The Tampa Bay Storm arbitration decision in Nucci v. Storm Football Partners, 82 So. 3d 180 (Fla. 2d DCA 2012), received significant media coverage in Central Florida. The Second District Court of Appeal affirmed an arbitration award of more than $3.5 million, along with the trial court order confirming it, in a dispute over a non-disclosure agreement tied to the ownership of the Storm, an indoor professional football club.
The case is a useful reminder for Florida business owners and litigants: once you proceed to a final arbitration hearing without objecting, you will have a very hard time convincing a court to undo the result.
The Non-Disclosure Agreement
Robert Nucci, M.D. sought to review the Partners’ confidential information regarding ownership of the Tampa Bay Storm. Before receiving that information, he signed a Non-Disclosure Agreement. The Agreement made injunctive relief the remedy for any disclosure or use of confidential information, and it went further: if Dr. Nucci circumvented the Partners to acquire or invest in the Storm, damages would be calculated as thirty percent of the price paid to purchase the franchise.
The Agreement also contained mandatory arbitration language requiring disputes to be settled by binding arbitration, while separately preserving the Partners’ right to seek preliminary and permanent injunctions in court. That two-track structure became the centerpiece of the Tampa Bay Storm arbitration fight that followed.
Breach and the Tampa Bay Storm Arbitration Proceedings
Shortly after executing the Agreement, Dr. Nucci received confidential business information and began direct negotiations with the Storm’s owner, unbeknownst to the Partners. He eventually acquired a fifty-one percent interest in the Storm for over $9.6 million.
The Partners responded on two fronts. They filed a civil action seeking injunctive relief, and they demanded arbitration seeking damages under the Agreement. Dr. Nucci argued that by going to court the Partners had waived their right to arbitrate. Importantly, he submitted that waiver question to the arbitrator, who found that the parties’ Agreement allowed the simultaneous pursuit of arbitration and the civil action. The parties then agreed that discovery from the arbitration could be used in the trial court, and the matter proceeded to a final arbitration hearing without objection. The arbitrator entered a substantial damage award in favor of the Partners.
The Appeal to the Second District
Dr. Nucci moved to vacate the award and challenged the trial court’s order confirming it. On appeal, the Second District affirmed in all respects. The court reasoned that an arbitrator’s jurisdiction derives from the parties’ agreement and can broaden during the course of the arbitration by waiver, failure to object, and consent. Having elected to present the waiver issue to the arbitrator and then proceed through a final hearing, Dr. Nucci could not later claim that the arbitrator exceeded his authority. The full opinion is available on FindLaw.
Three Lessons from the Tampa Bay Storm Arbitration Decision
- Parallel proceedings are not automatically a waiver. A well-drafted arbitration clause can expressly carve out injunctive relief for the courts. When it does, filing suit for an injunction does not forfeit the right to arbitrate damages.
- Object early or lose the objection. A party who believes the arbitrator lacks authority must say so before the hearing, and should consider seeking a court ruling first. Submitting the issue to the arbitrator and participating through a final award amounts to consent. Our article on what waiver means in Florida litigation explains how this doctrine applies more broadly.
- Liquidated damages clauses in NDAs have teeth. The thirty-percent formula in the Storm Agreement produced an award of more than $3.5 million. Anyone signing a non-disclosure agreement in connection with a potential acquisition should understand exactly what a breach will cost.
Why the Tampa Bay Storm Arbitration Case Still Matters
Arbitration clauses appear in franchise agreements, construction contracts, operating agreements, and commercial NDAs across Florida. The Tampa Bay Storm arbitration decision remains one of the clearer statements from a Florida appellate court that the scope of an arbitrator’s authority is shaped not only by the contract, but by how the parties conduct themselves once the arbitration begins.
Cox Law, PLLC represents businesses and individuals in Florida civil litigation and arbitration, including disputes over non-disclosure agreements, confidentiality obligations, and the enforcement or vacatur of arbitration awards. If you are facing a similar dispute, contact our Brandon office at 813-685-8600.