NFL Concussion Lawyer’s Bid to End Funder Suit Roundly Rejected

January 10, 2020
Jennifer Bennett-Bloomberg Law

A Florida attorney who represents professional football players in concussion proceedings must face a litigation funder’s suit accusing him of misleading it about the players’ medical diagnoses, after an Illinois federal judge strongly criticized Friday his arguments to stop the case.

Phillip Timothy Howard’s arguments in support of dismissing Preferred Capital Funding of Nevada LLC’s suit were “either perfunctory and undeveloped, or rambling and irrelevant,” the U.S. District Court for the Northern District of Illinois said.

Howard, who is representing himself and his law firm in the matter, also faces a Securities and Exchange Commission suit for allegedly defrauding National Football League players who invested with his advisory firm.

Preferred Capital accuses Howard of making false statements about the players’ diagnoses—and thus their likelihood of receiving compensation as part of the concussion settlement—to convince the litigation funder to make loans to them.

Howard allegedly had the players invest the loans with his firm then used the money to cover his mortgage and make settlement advances to other players.

Howard argued that the absence of a contract, the lack of any provision of private medical information, and the fact that Preferred Capital isn’t a lending institution or doctor should defeat subject-matter jurisdiction.

But he didn’t “actually argue how any of this impacts the Court’s subject-matter jurisdiction—perhaps because it is all irrelevant,” Judge Virginia M. Kendall said, noting that the parties’ diversity gave her jurisdiction to hear the case.

Howard also argued that the court lacked personal jurisdiction over his law firm—”Howard & Associates, Attorneys at Law, P.A.”—because Preferred Capital initially sued “Howard & Associates, P.A.” instead.

“To the extent Defendants’ single-sentence argument (devoid of any analysis or citations) can be considered a jurisdictional challenge,” it is rejected, the court said. The complaint “makes clear that Preferred Capital intended to sue defendant Howard’s law firm” and Howard didn’t argue that the firm wasn’t served, Kendall said.

Howard’s filing “fundamentally misunderstands the purpose of a motion to dismiss for failure to state a claim,” the opinion said. His argument “consists of disputing, denying, contradicting, or attempting to disprove Preferred Capital’s allegations with additional ‘facts,’ which is improper at the motion to dismiss stage.”

He and his firm didn’t “even attempt to address any sort of pleading deficiency, identify an essential element of a fraud claim that Preferred Capital failed to plead, or support their argument with any relevant case law, so any argument regarding the legal sufficiency of Preferred Capital’s complaint is waived,” Kendall said.

Preferred Capital has until Jan. 16 to file an amended complaint correcting the law firm’s name.

Grogan Hesse & Uditsky PC represented Preferred Capital.

The case is Preferred Capital Funding of Nev. LLC v. Howard, N.D. Ill., No. 19-cv-06245, motion to dismiss denied 1/10/20.

To contact the reporter on this story: Jennifer Bennett in Washington at jbennett@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com

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