The University of Louisville fired head basketball coach Rick Pitino in October last year, amid allegations that an Adidas executive conspired to funnel money to the families of two top recruits in exchange for their commitment to the school and agreement to represent the brand after they turned pro. That sparked quite a bit of litigation between Pitino and Adidas, which had just inked a 10-year, $160 million contract with the school and paid Pitino $2 million last year.
Pitino sued Adidas, claiming the company "knowingly or recklessly caused him emotional distress when its employees conspired to bribe University of Louisville basketball recruits," and Adidas moved to dismiss the case, arguing that Pitino's claims were subject to mandatory arbitration under his endorsement deal. This week, a federal judge agreed, and dismissed his suit.
Outrageous and Unlawful Conspiracy
Pitino's lawsuit claimed that he "now is publicly perceived as having participated or acquiesced in Adidas' actions" and suffered "profound embarrassment, humiliation, and emotional injury" as a result of the company's "extreme and outrageous conduct." And the suit maintains that Adidas conspired to pay the recruits "without Coach Pitino's knowledge, participation or acquiescence."
But Adidas wasn't interested in litigating Pitino's reputation before and after the payment scheme came to light, or if such payments are really that "extreme and outrageous" in college athletics. Instead, the company merely pointed to its contract with Pitino, which included a mandatory arbitration clause:
The parties agree that any dispute concerning the interpretation, construction or breach of this Agreement shall be submitted to a mediator agreed upon by the parties for nonbinding confidential mediation at a mutually agreeable location ... If the parties fail to resolve their dispute through mediation, then the parties agree that the dispute shall be submitted to final and binding confidential arbitration before the American Arbitration Association in Portland, Oregon.
Not all mandatory arbitration agreements are enforceable. But in this case, Judge David Hale of the U.S. District Court in Kentucky found that "the facts underlying Pitino's tort and contract claims are identical: both claims are based on Adidas's alleged bribing of a University of Louisville basketball recruit or his family." Therefore, because Pitino's contract claims must be resolved via arbitration, his tort claims must be as well. Hale stopped short of ordering arbitration, however, as the contract also stipulated that only a district judge in that jurisdiction (Oregon) could do so.
"We're happy to get the court's decision and can now move forward with both claims against Adidas," said Pitino's lawyer, Steve Pence.