Francisco Mejia, Big League Advance, and “Perry Mason Moments”

For every trial lawyer, the Holy Grail is that “Perry Mason moment.” That’s the dramatic point in the episode where the real killer, under skillful cross-examination by Mason, reveals everything to the shocked judge and jury, the chagrined prosecutor* agrees to drop the charges, and everyone rides happily into the sunset.

*On a completely irrelevant aside, the prosecutor in Perry Mason is just really awful. He doesn’t seem to know how to check his own cases, or interview witnesses, or use the Rules of Evidence, or object properly. I could never watch this show without wondering how he keeps his job.

It also almost never happens this way. Shocking, I know. (In my career, I’ve had three instances of what could be termed “Perry Mason moments.” Cultivating one requires a combination of preparation for the witness and a lot of luck.)

Earlier this year, I wrote about a lawsuit that Francisco Mejia had filed against Big League Advance, a company founded by former MLB pitcher Michael Schwimer which gives minor-league players capital advances against anticipated future major-league earnings. As I wrote then, Mejia made some pretty serious accusations against Schwimer’s company.

According to Mejia, BLA approached him when his mother was very ill and struggling with medical bills. The contracts were signed, says Mejia, without a translator, and BLA even paid for Mejia’s lawyer just so the contract could state Mejia had the advice of counsel. Mejia says that BLA employees showed up at his house unannounced to collect a payment of about $10,000 after Mejia made the big leagues and threatened to bar him from playing if he didn’t pay. And, according to the Complaint, given Mejia is projected to earn over $100 million in the major leagues, BLA stands to recover over $10,000,000 against a $360,000 investment, which Mejia says is unconscionable.

Then, last week, Mejia suddenly dropped his lawsuit.

Padres catching prospect Francisco Mejia is dropping his lawsuit against Big League Advance (https://t.co/IhgxwK3tDe). Statement here: pic.twitter.com/ZtgvewomGp

— Jack Dickey (@jackdickey) August 30, 2018

Here’s Mejia’s statement in full, via Jerry Crasnick at ESPN.

“Today I dropped my lawsuit against Big League Advance… I am happy with my agreement with Big League Advance, and appreciative of the information and support they provided to me. To be clear — I do not believe Big League Advance has ever deceived me. All of my interactions with Big League Advance and specifically Michael Schwimer have been very professional and respectful.

“I believe that Big League Advance offers a great option for all minor league players, and one that worked for me and helped me focus on baseball and fulfill my dream of reaching the major leagues. I want to make clear that I fully intend to honor my original agreement with Big League Advance. I apologize to BLA for filing the complaint and I have agreed to pay a portion of their legal fees as a result of my actions. I am happy to be putting this entire situation behind me and I am looking forward to focusing on baseball and continuing my professional baseball career.”

That’s obviously a very different account of events than the one Mejia alleged in his complaint. Michael Schwimer responded to the dismissal with this statement:

“We are pleased that Francisco Mejia has dropped his lawsuit… Big League Advance exists to help baseball players like Francisco achieve their dream of playing in the major leagues. Through our investments in minor league players, we provide them with the economic security and flexibility they need to help pursue a career in baseball. We have always, and will always, continue to act with the utmost professionalism and integrity.

“Our number one priority is to make sure any player we meet with has a complete understanding of our offer and access to all of the information they need in order to make the most informed decision. We were especially touched by the overwhelming support we received from hundreds of minor league players during this situation. We are grateful to all of them and will continue to help minor league players achieve their dream of becoming major leaguers.”

Ordinarily I’d chalk this up to a settlement, except for two aspects of Mejia’s statement. First, Mejia apologized to BLA. Apologies usually don’t happen in settlements, because settlements generally include denials of liability and wrongdoing by both sides. And second, more significantly, Mejia agreed to pay some of BLA’s attorney fees. That merits a closer look.

The United States is unusual in contested litigation because of something called the “American Rule.” (No, that’s not the Rule that says that the Designated Hitter is in the American League.) The American Rule stipulates that, unless there’s a statute or contract saying otherwise (something called “fee-shifting language“), each party to a lawsuit has to pay for its own attorneys. This surprises most people, who in my experience generally assume the loser pays. That’s not how it works in the United States. (It can also lead to some embarrassing errors, like when Oklahoma accidentally passed a law last year saying that the loser pays for attorney fees in cases brought in the State.) The United States is very much an outlier in this area, as most other countries using the British common law follow the English Rule, which requires the loser pays the winner’s fees. The rationale behind the English Rule is to limit and disincentivize frivolous lawsuits; the rationale behind the American Rule is to incentivize settlement and resolution of disputes.

In order for Mejia to pay BLA’s attorney fees, one of three things had to occur. First, under Federal Rule of Civil Procedure 11, a lawyer or party can be sanctioned (that is, punished) for filing a frivolous lawsuit by being forced to pay some or all of the other party’s attorney fees. Most states have a similar rule. For Rule 11 (or its state analogues) to apply, the lawsuit has to go beyond simply being meritless, though — it generally has to have no basis in fact or law. I actually talked to Schwimer about that back in April.

From that piece (linked above):

I asked Schwimer point-blank if Mejia was lying in his complaint. “Absolutely yes,” he said. “Where we said ‘denied’ [in our Answer], then obviously we’re saying that [that allegation is] a lie.” I then asked Schwimer if he would be pursuing a sanctions motion against Mejia based on that position. “I haven’t even spoken to anyone about that,” Schwimer said.

Looking at the docket in Mejia’s case, there wasn’t a motion for sanctions filed, though the parties could have settled the issue as part of the dismissal. The second possibility is that Mejia paid for BLA’s fees out of the goodness of his heart, which I find unlikely.

The third possibility — which is most likely — is that BLA enforced its fee-shifting and indemnification clauses in the contract. In other words, contracts can include language which says that the prevailing party (i.e., the party that wins) can get from the other party some or all of its attorney fees recouped. This contract had language like that in paragraphs 1.11(b) and 6.2, and since Mejia dismissed his lawsuit without getting anything, BLA was the prevailing party.

So what happened here? The case was dismissed by stipulation, which essentially means there is no court finding on the record. That said, this is one case where it seems the goal was never to litigate. Mejia filed a complaint with explosive allegations, then, without proceeding through discovery, dropped his suit, agreed to pay BLA’s attorney fees, and apologized. There’s no way to know for sure; Mejia may simply have lost his appetite for litigation and just wanted to get rid of the case. But it seems most likely that he simply wanted out of the contract, and his case never really had any merit. In other words, Big League Advance just had itself a Perry Mason moment.