Nash wins appeal in fitness-club case
VANCOUVER — Former National Basketball Association star Steve Nash has won his appeal of a ruling that threw out his lawsuit seeking to have his name removed from a chain of fitness facilities.
In October 2016, Nash filed suit in B.C. Supreme Court alleging that there had been a breach of contract between his holding company, B&L Holdings Inc., and SNFW Fitness B.C. Ltd., which runs the clubs.
There are 23 Steve Nash fitness facilities in B.C., including one at the Uptown mall.
Nash, who grew up in Saanich, sought an injunction that would prevent SNFW from using his name or image in the future, as well as an award in damages.
But the defendants applied to have the case dismissed before it could go to trial and in a ruling released in August 2017, B.C. Supreme Court Justice Nitya Iyer agreed with the defendants that Nash’s notice of civil claim had failed to disclose a proper cause of action.
The judge concluded that Nash’s claim that SNFW’s continued use of the Nash endorsement was unlawful raised no genuine issue for trial and summarily dismissed the suit.
Nash appealed the judge’s findings and in a ruling released Wednesday, a three-judge panel of the B.C. Court of Appeal overturned the lower court’s ruling dismissing the case.
In his reasons for judgment, B.C. Court of Appeal Justice Richard Goepel noted that the underlying issue in the litigation was whether under California law, a business can continue to use the endorsement of a celebrity when the celebrity is no longer using the business’s product.
In November 2006, Nash’s holding company had entered into an agreement with Vancouver Bay Clubs Ltd., creating a licensing deal allowing the use of Nash’s name on the clubs until March 2022. Court heard that the licensing agreement was to be governed and construed in accordance with the laws of the state of California.
Nash became a shareholder and director of the firm that operated the facilities.
But since October 2014, after several financial transactions that resulted in SNFW taking over operation of the fitness clubs, Nash’s holding company has not had an equity participation in the fitness clubs and the former basketball star has ceased to be a director or play any role in the clubs.
Nash claimed that under California law, the use of his endorsement after October 2014 was unlawful and as a matter of public policy the court must prevent SNFW from exercising any rights under the licence agreement.
Goepel said he agreed with Iyer that the defendants’ evidence established the terms of the licence agreement and its transfer and assignment to SNFW and agreed that Nash personally confirmed SNFW’s acquisition of the Nash endorsement under the licence agreement.
“To succeed in their application for summary judgment, however, the defendants had to go further. They had to establish that the continued use of the Nash endorsement was not deceptive or illegal under California law. They did not do so,” Goepel said.
Goepel noted that Nash’s holding company argued that the licence agreement was void under California law because of Federal Trade Commission regulations concerning celebrity endorsements.
“The chambers judge put the onus on B&L to provide evidence in support of its claim of illegality. With respect, she misapplied the test,” Goepel said.
Goepel allowed the appeal and set aside the dismissal of B&L’s claim against SNFW. Justice Lauri Ann Fenlon and Justice Gail Dickson agreed with Goepel’s findings.
SNFW and Mark Mastrov, the owner of the NBA’s Sacramento Kings, are the defendants in the case, along with Montreal businessman Leonard Schlemm.
Nash, who played for the NBA’s Phoenix Suns, Dallas Mavericks and Los Angeles Lakers, was twice named the league’s most valuable player, and is the only Canadian ever to be so honoured.
He was an eight-time National Basketball Association all-star and in 2007 was awarded the Order of Canada.