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.

Boxer Patrick Day Passes Away Four Days After Knockout

Last month, the sporting world was struck by the news of the passing of professional boxer Patrick Day. Following a knockout loss to Charles Conwell in a super welterweight title bout, Day fell into a coma and four days later, died from brain trauma injuries. The phenomenon of boxing-related deaths is nothing new, however debate surrounding the ethics, safety, and legal ramifications of the sport is on the rise in light of this tragic case and others.

The immediate reaction has been quite polarized with some saying that death is simply part of the risk that is run in participating in such a violent sport, while others have called for the abolition of boxing entirely. However, the most pragmatic solution came from Day’s promoter, Lou DiBella, who called for better safety measures to ensure more protections for those in the ring. This week, he outlined a number of suggestions that would increase safety such as elevated scrutiny of Performance Enhancing Drug (PED) use and more attention toward weight loss and dehydration. Others have called for the sport to go a step further by adding increased padding to gloves and headgear and shortening fights.

The difficulty in changing the fundamental safety structure of any organization is the necessity to prove that a safety issue exists in the first place. Similar to what happened to large tobacco companies and what the pharmaceutical industry is currently dealing with, the NFL spent billions trying to disprove that there was in fact a safety problem with its product because of the negative consequences acknowledging such a problem would, and did, carry. Even though the NFL concussion settlement has already paid out almost 700 million dollars to retired veterans, the case is still ongoing and already has caused many players to retire earlier than they might have without the revelation of CTE and has made countless families to reconsider whether they want their child playing football.

So, the question for boxing is: does the sport need to acknowledge that it has a safety problem? Well, the answer is a lot harder than you might think. Two of the biggest forces in pushing the NFL to admit that it had its own safety issue were well-recognized trends of player brain injuries and public opinion pressures — both of which the sport of boxing lacks. The revelation of CTE in ex-NFL players such as Terry Long and Junior Seau became widespread predominantly because of headlines that detailed these former stars acting extremely out of character following their careers. That they both died from suicide grabbed the eye of the sports world and these “anomalies” evolved into evidence in what would become the trend that would force the NFL to overhaul its rules.

However, boxing doesn’t have the widespread publicity, star power, resources, nor a meaningful trend to begin considering modifying its safety regulations. Although the death of Patrick Day was the fourth boxing-related death in 2019, he was only the first American to die of injuries sustained in a bout since 2006. And, although four deaths in a single year is a new high for boxing, many other years have seen two and three deaths. Moreover, though there have been eight boxing-related passings since 2017, from 2014 to 2016 there was only one so there is really no consistent trend for proponents of increased safety to rely on.

These stats all come together to say that boxing likely won’t face much outside pressure to reshape its rules in the near future and so the onus for change is largely on boxing organizations. While there are few precedents on cases related to injuries sustained in boxing, two examples highlight the potential for future issues to arise. In 2017, the State of New York agreed to pay out $22 million to Magomed Abdusalamov, who suffered severe brain damage in the ring four years prior and was subject to less-than-adequate post-fight care that resulted in a loss of walking and speaking ability. Earlier this year, former boxer, Daniel Franco, sued his agency Roc Nation Sports for severe brain damage he sustained after being pressured into three fights despite concerns of his health and readiness. While the case is still ongoing, the lawsuit itself represents the culpability involved in boxing and another ruling in favor of the boxers would foreshadow additional player-safety suits in the future.

It is wholly possible that given the differences between the way professional football and professional boxing are structured, boxing will never face the sort of pressure that the NFL was forced to confront. Yet, as boxing-related brain trauma and deaths pile up, one has to wonder just where the organizations or their fans draw the line. The NFL clearly handled the CTE research poorly and continues to pay a steep price for doing so. If the sport of boxing and its administration is paying attention, any legal settlements and unfavorable media associated with future injuries far outweigh the cost of preemptive safety measures and additional research. It is easy to express regret and give the routine “thoughts & prayers,” but unless those involved at all levels of boxing demand change, Patrick Day’s life, and undoubtedly many others, will have been in vain. Either way, the decision is in boxing’s corner.