BOULDER, CO – If you missed it, Pro Rugby owner Doug Schoninger and his Professional Rugby Organization (N.A. Rugby Union LLC) made it official by filing against USA Rugby, RIM and various individuals. All the basics can be seen by clicking this. As for this posting, these are the 18 Claims For Relief, which come after what we previously posted in the suit. And again, here are pertinent interviews with Mr. Shoninger and Mr. Chang prior to the filing:
DISTRICT COURT, BOULDER COUNTY, COLORADO
1777 6th Street, Boulder, CO 80302
Plaintiffs: N.A. RUGBY UNION LLC, d/b/a Professional
Rugby Organization, a Delaware limited liability company;
DOUGLAS SCHONINGER, an individual,
v.
Defendants: UNITED STATES OF AMERICA RUGBY
FOOTBALL UNION, a Delaware non-profit corporation;
RUGBY INTERNATIONAL MARKETING, a Delaware
limited liability company; WILL CHANG, an individual;
CHAD KECK, an individual; NIGEL MELVILLE, an
individual; and DANIEL PAYNE, an individual.
Attorneys for Plaintiffs
ROLLIN BRASWELL FISHER LLC
Caleb Durling, #39253; cdurling@rbf.law
Kasey Johnson, #44996; kjohnson@rbf.law
Edgar Barraza, #49369; ebarraza@rbf.law
8350 E. Crescent Pkwy., Suite 100
Greenwood Village, CO 80111
Telephone: (303) 945-7415
COMPLAINT:
Plaintiffs, N.A. Rugby Union LLC, d/b/a Professional Rugby Organization (“PRO Rugby”) and Douglas Schoninger, submit this Complaint against Defendants United States of America Rugby Football Union (“USAR”), Rugby International Marketing (“RIM”), Will Chang, Chad Keck, NigelMelville, and Daniel Payne:
INTRODUCTION
1. This case involves a contract and numerous associated promises and guarantees made by Defendants to Plaintiffs concerning an exclusive, sanctioned American professional rugby league. Relying on oral and written representations and contractual promises, Schoninger, an entrepreneur with no prior rugby affiliation, invested $6,000,000 of his own money and years of his time in a tremendous—and successful—effort to start and develop the first professional
rugby league in U.S. history.
2. Defendants lied to Plaintiffs during contract negotiation about their loyalty and commitment to the agreement’s exclusivity and the league’s development to induce Plaintiffs to spend millions to start the league.
3. Later, in the face of Plaintiffs’ undeniable success and widespread media praise, rugby’s old guard envied the newcomers and saw an opportunity. Defendants schemed to capitalize on Plaintiffs’ blueprint for success and force Plaintiffs out. Intent on destroying Plaintiffs’ exclusive rugby league to take it over for themselves, Defendants engaged in extensive
tortious misconduct and contractual breaches. The misconduct was designed to frustrate the very purpose of Plaintiffs’ league and the contract, and to destroy Plaintiffs’ business opportunities with private investors and rugby unions worldwide.
PARTIES
4. PRO Rugby is a limited liability company organized under the laws of Delaware, with its principal place of business located in New York, New York.
5. Schoninger is an individual who resides in New York. Schoninger is the CEO of PRO Rugby. Schoninger incorporated PRO Rugby for the purposes of creating the first professional, domestic U.S. rugby league and raising capital from investors to grow and develop the league and the sport of rugby.
6. USAR is a non-profit corporation organized under the laws of Delaware, with its principal place of business located in Lafayette, Colorado. It is authorized to do business in the state of Colorado.
7. RIM is a limited liability company organized under the laws of Delaware, with its principal place of business located in Lafayette, Colorado. It is authorized to do business in the state of Colorado.
8. Upon information and belief, Chang is an individual who resides in California. At all material times, Chang was a member of the board of directors for USAR, and beginning in August 2016, was the board chair.
9. Upon information and belief, Keck is an individual who resides in Washington. At all material times, Keck was a member of the board of directors for both USAR and RIM and was RIM’s board chair. Chang and Keck have been close friends since their twenties.
10. Upon information and belief, Melville is an individual who resides in England and maintains a residence in Boulder, Colorado. Melville was the CEO of USAR until June 2016.
11. Upon information and belief, Payne is an individual
FIRST CLAIM FOR RELIEF:
(Breach of Contract against USAR and RIM) 180. Plaintiffs incorporate the allegations contained in this Complaint.
181. The Sanction Agreement was a contract between PRO Rugby and USAR. RIM was not a party to the agreement but USAR agreed on RIM’s behalf for RIM to perform certain
acts.
182. PRO Rugby performed its obligations under the Sanction Agreement, including starting and operating a successful league within the first year on contracting.
183. USAR failed to perform under the Sanction Agreement in many material ways,
including by failing to ensure that PRO Rugby would be the sole, sanctioned U.S. rugby league. USAR and RIM intentionally and willfully violated the Sanction Agreement by encouraging and negotiating with other leagues to compete with PRO Rugby while under the obligations of the Sanction Agreement. USAR and RIM also failed to provide the player agent and marketing
services that they promised to provide under the Sanction Agreement. USAR failed to set up the Game Board to coordinate the joint venture.
184. Because of USAR and RIM’s multiple breaches of the Sanction Agreement, PRO Rugby has been damaged in an amount to be proven at trial.
SECOND CLAIM FOR RELIEF:
(Breach of the Covenant of Good Faith and Fair Dealing against USAR)
185. Plaintiffs incorporate the allegations contained in this Complaint.
186. The Sanction Agreement, like every contract, contained the implied duty of good faith and fair dealing.
187. The manner of performance under the Sanction Agreement allowed for discretion on the part of either party to the Agreement.
188. PRO Rugby justifiably relied on the duty of good faith and fair dealing.
189. Good faith performance under the Sanction Agreement involved USAR’s faithfulness to an agreed upon common purpose—the promotion of the sole sanctioned U.S. rugby league—and consistency with the justified expectations of PRO Rugby to enforce that exclusive sanction.
190. PRO Rugby had a justified expectation that USAR would act in a reasonable manner in its performance under the Sanction Agreement, including in keeping its promise to PRO Rugby that PRO Rugby would be the exclusively sanctioned U.S. rugby league and adhering to that promise when dealing with third parties.
191. USAR used the discretion conferred to it under the Sanction Agreement to act dishonestly and outside of accepted commercial practices by encouraging and negotiating with other leagues.
192. USAR’s conduct deprived PRO Rugby the benefit of the Sanction Agreement, rendering the Sanction Agreement breached and exclusivity illusory.
193. PRO Rugby was damaged because of USAR’s misconduct in an amount to be proven at trial.
THIRD CLAIM FOR RELIEF:
(Willful and Wanton Breach of Contract against USAR and RIM)
194. Plaintiffs incorporate the allegations contained in this Complaint.
195. The Sanction Agreement was a contract between PRO Rugby and USAR. RIM was not a party to the agreement but USAR agreed on RIM’s behalf for RIM to perform certain acts.
196. PRO Rugby performed its obligations under the Sanction Agreement, including starting and operating a successful league within the first year on contracting.
197. USAR failed to perform under the Sanction Agreement in many material ways, including by failing to ensure that PRO Rugby would be the exclusively sanctioned U.S. rugby league. USAR and RIM intentionally and willfully violated the Sanction Agreement by encouraging and negotiating with other leagues to compete with PRO Rugby while under the obligations of the Sanction Agreement.
198. USAR’s multiple, material breaches were intentional, involving willful, and wanton conduct, and made without any legal justification or excuse.
199. Because of USAR’s multiple, intentional, willful breaches of the Sanction Agreement, PRO Rugby have been damaged in an amount to be proven at trial.
FOURTH CLAIM FOR RELIEF:
(Tortious Interference with Contract against all Defendants)
200. Plaintiffs incorporate the allegations contained in this Complaint.
201. PRO Rugby had a contract—the Sanction Agreement—with USAR in which USAR agreed to sanction PRO Rugby as the exclusive rugby league in the United States.
202. RIM knew of the Sanction Agreement because RIM agreed to perform services under the agreement. Members of RIM’s board also corresponded directly with Schoninger on numerous occasions about the specifics of the Sanction Agreement.
203. Chang knew of the Sanction Agreement because he was the chairman of the board for USAR, negotiated the Sanction Agreement on behalf of USAR, and participated in the business decisions of USAR. Chang also had numerous conversations with Schoninger and others about the specifics of the Sanction Agreement.
204. Keck knew of the Sanction Agreement because he was also a board member for USAR and RIM and participated in the business decisions of USAR and RIM. Keck was also involved in numerous conversations with Schoninger and others about the Sanction Agreement.
205. Melville knew of the Sanction Agreement because he was the USAR CEO, negotiated the Sanction Agreement on behalf of USAR, and participated in the business decisions of USAR. Melville also had numerous conversations with Schoninger and others about the specifics of the Sanction Agreement.
206. Payne knew of the Sanction Agreement in his role as USAR CEO and participated in the business decisions of USAR. Payne also had numerous conversations with Schoninger and others about the specifics of the Sanction Agreement.
207. RIM, Chang, Keck, Melville, and Payne, through words and conduct as described above, intentionally interfered with USAR’s performance under the Sanction Agreement, including by: (1) encouraging and negotiating with other leagues to play in America knowing this conduct would violate the Sanction Agreement, for their own benefit and/or in their roles at USAR; (2) encouraging USAR to breach the Sanction Agreement by non-enforcement of the exclusivity provision; and (3) encouraging USAR not to extend the term despite USAR’s repeated promises to do so, thereby causing USAR not to perform under the Sanction Agreement with PRO Rugby.
208. The interference by RIM, Chang, Keck, Melville, and Payne was intentional, willful, improper, and designed to destroy the Sanction Agreement.
209. The interference with the Sanction Agreement by RIM, Chang, Keck, Melville, and Payne caused PRO Rugby damages in an amount to be proven at trial.
210. Plaintiffs also had a contract with Rugby Canada, in which Rugby Canada agreed to give Plaintiffs an exclusive rugby sanction to expand PRO Rugby into Canada for the 2017 season.
211. USAR and its leadership of Payne, Chang, and Keck knew of Plaintiffs’ agreement with Rugby Canada because USAR had originally connected Plaintiffs with Rugby Canada for the purposes of reaching such agreement.
212. USAR and its leaders, through words and conduct as described above, intentionally interfered with Rugby Canada’s performance under the contract, including by convincing Rugby Canada to back out of the deal.
213. The interference by USAR and its leaders was intentional, willful, improper, and designed to destroy the contract between Plaintiffs and Rugby Canada.
214. The interference with the contract between Plaintiffs and Rugby Canada by USAR, Payne, Chang, and Keck caused Plaintiffs damages in an amount to be proven at trial.
FIFTH CLAIM FOR RELIEF:
(Tortious Interference with Prospective Business Advantage against all Defendants)
215. Plaintiffs incorporate the allegations contained in this Complaint.
216. Plaintiffs had a prospective continuing business relationship with USAR that could have continued indefinitely beyond the initial three-year term in the Sanction Agreement.
217. Defendants RIM, Chang, Keck, and Payne knew of the prospective continuing business relationship between Plaintiffs and USAR, as they had all participated in the discussions regarding the promised extension.
218. Through intentional, willful, and wrongful conduct, Defendants RIM, Chang, Keck, and Payne improperly interfered with the prospective continuing business relationship by, among many things, encouraging USAR not to extend the Sanction Agreement, encouraging USAR to support new leagues in America that would compete with PRO Rugby, and dissuading
USAR from continuing its relationship with Plaintiffs, all causing USAR not to continue the prospective relationship with Plaintiffs.
219. Additionally, Plaintiffs had a prospective business relationship with Rugby Canada, including that Plaintiffs would add Canadian expansion team(s) to PRO Rugby.
220. Defendants USAR, RIM, Chang, Keck, and Payne knew of the prospective business relationship between Plaintiffs and Rugby Canada.
221. Through intentional, willful, and wrongful conduct, Defendants improperly interfered with the prospective business relationship by, among many things, encouraging Rugby Canada to renege on its plans to go into business with Plaintiffs.
222. Plaintiffs also had a prospective business relationship with the Southern Kings and SARU, including Plaintiffs’ plan to purchase the South African rugby team.
223. Defendants USAR, RIM, Chang, Keck, and Payne knew of the prospective business relationship between Plaintiffs, the South African rugby team, and SARU.
224. Through intentional, willful, and wrongful conduct, Defendants improperly interfered with the prospective business relationship by, among many things, encouraging, the South African rugby team and SARU to refuse to do business with Plaintiffs and renege on their plans to go into business with Plaintiffs, causing the team and SARU not to continue the prospective business relationship with Plaintiffs.
225. Plaintiffs also had a prospective business relationship with numerous investors and sponsors who sought to invest in PRO Rugby or sponsor the league.
226. Defendants USAR, RIM, Chang, Keck, and Payne knew of the prospective business relationship between Plaintiffs, investors, and sponsors because Defendants participated in making certain of the introductions.
227. Through intentional, willful, and wrongful conduct, Defendants improperly interfered with the prospective business relationship by, inter alia, destroying the exclusivity of PRO Rugby and the Sanction Agreement, not extending the Sanction Agreement’s term, encouraging other teams to come to America, and frustrating Plaintiffs’ ability to grow PRO Rugby and other rugby endeavors, all causing the investors and sponsors to discontinue their prospective business relationships with Plaintiffs.
228. Because of Defendants’ misconduct, Plaintiffs have been damaged in an amount to be proven at trial.
SIXTH CLAIM FOR RELIEF:
(Fraudulent Misrepresentation against USAR)
229. Plaintiffs incorporate the allegations contained in this Complaint.
230. USAR made false representations of both past and present facts regarding its intentions to extend PRO Rugby’s term, its promises that it was not and would not negotiate with other leagues to come to America, its relationship with RIM and the significance of using RIM as the exclusive marketing agency, and its relationships and business dealings with its own board
members, including Chang and Keck, contrary to its own bylaws and code of conduct. USAR made further false representations that PRO Rugby could expect to garner $4 million in identified, existing sponsorship opportunities in the league’s first year to offset operating costs.
231. The facts were material.
232. At the time the representation was made, USAR knew the representations were false or, at a minimum, knew that it did not know whether the representations were true or false.
233. USAR made the representations with the intent that PRO Rugby would rely on the representations.
234. PRO Rugby relied on USAR’s representations.
235. PRO Rugby’s reliance was justified given its relationship with USAR.
236. Because of USAR’s misrepresentations, PRO Rugby has been damaged in an amount to be proven at trial.
SEVENTH CLAIM FOR RELIEF:
(Fraudulent Misrepresentation against Chang, Keck, Melville, and Payne)
237. Plaintiffs incorporate the allegations contained in this Complaint.
238. Chang willfully and wantonly made false representations of both past and present facts regarding his intentions to encourage USAR to extend PRO Rugby’s term, his negotiations with other leagues to come to America despite the Sanction Agreement, and his personal business relationship with USAR and its effect on his actions as USAR board chair.
239. Keck willfully and wantonly made false representations of both past and present facts regarding his intentions to encourage USAR to extend PRO Rugby’s term, his negotiations with other leagues to come to America despite the Sanction Agreement, and his personal business relationship with USAR and its effect on his actions as RIM board chair and USAR board member.
240. Melville made false representations of both past and present facts regarding his intentions to encourage USAR to extend PRO Rugby’s term, his employment status with USAR and RIM, and his promise that an extension from USAR would be secured.
241. Payne made false representations of both past and present facts regarding his intentions to encourage USAR to extend PRO Rugby’s term and his promise that an extension from USAR would be secured.
242. The facts were material as evidenced by USAR’s bylaws and code of conduct.
243. At the time the representations were made, Chang, Keck, Melville, and Payne knew the representations were false or, at a minimum, knew that they did not know whether the representations were true or false.
244. Chang, Keck, Melville, and Payne made the representations with the intent that PRO Rugby would rely on the representations.
245. PRO Rugby did in fact rely on Chang, Keck, Melville, and Payne’s representations.
246. PRO Rugby’s reliance was justified given Chang, Keck, Melville, and Payne’s leadership positions within USAR.
247. Because of Chang, Keck, Melville, and Payne’s misrepresentations, PRO Rugby was damaged in an amount to be proven at trial.
EIGHTH CLAIM FOR RELIEF:
(Fraudulent Concealment/Non-Disclosure of Material Fact against USAR)
248. Plaintiffs incorporate the allegations contained in this Complaint.
249. USAR concealed both past and present facts that it had a duty to disclose to PRO Rugby, including its prior, undisclosed business dealings with its board members, including Chang and Keck, that directly affected its relationship with Plaintiffs, Melville’s plans to leave USAR, its plans not to renew the initial term, the relationship between USAR and RIM, and USAR’s prior and continuing encouragement of and negotiations with PRO 12 and other rugby leagues, actions contrary to USAR’s bylaws and code of conduct.
250. The facts were material.
251. USAR failed to disclose the facts with the intent of creating a false impression of the facts in Plaintiffs’ mind.
252. USAR failed to disclose the facts with the intent that Plaintiffs would take a course of action they otherwise would not have taken had they known the facts. 253. Plaintiffs acted relying on the assumption that the concealed facts did not exist.
254. Plaintiffs’ reliance was justified.
255. Plaintiffs’ reliance on the false impressions created by USAR’s concealment caused damages in an amount to be proven at trial.
NINTH CLAIM FOR RELIEF:
(Fraudulent Concealment/Non-Disclosure of Material Fact against Chang, Keck, Melville, and Payne)
256. Plaintiffs incorporate the allegations contained in this Complaint.
257. Chang willfully and wantonly concealed both past and present facts that he had a duty to disclose to PRO Rugby, including his prior, undisclosed business dealings with USAR that affected USAR’s relationship with PRO Rugby, his involvement in USAR’s decision not to renew PRO Rugby’s term, and his involvement with other leagues trying to come to America.
258. Keck willfully and wantonly concealed both past and present facts that he had a duty to disclose to PRO Rugby, including his prior, undisclosed business dealings with USAR that affected RIM and USAR’s relationship with PRO Rugby, his involvement in USAR’s decision not to renew PRO Rugby’s term, and his involvement with other leagues trying to come to America.
259. Melville concealed both past and present facts that he had a duty to disclose to PRO Rugby, including his plans to leave USAR’s employ for RFU and his involvement, on behalf of USAR, in negotiating with PRO 12 to come to America even while negotiating and securing the Sanction Agreement with PRO Rugby.
260. Payne concealed both past and present facts that he had a duty to disclose to PRO Rugby, including his communications with World Rugby, Rugby Canada, and the South African Rugby Union designed to frustrate Plaintiffs’ business dealings.
261. The facts were material as evidenced by USAR’s bylaws and code of conduct.
262. Chang, Keck, Melville, and Payne failed to disclose the facts with the intent of creating a false impression of the facts in Plaintiffs’ mind.
263. Chang, Keck, Melville, and Payne failed to disclose the facts with the intent that Plaintiffs would take a course of action they otherwise would not have taken had they known the facts.
264. Plaintiffs acted relying on the assumption that the concealed facts did not exist.
265. Plaintiffs’ reliance was justified.
266. Plaintiffs’ reliance on the false impressions created by Chang, Keck, Payne, and Melville’s concealment caused damages in an amount to be proven at trial.
TENTH CLAIM FOR RELIEF
(Negligent Misrepresentation Claim against USAR, Melville, and Payne)
267. Plaintiffs incorporate the allegations contained in this Complaint.
268. USAR, Melville, and Payne gave false information to PRO Rugby regarding, among other things, their intentions to extend PRO Rugby’s term, their promises that they were not negotiating with and encourage other leagues to come to America, their relationship with RIM and the significance of using RIM as the exclusive marketing agency, and their relationships and business dealings with USAR’s board members, including Chang and Keck.
269. USAR, Melville, and Payne gave this false information to PRO Rugby during USAR’s business.
270. USAR, Melville, and Payne gave this false information to PRO Rugby for PRO Rugby’s use and guidance in a business transaction, namely, the operation of the exclusive, sanctioned U.S. rugby league.
271. USAR, Melville, and Payne were negligent in communicating this false information to PRO Rugby.
272. USAR, Melville, and Payne gave the false information to PRO Rugby intending PRO Rugby to act in reliance on the information.
273. PRO Rugby relied on the false information.
274. PRO Rugby’s reliance on the false information damaged PRO Rugby in an amount to be proven at trial.
ELEVENTH CLAIM FOR RELIEF:
(Negligent Concealment Claim against USAR, Melville, and Payne)
275. Plaintiffs incorporate the allegations contained in this Complaint.
276. USAR, Melville, and Payne concealed both past and present facts from PRO Rugby including, but not limited to, their prior, undisclosed business dealings with USAR board members, including Chang and Keck, that directly affected their relationship with PRO Rugby, Melville’s plans to leave USAR for RFU, their plans not to extend the Sanction Agreement, the relationship between USAR and RIM, and their prior and continuing negotiations with PRO 12 and other rugby
leagues.
277. The concealed facts were material.
278. USAR, Melville, and Payne concealed these facts with the intent of creating a false impression of the facts in PRO Rugby’s mind.
279. USAR, Melville, and Payne concealed these facts intending PRO Rugby to take a course of action, namely, funding and operating the exclusive U.S. rugby league and doing
business with USAR, that PRO Rugby would not have done had it known the facts.
280. PRO Rugby acted in reliance that the concealed facts did not exist.
281. PRO Rugby’s reliance was justified.
282. PRO Rugby’s reliance on the false impressions created by USAR, Melville, and Payne’s concealment damaged PRO Rugby in an amount to be proven at trial.
TWELFTH CLAIM FOR RELIEF:
(Promissory Estoppel against USAR)
283. Plaintiffs incorporate the allegations contained in this Complaint.
284. USAR, both pre- and post- contract, made numerous promises to PRO Rugby to extend the term of PRO Rugby’s exclusivity, including the specific terms sent by Payne to Schoninger in August-September 2016 and Melville’s explicit promise in April 2016.
285. USAR made these promises reasonably expecting that PRO Rugby would enter the Sanction Agreement and thereafter would continue doing business with USAR, including investing millions to start the first professional American rugby league.
286. PRO Rugby reasonably and detrimentally relied on USAR’s promises.
287. The promises made by USAR must be enforced to prevent injustice to PRO Rugby.
THIRTEENTH CLAIM FOR RELIEF:
(Negligent Misrepresentation Causing Financial Loss in a Business Transaction against
USAR, Melville, and Payne)
288. Plaintiffs incorporate the allegations contained in this Complaint.
289. USAR, Melville, and Payne gave false information to PRO Rugby, including, but not limited to, their intentions to extend the league’s term, their promises that they were not negotiating with and encouraging other leagues to play in America, their relationship with RIM and the significance of using RIM as the exclusive marketing agency, and their business dealings with USAR’s board members, including Chang and Keck.
290. USAR, Melville, and Payne gave such information to PRO Rugby during USAR’s business and during a transaction in which USAR had a financial interest.
291. USAR, Melville, and Payne gave the information to PRO Rugby for PRO Rugby’s use in a business transaction.
292. USAR, Melville, and Payne were negligent in obtaining or communicating the information to PRO Rugby.
293. USAR, Melville, and Payne gave the information to PRO Rugby knowing that PRO Rugby would act in reliance on the information.
294. PRO Rugby relied on the information supplied by USAR, Melville, and Payne.
295. This reliance on the information supplied by USAR, Melville, and Payne damaged PRO Rugby in an amount to be proven at trial.
FOURTEENTH CLAIM FOR RELIEF:
(Civil Conspiracy against all Defendants)
296. Plaintiffs incorporate the allegations contained in this Complaint.
297. Defendants set out to accomplish a goal of interfering with Plaintiffs’ contractual relationships with USAR and Rugby Canada.
298. In accomplishing this goal, Defendants had a meeting of the minds on the goal and the course of action to achieve it.
299. Defendants participated in overt, unlawful acts including tortiously interfering with Plaintiffs’ contractual relationships 300. Defendants set out to accomplish another goal of interfering with the prospective business relationships between Plaintiffs and USAR, Rugby Canada, the South African rugby team and SARU, and prospective investors and sponsors in PRO Rugby.
301. To accomplish this goal, Defendants had a meeting of the minds on the goal and the course of action to achieve it.
302. Defendants participated in overt, unlawful acts including tortiously interfering with Plaintiffs’ prospective business relationships.
303. Because of Defendants’ conspiracies, Plaintiffs were damaged in an amount to be
proven at trial.
FIFTEENTH CLAIM FOR RELIEF:
(Breach of Fiduciary Duty against USAR, RIM, and Melville)
304. Plaintiffs incorporate the allegations contained in this Complaint.
305. USAR and RIM owed a fiduciary duty to PRO Rugby because they conducted their business relationship with PRO Rugby in the form of a joint venture. USAR stated to third parties it was a partner with PRO Rugby in establishing and developing the first professional rugby league in the United States. USAR and RIM agreed for USAR to coordinate with Plaintiffs in developing a Game Board and for RIM to act as the exclusive Player Agent for all PRO Rugby players. USAR
and PRO Rugby agreed that RIM would be the non-exclusive agent to represent PRO Rugby to potential sponsors. USAR and RIM also agreed to promote PRO Rugby and allow PRO Rugby to use USAR’s intellectual property to jointly benefit USAR, RIM, and PRO Rugby.
306. These ventures show a joint interest in property in the form of developing and
monetizing PRO Rugby. These efforts would lead to revenues for USAR, RIM, and PRO Rugby
to share. These actions show cooperation in the project.
307. In addition, USAR is the national governing body of rugby in the United States, and it oversaw and ensured that PRO Rugby was compliant with USAR and World Rugby rules and regulations. PRO Rugby’s players, coaches, and referees were all members of USAR or, as foreign players, allowed to play solely as a condition of PRO Rugby’s sanction and approval by USAR and World Rugby. USAR agreed that it, its leadership, and RIM would adhere to its bylaws and code of conduct, including as to conflicts of interest.
308. As part of this relationship, USAR agreed with PRO Rugby that it would have to make available and release its players, members of USAR, to the U.S. national rugby team for competitions. USAR paid PRO Rugby compensation for a PRO Rugby player injured on national team duty.
309. Melville placed himself in a position of trust and confidence with PRO Rugby as to collaborating to develop the league.
310. USAR, RIM, and Melville were in a position of trust and loyalty with respect to PRO Rugby and thus owed PRO Rugby fiduciary duties including the duty of care and loyalty.
311. USAR, RIM, and Melville breached their fiduciary duty to PRO Rugby by, inter alia, negotiating with and supporting other leagues knowing the devastating impact it would have on PRO Rugby’s business, thwarting PRO Rugby’s business opportunities with others, and causing PRO Rugby to lose millions of dollars. They undertook some or all of these actions to benefit themselves and usurp business opportunities to the detriment of their joint venturer PRO Rugby. Melville further breached his fiduciary duty to PRO Rugby by hiding his departure to RFU until after he knew PRO Rugby would commit the money to start the season, costing PRO Rugby millions more.
312. USAR and RIM’s cross-board memberships (and the self-interested decisions which resulted from this arrangement) violated USAR’s bylaws and code of conduct as to conflicts of interest and harmed their partner PRO Rugby by usurping business opportunities. USAR and RIM board members’ personal business interests in board decisions also violated USAR’s bylaws and code of conduct and harmed their partner PRO Rugby by usurping business opportunities. Their conduct also harmed all of PRO Rugby’s players, coaches, and referees who were members of USAR and lost their jobs when PRO Rugby had to shut down.
313. Because of USAR, RIM, and Melville’s breaches of their fiduciary duties to PRO Rugby, PRO Rugby has been damaged in an amount to be proven at trial.
SIXTEENTH CLAIM FOR RELIEF:
(Aiding and Abetting Breach of Fiduciary Duty against
Chang, Keck, Melville, and Payne)
314. Plaintiffs incorporate the allegations contained in this Complaint.
315. USAR and RIM owed fiduciary duties to PRO Rugby.
316. Chang, Keck, Melville, and Payne knowingly and substantially participated in USAR and RIM’s breaches of those duties to PRO Rugby. Each took steps to further USAR and RIM’s breaches.
317. Because of Chang, Keck, Melville, and Payne’s misconduct, PRO Rugby has suffered damages in an amount to be proven at trial.
SEVENTEENTH CLAIM FOR RELIEF:
(Negligence against USAR and RIM)
318. Plaintiffs incorporate the allegations contained in this Complaint.
319. As described above, USAR and RIM had a legal duty to PRO Rugby as the exclusively sanctioned league of USAR and a duty to follow USAR’s bylaws and code of conduct.
320. USAR and RIM breached that duty by failing to uphold their obligations to PRO Rugby and failing to follow USAR’s bylaws and code of conduct.
321. USAR and RIM’s breach of their legal duties to PRO Rugby injured PRO Rugby.
322. Because of their negligence, PRO Rugby has been damaged in an amount to be proven at trial.
EIGHTEENTH CLAIM FOR RELIEF:
(Declaratory Judgment against USAR)
323. Plaintiffs incorporate the allegations contained in this Complaint.
324. Pursuant to C.R.C.P. 57 and C.R.S. §§ 13-51-101 et seq., there is an actual and justiciable controversy between PRO Rugby and USAR based on the status of the Sanction Agreement. All parties to the Sanction Agreement are before this Court.
325. PRO Rugby bargained with USAR in the Sanction Agreement’s Article 4 for three years of exclusivity and three years of USAR enforcing PRO Rugby’s exclusivity. Section I.1 stated that if USAR failed to uphold its Article 4 obligations as to exclusivity, PRO Rugby received a day-for-day extension of the Sanction Agreement’s term.
326. USAR breached that duty by failing to uphold its obligations to PRO Rugby as the exclusively sanctioned league of USAR. It has emerged that USAR breached its obligations for the entire three-year term of exclusivity through its negotiations with and support of PRO 12, Major Rugby Championship, and Major League Rugby.
327. PRO Rugby requests that the Court declare that USAR failed to uphold its promises as to exclusivity throughout the entire term. Therefore, PRO Rugby requests that the Court declare that PRO Rugby is entitled to an additional three-year term of exclusivity as it contractually bargained and paid for.
LEAVE TO AMEND:
328. Plaintiffs respectfully request leave to amend this Complaint to add or delete any claims or parties after discovery reveals facts regarding the same, including, but not limited to, a claim for exemplary damages under C.R.S. § 13-21-102, after the exchange of initial C.R.C.P. 26 disclosures and upon sufficient proof.
JURY DEMAND:
Plaintiffs demand a trial by jury on all issues so triable.
RELIEF REQUESTED:
Wherefore, Plaintiffs respectfully requests the following relief:
A. Judgment in favor of Plaintiffs and against Defendants on all claims;
B. Actual and compensatory damages as proven;
C. Joint and several liability as provided by law;
D. Costs of suit according to law or contract;
E. Attorneys’ fees according to law or contract;
F. Interest pursuant to law or contract;
G. Specific performance of the contract extension terms as promised to
Plaintiffs by Melville and Payne;
H. A declaration that USAR failed to perform under the exclusivity
provisions of the Sanction Agreement throughout the entire threeyear
term and a corresponding order extending the Sanction
Agreement for an additional three-year term of exclusivity; and
I. Such other and further relief as the Court deems fit.
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