David Mark Sloane v. Tennessee Department of State, Business Services Division

10/03/2019
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
Assigned on Briefs August 1, 2019
DAVID MARK SLOANE v. TENNESSEE DEPARTMENT OF STATE,
BUSINESS SERVICES DIVISION
Appeal from the Chancery Court for Davidson County
No. 18-466-II Anne C. Martin, Chancellor
___________________________________
No. M2019-00126-COA-R3-CV
___________________________________
On September 30, 2016, Appellee Tennessee Secretary of State, Business Services
Division assessed $25,000.00 in civil penalties against Appellant David M. Sloane for his
violations of the Athlete Agent Reform Act of 2011. Mr. Sloane requested a hearing to
dispute the penalties, and the Administrative Law Judge (“ALJ”) reduced the penalties to
$5,000.00 for each violation and $740.00 in investigatory costs. Mr. Sloane then filed a
petition for judicial review with the trial court; the trial court affirmed the ALJ’s order.
Mr. Sloane appeals. We affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed and Remanded
KENNY ARMSTRONG, J., delivered the opinion of the court, in which THOMAS R.
FRIERSON, II and W. NEAL MCBRAYER, JJ., joined.
David M. Sloane, West Coral Springs, Florida, appellant, pro se.
Herbert H. Slatery, III, Attorney General and Reporter, Andrée Blumstein, Solicitor
General, Janet M. Kleinfelter, Deputy Attorney General, and Kelley L. Grover, Assistant
Attorney General, for the appellee, Tennessee Department of State, Business Services
Division.
OPINION
I. Background
Mr. David M. Sloane (“Appellant”), a Florida resident, worked as a professional
sports agent with a focus on representing young baseball players. In 2012, Mr. Sloane
became aware of Mr. Jordan Sheffield, a talented young baseball player in Tullahoma,
Tennessee with good Major League Baseball (“MLB”) draft prospects. That fall, Mr.
Sloane initiated correspondence with the Sheffield family, including Mr. Justus Sheffield,
Jordan’s younger brother who was also a talented young baseball player.1 In October
2012, Mr. Sloane traveled to Jupiter, Florida to meet with Jordan and Justus’ parents,
Travis and Misty Sheffield. Thereafter, Mr. Sloane kept in touch with the family by
telephone and email. In December 2012, Mr. Sloane sent an email to Jordan and Justus,
copying their parents, in which he stated, in part:
If you are interested in anything about me, please check out my web site . . .
. You can email me questions you may have as well or if it’s ok with your
Parents, I’m available by phone any time. If you get my voice mail, I
promise you will hear back from me within 24 hours as long as you leave a
number for me to call.
***
Thanks for giving me a chance to communicate with you. I promise you
will never regret giving me this chance to show you what I bring to the
table.
In the spring of 2013, Mr. Sloane met with Jordan, Justus, and their parents in the
family’s home in Tennessee. At that time, Jordan was a senior in high school and Justus
was a junior. The purpose of Mr. Sloane’s visit was to discuss the prospect of Mr. Sloane
representing Jordan and Justus, the services Mr. Sloane could provide, and the cost of Mr.
Sloane’s services. During this meeting, Mr. Sloane showed the family his standard
agency contract, but neither Jordan nor Justus signed a contract.
During the MLB 2013 draft process, Jordan did not sign with a team and chose
instead to attend Vanderbilt University. In August 2013, Justus began his senior year of
high school, and Mr. Sloane remained in contact with him. On August 13, 2013, Mr.
Sloane emailed Justus, copying his parents, and stated, in part:
1
Mr. Sloane alleges that he initiated correspondence when he mailed a letter to the family
followed by a telephone call to Mr. Travis Sheffield, Jordan’s father. Mr. Sloane further alleges that,
during the telephone call, Travis explained that Jordan already had a professional agent. Despite this
information, Mr. Sloane continued to contact the Sheffield family.
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My initial objective in this relationship is acquiring you as a client. To this
point, I have tried to provide as much information as possible about myself,
the business of Professional Baseball, and my view of what role I will play
in your future MLB career.
***
I promise that we will be seeing each other several times between now and
the MLB Draft in June. I will be in Tullahoma this Fall and will see you
again at the Jupiter Showcase in Oct. I will return to see you at some point
during your HS season. In between these visits, should you require my
presence, I’m a short plane trip away. I will also be keeping in constant
touch with you and/or your family by phone, email and texts.
In the fall of 2013, Mr. Sloane made a call to the Sheffields to discuss Justus’ 2014
draft prospects, the draft process, Mr. Sloane’s representation of Justus, and Mr. Sloane’s
professional agency contract. Shortly after this conversation, the Sheffields decided that
Mr. Sloane would represent Justus. In November 2013, Mr. Sloane and Justus came to
an oral agreement concerning Mr. Sloane’s contract, but Justus never signed a written
contract. However, after November 2013, Justus informed baseball scouts that Mr.
Sloane represented him, and Mr. Sloane began communicating with scouts and other
professionals on Justus’ behalf.
In 2012, when he initially contacted the Sheffields, Mr. Sloane was registered as
an athlete agent in Florida and Alabama; he was not yet registered as an athlete agent in
Tennessee. In April 2014, Mr. Sloane submitted his registration application to the
Tennessee Secretary of State, Business Services Division (“Appellee” or “Business
Services Division”) and was approved as an athlete agent in Tennessee under Tennessee
Code Annotated section 49-7-2101, et seq. (the “Athlete Agent Reform Act of 2011” or
“Act”).2 In June 2014, following his approval as an athlete agent in Tennessee, Mr.
Sloane represented Justus in the 2014 MLB professional draft. The Cleveland Indians
drafted Justus in the first round and paid him a $1.6 million dollar signing bonus.
Thereafter, Justus paid Mr. Sloane $48,000.00. Mr. Sloane contends that Justus orally
agreed to pay him five percent of his signing bonus, which is $80,000.00, not the
$48,000.00 amount.
In October 2014, Mr. Sloane sued Justus in Arizona state court alleging that Justus
breached his agreement to pay Mr. Sloane five percent of the signing bonus. During the
lawsuit, Justus discovered that Mr. Sloane was not registered as an athlete agent in
2
We note that the version of the Act cited in this Opinion is that which was in effect at the time
Mr. Sloane was charged with these violations. The Act has since been amended.
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Tennessee when he first initiated contact with him. Justus’ current professional sports
agent, Mr. Bo McKinnis, reported this information to Mr. Kevin Rayburn, who at the
time was the assistant director of the Business Services Division who oversaw
administration of the Act.3
On September 30, 2016, Appellee issued an Order and Assessment of Civil
Penalties against Mr. Sloane related to his representation of Justus and his violations of
the Act.4 Appellee assessed: (1) a $10,000.00 penalty for Mr. Sloane initiating contact
with Justus prior to Mr. Sloane’s registration as an athlete agent in violation of Tennessee
Code Annotated section 49-7-2114(b)(1); and (2) a $15,000.00 penalty for Mr. Sloane
acting as an athlete agent prior to Mr. Sloane’s registration as an athlete agent in violation
of Tennessee Code Annotated sections 49-7-2104(a) and 49-7-2114(b)(5). See also
Tenn. Code Ann. § 49-7-2135(b)(5). Mr. Sloane requested a hearing to dispute the
penalties.
On November 30, 2017, Administrative Law Judge (“ALJ”) Elizabeth Cambron
held a contested hearing concerning Mr. Sloane’s alleged violations of the Act. Mr.
Sloane proceeded pro se. Both Mr. Sloane and the Business Services Division were
given the opportunity to present witnesses and exhibits. Appellee called two witnesses:
(1) Mr. Nathan Burton, the director of the Business Services Division; and (2) Mr. Travis
Sheffield. Mr. Sloane testified as the only witness for his side. On February 28, 2018,
ALJ Cambron entered an initial order finding, inter alia, that Mr. Sloane violated the Act
when he initiated contact with Justus and represented a student athlete prior to registering
as an athlete agent with the Business Services Division. However, ALJ Cambron
reduced the two penalties to $5,000.00 each and assessed $740.00 in investigatory costs
against Mr. Sloane. Mr. Sloane filed a petition for reconsideration of the initial order,
which the ALJ denied.
On April 25, 2018, Mr. Sloane filed a petition for judicial review in the Chancery
Court of Davidson County (“trial court”). While it is not explicitly stated in his petition,
it appears Mr. Sloane argued that: (1) the Business Services Division “selectively” and
“unlawfully” enforced the Act against him; (2) the ALJ violated his Due Process rights
when she denied his motions to compel compliance with several subpoenas; and (3) the
penalties that Appellee/ ALJ assessed against him were excessive and unreasonable.5 On
3
The Arizona state court granted Justus’ motion to dismiss the lawsuit on the grounds that Mr.
Sloane was not a registered athlete agent when he entered into the oral agreement with Justus, thus
rendering the contract void ab initio.
4
Appellee originally assessed penalties against Mr. Sloane based on his contact with Jordan as
well, but it later withdrew its charges related to Jordan. Therefore, we are only concerned with Mr.
Sloane’s contact with Justus.
5
In our record, a page from Mr. Sloane’s petition for judicial review is missing. The third page
of his petition ends with paragraph thirteen, and the fourth page begins with lines that appear to be
running over from paragraph seventeen.
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November 27, 2018, the trial court held a final hearing. By order of December 29, 2018,
the trial court affirmed the ALJ’s order, concluded that Mr. Sloane violated two
provisions of the Act, and upheld the ALJ’s imposition of $10,000.00 in fines and
$740.00 in investigatory costs. Mr. Sloane appeals.
II. Issues
Mr. Sloane raises four issues on appeal, which we state as follows:
1. Whether the ALJ erred when she denied Mr. Sloane’s motions to compel.
2. Whether Justus Sheffield was a student athlete under the Athlete Agent Reform
Act of 2011 when Mr. Sloane initially contacted the Sheffield family.
3. Whether Appellee abused its discretion and conducted selective, unlawful
enforcement of the Act by rendering arbitrary and capricious fines against Mr.
Sloane.
4. Whether the civil penalties and investigatory costs assessed to Mr. Sloane violated
the Eight Amendment of the United States Constitution and Tennessee
Constitution Article I, Section 16.
III. Standard of Review
When the Tennessee Secretary of State assesses a civil penalty against an athlete
agent, “[a]ny hearing on the imposition of any fine . . . shall be in accordance with the
Uniform Administrative Procedures Act . . . .” Tenn. Code Ann. § 49-7-2117; Tenn.
Code Ann. § 49-7-2138. The UAPA provides, in pertinent part:
(a)(1) A person who is aggrieved by a final decision in a contested case is
entitled to judicial review under this chapter, which shall be the only
available method of judicial review. . . .
***
(b)(1)(A) Proceedings for review are instituted by filing a petition for
review in the chancery court of Davidson County, unless another court is
specified by statute. Such petition shall be filed within sixty (60) days after
the entry of the agency’s final order thereon.
***
(h) The court may affirm the decision of the agency or remand the case for
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further proceedings. The court may reverse or modify the decision if the
rights of the petitioner have been prejudiced because the administrative
findings, inferences, conclusions or decisions are:
(1) In violation of the of constitutional or statutory provisions;
(2) In excess of the statutory authority of the agency;
(3) Made upon unlawful procedure;
(4) Arbitrary or capricious or characterized by abuse of
discretion or clearly unwarranted exercise of discretion; or
(5)(A) Unsupported by evidence that is both substantial and
material in the light of the entire record.
(B) In determining the substantiality of
evidence, the court shall take into account
whatever in the record fairly detracts from its
weight, but the court shall not substitute its
judgment for that of the agency as to the weight
of the evidence on questions of fact.
(i) No agency decision pursuant to a hearing in a contested case shall be
reversed, remanded or modified by the reviewing court unless for errors
that affect the merits of such decision.
Tenn. Code Ann. § 4-5-322. This Court explained the standard set forth in Tennessee
Code Annotated section 4-5-322 in City of Memphis, to-wit:
Upon confirming that an agency has employed the proper legal
principles in the case under review, this Court must then consider the
disputed factual findings and address whether the agency had a reasonably
sound basis for making those findings. See McEwen v. Tenn. Dept. of
Safety, 173 S.W.3d 815, 820 (Tenn. Ct. App. 2005). Like the trial court,
this Court applies the substantial and material evidence standard in
reviewing the agency’s findings of fact. Bobbitt v. Shell, 115 S.W.3d 506,
509-10 (Tenn. Ct. App. 2003). Substantial and material evidence is “such
relevant evidence as a reasonable mind might accept to support a rational
conclusion” and to furnish a reasonably sound basis for the decision under
consideration. City of Memphis v. Civil Serv. Comm’n, 216 S.W.3d 311,
316 (Tenn. 2007) (quoting Jackson Mobilphone Co. v. Tenn. Pub. Serv.
Comm’n, 876 S.W.2d 106, 110-11 (Tenn. Ct. App. 1993)); Dickson v. City
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of Memphis Civil Serv. Comm’n, 194 S.W.3d 457, 464 (Tenn. Ct. App.
2005); Pruitt v. City of Memphis, No. W2004-01771-COA-R3-CV, 2005
WL 2043542, at *7 (Tenn. Ct. App. Aug. 24, 2005); Bobbitt, 115 S.W.3d at
510.
As directed by the statute, we take into account whatever in the
record fairly detracts from the weight of the evidence, but we may not
substitute our own judgment on questions of fact by re-weighing the
evidence. See Tenn. Code Ann. § 4-5-322(h)(5)(B). When the agency
conducts a hearing and can evaluate the witnesses as they testify, this Court
gives the tribunal’s credibility determinations great weight. Pruitt, 2005
WL 2043542, at *7. Moreover, the substantial and material evidence
standard does not justify reversal of an administrative decision only
because the evidence could also support another result. Martin v.
Sizemore, 78 S.W.3d 249, 276 (Tenn. Ct. App. 2001). Rather, we may
reject an administrative determination only if a reasonable person would
necessarily arrive at a different conclusion based on the evidence. Id.
Likewise, Tennessee Code Annotated Section 4-5-322(h)(4) permits
a reviewing court to modify or reverse an administrative decision if it is
“[a]rbitrary or capricious or characterized by abuse of discretion or clearly
unwarranted exercise of discretion.” Tenn. Code Ann. § 4-5-322(h)(4). A
decision unsupported by substantial and material evidence is arbitrary and
capricious. City of Memphis, 216 S.W.3d at 315. Yet, a clear error of
judgment can also render a decision arbitrary and capricious
notwithstanding adequate evidentiary support. Id. at 316. A decision is
arbitrary or capricious if it “is not based on any course of reasoning or
exercise of judgment, or . . . disregards the facts or circumstances of the
case without some basis that would lead a reasonable person to reach the
same conclusion.” Id. (quoting Jackson Mobilphone, 876 S.W.2d at 110-
11).
City of Memphis v. Civil Serv. Comm’n of Memphis, 238 S.W.3d 238, 243 (Tenn. Ct.
App. 2007).
While we are cognizant that Mr. Sloane is representing himself in this appeal, it is
well-settled that “pro se litigants are held to the same procedural and substantive
standards to which lawyers must adhere.” Brown v. Christian Bros. Univ., 428 S.W.3d
38, 46 (Tenn. Ct. App. 2013). This Court has held that “[p]arties who choose to represent
themselves are entitled to fair and equal treatment by the courts.” Hodges v. Tenn. Att’y
Gen., 43 S.W.3d 918, 920 (Tenn. Ct. App. 2000); Paehler v. Union Planters Nat’l Bank,
Inc., 971 S.W.2d 393, 396 (Tenn. Ct. App. 1997). Nevertheless, “courts must not excuse
pro se litigants from complying with the same substantive and procedural rules that
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represented parties are expected to observe.” Young v. Barrow, 130 S.W.3d 59, 63
(Tenn. Ct. App. 2003); Edmundson v. Pratt, 945 S.W.2d 754, 755 (Tenn. Ct. App.
1996); Kaylor v. Bradley, 912 S.W.2d 728, 733 n.4 (Tenn. Ct. App. 1995).
Tennessee Rule of Appellate Procedure 27(a) mandates that “[t]he brief of the
appellant shall contain under appropriate headings and in the order here indicated:”
(1) A table of contents, with references to the pages in the brief;
(2) A table of authorities, including cases (alphabetically arranged), statutes
and other authorities cited, with references to the pages in the brief where
they are cited;
(3) A jurisdictional statement in cases appealed to the Supreme Court
directly from the trial court indicating briefly the jurisdictional grounds for
the appeal to the Supreme Court;
(4) A statement of the issues presented for review;
(5) A statement of the case, indicating briefly the nature of the case, the
course of proceedings, and its disposition in the court below;
(6) A statement of facts, setting forth the facts relevant to the issues
presented for review with appropriate references to the record;
(7) An argument, which may be preceded by a summary of argument,
setting forth:
(A) the contentions of the appellant with respect to the issues
presented, and the reasons therefor, including the reasons why
the contentions require appellate relief, with citations to the
authorities and appropriate references to the record (which
may be quoted verbatim) relied on; and
(B) for each issue, a concise statement of the applicable
standard of review (which may appear in the discussion of the
issue or under a separate heading placed before the discussion
of the issues);
(8) A short conclusion, stating the precise relief sought.
Tenn. R. App. P. 27(a). Additionally, Tennessee Court of Appeals Rule 6 provides that a
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(a) [w]ritten argument in regard to each issue on appeal shall contain:
(1) A statement by the appellant of the alleged erroneous action of the trial
court which raises the issue and a statement by the appellee of any action of
the trial court which is relied upon to correct the alleged error, with citation
to the record where the erroneous or corrective action is recorded.
(2) A statement showing how such alleged error was seasonably called to
the attention of the trial judge with citation to that part of the record where
appellant’s challenge of the alleged error is recorded.
(3) A statement reciting wherein appellant was prejudiced by such alleged
error, with citations to the record showing where the resultant prejudice is
recorded.
(4) A statement of each determinative fact relied upon with citation to the
record where evidence of each such fact may be found.
(b) No complaint of or reliance upon action by the trial court will be
considered on appeal unless the argument contains a specific reference to
the page or pages of the record where such action is recorded. No assertion
of fact will be considered on appeal unless the argument contains a
reference to the page or pages of the record where evidence of such fact is
recorded.
Tenn. Ct. App. R. 6(a) and (b).
Mr. Sloane’s appellate brief fails to comply with many of the foregoing
requirements. Specifically, he fails to cite to precise page numbers or sections of the
record to support his contentions. Tenn. Ct. App. R. 6(a)(4) and (b). Mr. Sloane also
fails to refer to the pages in his brief where his authorities are cited. Tenn. R. App. P.
27(a)(2). Finally, as will be discussed, infra, many of Mr. Sloane’s arguments do not
include authority to support his arguments. Tenn. R. App. P. 27(a)(7).
“‘Courts have routinely held that the failure to make appropriate references to the
record and to cite relevant authority in the argument section of the brief as required by
Rule 27(a)(7) constitutes a waiver of the issue.’” Forbess v. Forbess, 370 S.W.3d 347,
355 (Tenn. Ct. App. 2011) (quoting Bean v. Bean, 40 S.W.3d 52, 55-56 (Tenn. Ct. App.
2000)); see also Tellico Village Property Owners Ass’n, Inc. v. Health Solutions, LLC,
No. E2012-00101-COA-R3-CV, 2013 WL 362815, at *3 (Tenn. Ct. App. Jan. 30, 2013)
(no perm. app. filed ) (quoting Branum v. Akins, 978 S.W.2d 554, 557 n.2 (Tenn. Ct.
App. 1998)) (“‘Where a party makes no legal argument and cites no authority in support
of a position, such issue is deemed to be waived and will not be considered on appeal.’”).
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Furthermore, “the Supreme Court has held that it will not find this Court in error for not
considering a case on its merits where the plaintiff did not comply with the rules of this
Court.” Bean, 40 S.W.3d at 54-55 (citing Crowe v. Birmingham & N.W. Ry. Co., 1
S.W.2d 781 (Tenn. 1928)).
Although Mr. Sloane failed to comply with the rules concerning the content of his
appellate brief, because this Court’s review is limited to reviewing the administrative
record, we conclude that Mr. Sloane’s procedural failures are not fatal to his appeal.
Accordingly, we will proceed to adjudicate this appeal on the merits while cautioning
future litigants to ensure proper compliance with the applicable procedural rules.
IV. Analysis
A. Whether Justus Sheffield was a “Student Athlete”
Under the Act, an “athlete agent” is defined as
(2)(A) . . . an individual who enters into an agency contract with a student
athlete or, directly or indirectly, recruits or solicits a student athlete to enter
into an agency contract, or, for compensation or for anything of value,
procures, offers, promises, negotiates, or attempts to procure, offer,
promise, or negotiate on behalf of a student athlete, employment with a
professional sports team or organization as a professional athlete or
enrollment at any college, university, community or junior college that
offers an athletic scholarship to the student athlete;
Tenn. Code Ann. § 49-7-2102(2)(A). A “student athlete” is defined as
(12)(A) . . . an individual who engages in, is eligible to engage in or may be
eligible in the future to engage in any intercollegiate sport;
Tenn. Code Ann. § 49-7-2102(12)(A).
As it concerns this appeal, the Act is violated only when an athlete agent, who is
not registered as such with the State of Tennessee, recruits or solicits a student athlete to
enter into an agency contract. See Tenn. Code Ann. § 49-7-2102(2)(A). If an athlete
agent recruits or solicits an individual who is not a student athlete then the Act does not
apply. During the hearing before the ALJ, Mr. Sloane stipulated that he violated the Act,
thereby implicitly admitting that Justus was a student athlete when he initiated contact
with the Sheffield family and when he entered into an oral contract with Justus.
During his testimony before the ALJ, Mr. Sloane read from sections of the
Uniform Athlete Agent Act, including:
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MR. SLOANE: An athlete agent may not intentionally initiate contact with
a student athlete unless registered under this act.
This section of the Uniform Athlete Agent Act reads very similar to the Act in
Tennessee, to-wit:
(b) An athlete agent shall not:
(1) Initiate contact with a student athlete, or a student
athlete’s family and friends, unless registered under this part;
Tenn. Code Ann. § 49-7-2114(b)(1); Tenn. Code Ann. § 49-7-2135(b)(1). Mr. Sloane
followed his reading of this section of the Uniform Athlete Agent Act with the statement,
“Now, the fact shows that I did [do this]. I was one of those people that was not aware of
[the law in Tennessee].” Mr. Sloane further admitted:
MR. SLOANE: Okay. I did not register. That’s a fact.
***
MR. SLOANE: Your Honor, initial notions of fair play and equal justice
are what motivated me to stipulate that I had not registered at the time I
first contacted the Sheffields.
Mr. Sloane’s testimony clearly demonstrates his knowledge that: (1) the Act applied to
this situation; and (2) he violated the Act when he initiated contact with the Sheffield
family prior to registering as an athlete agent in Tennessee. By admitting that he violated
the Act during his testimony before the ALJ, Mr. Sloane implicitly concedes that Justus
was a student athlete, and his argument now that Justus was not an eligible student athlete
under the Act is completely without merit.
Mr. Sloane also takes issue with some of the ALJ’s rulings concerning pre-trial
discovery. Tennessee Code Annotated section 4-5-311(a) provides that “[t]he
administrative judge . . . , at the request of any party, shall issue subpoenas, effect
discovery, and issue protective orders, in accordance with the Tennessee Rules of Civil
Procedure . . . . The administrative judge . . . shall decide any objection relating to
discovery under this chapter or the Tennessee Rules of Civil Procedure.” Tenn. Code
Ann. § 4-5-311. At the request of Mr. Sloane, the ALJ issued several subpoenas to
baseball teams and individuals involved in professional baseball. Mr. Sloane received
voluntary responses to some of the subpoenas but filed motions to compel concerning the
subpoenas to which he received no response. Mr. Sloane argues that the ALJ erred when
she denied his motions to compel, and he contends that the information he sought could
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have proven that Justus was not a student athlete when Mr. Sloane contacted and
represented him.6
Three of the four motions to compel concerned individuals employed by three
professional baseball teams: the Cleveland Indians, the San Diego Padres, and the New
York Mets. In reviewing the motions to compel, it is clear that Mr. Sloane was not
actually seeking information from these individuals, but was instead seeking information
from the baseball organization for which each individual worked. In her order denying
these three motions to compel, the ALJ found that none of the three baseball teams
maintained offices in Tennessee, and she did not have jurisdiction over them.
Mr. Sloane’s fourth motion to compel concerned Mr. McKinnis. In denying this
motion, the ALJ found that
Mr. McKinnis acted as an agent for Jordan and Justus Sheffield (the young
men Mr. Sloane allegedly represented while not registered to do so) after
the incidents that gave rise to this litigation. The issue in this proceeding is
whether Mr. Sloane represented student athletes without being registered to
do so as required by Tenn. Code Ann. § 49-7-2104. Mr. Sloane has been
unable to explain how the requested documents are relevant or may lead to
the discovery of relevant evidence in this proceeding.
“Decisions regarding discovery ‘rest within the sound discretion of the trial court’ and
‘will not be reversed on appeal unless a clear abuse of discretion is demonstrated.’
Benton v. Snyder, 825 S.W.2d 409, 416 (Tenn. 1992).” Phan v. Tennessee Dep’t of
Commerce & Ins., No. M2016-00612-COA-R3-CV, 2017 WL 829817, at *11 (Tenn. Ct.
App. Mar. 2, 2017) (applying discovery rules to administrative law cases before an ALJ).
Further, “[n]o agency decision pursuant to a hearing in a contested case shall be reversed,
remanded or modified by the reviewing court unless for errors that affect the merits of
such decision.” Tenn. Code Ann. § 4-5-322(i); see also Phan, 2017 WL 829817, at *11.
We agree with the trial court’s conclusion that the ALJ’s denials of Mr. Sloane’s motions
to compel do not evidence a lack of due process for Mr. Sloane because he “either did not
demonstrate entitlement to the requested documents or did not use a proper process to
obtain them . . . .” Additionally, assuming arguendo that the ALJ’s decision to deny the
motions to compel was error, the decision did not affect the merits of the case. As
discussed above, during the ALJ hearing, Mr. Sloane admitted that he violated the Act.
No discovery obtained by Mr. Sloane, pursuant to his motions to compel, would likely
trump his admission that his conduct violated the Act.
6
We note that Mr. Sloane’s appellate brief fails to mention the names of the individuals and/or
baseball teams for which he filed the motions to compel.
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B. Secretary of State’s Enforcement of the Act
Mr. Sloane contends that Mr. McKinnis manipulated Appellee into applying the
Act in a selective and biased manner. He further argues that Appellee “abused its
discretion and exercised its discretion in an unwarranted manner” when it assessed civil
penalties against him for his violations of the Act. “Persons making selective
enforcement claims have a heavy burden to overcome because the courts, in recognition
of the doctrine of separation of powers, presume that public officials have discharged
their duties in good faith, see Williams v. American Plan Corp., 392 S.W.2d 920, 923
(Tenn. 1965), and in accordance with the law.” 421 Corp. v. Metro. Gov’t of Nashville
& Davidson Cty., 36 S.W.3d 469, 480 (Tenn. Ct. App. 2000) (citing Reeder v. Holt, 418
S.W.2d 249, 252 (Tenn. 1967)). “A selective enforcement claim requires a party to show
‘(1) the government has singled out the plaintiff for adverse regulatory or enforcement
action while others engaging in similar activity have not been subject to the same type of
action and (2) that the decision to prosecute them rests on an impermissible consideration
or purpose.’” Cty. of Shelby v. Tompkins, 241 S.W.3d 500, 510 (Tenn. Ct. App. 2007)
(citing 421 Corp., 36 S.W.3d at 480); see also Nat’l Loans, Inc. v. Tennessee Dep’t of
Fin. Institutions, No. 01A01-9506-CH-00241, 1997 WL 194992, at *5 (Tenn. Ct. App.
Apr. 23, 1997).
Here, Mr. Sloane fails to provide any evidence in support of his position that
Appellee selectively enforced the Act against him. See Tenn. R. App. P. 27(a)(7).
Indeed, the trial court found that
[t]here [was] no evidence in the Record that the State ha[d] utilized a
selective enforcement process regarding the Act, or that [Mr.] Sloane was
held to a standard different from others.
We agree with the trial court. Despite his argument that other athlete agents engaged in
the same conduct were not prosecuted, Mr. Sloane presents no evidence to support his
contention. Tompkins, 241 S.W.3d at 510. Further, Mr. Sloane failed to show that
Appellee’s decision to prosecute him rested on an impermissible consideration or
purpose. Tompkins, 241 S.W.3d at 510 (citing 421 Corp., 36 S.W.3d at 480); see also
Nat’l Loans, Inc., 1997 WL 194992, at *5. In the absence of evidence of specific
instances of selective enforcement, Mr. Sloane’s protestations provide no proof to
support his allegations that he was treated differently than other similarly situated athlete
agents.
C. Civil Penalties and Investigatory Costs
Mr. Sloane argues that the civil penalties and investigatory costs assessed against
him violate the Eighth Amendment of the United States Constitution and Article I,
Section 16 of the Tennessee Constitution. As we have explained before,
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. . . with regard to a penalty imposed by an agency, our review is limited to
whether the remedy is “‘unwarranted in law’ or ‘without justification in
fact.’” Robertson v. Tenn. Bd. of Soc. Worker Certification & Licensure,
227 S.W.3d 7, 14 (Tenn. 2007) (quoting Mosley v. Tenn. Dep’t of
Commerce & Ins., 167 S.W.3d 308, 321 (Tenn. Ct. App. 2004)). Further,
the “[c]ourts are not to substitute their judgment as to an appropriate
sanction for that of the agency responsible for enforcement,” as “‘[t]he
appropriate remedy is particularly within the discretion of the [agency].’”
City Towing & Transp., Inc. v. Transp. Licensing Comm’n of the Metro.
Gov’t of Nashville, No. M2007-01246-COA-R3-CV, 2009 WL 276761, at
*4 (Tenn. Ct. App. Feb. 3, 2009) (quoting Robertson, 227 S.W.3d at 13).
Thus, “[s]o long as the sanctions imposed by an agency are within the
scope of its statutory authority, the reviewing court should not substitute its
judgment for that of the agency, unless the penalty is so clearly
disproportionate to the offense and completely inequitable in light of the
surrounding circumstances as to be shocking to the conscience of the
Court.” Overton v. Bd. of Exam’rs in Psychology, No. 01-A-01-9603-CH-
00098, 1996 WL 656104, at *2 (Tenn. Ct. App. 1996) (quoting 73A Corpus
Juris Secondum, Public Administrative Law and Procedure § 223 (1983)).
Howell v. Metro. Sexuality Oriented Bus. Licensing Bd., 466 S.W.3d 88, 110-11 (Tenn.
Ct. App. 2014). At the time Mr. Sloane was charged with violating the Act, it provided
that “[t]he secretary of state [could] assess a civil penalty against an athlete agent not to
exceed twenty-five thousand dollars ($25,000) for a violation of [the Act].” Tenn. Code
Ann. § 49-7-2117; Tenn. Code Ann. § 49-7-2138; see also Tenn. Code Ann. § 49-7-
2142.7 Appellee originally assessed Mr. Sloane: (1) a $10,000.00 penalty because Mr.
Sloane initiated contact with Justus prior to Mr. Sloane’s registration as an athlete agent;
and (2) a $15,000.00 penalty because Mr. Sloane acted as Justus’s agent before
registering as an athlete agent. The ALJ reduced Mr. Sloane’s penalties to $5,000.00 for
each violation, and assessed $740.00 in investigatory costs.
The record shows that, at the time of his violations of the Act in Tennessee, Mr.
Sloane was a registered athlete agent in Florida and Alabama, which demonstrates that he
was aware that some states required athlete agents to register with the secretary of state.
Concerning this fact, the ALJ found that
Mr. Sloane waited until April 2014, shortly before the June 2014 Major
League Baseball draft, when he knew he would likely be negotiating a
7
We note that the current version of the Act allows the secretary of state to assess a civil penalty
of up to $50,000.00 against an athlete agent for each violation of the Act. See Tenn. Code Ann. § 49-7-
2117.
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contract on behalf of Justus Sheffield, to register as an athlete agent with
the Tennessee Secretary of State. The facts in the record show that Mr.
Sloane failed to exercise due diligence in determining whether Tennessee
had a registration requirement for athlete agents and took a calculated risk
that he would not get caught in his representation of Justus Sheffield from
the time he first contacted the Sheffield family in 2012 until he registered
on April 10, 2014.
However, the ALJ also found that “a civil penalty of $25,000.00, as proposed by
[Appellee] would be excessive under the facts of this case . . .” because “Mr. Sloane’s
actions resulted in only two violations of the Act . . .[,]” and “Mr. Sloane did come into
compliance prior to negotiating Justus Sheffield’s major league contract.”
We conclude that the record supports the penalties imposed against Mr. Sloane.
The penalties were not “unwarranted in law” or “without justification in fact.” Howell,
466 S.W.3d at 110 (citing Robertson, 227 S.W.3d at 14). As the ALJ found, “Mr. Sloane
failed to exercise due diligence in determining whether Tennessee had a registration
requirement for athlete agents and took a calculated risk that he would not get caught in
his representation of Justus Sheffield from the time he first contacted the Sheffield family
in 2012 until he registered on April 10, 2014.” Additionally, the penalties imposed were
within the discretion of the agency, and the sanctions of $10,000.00 in fines and $740.00
in investigatory costs were well within the scope of the Act as they did not exceed
$25,000.00 per violation. See Tenn. Code Ann. § 49-7-2117; Tenn. Code Ann. § 49-7-
2138; Tenn. Code Ann. § 49-7-2142; Howell, 466 S.W.3d at 110-11. Accordingly, we
agree with the trial court that there is no basis to disturb the ALJ’s determination that the
$10,000.00 fines and $740.00 in investigatory costs were warranted.
V. Conclusion
For the foregoing reasons, we affirm the trial court’s order. The case is remanded
for such further proceedings as may be necessary and are consistent with this opinion.
Costs of the appeal are assessed against Appellant, David M. Sloane, for all of which
execution may issue if necessary.
_________________________________
KENNY ARMSTRONG, JUDGE
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