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Week in Review

By Chris Helsel

NFL Hands Down "DeflateGate" Punishment - Patriots Begrudgingly Accept, Brady Appeals

As discussed at length in previous "Week in Review" posts, the New England Patriots (Patriots, club) and quarterback Tom Brady were accused of intentionally deflating the game balls they used during the National Football League (NFL, league) American Football Conference (AFC) championship game in January. An NFL-ordered independent investigation led by attorney Ted Wells found that it was "more probable than not that New England Patriots personnel participated in violations of the Playing Rules and were involved in a deliberate effort to circumvent the rules" and that it was "more probable than not that Tom Brady was at least generally aware of the inappropriate activities ... involving the release of air from Patriots game balls."

Last Monday, following the release of the Wells Report, NFL commissioner Roger Goodell announced that the Patriots would be fined $1 million and stripped of two future draft picks, and that Tom Brady would be suspended for four games (out of 16) without pay.

Patriots owner Robert Kraft released a statement that night criticizing the punishment in harsh terms. "Despite our conviction that there was no tampering with footballs, it was our intention to accept any discipline levied by the league," he said. "Today's punishment, however, far exceeded any reasonable expectation. It was based completely on circumstantial rather than hard or conclusive evidence." He also called the investigation "one-sided," an opinion echoed by the NFLPA (players union), with executive director DeMaurice Smith telling ESPN that "the Wells Report delivered exactly what the client [the NFL] wanted."

Mr. Kraft's criticism of the Report's reliance on circumstantial evidence is curious, however, as he failed to offer any similar public defense of his former player, Aaron Hernandez, who was recently convicted of first degree murder based solely on circumstantial evidence. Mr. Kraft served as a key prosecution witness during Mr. Hernandez's trial.

As expected, Mr. Brady has appealed his four-game suspension. Mr. Kraft, however, after a private meeting with Mr. Goodell, announced this week that the Patriots organization would "reluctantly" accept the punishment levied by the league. While Mr. Kraft reiterated his disagreement with the "unfair" and "unprecedented" punishment, he stated that he had respect for Mr. Goodell and believed that the commissioner was "doing what he believes is in the best interest of the full 32 (NFL teams)." He continued, "The heart and soul and strength of NFL (is the) partnership of 32 teams. At no time should the agenda of one team outweigh the collective good of the full 32."

Following this announcement, speculation ran rampant that Mr. Goodell and Mr. Kraft had brokered a deal in order to persuade the league office to reduce Mr. Brady's suspension. Mr. Goodell quickly denied these rumors, however, telling reporters on Wednesday that the Patriots' decision to stand down would have no impact on Mr. Brady's appeal. He also stated that he understood the gravity of suspending Mr. Brady, one of the game's most popular players and reigning Super Bowl Most Valuable Player. "I have great admiration and respect for Tom Brady," he said. "But the rules have to be enforced on a uniform basis. And they apply to everybody. We put the game ahead of everything."

Mr. Brady, his agent and the NFLPA clearly do not share Mr. Kraft's opinion. The agent, Don Yee, was scathing in his criticism of the Wells Report and the subsequent punishment handed down to his client: "The discipline is ridiculous and has no legitimate basis," he said. He described the Wells Report as "an incredibly frail exercise in fact-finding and logic" which contains "significant and tragic flaws," as well as accused the NFL and Indianapolis Colts (the Patriots' opponent in the AFC Championship) of conducting a "sting operation" against the club.

Mr. Brady has steadfastly denied all wrongdoing, although the Wells Report described his claims of ignorance and non-involvement as "implausible." "It is unlikely that an equipment assistant and a locker room attendant would deflate game balls without Brady's knowledge and approval," said the report. This view has been echoed by numerous former NFL quarterbacks in the media.

Under the 2011 Collective Bargaining Agreement, Mr. Goodell has the right to personally serve as arbitrator to hear Mr. Brady's appeal. The NFLPA formally requested last Tuesday that Mr. Goodell recuse himself, because the union feels that he is a "central witness in the appeal hearing," "not impartial," and has a "history of inconsistently issuing discipline against our players." Such an action would not be unprecedented, as Mr. Goodell did recuse himself from the suspension appeals of Ray Rice, Adrian Peterson, and those involved in the 2012 New Orleans Saints bounty scandal.

However, in this instance, the league rejected the NFLPA's request. Mr. Goodell said that "If there's new information that can be helpful, I want to hear it from Tom. The key is to allow for new information ... anything that wasn't in the Wells Report." Specifically, Mr. Goodell likely wants a chance to review Mr. Brady's personal phone records, which the quarterback withheld from investigators even after they offered him the chance to limit what they saw to only those texts and calls relevant to the ball-deflation investigation. (Much of the crucial evidence within the Wells Report was gleaned from the phone records of other team employees.) Mr. Brady's refusal to turn over his phone records was noted with disfavor by the Wells Report, and was in fact a major factor in the league's heavy-handed punishment against both him and the club. Although the investigators lacked subpoena power, league rules call for complete cooperation with investigations. Failure to do so warrants additional or increased discipline.

Should Mr. Brady's appeal to the commissioner fail to result in a reduction or elimination of his suspension, it is likely that he will take his qualm to federal court, as did Mr. Peterson and the Saints bounty perpetrators. While federal courts generally give great deference to the outcome of collectively-bargained internal arbitration procedures, NFL disciplinary decisions have been overturned in the past, most recently in the case of Mr. Peterson.


ISIS Seizes Syrian Desert City of Palmyra, a United Nations World Heritage Site

The Islamic State (ISIS) has seized yet another city, and once again the world fears that priceless historical artifacts will be included among the many casualties.

As "Week in Review" readers well know by now, ISIS militants have swept across Syria and Iraq in recent months, often destroying irreplaceable historical artifacts, condemning them as idolatry and an affront to Islam. Hypocritically, of course, the group has also preserved some of the most valuable pieces to be sold for millions in order to fund their terrorist activities.

Palmyra, a city of 50,000 in the Syrian desert, is a United Nations world heritage site. The city is home to a medieval citadel as well as a vast trove of other culturally significant sites and antiquities.

Last week, ISIS fighters stormed the city and had established control of it by Wednesday evening. Earlier that day, local workers could be seen packing four truckloads of items from a historical museum to be rescued before the militants arrived. Soon after, government forces and police fled the city as ISIS closed in, Syrian authorities launched airstrikes, some of which came dangerously close to the citadel, according to a resident who documents damage to the site by combatants.

That day, the director general of Unesco, Irina Bokova, said in a statement: "The fighting is putting at risk one of the most significant sites in the Middle East."


BMI Prevails in Royalty Lawsuit Against Pandora; ASCAP Does Not

Last week, a federal district court in New York ruled in favor of performing rights organization Broadcast Media Inc. (BMI) in its case against Internet radio company Pandora Media Inc. regarding the amount of royalties the company owes to the copyright holders of musical works. BMI, which represents more than 650,000 prominent songwriters, composers and publishers including Lady Gaga and Sam Smith, convinced the court to increase Pandora's payments from 2.5% of its revenue from 1.75%.

This ruling came on the heels of a federal appellate court ruling in New York earlier this month that denied BMI's major rival, ASCAP, from increasing the rate at which it was paid by Pandora. ASCAP's rate remains at 1.85%.

Pandora pledged to appeal the BMI ruling, with the company's head of public affairs declaring: "We remain confident in our legal position. We strongly believe the benchmarks cited by the court do not provide an appropriate competitive foundation for a market rate."

In another related dispute, the Federal Communications Commission (FCC) recently allowed Pandora to purchase a South Dakota terrestrial radio station. The purchase was originally made in 2013, subject to FCC approval. The Internet radio provider hopes that the purchase will pave the way for it to qualify for the lower royalty rates typically paid to performing rights organizations (BMI and ASCAP) by traditional broadcast radio companies.

Additionally, last June the Justice Department commenced a review of its consent decrees governing BMI and ASCAP, as their request. The two organizations seek to amend the rules currently in place to more accurately reflect the ever-evolving modern landscape of music consumption.

In addition to those representing the interests of songwriters and composers, performing artists have also staked their claims this year for a bigger slice of the radio revenue pie. A coalition of artists, labels and other industry figures have voiced their support for the Fair Play, Fair Pay Act, which was introduced in Congress earlier this year. The Act, among other things, would end broadcast radio's practice of not paying labels performance royalties and ensure that satellite and Internet radio companies (which fall under a different category than traditional radio) would pay labels for pre-1972 recordings.


High School Athletic Association Faces Football-Related Concussion Lawsuits

Following in the footsteps of the NFL, National Hockey League, National Collegiate Athletic Association and the Pop Warner youth football program, high school football organizers have now joined the ever-growing list of parties sued by athletes or their representatives for failing to properly disclose and prevent the dangers of concussions.

In November of last year, the Illinois High School Association became the first state association to face class-action litigation regarding its head-injury policies. The suit, filed in Cook County Circuit Court on behalf of all current or former football players in the state since 2002, alleges negligence and seeks not monetary damages, but an injunction requiring new protocols including baseline testing, concussion reporting and tracking, coaches' and trainers' education, strict return-to-play guidelines, medical monitoring and the presence of concussion experts at all games.

The rules established by high school athletics' national governing body, the National Federation of State High School Associations (which was not named as a defendant in the Illinois suit, curiously), already require the implementation of certain concussion policies, including those governing player removal and return-to-play guidelines. Additionally, every state and the District of Columbia have passed laws in the last six years dictating how head injuries should be handled.

However, state associations vary greatly in their specific policies, with many offering limited protection to student-athletes. Illinois, for example, unlike many states does not require school districts to track concussions, nor does it require medical clearance to return to the playing field to come from a specially trained expert. Utah and Wisconsin do not require concussion training for coaches, and other states allow players to return to action without written approval.

Conversely, other states have adopted a more proactive stance in protecting players from the dangers of head injuries. California legislators recently passed a law limited full-contact practices, and Massachusetts requires concussion training for coaches and has strict policies regarding the collection of concussion data.

Predictably, high school athletic administrators across the country have taken notice of the suit and are on guard. While none will deny that concussions are a serious issue, many have expressed concern that rampant litigation over the issue will do more harm than good and ultimately threaten the institution of high school sports as a whole. Marty Hickman, the director of the Illinois association, fears that the extensive new protocols the suit seeks will be extended to all sports and ultimately bankrupt his association, which oversees 600 football schools and 50,000 players - all on a budget of just $10 million. Further, he says, the courtroom is the wrong forum to determine how the issue should be handled. "Courts aren't equipped to run high school sports," he said. "We're confident no judge is going to agree with this."

Clearly, this issue is not going away any time soon. Expect a forthcoming rash of similar suits in other states, with state associations on the defensive as they attempt to implement policies that sufficiently protect their student-athletes - while somehow managing to pay for it all.


Champion Thoroughbred Owner Faces Lawsuit Amid Chase for Triple Crown

Ahmed Zayat, the Egyptian-American owner of the champion racehorse American Pharoah, faces a federal lawsuit over an alleged $2 million gambling debt. The suit, brought in the United States District Court for the District of New Jersey, contends that Mr. Zayat opened a $3 million line of credit at the Costa Rican betting website Tradewinds Sportsbook over a decade ago and, after an initial hot streak, walked away from a $2 million debt when his luck ran out.

Mr. Zayat has acknowledged that he and the plaintiff, Howard Rubinsky, are family friends. However, he claims that he has never placed any bets through Mr. Rubinsky, nor has he ever wagered with Tradewinds or any other offshore betting site. He denies that the alleged debt exists. Mr. Rubinsky pleaded guilty in 2008 for his role in the operation of an illegal bookmaking operation with two brothers, Michael and Jeffrey Jelinsky.

Mr. Rubinsky says he has attempted on several occasions to collect the outstanding debt, with no success. Text message transcripts reveal a warm relationship between the two men, and in one exchange Mr. Zayat appears to promise to settle the debt through monthly payments. Mr. Rubinsky alleges that Mr. Zayat did in fact begin making monthly payments back in 2004, but ultimately reneged on the arrangement with $1.7 million still owed.

Mr. Zayat is no stranger to financial and legal struggles. In May 2008, agents from the FBI, Homeland Security and the Nevada Gaming Board arrived visited his office in New Jersey. In December 2009, Fifth Third Bank brought suit against the thoroughbred owner and former Egyptian beer mogul alleging that he had defaulted on $34 million in loans. In February 2010, Mr. Zayat filed for bankruptcy protection for his Zayat Stables. Additionally, in 2013 the owners of Freehold Raceway in New Jersey brought suit alleging that Mr. Zayat was improperly granted credit in the state's online betting system.

During his bankruptcy proceedings, Mr. Zayat said that the Jalinsky brothers owed him $605,000, though he insisted that the debt was from personal loans, not gambling winnings. He did, however, later admit to placing bets through the two brothers and alleged that he was "scammed" by them by placing wagers based on their fraudulent advice. "I would lose because they were giving me the wrong horses," he said.

Michael and Jeffrey Jalinsky, for their part, pleaded guilty to operating an illegal gambling business during the time Mr. Zayat allegedly "loaned" them money. They were both sent to prison for over a year and together forfeited nearly $5 million seized by authorities.

In a November 2014 deposition, Mr. Rubinsky (the plaintiff in the current federal suit) said that Mr. Zayat told him that during the investigation of the Jalinsky brothers, a federal agent told him not to repay his outstanding debt. Additionally, Mr. Rubinsky claims that at one point, Mr. Zayat offered him $1 million if he told Tradewinds that he died in a car accident.

Mr. Zayat has filed a motion to dismiss the current federal suit, a ruling on which is expected in the coming weeks.

Mr. Zayat's horse American Pharoah has won this year's Kentucky Derby and Preakness Stakes, and can become the sport's first Triple Crown winner since 1978 with a win at the Belmont Stakes on June 6th.


Anti-Muslim Film Trailer Should Not Be Banned From YouTube, Court Says

The Ninth Circuit ruled this week that YouTube should not have been forced to remove a trailer for an anti-Muslim film in 2012. The film, entitled "Innocence of Muslims," was ultimately never produced, but the trailer alone was enough to spark protests around the world, including Egypt, Iran, India, Pakistan and Malaysia.

The plaintiff, actress Cindy Lee Garcia, alleged that filmmaker Nakoula Basseley Nakoula tricked her into appearing in the film and dubbed over her dialogue with anti-Muslim rhetoric. As a result of her appearance in the trailer, she says, she received death threats. Last year, a three-judge panel of the Ninth Circuit ruled in her favor, holding that her copyright claim outweighed First Amendment free speech concerns.

Last Monday, however, an 11-judge panel of the same court reversed, holding that "a weak copyright claim cannot justify censorship."

The one dissenter, Judge Alex Kozinski, who wrote the majority opinion in last year's opposite ruling, wrote: "In its haste to take Internet service providers off the hook for infringement, the court today robs performers and other creative talent of rights Congress gave them."

In a statement following the ruling, YouTube said: "We have long believed that the previous ruling was a misapplication of copyright law. We're pleased with this latest ruling by the Ninth Circuit."

The ruling represents a considerable victory for free speech advocates, as well as websites and film and television studios regarding the types of content they can utilize without facing copyright infringement litigation.


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This page contains a single entry from the blog posted on May 26, 2015 10:06 AM.

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