No Slam Dunk

The Delaware Court of Chancery has ruled against basketball legend Julius Erving's effort to avoid arbitration of an agreement concerning the sale of his trademark and intellectual property rights

Julius W. Erving II, known by the moniker “Dr. J,” is a basketball legend. In 2016, Mr. Erving agreed to sell a majority interest in his trademark and other intellectual property to Authentic Brands Group, LLC (“ABG”), a brand development and marketing company. ABG and its controlling member and CEO, James Salter, promised to grow Mr. Erving’s brand exponentially by obtaining new licensing agreements, promotional appearances, and other marketing opportunities.

The dispute

Plaintiffs brought this suit on September 22, 2021, bringing claims for breach of contract and specific performance against ABG Intermediate.

Holding

Because the parties evidenced a clear and unmistakable intent to have the arbitrator decide issues of substantive arbitrability, the action is STAYED pending the arbitrator’s decision. “If the arbitrator determines the claim is arbitrable, then this action will be dismissed for lack of jurisdiction . . . . If the arbitrator determines the matter is not arbitrable, then the parties may return to this Court for further proceedings.”

(Mike Frisch)