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USA Track & Field, Inc. v. Leach

United States District Court, S.D. Indiana, Indianapolis Division

November 4, 2016

USA TRACK & FIELD, INC., Plaintiff and Counter-Defendant,
v.
LIONEL LEACH, RON MASCARENAS, KENNETH FERGUSON, DOROTHY DAWSON, LINDA ELLIS, LINDA PHELPS, NORINE RICHARDSON, HENRY MCCALLUM, DAVID REINHARDT, INEZ FINCH, MARC JONES, MARY ELIZABETH AUDE, and JACQUELINE WHITE, Defendants and Counter-Claimants.

          ORDER ON DEFENDANTS' MOTION TO STAY THE USATF GRIEVANCE HEARING

          TANYA WALTON PRATT, JUDGE

         This matter is before the Court on a Motion to Stay the USA Track & Field Grievance Hearing Set for November 14, 2016 filed by Defendants Lionel Leach, Ron Mascarenas, Kenneth Ferguson, Dorothy Dawson, Linda Ellis, Linda Phelps, Norine Richardson, Henry McCallum, David Reinhardt, Inez Finch, Marc Jones, Mary Elizabeth Aude, and Jacqueline White (collectively the “Youth Executive Committee” or “Defendants”) (Filing No. 70).

         I. BACKGROUND

         Max Siegel, the CEO of Plaintiff USA Track & Field, Inc. (“USATF”), negotiated and entered into an agreement with a service provider, Athletic.net, to provide online track meet registration services for USATF throughout 2016. Defendant Lionel Leach, the Divisional Chair of the Youth Executive Committee, and the rest of the Youth Executive Committee publicly criticized and opposed the decision to use Athletic.net. The Youth Executive Committee directed local youth track associations to use service providers other than Athletic.net.

         Viewing the actions of the Youth Executive Committee as an interference of business and contractual relationships and as being beyond the scope of the Committee's authority, USATF filed an internal grievance against Mr. Leach on February 2, 2016. The internal grievance sought declaratory relief that the event registration process and vendor relationships should be handled by the USATF National Office, not the Youth Executive Committee.

         USATF and the Youth Executive Committee continued to have an impasse regarding the use of Athletic.net and the parties' asserted authority, with letters, notices, and public announcements being sent out. The ongoing dispute between USATF and the Youth Executive Committee centered on who had the authority to select and contract with vendors who provide registration and timing systems for track meets.

         Because of the ongoing conflict and the actions taken by the Youth Executive Committee, USATF's Board of Directors voted to immediately suspend Mr. Leach and each of the members of the Youth Executive Committee on May 24, 2016, which was publicly announced on USATF's website on May 25, 2016. The Youth Executive Committee members were not given notice, a hearing or any other opportunity to present evidence or argument to defend against their suspensions. USATF's general counsel sent a letter to each of the Defendants on May 25, 2016, stating that they had been suspended from USATF and that they were not to have any involvement with the organization in any capacity.

         On June 3, 2016, USATF filed an internal disciplinary complaint against the members of the Youth Executive Committee, requesting that each member of the Committee have their membership revoked and that they be permanently expelled from participating in any activities of USATF as a member, volunteer, athlete, coach, or in any other capacity.

         Also on June 3, 2016, USATF filed a Complaint in state court against the members of the Youth Executive Committee, alleging eight separate counts. On July 8, 2016, the Youth Executive Committee removed the action from state court to this Court based on diversity jurisdiction.

         On June 4, 2016, Mr. Leach responded to the February 2, 2016 internal grievance complaint filed by USATF against him. On June 13, 2016, the USATF grievance panel, an independent body of arbitrators, conducted a pre-hearing conference. By agreement of the parties, the grievance panel ordered the February 2, 2016 grievance complaint against Mr. Leach and the June 3, 2016 disciplinary complaint against the Youth Executive Committee to be consolidated and decided together. The panel also set the hearing on the consolidated internal grievance and disciplinary complaints for November 14, 2016.

         On July 15, 2016, the Youth Executive Committee filed a Motion for Preliminary Injunction, which was heard on September 23, 2016 is pending before this Court. The Youth Executive Committee seeks reinstatement to their positions as members of the Youth Executive Committee; reinstatement of their USATF memberships and ability to serve as coaches, mentors, volunteers, officials, or local association leaders; and a defense and indemnification from USATF for USATF's claims against the Youth Executive Committee.

         II. DISCUSSION

         The Youth Executive Committee asks this Court to stay the USATF administrative hearing that is set for November 14, 2016, which will consider the February 2, 2016 grievance complaint against Mr. Leach and the June 3, 2016 disciplinary complaint against the Youth Executive Committee. That proceeding will address the Youth Executive Committee's desire for reinstatement as well as USATF's request that each member of the Committee have their membership revoked and that they be permanently expelled from participating in any activities of USATF as a member, volunteer, athlete, coach, or in any other capacity.

         As the basis for their request to stay the November 14 administrative hearing, the Youth Executive Committee asserts that they had no way of initiating an internal grievance proceeding after USATF had suspended their memberships, and USATF initiated this civil action, which is now ripe for a decision on the Motion for Preliminary Injunction. The Youth Executive Committee selectively quotes from Regulation 21-E-2 of the USATF Governance Handbook to assert that they are not subject to the internal ...


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