidate to speak at a tri club meeting, immediately distribute ballot photocopies, and take physical possession of cast ballots at the meeting's terminus. My objections were several: The ballots were not secret; they were cast without the other candidates having a chance to make their cases for election; and the candidate or his designate could simply discard ballots not cast for him, sending in to USAT's election administrator the ballots he chooses to send.

The then-race director of the Hawaiian Ironman was on the 2002 ballot, and friends electioneered for her at Kona's pre-race check-in, with open ballots offered to contestants attempting to pick up their packets. Bad form, for sure. But who could blame her, when the opposition engaged in the tactics described in the paragraph above?

Following the 2002 election and prior to that of 2003, USAT sought a legal opinion about these practices from David Backer (an attorney, a USAT founding father, and the then-chair of USAT's legal committee). The opinion was a thorough castigation of these practices, and a warning to prohibit them in the future. But a significant number of the Board's incumbents got elected using these very tactics and were fain to give them up. One board member characterized Backer's cautions to me as "One guy's opinion." The majority of the Board elected to ignore Backer's advice.

After the conclusion of the 2003 election, four losing candidates filed a protest under USAT's bylaws, asking that the election be voided. Again, USAT sought a legal opinion, this time of Jonathan Grinder: a lawyer, and a former USAT president. His opinion, in part, reads:

"If this matter were to proceed to litigation neither the Board members who were elected nor the defeated candidates would be allowed to serve... The personal expense to the candidates, as well as to USA Triathlon, would be enormous."

Again, USAT's Board decided to ignore the legal advice they solicited. Attorneys on USAT's legal committee resigned in protest. The four protestors filed suit. The prevailing candidates (by this time Board members) lawyered up accordingly.

Both sides eventually agreed to binding arbitration by a Blue Ribbon Panel appointed by the USOC. As Mr. Grinder predicted, federation governance was stripped from USAT's Board.

That Blue Ribbon Panel was chaired by Thurgood Marshall, Jr., son of the first African American to serve on the U.S. Supreme Court. Also on the 5-person panel were two USOC staff attorneys, including the USOC's ethics officer.

The conclusion of the Blue Ribbon Panel was predictable. It found that, "The 2003 election was flawed and directs that a new election be held as soon as is practicable." It continued:

"The Panel did not hear any evidence that the [winning candidates] committed fraud or that they changed any ballot, discarded any ballot or in any other way tampered with the election results. They proceeded under the rules as they were published by USAT, ill conceived as they were. However, the Panel questions the judgment of those individuals, as well as their motives, in advocating for and supporting USAT's election rules and then in engaging in practices under those rules that were perceived as improper and as casting doubt on the credibility of the election. Their actions, at times, were certainly not of a caliber one would expect of candidates for Director positions on a National Governing Body. The Panel questions whether those candidates let their own personal aspirations override good judgment. Certainly they should have understood that their actions would raise the specter of impropriety and cast doubt on the election process, especially since they were sitting Board members."

Longtime triathletes might remember that they received the Panel's entire 17-page decision in the mail. Near the beginning of the decision we read, "Nothing is more important, or sacred, than that an election be conducted under rules that are beyond reproach," and that, "even if the rules were approved, they were so adverse to proper election practices that the election was tainted and cannot stand."

Finally, "... The Panel holds USAT's Board accountable for the election rules that were used in the 2003 election. The Panel also holds the Board accountable for not heeding the advice of Mr. Backer, Co-Chair of the Legal Committee and Mr. Grinder, Board Counsel. If the Board had listened to Mr. Backer, candidates would not have been allowed to distribute, gather and submit ballots. If the Board had listened to Mr. Grinder, the Board would have either conducted a new election or submitted the Challenge filed."

Contemporaneously, Lew Kidder (yet another attorney and former Board member who rendered advice consistent with that of Messers Backer and Grinder) and I used an obscure referendum provision in USAT's Bylaws to rewrite the Bylaws governing the entire election process. Over strenuous objections by just about every side (including the USOC), the federation was bound to present these new Bylaws for a vote by the entire membership. You (if you were a USAT annual member) and those who came before you chose to adopt these new election procedures, most of which are in force today.

There is a backstory to this. Remember Mr. Grinder's prescient warning: "The personal expense to the candidates, as well as to USA Triathlon, would be enormous."

Substantial fees were sought by three legal firms, all of which looked to USA Triathlon for payment. One of these firms was USAT's own outside counsel, the job of which was to steer USAT clear of this very peril. The second was the firm hired by the four losing candidates.

The third firm represented those Board members who were so roundly criticized in both legal opinions, and by the USOC's Blue Ribbon Panel. That firm was Orrick Herrington & Sutcliffe, and the counsel Peter Bicks.

These three firms eventually settled for, in the aggregate, less than their billed fees. Still, it was an eye-popping sum, costing the federation well into the six figures, and this does not count amounts that each of these litigants paid their firms.

But nobody was happy with what they paid or what they received, the lawyers included. This I can say with confidence, because my pro bono job on behalf of the federation was to negotiate down more than a quarter of a million dollars in fees presented to the federation.

Peter Bicks is a superlawyer. By every account, he's formidable. But he did not prevail on behalf of his clients in this case (except perhaps to protect them from yet further legal peril). Nevertheless, whenever I spoke to those he represented, they told me they were confident they would win, be absolved, and have federation governance restored to them.

I note the above for this reason: John Korff and his New York City Triathlon is suing the newly formed NYC Triathlon Club for trademark infringement. I cannot opine on the merits of the case, though I do of course honor every business owner's right to protect his intellectual property up to the point it's legally defensible.

The firm pressing Mr. Korff's trademark infringement case is Orrick Herrington & Sutcliffe, and the attorney is Peter Bicks.

From my memory and according to my contemporaneous notes of the time, Mr. Bicks was tough, dogged, patient, and skilled. But it must also be noted that—as judged solely by the outcome—he was substantially wrong as regards his instincts and his (apparent) advice to his clients. The case he presented was also—according to the USOC's Blue Ribbon Panel—ultimately legally unconvincing.

There are lessons here. First, I would encourage two people whom I hold in high regard—John Korff and Christophe Vandaele (owner of SBR Tri Shop and president of what's currently called the NYC Tri Club) to creatively and in good faith put their heads together and determine whether there's a tri club name that each side can live with. Or, maybe the NYC Triathlon can license, for a dollar a year, in perpetuity or until the race changes ownership, the right for the club to use the name. While I am no legal scholar, this would seem at face value to enhance, rather than challenge, whatever trade rights the race might legally own.

I note Mr. Korff's business intersection with tennis tournaments and Mr. Bicks' successfully-obtained injunction on behalf of top women's tennis players (Po v. Wild). It's my uneducated guess this may be the intersection bringing Mr. Bicks back into our sport.

In any case, Mr. Bicks, welcome again to triathlon. I still believe as I did before: Triathlons are to be trained for and entered in; not litigated over. Likewise the non-profit clubs and organizations that seek to enhance the enjoyment of our fine sport. Perhaps this time all sides will quickly agree with me on that, and find a way to execute accordingly.