Get breaking news alerts via email

Click here to manage your alerts
Clothing maker sues U. for more than $2M, claims fraud, negligence

Courts » Level 7 Sports claims side deals and Under Armour favoritism.

By Matthew Piper

| The Salt Lake Tribune

First Published May 19 2014 05:32 pm • Last Updated May 20 2014 01:05 am

A clothing manufacturer is suing University of Utah Athletics for a range of claims that includes alleged fraud, negligence, breach of contract and retaliation for whistle-blowing.

Level 7 Sports LLC says its relationship with the U. soured after it brought to light "certain deals and relationships ... that Level 7 deemed inappropriate." It says the U. reneged on agreements after pressure from Baltimore-based clothing manufacturer Under Armour.

Join the Discussion
Post a Comment

"By everyone’s accounts, Level 7’s products were some of the best-selling items in the University bookstore and at the [U. of U.’s] Red Zone stores," states the complaint, which was filed in 3rd District Court Friday and names seven U. administrators.

Level 7 seeks more than $2 million in damages.

Officials at the U., onetime Level 7 manager Robert Moyer and plaintiff attorney Lisa Marcy all either declined to comment or had not responded to requests for comment by Monday evening.

The lawsuit states that in summer and fall 2011, Level 7 began discussions with the U. to produce and sell U.-branded merchandise in the school’s bookstore.

Level 7 said it could provide a low-cost, high-worth alternative to Champion, Gear and Under Armour. The company also pitched two new brands to the U.: "Utah Athletic Apparel" and a separate women’s clothing line, "cUte."

As part of a discussed deal, Level 7 expected an exclusive license to sell goods under those brands — which it says it developed and promoted — for five years at Utah retailers.

The company offered the U. a larger royalty than the school demanded from other manufacturers, but the lawsuit says that the U. asked Level 7 to instead donate to Utah Athletics, and so Level 7 principal Donnette Mayer donated $50,000. Robert Moyer and Donnette Mayer are listed together as major gift givers in the U.’s Office of Development.

Level 7 says the U. made a 20 to 25 percent return on its merchandise, counting the $50,000 donation, and that the "normal rate of return" is 12 percent.

story continues below
story continues below

The lawsuit states that Level 7 began Chinese production operations, marketing and design "before the agreement was executed," because the license from U. subcontractor Collegiate Licensing Corp. was billed by Brett Eden, U. licensing and marketing director, as "a mere formality."

After Level 7 began to deliver merchandise, the lawsuit states, the company learned that four other vendors had been given — without a request for proposal or legal review — the rights to sell products in the Sandy Red Zone store for "approximately $15,000."

The U. announced earlier this year that the Red Zone stores would close when their leases expired after a legislative audit found they unfairly compete with for-profit businesses.

When Level 7 asked U. Athletic Director Chris Hill about these alleged "side deals," they were eliminated, the suit says. But the company claims further unspecified "inappropriate relationships" occurred, this time in the bookstore.

Then Under Armour began to assert its influence, the lawsuit alleges.

Hill had requested that Level 7 create an all-black throwback jersey, but after it cleared licensing and legal review, Under Armour stepped in and complained that the U. had breached its contract.

The company says the U. "informed Level 7 that even though Under Armour had no right to stop the university from selling other jerseys, the university did not want to fight with Under Armour and, therefore, Level 7 could not sell its black replica jerseys."

Under Armour further benefited, the lawsuit states, when Associate Athletic Director Ann Argust paid $4.50 per shirt more than Level 7 had previously charged to have Under Armour create 6,000 fan shirts.

Those events led the U. to nix its deal with Level 7, the suit states.

Next Page >

Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment

About Reader Comments

Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.