Cybersquatters in a Sticky Situation

When in 2015 word broke out that entertainment giant Warner Brothers had filed new trademarks for “Space Jam,” the possibility of a sequel to the 1996 original seemed around the corner. The original movie grew out of Nike’s “Hare Jordan” campaign, which featured basketball legend Michael Jordan facing off in a one-on-one with beloved cartoon character Bugs Bunny. Picked up by Warner Brothers, Space Jam hit theaters on November 10th, 1996, and became a smash hit. The past 25 years have seasoned the live-action animation to be regarded as a classic. Unsurprisingly, any word of a sequel was set to be a big deal — especially for basketball fans. The 2015 buzz was not unfounded. Soon thereafter, Warner Brothers announced a partnership with SpringHill Entertainment, a company founded by none other than Lebron James, making him an executive producer in upcoming ventures. The partnership between a basketball legend and Warner Brothers seemingly confirmed Space Jam’s sequel even before James officially announced a 2021 release on Twitter. As of now, Space Jam 2 is set to release on July 16th. 

Last week, James gave fans a first look into the updated Toon Squad adding momentum to the buzz as he shared exclusive pictures of him on set. The excitement for the film has been long standing. So much so that about a year ago, advertising creative Hunter Fine and commercial director Peter Marquis bought the domain and, in a very literal interpretation of the name, began to sell fruit jam that “looks like space.” Why number 2? The duo claim, “Our first recipe didn’t look like space enough, so we perfected it with space jam recipe #2.” However, it doesn’t take long to piece together that the domain owners may have other goals in mind. Firstly, the homepage displays two products: their jam for $12.99 and their website for a slightly larger price tag of $1,000,000. The duo even produced their own “Space Jam 2 Trailer”, which showcases visuals from the farm as a couple talks about what makes their jam special. One of the reasons being that “you can also buy our website.” 

Coupled with the site’s ostensibly veiled tone, it is clear that the duo hopes for a Warner Brothers payout. According to Front Office Sports, “the ruse became a quarantine project,” the aim of which is a payday with most proceeds going to a sports-related charity. However, several factors may block their plan. Among which is the existence of cybersquatting laws. Tamara Kurtzman, founder at TMK attorneys and contributor at ABA’s Business Law section, notes, “a viable domain name, is not simply a luxury in today’s economy, but rather a corporate necessity without which a business is unable to effectively compete in the marketplace. The inability of a company to acquire a meaningful domain can therefore directly influence the success or failure of that business.” 

To address these concerns, the 1999 Anticybersquatting Consumer Protection Act (ACPA), specifically prevents “cybersquatters” from registering internet domains containing trademarks later to sell the domain name to the trademark owner. To gain relief by the ACPA, the domain name and the registration of the domain must have been registered in ‘bad-faith’ and must be identical or “confusingly similar” to a well-known trademark. As for the question of whether the duo registered the domain in bad faith, the jam front seems to be an attempt to offer legitimacy to their domain registration and sway any allegation of cybersquatting away. However, their subsequent commentary pretty much gives their motivations away, “When Hunter told me he secured, it just felt like, ‘Oh, we can do something really fun with this rather than just a straight extortion model,”  

Kurtzman points out that a viable domain name is a “corporate necessity” in today’s economy, but given Warner Brothers’ established influence coupled with Lebron James’ star-power, how necessary to sequel’s success is the domain, really? Perhaps this is why Warner Brothers have not yet commented on the situation, nor have they proceeded with any legal action. However, if they were to choose to seek action and to attain the domain, the case can be less straightforward than at first glance. Fine and Marquis may be participating in “anticipatory cybersquatting”, which is the practice of registering domain names with minimal present value in the hopes that these names will become desirable, and consequently increasingly valuable, in the future. Again, the existence of a physical jam for sale may hinder the argument that the domain has minimal present value; however, the advertising duo clearly has motives involving a $1,000,000 payout. Importantly, the ACPA doesn’t directly address the anticipatory nature of the cybersquatting exhibited in the Space Jam 2 case, potentially because this practice only gained popularity in the 2000s. Here, it may be relevant to take a closer look at what trademark law says. 

A trademark is usually deemed to belong to a party that uses the mark first in commerce. In other words, the party that first uses the mark in an ordinary course of trade (e.g., placed on containers/displays/documents, and sold or transported in commerce and on services in more than one State or abroad). Fine and Marquis started selling their jam before the release of the anticipated Space Jam sequel. Not to mention, the sequel’s full title is “Space Jam: A New Legacy” as opposed to “Space Jam 2”. This detail is kind of incongruous for the current domain holders.On the one hand, it may help them avoid cybersquatting charges, but it also provides even less incentive for Warner Brothers to proceed with a payout.

 All in all, it seems unlikely that Warner Brothers or James would proceed with a payout since the squatters occupying the Space Jam 2 domain don’t seem to present an exceptionally high obstruction to potential business. Even without the domain, the influence of Lebron James and Space Jam’s secure status is likely to guarantee a financially fruitful sequel. Of course, nothing is for certain, so it will be interesting to see how/if Warner Brothers or James proceed and whether the advertising duo stays in the jam business.


NYU Sports Law Association’s 10th Annual Colloquium Preview

This Friday, March 5th, the Sports Law Association of NYU Law will be hosting its 10th annual Sports Law Colloquium. The flagship event has hosted industry leaders such as NBA Commissioner Adam Silver (University of Chicago Law ‘88), President of the New York Yankees, Randy Levine (Hofstra University School of Law ‘80), and NYU Law’s own Gary Bettman, Commissioner of the NHL (‘77). 

This year, SLA will be hosting a unique slate of panelists given the unprecedented nature of sports in 2020 – 2021. The keynote conversation will feature Big Ten Commissioner, Kevin Warren and distinguished Brooklyn Law and NYU Law professor, Jodi Balsam. This article will preview the panels and the brilliant panelists who will be speaking. Click here to register for the colloquium. Registration will close Wednesday night, March 3rd. 

This event has been approved for a maximum of 3.5 New York State CLE credits in the Areas of Professional Practice category. The credit is both transitional and nontransitional; it is appropriate for both experience and newly admitted attorneys.

Keynote Conversation
Kevin Warren (Panelist) is the Commissioner of the Big Ten Conference. Previously, Mr. Warren served as the Chief Operating Officer of the Minnesota Vikings and was the highest-ranking African-American executive working on the business side for an NFL team at the time. Warren played college basketball at the University of Pennsylvania, where he was a member of the 1981-82 Ivy League Championship team before transferring to Grand Canyon University. Warren later graduated from University of Notre Dame Law School. In 1992, Warren established his own sports and entertainment agency. Five years later, he joined the St. Louis Rams as a front office executive and earned a Super Bowl Ring following the Rams’ Super Bowl XXXIV victory. Warren went on to work for the Detroit Lions, Greenberg Traurig LLP, and then the Vikings for fourteen years before being named Big Ten Commissioner in 2019.

Jodi Balsam (Moderator) is an Associate Professor of Clinical Law and Director of Externship Programs at Brooklyn Law School, and an Adjunct Professor of Law at NYU School of Law. Professor Balsam is a graduate of NYU Law and previously served as Counsel for the National Football League. Balsam began her legal career at Simpson, Thacher & Bartlett LLP and clerked for The Honorable Dennis Jacobs as well as The Honorable Charles L Brieant. Professor Balsam is frequently published for her commentary on sports law about topics including the NFL players’ concussion lawsuit, Tom Brady’s “Deflategate” lawsuit, sports betting, and more.

The Sports World’s Pandemic Response
Ron Klempner (Panelist) is Senior Counsel, Collective Bargaining at the National Basketball Players Association and has served in this role for over two decades. Klempner began his legal career at Weil, Gotshal & Manges and clerked at the U.S. Court of Appeals for the Second Circuit. He is a graduate of the Maurice A. Deane School of Law at Hofstra University.

Michael Goldsholl (Panelist) is the Director of Operations for Business & Legal Affairs at Women’s National Basketball Players Association (WNBPA). Goldsholl began his career working with a talent agency as well as a sports marketing company. He is a graduate of Brooklyn Law School and also interned with the WNBPA as a law student. 

Vanish Grover (Panelist) is Counsel at Major League Baseball (MLB). He began his career as a labor relations intern with MLB before joining Davis Polk LLP. Grover then clerked for the U.S. District Court for the Eastern District of New York, before rejoining MLB in his current role. He is a graduate of NYU Law.

Dr. Daniel Kelly (Moderator) joined NYU’s School of Professional Studies in 2019 as the Academic Director of Graduate Programs and Clinical Assistant Professor for the Preston Robert Tisch Institute for Global Sport. Dr. Kelly has consulted on strategic leadership and global business initiatives with international sports organizations based in Spain, Argentina, Qatar, and elsewhere. He has also organized recruiting events with various professional teams such as the New York Mets, Boston Celtics, and many more.

The Next Generation of Sports Broadcasting Deals
David Pahl (Panelist) is a partner at DLA Piper and focuses his practice in the media, sport and entertainment sector. He previously served as the Chief Legal Officer at ESPN for over two decades and oversaw all legal affairs, including programming acquisitions for broadcasting rights. Pahl was responsible for ESPN’s first MLB and NBA package purchases as well as the NFL’s Monday Night Football addition. He has negotiated or overseen carriage and distribution agreements with all of the major MVPDs, including Comcast, DirecTV, Time Warner and Dish. Pahl is a graduate of University of Michigan Law School. 

Richard J. Birns (Panelist) is a partner at Gibson, Dunn & Crutcher LLP where he is Co-Chair of the Sports Law Practice Group. Birns regularly serves as a personal advisor to owners of sports franchises and sports industry leaders on “bet the company” matters. He is also recognized as a leading sports lawyer by The International Financial Law Review. Birns is a graduate of Columbia Law School.

Andrew Marchand (Panelist) is a senior sports writer for the New York Post. Marchand began his career as a reporter for the New York Post before becoming a regular contributor to ESPN programs such as Sportscenter, Baseball Tonight, ESPN News, and ESPN New York radio broadcasts. After 11 years with ESPN, Marchand rejoined the New York Post in 2018. 

Mark Conrad (Moderator) is an Associate Professor of Law and Ethics at Fordham University Gabelli School of Business. He also is the director of Fordham’s Sports Business Concentration. Professor Conrad has had multiple works published on various areas of sports law including the First Amendment rights and social media in sports, disparaging trademarks against the Washington Football Team, and many more. Professor Conrad is a graduate of New York Law School. 

Social Activism in Professional Sports
Pamela Wheeler (Panelist) is a Consultant to the National Football League for diversity and inclusion as well as executive leadership development. Ms. Wheeler previously served as Director to the WNBPA for more than 15 years. She then lectured at Columbia University on labor and employment law, as well as leadership and personnel management. She is a graduate of Boston University School of Law. 

Ben Meiselas (Panelist) is a partner at Geragos & Geragos. He is best known for representing former quarterback and civil rights activist Colin Kaepernick in his lawsuit against the National Football League and continues to represent Colin in all related endeavors. Meiselas has previously served as the General Counsel for the Big3 Basketball League, and currently serves as General Counsel for Colin Kaepernick’s “Know your Rights Camp,” Meiselas was awarded the 2019 Variety Impact Lawyer of the Year for his legal achievements. He is a graduate of Georgetown University Law Center. 

Charles Grantham (Panelist) is the Director of Center for Sport Management at Seton Hall University’s Stillman School of Business. Grantham has deep expertise in sports having formerly represented or advised NBA players including Charles Oakley, Amare Stoudemire, and Tobias harris. Grantham began his career with the NBPA as a former executive for almost two decades, then serving as the Union’s Vice President before being names its first Executive Director. Grantham was a consultant to the plaintiffs in the O’Bannon v. NCAA lawsuit. He earned his M.B.A. from The Wharton School of University of Pennsylvania. 

Cameron “Cammy” Myler (Moderator) is a Clinical Assistant Professor at NYU’s Tisch Institute for Global Sport. Myler is perhaps best known for her time as an American Olympian and competed in four Winter Olympic teams as a luge athlete. After retiring from luge, Myler earned her J.D. from Boston College Law School and began her legal career at Milbank LLP before moving to Frankfurt Kurnit Klein & Selz, P.C. In 2016, Myler created the Women in Sports Initiative, which provides students with an opportunity to meet with and learn from successful professionals in the sports industry.

All-Star Game 2021: Behind the NBA’s Decision

The NBA All-Star Game is an annual tradition dating back to 1951. In normal circumstances, the weekend is a highly-anticipated event for fans and players alike. Besides the exhibition game showcasing the league’s best, the voting, slam-dunk contest, and parties make the game one of the most interactive and exciting annual weekends for sports fans. In-person interactivity is something that has been out of reach for almost a year now, so as one might expect, the excitement surrounding the All-Star Game has dwindled during the pandemic. So much so, that some of the league’s highest-profile players have issued statements expressing their disinterest. Earlier this month, Giannis Antetokounmpo told The Athletic, “The Big Dog (LeBron James) says he has zero excitement, zero energy for the All-Star Game. I’m the same way; I really, right now, I don’t care about the All-Star Game. I got zero energy, zero excitement.” Between the Orlando Bubble last spring, the league’s heightened health and safety protocols, and game postponements, a collective sense of pandemic-induced moral fatigue is understandable. Despite some player apprehension, the league officially announced last Thursday that the Game will take place in Atlanta on March 7th. Additional travel for players and staff presents an increased risk of infection, making the decision to go forward with the game seem rather counterintuitive during an already challenging season. ESPN’s Bontemps and Wojnarowski report that each time the NBA has returned from a break (in June, before the start of the bubble, and in November, before the start of training camp), there has been a significant spike in cases across the league. Therefore, the pros of holding an All-Star Weekend during the pandemic must outweigh the cons. Let’s take a look at the considerations the league may be looking at. 

NBA, ESPN, Turner Sports Media Deal 

In 2014, the NBA announced a nine-year extension deal with its long-term partners ESPN and Turner Sports, keeping the Association on the networks through the 2024-25 season. Although the terms of the agreement remain undisclosed, the deal was reportedly at $24 billion and nearly triple the previous contract’s annual value. Consequently, the NBA All-Star Weekend is a big one for Turner-owned TNT and TBS. Last year’s game averaged a 4.1 rating and 7.3 million viewers across TNT and TBS Sunday night (an 8% increase from 2019). Additional All-Star programming is exclusive and spans across the entire weekend, while Turner makes approximately $30 million in ad revenue alone. The New York Times estimates that for the NBA, the event is worth about $60 million. In the event of cancellation, the NBA would have to make up this amount to Turner later. 

Here, we can start piecing together that canceling the game would present some financial concerns thatfor the leaguemay outweigh the cons of canceling. As Sacramento Kings Point Guard, De’Aaron Fox pointed out, “money makes the world go ’round, so it is what it is. “Due to COVID-19, the NBA suffered losses of around $1.5 billion in 2020, and losses of such magnitude affect staff across the league — not solely the players. Therefore, one may consider that the decision to give the All-Star Game the green light comes from the NBA needing to maximize revenue…but what about that aforementioned apprehension from the players?

Labor Relations, HBCU funding, and Vaccine Confidence

This is where the league’s labor union, the National Basketball Players Association (NBPA), comes in. The NBPA’s mission is to ensure that the rights of NBA players are protected and that every conceivable measure is taken to assist players in maximizing their opportunities and achieving their goals both on and off the court. The most important document between the league and the labor union is the Collective Bargaining Agreement, the language of which explicitly notes that players do not have much choice on whether to partake in the game. Article XXI of the collective bargaining agreement states that any player selected to play in an All-Star game must attend and participate in the game and every other event conducted in association with All-Star Weekend. Additionally, a player will not be required to participate only if he has been excused from participation by the Commissioner at his sole discretion. 

Chris Paul, current NBPA President and point guard for the Phoenix Suns, expressed in an interview, “the job for the union has been to try to make sure our players are healthy and safe” while making it clear that players’ opinions are not a big factor in the league’s decision. Per ESPN, the NBA sent out a memo to its teams on Monday detailing its agreement with the National Basketball Players Association for health and safety protocols during the All-Star break, both for selected players and those who are not. 

Players selected to play are allowed to travel solely to their out-of-market home before going to Atlanta strictly by NBA-provided private transportation. Negative PCR tests are mandatory on March 6th and 7th, and each player can bring a limited number of guests who are to follow the same protocols as the players. Non-selected players can enjoy greater flexibility in travel as they can stay in their market home or go anywhere within the United States; however, staying at and using public accommodation is prohibited. Regardless of whether selected as an All-Star or not, all players have to undergo daily PCR testing. 

Notably, both the league and the NBPA have emphasized that the Game will feature a philanthropic component to benefit historically Black colleges and universities and COVID-19 relief efforts while featuring a campaign to urge fans to take the coronavirus vaccine. Thus far, NBA leadership has withstood the test of a global pandemic. In fact, the league has seen some weeks since the season’s start where none of the players tested positive, indicating that their protocols work. Here’s to hoping this holds true through All-Star Weekend. 

Biden’s Impact on the Industry: The Stadium Subsidy Question

As we near the end of the first month of Joe Biden’s presidency, it may be interesting to investigate further what Biden’s impact on the sports may be. Beyond the previously highlighted potential changes in environmentally-mind legislation, the current administration may invoke impactful financial regulations. 

First, let’s take a look at the existing landscape. In 2017, when players knelt during the national anthem in protest against police brutality, Donald Trump extended his attack on the National Football League to tax policy. He took to Twitter citing the NFL’s “massive tax breaks” and, as a result, highlighted the stadium-subsidies that exist at state and local levels. Some of these subsidies rely on the ability to issue municipal bonds and generate income, which is then exempt from federal taxes, allowing owners to take advantage of cheaper financing. The foundational assumption here is that the federal government shouldn’t indirectly tax local governments on projects that support public infrastructure. However, the delineation of what is in the public’s interest, and therefore can be exempt from federal taxes, lacks clarity. Although most states have restrictions rooted in the Public Purpose Doctrine that bar them from using public money to support private enterprise, the extent to which sports stadiums are in the public’s interest has been a malleable issue. 

The 1954 Supreme Court ruling in Berman v. Parker may help contextualize why this issue is such a debate. In this landmark case, the Court unanimously ruled that the term “public purpose” may be extended to uses that serve “public welfare,” including those private uses that promote “public safety, public health, morality, peace and quiet, [and] law and order.” Therefore, the legal definition of “public interest” is subject to contestation. During the time of Trump’s tweet in 2017, subsidies for sports stadiums had cost the federal government $3.7 billion since 2000 (follow this link for a closer look at which stadiums were financed with tax-exempt municipal bonds). Under this system, fans may even be unknowingly financing the construction of their rival team’s new stadium. Many suggested that Trump’s tweets did not mean much since his administration’s actual tax plan did not reflect the same energy. 

Unsurprisingly, stadium subsidies are a highly contested issue and have received pushback over the years from both the House and the Senate. Furthermore, in 2015, the Obama administration’s budget included a provision aimed at changing how tax-exempt bonds are issued in hopes of dismantling these stadium subsidies. Six years later, and the sports industry continues to benefit from stadium subsidies. For example, the most expensive Minor-League Stadium in history set to become the Pawtucket Red Sox home may cost taxpayers upwards of $150 million.

Another particularly timely example comes from reigning Superbowl Champions and the first team to host their own Super Bowl appearance, the Tampa Bay Buccaneers. To better prepare for a football season during the pandemic, Raymond James Stadium received upgrades to health and safety measures that cost over $10 million of federal funds. Notably, the Florida Supreme Court holds a history of allowing public funding to go towards recreational, entertainment, and tourism projects (e.g., Rowe v. Pinella Sports Auth., State v. City of Miami, State v. Orange County Indus. Dev. Auth, and more). However, this case comes with a bit of a twist since the funds came from the Coronavirus Aid, Relief, and Economic Security (CARES) Act as the upgrades aimed to address public health concerns and decrease infection risk. Some of the upgrades included touchless equipment ranging from sinks and soap dispensers to ticket scanners and credit card readers as well as a new parking lot PA system. However, in an article published last week, The Hill notes that these upgrades were not completed until most of the season was over, calling into question whether fans’ health and safety were the sole priority. 

Regardless, the added layer of the pandemic and CARES Act only complicates the public interest question when it comes to private enterprise related to sports infrastructure. Phil Mattera, research director at Good Jobs First policy resource center, noted last fall, “The Trump Administration is paying little attention to how CARES Act funds are being spent or the track record of the companies receiving the aid.” Although not much has changed in terms of stadium subsidies since Obama’s efforts in 2015, the turnover of administrations in the White House could present new possibilities and restrictions, especially regarding CARES Act fund monitoring. The case of the Tampa Bay Buccaneers and how they have benefited from CARES Act funds highlights the potential for impact on the industry. 

Regarding tax policy, the Biden administration has conveyed that changes are incoming. The official Biden Harris campaign website systematically defines their plans to put more pressure on big corporations. These changes will, of course, affect the wealthiest members of the sports industry, such as team owners and other executives, as they may consider fluctuations in capital gains tax, estate tax, and gift tax when making decisions. Sportico reported in October that the NFL sent out a memo to all executives across the 32 teams reminding them to inform the league of any ownership transactions before the end of the year. Although the league denies that the upcoming election had anything to do with the memo, Sportico emphasized that NFL owners and their families could have saved millions by making changes before the turnover towards Democratic leadership and the tax changes it may entail. Under the Biden administration, there is an increased likelihood that plans to end stadium-subsidies may re-energize.

2021 Preview: Litigation

In this second installment of previewing 2021, I take a look at some of the compelling storylines to follow in the world of sports litigation. As trials now occur virtually, several ongoing disputes are expected to reach resolutions this year, including a six year-old lawsuit against the National Collegiate Athletic Association (NCAA), which will fundamentally rearrange the way college athletes are “defined” and compensated. Let’s take a look at what is on the docket to be decided this year.

NCAA v. Alston
For fans of EA Sports’ NCAA Football, the dream of the beloved video game making a comeback has become a reality following a surprise announcement last week. O’Bannon v. NCAA, a class action lawsuit against the NCAA, Collegiate Licensing Company, and video game publisher Electronic Arts, brought an end to the game franchise in 2014 when college players sued over the unauthorized use of their name, image, and likeness (NIL). A $60 million settlement ended the dispute and with it any NIL-related profit opportunities for college players, such as broadcast rights and merchandising. Rather than simply license NIL rights with college athletes, all profiting parties were forced to abandon these lucrative areas of college sports, stemming from the NCAA regulations prohibiting athletes receiving outside compensation. This concept had become known as amateurism. Amateurism has prevented college athletes from profiting from their NIL.

This is just a snippet of the NCAA’s long battle against its athletes and their authority over NIL rights, however a new chapter may be on the horizon. The relevant lawsuit, NCAA v. Alston, is a years-old case that will be making its way to the Supreme Court. Following the Ninth Circuit’s decision in favor of the plaintiffs, the NCAA’s petition for certiorari was granted, meaning the Supreme Court will hear the case and make a final ruling. If the Supreme Court affirms the Ninth Circuit’s judgment, the NCAA rules restricting education-related pay and benefits for college athletes will be stricken down. However, if the Supreme Court goes a different route, a win for the NCAA may essentially grant antitrust immunity to the organization, which would allow it generous latitude in terms of what changes if any the NCAA would make to its current compensation structure. The debate over amateurism will take place on March 31st, and regardless of outcome, will have permanent, far-reaching consequences for the future of college sports.

Jeffery Kessler, head attorney at Winston Strawn LLP, will be arguing on behalf of Alston and college athletes as a whole, while the NCAA and its athletic conferences will be represented by a plethora of law firms.

Bryant v. Island Express Helicopters Inc.
Little more than a year ago, the helicopter carrying Kobe Bryant, his daughter Gianna, and seven other passengers crashed, tragically resulting in the deaths of everyone on board. Many of the details are well-known at this point: despite traveling the same route to a girl’s basketball tournament 24 hours earlier, pilot Ara Zobayan became disoriented in the heavy fog that hung over the Calabasas hillside that day and misperceived the helicopter’s final plunge, apparently believing that they were climbing to four-thousand feet shortly before impact. However, what still remains to be determined is the outcome of the litigation against Island Express, Zobayan’s employer and the owner of the helicopter.

Vanessa Bryant, the widow of the Lakers’ legend, brought suit against the helicopter company and Zobayan on twenty-eight counts alleging negligence resulting in the wrongful deaths of the passengers. Island Express attempted to cross-claim the Federal Aviation Administration, alleging that the air traffic controllers had negligently handled a shift change that occurred during the flight, according to Law360. Both Bryant and the federal government have filed a motion to dismiss, which if granted would remand the case from federal court to Los Angeles Superior Court, where Bryant is more likely to find a favorable verdict if the case goes to trial. However, both sides must first await the investigation results of the National Transportation Safety Board (NTSB). These findings will determine if the crash was due to a mechanical failure or human error, as previously suspected. The NTSB is expected to announce the release of its report tomorrow on Tuesday, February 9th via livestream.

Vanessa Bryant is represented by Munger, Tolles & Olsen LLP and Robb & Robb LLC. Island Express is represented by Cunningham Swaim LLP and Worthe Hanson & Worthe. The federal government is represented by the U.S. Attorney’s Office for the Central District of California and U.S. Department of Justice

Senne v. Office of the Commissioner of Baseball
The Minor League (MiLB) system of Major League Baseball (MLB) has been a lightning rod of controversy over the past year following the MLB’s decision to cut the number of minor league teams from 162 to 120 or one affiliate per MLB team for each of the four “levels” of MiLB. Commissioner Rob Manfred has faced backlash from minor league team executives and Congress alike. However, it seems that the MLB’s 120 Plan” not-so-coincidentally comes at a time where the league awaits a verdict on a class action lawsuit that would make the operation of the Minors Leagues exponentially more expensive. Enter Senne v. Royals.

Seven years ago, former minor leaguer Aaron Senne filed a lawsuit against the Kansas City Royals. The litigation has since expanded to include thousands of players past and present who are alleging that they have received unlawfully low wages from MLB for their services. These claims include zero compensation for spring training as well as its fall counterpart, both of which are reportedly “strongly implied” to be mandatory. Further, some players even claim to have made as little as $1,100 per month during the five-month regular season, which, assuming a minimum forty-hour workweek, would make their hourly wage $6.875. Of course, this figure falls well below the $7.25 federal minimum wage; however the MLB may already be shielded from this apparent discrepancy.

Hidden on page 1,967 (of 2,232 total) of Congress’s 2018 $1.3 trillion spending bill, the “Save America’s Pastime Act” essentially exempts minor league players from the protections of the Fair Labor Standards Act (FLSA). This legislation meant that minor league players could no longer receive overtime, nor payment for spring training, rendering minor leaguers “seasonal employees” by default. There are many other considerations that fill out this complicated picture, but in short, the MLB’s lobbying for these provisions may signal that the MLB is not expecting the court to rule in its favor. Hence, why eliminating 42 teams – or roughly one-thousand players – will mitigate some of the blow the MLB will face if it loses this case.

The MLB petitioned the Supreme Court to reject the class action on the basis that the claims lacked commonality; however the land’s highest court declined to hear the case. Therefore, the lawsuit will proceed in the Ninth Circuit where Judge Joseph C. Spero has tentatively scheduled a trial for June 2022. However, allowing such an expensive (and contentious) lawsuit to reach trial may threaten the MLB’s most valuable commodity: its antitrust exemption. While a settlement appears unlikely, all eyes are on the league as it prepares for its next move.

The minor league class is represented by law firms Korein Tillery LLC and Pearson, Simon & Warshaw, LLP. MLB is represented by Elise Bloom of Proskauer Rose LLP.

Biden’s Impact on the Industry: Sports Venues and the Environment

The Biden administration has repeatedly emphasized its commitment to environmental justice and climate change, generating some hope of increased momentum toward environmentally-minded legislation. For the sports world, this may mean more legislation encouraging or requiring the reduction of organizations’ impact on the environment. Specifically, these changes may occur in the infrastructure and maintenance of sports venues. Currently, there are several ballparks, arenas, and stadiums under construction across the United States. For example, David Beckham’s soccer-specific stadium Miami Freedom Park is scheduled to open in 2022 while the currently under construction multi-purpose Protective Stadium is set to become the UAB Blazers football program’s home later this summer. 

The 1970 National Environmental Policy Act (NEPA) is foundational in environmental policy law. The act requires federal agencies to consider the environmental implications of their proposed actions. These actions may include: decisions on permit applications, adopting federal law management actions, and constructing highways or other publicly owned facilities. Throughout his presidency, the Trump administration conducted several environmental rollbacks that have made significant cuts in the NEPA and affected the building industry. 

Last June, the Trump administration signed an executive order that weakened clean air and climate change regulations in response to the COVID-19 pandemic. The executive order waived parts of the NEPA to speed up infrastructure projects by citing economic arguments in light of the pandemic induced financial crisis. The New York Times highlighted that lawyers and activists questioned the legality of such an order and suggested that the administration used the pandemic to speed up slow-moving actions on their agenda through the regulatory process. These policies also violated the intent of the Clean Air Act of 1970, the goal of which is the regulation of hazardous air pollutant emissions.

Zoning back into the context of sports venues, a number of new arenas have opened over the last four years—the SoFi Stadium in L.A. and the Hard Rock Stadium in Miami, to name a few. Notably, Irwin Kishner, attorney at Herrick, Feinstein LLP, told Construction Dive that environmentally-minded pushback against sports arena construction is not uncommon. For example, when the Chase Center (the new home of the Golden State Warriors) was still in the planning phase in 2016, the project was met with lawsuits from neighboring businesses accusing the developers of violating the California Environmental Quality Act (CEQA). The case lasted over a year until the Warriors ultimately broke land. 

Sometimes, the push back has less of a grassroots nature and comes from other major organizations. For example, last year, Madison Square Garden Group (MSG) filed a lawsuit against Gov. Gavin Newsom and the state’s Joint Legislative Budget Committee over the California Assembly Bill No. 987. The bill fast-tracks requirements for the construction of certain sports and entertainment venues. MSG’s side argued that the new arena would cause “substantial harm” through traffic and pollution and “lightens the burden” on the project developers to meet CEQA requirements.  It’s important to note that the Los Angeles Clippers’ new Inglewood arena would have also been in direct competition with MSG-owned venue, the Forum. The dispute was settled when Clippers owner, Steve Ballmer, purchased the Forum from MSG for $400-million. Although it is difficult to assess whether the construction of any of the projects mentioned above has significantly benefited from Trump-era environmental rollbacks, the sports arena construction domain will be a worthwhile one to observe as the new administration rolls out environmental policies. 

On his first day in office, President Joe Biden signed an executive order on “protecting public health and the environment and restoring science to tackle the climate crisis.” Section 1 of the document lays out Biden’s overarching environmental policy. The policy includes, but is not limited to, ensuring access to clean air and water; limiting exposure to dangerous chemicals and pesticides; holding polluters accountable, including those who disproportionately harm communities of color and low-income communities; and reducing greenhouse gas emissions. Heads of all agencies must review all existing regulations and policies made between January 2017 and today to ensure compliance with Section 1. Additionally, Section 7 of the executive order revokes Trump’s two orders in 2017 that expedited procedures and deadlines for completion of environmental reviews for certain infrastructure projects. 

These new regulations may not present much of a hurdle for some organizations, given the momentum that sports arenas have gained in environmentally-minded efforts. For example, 2020 was also the year during which Amazon joined forces with NHL expansion team Seattle Kraken and the OakView Group to rename Seattle’s Key Arena to “Climate Pledge Arena” and renovate it to be a leader in sustainability. The venture’s goal is to create the “most progressive, responsible, and sustainable arena in the world.” A move that Bloomberg Law highlighted as the “highest-profile pro sports venue naming rights deal to be centered so prominently around sustainability.” The Seattle Kraken’s new home is set to open in the Fall of 2021 and will have the “greenest ice” in the NHL while being a carbon-neutral facility and eliminating single-use plastic completely by 2024. 

Not all sports organizations can partner with multinational tech companies such as Amazon; therefore, resources for plans unaffected by shifting legislation may vary. President of the Green Sports Alliance, Dr. Allen Hershkowitz, notes, “I know from first-hand experience that many environmental initiatives at ballparks and arenas are on hold due to COVID. Teams need revenue from fans in the seats to respond to environmental challenges.” Besides environmental-concerns pertaining to the infrastructure of sports venues, there will certainly be more changes to look out for as more policies roll out.