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U.S. District Judge Ronald Lew shot down well-known sports agent Leigh Steinberg’s attempt to add $23.5 million in lost revenue to a $44.6 million jury award against David Dunn, a former business partner who bolted in 2001 and took a group of high-profile pro football clients with him. Even though Judge Lew ruled against awarding more money to Steinberg, which could have forced Dunn out of business, Steinberg’s attorneys fared well. The judge upheld the validity of Dunn’s employment agreement with Steinberg’s agency, thus holding Dunn responsible for attorneys fees. Attorneys in the San Francisco office of Brobeck, Phleger & Harrison represented Steinberg, and the Cleveland-based firm Duvin, Cahn & Hutton represented Dunn. The legal fracas began when Dunn, a non-equity partner at Steinberg, Moorad & Dunn, left the sports agency in 2001 after it had been purchased by Canadian wealth management firm Assante Corp. Dunn opened his own agency, Athletes First, and took some employees and about 50 National Football League clients — including Buffalo Bills quarterback Drew Bledsoe and New York Giants receiver Amani Toomer — with him. “Dunn said that if Steinberg pursued litigation, private and salacious information about Leigh’s life would be made public,” said Franklin Brockway Gowdy, the lead partner on the case at Brobeck. Steinberg filed suit a few months later. On Nov. 15, a jury found Dunn had violated his employment agreement and awarded Steinberg and his partner, Jeffrey Moorad, damages. “This sends a message in the sports agency industry that employment agreements are important and will be enforced,” said Gowdy. A hearing is scheduled for Feb. 10 at which the judge will hear arguments by the defense looking to overturn the jury’s verdict. Dunn’s attorney, Lee Hutton, said he plans to argue a motion for retrial. He said the trial should be thrown out because the court blended state unfair competition law, which is a non-jury claim, with common law unfair competition claims. If unsuccessful, he said his client will appeal to the Ninth Circuit U.S. Court of Appeals. Hutton said Steinberg’s sole intent is to put Dunn out of business. “As for the attorneys fees, it shows their true desire, which is to bury Dave Dunn, so that athletes that want him as an agent won’t have that option.” In addition to Gowdy in Brobeck’s San Francisco office, partners Rollin Chippey II and Kent Roger, and associates Christopher Banks, Gregory Genske and William Friedman worked on the case. Associate Salvatore Picariello worked on the case out of the firm’s Irvine office. David Cornwell served as in-house counsel for Steinberg & Moorad. ELOQUENT/OPEN TEXT Attorneys in the San Francisco office of Farella Braun & Martel represented Open Text Corp., a maker of Web-based corporate management software, through their acquisition of Eloquent Inc., which makes software used in sales and marketing. Lawyers in the San Francisco office of Cooley Godward represented Eloquent. Under terms of the agreement, Open Text will acquire all of the issued and outstanding shares of Eloquent for cash up to $6.72 million. “This transaction is interesting because it was a public deal, but we provided for a holdback and a purchase price adjustment, which usually characterize a deal involving private companies,” said Mark Anderson, the lead partner on the deal at Farella. Anderson said that Open Text will look at the net cash position of Eloquent before the deal closes, and if it falls below a certain level, the $6.72 million figure will have to be adjusted down before the deal closes. “Despite the deal’s small size, it was as complex and challenging as any public company sale,” said Cooley partner Jodie Bourdet, who led the deal for Eloquent. In addition to Anderson, partners Matthew Lewis and Phyllis Solomon, special counsel Bruce Deming, and associate John “Jack” Martel worked on the deal. At Cooley, in addition to Bourdet, partner Kenneth Guernsey and associates Edward Deibert and William Edison worked on the deal.

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