« June 2015 | Main | August 2015 »

July 2015 Archives

July 1, 2015

National Hockey League Player Has Contract Terminated By Franchise

By Daniel S. Greene

The Los Angeles Kings organization has had its issues recently with the off-ice behavior of their players. Last October, defenseman Slava Voynov was arrested for domestic violence (http://www.latimes.com/sports/sportsnow/la-sp-sn-kings-slava-voynov-pleads-not-guilty-20141229-story.html), while forward Jarret Stoll was arrested on felony drug charges in April (http://www.usatoday.com/story/sports/nhl/2015/04/20/police-la-kings-jarret-stoll-had-cocaine-ecstasy-in-vegas/26085365/). The most recent King to get in trouble with the law is forward Mike Richards, who was questioned about Oxycodone (a prescription painkiller) when he was stopped while crossing the border into Canada (from North Dakota into Manitoba) on June 17th, about 10 days before the National Hockey League (NHL) Draft. At this moment in time, while the Royal Canadian Mounted Police are investigating the incident, Richards has not been officially charged with a crime (http://sports.yahoo.com/blogs/nhl-puck-daddy/mike-richards--border-stop-involved-oxycodone--tmz-232509765.html).

While all three of these men were members of the 2014 Stanley Cup championship team, the Kings have only attempted to terminate Richards' contract due to off-ice conduct. It was originally expected that the Kings would buy out Richards' contract, but decided on Monday to terminate it "for a material breach of the requirements of his Standard Player's Contract" (http://www.si.com/nhl/2015/06/29/kings-dodge-buyout-terminate-contract-mike-richards). It was public knowledge that the Kings were unsatisfied with Richards' recent on-ice performance. He had five years and $22 million left on his 12-year, $69 million deal that he signed in 2007 with the Philadelphia Flyers, and has not been playing as well as expected over the past few seasons, which ultimately led to him being sent to the minor leagues this past season. By buying out Richards' contract, the Kings would have received some salary cap relief, so that was the expected route for the Kings to take. However, with the termination attempt, the organization would receive significant cap relief anyway, as it would only be liable for $1.32 million over the next five seasons (http://www.forbes.com/sites/ericmacramalla/2015/06/30/the-l-a-kings-and-the-difficult-task-of-upholding-the-termination-of-the-mike-richards-contract/). Financially speaking therefore, the best route for the Kings is to try to terminate Richards' contract.

Yet in order for the Kings to terminate Richards' contract, it must do so in compliance with the Collective Bargaining Agreement (CBA) between the NHL and the NHL Players' Association (NHLPA). In this situation, the Kings have alleged that Richards has materially breached the Standard Player's Contract (SPC). Under paragraph 14 of the SPC, a franchise can terminate a player's contract if the player: "(a) fail[s], refuse[s] or neglect[s] to obey the Club's rules governing training and conduct of Players, if such failure, refusal or neglect should constitute a material breach; (b) fail[s], refuse[s], or neglect[s] to render his services hereunder or in any other manner materially breach this SPC." Further, paragraph 2(e) of the SPC (known as a morality clause) states that the player must "conduct himself on and off the rink according to the highest standards of honesty, morality, fair play and sportsmanship, and refrain from conduct detrimental to the best interests of the Club, the League or professional hockey generally" (http://www.nhl.com/nhl/en/v3/ext/CBA2012/NHL_NHLPA_2013_CBA.pdf, at pg. 318-19). It is therefore presumed that the team is claiming that Richards materially breached his contract by acting in a dishonest and/or immoral manner that is detrimental to the Kings, the NHL, and/or pro hockey as a whole. In accordance with Article 17 of the CBA, these kinds of issues between teams and players are ruled upon by an impartial arbitrator, who will decide on whether the contract was rightfully terminated (Id.).

At this moment, we don't officially know exactly what Richards did to warrant the termination of his contract. All we know is that it involved a border crossing issue and possibly prescription painkillers. So, we truly do not know if the termination will be upheld. However, as noted by sports law expert Eric Macramalla, barring extreme circumstances, an arbitrator will rarely uphold the termination of a player's contract since, "[a]rbitrators and judges take the individual right to earn a living very seriously and do not react favorably to an attempt to deprive someone of that fundamental right simply for the sake of convenience" (http://www.forbes.com/sites/ericmacramalla/2015/06/30/the-l-a-kings-and-the-difficult-task-of-upholding-the-termination-of-the-mike-richards-contract/2/). All we can do at this point is look at what type of conduct could be a valid basis for terminating a contract and having it be upheld. As Macramalla has pointed out, while morality is open to interpretation, in order for termination to normally stand, the behavior needs to be accompanied by something like a conviction. (Id.). While something like a DUI does not seem to be grounds to uphold termination, a murder conviction would be. From what is known, Richards' situation seems to be somewhere in between, so the outcome here is unpredictable.

At least in recent memory, no NHL franchise has ever attempted to terminate a player's contract on similar grounds. Even such incidents like former Atlanta Thrasher 50-goal scorer Dany Heatley's vehicular homicide incident (in which he ended up pleading guilty to four misdemeanor charges in exchange for the charges of first-degree vehicular homicide and reckless driving being dropped) in 2003 (http://www.nytimes.com/2005/02/05/sports/hockey/heatley-sentenced-to-3-years-probation.html) and former Toronto Maple Leaf forward Mark Bell's DUI and hit-and-run incident in 2006 (http://www.thestar.com/sports/hockey/2007/08/16/leaf_bell_blew_25_times_legal_limit.html), neither franchise attempted to terminate the player's contract (but were both ultimately punished by the NHL and the court).

Some precedent has been set by Major League Baseball (MLB), which has a similar process for when teams try to terminate a player's contract. In 1987, a situation with (presumably) similar facts to Richards'occurred when former Cy Young Award-wining pitcher Lamarr Hoyt was arrested and sent to prison for trying to cross the United States-Mexico border with approximately 500 pills. While the San Diego Padres terminated Hoyt's contract, an arbitrator reversed the termination (http://articles.latimes.com/1987-07-01/sports/sp-717_1_lamarr-hoyt). However, when pitcher Shawn Chacon had his contract terminated in 2008 for grabbing Houston Astros General Manager Ed Wade by the neck and throwing him to the group during an argument, an arbitrator upheld the termination (http://hardballtalk.nbcsports.com/2010/08/17/shawn-chacons-grievance-versus-astros-denied-by-arbitrator/comment-page-1/). However, just because a player grabs a team official by the neck, does not guarantee that the player's contract will be terminated. When the National Basketball Association's Golden State Warriors attempted to terminate the contract of Latrell Sprewell for choking head coach P.J. Carlesimo in 1997, an arbitrator overturned the termination (http://mobile.nytimes.com/2010/01/19/sports/basketball/19arenas.html?referrer=&_r=0). Obviously, rulings in other sports are not binding to the NHL, but that is not to say that the arbitrator in Richards' situation will not look at these facts as any different from Hoyt's situation.

What should we expect next? The NHLPA will most likely challenge this termination and argue that the Kings are taking this action because of Richards' on-ice performance, and that the team wants to save money. In doing so, it would invoke Article 17 of the CBA within the next 60 days and have the case decided by an impartial arbitrator if the parties cannot resolve the situation on their own (http://www.nhl.com/nhl/en/v3/ext/CBA2012/NHL_NHLPA_2013_CBA.pdf, at pg. 109). As previously noted, arbitrators are likely to take the side of the employee/player. It is very important that the NHLPA challenge the termination because of what it could mean to players in similar future situations. "The NHLPA is likely worried about the precedent of a team voiding a player's contract when that contract is drafted in way to be considered 'guaranteed,'" said professor Michael McCann, director of the Sports and Entertainment Law Institute at the University of New Hampshire. "The NHLPA is probably concerned that if the Kings can void Richards' contract for yet-to-be revealed reasons, could other teams escape their unwanted contracts by doing the same?" (http://www.latimes.com/sports/kings/la-sp-kings-mike-richards-20150630-story.html). McCann also notes that Richards must pursue his claim under the CBA before bringing his grievance to court, and even if he brings his claim to court, courts usually uphold arbitration awards (Id.).

This will be an interesting process, especially when all of the facts of the border incident come out. While we don't know what the result of this situation will be, we do know that this is definitely the end of Richards' stint with the Kings, and possibly the conclusion of his NHL career.

July 4, 2015

75 Years of Pari-Mutuel Wagering in New York

By Bennett Liebman

2015 should mark a significant year in New York horse racing. It is the 350th anniversary of horse racing in America, which originated in what is now Garden City. It is the 40th anniversary of the death of the champion filly Ruffian in a match race. The first commercial harness tracks started in New York 75 years ago.

Most importantly, April 15, 2015 marked the 75th anniversary of pari-mutuel wagering in the state of New York. Pari-mutuel wagering started on Monday April 15, 1940, the first day of the thoroughbred racing season at Jamaica Race Track in Queens County.

In November of 1939, the people of the state of New York had passed a constitutional referendum to authorize pari-mutuel wagering on horses. While such wagering had been successful in other states, nobody was certain how it would work in New York, which had utilized on-track bookmaking as the source of its wagering handle for many decades. The situation was further complicated by the fact that the laws to implement pari-mutuel wagering were passed only two weeks before the season was to begin.

The weather on April 15, 1940 was not promising. It was "dismal biting weather." There was a record low in New York City of 30 degrees. Water lines broke at the track. A baseball exhibition game between the New York Giants and West Point was called in the eighth inning due to cold weather.

Jamaica's betting menu for opening day was also not particularly exciting. There were seven races - all sprints - with a total of 44 betting interests. The only wagering was win, place and show, since the racing authorities in New York had determined that the daily double was "a device to lure women and those who could not afford to bet."

So how did this work out at Jamaica on April 15, 1940? Things could hardly have gone better for racing. Jamaica had a record crowd of 22,474 who bet $821,000. The New York Times proclaimed it "racing's red letter day." Track executive Alfred Gwynne Vanderbilt said that the fans were "absolutely crazy about pari-mutuel betting." Racing journalist Joe Palmer reported that "Jamaica's opening day was the biggest from a betting standpoint that a race track has every enjoyed."

The only negative on racing that day came from New York City Mayor Fiorello La Guardia. La Guardia, in a speech given two miles away from the track, said: "Race track function is retrogression . . . I don't think gambling will be successful in a progressive enlightened state like New York."

Opening day in 1940 ushered in a year of superlatives for New York racing. Thoroughbred racing attendance increased by 33%. Pari-mutuels were "amazingly successful" according to the Associated Press. The trade magazine, the Blood-Horse, found that the 1940 season was the "most successful in the history of New York."

It is hard to envision how far racing has fallen from grace in the last 75 years. In 1940, there were 29 weeks of thoroughbred racing and four small harness meets. There were approximately 225 racing programs. There was no turf racing, no Sunday racing, seven races a day, and only win, place and show wagering. In 2013 dollars, New Yorkers bet $1.75 billion in 1940.

Contrast that to racing in 2013, the last year for which we have full statistics. There were 1,327 live programs in New York. There are OTB's, year round racing, turf racing, Sunday racing, more races on each program, all possible permutations of wagering types, basically unlimited out-of-state racing and simulcasting, live TV, live Internet feeds, and account wagering including phone and Internet wagering. The net result was handle of $1.51 billion. The 1940 New York handle was 15.4% higher than the handle for 2013.

On April 15, 2015, the total world-wide handle on the nine races (three on the turf) run at Aqueduct on a day where the weather was nearly perfect (no rain and high of 72) was $3.860 million. The on-track handle was $608,000. In 2015 dollars, the handle on April 15, 1940 - which was entirely on-track, was $13.94 million. The on track handle on April 15, 2015 was less than 5% of what it was on the same date in 1940.

The presence of video lottery terminals (VLT's) at racetracks has not added to any interest in racing at the State's harness tracks. All New York State harness tracks have VLT's, and in the 10 years since 2003 (the last year without VLT's), the harness track facility handle is down 48.6% in inflation adjusted dollars. The handle on live racing at the harness tracks is similarly down 48.7%.

New York State now receives considerable revenue from VLT's, with the estimates coming in at approximately $900 million per year. Yet this number is actually significantly less than the excess of $1 billion in revenue that horse racing produced in real dollars for New York in 1969. New York State has not benefited from the decline of horse racing.

For more than 50 years, La Guardia's idea that racing would not be successful in New York was hogwash. Pari-mutuel racing could hardly have been stronger. In 2015, however, La Guardia now looks right. It no longer is successful. Racing is a puny fraction of what it was 75 years ago.

The numbers are not just bad. They are frightening. It is a sport where a Triple Crown winner like American Pharoah barely helps. This is a sport where minor changes - such as uniformity in rules and laws - won't do the trick. Uniformity would not hurt, but it's myopic to focus on it. The whole framework of the sport needs to be thoroughly rethought. While we have been rearranging the deck chairs on the sport's Titanic, the public has lost interest in horse racing. We have been bickering about trivia as the sport falls apart.

New Jersey Leading The Charge To Legalize Sports Gambling

By Daniel S. Greene

As it stands today, sports gambling is legal in four states: Nevada, Oregon, Delaware, and Montana. These are the only states that legalized sports gambling before or within a year of the passage of the Professional and Amateur Sports Protection Act (PASPA) (http://www.americangaming.org/government-affairs/key-issues/past-issues/sports-betting). PASPA was enacted in 1992 and made it illegal for any government entity or person to promote or operate any form of sports gambling involving amateur or professional sporting events. (28 U.S.C.A. § 3702) (https://www.law.cornell.edu/uscode/text/28/3702). Despite this, New Jersey is looking to legalize sports gambling in an attempt to revitalize business in the dying resort and casino haven of Atlantic City.

In 2014, four casinos closed their doors, while gambling revenue fell by 48% from $5.2 billion to $2.7 billion over the past decade (http://triblive.com/sports/nationworldsports/8532845-74/sports-jersey-state#axzz3eh0TAXr1). "Increasing competition from neighboring states and the proliferation of off-the-books betting has left Atlantic City's gaming operations at a disadvantage," said New Jersey U.S. Representative Frank LoBiondo (R - 2nd District). "Sports betting can help give our famed resort town a hand up, providing yet another unique option for patrons in addition to the quality entertainment, dining, shopping and beaches" (http://www.nj.com/politics/index.ssf/2015/01/lobiondo_and_pallone_introduce_legislation_to_brin.html). In doing so, New Jersey is challenging the constitutionality of PASPA, arguing that the Act "violates constitutional principles by commandeering the states' regulatory authority," is "unlawfully discriminatory because it carves out an exception for Nevada and some other states," and "does not affect interstate commerce and Congress, therefore, did not have the power to enact it under the U.S. Constitution's Commerce Clause" (Supreme Court Asked to Uphold New Jersey Sports Gambling Law, 26 Westlaw Journal Entertainment Industry 1 (2014)).

Ironically enough, the movement to ban sports gambling across the nation was led by National Basketball Association (NBA) Hall of Famer and U.S. Senator from New Jersey Bill Bradley, in 1991. Bradley argued that sports betting sent a bad message to children, gave bookies too much control over the outcome of games, and he didn't want athletes "to be turned into roulette chips." On the other hand, former Atlantic City casino magnate Donald Trump and others argued that sports gambling would be beneficial to Atlantic City and New Jersey's economy as a whole. While PASPA was authorized in 1992, states were allowed to pass bills supporting legal sports betting until January 1, 1994. The New Jersey state legislature argued over this issue in a battle of money versus morality. Despite the bill passing the State Senate in December 1992, it died in the Assembly, and failed to be approved by the deadline (http://www.nj.com/politics/index.ssf/2015/03/the_story_of_njs_missed_opportunity_on_sports_bett.html).

Nearly 20 years later, in 2011, New Jersey Governor Chris Christie signed a bill to legalize sports gambling. However, the bill was blocked in federal court, following a lawsuit by Major League Baseball (MLB), the National Football League (NFL), NBA, National Hockey League (NHL), and the National Collegiate Athletic Association (NCAA) (http://www.nj.com/politics/index.ssf/2015/01/lobiondo_and_pallone_introduce_legislation_to_brin.html). While the court ruled PASPA to be constitutional, it left an opening for New Jersey to repeal its state laws against sports betting, in hopes that the removal of the state laws would keep federal law enforcement away. However, instead of completely revoking the state laws, Christie partially repealed the laws in 2014, allowing sports gambling only at New Jersey casinos and racetracks. The sports leagues filed suit yet again, leading to the upcoming ruling in NCAA, et al v. Governor of New Jersey, et al as the latest installment of the battle (http://www.washingtonpost.com/news/sports/wp/2015/07/01/everything-you-need-to-know-about-new-jerseys-pending-high-stakes-sports-gambling-ruling/?tid=hpModule_a4df998e-86a7-11e2-9d71-f0feafdd1394&hpid=z12).

The three-judge panel of the Third Circuit of the Court of Appeals, which coincidentally includes Donald Trump's sister, Maryanne Trump Barry, heard oral arguments on March 17th in Philadelphia, and while the court's decision was expected in June, those involved will have to wait anxiously at least over the holiday weekend. Experts are divided as to who will win the battle, but regardless, the decision will have a major impact on the future of sports gambling in the United States (http://sports-law.blogspot.com/).

If New Jersey prevails, not only will the legalization of sports gambling bring money into the State and re-energize Atlantic City, a victory could also lead the way for legalization elsewhere. As proposed, the bill, if passed, would give all states four years to make a decision on the legalization of sports betting. While Pennsylvania, which has legalized slots and table games within the past decade to keep gamblers within the Keystone State, and Delaware could immediately follow their neighbor, other states like Minnesota, Indiana, and South Carolina have already proposed legislation to legalize forms of sports gambling. If New Jersey wins, these states could expedite the process to have similar bills passed. In addition, a victory would likely lead to new federal laws regulating sports gambling throughout the country (http://sports-law.blogspot.com/).

However, if the sports leagues win, PASPA will remain intact, leaving Las Vegas as the sports betting capital of America, where $3.9 billion was gambled on sports in 2014, with $1.75 billion being on football (http://www.washingtonpost.com/news/sports/wp/2015/07/01/everything-you-need-to-know-about-new-jerseys-pending-high-stakes-sports-gambling-ruling/?tid=hpModule_a4df998e-86a7-11e2-9d71-f0feafdd1394&hpid=z12). The Garden State definitely wants to encourage some of those football wagers, especially since the New York Jets, New York Giants, and Rutgers University play football within the state's borders, and the Philadelphia Eagles and Pennsylvania State University play games in nearby Pennsylvania. Perhaps, with a victory in court, New Jersey can become the eastern capital for sports gambling just in time for the 2015 NFL and NCAA football season.

Aside from the money versus morality issue, there is also something to be said about the importance of regulating sports gambling. Even though PASPA prohibits betting on sports throughout the nation, there is still plenty of sports gambling throughout the country that happens underground, mainly due to the growth of the Internet. It was projected by the American Gaming Association that while Americans would bet $3.8 billion illegally on the 2015 Super Bowl, only $100 million of legal betting would take place. "We know that sports betting is occurring without regulation and that the revenues from it are going to illegal enterprises rather than businesses in New Jersey, like our casinos and racetracks," said Representative Frank Pallone Jr. (D - 6th District). "It is time to bring this activity out of the shadows and allow states to regulate it" (http://www.nj.com/politics/index.ssf/2015/01/lobiondo_and_pallone_introduce_legislation_to_brin.html).

That being said, the arguments from both sides are relatively strong. On one side, bringing money into the state and revitalizing a dying city sounds rather enticing, as well as regulating an already prevalent practice, which in turn could reduce organized crime. On the other hand, gambling can be very dangerous and addicting, and by making it more available and prevalent, it opens the door for people, especially athletes, to get caught up in the business (http://espn.go.com/chalk/story/_/id/12555614/betting-sports-betting-legalization-cause-more-problem-gamblers). It should be interesting to see what the federal court decides in the coming days regarding this issue. While definitely not a guarantee that sports betting will become legal this year, this recent conversation started by New Jersey along with the continuous growth of the Internet could likely lead to the legalization and regulation of sports gambling, perhaps similar to Canada (see Andrew Vacca, Sports Betting: Why the United States Should Go All in, 11 Willamette Sports L.J. 1 (2014)), in the very near future.

July 6, 2015

Week In Review

By Chris Helsel

Appeals Court Vacates Decision on Unpaid Interns, Sets New Standard

This week, a three-judge panel of the U.S. Court of Appeals for the Second Circuit vacated a 2013 district court decision in favor of unpaid interns who had worked on the set of the 2010 Fox Searchlight film "Black Swan."

The suit, which was brought in 2011 by a group of interns who performed mostly menial tasks on set, alleged that Fox Searchlight had violated minimum wage laws and sought compensation for the workers' contributions. The plaintiffs were granted class certification and S.D.N.Y. Judge William H. Pauley held in 2013 that under the applicable set of criteria put forth by the Labor Department, the plaintiffs should have been classified as employees.

Judge Pauley's decision held that in order to qualify as a valid unpaid internship, the work done must be similar to training offered in a school setting; be performed entirely for the benefit of the intern, not the employer; and must not preclude work done by existing paid employees. By definition, this set of criteria required that, in order for the internship to comport with the "educational value" requirement, an unpaid intern must be enrolled at an academic institution at the time of his or her internship.

That ruling led to a rash of similar suits brought by unpaid interns against the companies for which they performed work. Many of these suits were settled for millions of dollars, including one against Warner Music discussed in the 6/23/15 edition of "Week in Review."

This week, a Second Circuit panel vacated the Fox Searchlight ruling and remanded the case to the lower court. The panel determined that the Labor Department criteria were both out of date and not binding on federal courts. The proper method to determine a worker's status, wrote Judge John M. Walker, is to employ a balancing test to consider whether it is the employer or the intern that benefits more from the working relationship between the two. "The proper question is whether the intern or the employer is the primary beneficiary of the relationship," said the court.

Judge Walker's opinion further held that the test should hinge mostly on the educational benefits received by the intern in question. In so holding, he upheld the notion that a properly-uncompensated intern must indeed be a student. For this reason, the specific plaintiffs in the instant case should still prevail on remand, because none of them were enrolled in school at the time of their internships.

Despite this silver lining, the ruling certainly raises the threshold for future claims by interns seeking compensation for their services. In addition, the new "primary beneficiary" balancing test presents an enormous obstacle for future suits seeking class certification, as such a test seemingly must be applied on a case-by-case basis.

Following the ruling, Fox released a statement celebrating the new criteria set forth by Judge Walker. "We are very pleased with the court's ruling, but the real winners are students," said the company. "Fox has always been very proud of its internship programs and continues to believe they offer tremendous benefits to those who participate in them."

Plaintiff Eric Glatt, who recently completed law school, offered a very different opinion on the case's outcome: "Instead of using the clear standards of the Department of Labor, it leaves it on a case-by-case basis. Every intern who thinks something is questionable has to litigate it. It's a terrible, terrible burden. Why burden the most vulnerable possible employee with all the heavy work?"

As someone who has worked an unpaid "internship" while attempting to pay rent and make ends meet, this writer finds Mr. Glatt's perspective considerably more convincing.


Donald Trump Sues Univision After Station Pulls "Miss USA" Broadcast

Republican presidential candidate Donald Trump filed suit in the New York Supreme Court this week against the popular Spanish-language broadcaster Univision after the company announced that it would not air the "Miss USA" beauty pageant. The broadcaster's announcement came after Mr. Trump, who is an owner of the Miss Universe Organization, denounced Mexican immigrants as "rapists" and "murderers" while announcing his presidential candidacy two weeks ago.

Univision's decision to drop the pageant mirrored that of NBC Universal (NBC), which also announced this week that it would no longer air "Miss USA." NBC also announced this week that Mr. Trump would no longer host "The Celebrity Apprentice." As of this writing, Mr. Trump has not sued NBC.

In addition, NYC Mayor Bill de Blasio ordered a review of the real estate mogul's city contracts, Macy's announced that it would drop his signature clothing line, and NASCAR is moving an annual banquet away from a Trump resort in Miami.

Mr. Trump, whose presidential platform includes constructing a wall on the U.S.-Mexico border (and somehow convincing the Mexican government to pay for it), contends that Univision's action is in breach of the five-year, $13.5 million contract it entered into this year to broadcast "Miss USA" and other Miss Universe pageants. In addition to breach of contract, the suit alleges defamation, breach of covenant of good faith and fair dealing and intentional interference of a contractual relationship. Finally, although none of the specific causes of action delineated by Mr. Trump reference the First Amendment, the complaint contends that Univision is trying to "suppress Mr. Trump's freedom of speech." The suit seeks $500 million in damages.

Univision, to the best of this writer's knowledge, is not a state actor, so Mr. Trump's free speech argument does not appear to rest on entirely firm footing.

The suit also notes that Univision's principal owner is a staunch Hillary Clinton supporter and fundraiser, and contends that the company's withdrawal is a "thinly veiled attempt" to undermine Mr. Trump's presidential campaign, which has "dramatically risen in the polls" in recent weeks.

Mr. Trump's comments in question included the following: "When Mexico sends its people, they're not sending the best. They're not sending you, they're sending people that have lots of problems and they're bringing those problems. They're bringing drugs, they're bringing crime. They're rapists and some, I assume, are good people, but I speak to border guards and they're telling us what we're getting."

In response to the suit, Univision issued the following statement:

"We just reviewed Mr. Trump's complaint for the first time, and it is both factually false and legally ridiculous. We will not only vigorously defend the case, but will continue to fight against Mr. Trump's ongoing efforts to run away from the derogatory comments he made on June 16th about Mexican immigrants. Our decision to end our business relationship with Mr. Trump was influenced solely by our responsibility to speak up for the community we serve."


Spanish Soccer League Becomes the First to Legally Challenge FIFA's Decision to Host 2022 World Cup in the Winter

In 2010, the FIFA Executive Committee awarded the 2018 and 2022 World Cup tournaments to Russia and Qatar, respectively. While Russia was perhaps an unlikely choice, it was the decision to award the sport's marquis event to tiny Qatar - with its complete lack of soccer heritage and 120+ degree summers - that raised the most eyebrows among the international sporting world.

Unsurprisingly, allegations of bribery and vote-swapping quickly emerged. As recounted in numerous previous "Week in Review" posts, these allegations spawned a mostly-ignored internal investigation and ultimately resulted in the U.S. Department of Justice investigating and finally indicting numerous FIFA officials and related sports marketing executives for their roles in the alleged corruption.

Aside from the corruption allegations, the decision to award the 2022 World Cup to Qatar raised numerous other concerns among interested observers worldwide. Most importantly, the tiny Middle-Eastern nation has a tumultuous human rights record, and it is estimated that thousands of migrant workers whose passports are confiscated upon arrival to the country will die in their efforts to construct the infrastructure necessary to host the event.

Secondly, the logistics of hosting a summer soccer tournament in 120-degree heat defy reality. Despite this, Qatar insisted throughout the bidding process that it had developed (or had plans to develop) outdoor air conditioning technology that would render its as-yet-unbuilt stadiums suitable for some of the world's best athletes to compete safely throughout the tournament. When, after the country had been awarded the event, this technological miracle failed to materialize, many observers called for the tournament to be shifted out of the summer and into the cooler winter months.

It is important to note that since the event's inception in 1930, every World Cup has been staged during the summer. This arrangement allowed the vast majority of the world's domestic leagues (with U.S.-based Major League Soccer, the Russian Premier League and some Scandinavian circuits being the main exceptions) to adopt season schedules beginning in the fall and continuing through the winter and into spring. The summer, therefore, is traditionally soccer leagues' offseason, a time when international events such as the World Cup are staged.

It should come as no surprise, then, that many of Europe's powerful domestic leagues have steadfastly opposed calls to shift the 2022 World Cup out of the summer and into the heart of their seasons, the winter.

Undeterred, FIFA announced in March of this year that the 2022 event would be moved to the winter, in order to placate concerns over the extreme desert heat of Qatari summers. This decision came after joint a proposal by the European Club Association and European Professional Football Leagues to host the event in May - rather than June/July - was rejected earlier that month. In order to calm tensions associated with the drastic move, FIFA agreed to pay clubs worldwide $209 million to release players for both the 2018 and 2022 World Cups (despite the fact that FIFA rules expressly require clubs to do just that, without a fee).

The clubs and domestic leagues were not the only dogs in this fight, however. Fox Sports (Fox), which owns the U.S. broadcast rights to the 2022 event and was not a party to the $209 million payoff, now found itself owning the rights to a massive sporting event that would conflict with the National Football League (NFL) season. Under its current broadcast contract, Fox pays over $1 billion annually to air NFL games.

As a result, it was widely expected that Fox would bring suit to prevent the 2022 World Cup from moving to winter. However, FIFA conveniently placated the American network's concerns by awarding it the rights to the 2026 World Cup as well - in a no-bid contest with undisclosed terms.

Now, despite FIFA's pledge to compensate domestic clubs for the use of their players during the 2018 and 2022 events, Spain's top soccer league, La Liga, has appealed FIFA's rescheduling of the 2022 World Cup to the Court of Arbitration for Sport (CAS). CAS is an international quasi-judicial body headquartered in Switzerland established to settle disputes related to sports. Its jurisdiction, like all arbitrators, is established by contractual agreement. The FIFA bylaws, which all clubs, leagues and players must follow, designate CAS as the sole arbiter of international soccer-related disputes.

La Liga, which houses world powers FC Barcelona and Real Madrid C.F., claims that shuffling its schedule to accommodate a winter World Cup in 2022 will cost the league $70 million or more in revenue. The league's legal challenge has been criticized by European soccer's governing body, the Union of European Football Associations (UEFA), with the group's general secretary accusing La Liga president Javier Tebas of merely wanting "to get some publicity out of it."

UEFA, which represents not clubs or leagues but the national soccer associations of each country, has already signed off on the move to winter. This, it argues, precludes any challenge from any individual country or league. Said UEFA General Secretary Gianni Infantino, "The World Cup is the best national team competition in the world. It has to be played if at all possible in the best conditions. If this means that for one year in 150 years of history of football, we change the calendar ... it will not be the end of the world."

UEFA's backing of the move to winter seems odd, however, considering that the major European leagues could each suffer millions in lost revenue. It is perhaps telling, then, that UEFA's current president, Michel Platini, is considered a frontrunner to take over for Sepp Blatter as the next president of FIFA. Whether UEFA's reluctance to challenge FIFA on the 2022 issue has anything to do with Mr. Platini's desire to please FIFA voters - perhaps to the detriment of his European constituents - is something only he can answer.

Regardless of UEFA's position, the Spanish league has made it clear that it does not intend to sit idly by while FIFA tramples on the lucrative winter domestic season of 2022. Expect the world's other domestic powers to watch the case closely, with many publicly championing La Liga's efforts. At this juncture, the only thing anyone can be certain of is that the issue of when - and where - the 2022 World Cup will be staged is far from set in stone.


ISIS Destroys More Antiquities

Once again, the Islamic State (ISIS) has destroyed ancient and irreplaceable historical artifacts in northern Iraq and Syria. The latest public displays of destruction included militants sledgehammering numerous statues stolen from the ancient Syrian city of Palmyra, smashing a 2,000-year-old lion statue discovered in a hidden Palmyra museum garden and a demolishing a 13th-century tomb near the Iraqi city of Kirkuk.

The destruction was chronicled and publicized in photographs and statements on ISIS social media and has been corroborated by antiquities experts. On Thursday, in addition to revealing that it had destroyed the Palmyra statutes, the group claimed to have captured a smuggler attempting to remove items from an area of Aleppo (the largest city in Syria) controlled by ISIS operatives. The smuggler was allegedly found guilty by a Shariah court and punished with a public flogging.

In response to the report of the destroyed Iraqi tomb, heritage expert Ihsan Fethi of the Iraqi Architects Society said, "This is a terrible and tragic addition to ISIS's long list of never-ending and incomprehensible destruction of some of Iraq's and Syria's most important historic monuments."

At a meeting in London on Thursday, UNESCO general director Irina Bokova said that the antiquities destruction carried out by ISIS in recent months had "reached unprecedented levels in modern history."

ISIS has defended its practice of destroying cultural heritage sites and antiquities by deeming the artifacts to be sacrilegious idolatry that, according to the prophet Mohammed, must be destroyed.

Despite the group's outward appeals to religious fundamentalism, unconfirmed reports from sources within ISIS-controlled areas of Syria indicate that militants had in fact confiscated some of the aforementioned smuggler's statues "in preparation to sell them in one of the neighboring countries" to fund the group's activities.


New York Employers Take Note: "Primary Beneficiary Test" to Determine Whether Interns Should Be Paid Under the Fair Labor Standards Act

By Kristine Sova

On July 2, 2015, the Second Circuit Court of Appeals answered the question: "[W]hen is an unpaid intern entitled to compensation under the FLSA?" The question was a matter of first impression in the Circuit, and the decision was a long-awaited one, because it addressed a question left unresolved since 2013 when two New York district court judges applied different tests in similar cases, the result of which were opposite outcomes (Glatt v. Fox Searchlight Pictures Inc., U.S.D.C., S.D.N.Y., Civil Action No. 11 Civ. 6784, and Wang v. The Hearst Corporation, U.S.D.C., S.D.N.Y., Civil Action No. 12 Civ. 0793).

On appeal, the Second Circuit considered whether to apply:

*the U.S. Department of Labor's (DOL) six-factor test for determining whether an internship at a for-profit institution may be unpaid under the Fair Labor Standards Act (FLSA, a variation of which had been applied by the district court judge in the Glatt decision), or

*another test whereby interns will be considered employees whenever the employer receives an immediate advantage from the interns' work, or

*a more nuanced "primary beneficiary test," as suggested by the district court judge in Wang and the employers on appeal, which considers whether the intern or the employer is the primary beneficiary of the relationship.

The panel adopted the primary beneficiary test, noting two salient features. The first is that it focuses on what the intern receives in exchange for his or her work. The second is that it accords courts the flexibility to examine the economic reality as it exists between the intern and the employer.

In adopting this test, the court laid out seven non-exhaustive factors to consider when assessing whether an intern is an employee entitled to compensation under the FLSA:

1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee--and vice versa.
2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
3. The extent to which the internship is tied to the intern's formal education program by integrated coursework or the receipt of academic credit.
4. The extent to which the internship accommodates the intern's academic commitments by corresponding to the academic calendar.
5. The extent to which the internship's duration is limited to the period in which the internship provides the intern with beneficial learning.
6.The extent to which the intern's work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

The court noted that applying these considerations requires weighing and balancing all of the circumstances, and no one factor is dispositive. Every factor need not point in the same direction for the court to conclude that the intern is not an employee entitled to the minimum wage. In addition, courts applying the "primary beneficiary test" are permitted to consider relevant evidence beyond the specified factors in appropriate cases.

Perhaps most notable about the Second Circuit's decision is that the court declined to follow DOL's six-factor test, which employers had been advised to follow in the absence of explicit guidance out of the Second Circuit. (For an in-depth discussion of the DOL's six-factor test, click here: http://sovalaw.com/blog/2013/05/02/how-to-use-unpaid-interns-the-right-way-and-keep-litigation-at-bay/?utm_source=Sova+Law+Blog+Newsletter&utm_campaign=1bd1543a1a-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_eff3a758ca-1bd1543a1a-62893717.)

The Second Circuit's territory encompasses Connecticut, New York, and Vermont. Employers with operations or workers in those three states should be mindful that the "primary beneficiary test" may apply when determining whether an intern should be paid or unpaid under the federal Fair Labor Standards Act.

Center for Art Law Case Updates

The following case selection first appeared in this week's Center for Art Law newsletter:

Castillo v. G&M Realty LP, 2015 WL 3776891 (E.D.N.Y. June 3, 2015) -- Nine graffiti artists have filed suit against Jerry Wolkoff, owner of the landmark 5Pointz site in Queens, for destroying their murals when his company, the named plaintiff, whitewashed the building in late 2013. The plaintiffs allege that their works were protected by the Visual Artists Rights Act (VARA) and seek compensation for their "gratuitous, willful, and wanton" removal without prior notice or regard for the plaintiffs' feelings or financial interests.

Washington v. Kaul, Case No. 15-1-02149-6 (Wash. Super. June 2, 2015) -- Christopher Robert Kaul, a warehouse worker for glass artist Dale Chihuly, has been charged in Tacoma, Washington with stealing $3 million worth of art to support a drug habit. Kaul admitted to the FBI that he began stealing art in late 2012 and would sell the famous glassblower's works or trade them for pills. He told buyers that he was able to get an employee discount. A private investigator has so far recovered nearly half of the stolen works.

United States v. Qiu, 2015 WL 2250716 (E.D.Tex. 2015) -- Ning Qiu, a Texas art appraiser, has been sentenced to 25 months in prison for conspiring to smuggle rhinoceros horns and elephant ivory out of the country. Qiu pleaded guilty to smuggling $1 million worth of the contraband into to China. His prison term will be followed by three years and supervision and the payment of a $150,000 fine to a federal conservation law and art fund.

Jaretzki v. Art Finance Partners LLC, 2015 WL 3430655 (S.D.N.Y. May 28, 2015) -- British noblewoman Lady Corinne Green has filed suit in federal court alleging that Timothy Sammons, a Manhattan gallery, sold her Henry Moore watercolor "Figure Studies" for less than the agreed minimum price of $461,000. The complaint alleges that when Art Finance Partners bought the painting for $360,000, they "knew or should have known that Sammons did not have the ability or right to convey good title to the artwork."

The Center for Art Law strives to create a coherent community for all those interested in law and the arts. Positioned as a centralized resource for art and cultural heritage law, it serves as a portal to connect artists and students, academics and legal practitioners, collectors and dealers, government officials and others in the field. In addition to the weekly newsletter (http://cardozo.us2.list-manage.com/subscribe?u=78692bfa901c588ea1fe5e801&id=022731d685), the Center for Art Law subscribers receive updates about art and law-related topics through its popular art law blog (http://itsartlaw.com/blog/)and calendar of events (http://itsartlaw.com/events/). The Center for Art Law welcomes inquiries and announcements from firms, universities and student organizations about recent publications, pending cases, upcoming events, current research and job and externship opportunities. To contact the Center for Art Law, visit our website at: www.itsartlaw.com or write to itsartlaw@gmail.com.

Former National Football League Player Sues the National Football League Players Association Over Agent Malpractice

By Daniel S. Greene

The National Football League Players Association (NFLPA) was founded in 1956 to represent and protect the rights all of the players in the National Football League (NFL). Among its responsibilities, the NFLPA represents each player in matters regarding wages, hours, working conditions, assures that the Collective Bargaining Agreement (CBA) is satisfied, negotiates and oversees insurance benefits, and defends the image of players, among many other things (https://www.nflpa.com/about). The NFLPA has filed many lawsuits on behalf of its players. Some people, including NFL executive Troy Vincent, even think that the organization is too litigious (http://espn.go.com/nfl/story/_/id/13171906/nfl-vp-troy-vincent-criticizes-nflpa-spending-legal-action-challenging-roger-goodell-authority).

Yet players have also sued the NFLPA. Former players file lawsuits when they believe that the NFLPA did not protect their rights. In 2014, Christian Ballard and Gregory Westbrooks sued the NFLPA for withholding "information about the perils of head injuries" (http://www.si.com/nfl/2014/07/18/nflpa-concussion-lawsuit-nfl), and in 2011 a group of retired players claimed that when the NFLPA was decertified in March 2011, "the players were in no position to bargain for and agree to the benefits for the retired players" (http://www.cbssports.com/mcc/blogs/entry/22475988/31964032).

Most recently, on June 30th, former San Diego Chargers player Richard Goodman sued the NFLPA in Broward County (Florida) Court for "negligence, gross negligence and breach of fiduciary duty" for failing to regulate his agent, Richard Burnoski. Goodman's complaint is a result of the $61,000 he was forced to pay when a $25,000 loan was taken out by Burnoski under Goodman's name in 2010. The former kick returner alleges that Burnoski forged Goodman's signature and then failed to pay the money back to Goodman. Further, when the loan defaulted, the lender sued Goodman for the $25,000, along with $22,500 in usury fees and $13,000 in personal legal fees. Goodman is seeking damages in excess of $15,000 (http://www.foxsports.com/nfl/story/richard-goodman-san-diego-chargers-suing-nflpa-over-former-agent-certification-070115).

In December 2014, Goodman attempted to receive compensation for these loses through Burnoski's liability insurance policy. Goodman learned that Burnoski had not paid his union dues in 2010 or renewed his liability insurance, and claims that he hired Burnoski based on the online database maintained by the NFLPA that lists the agents who it certifies to represent players. Goodman also asserts that "he would have never continued to use Burnoski as his agent had it been known that his NFLPA certification and mandatory liability insurance had lapsed when he failed to play for both" (http://profootballtalk.nbcsports.com/2015/07/01/former-nfl-player-richard-goodman-sues-nflpa/). He brings this claim in accordance with Article 48 of the CBA between the NFL and NFLPA, which states, "the NFLPA will regulate the conduct of agents who represent players in individual contract negotiations with clubs . . . The NFLPA shall provide and publish a list of agents who are currently certified in accordance with its agent regulation system, and shall notify the NFL and the Clubs of any deletions or additions to the list pursuant to its procedures" (https://nfllabor.files.wordpress.com/2010/01/collective-bargaining-agreement-2011-2020.pdf, at pg. 210).

Likely a big issue to arise during proceedings is whether Goodman's signature was actually forged. Obviously, if Burnoski forged Goodman's signature, then he's in big trouble. However, some feel that the signature was not forged, based on the timing of the loan. As the loan was taken out shortly after the conclusion of Goodman's career at Florida State, it is possible that Goodman took it so that he would have some cash between the end of college and the 2010 NFL Draft. However, if that is not the case, then two major issues will have to be resolved: (1) was Burnoski in good standing when Goodman checked the database, and (2) to what duty does the NFLPA owe a player regarding an agent who fails to pay his or her dues and/or fails to maintain liability insurance? If Burnoski is found to be in poor standing and the NFLPA has a duty to notify players for agent deficiencies, then the court will have to decide whether the certified agents' liability insurance covers these types of situations, which focus mainly on intentional fraud (http://profootballtalk.nbcsports.com/2015/07/01/former-nfl-player-richard-goodman-sues-nflpa/).

In a sense, this is a case involving a little known player, little known agent, and relatively small amount of money. Yet it is also a microcosm of the potentially dangerous and tricky world of athlete representation, where livelihoods are on the line. It is a tough game from both sides, as sometimes players and agents try to take advantage of each other. Players need to be careful that they are picking trustworthy representation, agents need to pick honest players, and the unions need to oversee everyone involved.

July 9, 2015

New York Giants Star Hurts Hand in Fireworks Mishap

By Daniel S. Greene

There may not be many things more American than football or fireworks on the 4th of July. Not much else gets your average red-blooded American more riled up than watching the night sky light up on Independence Day, or seeing a favorite defensive lineman sack the quarterback and do his celebration dance. However, things really don't always end up well when fireworks and football players collide. Just ask New York Giants defensive end Jason Pierre-Paul (nicknamed JPP), who suffered injuries to his hands when lighting fireworks this past Saturday in South Florida.

Reports state that he suffered severe burns on the palm of one hand and the tips of three fingers on the other, with possible nerve damage. Doctors also believe that JPP will not suffer any permanent damage or disfigurement. However, it appears that Pierre-Paul decided to have his right index finger amputated. While the Giants did not know about this decision before hearing about the report online, the team has no control over JPP's medical decisions, since he's technically not under contract (he has yet to agree to the franchise tag). At this point, a long term contract seems extremely unlikely, and his future with the Giants remains uncertain. The team can decide to pull the franchise tag from JPP, which would make him an unrestricted free agent, giving any other team to sign him to a contract. In the alternative, JPP can agree to the franchise tag, but can be placed on the non-football injury list if he's unable to play by the start of the season. Either way, this situation is just getting worse for Pierre-Paul as this whole contract situation seems to have blown up in his face.(http://www.nj.com/giants/index.ssf/2015/07/giants_had_no_knowledge_of_jason_pierre-paul_amput.html).

The fireworks incident was initially being investigated by both the Giants and the Coral Springs Police Department (CSPD), although CSPD will not continue its investigation as the incident did not take place in that jurisdiction. However, JPP could still face a criminal investigation in another Florida jurisdiction where certain fireworks are illegal without a permit (http://espn.go.com/new-york/nfl/story/_/id/13216636/coral-springs-police-not-investigating-jason-pierre-paul-say-fireworks-incident-occurred-jurisdiction).

In 2014, JPP had one of his best seasons in his five-year career, notching 77 tackles and 12.5 sacks while playing in all 16 games. Last season also marked the final year of the contract he signed after being selected fifteenth overall in the 2010 NFL Draft. This left the Giants with three options: let him leave via free agency; agree to a new contract with JPP; or give him the franchise tag where he is signed for one-year and has a guaranteed salary (for explanation of the Franchise Tag, see http://www.sportingcharts.com/dictionary/nfl/franchise-tag.aspx). The Giants clearly wanted JPP to return for the 2015 season, as the team tried to negotiate a long-term deal with JPP's representation, but ended up using the franchise tag worth approximately $15 million. If both sides cannot agree to a new contract by July 15th, JPP must play under the franchise tag, or not play at all (http://www.sbnation.com/nfl/2015/2/23/7994081/jason-pierre-paul-franchise-tag-giants-contract-nfl-free-agents-2015). In the days leading up to July 4th, it was rumored that the Giants offered JPP a new deal worth $60 million.

However, Pierre-Paul's firework mishap may cost him dearly. To start, there are conflicting reports that the Giants pulled its $60 million offer after the incident (http://bleacherreport.com/articles/2516009-jason-pierre-paul-contract-latest-news-and-rumors-on-negotiations-with-giants). While it was thought that JPP was not going to sign this deal prior to the accident, he might be rethinking this. If this injury has any effect on his on-field performance, it could be difficult for JPP to get the long-term deal that he expected before. Therefore, he might be scrambling to get any of his able fingers on a pen and sign that contract if it's still available.

Secondly, if JPP's injury forces him to miss time on the field, the Giants can place him on the non-football injury list (Article 20, Section 3 of National Football League Collective Bargaining Agreement (https://nfllabor.files.wordpress.com/2010/01/collective-bargaining-agreement-2011-2020.pdf), which would allow the team to refuse payment to JPP for any games that he misses. Therefore, if JPP plays under the franchise tag this upcoming season, he'll lose $870,000 for each game he misses (http://profootballtalk.nbcsports.com/2015/07/06/fireworks-injury-could-force-jason-pierre-paul-to-miss-start-of-season/).

Though the Giants have stated that its first concern is JPP's well-being (http://bleacherreport.com/articles/2516009-jason-pierre-paul-contract-latest-news-and-rumors-on-negotiations-with-giants), the franchise has a big financial decision to make. Does the team keep the $60 million offer on the table or alter the franchise tag offer?

July 10, 2015

The Statute of Limitations Invoked to Dismiss Copyright Claims

By Joel L. Hecker

On June 26, 2015, a decision of interest concerning the application of the statute of limitations and work made for hire doctrine in connection with copyright litigation was issued in the Southern District of New York. The case is Gideon Lewin vs. The Richard Avedon Foundation, docket No. 11-cv-8767 (KMW) (FM). The court dismissed the The Richard Avedon Foundation's (the Foundation) affirmative claims that photographs created by Lewin while he was acting as studio manager for Richard Avedon between 1965 and 1980 were works made for hire, since it waited too long to raise the defense. However, the work made for hire argument, ruled the court, is still available as an affirmative defense to Lewin's suit for declaratory judgment that he owns such copyrights. This article will discuss these aspects of the decision.

Disclaimer: I am counsel to the plaintiff, Gideon Lewin, in this action, which is ongoing.

Basic Facts:

Lewin had a special relationship with Avedon, which permitted him to take photographs on his own time and for his own clients, resulting in Lewin owning the copyright to such photographs (the Foundation claims such images are works made for hire.) In 2006, Lewin met with Norma Stevens, who was the executive director of the Foundation at that time, to discuss his plans to write a book about his years with Avedon. Lewin showed Stevens images that he created and that he owned. Stevens then sent an email to another director of the Foundation, which reported on this meeting. Stevens admitted in the email that Lewin had many pictures of Avedon working, and was preparing a "dignified" book. Stevens further wrote that she made it clear to Lewin that the Foundation couldn't prevent him from using his images.

Summary Judgment Motions:

After discovery was closed, the parties each moved for summary judgment. The court granted that part of Lewin's motion seeking dismissal of the Foundation's affirmative copyright ownership claims to his photographic images. The court found that at some point during this meeting with Stevens, Lewin made "an expressed assertion of sole authorship and ownership sufficient to put a reasonably diligent plaintiff on inquiry as to the existence of a right." The court found that Stevens acknowledged not simply that Lewin possessed these photographs, but that the Foundation was unable to prevent him from publishing them in the book he was seeking to write. Thus, the court held, Stevens's email put the Foundation on notice as early as 2006 that Lewin was claiming copyright ownership over these photographs. This notice created in the Foundation a duty to investigate Lewin's copyright claims, and it was at this point that the statute of limitations accrued. Once a party is aware, or put on notice, as to the existence of such a right, the statute of limitations begins to run. Since the Foundation did not bring its affirmative claims until more than three years after this meeting, the Foundation's affirmative claims as to these images were dismissed.

The Foundation argued that Lewin did not, during his meeting with Stevens, state outright that he owned the copyrights, and therefore the Foundation was not on notice of such a claim. The court dismissed this argument, holding that an overt discussion of copyright was unnecessary, since the email makes clear that Stevens understood that Lewin believed he owned the copyrights to the photographs he had shown to her, and that this, in and of itself, is sufficient to constitute an "expressed assertion of adverse ownership."

Work for Hire as an Affirmative Defense

Although the Foundation's direct claims that it owns the copyright to Lewin's photographic images as works made for hire was dismissed, the court determined that the work made for hire defense is not barred by the statute of limitations when it is used solely as an affirmative defense against a copyright claim. Accordingly, although the Foundation may no longer claim it owns the copyright to these images, the Foundation can still raise it as an affirmative defense against Lewin's declaratory judgment action and argue that Lewin is not the copyright owner of the work he created.

Regardless of whether or not Lewin prevails in his declaratory judgment claim, the Foundation no longer has standing to prevent Lewin from using his photographs.

Current Status of the Case

Since the court denied summary judgment to both sides on issues other than the above relating to other aspects of the relationship between the parties, the case is ongoing. Time will tell what the outcome will be, but I recommend a reading of the court's decision for its analysis of the juxtaposition of work made for hire issues relating to the statute of limitations.Wood.Decision.SJ.6.26.15.pdf

July 12, 2015

National Hockey League Salary Arbitration: Hockey's Alternative Dispute Resolution

By Daniel S. Greene

In the legal world, Alternative Dispute Resolution (ADR) is often used to settle disputes with the help of a third party, and without resorting to litigation. The world of professional sports has its own version of ADR. The National Hockey League (NHL) and Major League Baseball (MLB) have some form of an arbitration process to settle contract disputes between players and teams. While the rules and requirements are slightly different for each, the general purpose of the process is to have the contract conflict resolved by a neutral arbitrator for the upcoming season. This has been a very useful tool for both leagues, which see fewer contract holdouts and issues than in the National Football League and National Basketball Association.

July is when arbitration heats up for the NHL. By the July 5th deadline, 23 players filed for arbitration, including high profile players, such as New York Rangers forward Derek Stepan and Washington Capitals goaltender Braden Holtby. Each of the arbitration hearings will be held in Toronto between July 20th and August 4th. Filing for arbitration can end up either in settlement or with an arbitrator's decision. (http://www.usatoday.com/story/sports/nhl/2015/07/05/nhl-players-salary-arbitration-sunday-deadline/29745023/). Historically, most players settle a contract dispute prior to a hearing with one the eight members of the National Academy of Arbitrators, as the process can be costly and time-consuming. In addition, the process can be emotional, as management is pointing out the player's flaws and saying why he is not worth a certain amount of money, which can lead to an uncomfortable employer-employee relationship the following season (http://www.si.com/nhl/2015/07/06/nhl-salary-arbitation-stories-brendan-morrison-mike-milbury-tommy-salo). While the number of arbitration hearings has decreased over the past 10 years, players still file after every season and some, including superstars like Montreal Canadiens defenseman P.K. Subban, go through the entire process.

NHL Salary Arbitration Explained

The NHL's arbitration process is governed by Article 12 of its Collective Bargaining Agreement (CBA) (page 57, http://www.nhl.com/nhl/en/v3/ext/CBA2012/NHL_NHLPA_2013_CBA.pdf). This process is only available to restricted free agents, which are also known as Group 2 players. Eligibility for Group 2 players depends on the age of the player of when he signed his first Standard Players Contract (SPC) and the number of years of professional experience. The older the player was when he signed his first SPC, the fewer years of professional experience he needs to qualify as a restricted free agent (CBA, page 30). While the player and the franchise each has the right to file for salary arbitration, there are certain restrictions. A player can be taken to arbitration only once in his career and can never receive less than 85% of his previous year's salary. However, there are no restrictions on how often a player can file for arbitration or the size of the salary awarded to him (http://proicehockey.about.com/od/nhlfreeagents/a/arbitration.htm).

Once the hearing is scheduled and the arbitrator is assigned, each side exchanges briefs that include the proposed salary along with supporting evidence. Article 12.9(g) of the CAB specifies that only certain kinds of evidence can be offered. This includes official NHL statistics, overall contribution to success of the team, and special qualities of leadership. Certain evidence is not allowed, and includes qualifying offers made by the team, newspaper articles, and the financial condition of the team. (CBA, pages 63-64). In previous years, analytic statistics known as "fancy stats," such as Corsi, Fenwick, and PDO (explanation of each statistic: http://proicehockey.about.com/od/scoresandstat1/fl/Corsi-PDO-and-Fenwick-3-hockey-stats-you-need-to-know.htm) were not allowed in arbitration proceedings. However, these types of statistics have become more widely accepted in the NHL and, as of 2015, are generally allowed in arbitration hearings (http://www.sportsnet.ca/hockey/nhl/headlines-fancy-stats-ok-for-arbitration/). Each brief is due no later than 48 hours before the scheduled hearing. Further, the party against whom arbitration is filed gets to choose whether the arbitrator's final decision will encompass a one or two year contract.

The arbitration hearing's procedure is governed by Article 12.9(k) of the CBA. At the hearing, each side gets 90 minutes, between its affirmative case and rebuttal, to argue its case. Whomever elected for arbitration brings its case first, which is then followed by the case of the opposition. Each party is then offered the opportunity for a rebuttal. There is also the possibility for a 10 minute surrebuttal if there are new issues or comparable players that/who need to be addressed and can't be used in the closing arguments. The arbitrator's decision must come within 48 hours of the hearing. The decision includes the award and brief summary. While the arbitrator's decision is binding, teams can "walk away" from an award of over $3.5 million if arbitration was filed by the player, but cannot do so if the team itself filed. If the team "walks away," the player then becomes an unrestricted free agent. Historically, team owners have opposed arbitration, since they feel that it gives the players too much leverage, but, when the parties do end up going through the process, the contract is generally seen as a fair outcome, especially since the term of the contract does not exceed two years.

Example: Josh Jooris

One of the 23 players to file for arbitration this summer is Calgary Flames forward Josh Jooris. The former Union College (NY) star just finished his second season in the Flames organization, but spent this past season with the NHL club. Jooris was a relatively unknown prospect coming out of college as an undrafted player. He spent his first professional season with Calgary's minor league affiliate, but with a decent season in the minors and a very strong showing in training camp, Jooris surprised many and played in 60 games with the big club in 2014-15, notching 12 goals and 12 assists in 60 games.

Since the Burlington, Ontario native signed his first SPC when he was 22 years old, he only needed two years of professional experience to be eligible for salary arbitration. Jooris' arbitration process could be very interesting, considering that he is a somewhat obscure player. The Uptown Sports client will be turning 25 years old on July 14th, and is due a decent raise from his two-year entry level deal, where he earned $70,000 for playing in the minors and $925,000 for playing in the NHL (http://www.generalfanager.com/players/374).

What could make Jooris' arbitration process interesting is the now accepted use of "fancy stats." While his 24 points don't jump off the page, it's Jooris' intangibles and "fancy stat" numbers that really show his worth. However, it is not a guarantee that these stats will be seen as valuable to the arbitrator, who is usually an older or retired attorney or judge, and may not understand or respect the value of these statistics. Regardless, I'd expect Jooris' representation to bring up as many of these non-traditional statistics as possible (examples: http://www.matchsticksandgasoline.com/2015/5/15/8589905/josh-jooris-and-why-his-upcoming-contract-is-important; http://flamesnation.ca/2015/6/4/2014-15-by-the-numbers-86-josh-jooris?utm_source=dlvr.it&utm_medium=twitter; http://flamesnation.ca/2015/6/9/rfa-profiles-josh-jooris-micheal-ferland-and-drew-shore).

It should also be noted that Jooris was nice contributor to an over-achieving Flames team that made the playoffs for the first time since the 2008-09 season, while also being a good citizen and a fan favorite. On the other hand, I'd expect the club to rely mainly on Jooris' traditional stats (goals, assists, points, face-off percentage, etc.), which for the most part projects him as a respectable "bottom six" forward," as well as being held out of the lineup in the playoffs and his limited NHL experience.

Player comparison will also play a major role in deciding Jooris' contract. Comparable players could include Carolina Hurricanes forward Riley Nash and Columbus Blue Jackets forward Matt Calvert. Both are around the same age as Jooris, 26 and 25 years old, respectively, while each putting up similar numbers this past season (Nash: 25 points in 68 games; Calvert: 23 points in 56 games). In addition, each player signed a new deal this summer, as Nash signed a one-year, $1.15 million deal, and Calvert signed a three-year contract worth $6.6 million (receiving $1.5 million in 2015-16, $2.2 million in 2016-17, and $2.9 million in 2017-18). While there are definitely more detailed and closer comparisons to be made, in my non-expert opinion, I'd predict Jooris to receive a deal worth somewhere in the neighborhood of $1.4 - $1.6 million per year. However, there is no true way to know what effect the "fancy stats" will have on the arbitrator's decision, so Jooris could expect a few hundred thousand dollars more or even a little less than my projected value. No matter what, this versatile, productive, and valuable player will receive a raise whether or not he settles before the hearing.

July 14, 2015

Week In Review

By Chris Helsel

Federal Court Upholds Repeal of Redskins Trademark

Judge Gerald Bruce Lee of the Eastern District of Virginia ruled this week that the U.S. Patent and Trademark Office's appeal board was correct in cancelling six trademarks held by the Washington Redskins (team, club) of the National Football League (NFL).

The appeal board cancelled the trademarks last year after determining that the word "redskin" "may disparage" Native Americans. The team appealed the decision in federal court last August, with team president Bruce Allen insisting that "the facts and the law are on the side of our franchise that has proudly used the name Redskins for more than 80 years."

Judge Lee disagreed, though his decision emphasized that fans of the club would not be precluded from "wearing or displaying the Redskins marks." However, while fans can still sports Redskins gear, federal customs agents are no longer required to confiscate Redskins merchandise that enters the country. As a result, the club is not protected from counterfeit merchandise, which is likely to harm official NFL vendors such as Nike and New Era.

In addition to damaging the club (and league, because all NFL teams except the Dallas Cowboys share merchandise revenue) financially, the decision provides additional ammunition for opponents of the Redskins moniker, who have long called for the NFL to force a name change. These vocal opponents include numerous Congressmen, some of whom have publicly called on NFL commissioner Roger Goodell to prohibit the club from using the name. Following this week's ruling, Senator Maria Cantwell (D-Wash.) said in a statement, "The N.F.L. should stop allowing this name to be used immediately. It remains clear they are on the wrong side of history for continuing to defend the name -- and the profits they make from this slur will be severely impacted by this decision."


ESPN's Publication of Jason-Pierre Paul's Medical Records Raises Legal, Ethical Concerns

Over the 4th of July weekend, New York Giants defensive end Jason Pierre-Paul sustained a serious injury to his right hand in a fireworks accident in Florida. In the days that followed, speculation ran rampant as to the exact extent of Mr. Pierre-Paul's injuries. On July 8th, ESPN's Adam Schefter reported that the player's right index finger had been amputated, and posted an image of a hospital record to prove it.

Unsurprisingly, the public production of a confidential hospital record has drawn significant criticism. Such a disclosure raises substantial questions of both legality and ethics, and many believe that Mr. Pierre-Paul will seek legal recourse against ESPN, Miami's Jackson Memorial Hospital and/or the individual who provided the image.

While the source of the image is currently unknown, the hospital has pledged to open an "aggressive" investigation into the release of Mr. Pierre-Paul's pre-surgery medical chart. In an interview last week, Mr. Schefter insisted that he did not seek the photo out, but rather "the image came to [him]."

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) protects the privacy of a patient's medical records. Under HIPAA, unauthorized release of a patient's medical records is forbidden. As such, if the source of the image were identified, that individual would face steep fines and potential jail time.

However, because HIPAA applies only to a specific list of medical professionals (and therefore not to the media), it appears that ESPN and Mr. Schefter did not act in violation of the federal law in publishing the medical record. ESPN was quick to point that fact out last week, responding to the widespread criticism with a brief statement: "HIPAA does not apply to news organizations."

While a suit against ESPN and Mr. Schefter likely would fail, Mr. Pierre-Paul may also consider bringing suit against hospital for the unauthorized disclosure of medical records.

In addition to the controversy over his medical records, Mr. Pierre-Paul faces a complicated contractual situation in the wake of his self-inflicted injury. At the time of the injury, the defensive star was not officially under contract with the Giants. Rather, he had been designated as the team's "franchise player," a provision by which an NFL club can strategically retain the rights to a free agent player who spent the previous season with the team. In simple terms, under the franchise tag, a player is obligated to remain with his team for one season at a salary equal to the average of the league's top five players at his position.

At the time of his injury, Mr. Pierre-Paul had not yet signed the club's franchise tender, and as such was permitted to continue negotiating a long-term contract with the team. Reports indicate that the Giants had offered him a multi-year contract in the neighborhood of $60 million - an offer that evaporated following the unfortunate fireworks mishap.


Rapper Kendrick Lamar Faces Lawsuit Over Artwork Used to Promote Single

Kendrick Lamar Duckworth, known professionally as Kendrick Lamar, has been sued by a freelance photographer in New York federal court over the use of an image to promote his latest single, "The Blacker the Berry."

According to the suit, which seeks $150,000 for each time the image was used, the rapper used a photograph of a woman breastfeeding two children simultaneously taken by Giordano Cipriani in Africa in 2011 to promote the single - without providing compensation to the photographer. The suit also names Top Dawg Entertainment, Interscope Records, and Aftermath Entertainment as defendants.

Mr. Duckworth has also been sued at least twice before for allegedly using samples of other artists' songs without proper permission or granting writing credits.


Brooklyn Street Artist Sues Starbucks Over Mini Frappuccino Promo Campaign

Brooklyn-based street artist Maya Hayuk has filed suit against Starbucks for copyright infringement. The suit, brought in Manhattan federal court, contends that the coffee company improperly used her artwork to promote its new Mini Frappuccino product without providing compensation.

Ms. Hayuk alleges that Starbucks reached out to her last fall about potentially using her work in its upcoming campaign. "We love your work," said the company, according to the complaint. The artist apparently declined the offer.

According to the suit, following her refusal to cooperate, Starbucks "brazenly created artwork that is substantially similar to one or more of Hayuk's copyrighted works and used the substantially similar art for the Frappuccino campaign. The Frappuccino Campaign is essentially identical to the Starbucks campaign (advertising agency 72andSunny) proposed to Hayuk."

The complaint includes a side-by-side comparison of five of Ms. Hayuk's works to Starbucks promotional materials, which she contends improperly imitate the kaleidoscopic, brightly-colored radiating beams that are the artist's style.

Ms. Hayuk claims that the infringing advertisements appear in "many, if not all, of Starbucks' over 21,000 retail locations in 66 countries" as well as the company's website in the U.S., U.K., Canada, France and Germany.

The suit seeks $150,000 per infringed-upon painting and a share of the Mini Frappuccino profits.

Ms. Hayuk has also recently sued singer-songwriter Sara Bareilles and luxury brand Coach for featuring one of her murals in advertisements without permission.


July 16, 2015

Class Action Lawsuit Demands Major League Baseball Stadiums to Install More Protective Netting

By Daniel S. Greene

On June 5th, a 44-year old New England woman who was attending a Boston Red Sox game was struck in the head by a broken bat that had been swung by an Oakland Athletics player. The bat broke and flew into the stands. Her injuries were initially reported as life-threatening, but she was released from the hospital a few days later and her recovery is going "excellent" (http://www.foxsports.com/mlb/story/boston-red-sox-fenway-park-fan-hit-by-broken-bat-released-from-hospital-061215).

This incident was just the latest of many involving bats or balls flying into the stands and striking fans. According to a September 2014 study by Bloomberg News, approximately 1,750 attendees get hurt by balls flying into the stands at Major League Baseball (MLB) games, which adds up to about two out of every three games (http://www.bloomberg.com/news/articles/2014-09-09/baseball-caught-looking-as-fouls-injure-1750-fans-a-year). This safety issue has been a topic of conversation for a number of years, but it might have finally reached its zenith. On July 13th, a class action lawsuit was filed in Federal District Court in Northern California against MLB, claiming that the organization has not done enough to protect the fans from projectiles entering the stands. The suit does not seek any monetary relief, but states that MLB should be forced to add protective netting that stretches from foul pole to foul pole at all MLB ballparks, including the minor leagues (Read the entire Complaint: http://www.hbsslaw.com/Templates/media/files/case_pdfs/MLB/07-13-2015_Complaint_Payne_v__MLB_No__15-cv-3229.pdf).

The Complaint states how MLB and Commissioner Rob Manfred have "failed to follow the path of other professional sports in the United States and in other countries that have taken readily-available and relatively inexpensive steps to protect its spectators." It further notes that "fans of all ages, but often children, suffer horrific and preventable injuries, such as blindness, skull fractures, severe concussions and brain hemorrhages, when they are struck by a fast-moving ball or flying shrapnel from a shattered bat" (http://hardballtalk.nbcsports.com/2015/07/13/a-class-action-law-suit-was-filed-against-mlb-today-seeking-the-installation-of-more-netting/).

The lead plaintiff in the suit is Oakland Athletics (A's) season ticket holder Gail Payne, who sits in Section 211 at the O.co Coliseum. These seats are not field level and not protected by netting. Payne, an A's fan for nearly 50 years, purchased season tickets for the first time this year. The Complaint says that "she fears for her and her husband's safety and particularly for her daughter," and "she is constantly ducking and weaving to avoid getting hit by foul balls or shattered bats." It also notes that there are a lot of distractions in the stadium, including a large video screen, fan contests that involve cell phone use, and that this increases the risk of injury. However, she was not injured by any ball or bat that has flown into her section.

The Complaint also notes that the National Hockey League (NHL) has implemented protective netting behind each goal at every NHL arena after the extremely sad and unfortunate incident at a Columbus Blue Jackets game in 2002, where a deflected slapshot ricocheted into the stands, striking a 13-year old girl who died two days later (http://sports.yahoo.com/blogs/nhl-puck-daddy/ten-years-death-brittanie-cecil-recalling-backlash-over-214937256.html). It also highlights that baseball stadiums in Japan have protective screens from foul pole to foul pole (http://cdn.leanblog.org/wp-content/uploads/2015/06/Screen-Shot-2015-06-09-at-6.39.34-AM.png).

However, while it is true that attending a baseball game can be dangerous and that other leagues and sports have taken measures to limit this risk of injury and death, for some reason, I am not fully on board with the purpose behind this class action lawsuit. It must be noted that while Japanese stadiums have installed netting to protect its fans, there have still been incidents where fans have been injured. In August 2010, a woman attending a Nippon Ham Fighters game was hit in the face by a foul ball at the Sapporo Dome, which caused her to lose sight in her right eye. The team was forced to pay $350,000 in damages (http://sports.yahoo.com/news/japanese-baseball-team-ordered-pay-damages-foul-ball-070822903--mlb.html). In addition, during the 2014 season at the Nagoya Dome, home of the Chunichi Dragons, 115 fans requested in-house first aid after being struck by a ball during the 67 games played in the stadium that season (http://www.japantimes.co.jp/sports/2015/04/05/baseball/japanese-baseball/japanese-baseball-taking-cover-foul-ball-decision/#.VaRjH5NVikp).

Further, I feel that the event of a baseball being hit into the stands is slightly different from a hockey puck going into the seats. While both are definitely dangerous incidents, the game of baseball moves at a slower and more predictable pace. In baseball, you know when a ball is being pitched, whereas in hockey, it is more unpredictable when a shot is being taken, plus there's the high probability of the puck being deflected in many different directions. Further, I feel that a white ball is easier to see than a black rubber disc. That being said, I completely agree with the NHL's decision to put the netting behind the goals. You only need to watch warm-ups of a professional game to see how many pucks go up into that netting off of the crossbar and goalie, and how many shots get deflected up there during a game. Yes, sitting high up behind one of the goals may be an "annoying" seat for a game, but having the netting there is important and necessary, just as it is in baseball to have netting behind home plate. However, I'm having trouble seeing historic venues like Fenway Park and Wrigley Field lined by protective netting. One of the beauties of going to a baseball game is being a part of the action and interacting with the players. Further, issues regarding foul pop ups that come near the netting will arise, and no one knows what will be the height of the netting itself. If the netting will be high enough to protect Ms. Payne, then you might as well just play the game in a bubble.

Hey, I'm just a guy that has never been struck by a bat or ball, so what do I know? Decent point. In reality, my opinion doesn't really matter. However, the precedent set by the law does matter, which leads to the prediction that this lawsuit will not prevail.

One issue that crosses my mind is whether Ms. Payne has proper standing to bring suit. As stated by the United States Supreme Court in Lujan v. Defenders of Wildlife, a plaintiff must satisfy three elements to have standing to bring a lawsuit: "First, the plaintiff must have suffered an 'injury in fact' -- an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not 'conjectural' or 'hypothetical.' Second, there must be a causal connection between the injury and the conduct complained of -- the injury has to be "fairly . . . trace[able] to the challenged action of the defendant, and not . . . the result [of] the independent action of some third party not before the court. Third, it must be 'likely,' as opposed to merely 'speculative,' that the injury will be 'redressed by a favorable decision'" (https://www.law.cornell.edu/supremecourt/text/504/555).

First of all, Ms. Payne has not suffered any injury due to a foul ball or broken bat. She merely states that there is a chance that she may get hurt because of the lack of protection. It could be difficult for any other season ticket holder who is not protected by netting to join the suit, if he or she has not sustained any injury. Further, while it is a reasonable hypothetical possibility that a ball could come into Ms. Payne's section and cause her some sort of injury, I find it extremely hard to believe that any broken bats will be making their way up to Section 211 (http://aviewfrommyseat.com/photo/12762/O.co+Coliseum/section-211/row-10/seat-4/), especially since O.co Coliseum is notorious for having the largest foul territory in all of baseball. From what I can tell, the only way that a broken bat is making it anywhere near Ms. Payne is if an Olympic javelin thrower takes it and throws it towards her. In addition, if Ms. Payne is truly that scared of bats and balls coming her way, she should change her seat. There are plenty.

The second, and probably most difficult issue to overcome for the plaintiffs, is the "Baseball Rule," which has traditionally held stadium owners to a limited duty of care in providing protection for their patrons. While the Baseball Rule, slightly differs from state to state, it "generally holds stadium owners to a lower duty of care for the safety of fans compared to the reasonable duty of care owed by most property owners under the common business-invitee rule. Consequently, the rule has allowed baseball owners to avoid liability for fan injuries" (Take Me Out To The Ballgame . . . But Bring A Helmet: Reforming The "Baseball Rule" In Light Of Recent Fan Injuries At Baseball Stadiums, 24. Marq. Sports L. Rev. 123, 124). This rule is similar to the assumption of risk defense to a negligence claim, besides that a stadium owner's "duty is 'limited' because it is less than the ordinary reasonable duty of care owed by landowners to business-invitees in other settings" (Id. at 127). Essentially, under this rule, a defendant will not be liable to a plaintiff if he or she knows "of a certain risk and voluntarily assumes or confronts the risk" (Id. at 128).

Here, it can be reasonably inferred that Ms. Payne was knowledgeable about the game, having been a fan for about 50 years. She knew that balls and bats occasionally came into the stands. It is also assumed that Ms. Payne understood the fact that the closer one sits to home plate, the higher the probability that objects would come into the stands. Anyone that has attended or watched a handful of baseball games would know that it is extremely common and expected that balls and the occasional bat would fly towards a spectator. The fact that this is an inherent risk to attending a baseball game makes this rule and defense hard to overcome for any plaintiff. Further, as noted by Professor Nathaniel Grow, "[b]ecause personal injury cases are primarily governed by state law, the federal court hearing the new class action suit will lack the power to overturn the state-level precedent absolving MLB teams of liability for injuries inflicted by foul balls or broken bats" (http://www.fangraphs.com/blogs/new-mlb-fan-safety-class-action-lawsuit-unlikely-to-succeed/).

As a life-long baseball fan who has attended numerous MLB and minor league games, I do understand Ms. Payne's and others' concerns. I have seen fans around me get cracked in the head by a line drive into the stands and get carried out on stretchers. This is why I am never on my phone or looking somewhere else in the stadium when the pitcher is going into his stretch. To me, it is common sense that the closer you sit to the action, the greater the risk you take of getting hit by a bat or ball, especially since warnings are announced throughout the stadium prior to the game and there are signs in stadiums telling patrons that balls and other objects can come into the crowd. I know that going to a sporting event is becoming more of an "entertainment" experience, but, call me old school or a purist, people should go to these events to watch the game. It would be unfair if a few scared patrons ruin the experience of going out to the ballpark for thousands of people, including those season ticket holders who could be a part of the class action lawsuit. You get to choose where you sit, and if you want to be in a "danger zone," you have to pay more to sit there. There are inherit risks in doing anything in life, and I feel terribly for the people who have been affected by sports spectator incidents, but that doesn't mean that over-reaching protections should be made. While protective measures, such as extending the netting from the beginning of each dugout to the beginning of the other dugout, might be voluntarily taken by the MLB at some point, I feel that the relief requested in this lawsuit is unlikely to occur.

Center for Art Law Case Updates

Albrecht v. Achenbach, Landgericht Düsseldorf [LG Düsseldorf] [Regional Court of Düsseldorf], Jan. 20, 2015, Docket No. 6 O 280/14 (partial judgment in accordance with section 301 of the German Code of Civil Procedure) -- One of Germany's most influential art advisors, Helge Achenbach, was found guilty of 18 counts of fraud and sentenced to six years in prison. During the trial he confessed to marking up purchase invoices in order to lessen the risk imposed by the buy-back clause. Achenbach was also ordered to pay the Albrecht family €19.4 million, the sum of the additional charges.

Christie's France SNC v Syndicat national des antiquaires, Case C-41/14: Judgment of the Court (Fourth Chamber) of 26 February 2015 (request for a preliminary ruling from the Cour de cassation - France) (OJ C 102, 7.4.2014), Celex No. 614CA0041-- Syndicat National des Antiquaires (SNA) claimed that Christie's France's practice of having the buyer pay for the amount for the resale royalty constituted unfair competition. The judgment of the Court of Justice of the European Union states that member states can determine who should pay the royalty fees even though under EU law, the royalty is paid by the seller, not the buyer. The court claims that it is beneficial to allow the states this freedom because competition in the art market will be less distorted with few and indirect effects on the internal market.

• Landgericht Wiesbaden [LG Wiesbaden] [Regional Court of Wiesbaden], Docket No. 1 KLs-4423 Js 39160/12. -- In this currently ongoing case, the prosecutors accused the co-owners and manager of the SMZ Gallery, Itzhak H., Moey Ben H., and Adenande Ben H. of commercial and gang-fraud and forgery. The defendants insist that the paintings are authentic and come from archives in the former Soviet Union. Prosecutors claim damages of €11 million for sales of 19 forged Russian paintings.

• Rechtbank Rotterdam, 24 Juni 2015, Kreuk v. Vō (Neth.). -- The court ruled in favor of art collector Bert Kruek and ordered Danh Vō, a Danish-Vietnamese artist, to make and deliver the artwork promised within one year. Late delivery would have a penalty of €10,000 per day and capped at €350,000. Kruek will still pay the originally agreed upon price, even though Vō's works now sell at higher rates. The court further ordered that the artist can produce artwork that reflects his developments since the deal and cannot be forced to repeat past works.

Thwaytes v. Sotheby's, [2015] EWHC (Ch) 36, (appeal taken from Eng.) -- On January 16, 2015, Justice Rose ruled in favor of Sotheby's and held that the auction house had been entitled to rely on the expertise of its specialists when appraising a Caravaggio painting. The painting sold at £42,000 under the auction house's advice, but was later valued at £10 million. Sotheby's experts stand by their lower valuation, claiming that the work is not an authentic Caravaggio.

The Center for Art Law strives to create a coherent community for all those interested in law and the arts. Positioned as a centralized resource for art and cultural heritage law, it serves as a portal to connect artists and students, academics and legal practitioners, collectors and dealers, government officials and others in the field. In addition to the weekly newsletter (http://cardozo.us2.list-manage.com/subscribe?u=78692bfa901c588ea1fe5e801&id=022731d685), the Center for Art Law subscribers receive updates about art and law-related topics through its popular art law blog (http://itsartlaw.com/blog/)and calendar of events (http://itsartlaw.com/events/). The Center for Art Law welcomes inquiries and announcements from firms, universities and student organizations about recent publications, pending cases, upcoming events, current research and job and externship opportunities. To contact the Center for Art Law, visit our website at: www.itsartlaw.com or write to itsartlaw@gmail.com.

July 17, 2015


By Barry Werbin

An important new decision of first impression out of the Fifth Circuit in Texas, issued on June 30th, holds that state law claims based on ideas - including trade secrets - that are fixed in tangible media are preempted by Section 301(a) of the Copyright Act, despite Section 102(b) excluding from copyright protection "any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work."

Section 301(a) is the preemption clause that bars state law claims concerning "all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103...."

The Court explained that the interaction between Sections 301(a) and 102, based on the reasoning of a majority of Circuits that have ruled on this issue (as well as Nimmer), "clearly delineates between the purpose of federal copyright preemption and that of federal copyright protection. Congress intended the Copyright Act to protect some expressions but not others.... Finding this reasoning is persuasive, we join the majority position and hold that state law claims based on ideas fixed in tangible media are preempted by §301(a)."

This aligns the Fifth Circuit with the Second, Fourth, Sixth, Seventh and Ninth (en banc) Circuits, whereas the Eleventh Circuit remains in the minority on this issue.

SPEAR MARKETING, INC. v. SPEAR MARKETING, INC., No. 14-10753 (5th Cir. 6/30/2015) - SPEAR MARKETING.pdf

July 19, 2015

Major League Soccer Institutes Free Agency For First Time in League History

By Daniel S. Greene

This year marks the 40th anniversary of the first sports league to institute free agency. While the famous Flood v. Kuhn case (which challenged Major League Baseball's (MLB) reserve clause as a violation of antitrust laws and the 13th Amendment) started the ball rolling for free agency, it wasn't until 1975 when free agency became an integral part of MLB. After outfielder Kurt Flood lost his case 5-3 in the United State Supreme Court in 1972, pitchers Andy Messersmith and Dave McNally challenged the ruling just three years later. In December 1975, all MLB players were granted the right to free agency, thanks to arbitrator Peter Seitz, who overturned Flood, and ruled that players had the right to free agency after playing one year without a contract, banning the reserve clause's applicability to MLB. This decision led the way for future sports leagues to allow free agency for its players, including the National Football League in 1992, National Hockey League in 1995, and National Basketball League in 1996 (http://www.villanovau.com/resources/bls/history-free-agency-pro-sports/#.VahWsxNViko).

This past Thursday, Major League Soccer (MLS) players ratified a new five-year Collective Bargaining Agreement (CBA) that runs through 2019, after 91% of the players voted in favor of ratification (http://www.mlssoccer.com/news/article/2015/07/16/mls-players-union-announces-it-has-ratified-collective-bargaining-agreement?utm_source=Twitter&utm_medium=referral&utm_content=News&utm_campaign=Unpaid). While many important new items were introduced into this version of the CBA, arguably the most important one is the creation of free agency for the first time since the league's founding in December 1993. Under the new CBA, free agency applies to players who are 28 years old and have at least eight years of MLS service, are below the maximum salary, and are within certain salary limits:

- Players earning less than $100,000 can negotiate a raise of up to 25%
- Players earning between $100,000 and $200,000 can negotiate a raise of up to 20%; and
- Players earning $200,000 and above can negotiate a raise of up to 15%.

In addition, the percentage increases may be raised if a player significantly outperforms his or her contract (http://www.rslsoapbox.com/2015/7/16/8982515/players-union-ratifies-mls-collective-bargaining-agreement-details).

This form of free agency seems to be beneficial to both sides. "The players were very focused on having more freedom of movement and we've been able to provide that," said MLS Commissioner Don Garber. "Everyone wins. Our owners are able to protect their system and players are able to achieve more movement." Under the old CBA, players with expired contracts could be re-drafted by other teams, but only at the player's current salary. Therefore, not only were players unable to increase their salaries, but they were also unable to choose where they could play (http://www.nytimes.com/2015/03/05/sports/soccer/mls-and-union-reach-deal-giving-free-agency-to-veterans.html?_r=0).

The implementation of free agency has come at a very good time for the MLS, as the league has expanded rapidly over the past few years. While only 10 teams existed in the 1996 inaugural season, that number has doubled this season, with New York City FC and Orlando City SC joining the league for 2015. While expansion has led to an increase of players and fans, free agency means (hopefully) more money for MLS players. One just needs to look at the effect of free agency in the other sports. For example, in 1975, future Hall of Famer Hank Aaron was the highest paid player in MLB at $240,000 per year. Yet a year after the Seitz decision, future Hall of Famer Mike Schmidt earned a league-high $560,000 per year. Similarly, in 1992, the NFL average salary was approximately $484,000, but increased to $667,000 per year just a season later (http://www.villanovau.com/resources/bls/impact-free-agency-pro-sports/#.VahkLBNViko). Today, many athletes are signing contracts for millions of dollars per year, which is large in part to free agency.

While it is unknown how much free agency will impact player salaries, considering that MLS is relatively smaller and less wealthy compared with the other major North American sports, and as free agency is limited to only certain players, it is very likely that MLS players should see an increase in their annual salaries in the upcoming seasons. With the popularity of the USA men's and women's soccer teams, the growth of the MLS, along with its new television and sponsorship deals, and now its acceptance of free agency, it seems that soccer in the United States is on an upward trend.

Log Cabin Stud: The Bipartisan Politically Powerful Stable

By Bennett Liebman
Government Lawyer in Residence

We take it as a given that horse racing and politics generally don't mix well, and most states have laws and rules that try to keep government officials from having interests in racing operations. Yet in the years before these regulations, there were times when political interests were invested in racing. Tammany boss Richard Croker was heavily involved with horse racing in the late 19th and early 20th centuries. He even won the English Derby in 1907 with his horse Ormsby, after he had retired to Ireland. Tammany leader and Congressman "Big Tim" Sullivan ran a stable of horses in the early 20th century and also had interests in various racetracks. John Morrissey, the principal founder of Saratoga Race Course, served as a Congressman and as a State Senator. It is likely that Morrissey's involvement in government was to protect his illegal gambling establishments.

Ogden Mills - a Congressman from New York State who ran unsuccessfully as the Republican candidate for New York State Governor in 1926 - founded the Wheatley Stables with his sister Gladys Mills Phipps. Mills also served as the Secretary of the Treasury under President Herbert Hoover. He was the uncle of Ogden Phipps and the great uncle of Ogden Mills Phipps.

William Collins Whitney - the founder of the Whitney interests in horse racing - was an active Democrat. He ran unsuccessfully for District Attorney in New York City, was a long-time supporter and a member of the cabinet under President Grover Cleveland, and was nearly nominated as the Democratic candidate for Governor in 1894.

August Belmont served as the chairman of the Democratic National Committee in the 1860's.

Log Cabin Stud

Yet of all these potentially politically powerful stables, the most potent was probably the Log Cabin Stud of the mid 1920's. The stable was significant politically when it was formed due to the wealth of its partners, but only in retrospect can the political clout of this stable be seen. Ninety years after it was established, the extent of the political influence of this stable is still being felt.

Log Cabin Stud was the partnership of W. Averell Harriman and George Herbert Walker. They were at the time principals of the Wall Street investment banking firm, W.A. Harriman & Co. Harriman had inherited one of the largest fortunes in the world. Walker founded, owned and ran the very successful St. Louis investment company, G. H. Walker and Co. and had amassed his own very ample fortune. When W.A. Harriman & Co. was formed, George Herbert Walker moved in 1920 from St. Louis to New York City to become president of W.A. Harriman & Co. Harriman was the Chairman of the Board.

In the 1920's, both Harriman and Walker would have been considered to be major sportsmen. Walker was a former president of the United States Golf Association. He established and provided the trophy for the Walker Cup, which is the amateur golf tournament between Great Britain and the United States. He was the amateur heavyweight champion of Missouri. He played competitive tennis. (His friend in St. Louis, Dwight Davis, had established the Davis Cup in tennis.) He was one of the original investors of Madison Square Garden, which opened in the 1920's. He was a member of the Jockey Club, and for approximately a decade - until 1934 - he was a member of the New York State Racing Commission. Eventually his son George Herbert Walker, Jr. would became one of the initial investors and a director of the New York Mets. His son-in-law Prescott Bush also served as a president of the United States Golf Association.

Harriman was more than 15 years younger than Walker and an equally accomplished sportsman. He was a talented harness driver, a world class polo player (allegedly the fourth highest rated player in the nation) a star croquet player, and a coach and an oarsman on the Yale crew team. Harriman was also a talented skier who developed the Sun Valley ski resort in Idaho.

Given their positions, competitiveness, wealth, social prominence, and mutual interests, it only made sense that they would be involved in thoroughbred racing. In 1922, Harry Payne Whitney offered to sell Harriman two horses in training plus six yearlings. Harriman took him up on the offer, and started the Log Cabin Stud with Walker.

Their major plunge into racing did not occur until January of 1925. For $250,000, they bought the 20 horse racing stock (17 yearlings and three older horses) of August Belmont Jr., who had died in December of 1924. Belmont had been a major force in racing. He built Belmont Park, bred Man o' War, won three Belmont Stakes, and owned the excellent race horse and terrific sire Fair Play. Much of the Belmont racing stock had been sired by Fair Play.

The purchase of the Belmont horses made Log Cabin an immediate force in racing. The Log Cabin partners even took on as their trainer August Belmont's trainer, Louis Feustel, who had been the trainer of Man o' War. Their race results, however, were mixed. The big horse in the Belmont purchase was not successful. The best of the Belmont horses had been Ladkin, who had defeated the great French horse Epinard in the International Special No.2 in 1924. Ladkin had been valued at $100,000. However, Ladkin had gone lame in October of 1924. He would never win a race for Log Cabin - including a last place finish in the 1925 Yonkers Handicap - and was retired in the fall of 1925. Nonethless, Log Cabin Stud had 37 winners, and in 1925 Log Cabin finished 19th in the nation in earnings for owners.

By far the best of their horses was Chance Play, who was a two-year old in 1925. Chance Play won his first two races at age two, and to a number of observers, his style was reminiscent of Man o' War, who like Chance Play had been sired by Fair Play. Yet his early successes in the spring of 1925 were not repeated later in the year. Chance Play finished third in both the Hopeful and the Futurity.

There were numerous controversies about the handling of Chance Play in his three year-old season. The horse was ill early in the year and missed the Kentucky Derby and the Preakness. He won a stakes race in preparation for the Belmont, but a decision was made not to enter the horse in the Belmont.

Apparently, there was considerable antagonism among Walker, Harriman, and Feustel over the handling of Chance Play. This culminated in Feustel announcing in July of 1926 that he had resigned as the trainer of Log Cabin Stud. Feustel had desired to handle the horse conservatively and wait until the horse was in top condition. At least one of the owners wanted to run the horse far more often. While one source claimed that Harriman wanted to run the horse more frequently, it seems far more likely that Walker - often described, even by his family, as a reckless gambler and risk taker - who probably wanted the horse to race more frequently.

It was reported that Walker and Harriman turned down $150,000 for Chance Play. Instead, the partners in August of 1926 decided to disband their partnership and split up the horses. Walker kept the Log Cabin name and its colors. Harriman received Chance Play and formed his own stable, the Arden Farm Stable.

The racing dispute did not prevent Harriman and Walker from remaining friends and business partners. According to one Bush family biographer, Jacob Weisberg, after dividing the horses, Harriman and Walker bought a 150 foot yacht together.

Harriman clearly got the better of the deal. Chance Play in 1927 was likely the top horse in the nation, winning six stakes races, including the Jockey Club Gold Cup and the Saratoga Cup. (At Saratoga, Harriman accepted the trophy from Governor Al Smith. It is likely that this was the only time that one New York State Governor awarded a racing trophy to a future Governor.) In 1927, the Arden Farm stable finished 14th in the nation, with nearly $100,000 in purse money. By contrast, Walker's Log Cabin Stud had four wins and total purse earnings of less than $9,000.

Chance Play was not nearly as successful as a five year old, but still won three more stakes races. He was retired after the 1928 season having won 16 of 39 races. Chance Play was also a very successful sire, twice leading the Unites States in sire earnings.
After Chance Play, both Walker and Harriman continued their involvement in horse racing, but neither were major players. Harriman continued to run horses into the late 1930's. Walker ran horses under his Log Cabin Stud until the 1940's.

Eventually, their business partnership also ended. After W.A. Harriman merged with Brown Brothers in 1931 to become Brown Brothers Harriman (now the oldest private commercial bank in the nation), Walker was forced out of management. His son-in-law Prescott Bush, however, remained as a partner of the firm. Again, the apparent belief was that Walker's desire/tolerance for risk was not what the firm wanted during the Depression. Walker's fortune was not threatened or harmed as he managed to liquidate his holdings before the Depression hit. He returned to running G. H. Walker & Co.

The Future Racing Side of Harriman

Even after his formal involvement with racing had ended, Harriman still had significant contacts with racing. First of all, his second wife - Marie Norton - to whom he was married for 41 years until her death in 1970, was the first wife of Cornelius Vanderbilt "C.V." Whitney. Whitney was arguably the leading owner in thoroughbred racing for many decades. C.V. was the son of Harry Payne Whitney, who had started Harriman off in thoroughbred racing. Marie Norton left Whitney to marry Harriman. Harriman was also the governor in 1955 when the Jockey Club plan, which established the New York Racing Association, to revamp New York thoroughbred racing, was passed. Harriman did not play an active role in drafting or negotiating the proposal. After the Republican leadership of the State Legislature signed on to the proposal, he apparently advised the parties that he would also agree to it. He did not, however, say anything publicly on the bill, and there were still some speculation as to whether he would sign the legislation. He signed it on the last possible day for approval and made no comments on the bill in his approval of the legislation.

The Political Legacy

The political legacy of Log Cabin Stud is hardly in doubt. George H. Walker was initially a Democrat who became a Republican. His son-in-law Prescott Bush became the United States Senator from Connecticut. Prescott won two elections for the Senate and decided not to run for re-election in 1962.

Prescott's son George Herbert Walker Bush served as Vice President and President of the United States. George Herbert Walker Bush's oldest child, George Walker Bush, served as Governor of Texas and President of the United States. George Herbert Walker Bush's second oldest son John Ellis 'Jeb" Bush is a former Governor of Florida who is currently running for President. You can hardly have been part of a more politically influential family.

On the Harriman side, Averell provided almost all the political connections. In contrast to Walker, Harriman was a Republican who became a Democrat in 1928. He was a Governor of New York State and twice tried (1952 and 1956) unsuccessfully to be the Democratic candidate for President. He was the Ambassador to both the Soviet Union and to the United Kingdom. He was Secretary of Commerce, and in the 1960's served in various high positions in the U.S. Department of State. After his death, his third wife, Pamela, became the Ambassador to France in the Clinton administration.

Log Cabin may not have been the most successful racing stable, but it's just not possible to find a racing stable that ever left a greater political legacy.

July 21, 2015

Recent Developments In Russian Sports Legislation

By Sergey Yurlov
Sports Law Researcher, sport judge and member of the Russian National Union of Sport Lawyers, member of the International Association of Sports Law (IASL)

The Russian government introduces amendments to sports legislation on a rolling basis. This blog will cover the following developments.

On June 29th, Draft Law No.763029-6: "On the amendments to Article No.36 of Federal Law on Physical Culture and Sport in the Russian Federation" to limit the participation of the Russian athletes in the Olympic Games was withdrawn from State Duma (Draft Law, Law on Sport) (See an overview of the Draft Law http://nysbar.com/blogs/EASL/2015/06/russian_moves_to_limit_partici.html). No explanations were given as to why, however, the Draft Law had been criticized by athletes, sports governing bodies and other sports subjects.

On June 29th, Russian President Vladimir Putin signed Federal Law No.202 - FZ "On the amendments to Federal Law on Physical Culture and Sport in the Russian Federation" and to Article 13.2 of Federal Law on Legal Status of Foreigners in the Russian Federation". (http://www.garant.ru/hotlaw/federal/633998/) (Law). The is aimed at eliminating foreign athletes, coaches and other specialists from participation in the Russian Physical Culture and Sport. According to the Law, the Russian Ministry of Sport and respective sports bodies can impose restrictions on the participation of foreign athletes and coaches in command sports (such as football and basketball). For instance, the following limitations could be imposed:

• The number of athletes who can take part in a sporting competition;
• Athletes' ages;
• The period of permanent residence within the territory of the Russian Federation; and
• The period of sports training in the Russian Federation.

On June 25th, President Putin, based on the resommendations from a Meeting of Council for the Development of Physical Culture and Sport, gave several assignments to the Russian Government. (http://www.kremlin.ru/acts/assignments/orders/49777). Among other things, the President instructed:

• To define the legal status of sports leagues and growth directions of professional sport;
• To amend the Law on Sport by including certain provisions on the sports disputes resolution procedure;
• To improve financial issues; and
• To create a free federal sport channel.

It appears that the most important issue concerns sports disputes resolution. It is expected that a draft law relating to this issue would be introduced to State Duma in October or November. It is suggested that the draft law would provide for the creation of a new national sports arbitration court, which should resolve all kind of sports disputes, including labor sports disputes (players v clubs). The government and Russian sports lawyers notice that it would be better to adjudicate sports related cases in a Russian (national) sports arbitration court, rather than in the Court of Arbitration for Sports.

Week In Review

By Chris Helsel

Federal Judge Approves Settlement in National Collegiate Athletic Association Video Game Suit

Judge Claudia Wilken of the Northern District of California approved a $60 million settlement this week in the class action lawsuit brought by former college athletes against the National Collegiate Athletic Association (NCAA) and video game maker Electronic Arts (EA). The collegiate football and basketball players, led by former Arizona State and Nebraska quarterback Sam Keller and West Virginia running back Shawne Alston, alleged that their names and likenesses had been illegally used in video games for many years without compensation.

Until they were discontinued in 2013, the college sports video games - which were licensed by the NCAA - featured avatars of "fictional" players, whose physical appearance, jersey numbers, playing styles and even alleged hometowns bore a striking resemblance to the schools' contemporary star players. Of course, as amateur athletes subject to strict NCAA rules prohibiting monetary compensation, none of the student-athletes were compensated at the time for their appearances in the highly profitable video games.

Initially, EA and the NCAA argued that the on-screen performers did not depict the likenesses of real players, and that the games never used the actual names of current athletes. That claim took a major hit when it was revealed that the 2009 edition of the "NCAA Football" game featured a series of plays in a formation called "Shotgun Twin QB Tebow." At the time of the game's release, the reigning national champion Florida Gators featured a star quarterback who was then entering his senior season. His name? Tim Tebow.

EA settled with the athletes in September of 2013, but the NCAA vowed to fight on. At the time, NCAA chief legal officer Donald Remy proclaimed, "We're prepared to take this all the way to the Supreme Court if we have to. We are not prepared to compromise on the case."

That stance softened considerably in the months that followed, as the NCAA announced in June 2014 that it would pay $20 million to former football and basketball players. That number grew to $60 million as it expanded to include other similar suits, and Judge Wilken rubber-stamped the final agreement this week. The settlement covers collegiate basketball and football players whose teams appeared in NCAA video games from 2003 through 2014, and allows current players to collect compensation without affecting their amateur eligibilities.

Each student-athlete's payout has a maximum value of $7,026, and those eligible have until July 31st to claim their shares.

Plaintiffs' attorney Steve Berman celebrated the ruling this week. "This landmark decision marks the first time student-athletes will be paid for the likeness or image and stands as a huge victory in the ongoing fight for student-athletes' rights," he said.


Senate Subcommittee Examines U.S. Soccer in Wake of FIFA Scandal

A U.S. Senate subcommittee convened a hearing last week to examine what the United States Soccer Federation knew - or should have known - about the widespread corruption within the sport's world governing body, FIFA.

In addition to inquiring into U.S. Soccer officials' knowledge of the corruption, the subcommittee also repeatedly asked about why the Federation's president, Sunil Gulati, had declined to participate. Mr. Gulati is a member of the influential FIFA Executive Committee.

Before the Senate, in lieu of Mr. Gulati sat U.S. Soccer's Chief Executive and Secretary General, Daniel Flynn. Mr. Flynn, who was not under oath, sought to distance the Federation from FIFA and paint the U.S. contingent as a dissenting member that had lobbied for greater transparency within the global governing body. As evidence that the Federation did not support the current regime, he pointed out that the U.S. voted against embattled (and soon-to-be-ousted) FIFA president Sepp Blatter in the most recent election held earlier this year.

Mr. Flynn repeatedly told the subcommittee that he, rather than Mr. Gulati, had been sent to testify because he had greater familiarity with U.S. Soccer's daily operations than did the Federation's top official. Critics were quick to point out, however, that in addition to Mr. Gulati's position on the FIFA Executive Committee, he also has close ties to several of the officials indicted in May.

It should be noted, however, that Mr. Gulati was one of the loudest voices calling for the public release of FIFA Ethics Committee Chairman and former U.S. Attorney Michael's Garcia's report into allegations of corruption surrounding Russia and Qatar's bids for the 2018 and 2022 World Cups. Unsurprisingly, FIFA declined to release the Garcia report, but rather issued a highly-disputed "summary" - so disputed, in fact, that Mr. Garcia promptly resigned his post in protest.

While Mr. Flynn insisted that he "knew nothing about any corruption," he did concede that he had experienced "a level of discomfort" with FIFA's method of transacting business, despite having no "cold facts" on which to base this discomfort. The assembled senators were not satisfied with this position, with Sen. Richard Blumenthal (D-Conn.) declaring, "There had to be either willful ignorance or blatant incompetence." Sen. Blumenthal also called on U.S. Soccer to conduct an internal inquiry in addition to complying with the ongoing Justice Department, FBI and IRS investigations.

The Connecticut Senator also derided FIFA sponsors such as Coca-Cola and Visa, calling the corporations "enablers" for continuing to support the organization in the face of such seemingly obvious corruption.

Regarding FIFA as a whole, Sen. Blumenthal concluded that soccer's global governing body was akin to a "Mafia-style crime syndicate." He added, "My only hesitation in using that term is that it is almost an insult to the Mafia, because the Mafia would never have been so blatant."


Street Artist Who Created Barack Obama's "Hope" Poster Surrenders to Authorities

Street artist Shepard Fairey, who created President Obama's iconic "Hope" poster, surrendered to Detroit authorities last week on charges that he defaced several properties in the city. Mr. Fairey is charged with two counts of malicious destruction of property, each of which is punishable by up to five years imprisonment and a fine of up to $10,000.

In addition to the 2008 "Hope" image, Mr. Fairey also created the "Obey" street-art sticker campaign in 1989. It was that image, which features legendary professional wrestler Andre the Giant, that he reportedly plastered on nine Detroit buildings - two of which are city-owned - earlier this year.

After Detroit police issued a felony warrant for his arrest, Mr. Fairey was apparently apprehended in a Los Angeles airport last week. Authorities declined to extradite him, and he returned to Detroit on his own accord, where he turned himself in.


Avant Garde Filmmaker Sent to Prison For Bank Robbery "Performance"

Performance artist Joe Gibbons was sentenced to one year in prison after pleading guilty to third degree felony robbery in Manhattan Supreme Court last week. In January, Mr. Gibbons strolled into a Chinatown bank and handed the teller a note demanding cash and "NO DYE PACKS / NO GPS." The teller complied with the cash demand, but added an exploding dye pack to that burst as he made his getaway. Mr. Gibbons made off with a total of $1,002. Soon after the arrest, the culprit was arrested in a nearby hotel.

The 61-year-old Mr. Gibbons, who previously taught art at the Massachusetts Institute of Technology and whose work is featured at the Museum of Modern Art, claimed that the robbery was all part of an art performance. In fact, he filmed the entire episode with a pocket-size camera.

While police and the Manhattan court were clearly not persuaded by Mr. Gibbons' "art performance" claims, many in the art world have come to his defense. A Brooklyn electronic art venue staged a benefit for the artist in February, and an IndieGogo kickstarter campaign raised nearly $9,000 to support his cause. According to New York University professor of performance studies Ann Pellegrini, the January bank robbery was a classic example of "performance becoming performative," an act that questions "the relationship between actor, audience and enactment." According to Ms. Pellegrini, during the robbery the bank teller and police performed their professional roles "without knowing that they were at the same time performing in Gibbons's art performance of a bank robbery."

Authorities also suspect that the avant garde artist was involved in a robbery at a Providence, R.I. bank last year. During that incident, a middle-aged man demanded $3,000 in cash as a donation for his church. While his attorney claims he has not been charged in that case, Mr. Gibbons did admit to his involvement during a jailhouse interview with the New York Post earlier this year.


July 27, 2015

Week In Review

By Chris Helsel

European Union Opens Antitrust Case Against U.S. Movie Studios and U.K.'s Sky for "Geo-Blocking" and Monopolistic Practices

The European Union (EU) launched an antitrust case this week against six major U.S. movie studios and British satellite provider Sky UK, contending that some of the companies' contractual provisions violate EU competition law.

Specifically, officials charge that Sky engages in "geo-blocking," or improperly restricting EU consumers outside Britain from accessing its services online or via satellite. Additionally, the regulators contend that Sky's "absolute territorial exclusively" contractual clauses and its practice of requiring movie studios to prevent their services from being made available in the UK and Ireland to companies other than Sky are unduly restrictive and therefore violate European free market ideals.

The American studios named are NBCUniversal, Paramount Pictures, Sony, Twentieth Century Fox, Disney and Warner Bros.

According to the EU Executive Commission, which sent a "statement of objections" to the companies outlining the charges, the exclusivity clauses in their contracts run counter to the European cornerstone of removing barriers to trade within the EU.

In addition to the American studios and Sky UK, the Commission confirmed that it is also investigating similar cases involving Canal Plus of France, Sky Italia of Italy, Germany's Sky Deutschland and DTS of Spain. Commission spokesman Ricardo Cardoso said that: "We continue to examine cross-border access to pay-TV services in these member states."

If the Commission ultimately determines that the companies' practices are in violation of EU law, they could face fines as high as 10% of gross revenue.


Fans' Class Action Suit Calls on Major League Baseball to Install Additional Protective Netting at Ballparks

Earlier this month, Oakland Athletics season ticket holder Gail Payne filed a lawsuit in California federal court against Major League Baseball (MLB, league) and its commissioner, Rob Manfred, seeking to compel the league to expand the area in stadiums shielded by protective netting. The suit, which seeks class certification, comes on the heels of an ugly incident at Fenway Park in Boston last month in which a spectator was struck with a flying broken bat and seriously injured.

According to Bloomberg, about 1,750 spectators are injured in MLB ballparks each year by balls hit into the stands. For over a century, many of these injured fans have sought compensation through the legal system - with virtually no success.

"The Baseball Rule," which stems from a landmark 1913 Missouri appellate court decision, holds that those who choose to attend a MLB game knowingly assume the risk of injury caused by balls or other objects flying into the stands. Provided that the stadium operator provides a reasonable number of seats behind protective netting (typically those directly behind home plate, which is the most dangerous area), it is not liable for the injuries suffered by fans who choose to purchase tickets elsewhere in the ballpark. This immunity extends even to the events prior to a game: In 2013, a Texas court denied recovery to a fan injured by a batting practice home run in Houston.

Unlike the vast majority of (if not all) the previous lawsuits, the current action is not on behalf of an injured spectator. Ms. Payne, whose season tickets are not behind protective netting, has never been injured by a projectile at the stadium, but claims that she is "constantly ducking and weaving to avoid getting hit by foul balls or shattered bats."

Her suit, brought on behalf of every MLB season-ticket holder with an unnetted seat in foul territory, charges that MLB is "negligent in failing to provide a reasonably safe facility for spectators sitting in the exposed areas along the first and third base lines, between the foul poles." In addition to constituting negligence, she says, MLB's failure to adequately protect fans also violates certain California consumer protection laws.

Ms. Payne contends that MLB and Mr. Manfred are fully aware of the risks associated with failing to provide more netting and have "turned a blind eye" to the problem. She also posits that only the most fortunate fans can afford to purchase protected seats, as those behind the netting tend to be closest to home plate and therefore the most expensive.

To date, MLB clubs have resisted calls to increase netting, arguing that most fans prefer a clear view of the game and that installing additional netting would detract from the ballpark experience.

While Ms. Payne's suit may raise some valid points, from a legal perspective, her suit appears doomed to fail. First, there is the question of standing. The Federal Rules of Civil Procedure require an aspiring litigant to have suffered a "concrete and particularized injury." As such, the uninjured Ms. Payne will have a very difficult time convincing the court to enjoin MLB to act in prevention of a potential future harm.

Second, Ms. Payne's argument that only the most well-heeled baseball fans can afford to sit in "safe" areas is shaky at best. In Oakland, for example, where Ms. Payne attends games regularly, there are many "protected area" tickets available at a price equal to or below the face value of the plaintiff's seats. Perhaps more importantly, the vast majority of seats at any MLB stadium are sufficiently high above and far away from the action that no real risk of injury from flying bats or balls exists. MLB can therefore present a strong argument that nothing compels fans to purchase tickets in the more dangerous areas of the stands.

The third and final major impediment to Ms. Payne's chances of success is precedent. As mentioned earlier, courts have repeatedly denied recovery to injured baseball fans under a theory of assumption of the risk. It seems highly unlikely that the court will change course in the current case, especially considering that Ms. Payne herself was never injured.

Despite these legal obstacles, Ms. Payne is not alone in her belief that MLB clubs should do more to protect their paying customers. In Japan, for instance, professional baseball stadiums are required to provide protective netting guarding the entirety of foul territory. In addition, MLB players have indicated that they would prefer not to risk being responsible for a fan getting hurt. The MLB players' union, Major League Baseball Players Association (MLBPA), proposed twice during collective bargaining sessions in 2007 and 2012 to extend the netting in every stadium further down the foul lines. Both times, club owners shot them down.

Prior to the commencement of the current suit, in the days that followed the aforementioned Boston incident, the Red Sox and Mr. Manfred publicly discussed ways that baseball could more effectively keep its fans safe. The commissioner spoke of the possibility of expanded netting, as well as instituting regulations on how bats are made, and mandating that bat handles be wrapped in order to prevent them breaking so easily.

For the reasons discussed above, it does not seem likely that Ms. Payne will succeed in her current suit. However, the issue of fan safety is a real one, and it is encouraging that league officials have acknowledged it and seem intent on exploring ways to strike a balance between optimal ballpark experience and spectator safety.


Authors and Booksellers Accuse Amazon of Anticompetitive Practices

Just weeks after it was reported that Amazon faced antitrust scrutiny from EU regulators over its e-book business, the online retailer now finds itself facing similar accusations domestically. Last week, a collection of groups representing thousands of authors, agents and independent booksellers asked the U.S. Department of Justice to launch an inquiry into the company for antitrust violations.

According to the Authors Guild, the American Booksellers Association, the Association of Authors' Representatives and Authors United, Amazon uses its market dominance (2/3 of e-books sales and an unprecedented 1/3 of new print books) to artificially suppress prices to the point where smaller booksellers simply cannot compete. This, say its detractors, also harms both authors and the reading public as well.

The group told the Justice Department that "Amazon has used its dominance in ways that we believe harm the interests of America's readers, impoverish the book industry as a whole, damage the careers of (and generate fear among) many authors, and impede the free flow of ideas in our society."

The charges stem in part from a bitter dispute last year between the online retailer and the publisher Hachette, during which Amazon intentionally made it more difficult for customers to purchase the publisher's books. In addition, detractors alleged that Amazon intentionally engaged in content control last year by "selling some books but not others based on the author's prominence or the book's political leanings," sold some books below cost as loss leaders to drive competitors out of business, and pressured publishers for better deals by curtailing the sale of "millions of books by thousands of authors."

Amazon declined to comment on the current allegations, but in the past has defended its low-cost model by asserting that the best way to build "a healthy reading culture" was to keep prices as low as possible.

While those allied against Amazon acknowledge that market disruption is a healthy and inevitable byproduct of the industry, its leaders contend that in this case, the company has gone too far. According to Hachette author Douglas Preston, "There isn't a single example in American history where the concentration of power in one company has in the long run benefitted consumers."

The irony behind this whole saga is that just five years ago, it was Amazon who secretly complained to regulators about the allegedly anticompetitive business practices of the nation's largest book publishers. At that time, Apple and five major publishers attempted to wrest some control of the e-book market - of which Amazon controlled 90% at the time - from the online giant. Apple and the publishers argued that their apparent collusion was justified because the entrance of another major participant would increase market competition and therefore benefit consumers. Federal prosecutors disagreed, holding that the groups' efforts constituted illegal collusion to impose higher prices. The publishers eventually settled, and Apple lost at trial and then again on appeal last month. In his concurring opinion, Judge Raymond Lohier of the Second Circuit opined that while Apple's and the publishers' argument had some merit, "more corporate bullying is not an appropriate antidote to corporate bullying."

This time around, it appears that Amazon may have transformed itself from the bullied into the bully. It remains to be seen whether federal authorities will agree and take action against the seemingly insurmountable market leader.


Competitive Video Gaming To Introduce Performance-Enhancing Drug Testing

The Electronic Sports League (ESL), a leading competitive video gaming league, announced this week that it will begin testing competitors for performance enhancing drugs next month.

This announcement came on the heels of an interview with e-gamer Kory Friesen, during which the "Counter-Strike" champion admitted that he and many other competitors had used Adderall without a prescription during an ESL tournament in order to improve focus and gain a competitive advantage. "We were all on Adderall," Mr. Friesen said of his team. "Tons of people do it."

Adderall is a widely prescribed drug intended to combat attention deficit hyperactivity disorder, but often abused by those without the disease in order to improve focus. It is highly popular among college and graduate school students, especially around exam season.

E-sports, as professional video gaming has come to be known, is rapidly gaining in popularity and quickly evolving into a mainstream form of competitive entertainment. According to Newzoo, a gaming research firm, global revenue from e-sports is expected to surpass $250 million this year.

With that increased popularity and exposure comes increased regulation, as these new testing protocols demonstrate. ESL has long had a general prohibition against doping, but until now had failed to specify which drugs were prohibited or test competitors. The league now says that it will partner with the National Anti-Doping Agency of Germany to develop a new testing policy. In addition, ESL says it will meet with the World Anti-Doping Agency (WADA) to discuss how best to enforce the new policy. WADA is recognized as the global leader in the fight against doping and oversees the testing of Olympic athletes and professional cylists.

"We want to create a level playing field for all competitors and maintain the integrity of the sport," said James Lampkin, ESL's vice president of professional gaming.

Unlike traditional sports, however, e-gaming faces a unique challenge in policing its competitors. While sanctioned tournaments are generally held in a central location, many preliminary and qualifying competitions are held online, with players scattered across the globe. Testing each individual competitor at his or her home is obviously impossible - a fact not lost on ESL officials.

As a result, Mr. Lampkin said that in order to ensure compliance with the new drug testing policy, ESL would explore the possibility of converting from remote access to predominantly live, in-person games. While this would certainly allow for increased testing and a more level playing field, the obvious danger is that tournaments would suffer from decreased participation and the sport's overall reach - and therefore profitability - would decline.

"A lot of this is going to affect the nature of the entire industry," said Mr. Lampkin.

For many in the industry, however, these hurdles represent a necessary step on the path to establishing e-gaming as a legitimate sport. "The more e-sports grows, the more it is going to be sanctioned by a governing body, and it was only a matter of time before this was part of it," said Hector Rodriguez, owner of OpTic Gaming, a professional team. "We're becoming an actual sport, so that's why I welcome it. It's an indication of growth."


July 30, 2015

Claim to Comic Book Art Ownership Tossed

By Joel L. Hecker

On July 24th, United States District Judge Laura Taylor Swain dismissed an action brought in the United States District Court of the Southern District of New York concerning ownership of comic book art on the grounds that the action was commenced after the applicable three-year statute of limitations had run. The case is Wallace Wood Properties, LLC v. Tatjana Wood, docket No. 14-CV-8597-LTS: Decision.pdf

Disclosure: I am counsel to the prevailing defendant, Tatjana Wood, in this action.

Legal Standard on a Motion to Dismiss

On the motion to dismiss, the court is required to accept all allegations in the complaint as true and to draw all reasonable inferences in the plaintiff's favor. Accordingly, the defendant's motion to dismiss must assume that the allegations in the complaint were true, although, if the action continued, the defendant certainly would have contested many of the allegations. Accordingly, in reviewing the actual opinion, the reader should not assume the facts are accurate or truthful, except insofar as they relate to the issue pertaining to the expiration of the statute of limitations.

Background Facts

Wallace Wood ("Wally") was a famous comic book writer and illustrator whose work has been featured in well-known comic books published by Marvel Comics ("Marvel") and EC Comics. The defendant was Wally's first wife. Although the couple divorced in the 1960s, they remained friendly until his death by suicide in 1981. In fact, Wally bequeathed all "bank accounts, whether savings, checking, Certificates of Deposit, or otherwise" to her. Unfortunately for the defendant, there were no assets in the estate to fulfill this bequest.

Wally's will left the rest, residue, and remainder of his estate to a close friend, John Robinson, who also was named executor.

The plaintiff ("WWP") is a not-for-profit limited liability company established in 2011 by J. David Spurlock ("Spurlock"), allegedly to promote Wally's legacy and to manage the latter's tangible properties and intellectual property rights. Spurlock is the sole member and manager of WWP and, as such, is the driving force behind the litigation.

Spurlock, who had written a biography of Wally, claims he first saw a copy of the will in 2009. On February 23, 2012, Robinson assigned to WWP his interest in Wally's property, which was left to Robinson under the terms of the will. The complaint alleges that WWP became the owner of all original artwork created by Wally during his lifetime, which was not subject to a written agreement explicitly providing otherwise. [This allegation was accepted as true for purposes of the motion, but otherwise was contested in that there was a very strong argument that Wally's work consisted of works made for hire for Marvel and that Marvel owned the original artwork and copyrights thereto.]

The 2005 Marvel Transfer to the Defendant

The complaint alleges that in 2005, Marvel transferred 150 to 200 pieces of Wally's original comic book artwork ("the Marvel Artwork") to the defendant. The complaint also alleges that this transaction was not authorized by Wally, his estate, or Robinson, and the defendant knew that Marvel was not the actual owner of the artwork. The complaint further alleges that the defendant admits she did not receive the original artwork until 2005, and subsequently concealed the fact that she possessed it from Robinson and, ultimately, WWP.

The complaint sought return of the original artwork, as well as every other piece of art created by Wally that is or was ever in the possession, custody, or control of the defendant, including, but not limited to, the Marvel Artwork. This contention clearly had no merit in its breadth, since WWP knew that Wally had in fact given some of his artwork during his lifetime to the defendant, but, as stated above, the allegations are assumed to be true for the purposes of this motion.

WWP's Ownership Claims Regarding the Original Artwork

In 2006, well before Spurlock established WWP, he had visited the defendant's home and personally saw Wally's comic book artwork in the defendant's possession. The complaint further alleges that in 2013, Spurlock, "now in the WWP management role," realized for the first time that the artwork he had seen in the defendant's home seven years prior, was WWP's rightful property. As a result, on March 20, 2013, Spurlock, on behalf of WWP, made his first demand for the return of the artwork he had seen in 2006 in the defendant's home.

The defendant obviously refused to comply with such demands, and on October 28, 2014, WWP commenced this action for conversion and replevin, seeking money damages and the return of the Marvel Artwork. The defendant threatened to move to dismiss the complaint as being a frivolous action, which resulted in WWP filing a first and then a second amended complaint. The defendant brought her motion to dismiss the second amended complaint, which is the subject of this blog, on the basis that it was barred by the three-year statute of limitations, the doctrine of laches, and that WWP failed to sufficiently allege specific, identifiable property and ownership of the property in question.

Legal Analysis

The court accepted the defendant's contention that the three-year statute of limitations expired in 2009 because the limitations period accrued in either 2005 or 2006, when WWP alleges that the defendant wrongfully took possession of the artwork. WWP had also argued that it was entitled to an equitable tolling of the statute of limitations in light of the defendant's alleged fraudulent concealment of the Marvel artwork. The court rejected this contention as well.

The court first addressed the issue, for statute of limitations purposes, as to whether the current possessor was a good-faith purchaser or bad-faith possessor. An action against a good-faith purchaser of stolen property accrues once the true owner makes a demand and is refused. This is the argument made by WWP and rejected by the court. On the other hand, where the property is held in bad faith or unlawfully, the limitations period begins to run immediately from time of possession, without a demand and refusal period. Furthermore, such a demand and refusal is not required when the current possessor deals with contested property openly as his or her own.

In this case, WWP specifically and affirmatively alleged in the complaint that the defendant actually possessed the Marvel Artwork in bad faith. The court found that, based upon WWP's own allegations, no demand and refusal period was required and that the limitations period accrued at the time of the alleged conversion in 2005, when Marvel delivered the Marvel Artwork to the defendant. In a footnote, the court explained that, even if the limitations period did not accrue until 2010 when the defendant sold two of the original illustrations at a public auction, which acts constituted the exercise of ownership rights, WWP's claims nevertheless would have become time-barred in 2013.

To avoid dismissal, WWP contended that the defendant had fraudulently concealed these transactions and therefore WWP was entitled to the benefit of equitable tolling. However, to prevail on these grounds, WWP needed to establish that the defendant's alleged fraudulent conduct actually concealed the cause of action during the period WWP sought to have tolled. Moreover, WWP needed to also establish that it exercised due diligence in pursuing the discovery of the claim.

The court found that WWP made only general allegations, which were not supported with any facts, and the court correctly determined that these conclusory allegations of fraudulent concealment and diligence were insufficient to raise a factual issue as to the potential availability of equitable tolling. In effect, the court determined that WWP's complaint contained no pleadings to indicate that the defendant or Marvel caused it, or Wally, or Robinson, to refrain from taking any action to protect the alleged rights of Wally's estate. This was so, despite the fact that Wally's work had been published extensively by Marvel and that Robinson made no effort whatsoever in the decades after Wally's death to inquire after any possible ownership interest. Furthermore, there was no allegation of any kind in the complaint that Marvel or the defendant made any affirmative misrepresentation upon which WWP or its predecessors relied upon in determining whether or when to sue. In fact, the reverse was the case, as the complaint alleges that the defendant actually displayed the Marvel artwork to Spurlock in 2006, and had been selling some of it at auction.

In light of the court's determination that the action must be dismissed as untimely, the court did not reach any of the work made for hire or other underlying issues involved in the case.


The complaint, on its face, actually alleged sufficient facts to affirmatively prove that the three-year statute of limitations had run, and that the complaint therefore required dismissal. As a result, the court correctly dismissed the second amended complaint as time-barred.

About July 2015

This page contains all entries posted to The Entertainment, Arts and Sports Law Blog in July 2015. They are listed from oldest to newest.

June 2015 is the previous archive.

August 2015 is the next archive.

Many more can be found on the main index page or by looking through the archives.