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Pittsburgh Steelers running back Rashard Mendenhall‘s $1 million lawsuit against clothing retailer Hanesbrands Inc. for canceling his lucrative endorsement deal has been cut short. On Tuesday, the parties filed a notice of voluntary dismissal after coming to a settlement.
Mendenhall brought the lawsuit in July 2011, and the resulting case had it all: Osama bin Laden, Charlie Sheen, free speech, morals clauses of celebrity contracts and more.
The NFL star’s contract to endorse Champion sporting gear was terminated after the outspoken player tweeted about the 9/1 terrorist attacks, “We’ll never know what really happened” and tweeted after bin Laden’s death: “What kind of person celebrates death? It’s amazing how people can HATE a man they have never even heard speak. We’ve only heard one side.”
Mendenhall presented his case as defending the First Amendment right for celebrities to say controversial things. Hanesbrands countered by saying the dispute was really about whether a trademark owner that had built a famous brand was required to continue to pay a celebrity endorser whose opinions threatened to bring the company into public disrepute.
In April, a federal judge in North Carolina was tasked with deciding whether the case should be dismissed or allowed to be heard by a jury.
Judge James Beaty said that it should survive, denying a motion to dismiss.
Morals clauses tend to get lots of ink because celebrities often do stupid things. But disputes over contractual legalese like morals clauses rarely make it into a public courtroom, even if these morals clauses are written so broadly as to make their enforceability a bit of mystery.
In this case, Beaty ruled that Hanesbrands had an implied covenant of good faith and fair dealing “not to act arbitrarily, irrationally or unreasonably in exercising [its] discretion” to execute its termination rights under the morals clause of the contract with Mendenhall.
Did Hanesbrands act arbitrarily?
As the case proceeded into the discovery stage on the path to trial, Mendenhall’s attorneys began building what will henceforth be known here as the “Charlie Sheen defense”: pointing to another celebrity who has said outrageous things and putting the onus on the other party to explain why one endorsement deal was terminated and another wasn’t.
Mendenhall quoted Sheen saying in an old radio interview: “It seems to me like 19 amateurs with box cutters taking over four commercial airliners and hitting 75 percent of their targets feels like a conspiracy theory. It raises a lot of questions.”
Mendenhall’s lawyers argued that Hanesbrands “hired Mr. Sheen as an endorser after he had gone public to challenge the United States government’s explanation for the attacks of Sept. 11″ and questioned why their client who had tweeted his own 9/11 conspiracy thoughts had been treated differently.
Soon thereafter, the parties reached a settlement, precluding what surely would have been a tweet-friendly trial. Terms of the settlement have not been revealed.
E-mail: email@example.com; Twitter: @eriqgardner
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