Detroit Tigers v. Ignite Sports Media

Citation: Detroit Tigers, Inc. v. Ignite Sports Media, LLC, 203 F.Supp.2d 789 (E.D. Mich. 2002).

Factual Background
In January of 2000, Plaintiff, Detroit Tigers, Inc., and Defendant, Ignite Sports Media, LLC, entered into negotiations for the operation of the Tigers' official website for the 2000 baseball season. These oral negotiations were reduced to writing in February of 2000, in a document entitled "Letter of Intent" (LOI). The basic provisions of the LOI provide that Defendant will produce, maintain and host the website for Plaintiff, in exchange for a 50/50 share of the net profits of the site. Defendant would be responsible for its costs, and would guarantee a specific fee to Plaintiff per year, which was $600,000 for 2000). The parties negotiated and drafted a written contract, entitled "Interactive Media Services Agreement Between Ignite Sports Media, LLC and [Detroit Tigers, Inc]" (MSA). Its provisions are similar, but not identical to the basic provisions found in the LOI. The agreement required the approval of the Office of the Commissioner of the Major League Baseball (MLB), per the LOI. At the end of negotiations, Defendant Ignite sent the MSA to MLB for approval. In anticipation of approval from MLB, the parties commenced performance of the agreement. MLB approved the MSA on a later date. Despite hosting the website for the entire 2000 season, Defendant never signed the MSA. It appears Plaintiff has not signed it either. Defendant also allegedly never paid the $600,000 annual fee. Plaintiff brought this suit against Defendant for breach of contract, breach of an implied promise, promissory estoppel, and unjust enrichment. The Defendant filed a motion to dismiss for failure to state a claim upon which relief can be granted.

District Court Decision
Although the MSA includes a choice of law provision, the MSA was never signed by either party. Therefore, the court found that Illinois law should apply because the transaction at issue (hosting the website) was to be performed in Illinois at Defendant's place of business. Because the transaction at issue was performed in less than a year, the court found that it falls outside of the Statute of Frauds.

Breach of Contract
The elements for a valid contract are competent parties, valid subject matter, legal consideration, mutuality of obligation, and mutuality of agreement. The element at issue in this case is the mutuality of agreement. Mutuality of agreement is the mutual assent by the parties to its terms. Plaintiff alleges that although the MSA was never signed, Defendant manifested it assent to, and its intent to be bound by, the MSA by: (1) sending the MSA to the MLB for approval, and (2) behaving as if there were a contract in force, by creating and hosting the website, which is the subject of the MSA. The court denied Defendant's motion to dismiss Count I for breach of contract and found that Plaintiff has alleged facts which, if proven, would entitled Plaintiff to recover on a breach of express contract theory.

Breach of Implied Contract
Plaintiff's implied-in-fact contract theory is alternative to its breach of express contract. The court found that an agreement must have existed between the parties because the parties, as is evident from the facts and circumstances, intended to contract with each other. The court concluded that Plaintiff has properly pleaded, in the alternative, a cause of action for breach of an implied-in-fact contract claim and denied Defendant's motion to dismiss Count II.

Promissory Estoppel
Promissory estoppel cannot be based upon a promise which only induces plaintiffs to do that which they were already legally bound to do. Furthermore, promissory estoppel is a method to enforce promises that do not meet the requirements of consideration. In the instant case, the exchange of promises between the two parties constitutes considerations. The court found that because Plaintiff alleges consideration and because Plaintiff's detrimental reliance was something it was already contractually bound to refrain from doing, Plaintiff's promissory estoppel claim is defective as a matter of law. The court dismissed this count.

Unjust Enrichment
Plaintiff alleges that even if there is no express contract, and even if the court determines that there was no implied-in-fact contract, Plaintiff still licensed its trademarks, logos, etc. to Defendant and has not received any remuneration. The court found that the Plaintiff has properly pleaded this count in the alternative and denied the motion to dismiss for Count IV.