Student-Athletes Can Seek Injunction Against NCAA But No Class Certification for Damages

By Tamlin H. Bason  

Nov. 12 --A group of former student-athlete plaintiffs was granted class certification on Nov. 5 in their bid to enjoin the NCAA's allegedly anticompetitive practice of profiting from use of the Division I athletes' publicity rights (In re NCAA Student - Athlete Name& Likeness Licensing Litig., N.D. Cal., No. 09-1967, 11/8/13).

“Without the requested injunctive relief, all class members -- including both current and former student-athletes--would potentially be subject to ongoing antitrust harms resulting from the continued unauthorized use of their names, images, and likenesses,” the court said, granting class certification to the class of plaintiffs seeking injunctive relief.

The court, however, declined to certify a class that was seeking damages as opposed to injunctive relief. Class adjudication of those claims would be difficult to manage because it is not clear what athletes were harmed by what NCAA practice, the court said. Therefore a class action is not preferable to alternative forms of litigation with respect to the demands for monetary damages, the court said.

Antitrust, Right of Publicity Claims Raised

A number of student athletes brought suit against the NCAA, as well the Collegiate Licensing Co. (CLC) and Electronic Arts Inc., to challenge its rule, underSherman Act §1, 15 U.S.C. §1, precluding the athletes from receiving compensation for the commercial exploitation of their names and images.

When initially filed in 2009, the lead plaintiff was Edward C. O'Bannon Jr., a former University of California Los Angeles basketball star voted most outstanding player in the 1995 NCAA basketball tournament. O'Bannon's complaint asserted antitrust claims. The case was later consolidated with a number of similar lawsuits filed by other former Division I athletes, including the right of publicity action filed by Samuel Michael Keller, a former quarterback for the Arizona State University football team.

The antitrust and right of publicity causes were split, resulting in the right of publicity action moving much more swiftly. Indeed, the U.S. Court of Appeals for the Ninth Circuit in July held that the EA's NCAA Footballvideo game series might offend Keller's right of publicity under California law. In re NCAA Student-Athlete Name& Likeness Licensing Litig., 724 F.3d 1268, 2013 BL 203083, 107 U.S.P.Q.2d 1629, (9th Cir. 2013) (148 PTD, 8/1/13). That decision, which affirmed a 2010 district court ruling (29 PTD, 2/16/10), has been appealed to the Supreme Court (187 PTD, 9/26/13).

Meanwhile, in the antitrust action, the plaintiffs in July filed a third consolidated amended complaint, which the defendants moved to dismiss. While the motions were pending, however, both CLC and EA agreed to a settlement with the plaintiffs, leaving the motions pending only as to the NCAA (189 PTD, 9/30/13).

NCAA Dismissal Arguments Rejected

Then, on Oct. 25, Judge Claudia Wilken rejected all of the NCAA's arguments for dismissal. In particular, the court summarily rejected the NCAA's argument (1) that the First Amendment and the California Civil Code bar the plaintiffs from asserting any rights of publicity in the use of their names and likenesses during game broadcasts; and (2) that the application of any right of publicity laws is preempted by the Copyright Act.

As to the first, it held that the state law applies only to right-of-publicity claims brought in that state and thus would not preclude any such claims brought in any other state.

Further, the court noted that the plaintiffs here are alleging harm to a nationwide market and thus while the First Amendment argument warranted greater scrutiny, it does not merit dismissal.

As to the second, the court determined that the claims at issue here were not preempted “because they are based principally on an injury to competition, not simply misappropriation.”

No Class Certification for Damages

The court's instant order was on the plaintiffs' petition for class certification. The plaintiffs wanted to certify two separate classes: one that would seek injunctive relief, and the other that would seek monetary damages.

The court determined that both potential classes were able to demonstrate the threshold prerequisites to a class action, which, under Rule 23 (a), are numerosity, commonality, typicality and adequacy of representation. However, only the class seeking injunctive relief could demonstrate that any of the sections of Rule 23 (b) were met, which lists a number of different types of class actions.

The injunctive relief class sought certification under Rule 23 (b)(2), which applies where “the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole.”

The court noted that this class is hoping to pursue “an injunction barring the NCAA from prohibiting current and former student-athletes from entering into group licensing deals for the use of their names, images, and likenesses in videogames and game broadcasts.”

An injunction, the court determined, would provide “uniform relief” to all members of the class, and thus class certification was granted pursuant to Rule 23(b)(2).

The damages subclass was seeking certification under Rule 23 (b)(3), which allows for certification where “questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.”

The court noted a certification of the damages subclass would raise a number of case management issues. For instance, the plaintiffs “have failed to satisfy the manageability requirement because they have not identified a feasible way to determine which members of the Damages Subclass were actually harmed by the NCAA's allegedly anticompetitive conduct,” the court said.

Moreover, “Another barrier to manageability here is determining which student-athletes were actually depicted in videogames during the relevant class period and, thus, members of the Damages Subclass,” the court said. Because class litigation seems unmanageable, the plaintiffs failed to demonstrate that a class action was a “superior method” under Rule 23 (b)(3), the court held. It therefore declined to certify the damages subclass.

The plaintiffs are represented by Shana E. Scarlett of Hagens Berman Sobol Shapiro LLP, Berkeley, Calif. The NCAA is represented by Juan Carlos Araneda of Meckler Bulger Tilson Marick & Pearson LLP, San Francisco.

 

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Text is available at http://www.bloomberglaw.com/public/document/Keller_v_Electronic_Arts_Inc_et_al_Docket_No_409cv01967_ND_Cal_Ma/9.

 

To contact the reporter on this story: Tamlin Bason in Washington at tbason@bna.com

To contact the editor responsible for this story: Naresh Sritharan at nsritharan@bna.com