Contract – NASCAR Driver – Suspension – Positive Drug Test – Waiver of Claims

Mayfield v. Nat’l Ass’n for Stock Car Auto Racing Inc. (Lawyers Weekly No. 12-01-0368, 16 pp.) (Gregory, J.) No. 10-2437, March 26, 2012; USDC at Charlotte, N.C. (Mullen, J.) 4^th Cir. Full-text opinion.

Holding: Race car driver Jeremy Mayfield, who was suspended by NASCAR after testing positive for methamphetamine, cannot overturn dismissal of his suit against NASCAR including claims for defamation and breach of contract, as he has waived his claims under agreements he signed with NASCAR; the 4^th Circuit says the district court properly dismissed Mayfield’s case and did not abuse its discretion in denying defendant’s motions to reconsider and to amend.

Prior to the 2009 racing season, Mayfield signed three documents: the NASCAR Sprint Cup Series 2009 Driver and Car Owner Agreement, in which he agreed to abide by the NASCAR Substance Abuse Policy; the 2009 NASCAR Competition Membership and License Applications, in which he acknowledged he was familiar with and would abide by the current rules; and a Driver and Car Owner Application.

Several of the documents Mayfield signed purport to release NASCAR from any and all liability arising out of its Substance Abuse Policy, which subjected drivers to random drug screens for identified drugs, including methamphetamine.

After Mayfield tested positive for methamphetamine in  May 2009, NASCAR suspended him indefinitely until he completed its “Road to Recovery” program. On May 15, 2009, defendant and NASCAR CEO Brian French held a press conference where he indicated Mayfield had been suspended because he took a “performance enhancing” or “recreational” drug. Mayfield alleges these statements were “intentional, malicious, reckless and false.” He sued for defamation, violation of the North Carolina Persons with Disabilities Protection Act, unfair and deceptive trade practices, breach of contract, and negligence. Defendants counterclaimed. Plaintiffs informed defendants they intended to amend their complaint to add new allegations and to assert additional claims. The district court granted NASCAR’s motion to voluntarily dismiss its counterclaims and denied plaintiffs’ motion to reconsider and to amend their complaint. Plaintiffs appealed.

Applying the Iqbal standard to this case, we find appellants have not stated a claim. Appellants’ assertion that appellees’ statements “were known by [them] to be false at the time they were made, were malicious or were made with reckless disregard as to their veracity” is entirely insufficient. This kind of conclusory allegation – a mere recitation of the legal standard – is precisely the sort of allegation that Twombly and Iqbal rejected.

Mayfield was randomly selected to undergo drug testing pursuant to a valid NASCAR policy and two separate tests yielded positive results for methamphetamine, a drug that drivers are prohibited from taking. The statements French made at a press conference did no more than report what positive drug tests indicated – that Mayfield took a recreational drug or performance-enhancing drug. We affirm dismissal of the complaint.

The district court’s denial of appellant’s Rule 15(a) to amend was contrary to circuit precedent. In its order, the court noted the ruling in Matrix Capital Mgm’t Fund LP v. Bearing-Point Inc., 576 F.3d 172 (4^th Cir. 2009), that it may not grant a post-judgment motion unless the judgment is vacated pursuant to a motion to reconsider; and because it had denied the motion to reconsider, it summarily denied the motion to amend. But the court failed to take note of the rule in Matrix Capital, which holds that an improper denial of a 15(a) motion is sufficient grounds for reversing the denial of a motion to reconsider.

Nevertheless, we affirm the district court’s denial of the motion. With respect to the breach of contract and unfair and deceptive trade practices claims, the liability waivers preclude recovery. Any amendments to those counts would be futile. As for the new defamation allegations and the new additional tort claims, we find that permitting appellants to amend their complaint would be prejudicial to appellees. The additional allegations meant to bolster the defamation claim arise out of an alleged interaction that occurred in January 2006, more than three years prior to the drug test that spawned this litigation, under an entirely separate sponsorship agreement. The district court did not abuse its discretion in denying the motion to amend.

Judgment affirmed.