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Week in Review

By Martha Nimmer

May It Please The Court

The U.S. Supreme Court has decided to hear an appeal from television networks including ABC, NBC Universal, Fox and CBS, as part of the "hotly debated issue of whether the online dissemination of television broadcasts infringes on network rights." Aereo, a service that uses mini antennas to stream broadcast television online, is the brainchild of IAC/InterActiveCorp and Expedia, Inc. Chairman Barry Diller.

Since its founding in February 2012, Aereo has found itself at the center of a complex legal battle: "[t]he main complaint from the networks is that Aereo is violating copyright law by retransmitting signals without paying the same retransmission fees that cable and satellite providers pay." Supporters of the new service counter, however, that Aereo has broadened the public's access to the media, decrying the major networks' control of the airwaves.

Hoping to shut down Aereo's feed, ABC, CBS and NBC sued Aereo in New York federal court in 2012. U.S. District Judge Alison Nathan sided with Aereo, however. Last April, a divided three-judge panel of the Second Circuit affirmed the trial court's decision in favor of Aereo. Now, Aereo and the nation's biggest television networks find themselves ready to go before the Supreme Court. In response to the high court's granting of cert., Aero released a lengthy statement that touched on everything from consumers' rights to cloud storage. Dana McClintock from CBS corporate communications was more concise, tweeting "we are pleased that our case will be heard and we look forward to having our day in court."



Banned from Baseball

On Saturday, an arbitrator handed Alex Rodriguez a season-long suspension for his use of performance enhancing drugs (PEDs). This punishment, "the most severe punishment in the history of baseball's drug agreement," comes as a result of a lengthy investigation by Major League Baseball (MLB) into the now-shuttered Florida health clinic, Biogenesis of America. Biogenesis founder, Anthony Bosch, appeared before the arbitration panel "after reaching an agreement with MLB to provide evidence."

The decision by arbitrator Fredric Horowitz to suspend the Yankees' third baseman for the entire 2014 season reduced the August 5th suspension issued by baseball Commissioner Bud Selig from 211 games to this year's entire 162-game regular-season schedule, plus any postseason games. Despite the ban, baseball's rules permit Rodriguez to participate in spring training and exhibition games, although the Yankees may tell him not to report for spring training.

Rodriguez, a 14-time All Star, is the most high profile and successful player to have been found in violation of the MLB's "drug rules, which were first agreed to in 2002 as management and union attempted to combat the use of steroids and other performance-enhancing drugs." Rodriguez admitted in 2009 that he had used PEDs while playing for the Texas Rangers from 2001-2003, but has adamantly denied using such substances since then.

As a result of the suspension, the Yankee will lose approximately $22 million of his $25 million salary. Rodriguez has been baseball's highest paid player under a $275 million, 10-year contract, although he has spent periods throughout the last six seasons on the disabled list. Rodriguez will be 39 years old when he is eligible to return to the game in 2015. According to the Associated Press, he is signed with the Yankees through the 2017 season.


A-Rod Back in Court

Seeking to vacate his season-long suspension from baseball, Yankees third baseman Alex Rodriguez has sued Major League Baseball (MLB) and the Major League Baseball Players Association (MLBPA) in New York federal court. In his lawsuit, Rodriguez claims that he was unfairly suspended from the game "for allegedly using banned drugs, 'without a positive test result.'" The 42-page lawsuit, with 37 pages of attachments, goes on to accuse Fredric Horowitz--MLB's chief arbitrator -- of "manifest disregard for the law," and calls the 162-game ban "wholly unjustifiable." The complaint further alleges that Horowitz "ignored the stipulation of baseball's Joint Drug Agreement," which sets out a 50 game ban for a first time drug offense. Rodriguez also alleges that Horowitz was not impartial, adding that "he refused to hear evidence in Rodriguez's appeal of the suspension imposed against him last year" by MLB Commissioner Bud Selig. Specifically, the lawsuit accuses Horowitz of denying Rodriguez and his attorneys the right to cross-examine Biogensis founder Anthony Bosch and Commissioner Selig. Additionally, Rodriguez claims that Horowitz denied his attorneys the opportunity to examine the BlackBerries that the MLB says were used to "transmit incriminating text messages" between Rodriguez and Bosch.

Rodriguez has petitioned the court to vacate the arbitration award, hold the players' union "responsible for its breaches of the duty of fair representation owed to Mr. Rodriguez prior to and during the grievance process, and to hold MLB responsible for its violation of the collectively bargained agreements between MLB and the MLBPA by imposing a suspension upon Mr. Rodriguez without just cause."

It appears unlikely, however, that Rodriguez will prevail in his latest legal maneuvering. Judges are generally hesitant to intervene in arbitration proceedings in a situation where private parties have agreed to arbitrate as a means for resolving disputes. To succeed, Rodriguez will need to establish that Horowitz was unfair or biased. Rodriguez will likely have a difficult time convincing a judge that the arbitrator was unfair or biased, however, considering that Horowitz heard 12 days of testimony in the case, and reviewed other evidence, such as text messages between Bosch and Rodriguez, before issuing his decision.





Saving Detroit, One Work of Art at a Time

In an effort to save the Detroit Institute of Arts' renowned collection and avoid cuts to retirees' pensions, nine philanthropic foundations have committed $330 million, according to mediators working in the city's bankruptcy proceedings. This commitment would "essentially relieve the city-owned Detroit Institute of Arts museum of its responsibility to sell some of its collection to help Detroit pay its $18 billion in debts." Specifically, the allocated funds can help "reduce a portion of the city's obligations to retirees, whose pensions are at risk of being reduced in the bankruptcy proceedings." According to some estimates, the city's pensions are underfunded by a staggering $3.5 billion.

This plan is a much-needed "sign of progress" in the mediation with Detroit's creditors to help resolve the city's financial woes. As part of the plan, ownership of the museum would be transferred from Detroit to the control of a nonprofit; this arrangement also has the added benefit of protecting the museum from future municipal financial threats. Another facet of the plan is that Detroit must put the money received from the philanthropic foundations into the city's ailing pension system.

City and museum officials worry, however, that $330 million may not be enough to save the museum's entire collection from the auction block. According to The New York Times, "as much as $500 million may be needed to protect the art from an auction, officials have said, so additional philanthropic donations are being sought."


Embattled Barbie

MGA Entertainment, the maker of the highly popular Bratz dolls, has demanded $1 billion in damages from Mattel for misappropriation of trade secrets. This is just the latest move in a nearly decade-long legal fight over Bratz, the skinny doll with the big head and flashy outfits.

Last year, the Ninth Circuit vacated a $172 million judgment against Mattel, leading MGA to move the case from federal to state court. In its decision, the Ninth Circuit ruled that MGA's claim of theft of trade secrets was "not logically related" to Mattel's claim that a former employee still worked for Mattel when he showed MGA a concept that spawned the Bratz doll. Undeterred by the Ninth Circuit's unfavorable ruling, MGA went back to court, and filed suit again against Mattel on Monday. In the lawsuit, MGA claims that the Ninth Circuit ruling covered a "technical procedural issue having nothing to do with the merits of the claims." In addition to the $1 billion in general and actual damages, the plaintiff has also requested a jury trial.


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This page contains a single entry from the blog posted on January 16, 2014 9:40 PM.

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