On May 24, 2013, the United States Court of Appeals for the Ninth Circuit affirmed the ruling of the district court granting the motion filed by KHIKS partners Michael Kump and Jonathan Steinsapir to dismiss a complaint filed against NBA legend, Shaquille O’Neal.
When Mr. O’Neal was sued in July 2011 by an alleged former business associate, KHIKS filed a motion on his behalf to dismiss the entire lawsuit on the ground it was time-barred by the applicable statute of limitations. Plaintiff countered that the statute of limitations had been tolled by California Code of Civil Procedure Section 351 because Mr. O’Neal lived outside the state of California from the time the causes of action accrued. KHIKS’s motion demonstrated, however, that Section 351 cannot be constitutionally applied against Mr. O’Neal because to do so would impose an unreasonable burden on interstate commerce in violation of the Commerce Clause of the U.S. Constitution.
On October 17, 2011, U.S. District Judge H. Jacqueline Nguyen granted KHIKS’s motion and dismissed the entire action against Mr. O’Neal with prejudice. Plaintiff appealed the dismissal to the United States Court of Appeals for the Ninth Circuit.
On May 9, 2013, the Ninth Circuit held oral argument on Plaintiff’s appeal. KHIKS partner Jonathan Steinsapir told the three-judge panel that Section 351 imposes an unreasonable burden on interstate commerce in this case because it required Mr. O’Neal to choose between his NBA career or moving to California to obtain the benefit of California’s statute of limitations.
On May 23, 2013, the Ninth Circuit unanimously agreed and affirmed Judge Nguyen’s ruling, finding that “the burden on interstate commerce as applied to O’Neal is substantial and the countervailing interest is minimal. Application of section 351 in this case would offend the Commerce Clause and [Plaintiff’s] suit was properly dismissed because it was untimely.”