SBJ/November 18 - 24, 2002/Labor Agents

Steinberg-Dunn in jury's hands

Jurors began deliberating last week on a request by agent Leigh Steinberg's attorney that they make former Steinberg partner and protégé David Dunn pay more than $40 million for taking 50 clients and setting up a competing firm.

Dunn was a highly skilled lawyer who plotted to steal Steinberg's business and then tried to use his former partner's problems resulting from alcoholism to blackmail him, Brock Gowdy, Steinberg's attorney, told a Los Angeles federal court jury in his closing statement. "This is a case about betrayal and a case about blackmail," Gowdy said.

But Lee Hutton, lead litigator for Dunn and his new firm, Athletes First, told the jury it should not give Steinberg anything because he was to blame for any damages caused by the defection of Dunn and five other employees. Employees left Steinberg because they were mistreated and players left him because they were neglected, Hutton said.

"Leigh Steinberg, in pursuit of his own legacy, lost sight of his roots and lost sight of his players," Hutton said.

Steinberg has sued Dunn and Athletes First for more than $40 million, alleging breach of contract and unfair competition, among other things.

Gowdy, in his closing statement, asked jurors not only to award the $40 million in actual damages but also to make Dunn and his new company pay punitive damages to make an example of them.

Dunn has filed a countersuit, claiming false advertising and invasion of privacy.

"In a nutshell, our position is their damages are zero," Hutton said. "They haven't proven their case."

Hutton said Dunn and Athletes First employees testified to bizarre behavior by Steinberg and negative aspects of his firm not to blackmail him but to defend themselves in court.

Hutton told jurors that Dunn did not breach a five-year employment deal with Steinberg's firm because Dunn was fraudulently induced into signing a blank signature page for a contract whose terms were changed later.

Gowdy reminded the jury that a witness testified at the trial that Dunn signed the contract after clauses that prohibited him from setting up a competing business were added to the deal.

Gowdy told jurors that Dunn and Brian Murphy, a lawyer who left Steinberg with Dunn to form Athletes First, were trying to blackmail Steinberg, who suffered the effects "of a disease called alcoholism." Gowdy showed the jury a memo in which Murphy wrote that Steinberg wouldn't sue for fear that his personal secrets would be revealed. "Defendants believed Mr. Steinberg wouldn't have the courage to bring this case," he said.

The jury had not reached a verdict as of late Thursday afternoon.

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