NCAA on the Defensive in Licensing Lawsuit

 

The California federal judge that is presiding over the lawsuit involving ex-players suing the National Collegiate Athletic Association (NCAA) over its failure to pay them licensing fees for the use of their names and likenesses, issued a procedural ruling yesterday that may have a far-reaching impact on college athletics.

The NCAA in October 2012 filed a lengthy motion asking the court to preclude the plaintiffs from advancing their lawsuit.  The players amended their original lawsuit asking that the court award football and men’s basketball players receive fees, not only from rebroadcasts of games, but from live television broadcasts.  In other words, the argument was that current players should have a right to receive a cut of television revenues for games they participate in.

The NCAA does not treat players as employees, and players have never organized as their pro counterparts have.  This means that players have never had an entity to negotiate for them.  The crux of this lawsuit, which bears the name of former University of California, Los Angeles (UCLA) basketball player Ed O’Bannon, is the argument that players are all similarly situated and thus should be certified as a class.  If they win on this point, then in effect, the legal system would create an entity that would be entitled to negotiate for players for compensation for use of their likenesses, just like pro players have done for years.

The NCAA, in its motion rejected on January 29 by the court, argued that players lack “standing” to pursue their legal claim.  This is a narrow, procedural legal term that in effect refers to whether or not a plaintiff (or group of plaintiffs) has the legal right to pursue a claim in the first place.  A defendant raising this issue argues that a plaintiff does not have a sufficient interest or legal vehicle to bring a claim in court.

Judge Claudia Wilken rejected this claim and has set a hearing for June 20.  At that hearing, she has ordered that the NCAA challenge the right of the plaintiffs to file the suit on the legal merits of their case and not on procedural grounds.  This is considered by many to be a significant victory for the plaintiffs in the case.

Judge Wilken has in the past few months issued other rulings relating to discovery in the case that have favored the plaintiffs and allowed them to attempt to gather evidence that the NCAA was trying to block on procedural grounds.  As the case is now unfolding, there seems to be an increasing likelihood that the court will eventually deny any defense motion for a summary judgment.  This would, in effect, ensure that the case would go to trial before a jury, which is currently scheduled to take place in June 2014.

More than a dozen law firms are representing the plaintiffs.  These firms have so far spent some $20 million on expenses to pursue the case, which was filed back in 2009.  The possibility of getting licensing fees for live broadcasts has raised the stakes on the case.  Legal experts now believe that the NCAA and its co-defendants, Collegiate Licensing Company and EA Sports, could eventually be facing hundreds of millions of dollars in awards for the plaintiffs.

The plaintiff attorneys have already set up a company headed up by Sonny Vaccaro, a former shoe company representative who has worked in college sports for years and Ken Feinberg.  This company would administer a mechanism to pay out licensing fees to players and former players.

This lawsuit has the potential to change the face of college sports forever.  Anyone who follows college football and basketball should keep tabs on this case as it develops.  The June hearing and the judge’s ruling will be “must see TV” for college sports fans.

This case is styled Ed O’Bannon v. NCAA, 2010 U.S. Dist. LEXIS 19170 (N.D. Calif. July 9, 2009) (No. CV 09-3329).  A full copy of the complaint can be found online by using the citation for an internet search.

Greg Tyler is the Library Director at the United States Sports Academy. He has also taught courses at the Academy in sports law. He worked for years in youth sports as a coach, league administrator and as a soccer referee. He has a law degree and practiced law for a number of years. You can reach him at gtyler@ussa.edu.

 

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