OCEAN CITY — There was some movement on Friday in the federal suit involving the alleged rules violation in the 2016 White Marlin Open (WMO), including a ruling by the judge the tournament will remain a party in the case and another ruling that it will not be afforded a “grossly disproportionate” amount of the $2.8 million at stake in attorney fees and costs.
About two weeks after the tournament’s conclusion, WMO officials reported a potential rules infraction that could disqualify the winner in the white marlin division, a 76.5-pounder caught by angler Phillip Heasley on the Kallianassa out of Naples, Fla. Heasley’s 76.5-pound white marlin was awarded a tournament-record $2.8 million in prize money because the Kallianassa was entered across the board in all added entry levels and was the lone qualifier.
The timing of the catch has been brought into question as has the assertion that Heasley and the captain and two mates on the Kallianassa were deceptive in their answers to some of the questions during the requisite post-tournament polygraph examinations for the winners in major categories.
In August, WMO officials through their attorneys filed a Complaint for Interpleader in Worcester County Circuit Court, asking a judge to intercede and decide first if there were rules violations committed by Heasley and the Kallianassa crew, and secondly, if there were violations, how best should the $2.8 million in prize money be distributed to the winners in other categories. The case was ultimately transferred to U.S. District Court where it continues to plod toward a May trial date.
In December, Heasley, through his attorneys, filed a motion to dismiss the WMO as a party in the case, asserting tournament officials had already deposited the $2.8 million in question into the court’s registry and, therefore, no longer had any claim in the suit, which it believed now came down to a dispute between Kallianassa and the winners in the other major divisions should Heasley be disqualified.
Heasley also filed a motion seeking to deny the WMO a requested five times the amount of its attorney fees and costs associated with the litigation. On Friday, U.S. District Court Judge Richard Bennett denied Heasley’s request to dismiss the WMO from the suit, but granted the motion to dismiss the WMO’s claim to five times the amount for its attorney fees and costs.
In terms of the WMO remaining a party in the case, Heasley claimed the tournament no longer had a financial stake in the proceedings and should be dismissed as a plaintiff.
“Heasley argues that dismissal is proper because WMO, as interpleader plaintiff, has already deposited the tournament prize money in the court’s registry and has no further interest in this case,” the opinion reads. “Perhaps more importantly, Heasley asserts WMO’s claimed entitlement to five times its litigation costs and attorney’s fees is grounds for its immediate dismissal. Heasley asserts as long was WMO stays in the case, the prize money could be materially reduced since that is the source from which WMO seeks to be paid its attorney’s fees and costs.”
However, the WMO opined it is still very much a party in the case because the integrity of the tournament and its rules remains at stake.
“The WMO asserts in opposition that because Heasley’s claim to the interpleaded funds would be an attack upon the actions and practices of the WMO’s directors, including the decisions of the WMO with regard to the prize money, the WMO has an interest relating to the subject of the action, which WMO could not protect if it did not remain a party to the case,” the opinion reads.
After hearing both arguments, Bennett on Friday ruled the WMO should remain as a plaintiff in the case.
“In this case, there can be little doubt that the WMO retains a significant interest in the subject matter of the interpleader action,” the opinion reads. “As Heasley’s entitlement to the prize money is based on the WMO’s purported failure to follow the tournament rules, and as the integrity of these rules and the tournament itself are very much in dispute in this case, the WMO retains a significant interest in the outcome of this case. Only be remaining a party to this action will WMO be able to sufficiently protect its interests in this matter.”
In terms of the WMO claims to five times the amount of its attorney fees and associated costs, Bennett ruled against the tournament, essentially ruling allowing the tournament to recover such an amount would considerably cut into the $2.8 million at stake.
“Even viewing the clause in the light most favorable to the WMO, these principles make clear that the five times multiplier set forth in the tournament rules is a penalty provision and not an enforceable liquidated damages clause,” the opinion reads. “Several considerations point the court to this conclusion. First, in an era in which attorney’s fees quickly and routinely amount to tens or even hundreds of thousands of dollars, a clause granting the WMO five times such an amount likely would be grossly excessive and disproportionate in light of the $2.8 million stake in this case.”
The judge’s opinion points out even if the WMO’s reasonable attorney fees through the trial would reach $100,000, the WMO would then recover $500,000 of the $2.8 million, or roughly 18 percent. If the WMO’s attorney fees reached $200,000, which is likely more accurate given the complexities of the case and the multiple claims and cross claims, the WMO would recover $1 million, or about 36 percent of the total prize money at stake in the case.
“While the exact percentage of the tournament prize money that the WMO would recover under the clause remains to be determined, the foregoing calculations point to the threat of a grossly excessive and disproportionate damages provision,” the opinion reads. “This concern is particularly acute in light of the WMO’s assertion that it remains a disinterested stakeholder with no financial stake in the case.”
The judge’s opinion points out the provision in the tournament rules appears to be a deterrent for every single challenge or potential rules infraction to be dragged into court, but in this case, the WMO itself brought the legal action when it filed the interpleader action.
“Finally, the court notes that it was the WMO and not an angler who initiated this suit,” the opinion reads. “While the clause appears to be targeted at discouraging tournament participants from rushing to the courthouse, its intended effect should not be accorded the same weight when the tournament itself was the party seeking judicial assistance.”
