IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

BEAUMONT DIVISION

GAMES PEOPLE PLAY, INC.,

Plaintiff,

v. Civil Action No. 1:14-cv-00321

NIKE, INC.,

Defendant.

PLAINTIFFS FIRST AMENDED COMPLAINT

Games People Play, Inc. (GPP) files this, its First Amended Complaint complaining of
Nike, USA Inc. (Nike)
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as follows:
I. SUMMARY OF THE CASE
1. GPP is a Beaumont-based, family owned golf supercenter, including a retail
component, a 40 acre practice area, and a teaching center. It started on leased premises in 1984
as a driving range with a 600 square foot portable building. It has grown to become a nationally
renowned golf retail center with a global online sales operation.
2. Nike is among the worlds leading golf product manufacturers and distributors.
GPP has for many years been southeast Texas and southwest Louisianas leading retailer of Nike
golf products.
3. In order to continue ordering products from Nike on credit (as is customary in the
industry), GPP was required to enter into a credit agreement with Nike (the Agreement). Exhibit
A. The Agreement provides that Oregon law governs not only disputes arising out of the

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Nike was named in Plaintiffs Original Petition as Nike, Inc. instead of Nike USA, Inc. This was a misnomer
which Plaintiff corrects by this pleading. Rule 15(c)(1)(C).
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Agreement which is not the case here but the relationship between Nike and GPP. Because
this dispute arises out of the relationship between the parties, Oregon law applies.
4. Beginning around 2010, Nike became unhappy with GPPs prices and its (Nikes)
resulting loss of control over the golf supply market. In order to regain that control, Nike began
imposing unreasonable restrictions on GPP, treating GPP inequitably, favoring other retailers by
providing lower prices and permitting conduct such as Internet sales forbidden to GPP. When
GPP complained, Nike retaliated by cutting off its supply entirely, costing GPP millions of
dollars.
5. GPP files this action under federal and state antitrust laws, specifically Section 2(a)
of the Robinson-Patman Act and Oregons Anti-Price Discrimination Act, which prohibit the sale
of goods of like grade and quality to different purchasers at different prices and discriminatory
promotional practices. GPP additionally sues for Nikes breach of its fiduciary duty to GPP, bad
faith and unfair dealing, intentional interference with economic relations, and negligent
misrepresentation, all violations of Oregon law.
II. JURISDICTION AND VENUE
6. This Court has jurisdiction over the claims in this action pursuant to 28 U.S.C.
1331, 1332 and 1337. Venue in this district is proper under 28 U.S.C. 1391, because Defendant
transacts business within this district, is subject to this Courts personal jurisdiction, and a
substantial part of the events giving rise to Plaintiffs claims occurred within this district.
III. Parties
7. GPP is a Texas corporation with its principal place of business in Beaumont,
J efferson County, Texas.
8. Defendant Nike is an Oregon corporation with its principal place of business at One
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Bowerman Drive, Beaverton, Oregon 97005.

IV. FACTS
9. J eff and Marilyn Williams bought GPP in 1984. Their Beaumont business was
comprised of driving range sales, batting cage sales, and some golf retail sales. Their total retail
inventory was less than $35,000 at that time and they didnt have experience in the retail industry.
While J eff Williams loved golf, he didnt have any specialized knowledge of the golf business.
10. After they had been in business a couple of years, J eff Williams read an article
about a family in Oregon that seemed to have a similar business model but was far more
successful. He reached out to the family to see if they would be willing to share their experience.
They were, and invited J eff to come to Oregon. There he learned that the secret to the familys
success was not all that secretive: providing excellent service and consistently offering the lowest
prices when possible. It was a cold, rainy J anuary day when J eff made his visit to Oregon but
they still rang up almost $20,000 in sales. At that time, a good sales day at GPP would have been
$500 to $1,000. When J eff returned to Beaumont, he decided to add very low, competitive pricing
to the great service they were already offering. Sales increased and the business started growing.
11. GPP faced challenges over the years from franchise stores and other independents
but those all came and went while GPP continued to grow and prosper. In 1996, GPP was able to
buy the 40 acre premises they had been leasing. In 1999, they built their dream store about 50
yards from their old location, which they tore down. Then in 2000, GPP won the most coveted
award in the golf retail industry: they were selected as one of the Top 100 Golf Shops in America
by Golf World Magazine. They would go on to win the award a number of times.
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12. Nike entered the golf industry in 1986 and shortly thereafter, GPP started selling
Nike golf shoes and continued to be an active Nike account. Until the early 2000s, GPP had been
solely a brick and mortar operation but decided to go online. This decision was made, in part, at
the urging of GPPs Nike field representative, who routinely encouraged expansion into Internet
sales. It also coincided with J eff and Marilyn Williams son, Austin, joining the business. Austin
had been a college golfer and graduated with a degree in finance. He proved to be the perfect
person to grow GPPs e-commerce division and he soon became vice president in charge of
purchasing.
13. GPP expanded its retail presence globally through a variety of e-commerce
platforms that included its own website, gppgolf.com, eBay stores, and Amazon.com. It invested
hundreds of thousands of dollars in its e-commerce operation and became the largest independent
golf account Nike had in southeast Texas and southwest Louisiana, buying well over a million
dollars a year in Nike products. As the relationship developed between GPP and Nike, there were
ups and downs. GPP believed at times they were treated differently by Nike than their
competitors and would make their complaints known. The situation reached a boiling point in
2010.
14. Since 1996, when Nike entered the hard goods ball and club segment of golf
retail, it had not had a great deal of success with clubs. To turn that around, the company invested
heavily in its Victory Red (VR) Iron, which was reported to have been designed and played by
Tiger Woods, one of Nikes sponsored athletes. In the 2009 2010 time frame, the VR Iron was
initially very popular and in demand. There were two different types, one a full cavity and the
other a split cavity. GPP sold both types.
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2
Though GPP would dispute any claim of confidentiality, in an abundance of caution, GPP does not include Nikes
wholesale prices here.
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15. On May 17, 2010, Austin Williams received an email from Kevin Goode of Nitro
Golf, an equipment reseller, offering to sell him the VR full and split cavity models, the identical
clubs, for significantly lower than the prices offered by Nike to GPP, which GPP had been paying.
The full email string revealed that the opportunity originated with a GPP competitor named Hap
Personet, an individual who, based on information and belief, owns companies that sell golf
equipment online, the same as GPP. Nike sold Personet the identical VR Irons for significantly
less than what GPP had been paying Nike.
16. GPP requested that Nike sell it the clubs for the same price it was offering Personet
but was told that as of right now, we do not have any program we can offer on any of the VR
Irons. GPP purchased the clubs from Hap Personet for less than it would have paid Nike. J eff
Williams told Nikes regional sales manager, Carey Guglielmo, that GPP had purchased the VR
Irons at a discounted price. Guglielmo said GPP could sell the clubs at whatever price it wanted
and did not have to follow Nikes pricing policies regarding the clubs. J eff Williams offered to
produce serial numbers from the clubs so Nike could trace their origin but Guglielmo said that
would not be necessary.
17. On J une 21, 2010, J eff Williams sent a detailed letter to Carey Guglielmo
recounting their earlier conversation and setting out his complaints about inequitable pricing and
the gray market Nike was apparently utilizing to sell its clubs, all while harming retailers such
as GPP. J ust eight days later, on J une 29, 2010, Nike was suddenly able to offer GPP a much
lower price for VR Irons. When a price is suddenly lowered in this way, manufacturers usually
offer what is known as a net down allowance
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Net down is a term used to describe a manufacturer-imposed price reduction. Since the supplier has instituted the
price drop, the retailer expects to be compensated for the gross profit loss on future sales at the reduced price. The
allowance the supplier provides the retailer is therefore called a net down allowance.
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18. In the wake of the new lower price, GPP went back to Hap Personet to ask if he
would share some of his net down allowance in order to help make GPP whole. Personet
responded as follows:
I was offered a deal to help my rep out in which this deal was the only
deal like it on the table in mid-May, period!...I do know this as a fact, they
used all of their promotional money in the region to get me the prices that
allowed me to offer the extremely low prices at the time, which means
that this deal was completely finalized in their mind, my mind, and all of
my other customers [sic] minds when I shipped the goods. This deal came
out of their promotional budget, so I am not sure how they will look upon
me asking for a credit, because I do not want to ask them for anything
more as I feel they were very generous in their offer.

Each Nike regional representative is provided an advertising/promotional budget which is
referred to as the Manufacturer Development Fund or MDF. The Robinson-Patman
Act requires sellers to provide allowances and services promoting resale, such as the
MDF, on a proportionally equivalent basis to all competing customers. That was not done
here.
19. On J uly 5, 2010, Guglielmo informed GPP that he was going on a 30 day
sabbatical beginning that very day. When he returned in August 2010, he made a site
visit to GPP during which J eff Williams shared numerous written complaints and
questions, many of them about what had transpired regarding the VR Irons. Guglielmo
refused to discuss almost all of the complaints but did say what happened regarding the
VR Irons was not that out of the ordinary.
20. On September 24, 2010, J eff Williams sent Nike Golf General Manager
Mike Francis a letter regarding the VR Irons incident and other Nike policy violations.
Following Franciss receipt of the letter, there were follow up calls and emails between
J eff Williams and Francis. Francis stated that regarding the future of these types of deals
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(the VR Irons incident), you can rest assured this is not how we want our business done
and I will personally involve myself if you are approached with these offers in the future.
21. On October 12, 2010, Francis and five other Nike representatives flew to
Beaumont to visit GPP and J eff Williams. The letter Williams sent on September 24,
2010 served as the meetings agenda. No answers regarding the VR Irons incident were
provided. Instead, Nike simply assured GPP that nothing like it would happen again.
Francis asked J eff Williams to give him a year to clean up problems at Nike Golf and get
new policies in place. J eff agreed but was very concerned that because he had gone to the
highest level at Nike Golf, there would be retribution from Guglielmo, the regional
manager. Both Francis and Guglielmo assured J eff Williams nothing like that would
occur.
22. After the October 12, 2010 meeting, communication between GPP and
Guglielmo slowed, then stopped almost entirely. Guglielmo quit making site visits to
GPP. He refused to answer business questions sent to him by GPP and delegated GPP to
other representatives in the Nike organization. He greatly reduced the promotional offers
made to GPP, made little or no effort to help increase Nike business for GPP, and never
attended demo days at GPP. Prior to the October 2010 meeting, Nike had routinely made
promotional offers and discounts available to GPP. For instance, in 2009, Nike had given
GPP rebates totaling more than $50,000 and had offered an average discount of
approximately 17.5 percent on various products. Nike representatives also routinely took
part in demo days prior to the October 2010 meeting.
23. Nikes harmful, inequitable treatment did not cease. Beginning in 2010
and continuing throughout the relationship between Nike and GPP, Nike would arbitrarily
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and inequitably enforce its policy regarding minimum advertised price or MAP. Nike
would accuse GPP of violating its MAP policy and insist that prices be raised. When GPP
would discover that competitors were not being required to do the same and would
complain to Nike, the competitors were not forced to raise their prices accordingly. Or,
in other instances, GPP would discover competitors advertising Nike products for a price
below MAP, seek guidance from Nike as to whether they could do the same and then,
receiving no response, go ahead and lower their price. GPP would then be directed by
Nike to advertise a higher price.
24. In March 2011, GPP learned that Nike was selling its two types of Red
Swoosh Balls for $15.50 and $16.50 per dozen. GPP reached out to its field
representative, J eff Morici, and told him they wanted dozens of both types at those prices.
Morici initially said he wasnt aware of such an offer but then said he had contacted
Guglielmo and while there was such an offer being made to some retailers, Guglielmo
told Morici he didnt want the Red Swoosh Ball sold to retailers with an Internet presence.
GPP assured Nike that it was willing to sell the balls only through their brick and mortar
stores and not via the Internet but Nike continued to refuse to sell them the balls. Then,
on March 4, 2011, Morici informed GPP that Red Swoosh Balls would now be sold via
Internet accounts but that Guglielmo had said the opportunity would not be made available
to GPP. GPP was required to purchase Red Swoosh Balls from a different supplier at a
higher price.
25. On May 3, 2011, GPP learned that Nike was offering its Vapor One in a
cubed package to retailers and that each regional manager had been allocated 5000 dozen
at a price of $10.00 per dozen. GPP sent a request to Guglielmo asking for 500 dozen. On
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May 4, 2011, Guglielmo informed GPP that other Nike representatives would be
contacting them regarding the Vapor One offer. GPP heard nothing despite repeatedly
following up. Mike Francis finally emailed J eff Williams on J une 3, 2011 saying that he
was following up with the Nike personnel who had been involved and hoped to get
everything back on track.
26. Instead of getting back on track, however, the incidents involving unfair
and inequitable treatment simply continued. In February 2012, GPP learned that Nike
was again offering other retailers exclusive deals and promotions not being offered to
GPP. In March 2012, Nike ignored more requests from GPP to run advertisements and
promotions similar to those of other Nike retailers. Also in March 2012, Morici offered
GPP a special Masters promotional package only to then withdraw the offer. In August
2012, GPP inquired about selling Ryder Cup shoes but were told by Nike that they were
being offered exclusively to Medinah Country Club, the host for the 2012 Ryder Cup.
GPP then learned that wasnt true and that Ryder Cup shoes were actually being sold
online.
27. In October 2012, Nikes inequitable treatment of GPP culminated in its
suspension of GPPs account. Nikes notice of suspension was utterly fabricated and
pretextual. Nike complained about GPPs alleged violations of policy this despite the
fact GPP had been conducting itself the same way for at least eight years with Nikes
approval. GPPs account was eventually reinstated but the damage could not be undone.
All of the acts by Nike described above caused more than a 75 percent decline in the sale
of Nike goods by GPP in the last four years and the loss of millions of dollars in revenue.

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V. CAUSES OF ACTION
FIRST CAUSE OF ACTION
PRICE DISCRIMINATION UNDER SECTION 2(A)
OF THE ROBINSON-PATMAN ACT
28. Plaintiff incorporates and realleges paragraphs 1 27.
29. As a result of Nikes discriminatory practices in violation of the Robinson-
Patman Act, GPP has suffered damages in the form of lost profits which, under the
Robinson-Patman Act, are trebled.
30. As a result of Nikes ongoing unlawful practices, GPP has lost a significant
number of customers to competitors receiving more favorable pricing and promotions
from Nike. This has forced GPP to reduce the scale of its operation, lay off employees
and reduce wages and benefits for those who remain.
31. Because Nike refused and continues to refuse to stop its ongoing
discriminatory conduct and equalize pricing and promotions consistent with the terms of
the Robinson-Patman Act, GPP continues to suffer ongoing lost profits in an amount to
be proven at trial.
32. Nike should be permanently enjoined from engaging in continued price
discrimination against GPP in violation of the Robinson-Patman Act.
33. GPP is also entitled to an award of its reasonable and necessary attorneys
fees and costs in connection with prosecuting this claim.
SECOND CAUSE OF ACTION
VIOLATION OF OREGONS ANTI-PRICE DISCRIMINATION LAW

34. GPP incorporates and realleges paragraphs 1 33.
35. Nikes price discrimination against GPP violates Oregons Anti-Price
Discrimination Law, OR. REV. STAT. ANN. 646.010-646.180 (2011) .
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36. Nike engaged in illegal price discrimination. Because a price differential

between Nikes prices to GPP and those given to GPPs competitors -- those most favored
by Nike during the relevant time period -- GPP suffered damages. OR. REV. STAT. ANN.
646.160 (2011). GPPs damages are trebled pursuant to OR. REV. STAT. ANN.
646.150(1) (2011).
37. Because Nike has refused to stop its ongoing price discrimination
consistent with the terms of Oregons Anti-Price Discrimination Law, GPP continues to
suffer ongoing price discrimination and lost profits in an amount which will be proven at
trial.
38. Nike should be permanently enjoined from engaging in continued price
discrimination against GPP in violation of OR. REV. STAT. ANN. 646.040 (2011). GPP
is additionally entitled to recover its reasonable and necessary attorneys fees. OR. REV.
STAT. ANN. 646.140(1) (2011).
THIRD CAUSE OF ACTION
BREACH OF FIDUCIARY DUTY
39. GPP incorporates and realleges paragraphs 1 38.
40. GPP had a fiduciary relationship with Nike. For years, GPP had acted as an agent
for Nike, selling millions of dollars worth of Nike goods and following policies set forth by Nike
in the selling of those goods. The agency relationship gave rise to a duty of mutual trust, confidence
and loyalty between GPP and Nike.
41. Nike breached its fiduciary duty to GPP by the acts described in detail above,
engaging in inequitable pricing schemes and promotions, unlawfully suspending GPPs Nike
account and allowing GPPs competitors to gain an advantage over GPP.
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42. Nikes breach of fiduciary duty injured GPP by causing a loss of profits to be
determined at trial.
FOURTH CAUSE OF ACTION
BAD FAITH / UNFAIR DEALING
43. GPP incorporates and realleges paragraphs 1 42.
44. A special relationship existed between Nike and GPP. Nike was the manufacturer
and GPP was its dependent distributor. Not only was Nike GPPs fiduciary, it had vastly superior
bargaining power.
45. This relationship made the injury from breach of this duty foreseeable.
46. Nikes breach caused GPPs injury.
FIFTH CAUSE OF ACTION
INTENTIONAL INTERFERENCE WITH ECONOMIC RELATIONS
47. GPP incorporates and realleges paragraphs 1 46.
48. GPP had valid business relationships in the golfing market or expectancy that such
relationships would develop.
49. Through its predatory and retaliatory conduct, Nike purposefully interfered with
GPPs relationships by depriving GPP of products Nike knew GPP would have sold.
50. Nike accomplished this interference through improper means or for an improper
purpose. Specifically, Nike decided to punish GPP simply for doing what other retailers had done
and selling Nike products at discounted prices and making sales on the Internet. Nikes objections,
such as they were, were lodged solely in order to make an example of GPP and demonstrate Nikes
power in the market and ability to whip recalcitrant retailers back into line.
51. Nikes interference with GPPs economic relations with its customers directly
caused GPPs damages.
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52. Damages suffered by GPP as a result of Nikes conduct are substantial.

SIXTH CAUSE OF ACTION
NEGLIGENT MISREPRESENTATION
53. GPP incorporates and realleges paragraphs 1 52.
54. As detailed more fully above, Nike made representations to GPP that certain
products were not available and that certain rebate plans and promotions were not available. GPP
relied on those representations and either did not offer those products or purchased the products
for higher prices from other sources. GPP did not receive the rebates being offered to others. Nike
also represented in 2010 that new policies would be put in place within a year and that there would
be no retaliation against GPP for reporting problems to the company. Based on those
representations, GPP continued to try to conduct business with Nike in the same fashion while
Nike was routinely engaging in retaliatory practices and not changing any of its policies.
55. Nike said to GPP that it (GPP) could participate in the sale of shoes specially
designed for the Ryder Cup but then represented the shoes would only be made available to
Medinah Country Club. This was not true and GPP was damaged by not being able to participate
in a promotion built around one of the biggest golf events of the year after planning otherwise.
56. Nike told GPP that the company would participate in demo days after the meeting
in 2010. This was false and, as Nike was well aware, these days set aside by a retailer to
demonstrate and sell equipment from the different brands it markets are never as successful
without a manufacturer representative being present. GPP advertised and marketed the demo days
believing Nike would take part and sales of Nike equipment suffered during demo days as a result
of Nikes absence.
57. Nike told GPP that it was in violation of Nikes MAP policy. This was not true and
the misrepresentations led GPP to price products at a disadvantage to its competitors.
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58. Nike made the above representations in the course of transactions in which Nike
had an interest.
59. Nike made the representations for the guidance of GPP.
60. Nikes representations were misstatements of fact. The products that were
represented to be unavailable were simply not made available to GPP although they could have
been; the same is true of various rebate plans and promotions; no new policies were put in place
by Nike after the meeting that occurred with GPP and there were numerous incidents of retaliation.
61. After representing that the Ryder Cup shoes would only be sold by Medinah
Country Club, it was discovered that the shoes were actually being sold online by another
company. Nike did not participate in demo days at GPP following the meeting that occurred in
October 2010. Other retailers were permitted by Nike to violate its MAP policy while GPP was
required to raise prices to its competitive disadvantage.
62. Nike did not use reasonable care in communicating the information.
63. GPP justifiably relied on Nikes representations.
64. Nikes misrepresentations proximately caused injury to GPP, which resulted in a
loss of profits.
V. JURY DEMAND
65. GPP demands a trial by jury.
VI. PRAYER
66. Plaintiff GPP respectfully requests that upon final trial of this matter, the
Court enter judgment awarding GPP:
A. Actual damages as determined by the jury;
B. Treble damages;
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C. A permanent injunction to prevent Nike from engaging in continued

price discrimination against GPP.
D. Prejudgment and postjudgment interest;
E. Court costs;
F. Attorney fees; and
G. All other relief to which GPP is entitled.
Respectfully submitted,

By: /s/ Chris Bell___________
Chris Bell (cbell@bfjblaw.com)
Lead Attorney
Texas Bar No. 00783631
4203 Montrose Boulevard, Suite 150
Houston, Texas 77006
713-526-0200 (tel)
832-615-2665 (fax)
OF COUNSEL:

BERG FELDMAN JOHNSON BELL, LLP
Geoffrey Berg (gberg@bfjblaw.com)
Texas Bar No. 00793330
4203 Montrose Boulevard, Suite 150
Houston, Texas 77006
713-526-0200 (tel)
832-615-2665 (fax)

Attorneys for Plaintiff Games People Play, Inc.

CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document has been
forwarded to all counsel of record via Electronic Court Filing (ECF) on J uly 2, 2014.
/s/ Chris Bell
Chris Bell