A Michigan credit union has cried foul in court against theDetroit Pistons, but its case against the basketball team and itsowner, Palace Sports & Entertainment, isn't exactly aslam-dunk, according to recent court filings.

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This week a Michigan appeals court reversed an injunction thatLathrup Village, Michigan-based Michigan First Credit Unionoriginally won against the team over a soured sponsorshipagreement, according to court records. That sponsorship agreement,signed on November 9, 2016, would have made the credit union asponsor of the Pistons until October 13, 2021.

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But just days after signing the agreement, on November 22, 2016,the Pistons announced the team was moving from the Palace of AuburnHills to Little Caesars Arena, which was under construction, forthe 2017-2018 basketball season.

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According to court documents, the sponsorship agreement allowed the Pistons toterminate the deal if the team stopped playing home games at thePalace. But it also required the team to negotiate a new agreementthat would provide comparable sponsorship opportunities to MichiganFirst.

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That apparently became a problem for Michigan First when thePistons signed a competing, exclusive sponsorship agreement with Flagstar Bank. Thatdeal, announced in July 2017, put the bank's logo on the team'sjerseys and involved a number of social media, radio and communityoutreach activities. The next month, in August 2017, the Pistonsformally terminated the agreement with Michigan First.

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A Michigan trial court issued a preliminary injunction requiringthe Pistons to negotiate a deal with Michigan First, which has $863million in assets and about 139,000 members, and give it“identical” rather than “comparable” sponsorship assets.

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The Pistons appealed, and earlier this week a state appealscourt agreed with the team and reversed the injunction.

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Part of the problem appears to revolve around the difficultymeasuring the damages Michigan First suffered as a result of thebroken deal, and it was a significant factor in why the trial courtawarded the injunction in the first place.

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But according to the appeals court, the trial court's job wasn'tto determine the dollar amount of the damages Michigan Firstsuffered, it was to determine whether awarding damages could remedythe injury to the credit union in the first place.

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“It was not incumbent at this stage of litigation, prior todiscovery, for the trial court to determine what MFCU's damagesmight have been, or even exactly how they might be calculated.Rather, to justify the extraordinary remedy of an injunction, MFCUhad the burden of showing that its injuries were not fully capableof being calculated in damages,” the appeals court found.

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“Uncontroverted testimony demonstrated that there are firmswhich undertake such analysis with regularity and which, at trial,could offer a reliable expert opinion as to value and damages,” itadded. “Thus, the testimony at the hearing established clearly thatif PSE breached the sponsorship agreement, the harm inflicted bysuch breach could be measured and thus compensated at law by anaward of damages.”

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Michigan First also failed to prove that the loss of goodwill itsuffered as a result of the broken deal amounted to economic harm,the court said.

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“[Michigan First chief marketing officer Sue] Postemskitestified that she was unaware of any customers or potentialcustomers that MFCU would lose as a result of the changes in MFCU'ssponsorship relationship with the Pistons, nor was she aware of anyspecific concrete business that MFCU had lost due to thesponsorship issue. Poulos acknowledged that MFCU would not bedestroyed because of the loss of the Pistons sponsorship and thatthere is no serious and immediate threat to MFCU's economicexistence if MFCU were unable to obtain a comparable sponsorshipdeal,” it noted.

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The trial court's requirement to give the credit union with“identical” rather than “comparable” sponsorship opportunities wasover the line as well, according to the appeals court.

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“Even if an injunction had been justified in the present case,we nevertheless would have to vacate the injunction that the trialcourt entered because it was overly broad,” it said.

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