California will allow college athletes to profit from endorsements under bill signed by Newsom (via Los Angeles Times)

Gov. Gavin Newsom has signed a bill that will allow California athletes to earn money from the use of their names, images and likenesses, despite warnings from the National Collegiate Athletic Assn. that the measure would upend amateur sports.

Senate Bill 206 by Sen. Nancy Skinner (D-Berkeley) garnered national attention, with athletes including NBA stars LeBron James and Draymond Green lauding the California effort to give college athletes a share of the windfall they help create for their universities and NCAA. The bill passed the state Legislature unanimously.

Newsom signed the bill on an episode of UNINTERRUPTED’S talk show The Shop with James, WNBA’s Diana Taurasi and former UCLA basketball player Ed O’Bannon, saying the new law addresses a “major problem for the NCAA.” . . .

The bill would prohibit the NCAA from barring a university from competition if its athletes are compensated for the use of their name, image or likeness beginning in 2023. NCAA rules strictly prohibit athletes from profiting in any way from their sports.

While the bill would allow athletes to sign endorsement deals with major companies, it would also open up smaller opportunities that were previously prohibited, such as paid youth coaching positions. SB 206 would still forbid schools from directly paying athletes.

The NCAA sent a letter to Newsom in September while lawmakers were mulling the bill, calling it “unconstitutional” and a “scheme.”

In September, a New York state senator introduced legislation similar to Skinner’s bill with the added provision that college athletic departments share 15% of annual revenue from ticket sales with student athletes. … Read More

(via Los Angeles Times)

Sports Law Roundup – 1/13/2017

aslr

I used to write the sports technology roundup at TechGraphs, an internet website that died, and now I am writing the sports law roundup at ALDLAND, an internet website.

Here are the top sports-related legal stories from the past week:

  • College football head injuries: A group of former Texas Tech, Oklahoma, and TCU football players has sued the NCAA and Big XII conference, alleging that those entities breached contractual obligations to warn players of and take adequate steps to prevent head injuries. The plaintiffs are seeking class action status, and their lawyer has said that he expects to file similar lawsuits on behalf of more players this year.
  • Olympic surveillance: Two years ago, the former mayor of Salt Lake City and six SLC residents filed a proposed class action against George W. Bush, Dick Cheney, David Addington, Michael Hayden, the FBI, and the NSA, alleging that the federal government improperly spied upon people attending the 2002 Winter Olympics. Now, a judge has denied the NSA’s motion to dismiss the case and will allow it to proceed.
  • Gymnast abuse: In more Olympic news, eighteen women sued USA Gymnastics, the national governing body for gymnastics in the United States; Michigan State University; and a gym in the Lansing area. Their complaint alleges that an affiliated doctor molested and sexually assaulted the plaintiffs, some of whom were as young as nine years old when the alleged attacks occurred, and that the defendants failed to act appropriately upon their knowledge of this doctor’s actions. This is the third civil action involving this doctor, and criminal complaints also have been filed. The FBI reportedly recovered child pornography from the doctor’s electronic devices and is in possession of video evidence of the doctor perpetrating sexual assaults.
  • Baseball land shark attack: The judge overseeing a dispute between the Miami Marlins and a fan who alleges she suffered a serious neck injury in 2013 when a shark mascot, following an on-field race with other mascots, leaned into the stands and pretended to bite her head has ordered the parties to participate in mediation in advance of the case’s June trial date.
  • Concert dodgers: A concert promoter sued the Los Angeles Dodgers and Guggenheim Partners, the entity that owns the team, because, the promoter alleges, they failed to pay him a share of the proceeds from concerts by Paul McCartney and AC/DC hosted at Dodger Stadium for his work in securing those performances. The promoter says he’s owed $2 million, while a leaked draft response from the defendants reportedly tells him to “forget about the check, we’ll get hell to pay.”
  • Sports gambling legalization: Legislators in South Carolina and New York separately proposed amendments to their state constitutions that would legalize sports betting. The South Carolina proposal would allow all forms of gambling, while the New York one would be limited to allowing sports gambling at racetracks and casinos.
  • Preemptive free agency: Last week, we highlighted an article suggesting that a California employment law could allow certain athletes playing for teams in that state to unilaterally opt out of long-term contracts and become free agents. High-profile baseball agent Scott Boras subsequently weighed in on the subject and counseled against the idea largely because the transactional costs of attempting the move (i.e., years of litigation) likely would outweigh– and, due to time delay, probably completely negate– any potential benefit to the player.
  • CTE: This also is not a legal news story, exactly, but this space has highlighted a number of sports-related head-injury lawsuits in the past, which makes sharing this compelling and well-told story of a young person’s struggles with CTE appropriate. If you only click through to one link in this post, make it this one.

Sports court is in recess.

Sports Law Roundup – 1/6/2017

aslr

I used to write the sports technology roundup at TechGraphs, an internet website that died, and now I am writing the sports law roundup at ALDLAND, an internet website.

Here are the top sports-related legal stories from the first week of 2017:

  • Baseball stadium funding: The Arizona Diamondbacks, seeking the right to “explor[e] other stadium options,” have sued the Maricopa County Stadium District after the District refused to authorize funding for the $185 million needed for capital repairs and improvements to Chase Field, which opened in 1998, according to an assessment completed by the District.The team has expressed willingness to cover all of the District’s expenses, but the District apparently must give its permission to proceed and thus far has declined to do so.
  • Student-athlete classification: In a case we have been monitoring in this space (here and here), the U.S. Court of Appeals for the Seventh Circuit has denied the request of a group of former Penn student-athletes for full-court (en banc) review of that court’s earlier rejection of their claim that they were employees entitled to minimum-wage compensation under the Fair Labor Standards Act. The denial of the request for further review leaves in place the court’s decision handed down last month. It is unclear whether the plaintiffs will request permission to appeal to the Supreme Court.
  • Daily Fantasy Sports: A DFS website argued that daily fantasy sports actually are illegal gambling in an attempt to avoid a $1.1 million lawsuit based on an advertising and sponsorship contract with the Minnesota Wild. I wrote more about this case here earlier this week. Meanwhile, a Maryland law authorizing the lawful, regulated conduct of DFS contests in that state, which is regarded as less restrictive than similar measures in other states, went into effect on Monday; a Florida legislator introduced a bill Wednesday that would declare DFS legal in that state; and FanDuel earned another win in a patent-infringement suit brought by two gambling technology companies in Nevada.
  • Preemptive free agency:  Nathaniel Grow has an interesting article on FanGraphs that illuminates a California employment law that could apply to allow even union employees like professional athletes to unilaterally opt out of long-term contracts after seven years of employment. This poses a potentially tantalizing, if legally unproven, opportunity for someone like Mike Trout, a generational talent not yet in his prime who likely could fetch an even more historically large contract were he to hit the open market now, at age twenty-five, rather than after the 2020 season, which is when his current contract ends.

Sports court is in recess.

The Department of NFL Justice

David Post writes:

The public clamor for the NFL to “do more” when confronted by evidence of serious wrongdoing in the cases of Ray Rice, Adrian Peterson, Greg Hardy, and an unfortunately large number of other cases strikes me as very troubling, and reflective of this view, apparently pretty widespread, that we can’t count on the legal system to mete out appropriate punishment in a reasonable way. We have a criminal law, one would think, to define behavior that we cannot accept as a society, and to identify and punish those who violate those norms. Many people, though, seem to want the NFL, and/or the individual NFL teams, to take over that function. It’s a kind of privatization of a public function, and, extended more broadly, its costs might be much higher than we think. Do we really think it would be a such a good idea if Microsoft, say, or General Electric, or Wal-Mart, or Amazon, or other large private employers started instituting “codes of conduct” governing employee behavior outside of work time? And if they started firing people because they received a video showing them behaving unlawfully, even heinously? And let’s see, whose interests do we think the NFL’s process for determining punishment is going to serve – the public’s? Or the NFL’s?

His full post is available here.

The NCAA still wants you to believe its rules carry the force of law

This is a topic that probably deserves further extrapolation, but for now, just take a moment to remember that a violation of NCAA rules, to which most of us are not subject, is not the same thing as violating the law. This was the lesson of the Nevin Shapiro foul-up. That doesn’t mean that the NCAA doesn’t want you to think they can’t act with the force of law, though. [Note that lawyers receive bonus law points for triple negatives. – Ed.] The latest example came this afternoon:

That’s the NCAA’s official news account, and the tweet contains a link to the NCAA’s Sports Wagering Brochure, which is not a legal advice document from a lawyer or the government. Its text says that a variety of gambling-related acts may constitute violations of NCAA rules. That’s fine. So is eating too much pasta.

The brochure’s images and layout attempt to tell a different story, though:

ncaawageringshaving

Point shaving is a federal crime, and sports gambling, like just about everything else, is a regulated activity. To say that the NCAA’s brochure clearly parses people’s obligations under the law, as compared with their obligations under the NCAA’s rules is as much of an understatement as Mercer is an underdog to win the NCAA tournament. Take a look at the full brochure layout and see if you agree.

Do you think the NCAA cares that it might have caused confusion about the extent of its enforcement authority vis-a-vis state and federal law? Don’t bet on it.

San Jose wants to overturn baseball’s antitrust exemption (via Volokh Conspiracy)

federalleagueBetween 1913 and 1915, there was a third baseball league, the Federal League, competing with the two established organized leagues we already know, the National League and the American League. Players’ salaries skyrocketed, and the NL and AL ended up breaking up the FL by buying up some clubs and inducing others to leave the League. The sole remaining FL team, from Baltimore, sued the organized leagues and the National Commission, arguing that their action in breaking up the FL violated antitrust law.

In Federal Baseball Club of Baltimore, Inc. v.  National League of Professional Baseball Clubs (1922), the Supreme Court said it didn’t violate antitrust law. Justice Holmes, writing for a unanimous Court, said this didn’t fall within antitrust law because it wasn’t interstate commerce (and the presence of interstate commerce is expressly made necessary by the text of the Sherman Antitrust Act). Of course, this is contrary to many decades of later jurisprudence: there’s no way the Supreme Court would have decided this way if the case came up today.

But the Supreme Court reaffirmed its 1922 decision in a short 7-2 per curiam in Toolson v. New York Yankees (1953), saying if baseball’s exemption was wrong, Congress should fix it.

In Flood v. Kuhn (1972), the Supreme Court reaffirmed Federal Baseball again.

Now San Jose wants to challenge the antitrust exemption again. San Jose claims that Major League Baseball has undermined the Oakland As’ desire to move to San Jose. Of course San Jose lost in district court, but the case is being fast-tracked to the Ninth Circuit, which . . . could hear it by May. . . . Interestingly, one of the possible grounds that the Ninth Circuit could use would be to read the baseball exemption narrowly, as limited to labor issues like the reserve clause — which is how the previous cases arose — and not applicable to issues here like restraints on relocation of teams. … Read More

(via Volokh Conspiracy)

Judges Take Swings at The ‘Baseball Rule’ (via Fulton County Daily Report)

A panel of the Georgia Court of Appeals on Tuesday tested the Atlanta Braves’ argument that the team should be insulated from suits by fans hit by flying bats or balls.

The Braves’ lawyer, former state Supreme Court Chief Justice Leah Ward Sears, said the appeals court should adopt the so-called “baseball rule,” which says teams are immune if they provide enough seats behind home plate shielded by a net to meet demand.

Hearing the case with two colleagues, Judge Michael Boggs wondered why the baseball industry should get its own rule. “The concern being, of course, if you carve out a rule for baseball, if we adopt the baseball rule, next week we’ll be adopting the hockey rule, and the week after that we’ll be adopting another rule,” he said.

The case was filed against the Braves by a parent of a 6-year-old girl who was hit by a foul ball while attending a game at Turner Field in 2010. A Fulton County judge has refused to dismiss the case.

Backed by the commissioner of Major League Baseball, the Braves say the baseball rule is used in the majority of states that have adopted a rule around errant balls and bats at baseball venues.

On Tuesday, Sears told the judges that the Braves need to know exactly what their duties to spectators are. “The baseball rule is a clear rule,” she said, “and, quite frankly, its clarity is its virtue.”

Arguing for the girl and her family, Atlanta lawyer E. Michael Moran of Law & Moran said it didn’t make sense to adopt a rule created for baseball in another jurisdiction about 100 years ago. “The game has changed,” he said, noting high rates of speed of balls hit by players today. … Read More

(via Fulton County Daily Report)

The NFL Lawsuit That Could Be Bigger Than The Bounty Scandal (via Deadspin)

Preliminary arguments began Thursday in Minneapolis in a lawsuit against the league that harks back to the worst sports scandals of the last generation: unrestrained collusion among the owners to keep payrolls down.

The facts in the White case are straightforward and damning, and largely agreed upon by both sides. In 2010, the last year of an expiring labor deal, there was no salary cap. Teams were ostensibly free to carry whatever payroll they could afford, but in their summer meetings the owners came to a secret agreement. No one would cross the $123 million boundary, because if some teams spent freely, that would drive up prices for teams that would rather not spend at all.

The imaginary salary cap “came up several times in our meetings,” said John Mara, Giants owner and chairman of the NFL’s management committee. Still, four teams took the gentlemen’s agreement as something less than binding, because after all: There was no actual rule. The Redskins, Cowboys, Raiders, and Saints all spent more than $123 million, despite being warned “at least six times” that serious consequences would follow. And sure enough, the gavel came down. This season and next, Washington and Dallas (the two biggest spenders) will forfeit a combined $46 million in salary cap space, to be distributed among the other teams.

In other words: Dan Snyder and Jerry Jones are being punished for failing to collude with their fellow owners in a secret deal to keep hundreds of millions of dollars out of the hands of NFL players. … Read More

(via Deadspin)

Behind the Curtain: Class Actions and the NBA Lockout (via QuestionsPresented)

Class actions have been in the news lately, first with the lawsuits filed against law schools by former students, and, more recently, the antitrust complaint professional basketball players filed against the NBA. David Boies, the high-profile litigator who previously represented the NFL against the class of football players that sued it this summer and Jamie McCort in her divorce from Los Angeles Dodgers owner Frank McCort, is serving as class counsel in the players’ class action against the NBA.

In an interesting publicity move, Boise and Billy Hunter, leader of the now-disbanded players’ union, held a small press conference with twelve members of the media last Tuesday to discuss the players’ case against the NBA. Boies apparently walked through the complaint with those present and offered his commentary and legal strategy explanations. While he certainly was posturing with the public (no doubt Hunter’s aim in calling the meeting), Boies’ remarks hit on a number of class action legal issues. … Keep Reading

(via QuestionsPresented)