Rapaport v. Barstool Sports Inc.

Background

Michael Rapaport and Michael David Productions, Inc. moved under Local Rule 6.3 for reconsideration of the court’s March 29, 2021 order. That earlier order denied Rapaport’s motion for summary judgment on Barstool Sports, Inc.’s breach-of-contract counterclaim and on Rapaport’s breach-of-contract claim concerning good-faith promotional efforts. It also granted summary judgment to Barstool Sports, Adam Smith, Kevin Clancy, Eric Nathan, and David Portnoy on Rapaport’s fraud and defamation claims. Rapaport alternatively asked the court to certify issues for an immediate, mid-case appeal.

Reconsideration standard

The court explained that reconsideration is an extraordinary remedy. It is generally available only when the court overlooked controlling law or important facts, when controlling law has changed, when new evidence is available, or when correction is needed to prevent clear error or serious unfairness. A reconsideration motion cannot be used to repeat rejected arguments, raise arguments that could have been made earlier, or obtain another hearing on the merits.

Contract counterclaim

Barstool’s counterclaim alleged that it properly terminated the Talent Agreement for cause and could recover the $400,000 guarantee it paid Rapaport, minus Rapaport’s 60% share of revenue from his podcast and Rant Videos. Rapaport argued that Barstool could not prove damages because his share of the relevant revenue exceeded $400,000.

The dispute focused on whether a document’s figure of $417,646 in “Lifetime Gross Ad Revenue” represented total advertising revenue or Rapaport’s share of that revenue. The court held that both interpretations were plausible. Rapaport could ultimately persuade the factfinder that his interpretation was correct, but he had not shown that it was the only reasonable interpretation. The court therefore declined to reconsider its earlier decision leaving the issue for the factfinder.

Good-faith promotional-efforts claim

Rapaport also sought reconsideration of the denial of summary judgment on his claim that Barstool breached the Talent Agreement by failing to make good-faith efforts to promote his content and brand. The claim concerned Barstool’s alleged failure to obtain advertisers for his Rant Videos and alleged insults directed at him.

The court stated that questions about good faith are almost always questions for a jury. Rapaport had repeated his earlier arguments without showing that the court overlooked controlling law or important evidence. The court therefore denied reconsideration of this contract issue. It noted that a jury could accept Rapaport’s position, but could also conclude that Barstool and Rapaport used insults and public disputes for promotional purposes.

Fraud claims

Rapaport’s fraudulent-concealment and fraudulent-inducement claims concerned alleged misrepresentations about Barstool’s negotiations with Sirius and Barstool’s contractual obligation to make good-faith efforts to seek opportunities for Rapaport to host a weekday show.

The court reaffirmed that the fraud claims duplicated the contract claim. Under the New York law discussed by the court, a fraud claim does not duplicate a contract claim only if the alleged misrepresentations were outside the contract, the defendant had a duty to disclose, or the plaintiff suffered special damages. The court concluded that Rapaport had not established any of those circumstances.

On the alleged outside-the-contract representations, the court found that the Talent Agreement imposed no obligation to provide Rapaport with a Sirius show or any show. Instead, it required Barstool to use good-faith efforts to explore opportunities for a show on some platform. The court concluded that the alleged misrepresentations about the timing and conditions of a possible show were covered by that contractual obligation.

On the alleged duty to disclose, the court rejected Rapaport’s attempt to rely on a misleading-partial-disclosure theory because he had not raised that theory in his original summary-judgment briefing. The court also rejected his argument under the special-facts doctrine. It reasoned that Rapaport, with counsel, entered a fully integrated agreement after knowing that the Sirius negotiations were tentative and progressing slowly. The agreement stated that it contained the parties’ entire understanding and replaced earlier negotiations and understandings.

On special damages, the court found that Rapaport had forfeited the argument by failing to develop it adequately in his original briefing. It further held that his newly developed theories were unavailing. New York law, as described by the court, does not recognize the loss of an alternative bargain as special damages when that theory is speculative. The court also rejected Rapaport’s argument that his fraud damages were the same as his alleged defamation damages, stating that defamation damages do not flow from entering a contract.

The court therefore denied reconsideration as to the fraud claims.

Defamation claims

The court also reaffirmed its earlier conclusion that Rapaport had not shown that the challenged statements would have been understood by reasonable audiences as factual statements conveyed for their accuracy rather than opinions.

The court rejected Rapaport’s argument that this analysis should apply only to anonymous or pseudonymous online speakers. It held that publication on social media or blogs may signal that a statement is opinion even when the speaker is identified, and that the online context supported the earlier ruling.

The court also rejected arguments based on Bing’s suggested search term “Michael Rapaport herpes” and negative Apple Podcasts reviews. Repetition of an opinion by a third party, the court stated, does not turn that opinion into an actionable factual statement. The court further found that Rapaport had not tied his “inside look” argument to any specific statement or shown that the court had overlooked it.

Finally, the court rejected Rapaport’s argument that statements calling him a “fraudulent sack of shit” were actionable mixed opinions based on false accounts of bets. The court concluded that the blog posts’ premise was that the bets were not completed, so Rapaport’s evidence that they were not completed did not establish that the posts were false. The court therefore found no basis to reconsider its earlier ruling on defamation.

Interlocutory appeal and disposition

Under 28 U.S.C. § 1292(b), an interlocutory appeal may be certified when a case presents a controlling legal question with substantial disagreement, and an immediate appeal could materially advance the litigation. The court found that Rapaport merely appended his appeal request to his other arguments and did not explain why this exceptional relief was warranted. The court denied the request for certification.

Judge Naomi Reice Buchwald concluded that Rapaport’s motion was denied. The clerk was directed to terminate the pending motion.