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April 15, 2009

Revenge Knock Out?

Can Joey Gamache Make the New York State Athletic Commission Pay for the Loss That Ended His Boxing Career?

By Paul Stuart Haberman, Esq.

On February 26, 2000, thousands in attendance at Madison Square Garden and millions of fans watching across the world on pay-per-view bore witness to the very best and very worst features of professional boxing as they watched junior welterweight sensation Arturo Gatti knock out fan favorite and one-time World Boxing Association super featherweight champion Joey Gamache in dramatic fashion in round two of their fight on the televised undercard of Oscar De La Hoya's bout with Derrell Coley. On the one hand, fans witnessed a knockout for the ages, a knockout so well put together, so crushing, and so final that it would be on the lips of boxing fans for years to come when the topic of their favorite knockouts came up in conversation. On the other hand, however, the fans also saw the brutal ending to the career of a proud warrior in Gamache, a veteran of many high profile fights who had given his all in the ring during in a sixteen-year professional career. That is because in suffering brain damage from the knockout, Gamache was rendered medically ineligible to ever box again.

The outcome was not entirely unexpected to boxing cognoscenti, as Gatti had already scored plenty of memorable knockouts in his career and Gamache was a few years and a few weight classes past his prime. What was surprising, however, was that Gatti looked about two to three weight classes heavier than Gamache when he entered the ring on February 26, 2000. Indeed, since the weigh-in the day before, Gatti had reportedly put on close to 20 pounds, effectively making him a middleweight (160 lbs) in a bout that was scheduled to take place one pound over the junior welterweight (140 lbs) limit. While putting on several pounds after a weigh-in is standard in boxing, it was the circumstances that surrounded Gatti's weigh-in that ultimately shrouded the weigh-in the controversy. Questions arose as to whether Gatti had properly weighed in at the limit to begin with, and more specifically whether he stood on the scale for long enough for it to balance out and provide an accurate reading of his weight. Further questions arose as to whether Gatti should have been allowed to fight the night of February 26, 2000, after reports on his weight gain started circulating around Madison Square Garden.

By virtue of a Notice of Intention to File a Claim against the New York State Athletic Commission (hereinafter the "Commission"), date stamped March 24, 2000, Gamache asserted that Gatti did not make weight and that the Commission was responsible for making certain that he did. In the next few months, the New York Court of Claims will decide whether Gatti's weigh-in was, in fact, compromised, and whether the Commission committed acts of negligence in allowing it to be so compromised and in allowing the fight to take place. After nearly nine years of discovery and motion practice, Gamache will soon get to see whether he can score a revenge knock out for the premature termination of his boxing career.

Elements of Negligence Under New York Common Law

The basic elements that must be established for any claim of negligence under New York State common law are: (1) duty, (2) breach, (3) causation, and (4) damages. To prove his case against the Commission, therefore, Gamache will have to establish that the Commission had a duty to make certain that the weigh-in was properly conducted in accordance with its standard practices and procedures and/or to disallow the fight if Gatti was more than 11 lbs. over the junior welterweight limit by fight night, that it had breached that duty by allowing Gatti to weigh-in in the manner in which he did or by not canceling the fight, that the fact that Gatti was permitted to weigh-in over the junior welterweight limit and/or that he was permitted to fight 11 lbs. over the junior welterweight limit on fight night was the cause of the injuries alleged, and whether Gamache suffered damages as a result of the breach of said duty. An element-by-element analysis follows below.

The Duty That the Commission Owes to All Boxers Under Its Jurisdiction

19 NYCRR § 206.5 provides, in relevant part, that a representative of the Commission "shall have complete authority, subject only to the direction of the commission or a higher-ranking representative of the commission acting on behalf of the commission, over all phases of the weigh-in[.]" At the same time, 19 NYCRR § 210.6 states that "all participants shall be weighed in on scales approved by the commission and in the presence of their opponents, the matchmaker and representatives of the commission, unless otherwise directed or authorized by the commission." Reading these two provisions together, it is indisputable that the Commission is the ultimate authority when it comes to a weigh-in, but at the same time partially delegates the witnessing of the weigh-in itself to other parties, the opponent and the matchmaker. Despite allowing other parties to witness the weigh-in, however, the New York Code of Rules and Regulations appears to create a duty to make certain that the weigh-in was properly conducted in accordance with the Commission's standard practices and procedures.

The duty owed by the Commission is heightened by a third provision, 19 NYCRR § 213.14, which provides that "[n]o boxer shall participate in any contest or exhibition following weight loss of one percent or more of body weight within 24 hours prior to such contest or exhibition, unless otherwise authorized by the commission." This provision would seem to indicate that the Commission has a proactive duty to investigate whether a boxer had to lose weight by extreme means prior to the weigh-in to get to the contractually agreed upon weight for a given fight. The duty is further heightened by 19 NYCRR § 214.8, which indicates that a bout should not be permitted to take place between two junior welterweights if there is more than an 11 lb. weight differential between them.


In its written decision and order on the summary judgment motion filed by the Commission in this matter (hereinafter the "Decision & Order"), the Court of Claims found that the statutory and regulatory scheme that governs professional boxing in New York State "does indeed create...a duty of care which runs from the Athletic Commission directly to the licensed boxers under its jurisdiction and control." The Court of Claims continued on to state that the Commission "must determine in the first instance whether two fighters are suitable opponents and may reject the match if it is not in the best interests of the health of either." It goes on to note that from the time that a fight is made in New York State, a boxer is required to be in ongoing contact with the Commission, and that on fight night the laws mandate that the Commission and "its agents are in direct control of everything that happens." As an initial matter, therefore, Gamache must establish, at trial, the duty that the Commission had as to the particular circumstances of the Gatti fight in order to succeed on his negligence claim.

The Purported Breach of Duty by the Commission

Once Gamache establishes that the Commission had a duty to make sure the weigh-in was conducted properly and/or to cancel the bout if it appeared that Gatti was more than 11 lbs. heavier than Gamache on fight night, he must then establish that the Commission breached that duty. The Decision & Order summarizes several purported discussions, interactions, and observations both at and after the weigh-in about Gatti's weight and whether a real protest was ever lodged after he stepped off the scale. It further refers to Gatti's noted history of having difficulty making weight and putting on sizeable amounts of weight between his fights. Based upon this evidence, it will be for the trier of fact to determine whether the Commission breached its duty, once so established.

The Causation Between the Commission's Actions and Gamache's Injuries

On causation, the Decision & Order infers that Gamache may have some problems establishing traditional negligence, but may be able to establish "relative fault." This is because by the time that the bout took place, the report that Gatti weighed-in around 160 lbs. on HBO's scale and the publicized controversy over Gatti's "rehydration" after the official weigh-in had "ripened sufficiently" as to impute the awareness of same to Gamache. Gamache, however, went forward with the fight. He later explained in his deposition that upon seeing Gatti in the ring that night, he said to himself "oh my God he's huge and we're fighters. I mean, we're in the trenches...so me I never quite a fight. I've never backed down from a fight or been intimidated whatever may be the case." In citing this, the Court of Claims concluded that it needed "no more eloquent a statement of why the question of reliance does not preclude claimants' recovery in negligence but goes only to determining relative fault."

It should be noted here that, rather than walking through the traditional elements of negligence, the Court of Claims first dismissed a cause of action for fraud against the Commission and then employed the fraud element of "reliance" to evaluate the negligence claims. Thus, although the causation element of a negligence claim is not neatly discussed within the decision, the inference of the Decision & Order in finding that this may be a matter of relative fault is that the decision by Gamache himself to participate in the Gatti fight, knowing what he likely knew about Gatti's weight issues, was the partial cause of the injuries that he ultimately sustained therein. To put it another way, the Court questioned whether Gamache reasonably relied on the Commission alone, rather than his own instincts and those of his handlers, in allowing the fight to go forward.

The Damages Sustained by Gamache

There is no dispute that Gamache suffered permanent injuries in his fight with Gatti and sustained financial loss as a result. Damages can be established even if the rest of a negligence claim ultimately cannot. If negligence can be shown under the idea of relative fault, therefore, the question is how much at fault Gamache was for what happened to him against Gatti, and once established, how much of the financial loss that he incurred as a result of the fight is owed to him by the Commission as damages.

In sum, the Decision & Order of the Court of Claims opened the door for Gamache to take the Commission to trial on several issues of fact surrounding the weigh-in prior to his ill-fated February 26, 2000 bout with Arturo Gatti. While Gamache's case appears strong as to the Commission's duty and breach of duty as to him, it might prove tricky for Gamache's counsel to fully overcome the argument that Gamache and his corner, knowing what they knew about the controversy surrounding Gatti's weigh-in, were partially at fault for what happened by allowing the fight to go on. If Gamache is found too much at fault, he may see this matter reach a dissatisfying conclusion. If not, perhaps the scales of justice will be more kind to Gamache than were those of the Commission, and will allow him to score the knockout this time around.

Paul Stuart Haberman, Esq. is an attorney at the New York law firm of Heidell, Pittoni, Murphy & Bach, LLP. He is also a New York State licensed boxing manager and the Chairman of the Sports Law Committee of the New York County Lawyers Association. ©

Would an Exception Knock Out the Rule?

Whether it Would be Smart for New York State to Lift Its Medical Suspension of Lightweight Champion & Knockout Artist Edwin Valero

By Paul Stuart Haberman, Esq.

In 2004, undefeated Venezuelan junior lightweight prospect Edwin (El Inca) Valero applied for a license to box in New York State after scoring 12 first round knockouts in his first 12 professional fights. On the strength of his knockout streak, Valero was then becoming one of the hottest prospects in boxing. Valero, however, had a skeleton in his closet: a head injury sustained in a 2001 motorcycle accident. Evidence of Valero's head injury went undiscovered, or was otherwise ignored, before three bouts in California and nine in his native Venezuela, but was revealed during a MRI that he underwent for his New York State license. Valero was subsequently denied a license to box in New York and, until April 4, 2009, had not fought again in the United States. Undeterred, Valero continued his boxing career in both Japan and South America, becoming an international sensation in the process.

At the end of March, Valero, now 25-0 (25 KOs) and a junior lightweight and lightweight world champion, was granted a license to box in Texas in advance of his April 4, 2009 bout with Antonio Pitalua for the vacant World Boxing Council lightweight title. That Texas granted Valero a license was not entirely surprising to boxing cognoscenti as Texas has a history of thumbing its nose at the suspensions of other states' commissions. Indeed, Texas was the same state that granted former undisputed heavyweight and cruiserweight champion Evander Holyfield a license to box after New York State placed him on administrative suspension in 2005. However, in light of Texas' decision to license Valero, the question is begged as to whether a boxer such as Valero, who at age 27 is an undefeated two division world champion and seemingly entering into the prime of his career following a second round stoppage of Pitalua, should have the denial of his license reversed by the New York State Athletic Commission (hereinafter the "Commission") or otherwise be permitted to box in the United States by other influential commissions.

The Medical Testing Required for Licensure in New York State

In New York, in order to "obtain a license or the renewal of a license to box, all boxers shall submit to a thorough medical examination by a physician approved by the medical advisory board." Said medical examination must include "a complete physical examination, an electroencephalographic examination, electrocardiographic examination, CAT scan, dilated eye examination by a licensed ophthalmologist and laboratory and other tests and examinations as may be required by such physician and/or the commission." Underscoring the importance of the pre-licensing medical examinations, New York mandates elsewhere in its laws governing professional boxing that:

"[a]ny professional boxer applying for a license or renewal of a license...shall undergo a comprehensive physical examination including clinical neurological and neuropsychological examinations by a physician approved by the commission. If, at the time of such examination, there is any indication of brain injury, or for any other reason the physician deems appropriate, the boxer shall be required to undergo further neurological and neuropsychological examinations by a neurologist including, but not limited to, a computed tomography or medically equivalent procedure. The commission shall not issue a license to a boxer until such examinations are completed and reviewed by the commission. The results of all such examinations herein shall become a part of the boxer's permanent medical record as maintained by the commission. The costs of all such examinations called for...shall be assumed by the state if such examinations are performed by a physician or neurologist approved by the commission."

In addition, a boxer shall present to the Commission his or her "medical history relating to any physical condition, medical test or procedure which relates to his ability to box, and a record of all medical suspensions[]" along with their application for a license.

The above laws, widely regarded as among the most stringent in the country, leave little room for disguising evidence of, or omitting information about, a boxer's medical conditions and history. They also leave no room for the removal of any medical findings from a boxer's permanent record. Although a boxer denied a license on medical grounds always has an opportunity for a hearing before the Commission can take "any final action negatively affecting such person's individual privileges or property granted by a license duly issued by the commission[,]" therefore, a brain injury such as Valero's will forever be in the medical record of such a boxer requesting the hearing and effectively render the hearing over before it started given the grave concerns that such an injury would inevitably raise.

Notwithstanding the above, the Commission alone has and "is vested with the sole direction, management, control and jurisdiction...over all licenses to any and all persons who participate in...boxing, sparring or wrestling matches or exhibitions" in the State of New York.. The inference then is that no matter what is in a boxer's medical file, it is ultimately within the Commission's discretion whether or not a boxer should be granted a license despite a given condition. In that case, in addition to evaluating the condition itself, the analysis of a given boxer then becomes a balancing test between such issues as whether a given decision would subject the Commission to liability in the event of an injury to a boxer, whether it comports with public policy to license a given boxer, what kind of precedent the licensure of one boxer could set for the licensure of another boxer, and where the Commission could draw the line in licensing certain boxers with questionable medical conditions over others. Each of these items will be looked at individually below as they would apply to Valero's situation.

The Commission's Potential Liability if Valero Were Licensed and Then Injured

As recently reinforced in Joey Gamache's lawsuit against the Commission regarding the brain damage that he suffered in his February 26, 2000 knockout loss to Arturo Gatti at Madison Square Garden, the statutory and regulatory scheme that governs professional boxing in New York "does indeed create...a duty of care which runs from the Athletic Commission directly to the licensed boxers under its jurisdiction and control." In other words, in the event that Valero were licensed to box by the Commission despite the Commission's knowledge of his 2001 brain injury, and sustained another brain injury during a boxing match in New York, the Commission could very likely be found liable in a subsequent lawsuit. The Commission would, therefore, be licensing Valero at its peril. In reality, a majority of athletic commissions and federations that grant Valero a license are likely operating under the same peril since New York's discovery in 2004.

Is it Against Public Policy in New York State to License a Boxer with a Known Brain Injury?

To find the answer to this question, one needs to look no further than the case of undefeated New York-based heavyweight contender "Baby" Joe Mesi. Mesi, a former 1996 U.S. Olympic alternate who was once so popular in his home city of Buffalo, New York that he was often referred to as Buffalo's "third franchise," has not been permitted to box in New York State since suffering a brain bleed in his March 13, 2003 decision win in Las Vegas over former cruiserweight champion Vassiliy Jirov. In other words, although Mesi was subsequently licensed to box in Puerto Rico, Quebec, Arkansas, Michigan, West Virginia, and Rhode Island, one of the biggest ticket sellers in recent New York history has been not allowed to fight before his hometown fans since 2003. The moral of the Mesi story is clear: the Commission will not permit boxers that have sustained brain injuries to fight again under its jurisdiction. It would, therefore, appear that allowing boxers with known brain injuries is plainly against public policy in New York State.


What Kind of Precedent Would it Set for New York State to License Valero?

In the event that the Commission were to grant a license to Valero, it would not only open itself up to heavy criticism and the re-examination of its suspensions of Mesi, Evander Holyfield, Junior Jones, and others who are no longer permitted to box in New York State, but it would also hazard leaving itself open to future legal challenges of license denials from other boxers with brain and other injuries. Such legal action could lead the New York State courts to conclude that certain denials were improper given that the Commission had issued Valero a license despite knowledge of his brain injury. In short, granting Valero a license to box in New York State could send the Commission down a very slippery slope in the licensing of boxers under its jurisdiction and into a wave of prospective legal challenges to the future denial of boxing licenses.

Despite the above prognostication of doom in the event that the Commission ever decided to license Valero, it should be noted that the Commission must simply furnish a rational basis for its decision to not issue a boxer a license. When coupled with the fact that the Commission alone has and "is vested with the sole direction, management, control and jurisdiction...over all licenses to any and all persons who participate in...boxing, sparring or wrestling matches or exhibitions" in the State of New York[,]" it would therefore likely survive most any legal challenge to its denial of a license, even if Valero were issued a license. The first court to rule on such a case, however, would have to be very careful to tailor its decision as to distinguish the case before it from Valero's situation to make sure it does not create a culture of inconsistency in the licensing of boxers in New York State.

Is the Commission Capable of Drawing a Line Between One Brain Injury and Another?

In the event that the Commission were to one day license Valero, there would be serious questions as to where, if anywhere, it would be able to draw the line going forward. Would it make a difference if a brain injury happened earlier in one's life or boxing career, as it did with Valero, who turned pro the year after his motorcycle accident? Would it be possible, for example, for amateur boxer Angelo Piccirillo, who sustained a brain injury during the 2009 New York State Golden Gloves competition, to apply for a license to fight professionally a few years from now, if he sufficiently recovers, under the idea that he had time to heal and his body would be more mature by then? Could non-boxing related head injuries be regarded as less relevant or probative than those actually sustained in the ring? Would the Commission entertain a petition for a license from a star athlete from another sport, such as retired New York Jets wide receiver Wayne Chrebet, despite his long history of concussions?

If the above scenarios seem difficult to differentiate between, that is because they are all simply permutations of the same problem: How to handle an applicant for a boxing license that has a history of brain injuries when boxing presents a real risk for either an aggravation of said injuries or the creation of additional injuries. Perhaps then, the Commission would be best served to stay consistent and keep Valero out of New York State. This is because while New York law could keep an exception such as Valero from swallowing the rule regarding applicants with head injuries, the Commission would be unable to maintain the high degree of credibility and integrity that it has today versus other athletic commissions in the United States if it did make such an exception.

Paul Stuart Haberman, Esq. is an attorney at the New York law firm of Heidell, Pittoni, Murphy & Bach, LLP. He is also a New York State licensed boxing manager and the Chairman of the Sports Law Committee of the New York County Lawyers Association. ©

May 18, 2009

Score One Touchdown in the Endzone for the Washington Redskins

Score one touchdown in the endzone for the www.redskins.com/gen/index.jsp>Washington Redskins. After a 17 year court battle over their trademark, which depicts a drawing of an Indian along with their name Redskins, the U.S. Court of Appeals for the D.C. circuit ruled that the plaintiffs waited way too long to challenge this mark. See: www.ipwatchdog.com/ip-cases/trademark-cases/pro-football-v-harjo-may-15-2009/>Pro-Football, Inc. v. Harjo (D.C. Cir. 2009)

A group of Native Americans had challenged the mark alleging it was disparaging to their ethnic group. Yet, the court held there was too great a delay between when the NFL team began using the mark in 1967 and when the mark was first challenged in this action back in 1992.

Unfortunately for the Redskins, the Court did not address the merits of the claim and whether or not the mark en.wikipedia.org/wiki/Disparagement> disparaged Native Americans under the meaning of the Lanham Act §2, 15 U.S.C.§1052(a). Instead, Judge David Tatel, writing for the Court, based the decision on the team's defense of laches. Judge Tatel stated that the Redskins suffered great economic and trial prejudice because of the long lag time. Oddly, this was the second time this issue had been before the Circuit, which previously ruled against the team and remanded back to the District Court in 2005, See: Pro Football, Inc. v. Harjo, (Harjo II), 415 F.3d 44, 50 (D.C. Cir. 2005)

The trial clock had actually been set in 1984 when Mateo Romero, the youngest of the seven plaintiffs turned 18, the age of majority, and nothing happened between 1984 and 1992. Romero would've been one year old in 1967 when the team first began using the mark, so on remand, the district court deemed the period between 1984 and 1992 the Romero Delay Period. See: Harjo III, 567 F.Supp.2d 46, 53-56 (D.D.C. 2008) During this Romero Delay Period, Edward Bennett Williams, the team's former president, unfortunately died. Williams had reportedly met with Native Americans to get their opinions on the team's mark and he could no longer testify. The court determined that the near eight year delay also made it more difficult to obtain contemporaneous evidence of public attitudes toward the mark.

Romero had also made a claim against the NFL team's cheerleaders, the Redskinettes, which were not borne of the team until 1990. However, Romero shot himself in the foot there too. He noted for the district court that the allegedly disparaging mark for the Redskinettes was so closely tied to the disparaging nature of the team's mark that the court held it would have to look at the team's mark to assess the nature of the claim against the cheerleaders and it was prevented from doing so by the defense of laches.

While this decision does not address the merits of the case, it does put it to rest but that is not enough for Intellectual Property attorneys. In this ridiculously politically correct society of ours why does freedom of speech and expression always take a back seat to the hurt feelings of a chosen few seeking their 15 minutes in the spotlight? The word Indian dates back to the 15th century when Christopher Columbus mistakenly thought he landed on a sub-continent of India and thereby referred to the indigenous people of the new land as Indians. What is disparaging about that?

Perhaps as a New Yorker I should be insulted if someone from the south calls me a Yankee. However, as an intelligent woman I am not; in fact, I am proud to be a Yankee, now if only Derek Jeter would call.

www.LisaFantino.com>Lisa Fantino is an award-winning journalist turned attorney with a general and entertainment practice in Mamaroneck, NY

June 13, 2009

Entertainers and Athletes Must Report their Foriegn Bank Accounts Too (UPDATE)

By Daniel J. Scott

Entertainers and athletes who are not citizens or residents of the United States, and entities that are not domestic entities, can relax when it comes to worrying if they have to disclose their foreign bank accounts to the United States government, at least for now. On June 5, 2009, the IRS announced that it is "temporarily suspending the reporting requirement with respect to foreign bank accounts . . . due on June 30, 2009, for those persons who are not citizens, residents, or domestic entities." See IRS Announcement 2009-51 (http://www.irs.gov/pub/irs-drop/a-09-51.pdf). In doing so, the IRS noted that is "has received a number of questions and comments from the public concerning the new filing requirement that may require additional guidance."
For purposes of filing Forms TD F 90.22-1 ("FBARs") due June 30, 2009 only (i.e., relating to foreign accounts with a value that exceeded in the aggregate $10,000 at any time during the 2008 calendar year), only (i) citizens and residents of the United States, (ii) domestic partnerships, (iii) domestic corporations, and (iv) domestic estates and trusts are subject to the reporting requirement. It is unclear at the moment who will be required to file and FBAR in subsequent years, and the IRS has promised to issue additional guidance on this point.

August 31, 2009

Throwing Stones When Living with a Glass Jaw?

A Look at the Arguments For and Against the Placement of Morals Clauses in Boxing Management and Promotional Agreements

By Paul Stuart Haberman

Allow me to take you on a trip back in time to April 1, 1993. The United States Senate's Subcommittee on Investigations is conducting a hearing on the connections between organized crime and boxing as part of its goal of creating a federal regulatory body to oversee the sport in the United States. At the witness table is Salvatore (Sammy the Bull) Gravano, former underboss to legendary Gambino family leader John Gotti. Within a matter of a few hours of testimony, Gravano links several prominent members of the boxing establishment to the Gambinos and other La Cosa Nostra groups throughout the country. (Richard Sandomir, "Names Fly Like Jabs at Boxing Hearing," New York Times, April 2, 1993, page B11. Available online at http://www.nytimes.com/1993/04/02/sports/boxing-names-fly-like-jabs-at-boxing-hearing.html (last visited August 21, 2009)). Although no wrongdoing is alleged by any of the individuals identified, their names are now linked in the international press to America's gangland.

Now imagine that you are an undefeated young prospect that is managed or promoted by one of the named individuals and pride yourself on a squeaky clean, all-American image. After all, it is less than a year after Oscar De La Hoya did the United States proud at the 1992 Olympics, so its en vogue to be an all-American type in boxing. And imagine further that you had no idea that your manager or promoter was linked to people like Gravano. Horrified, you contact a local attorney and ask him to review your management agreement and see if there are any provisions that would allow you to terminate the contract with your manager if he did something that could bring you ill-repute and cause your fans to second guess you and your cuddly, well-cultivated image. The attorney finds nothing that suggests that possibility. So what do you do when your agreement is up and you want to address this issue with your next manager or promoter?

The answer, perhaps, is negotiating for a morals clause in your next management agreement. A typical morals clause gives one or both parties to a given contract the option of terminating the agreement in the event that the other party does something to either bring ill-repute to himself, such as being charged with or convicted of a crime, as Mike Tyson was in the early 1990s, or otherwise does something to sully the other party's name or image, such as make highly controversial or otherwise offensive remarks in the press, as Australian super middleweight contender Anthony (The Man) Mundine did several years ago in regard to the September 11 attacks. (See, e.g., http://www.answers.com/topic/anthony-mundine#Comments_regarding_the_September_11_attacks (last visited on August 21, 2009)). However, requesting such a provision in an agreement that does not originally contain one could open some unexpected and potentially economically ruinous doors, as one day it could be you in the wrong place at the wrong time, or photographed with the wrong person. With that in mind, a look at that pluses and minuses as to the core parties involved in the negotiation of boxing contracts follows.

A Morals Clause for the Boxer's Benefit

Let's take our horrified friend from up above and see what can happen if he asks his next manager for a morals clause in his agreement. Suppose an attorney for the manager comes back to All-American Boy and says, "Sure, we'll allow you to add a provision whereby you can terminate the agreement is your manager is arrested, but we want the same provision to cover your actions as well." Content that his manager agreed to it and knowing that he does not put himself in position to get arrested in his every day life, All-American Boy agrees to this bilateral morals clause. Three months later, following a guest appearance at a local university, All-American Boy decides to accept the invitation of a fraternity to attend a party of theirs. Long story short, All-American Boy is photographed as "Iron" Michael Phelps and is later arrested for drug possession and underage drinking when the fraternity party is raided following a noise complaint from the neighbors.

Upon finding out of his arrest, All-American Boy's new manager has some decisions to make. Does he release his prized prodigy after he was photographed smoking marijuana, arrested, and sued? Does he stay on board and simply help All-American Boy in his public relations campaign following his arrest? Whatever the outcome, the fact of the matter is that All-American Boy would not have been at peril of losing his management agreement if he hadn't said anything in the first instance about a morals clause. Now he is at peril of losing the monthly stipend and the savvy negotiating skills of his manager that came with his management agreement.

On the flip side, what if All-American Boy's manager is arrested on felony charges? Although the manager is released on bail, he is facing 10 years in prison if convicted, and the management agreement lasts through at least three of those years. Perhaps All-American Boy can call the state athletic commission that has jurisdiction over the management agreement and tell them what happened. The athletic commission may invalidate the agreement on the arrest alone, but that's not certain. Boxing is full of people with criminal records, including many that have had productive careers in boxing since their incarcerations, such as Bernard Hopkins, Jameel (Big Time) McCline, and Don King. In the alternative, All-American Boy does have that morals clause in his agreement, so with a written termination notice he can now be free and clear to pursue a new management team if he so chooses.

A Morals Clause for the Manager's Benefit

Let's take a manager's worst nightmare from the pages of the boxing tabloids: Clifford (The Black Rhino) Etienne. One day, Etienne, 29-4-2 (20 KOs), was a manager's dream: a heavyweight with an exciting, fan friendly style who got a lot of opportunities for big fights because he's a vulnerable, but entertaining, name opponent. The next day, Etienne was arrested after robbing a check-cashing store, carjacking a vehicle containing a woman and her child, and attempting to gun down a police officer. His sentence: 150 years in prison without the possibility of parole. (See http://en.wikipedia.org/wiki/Clifford_Etienne (last visited on August 22, 2009)) But what if the facts were a little different? What if Etienne had not had a prior felony record and the court considered the fact that he was high on cocaine at the time? New sentence: two years, and five years of drug counseling. Now pretend that you are Etienne's manager, and have three years remaining on the contract at the time of his sentencing. Etienne calls you upon his release and asks you to begin seeking out a comeback fight. A morals clause in your management agreement allows you to terminate the agreement upon a conviction on criminal charges. You thought that might be a smart thing to add, given Etienne's previous incarceration. What do you do?

On the one hand, perhaps you can release him without a second thought. Etienne has now shown himself incapable of staying on the straight and narrow, even with a lucrative professional boxing career. In addition, all sponsorship possibilities for him have dried up. On the other hand, maybe you're not giving him any money between fights anyway and find that he is more marketable as volatile, bad boy-type heavyweight. Indeed, boxers like Mike Tyson and Andrew Golota have made some serious cash with similar personas.

Let's throw one more wrinkle in: Perhaps Etienne's attorney, in negotiating the management agreement, insisted on phrasing the morals clause such that Etienne can terminate the agreement in the event that the manager was sued by one of his other fighters. You know how litigious some boxers can be, especially after you refuse to give them a raise in their monthly stipend after someone's been whispering in their ear at their gym for a few months. Furthermore, you know that even the top managers in boxing get sued by their charges several times over the course of their careers. Do you agree to it and pray that your other boxers stay in line during the course of your representation of Etienne, or do walk away from a heavyweight with a lot of money making potential because you are uncomfortable with having such a provision in the agreement, given the litigious nature of boxing?

A Morals Clause for the Promoter's Benefit

A morals clause in a promotional agreement would give the promoter the right to terminate the agreement if the boxer fails to stay out of trouble to one degree or another during the term of their promotional deal. Like many contracts in team sports, this would make a lot sense for a promoter since you could unload your negative baggage if said baggage would bring you and the rest of your stable of boxers ill-repute and bad publicity. But what if the boxer came back and asked that the morals clause in the promotional agreement go both ways, such that he too can terminate the contract upon the arrest, conviction, or suing of the promoter? Maybe then the promoter does not want throw as many stones, as he is one of many owners of boxing's glass houses, and thus withdraws his request for a morals clause, replacing it with a provision that simply tolls the agreement in the event of the boxer's incarceration at the promoter's discretion. This compromise relieves the promoter of the need to commit himself to a morals clause and, at the same time, allows him the option to profit off of one of boxing's bad boys after the boxer's legal problems clear up.

A Morals Clause for the Television Networks' Benefit

HBO and Showtime have the high card in negotiations with boxers under almost any scenario, unless they are in a bidding war against each other for a particular boxer. As a result, there is little downside to holding the precious few boxers that are signed to multi-fight agreements with either network to a moral standard in writing. After all, they are the poster boys for major television networks who appeal to a far broader audience than just the boxing cognoscenti. While an individual promoter may not mind the negative publicity that a convicted felon can bring to their fight cards, HBO or Showtime just might, as it reflects on the channel as a whole.

As discussed above, a morals clause in your boxing-related contract may have considerable upside, considering boxing's reputation in some quarters as the red light district of sports. But given the litigious nature of its participants, the types of people those in boxing might associate with outside of the gyms, the questionable business practices of some of its managers and promoters, and the types of backgrounds some of its personalities come from, the addition of a morals clause has the potential to open a Pandora's Box under the right circumstances. One has to give some serious thought, therefore, to whether they wish to throw stones if they are living with a glass jaw and demand a morals clause.

Paul Stuart Haberman, Esq. is an attorney at the New York law firm of Heidell, Pittoni, Murphy & Bach, LLP. He is also a New York State licensed boxing manager and the Chairman of the Sports Law Committee of the New York County Lawyers Association. ©

December 8, 2009

21st Century Dreidel

By Bennett Liebman

The gambling game of dreidel has become synonymous with the Jewish festival of Hanukah. A dreidel is a four-sided square top, which has four Hebrew letters on each side. The letters are Nun, Gimmel, Hay and Shin, which stand for the Hebrew phrase "nes gadol hayah sham", a great miracle happened there, which in turn symbolizes the marvel that the oil at the initial Hanukah celebration burned for eight nights and days.

The game operates much as a prehistoric dice game. It is played typically for a penny, but also for candy, matchsticks or other tokens. All the players ante up to begin the game. Each spin of the dreidel has four equally likely outcomes. The chances that a Nun, Gimmel, Hay and Shin are all one of four. The players take turns spinning the dreidel. If the letter Nun (N) comes up, there's no payoff, and play passes to the next player. If Gimmel (G) comes up, the player collects the entire pot, and everyone contributes a penny to form a new pot. If Hay (H) comes up, the player collects half the pot. If Shin (S) comes up, the player adds a penny to the pot. After each spin, the dreidel is passed to the next player. The whole pot needs to be replenished only after a Gimmel is spun. The game continues until one player owns the entire pot or until some agreed upon stopping point.(1)

This game has been played for centuries, and the fact is that while small children, or individuals who have consumed an excessive amount of schnapps, might enjoy it, the game is at best slow and tedious. It is hardly the crack cocaine of gambling. It is far closer to the Sominex of gambling. Also at least according to one mathematical study it is an unfair game. The first player who spins the dreidel has a better chance of winning than the second player, and on and on.(2)

The thought here is that the game of dreidel needs to be retooled for the 21st century. It need not be your zayde’s game of dreidel. The payoffs need to be increased. The pace of the game needs to be sped up, and there ought to be a way to involve all the players while one player is spinning the dreidel.

It might be best if the game of dreidel could be combined with the best elements of the gambling game of craps. Two dreidels would be utilized, and the game would be played against a bank – rather than against the other players. All players could bet on all spins of the dreidel, and there would be the opportunity to win (or lose) real money. In short, it might actually be an interesting game.

Many skeptics might claim that the game of craps has seen better days, and that it reached its peak during the era of Nathan Detroit and the Rat Pack. Even if that is an accurate assessment of the current state of craps, it is far better than the game of dreidel which probably peaked in popularity during the age of Maimonides.(3)

Here’s how the basics of the 21st century dreidel game might be played. I have little training in statistics so the odds calculations are rudimentary. As a casino game, 21st Century Dreidel could be designed to insure a house edge on all wagers, but the edge would not be the same for all wagers. It could also be played as a friendly game with almost no edge to the house. I have tried to use traditional craps terminology to describe possible wagers.(4)

Basic Play:

Pass Bet – (Even money) On the first spin or the “coming out” roll, the “pass” bettors win on any doubles. Any other result becomes the point. Let’s say the point is N-S. If the payer spins an N-S before spinning any double, the “pass” bettors win. If the player spins any double before spinning N-S, the “pass” bettors lose. This is truly an even money bet. If this was a casino which needed a small house edge, you might make the “pass” bettors lose on a double S on the first spin.

Don’t Pass Bet - (Even Money) This is the reverse of the pass bet. On the first spin, the “don’t pass” bettors lose on all doubles. Once the point is established, the “don’t pass” bettors win if a double comes up before the point is spun. The “don’t pass” bettors lose if the point is spun before a double. Again, this is a 50-50 bet. A casino might want to charge the “don’t pass” player double for a double S on the first spin.

Similarly “come” bets and “don’t come” bets (Even Money) would work in the same fashion as “pass” and “don’t pass” bets after the point has been established. Again the odds are exactly even money for these bets.

Single Spin Wagers

Any Double (3-1) The odds of spinning a double are 4 of 16. So in order to put the players at the same level as the bank, the payoff should be 3-1. At a casino, the payment to the winning bettor might be 2-1 or 5-2.

2 N’s, S’s, G’s H’s (15-1) The odds of spinning 2 N’s, or any specific double 1 of 16 or 15-1. Again, at a casino, it might be appropriate to maintain a house edge and pay winning bettors at odds of 14-1 or 13-1.

Any N, S, G, H (1.2-1) The odds of spinning at least one N or other specific letter is 7 of 16. This translates into real odds of 1.2-1. The appropriate odds level for a payout both in a casino and at a friendly game should probably be even money.

Any N, S,G, or H but no doubles. (1.67-1) The odds of spinning at least one N (but not 2 N’s) is 6 of 16 or 1.67-1. Again, a casino might only pay out at 3-2.

Point Established Bets – These are wagers that can be placed after the point has been established. It is traditional in craps that the “pass” and can take “pass” line the odds by placing additional wagers on their original bets after the point has been established. (The same is the case for “don’t pass” bettors who can lay the odds after the point has been established. These bets are set at the correct odds. Most casinos will allow the player to double or triple the size of his or her original bet. In 21st century dreidel, the additional “pass” bets would pay off at 2-1. The additional “don’t pass” bets would pay off at 1-2.

Opposite – (Even money) If the point is G-S, then an opposite bet would be that H-N would be spun before the G-S is spun. There are 2 in 16 chances that a G-S would be spun, and similarly 2 in 16 chances of an H-N. The odds are exactly even, and this would be appropriate in a friendly game, if not at a casino. This bet could be utilized whenever the point has been established.

There are clearly other wagers that might be considered in the 21st century game of dreidel. But the point is that 21st Century Dreidel (5) is not just your typical crappy game of dreidel. It combines the best of both craps and dreidel. It has the potential to get people over the age of 10 interested in playing dreidel. It offers plenty of action and the opportunity to win significant money. It could be a popular wager in the state of Israel which regularly ponders the legalization of casinos, (6) and it might prove to be a useful wager for charitable organizations conducting casino nights during the season of Hanukah. Maybe State constitutions, statutes, and rules can be changed to authorize the 21st century game of dreidel as a charitable game of chance. From there, it could be a staple at tribal casinos. Who knows what the limits will be for the 21st century game of dreidel? Maybe we’ll soon have to worry about dreidel specialists shaving dreidels as part of a scheme to produce a higher percentage of Gimmels.

1. For the rules of the game of dreidel, see http://www.mahalo.com/how-to-play-dreidel.

2. Feinerman, Robert. 1976. An ancient unfair game. American Mathematical Monthly 83(October):623-625.

3. The Jewish philosopher Moses Maimonides lived from 1135-1204.

4. A craps glossary can be found at: http://casinogambling.about.com/od/craps/a/crapsterms.htm and http://homepage.ntlworld.com/dice-play/CrapsGlossary.htm.

5. Other names for the game are possible. Maybe it should be called Crappy Dreidel, Dueling Dreidels, or maybe Dead Sea Stud Dreidel?

6. “BDI: 3 casinos will create 1,200 new jobs,” Globes [online] - Israel's Business Arena December 10, 2003. See also Freidberg and Thompson, “Politics of Casino Gambling: Israel and the Palestinian Authority -An Update,” Gaming Law Review, December 2003, 7(6): 421-426.

February 9, 2010

Rescheduled - Seton Hall University School of Law, Sports and Entertainment Law Journal 2010 Sports & Entertainment Law Symposium

Seton Hall University School of Law, Sports and Entertainment Law Journal

Presents: 2010 Sports & Entertainment Law Symposium
Newark, New Jersey

The SHU Law Journal of Sports and Entertainment Law Symposium has been rescheduled from its original date, which had to be cancelled due to inclement weather.

New Date: April 12, 2010

Time: 8am-3:45pm

Registration: is required and can be completed at: http://law.shu.edu/Students/academics/journals/sports-entertainment/symposium/registration.cfm.

Panels will remain the same, with the exception of a few speakers.

Keynote: Lou Lamoriello, CEO and GM of the New Jersey Devils

5 NYCLE Credits (full day attendance required) $100

General Public $25

Free Admission for Students

Breakfast & Lunch will be provided to all attendees

More details to follow along with the official list of panelists.

If you have any questions, please contact Brett Theisen at brett.theisen@gmail.com

May 19, 2010

Taking a Sack: The NFL and Its Undeserved Tax-Exempt Status

Andrew B. Delaney

Though football teams and NFL-licensing entities are for-profit enterprises, the overseeing body is considered nonprofit. As such, it doesn't pay federal taxes. I also found out recently that the NFL doesn't pay New York state taxes either. It gets several million dollars from each of its 32 teams in the form of "dues and assessments"-- those are tax write-offs for the teams and tax-free income for the NFL. It's a pretty interesting little setup.

The NFL's stadium loan program is even more interesting. Under the G3 program, the NFL provides "loans"--and the quotes are indeed there for sarcasm--to teams that have entered into public-private partnerships with their home cities to build new stadiums. What is often touted as a "generous contribution" from the team is a mixture of financing structures that leaves very little coming from the team owner's pocket.

I have argued in an article that the NFL's abuse of its tax-exempt status requires that the NFL make the switch to for-profit status, as the MLB recently did. I did my best to make the piece amusing and lively. It's a work in progress, so suggestions are much appreciated. A full version of the article can be found at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1605281.

andrew@nationalsels.org.

August 15, 2010

Report on the ABA Forum on the Entertainment and Sports Industries –Part I: “From Music, Film and Art to Motorcycles and Other Sports: Hot Issues and Disputes in Entertainment, Art and Sports Licensing Deals”

By Monica Pa

This panel was held on Friday, August 6, 2010 at the InterContinental Hotel in San Francisco.

The panel included Richard J. Idell, Idell & Seitel; Jessica Darraby, the Art Law Firm; Samuel Lew, Feldman Gale PA; Jann Moorhead; and Rob Rieders, Pixar Animations Studios. This blog entry only discusses Rob’s presentation, which I thought raised excellent points about entertainment licensing by a content creator.

Pixar has been involved in numerous award-winning animated movies, including Toy Story, Up, Cars, etc. Rob’s presentation provided practice tips for how to negotiate and work with content owners, licensors, creative executives and the marketing team in setting forth the parameters of the licensing agreements and the scope of permissible use for creative works.

He used the movie Toy Story as an example of various entertainment licensing issues that come up in a movie. Toy Story licensed a tremendous number of characters (e.g., Ken and Barbie, Mr. Potato Head, Slinky the dog, lots of Fisher Price toys, etc.). When you are licensing a character, you want to consider all the artistic interpretations of the licensed elements and potential changes to the brand identity from these interpretations. For example, if you are licensing Mr. Potato Head, you want to think about what happens when a toy becomes a “living character,” animated with a voice, personality and 3D design. Similarly, if you are licensing a historic character like Kasper the Ghost, and the licensee intends to update this character, are these updates going to be appropriate for the character? Will it be positive for the brand and/or the overall line of business?

For example the movie Cars animated several iconic cars and gave them distinct personalities. Pixar depicted the 1960 VW Bus as an old hippie van narrated by George Carlin. The 1959 Chevrolet Impala was updated as a snazzy slick Hispanic car narrated by Cheech Marin. In Toy Story, Barbie and Ken were primary characters. Pixar was unsure whether Mattel would be comfortable with the depiction of Ken as a fashionista metrosexual. Barbie, on the other hand, was depicted as very intelligent, which Mattel liked. Similarly, Mr. Potato Head is an important brand for Hasbro (it's the company's Mickey Mouse), so it is protective of this character. In Toy Story, Mr. Potato Head was depicted as a folksy character narrated by Don Rickles. Pixar queried whether Hasbro would be comfortable with the fact that Mrs. Potato Head was depicted walking around for half the film without an eye. Notably, Mr. Potato Head was depicted with a bowler hat and mustache, which was not original to the toy. By doing this, Pixar added to the Mr. Potato Head character, thereby creating new intellectual property that Pixar now has some ownership interest.

In entertainment licensing, you want to continually consult with the licensor along the way. Even if you have a broad license, you do not want to have the licensor unhappy with the resulting product or be surprised about how its character was depicted. Once a film is made (which can take up to five years), it is extremely difficult and expensive to extract elements from the animated work if a dispute arises.

In licensing a character or toy, you’ll also want to consider unexpected uses of the licensed element. For example, Pixar created a Mr. Tortilla Head (which took Mr. Potato Head’s features and put it on a tortilla because at one point the toys needed to slide under a closed door.) Make sure the license provides for whether the elements of the intellectual property can be disembodied and whether it governs the “whole” work. Remember, people love mash ups.
In seeking to obtain a license for a character, as a preliminary consideration, analyze whether a license is even obtainable given the intended use. For example, in the current Toy Story, the nemesis was an evil teddy bear. There is no famous teddy bear brand (such as Paddington Bear) that would be willing to license their character for this use because this would be so detrimental to the brand. Accordingly, Pixar created its own teddy bear character that is pink, bitter and walks with a cane. Indeed, it’s sometimes better to create your own content rather than operate under a restrictive license where the licensor is uncomfortable with the intended use.

However, if you are going to license a character as a nemesis, e.g., a “Bad Guy”, make sure you fully and accurately disclose your intended use because, again, you do not want the licensor to be unhappy later. Put a full disclosure in writing setting forth the intended use (e.g., this character is going to be depicted as a homicidal maniac). Regardless of how the character is going to be used, the licensee should never agree to a “positive light” provision, which provides that the character will be portrayed positively; at most, agree to a “neutral light” provision. Also pay attention to the precatory language in the agreement, and be careful about boiler-plate provisions, including provisions for injunctive relief, venue, choice of law, and publicity rights the content creator should control the publicity of the film and not the licensor).
A content creator also wants to avoid giving the licensor script approval or final product approval. This, however, depends on the bargaining power of the respective parties, and on the reputation of the content creator. Pixar does not give story approvals, but they have good relationships with their licensors. They work closely with those companies to keep people on board all along the way. With smaller content creators, a licensor may want to be more careful and protective of their brand. In these instances, the licensor may want to push for some level of script approval.

Rob pointed out the challenges that arise when the creative team insists that an element is a “must have.” This results in the loss of negotiation leverage (e.g., the licensor know that you need them more than they need you). If the content creator has an unequal bargaining position (desperation can be obvious), the resulting license will not only be more expensive, it can be limited in the scope of granted rights, and other provisions (e.g., the representations and warranties, indemnification) may be compromised. The in-house lawyer should be willing to push back on the creative team. Try exploring available alternatives with them, such as creating a new character instead.

Another practice point is to make sure that the in-house lawyer is consistent with licensing methods and practices. If the company has a best practices policy, these should be consistently followed. For example, if Pixar is licensing several characters from various toy companies, all of the companies should be treated fairly and subject to similar deal terms. For example, do not give one company script approval when no other company go this and/or there is a company practice against this. Try not to make exceptions, even if the licensed elements is a “must have.” Bear in mind that the licensing community is tight knit and people talk.
In drafting, make sure the license contains contingent obligations. Obligations for payment and screen credit should be contingent on actual use. Without this provision, if the product or character does not actually appear in the film, there is a chance that the content creator will still need to pay the licensor.

License agreements should also contain certain non-contingent obligations, such as a strict confidentiality clause. If the creator discloses preliminary drafts of its film and marketing campaign with its licensing partners, this needs to remain confidential. Another non-contingent obligation should be that the creator reserves the right to use or not use any licensed element. The content creator wants to make sure that no one is shoving their product into a film or marketing campaign.

Finally, Rob pointed out that, in entering into a license, the content creator should assume success; meaning, the film is going to have sequels, toys, books, games, theme parks, etc. For example, there is a “Cars Land” theme park now based on the Cars movie. Try not to give away toy merchandising rights, book rights, and other derivative rights. The creative team may not think this far ahead and, if this is a “must have,” may be willing to forgo these rights in order to get the deal done.

October 13, 2010

Upon Review, NFL Owners Overturns League's Call on Exclusive Reebok Licensing Deal

By Joseph M. Hanna

NFL Owners decided at their October 12, 2010 meeting in Chicago to award new licensing deals for NFL Apparel to seven different companies, splitting up the rights previously held exclusively by Reebok. In 2002, the NFL granted Reebok a 10-year exclusive rights agreement as the league's official on-field and sideline apparel distributor. The deal covered all apparel that is visible on the field during games and practices, including uniforms, and called for Reebok to make a line of NFL branded sportswear under a new apparel division that is dedicated to the NFL.

The NFL/Reebok partnership faced a number of challenges, including a loss for the League and Reebok at the Supreme Court over anti-trust allegations. While the League firmly backed its decision to enter into the exclusive agreement, the owners have voted to return to a multiple license system in order to boost revenues. Reebok will remain on board with the NFL until the expiration of its licenses at the end of the 2011-2012.

In a victory for one of Reebok's rivals, the NFL has decided to enter into an agreement with Nike, Inc. to provide on-field and NFL-branded apparel. Nike will provide uniforms and other on field apparel and New Era Cap Co. Inc. will provide on-field headwear. In addition to Nike and New Era, the NFL has also signed licensing agreements with five other companies. Under Armour Inc. will continue to remain as the sponsor of the NFL Combine and will begin selling related apparel. Gill and VF Corp. will manufacture fan gear and '47 Brand will manufacture headwear for fans. Overstuff Ltd. will continue as the NFL's youth apparel provider.

While details of the agreements have not been made public, it is estimated that the five-year deals that will begin in 2012 could be worth up to $1 billion to the NFL.

October 22, 2010

WHAT DOES IT MEAN TO SAY - "I WANNA BE A PRODUCER"?? THE NATIONAL FOOTBALL LEAGUE PRESENTS "LOMBARDI" on BROADWAY

By Diane Krausz and Jennifer Bellusci

On September 21st, the National Football League (NFL) "touched down" on Broadway as a first time producer with the play "Lombardi", about the revered football coach Vince Lombardi who transformed the Green Bay Packers " into one of the NFL's most formidable championship franchises and Lombardi into the archetype for the all-American coach." (The New York Observer 9/10/10) Since the Green Bay Packers, the football team Lombardi coached is a name and logo significantly featured both in the Play and its proposed marketing and merchandising campaign, licensing the right to use the Green Bay Packers' logo, name and brand is essential element required both in the play and for its marketing and advertising campaign. Also, Lombardi's "lead" or main producer, Tony Ponturo, has a long and very strong history in sports and marketing, including employment with the NFL, and clearly understands how the NFL's endorsement as producer, and the marketing through its 32 franchise teams, would be an enormous promotional boost to the Play in markets that most Broadway shows never even attempt to approach. This does not even take into account the legitimacy and prestige that the NFL name provides as an authentic sports history certified event.

Therefore, the addition of the NFL as a Producer to Lombardi is of great value to the marketing and promotion of the play, particularly to an audience that is usually not regarded as "theater friendly", e.g., the sports fan.

The publicity and news regarding the play have reported that the NFL has made no actual direct financial contribution in exchange for its producer credit and participation. There is no doubt, however, that, in exchange for its enormous contribution in marketing, promotion and advertising support, both in using its own internal resources and in additional special advertising and marketing, the NFL is most deserving of a standard producer's gross royalty and net profit participation, including in any ancillary rights that may occur after the initial Broadway production.

In most cases, to earn a producer or associate producer credit, a individual or entity will raise a certain amount of the capital investment required to fund the play, or invest his/her/its own funds. In other instances, a producer will contribute "sweat equity" or some other form of consideration that translates into an investment and producer credit. On occasion, a producer has made a significant "in kind" donation where a bond with a union, such as Equity, has been guaranteed or posted by a producer/investor. The NFL, in the case of "Lombardi", has more than provided its fair share by contributing the licensing rights of its franchises and advertising support, both of the standard theater type and of a much more expanded variety, such as internet advertising on all team sites and large billboard ads, as well as other more sports-oriented marketing programs. According to Brian McCarthy of NFL Properties, the NFL is also sponsoring several special evenings at the theater, including a "retired players" night in the beginning of the play's run. Mr. McCarthy assures me that the NFL has access to a standard industry right of "house seats", e.g., orchestra tickets, usually in the first ten rows, available for purchase by producer each performance at retail cost, available up to 48 hours notice prior, although he would not comment on whether or the amount of the percentage of gross and net percentage participation the NFL had in the weekly box office proceeds of the play and subsidiary rights.

Among members of the theater community, particularly those who work on Broadway, the type of new audience members that the NFL name and franchise could potentially attract would certainly be welcome.

November 16, 2010

"King of Beers" May No Longer be King of the Ballpark

By Joseph M. Hanna

The long standing relationship between Anheuser-Bush and Major League
Baseball appears to have hit a rough patch as Anheuser-Bush filed suit
against Major League Baseball Properties Inc. ("MLBP") today in federal
district court. Anheuser-Bush alleges that MLBP reneged on a
sponsorship agreement that the two parties renewed in April for
Budweiser to continue as the official beer sponsor of Major League
Baseball. The trouble stemmed from an Anheuser-Bush announcement in May
that it had reached an agreement with the National Football League
("NFL") where Bud Light would serve as the NFL's official beer sponsor
beginning in 2011. Anheuser-Bush alleges that after the NFL deal was
announced, MLBP demanded that their agreement be renegotiated and that
Anheuser-Bush pay significantly higher rights fees than originally
negotiated. The lawsuit seeks a court order the April agreement is
valid and that Anheuser-Bush has retained its exclusive sponsorship
rights precluding MLBP from entering into talks with other beer makers.

December 1, 2010

A Bad Bet - Suit Alleges That Head of IMG Gambled on College Sports

By Joseph M. Hanna

In a suit recently filed in Los Angles County Superior Court, sports and entertainment superpower IMG Worldwide's chairman Ted Forstmann is accused of betting more than $600,000 (in amounts ranging from $2,000 to $23,000) on the men's NCAA basketball tournament from 2004 to 2007-- all while IMG was representing top college coaches.

Forstmann's alleged gambling habits came to light in a lawsuit filed by Agate Printing. Agate alleges fraud, interference with contract and breach of contract related to lost business that it alleges Forstmann had promised to it. Forstmann stated that the allegations set forth in the lawsuit are inaccurate and IMG stated that Forstmann was not involved in the firm's representation of college coaches.

IMG plays a significant role in the multibillion-dollar business of college sports. According to the lawsuit, after Forstmann made bets worth nearly $100,000 on the 2007 NCAA men's basketball tournament, IMG significantly increased its investment in collegiate athletics. Today, IMG is the licensing agency for nearly 200 collegiate properties, including the NCAA, the BCS and several universities including Ohio State University, University of Florida, and the University of Oregon. It should be noted that IMG was not representing the NCAA from 2004 to 2007. However, as an NCAA Vice President stated, "as almost everyone knows, the NCAA doesn't like anyone betting on college sports."

As the case progresses, it will be noteworthy if any athletes, coaches or colleges get dragged into Forstmann's mess or if the NCAA chooses to open an investigation into the issue on its own. For example, Jay Wright, Villanova's head men's basketball coach, is listed as a client of IMG on its webpage. According to the lawsuit, one of Forstmann's many bets on the 2006 NCAA was a $7,000 wager on Villanova made on March 25, 2006.

For more information about the claims, see http://www.nytimes.com/2010/12/01/sports/01gambling.html?_r=1


January 28, 2011

NHL Team Faces Charge of Religious Discrimination by Jewish Hockey Player

By Joseph M. Hanna

The issue of the lack of racial diversity in the National Hockey League (NHL) is not a new one, but with the filing of a new lawsuit in California on January 25, 2011, it appears that the NHL may have other discrimination issues to worry about as well. Jason Bailey, a Jewish hockey player drafted by the Anaheim Ducks and assigned to play with their minor league affiliate the Bakersfield Condors, is suing the Ducks for religious discrimination and failure to prevent harassment. According to The Orange County Register (see below link), Bailey's Complaint alleges that he was subject to severe harassment from both the Condors' head coach and assistant head coach relating to his religious beliefs. In response to Bailey's complaints about the harassment, both coaches were briefly suspended and made to write letters of apology, a penalty that Bailey alleges was not stiff enough. Bailey was subsequently traded by Anaheim to the Ottawa Senators organization, where he plays for its minor league affiliate, the Birmingham Senators. Both coaches remain with the Condors, although the Ducks cut their ties with the team last year.

(http://www.ocregister.com/news/bailey-285628-ducks-complaint.html webmail.goldbergsegalla.com/exchweb/bin/redir.asp?URL=http://www.ocregister.com/news/bailey-285628-ducks-complaint.html>)


February 18, 2011

The 15th Annual Fordham Sports Law Symposium on Current Legal Issues in Sports

Friday, April 1, 2011 9:00 am - 5:00 pm

Fordham Law School
James B.M. McNally Amphitheatre
140 West 62nd Street
New York, NY 10023

Keynote Speaker: Howie Roseman, Esq. '00; General Manager, Philadelphia Eagles

Panels Include:
•Damaging Impact: The long-term health effects of concussions and where future liability might lie

•Agents, Amateurism and Accountability: Legal and ethical questions arising from the relationships between lawyer/agents and the amateur athletes seeking their representation

•Collective Bargaining Agreements in Sports: Impending negotiations, potential lockouts, and the main sources of conflict between owners and unions

For price and registration information
visit http://law2.fordham.edu/ihtml/cal-2uwcp-calendar_viewitem.ihtml?idc=11557&template=cal

April 26, 2011

Was He Really a Duke?

By Bennett Liebman

Dodger Hall of Famer Duke Snider died two months ago on February 27. To many baby boomers, especially those of us who grew up in and around Brooklyn, he will always be our idol. To those of us who saw him in his prime, he could do little wrong. He hit home runs - more than anybody in the 1950's. He had a special distinctive grace, and he was clutch. With the aging and fading in talent of Jackie Robinson and Pee Wee Reese, and to a certain extent Roy Campanella, Duke personified the Dodgers in their last five years in Brooklyn.

When he returned to New York to play for the Mets in 1963, I spent months cajoling my mother to drive around Rockville Center on Long Island to scope out his apartment so that we could meet the Duke. (Nobody called it stalking in those days.) Even one of the world's most indulgent mothers would not put up with this 13 year old's demands.

Yet, the Duke had a more fragile relationship with the bulk of Brooklyn fans than his other teammates. He was the youngest of the regulars who dominated the Dodger lineup from 1947-1957. He was also the least media savvy of the Boys of Summer. Every once in a while, he would complain about Brooklyn and its fans. He always seemed to need to be schooled by Pee Wee Reese. The kids who followed the Dodgers loved Duke far more than their parents.

Perhaps that was what was most striking about all the encomiums to Duke Snider in the media when he passed away. All of the Duke's perceived petulance had disappeared. What remained was a man who behaved as gracefully in person as he had patrolled center field in Ebbets Field. Everybody had an enjoyable encounter with Duke Snider.

His Hall of Fame induction speech included no mention of his playing abilities but included his gratitude for his teammates, family, and fans. He found the time to talk with everyone. Dodgers historian Mark Langill said, "Hanging around him, he always was the nicest, most unassuming of stars...He was always truly just happy to be a Dodger."

We read of him returning to his former home in Bay Ridge in Brooklyn just to talk to the people who now lived in his home. Former colleagues during his time as a broadcaster for the Montreal Expos talk about his stopping on every visit to New York City to meet with a longtime fan who had become homeless. His visits to New York also included trips to old friends who owned a restaurant where the Duke would play bocce. At Vero Beach, he would get up early to help fantasy campers with their swings. He wrote encouraging letters to the kids who played baseball at his local high school in Falbrook, California. Even at his death, his family directed donations to the Fallbrook Union High School Baseball Program.

As Richard Griffin in the Toronto Star wrote, "There are other celebrities like Duke Snider who was comfortable with his status in life as a sports hero and didn't try to hide it. He tried to share it. For the short time they are together, athletes like Duke elevate their new friend du jour to their own level and make them feel for a shining moment that they also are very special, more important than when they entered the room. Duke never apologized for celebrity and was always willing to share it generously."

I was able to encounter Duke Snider once during spring training in Palm Beach Florida in 1980, where the Atlanta Braves and the Montreal Expos shared a training camp. I was walking up the ramp to the mezzanine while the Duke was walking down. There was almost nobody else in the ballpark. We talked for ten minutes. He told me how he hit knuckle ball pitchers. I told him about seeing his 300th and his 400th home run. He couldn't have been more gracious. I didn't have the heart to tell my mother that it would have been worth it to stalk his apartment in Rockville Center.

While Mickey Mantle remained a kid (maybe not the "last boy" of Jane Leavy's book, but a boy nonetheless) throughout his life, alternating between debauchery, drunkenness, humor, and confessionals, and Willie Mays, for all his greatness, withdrew from his public almost to a level approaching Greta Garboism, Duke Snider grew up. He wasn't just a Duke. He became the Mensch of Flatbush.

June 1, 2011

Seeking Authors

EASL's Publications Committee is seeking authors for its upcoming book about sports law - In The Arena.

Chapters will focus on the following issues and topics: NCAA and college/university athletic rules; arena football; right of publicity and privacy of athletes; doping; eminent domain; Pete Rose/gambling and the Baseball Hall of Fame; Title IX; Insurance; and medical safety issues (i.e. concussions and helmets). We are also accepting other suggestions regarding topics. Please note that this topic list is preliminary and subject to change. The target date for publication is 2013.

The book's editors are Elissa D. Hecker and David Krell.

Elissa is former Chair of the EASL Section, Co-Chair of EASL's Pro Bono Committee, Chair of EASL's Publications Committee and Editor of the EASL Journal and Blog. Elissa also co-edited the popular NYSBA books Entertainment Litigation: Know the Issues and Avoid the Courtroom and Counseling Content Providers in the Digital Age.

David Krell is The Writing Guy™. He is the writer of Krell's Korner, an article series in the EASL Journal. David has also written more than 60 articles and 100 commentaries about popular culture.

Please email Elissa at eheckeresq@yahoo.com if you are interested in contributing to this book.

July 1, 2011

Take Me Out to the Courts: the Los Angeles Dodgers File for Bankruptcy

By Marie-Andrée Weiss

On Monday June 27th, the Los Angeles Dodgers, owned by Frank McCourt, filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware. Bankruptcy filing is the last episode of a saga that had been featured in the news for some two years now.

The bankruptcy filing lists the creditors holding the 40 largest unsecured claims. Among them are Manny Ramirez, the now-retired slugger who is owed $20,992,086, and Andruw Jones, now playing for the New York Yankees, who is owed $11,075, 000. The assets of the team are listed in the filing as being 500,000,001 to one billion dollars. Major League Baseball (MLB) Commissioner Bud Selig issued a statement the same day, writing that "[t]he action taken today by Mr. McCourt does nothing but inflict further harm to this historic franchise."

Indeed, the Dodgers are an historic baseball team, still dear to many New Yorkers, whether or not they can remember when the Brooklyn Dodgers became the Los Angeles Dodgers in 1958. It is the team of Jackie Robinson, Sandy Koufax, and Pee Wee Reese, a team which won six World Series titles, one of these titles while still playing at Ebbets Field.

Jamie and Frank McCourt bought the franchise in 2004. After the couple commenced divorce proceedings in 2009, the question of whether the team was community property, and thus co-owned by Ms. McCourt, or whether it was owned solely by Mr. McCourt, became contentious.

Citing "deep concerns regarding the finances and operations of the Dodgers and to protect the best interests of the Club, its great fans and all of Major League Baseball," Commissioner Selig seized control of the Dodgers on April 20, 2011, and took over day-to-day operations of the club. Mr. Selig then appointed Tom Schieffer, a former president of the Texas Rangers, to monitor the franchise.

On June 17, 2011, Frank and Jamie McCourt agreed to a binding divorce settlement. The court would then have conducted a one-day trial to characterize the Dodger's assets as community property, or as Mr. McCourt's sole property. However, the agreement was contingent upon MLB approving a proposed transaction with Fox. Mr. Selig, however, rejected a 17-year, $2.7 billion deal with a Fox, citing the "best interests of Baseball" clause of the MLB Constitution when rejecting the deal between the Dodgers and Fox. Mr. McCourt planned to use some $150 million from the deal to settle his divorce with Jamie McCourt, and to pay off some of his debts.

MLB and its two constituent members, the National and the American Leagues, is largely self-regulated, and operates under its own private rules, the MLB Constitution, the document governing all major league baseball franchises. Article II § 2(b) of the MLB Constitution describes the Office of the Commissioner of Baseball as being "Chief Executive Officer of Major League Baseball" and gives him the power to "investigate, either upon complaint or upon the Commissioner's own initiative, any act, transaction or practice charged, alleged or suspected to be not in the best interests of the national game of Baseball."

Indeed, the office of the Commissioner stems from the "Black Sox scandal" of 1919, when players of the White Socks team "threw" World Series games. Baseball club owners (16 at the time) decided in 1920 to have one sole commissioner of baseball, and Judge Kenesaw Mountain Landis was appointed in 1921 as the first Commissioner of Baseball. The team owners pledged to "loyally... support the Commissioner in his important and difficult task..."

Baseball clubs are still privately owned, by persons of great wealth, and more often than not, big personalities. George Steinbrenner will not be forgotten any time soon in New York, and Frank and Jamie McCourt were wealthy real estate developers when they bought the team. However, Article II § 3(c) of the Baseball Constitution gives the Commissioner the right to suspend or remove any owner of a Major League club. The sale of a team must be approved by a vote of the MLB owners, who indeed voted unanimously in 2004 to approve the sale of the Dodgers to the McCourts.

Pursuant to article II § 4(ii)(l) of the MLB Constitution, "[t]he rights, privileges and other property rights of a Major League Club hereunder and under any other Baseball-related agreement may be terminated... if the Club in question... files a voluntary petition in bankruptcy." The New York Times reported on June 30 that MLB may plan to use this rule and to ask the court to let it take control of the Dodgers.

What could be next? According to the New York Times, the Dodgers and the MLB agreed on June 29 to let the Dodgers accept interim financing from an outside lender in order to continue to operate, and agreed that the loan would not have to be tied to a sale of the team's future television rights. This compromise was approved by Judge Kevin Gross in the U.S. Bankruptcy Court in Wilmington, Delaware. However, the MLB contended in court that the Dodgers should have first obtained approval from Mr. Schieffer, the MLB-appointed monitor, before filing for bankruptcy.

Two other baseball teams have filed for bankruptcy in the last two years, the Chicago Cubs in 2009, and the Texas Rangers in 2010. Before that, the Seattle Pilots was the last baseball team to have filed for bankruptcy in... 1970. In the case of the Texas Rangers, the general partnership operating the Rangers had entered into an agreement with the Commissioner of Baseball, giving the Commissioner certain rights concerning the sale of the team, and the Commissioner contended that the agreement gave him the right to bar any unapproved sale of the team. The bankruptcy Judge, however, ordered the team to be sold at an open auction, not to a preferred bidder.

Meanwhile, baseball is still America's favorite summer pastime. The MLB reported the best weekend attendance since 2008 during last Father's Day weekend, when 1,646,000 spectators attended the 45 games played over the weekend.

Bankruptcy filing: http://online.wsj.com/public/resources/documents/dodgers.pdf

Bud Selig statement re bankruptcy filing, June 2011: http://mlb.mlb.com/news/press_releases/press_release.jsp?ymd=20110627&content_id=21076822&vkey=pr_mlb&fext=.jsp&c_id=mlb

Bud Selig statement re Dodgers, April 2011: http://mlb.mlb.com/news/press_releases/press_release.jsp?ymd=20110420&content_id=18038724&vkey=pr_mlb&fext=.jsp&c_id=mlb


August 6, 2011

The End of the NFL Lockout

By Sylvia Chen

On July 25th, after 135 days of lockout and following the owners' approval, the players' representatives voted unanimously to approve a new collective bargaining agreement. The players voted to re-certify as a union (the National Football League Players Association, "NFLPA"), and the NFLPA is negotiating the last terms of a new collective bargaining agreement ("CBA"). The final negations between the union and the NFL concern drug testing, player conduct, grievances policies, disability issues, and pension programs. The NFL players voted to fully ratify the new 10-year CBA on August 4th.

What Led to the Lockout?

As the negotiations dragged on into mid-March, the players and the owners could not agree on how to divide the billions of dollars in revenues and other key issues. The NFL earns an estimated nine billion dollars annually.(1) The owners initially demanded an 18 percent decrease in players' compensation and an expansion of the season from 16 games to 18 games for at least two years.(2) The players wanted higher minimum levels of compensation. At the early stage of the negotiations, the players agreed on the 50-50 split after the first billion dollars. They also demanded full financial disclosure from all NFL clubs.

With regard to health and safety issues, the NFL intended to create new year-round rules. It offered to establish a fund for retired players, with $82 million contributed by the owners over the next two years. The players, however, demanded better protections for those whose careers are interrupted by injuries.


The Lockout

On March 12, 2011, the NFL announced a lockout of players hours before the old CBA expired.(3) The lockout, the first NFL work stoppage since 1987, suspended the negotiations. It barred the players from entering into practice or stadium facilities; players could not communicate with team officials; no players could be signed; and teams would not pay for health insurance for players.

Brady v. NFL

In response to the lockout, the NFLPA decertified itself as a labor union in order to allow the players to be heard in court. Tom Brady, Drew Brees, Peyton Manning, and seven other players filed a class action complaint alleging that the lockout would violate federal antitrust and state contract and tort laws. The players also sought a preliminary injunction that would prohibit the NFL from imposing or continuing the lockout.

The district court rejected the NFL's argument that the Norris-LaGuardia Act prevented the court from granting injunctive relief. The district court held that this particular scenario was not a case "involving or growing out of a labor dispute" - as defined by the federal statute. The district court entered an order to enjoin the lockout.

On appeal, the Eighth Circuit reasoned that the Congress drafted the Norris-LaGuardia Act in broad language, and that the definition of a labor dispute is expansive. The Eighth Circuit referenced the statutory language, that "labor dispute includes any controversy concerning terms or conditions of employment, or concerning the association or representation of persons in . . . seeking to arrange terms or conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employer and employee."(4) The Circuit court held that the dispute between the players and the league over the CBA was a case 'growing out of a labor dispute' between employers and employees.

The Eighth Circuit reversed the district court's decision and ruled in favor of the NFL to allow it to continue the lockout. However, the court also permitted the players' antitrust lawsuit to move forward.

The New CBA

The end of the lockout introduced a new CBA. The players and the owners have agreed on the key issues, including how to divide the revenues, from which the players will receive 47 percent of the NFL's revenues over the next 10 years, as opposed to 51 percent in the previous agreement.(5)

Furthermore, the owners will have to guarantee that 89 percent of the money set aside goes towards compensation. For the players, the new agreement improved upon the previous guarantee at 87 percent, which also included several loopholes that allowed owners to spend less.

The new deal provides players whose careers are interrupted by injury up to 1.5 million dollars in compensation during the two years after injuries occur. The retired players as a group will receive up to one billion dollars more in benefits during the next 10 years. (6)

The Outlook

At the end of the day, both the players and the owners win. While the latter will receive a higher share of revenues, the real dollars for the formers' incomes have increased. The NFL is a profitable enterprise. Billions of dollars are at stake. Both the players' and the owners' need to benefit from a football season this year outweighs their underlying demands.

References:
(1) Russell Arch, 2011 NFL Lockout: Why the Players' Side Is Right, Bleacher Report, March 13, 2011. < http://bleacherreport.com/articles/634383-the-2011-nfl-lockout-why-the-players-side-is-right) (accessed on July 23, 2011).
(2) Matthew Futterman, The NFL's More Perfect Union, The Wall Street Journal, July 26, 2011.
(3) Simon Evans, NFL Announces Lockout of Players, Reuters, March 12, 2011. www.reuters.com/article/2011/03/12/us-nfl-lockout-idUSTRE72B25I20110312> (accessed on July 23, 2011).
(4) 29 U.S.C. § 113(c).
(5) Matthew Futterman & Lauren Schuker, NFL and Players Agree on New Deal, The Wall Street Journal, July 26, 2011.
(6) Id.

August 17, 2011

Hosers or Hosed? Labatt Brewing Co. Ltd. v. NHL Enterprises Canada and the Battle over Beer Rights

By Carter Anne McGowan

Few if any sponsorships are more lucrative in professional sports than beer sponsorships. The National Hockey League (NHL or League) - long sponsored by Anheuser-Busch-owned Labatt in Canada - recently found itself embroiled in litigation brought by Labatt alleging that the League breached its Canadian beer deal when it entered into a U.S./Canada beer sponsorship with Labatt's archrival, Miller Coors (Molson Coors in Canada). On June 3, 2011, two days after NHL Commissioner Gary Bettman trumpeted the Molson Coors deal in his annual state-of-the-game speech at the Stanley Cup Finals, Justice Frank Newbould of the Ontario Superior Court ruled that the League engaged in double-dealing when it contracted with Molson Coors regarding rights the court deemed already granted to Labatt.

The case presents a fact pattern only a contracts professor could love: at issue were law school favorites like the interpretation of a renewal clause, waiver, the point at which an agreement becomes binding, and agreements to agree. In brief -- as brief as one can be - the NHL twice expressly extended a period of exclusive negotiation provided in the renewal terms of the 2008 contract between the League and Labatt, and then, instead of further express extensions, made casual intimations that extensions "would not be an issue" as they progressed toward an agreement. Labatt and the NHL exchanged non-binding term sheets and letters of intent setting forth their agreed upon deal points through November and December 2010 and, instead of signing any of these, agreed to go directly to a long-form agreement. After a month of exchanging mark-ups, on February 8th of this year, the NHL told Labatt it was terminating negotiations. On that same day it signed the biggest beer sponsorship in League history: a seven-year, $375 million deal with Molson Coors.

Molson Coors had approached the NHL regarding sponsorship rights on January 3, 2011. Over the next several weeks, various NHL-related sources informed Molson Coors that the NHL already had a Canadian deal with Labatt. On January 26th, the NHL proposed exclusive U.S. beer sponsorship rights to Molson Coors; Molson Coors responded that it was only interested if the sponsorship was for the United States and Canada. The next day, the NHL agreed that it was able to grant such rights. Molson Coors agreed to the deal with the proviso that the NHL indemnify it against any claim brought by Labatt. Thirteen days later, the NHL and Molson Coors agreed to terms and signed a letter of agreement, including the requested indemnity. Labatt promptly brought suit. (Labatt Brewing Co. Ltd. v. NHL Enterprises Canada, L.P. (2011 ONSC 3219).)

At trial, Labatt argued that after its exclusive negotiating period was twice expressly extended, the NHL then waived the time limit (or, in the alternative, represented an intention not to be bound by the express exclusivity period due to its course of conduct), and the parties had come to "terms of renewal" as stated in the renewal clause of the 2008 contract which, although less than fully-negotiated terms of agreement - required the parties to continue to negotiate until they reached agreement on all business terms. The NHL countered by claiming that the exclusive negotiation period ended on October 22nd, irrespective of the NHL's continued negotiating thereafter, and that requiring it to continue negotiating until the parties reached agreement on all business terms after agreeing on terms of renewal constituted an unenforceable agreement to agree.

Justice Newbould, taking a view that comported entirely with neither NHL nor Labatt arguments, held for Labatt, finding that the negotiating period was indefinitely extended by the NHL; "an agreement" was reached on November 12th and therefore there was no obligation that Labatt and NHL ever reach a long-form agreement; and the NHL was precluded from negotiating with Molson Coors as of November 12, 2010.

As the clock ticked inexorably toward the 2011 - 12 season - without a pro season start minus the seemingly necessary beer sponsor in place - the NHL requested and received an expedited appeal at the Ontario Court of Appeals. In a brief eight-page ruling that did not even discuss three of the NHL's four grounds for appeal, the Court of Appeals reversed Justice Newbould's decision. (Labatt Brewing Company Limited V. NHL Enterprises Canada L.P. (2011 ONCA 511).) The reversal came on procedural grounds, with the appellate court finding that Justice Newbould had erred in determining that the NHL and Labatt had reached a binding sponsorship agreement as of November 12th when neither party had argued that a binding agreement was reached on that date. Citing many precedents in Canadian law, the Court of Appeals found that it was procedurally unfair to the NHL to determine a case based on a novel theory of liability not raised by either party at any point during litigation, as that left the NHL without the ability to rebuff the assertions made under the theory.

As of this blog, the 2011-12 NHL season will commence with Molson Coors as the League's beer sponsor. However, Labatt is contemplating further legal action and has acquired direct beer sponsorships with three Canadian teams, which sponsorships include the extremely important pouring rights in those teams' arenas. Meanwhile, the case will not go down as one of the finest moments in the NHL's legal history, as it appears that neither the NHL nor Molson Coors acted in an altogether upstanding fashion during these negotiations. Perhaps the current result is legally correct, but the whole affair leaves a bad taste in the mouth...perhaps the taste of spoiled beer.

September 9, 2011

EASL CLE: Lending in the Sports and Entertainment Industries

Wednesday, September 21, 2011
Herrick Feinstein
2 Park Avenue
New York, NY 10016
518.487.5591

9:00 a.m. - 11:00 a.m.
Pending approval, this program will earn up to 2.0 MCLE credits in Professional Practice
PROGRAM DESCRIPTION:

This program will cover the elements and trends of lending in the sports and entertainment industries. It will include the following topics:

Contents of credit agreements
Credit enhancement documents
Industry, league and regulatory restrictions
Other applicable topics related to this field

SPEAKERS:

Panelist and Moderators:
Stephen Brodie, Partner, Herrick Feinstein
Nick DeFabrizio, Chief Counsel Communications, Media and Entertainment Group CIT Legal Department

Panelists:
David Zimmerman, Executive Vice President and General Counsel, NHL
Bradley Rangell, Managing Director, Team Leader, Sports Advisory, Citi Private Bank
W. Wilder Knight II, Of Counsel, Pryor Cashman LLP
Lucie Guernsey, Managing Director, Woodland Bay Capital, Inc.


INFORMATION AND POLICIES

Pre-registration is Strongly Advised: You can guarantee your seat and course materials by registering early.

Seating is limited and registrations are taken on a first-come, first-served basis. Cancellations are easy - full refunds are given if you cancel within 48 hours of the start of the program. Your full registration fee will be refunded if you give us notice no later 48 hours before the start of the program for which you registered. To cancel, please contact Tiffany Bardwell at One Elk Street, Albany, New York 12207; or fax (518) 463-8844.

If you do not cancel and do not attend the program, a complete set of materials will be forwarded to you in consideration of the registration fee.

MCLE Credit: This program is acceptable for MCLE credit in New York.

EASL Section and NYSBA members can save a substaintal amount over non-members on CLE seminars alone. Join now and take advantage of NYSBA and EASL Section membership discounts throughout the year. If you wish to join, please contact NYSBA Customer Service Center at (800) 582-2452 and an application will be sent to you.

Tape Recording of NYSBA Seminars is not permitted.


For more information, contact: tbardwell@nysba.org


The last day to pre-register online is September 21, 2011. Register online now at our website at http://www.nysba.org/AM/Template.cfm?Section=Entertainment_Arts_and_Sports_Law_Home1&Template=/Conference/ConferenceDescByRegClass.cfm&ConferenceID=5003.


Members, please login to get member discounts.

October 18, 2011

Thoroughbred Trainer's License Revocation Headed for Article 78 Review

By Chris E. Wittstruck

Citing repeated violations and disregard of the rules of racing, on October 12th the New York State Racing and Wagering Board (the Board) revoked the license of veteran Thoroughbred horse trainer Richard "Dick" Dutrow, Jr. In addition to prohibiting Dutrow from reapplying for a license for 10 years, the Board fined him $50,000.00. On Monday, October 17th, the State Supreme Court in Schenectady granted the trainer a 30-day stay of enforcement pending the filing of a C.P.L.R. Article 78 proceeding challenging the administrative adjudication (Index # 2254/2011).

Dutrow, 52, was the trainer of 2005 Horse of the Year, Saint Liam, as well as 2008 Kentucky Derby and Preakness winner Big Brown. While the trainer's licensing history is checkered with numerous violations of racing regulations over the course of a decades- long career, Dutrow denies the instant allegations lodged against him, and alternatively takes issue with the severity of the penalty imposed. An intense analysis at the facts and circumstances surrounding the matter presents a preview of the issues that will be litigated over the course of the foreseeable future.

One sustained charge involved the presence of a veterinary sedative and analgesic in a post-race sample taken from one of Dutrow's horses. Yet the sedative appeared only in a urine sample; the horse's blood sample tested negative. Dutrow's expert opined that based upon a low positive in urine and no positive in the blood, the result could have been the product of cross-contamination of the sample, inasmuch as the sedative in question is commonly utilized as an intranasal spray for the treatment of migraines in humans. The possibility that a prior horse in the test stall might have excreted the substance prior to the arrival of Dutrow's horse was also raised. The Hearing Officer rejected both theories as lacking the level of substantial evidence required to rebut the presumption that Dutrow, having full care, custody and control over the animal, was at all times the guardian of the horse's physical condition. This presumption is known in racing law as the trainer responsibility rule.

Another sustained charge involved the confiscation of three syringes and needles containing a tranquilizer from Dutrow's desk drawer at his barn at Aqueduct Racetrack. It is a violation of Board rules for non-veterinaries to be in such possession. Dutrow was not present for the search, and denied any knowledge of the syringes.

Dutrow's attorney, Michael Koenig, was quoted in industry media outlets as complaining that: "The Racing and Wagering Board structure and process allows them to play prosecutor, judge and jury. No fair decisions can result from such a stacked process." Unlike states such as New Jersey, where an independent administrative law judge system (Office of Administrative Law) is in place, New York hearing officers receive an Order of Reference from the Board and act accordingly. Still, even in New Jersey, agency heads can in certain circumstances reject or modify an Administrative Law judge's determination.

Mr. Koenig also accused the Board's Chairman, retired state senator John Sabini, as having a "remarkable'' conflict of interest in the Dutrow matter, inasmuch as Sabini is also a board member of the Association of Racing Commissioners International; the same group whose President, Ed Martin, a former New York racing official, called for the revocation of Dutrow's license in a highly publicized letter to the Board. Mr. Koenig's call for Chairman Sabini's recusal was denied by the Hearing Officer as beyond the scope of his authority and was, in any event, rejected by Chairman Sabini himself. Whether Mr. Koenig's theory of conflict goes beyond a mere appearance of impropriety remains to be seen.

The rejection by the Hearing Officer of the testimony of Mr. Dutrow's character witnesses, ranging from retired Hall of Fame jockey Angel Cordero, Jr. to renowned Kentucky veterinary surgeon Dr. Lawrence Bramlage, coupled with the nature of Mr. Dutrow's medication violations over the last 10 years as being mostly minor overages of legitimate therapeutic drugs, sets the stage for a claim that the 10-year administrative ban is "shocking to the conscious" (See Matter of Pell v. Board of Education, 34 NY2d 222 (1974)). The Board's 10-year reapplication ban, however, was in fact a melioration of the hearing officer's recommendation that Dutrow never be permitted to reapply for a racing license.

In opposition to the injunctive relief request, Board counsel argued that a stay through the appeals process could grant Dutrow the right to train in New York for up to 36 months. Such a stay would also enable Dutrow to avoid the collateral reciprocity effects of the ban, and thus permit him to train in other jurisdictions as well. While time would assuredly be on Dutrow's side if he receives a stay throughout his appeals (C.P.L.R. 7805), whether any of his claims regarding due process violations, substantial evidence, inherent conflict and excessive penalty are ultimately viable will determine whether his property right in an occupational racing license is irretrievably lost (Barry v. Barchi, 443 U.S. 55 (1979).


November 2, 2011

THE USGA AND R&A ANNOUNCE CHANGES TO THE RULES OF GOLF IN RESPONSE TO FRUSTRATING RULES-RELATED INCIDENTS

WILL THE PGA FOLLOW SUIT AND REVISE THE INFAMOUS LOCAL RULE AT WHISTLING STRAITS?

By Brian Pelanda

The United States Golf Association (USGA) and the R&A, golf's international governing bodies, recently announced significant changes to the Rules of Golf beginning in 2012. A few of these revisions address certain provisions at the heart of several unfortunate incidents at professional golf tournaments in recent years. The question now is whether the PGA will follow suit and revise the unpalatable Local Rule on bunkers at Whistling Straits that fostered the unidentifiable-bunker-scenario that cost Dustin Johnson the opportunity to contend in a playoff at the 2010 PGA Championship (for more information, see "What's A Bunker?: The Curious Case of How Dustin Johnson Lost the 92nd PGA Championship and Why the PGA Must Revise the Now Infamous Local Rule at Whistling Straits" that will be published in the Fall/Winter EASL Journal).

I. THE REVISED RULES OF GOLF FOR 2012

Under the new Rules, a golfer will thankfully no longer be penalized if the wind or other natural circumstance causes his or her ball to move after he or she has addressed it. Rule 18-2b currently penalizes a player one stroke if his or her ball moves after addressing it, regardless of cause. In recent years, several professionals have suffered under this harsh and unreasonable rule in major championships: Fredrik Jacobson at the 2008 British Open, Padraig Harrington at the 2009 Masters, and Rory McIlroy at the 2011 British Open. Webb Simpson also took a Rule 18-2b penalty on the chin at the 2011 Zurich Classic. As Simpson held the outright lead during the final round and lined up for his par putt on the 15th hole, gusting winds caused his ball to move; the resulting penalty forced him into a playoff with Bubba Watson that he ultimately lost.

The revised Rule 18-2b now contains an exception that exonerates a player from penalty if his ball moves after it has been addressed when "it is known or virtually certain that he did not cause the ball to move." Although this much needed change in the Rules has come too late for some, it is better late than never.

Another one of the upcoming changes in the Rules remedies the rare and ridiculous circumstance under the text of Rule 13-4, in which a player could be penalized for raking a bunker that he or she walked through in the course of making one stroke, prior to making the next stroke if his or her ball on that next stroke currently lies in another bunker. This rule victimized Stewart Cink at the 2008 Zurich Classic. Cink's drive on the 15th hole during the third round landed near, but not in, a fairway bunker, and as he surveyed the scene for his second shot he walked through that bunker. He took his second shot, and his ball landed in a greenside bunker. Before moving on to take his third shot from the greenside bunker, adhering to common golf etiquette, his caddie raked the fairway bunker through which Cink had walked in preparation for his second shot. This violated Rule 13-4a's prohibition on "test[ing] the condition of the hazard or any similar hazard" when the player's ball currently lies in a hazard.

As Cink didn't realize that what he had done violated the Rules until the following day, he was unable to add the two-stroke penalty to his score and he was thus disqualified from the tournament under Rule 6-6b for signing and returning an incorrect score card.

The newly revised version of Rule 13-4 now "permit[s] a player to smooth sand or soil in a hazard at any time, including before playing from that hazard, provided it is for the sole purpose of caring for the course and Rule 13-2 [a player must not improve the position or lie of his or her ball] is not breached."

The USGA and R&A also revised several other provisions in the Rules for 2012. Both of the new revisions to the Rules discussed above attempt to remedy unreasonable results that have occurred under the current Rules in recent years at professional golf tournaments. The governing bodies essentially acknowledged that there were problems, considered solutions, and revised the Rules accordingly. The PGA should do the same in response to the controversy that came to fore over the Local Rule on bunkers at Whistling Straits during the 2010 PGA Championship.

II. THE PGA SHOULD FOLLOW SUIT AND REVISE
THE INFAMOUS LOCAL RULE AT WHISTLING STRAITS

During the final round of the 2010 PGA Championship at Whistling Straits, Dustin Johnson incurred a fatal 2-stroke penalty on his final hole pursuant to an ambiguously worded Local Rule on the play of bunkers that knocked him out of a tie for the lead and an opportunity to compete in a three-way playoff with Bubba Watson and Martin Kaymer. Johnson incurred the penalty under Rule 13-4 for grounding his club while his ball allegedly lay in a bunker on his second shot--even though it never occurred to him that his ball was ever in a bunker. The unique condition of the Whistling Straits course contributed to his confusion. Although the location of Johnson's second shot didn't appear to be a bunker at all, the officials determined that the Local Rule established that the area in question was in fact a bunker.

The controversial Local Rule stated that: "All areas of the course that were designed and built as sand bunkers will be played as bunkers (hazards), whether or not they have been raked." Course officials had allowed thousands of tournament patrons to traipse through and stand in the questionable area all week, without maintaining the appearance of the area as a bunker. While the Rules of Golf require a bunker to be (1) a prepared area of ground, (2) from which turf or soil has been removed, and (3) replaced with sand or the like, the Local Rule impermissibly redefined a bunker as being any area that was merely "designed and built" as a sand bunker, regardless of its present condition.

Under the language of the Local Rule, it's easy to imagine an unidentifiable bunker-scenario where the course architect supposedly had "designed and built" an area on the course to be a bunker, but the turf or soil from that area has since returned, or the sand has vanished--things that are more than likely to happen with thousands of spectators trampling through it over a six-day period and when the bunker itself isn't maintained by the grounds crew.

The Local Rule essentially requires players to have an intimate knowledge of the architectural plans for Whistling Straits, a course that was built more than a decade ago and boasts that it has more than 1,000 bunkers, most of which are unmaintained.

Even if we were to presume for the moment that holding players responsible for being familiar with the course's architectural plans would be fair, we can't reasonably apply such a presumption in Dustin Johnson's case, because tournament officials actually admitted after the incident that the reason they didn't provide players with a map of all the existing bunkers on the course was precisely because no such map even exists, primarily due to the fact that not all of them can be readily identified. Among other things, this point raises the troubling question as to how the tournament officials were thus ever able to conclusively determine whether Dustin Johnson actually was in an area that was "designed and built" as a bunker when he took his second shot on the 18th hole, but we've just been left to take their word for it.

Despite the controversy that ensued and the apparent impermissible contradiction between the Local Rule and the definition of a bunker under Rules of Golf, the PGA has nevertheless stated that it plans to maintain the Local Rule at Whistling Straits for future tournaments, such as when the PGA Championship returns there in 2015, and when it hosts the Ryder Cup there in 2020.

Dustin Johnson's confusing penalization under the Local Rule was unfortunate. The Local Rule deprived him of a chance to win the tournament in a playoff, and it deprived Martin Kaymer from a major championship victory untainted by controversy. For the sake of fairness and to prevent another leaderboard-altering bunker blunder, the PGA must change the now infamous Local Rule at Whistling Straits.

As mentioned above, for an in-depth analysis of the Local Rule and other rules at issue in the controversy at the 2010 PGA Championship, see my article "What's a 'Bunker'?" in the Fall/Winter issue of the Entertainment, Arts and Sports Law Journal. Please feel free to send me your thoughts at bpelanda@gmail.com.

November 22, 2011

NBA Season Hangs in Peril

By Nili Wexler

Players from the National Basketball Association (NBA) disbanded their union last Monday, which allowed them to file two antitrust suits the following day in different jurisdictions. The owners and league officials responded negatively to the move, asserting that "[i]t's a shame that the players have chosen to litigate rather than negotiate." (http://www.nytimes.com/2011/11/16/sports/basketball/nba-players-file-antitrust-suit-against-the-league.html)

Conversely, the players claim that the league acted in bad faith and impeded the negotiation process by issuing an expiring ultimatum. After failing to reach an agreement on a new collective bargaining contract, NBA owners locked out the players on July 1, and the ongoing discord between the two parties has forced games to be canceled through December 15.

This Monday the players consolidated their suits and re-filed a single federal claim in Minnesota. This action should "should permit us to expedite the case," said the player's newly appointed attorney David Boies, who represented the National Football League (NFL) owners in a recent labor dispute with players. (http://www.npr.org/blogs/thetwo-way/2011/11/18/142507617/nba-anti-trust-lawsuit-will-take-months-to-reach-court)

Boies also stated that the players' representatives have had no contact with the league's lawyers, and expressed that "[i]f the league's approach is to ignore the litigation...and hope it goes away...I don't think that's in our interest, I don't think it's in their interest...it's certainly not in the fans' interest." (http://www.nytimes.com/2011/11/22/sports/basketball/nba-players-merge-lawsuits.html)

The league has filed a pre-emptive federal lawsuit in New York to validate its claim that the lockout is legal, and it will likely attempt to move the venue of the players' suit to New York as well. League attorney Rick Bauchman criticized the players' choice of venue by noting, "[t]his is consistent with Mr. Boies' inappropriate shopping for a forum that he can only hope will be friendlier to his baseless legal claims." (http://www.nytimes.com/2011/11/22/sports/basketball/nba-players-merge-lawsuits.html)

The players are suing for treble damages, meaning they are seeking triple the amount they make for the games they miss during the 2011-2012 season. They contend that this lockout will cause irreparable harm, given that professional basketball careers are very short and that even a small break significantly impairs their earning capacity.

The thrust of the players' claim is that the teams are conspiring with one another against the players in contravention of existing antitrust law, and that "the express purpose of Defendants' group boycott and price fixing is to reduce the salaries, terms, benefits and conditions of employment available in the market for players." (http://blogs.wsj.com/dailyfix/2011/11/16/nba-players-must-wait-for-day-in-court/)

Boies acknowledged that the suit could take months, in which case the entire season would be canceled, but expressed hope that the matter would be settled in the near term. As of now, the first case management conference is set for March 9, which would be too late to salvage any part of the season, but the parties can request that the date be changed. Alternatively, they might agree to settle prior to the trial phase.
(http://sports.yahoo.com/nba/news?slug=ap-nbalabor)

Labor attorney John Goldman of Herrick Feinstein warned that if the case ultimately proceeds through litigation, it will be a lengthy process. "This case won't be over a year from now...it's probably two years." (http://aol.sportingnews.com/nba/story/2011-11-22/time-might-be-on-the-side-of-nba-players)

Economics professor Andrew Zimbalist, who has worked with the player's association in a previous matter, was interviewed about the players' litigation strategy. He suggested that the players might seek an injunction against the lockout so that they would be able to return to work immediately.

Zimbalist also suggested that the players' suit is more of a bargaining tactic aimed at eliciting concessions than a firm commitment to litigate the issue. As a result, he says, the NBA might argue that the disbanding of the players' union is a "fraudulent decertification" because the union will reconstitute immediately after it achieves its desired outcome.

In a more hopeful tone, Zimbalist suggested that "[m]aybe some of the owners who are more dovish will get together and say 'Enough already. Let's get together and try to get this thing done.' If they do that, maybe we can start playing basketball at some time at the end of December. But it doesn't look great right now." (http://www.grantland.com/blog/the-triangle/post/_/id/9699/an-economics-professor-explains-the-nbpa-and-the-lockout)

November 28, 2011

Hazing in the Locker-Room: The Neepawa Natives Investigation

By Carter Anne McGowan

While the sports airwaves here in the U.S. are filled with stories of unfolding sexual abuse scandals at Penn State and Syracuse, Canada is doing its own soul-searching due to a hazing incident in junior hockey which has resulted in a just-closed Royal Canadian Mounted Police (RCMP) investigation, an ongoing league investigation into the involvement of the assistant coach, issues of minor consent, and questions about the legitimate boundaries of humiliating initiation rituals.

In September of this year, up to five rookies on the Neepawa Natives of the Manitoba Junior Hockey League (MJHL) were made to engage in several hazing rituals. Veterans on the team made one 15 year old (Player One) walk around the locker room with a water bottle rack tied to his scrotum as other players tossed towels on the rack to add weight to it. Other rookies were tasked to engage in a locker room striptease, on which they were rated and for which the lowest-rated players were penalized by doing pushups over tubs of ice water.

Soon after these events, Player One left the team. His story became public when he shared the facts of the incident with his girlfriend, who told her father. Word of the hazing made it back to Player One's father, who confronted the Natives' head coach, and informed him that not only were players in the locker room during the hazing, but so too was assistant coach Brad Biggers.

While the Natives did inform the MJHL of the hazing incident, team management told Player One that if he desired to return to the team, he must first apologize to his teammates because he didn't seek to handle the situation internally but instead spoke to outsiders about the situation. Player One did apologize to the team, but management then requested that he stay away from the team during the investigation. As of now, Player One has not returned to the team but is instead making plans to play in the U.S.

After the MJHL completed its initial investigation - during which the members of the team were interviewed and informed the MJHL Commissioner that Biggers was not in the room - the MJHL handed down a $5,000 fine and issued 18 suspensions: five games for assistant coach Biggers; five games for the team captain; three games for each of the assistant captains; two games for the head coach; and 12 one-game suspensions for 12 other players.. These were the most suspensions and largest fines ever handed down by the MJHL.

Yet the story was not over. After the completion of the MJHL investigation, the team's board of directors engaged in its own investigation of the hazing incident. During this second investigation, four players stepped forward to admit that they had lied about Biggers' involvement in the hazing, stating that he was in the locker room when the hazing occurred. Biggers resigned; the MJHL reopened its investigation, suspended Biggers from the league indefinitely (which operates to ban him from all coaching in Canadian junior hockey leagues), and appointed a retired Winnipeg detective to serve as an independent investigator.

Unlike many U.S. jurisdictions, Canada - where criminal law is an exclusively federal body of law - does not have an anti-hazing statute. This incident naturally raised the question of whether Canada should have a federal anti-hazing statute, as the law available to the Crown Attorney is the law of assault, which, unlike anti-hazing laws, carries with it questions of consent. Under the Canadian Criminal Code (RSC, 1985, c.C-46 §265):

(1) A person commits an assault when
(a) without the consent of another person, he applies force intentionally to that other person, directly or indirectly;
[...]
(2) This section applies to all forms of assault, including sexual assault [...]
(3) For the purposes of this section, no consent is obtained where the complainant submits or does not resist by reason of:
(a) the application of force to the complainant or to a person other than the complainant;
(b) threats or fear of the application of force to the complainant or to a person other than the complainant;
[...]
(d) the exercise of authority.

The Neepawa Natives rapidly moved to establish a consent defense in its apologetic press release of November 3rd:

First and foremost, no player was forced or threatened to take part in anything they were not comfortable doing, this was and remains a team policy from the start of the season. The victims of the incident participated in the events that took place in the month of September on [sic] their own will and were not pressured in any way by any member of the team. We are truly sorry for allowing this kind of immature behavior to happen in our dressing room.

Taking the statute at face value, there are several reasons why consent, even if given, would seem to be of dubious validity: the minority of the hazed players; the questions of force applied; the exercise of authority (captains/veterans have at least informal authority over rookies; assistant coaches obviously have authority over all the players). Yet Canadian legal commentators felt the issue of whether consent had been granted was a significant barrier to prosecution of any locker room hazing under the assault statute. This week, the Crown Attorney appeared to agree, and the RCMP announced that no criminal charges would be filed arising from the hazing incidents. The MJHL's second internal investigation is ongoing and is likely to be completed within a week, and according to reports focuses on Assistant Coach Biggers and his involvement. If nothing else, this incident serves as yet more evidence - as if after the last several weeks North America needed more evidence - that the culture and power structures exhibited in too many sports locker rooms are in need of significant overhaul.

March 5, 2012

From Prospect to Pro: A Legal Primer on Recruitment of Professional Athletes Including Foreign Players



Thursday, March 8, 2012 from 6:00pm - 8:00pm

- Location -
Benjamin N. Cardozo School of Law
Room 424
55 5th Avenue
New York, NY 10003

The Entertainment, Arts and Sports Law Section and the Metropolitan Black Bar Association, Benjamin N. Cardozo School of Law Black Law Student Association and the Minority Law Student Association will cover key issues affecting the recruitment or professional players, including the regulation of agents, NCAA rules, the NBA categorization of prospects, dealing with foreign agents and players, including immigration aspects.

The speakers include Jared Bartie, Esq., Arent Fox, who has counseled sports clients on a variety of matters; Colleen Caden, Esq., Pryor Cashman, LLP, who represents many professional players and professional teams on immigration issues; Professor Mark Conrad, Associate Professor of Law and Ethics at Fordham University's Gabelli School of Business and its Graduate School of Business Administration; Brooks Meek, NBA, VP - Basketball Operations, International;; and Sunny Shah, CEO of 320 Sports Inc. and NFLPA Certified Contract Advisor.

EASL & MBBA Members: $25 (MBBA Members please call 518-487-5674 to register)
Non-Members: $50
Law Students: $15
Cardozo Law Students: Free with ID (Please call 518-487-5674 to register)
For more information, contact: bgould@nysba.org

March 7, 2012

Madoff Trustee Wins Partial Summary Judgment in Suit Against Mets Owners; Jury to Hear Remaining Claims


By Pamela R. Shisler

Mets fans have dealt with a slew of bad news recently. On the field, promising young first baseman Ike Davis was diagnosed with a likely case of Valley Fever, and beloved third baseman David Wright was placed out indefinitely with a rib-cage injury. On Monday, off the field, S.D.N.Y. Judge Jed Rakoff dealt the beleaguered fan base another blow in the form of a four-page order in the high-profile suit by Madoff bankruptcy trustee Irving Picard against New York Mets owners Fred Wilpon and Saul Katz (Picard v. Katz, No. 11 Civ. 3605).

Judge Rakoff characterized the brief order as a set of "bottom line" rulings on the parties' summary judgment motions, indicating that a full opinion is still to come. In the order, which followed full discovery, the court granted the trustee's motion for partial summary judgment, holding that the trustee was summarily entitled to recover up to $83 million from the defendants. The $83 million represents the net profits beyond their principal investment that the defendants had received from the Madoff fund during the applicable two-year look-back period. In an earlier opinion dated September 27, 2011, the court ruled that federal bankruptcy law entitled the trustee to "avoid" or claw back any of the net profits paid out by the fund within two years prior to the bankruptcy filing, unless the defendants could show that the profits were received "for value". In Monday's order, Judge Rakoff held that the "value" the defendants gave to the Madoff fund was limited to the amount of their principal investment. Thus, the trustee was entitled to recover up to the $83 million in profits that were paid to the defendants. The exact amount recoverable by the trustee and the apportionment of that amount among the various defendants will be determined in a subsequent order.

The court also denied the defendants' motion to dismiss the trustee's remaining claims to recover the amount of principal investment that was returned to the defendants during the two-year look-back period, approximately $303 million. In his earlier opinion, Judge Rakoff had ruled that the trustee could only succeed on these claims by showing that the defendants had invested the principal with Madoff in bad faith. Rejecting the more lenient "inquiry notice" standard advanced by the trustee, the court had ruled that the trustee could only rebut the defendants' presumption of good faith by showing that the defendants had been "willfully blind" to the Madoff fraud. In Monday's order, Judge Rakoff held that the trustee had presented enough evidence to allow the issue of the defendants' good faith to proceed as a question of fact for the jury at trial. However, in the brusque language that has come to characterize Judge Rakoff's opinions in this case, he stated in no uncertain terms that he remained skeptical of the trustee's ability to ultimately succeed on the issue. Mets fans might see a silver lining in Judge Rakoff's stated concern that much of the trustee's evidence of bad faith presented during summary judgment proceedings may not be admissible at trial under the Federal Rules of Evidence. "Nevertheless," he wrote, "there remains a residue of disputed factual assertions from which a jury could infer either good or bad faith depending on which assertions are credited."

As the case proceeds to trial, the principal issue to be resolved will be the question of the defendants' good faith in making their investments with the Madoff fund, which will determine whether the trustee can claw back the $303 million principal investment, in addition to the $83 million in profits. Judge Rakoff's order stressed, as he has in past rulings, that the trial date in the case remains firmly fixed for March 19th, so any delay in the start of the trial seems unlikely. Coincidentally, March 19th is also one of the few off days in the Mets' spring training schedule, so expect all Mets-interested eyes to be on the courtroom that day, instead of on the field.

March 29, 2012

NFL Bounty Scandal

By Thomas Grove

Last week, NFL Commissioner Roger Goodell issued severe penalties against the New Orleans Saints, its general manager, and members of its coaching staff for running a bounty program. Under the program, money was given to players for targeting players on other teams and injuring them. As a result of the program, Saints head coach Sean Payton was suspended for a year without pay, former Saints defensive coordinator and current Rams defensive coordinator Gregg Williams was suspendedindefinitely without pay, general manager Mickey Loomis was suspended eight games without pay, assistant head coach Joe Vitt was suspended six games without pay, the Saints forfeited a 2012 second-round draft pick and a 2013 second-round draft pick, and were fined $500,000.
(http://nfllabor.files.wordpress.com/2012/03/saints-2012.pdf)

An NFL investigation uncovered evidence of a bounty program during the 2009, 2010, and 2011 seasons. The pot was mostly funded by players who would then be awarded for "knock-outs" and "cart-offs", which are words typically associated with injuries. Specific players were also targeted, namely Brett Favre, Kurt Warner, Cam Newton, and Aaron Rodgers. (Id.)

Head coach Sean Payton denied the allegations in 2012 and said to his assistants, "let's make sure our ducks are in a row", when investigators began pressing for information. Payton is obligated under the NFL Constitution and Bylaws to "communicate openly and candidly with the principal owner and/or his designated representative to ensure that club ownership is informed on a complete and timely basis of all matters affecting the club's operations; and to avoid actions that undermine or damage the club's reputation or operating success". He has a similar obligation under the standard coaching agreement he signed with the Saints. (Id.)

Commissioner Goodell issued a statement detailing how this situation was "particularly unusual and egregious." He stated, "when there is targeting of players for injury and cash rewards over a three-year period, the involvement of the coaching staff, and three years of denials and willful disrespect of the rules, a strong and lasting message must be sent that such conduct is totally unacceptable and has no place in the game." He added "there is no place in the NFL for deliberately seeking to injure another player, let alone offering a reward for doing so. Any form of bounty is incompatible with our commitment to create a culture of sportsmanship, fairness, and safety. Programs of this kind have no place in our game and we are determined that bounties will no longer be a part of the NFL." (Id.)

The coaches and general manager can appeal their suspensions, but the appeal process returns to Commissioner Goodell. If they appeal, the coaches can continue to work for their teams, but Goodell has stated that any decision would be expedited. Further, appeals go straight back to the man who handed down the sentence, and league counsel Jeff Pash said, "we are comfortable with the sanctions."
(King, Peter, "Bounty Saga Still Dominating League Landscape at Owners Meetings," Mar. 26, 2012, available at http://sportsillustrated.cnn.com/2012/writers/peter_king/03/26/meetings/index.html)

One remaining issueyet to be decided is the penalty for the players who took part in the program. Currently, the Commissioner's Office and the NFLPA are working on proper punishments for the players. Commissioner Goodell could suspend and/or fine any player that has been deemed to have taken any part in bounties. Currently, Jonathan Vilma has been named as personally offering $10,000 to any Saints player who knocked Brett Favre out of the 2010 NFC Championship Game.
(http://nfllabor.files.wordpress.com/2012/03/saints-2012.pdf)

Aside from league penalties, players and coaches could face criminal charges for their role in the program. Under Louisiana law, "battery is the intentional use of force or violence upon the person of another." Although players assume the risk of getting injured when they play football, they do not assume the risk of another player purposefully attempting to injure them. This could also apply to second-degree battery, which carries a more severe penalty under Louisiana law. Second-degree battery "is a battery when the offender intentionally inflicts serious bodily injury" and serious bodily injury is defined as "bodily injury which involves unconsciousness, extreme physical pain or protracted and obvious disfigurement, or protracted loss or impairment of the function of a bodily member, organ, or mental faculty, or a substantial risk of death." A player who inflicted a "knock out" hit could arguably have inflicted serious bodily injury under this statute.
(McCann, Michael, "Breaking Down the Potential Legal Fallout of Saints' Bounty System," Mar. 3, 2012, available at http://sportsillustrated.cnn.com/2012/writers/michael_mccann/03/03/saints.bounty.system/index.html)

The government could also get involved in this scandal. Taxes are as American as football and the IRS has reportedly begun "poking around" the bounty program for potential tax evasion charges.Pay for performance programs are outlawed in the NFL and any player receiving extra money would have to report it as taxable income. Furthermore, Senator Dick Durbin from Illinois requested a hearing by the Judiciary Committee to explore the bounties. The government has recently held hearings dealing with NFL issues, including the lockout, performance-enhancing drugs, player safety, and the television blackout policy, so this comes as no surprise.
(Pasquarelli, Len, "IRS Among Federal Agencies 'Poking Around' in 'Bountygate,'" Mar. 26, 2012, available at http://www.cbssports.com/nfl/story/18059904/irs-among-federal-agencies-poking-around-in-bountygate)

Participating in a bounty program raises serious issues of a player's integrity, especially with the recent rise of player safety. The Saints may seek to terminate a player's contract "for cause" because bounties are criminal in nature. Terminating "for cause" would relieve the Saints of that player's financial obligations for the remainder of his contract. The Saints could also seek to void the contract under the morals clause, as this type of behavior raises serious issues relating to a player's integrity.
(http://sportsillustrated.cnn.com/2012/writers/michael_mccann/03/03/saints.bounty.system/index.html)

April 2, 2012

Nike v. Reebok: Reebok takes Advantage of Tebow-Mania

By Jenna Norys

While Jeremy Lin has created hysteria and cause for sportscasters all over the world to exhaust their creativity with Lin-puns, one would think that the previous sensation, the man that inspired YouTube to explode with "Tebowing", had finally lost steam to another. Oh how some of us underestimated the fanaticism that is Tim Tebow. On March 21st of this year, Lady Liberty herself was seen to kneel with her fist to her head as the New York Jets announced its acquisition of the clean cut Christian Quarterback. Jets fans all over the nation could not wait to get their hands on Jets t-shirts with Tebow's name proudly sprawled across the back. However, Tim Tebow's team affiliation was not the only thing that changed in the NFL. This year the NFL ended its longstanding relationship with Reebok as its official apparel company, and signed on to a 5-year deal with Nike.

These relationships give rise to the recent conflict between Nike and Reebok slated to be battled out -not on, but in the court of the Southern District of New York. While Reebok's rights were said to have ended prior to Tebow's move to the Jets, a complaint filed by Nike explains that as soon as the announcement was made, Reebok t-shirts bearing the name of Tebow were sold all over the nation. (Nike, Inc. and Nike USA, Inc., v. Reebok International Ltd. 12 cv. 2275, Complaint Available at: http://docs.justia.com/cases/federal/district-courts/new-york/nysdce/1:2012cv02275/393953/1/)

Nike's complaint came only one week after the purported sale. It claimed violations of the Lanham Act, misappropriation of rights of publicity, tortious interference with current and prospective business relationships, and unjust enrichment. On March 28th, Judge Kevin Castel granted Nike's request for a Temporary Restraining Order blocking Reebok from distributing, manufacturing or selling anymore Tebow gear.

Part of this case comes down to the licensing schemes of respective NFL entities. Reebok has had past licenses with the NFL for the use of its teams' trademarks, as well as a group license from the NFL Players Association for individual players. While Reebok is apparently allowed to sell off its remaining products, however, what it has purported to do in this situation is to take 2 previous licenses and lump them together where only one was permissible. This is a catch-22 in all senses: had Reebok sold its Jets t-shirts without Tebow's name, there would be no issue, yet there would not likely be an influx of sales either.

A Chargers fan myself, my thoughts went to Peyton Manning and his move to Denver as being the critical NFL player change this year (who wants Peyton anywhere near their division?!). Thinking this was big news, I thought why would Nike sue only on Tebow's name? Are Denver fans eating up Bronco shirts reading "Manning" just as fast? Apparently not, for as the Nike complaint points out, New York is the largest market for sports in the nation and the public interest in Tebow is a unique phenomenon that has made his jersey the second most popular of all NFL players in 2011, only second to Aaron Rogers.

There is a unique issue in this case, in that Nike did not actually acquire the rights to the NFL trademarks until April 1st, but has the licensing for Tebow individually. One concern is that neither Reebok nor Nike could have lawfully sold a Jets Tebow t-shirt from March 21st - April 1st due to the fact that each had rights to only one aspect of the product, Reebok having the Jets' rights and Nike having Tebow's.

Nike has alleged that it has been prevented from capitalizing on the market for New York-Tebow apparel in the immediate aftermath of the trade. While the arguments are persuasive in the complaint, it is clear that Nike would not be able to capitalize on the trade at the height of the event. It has only been 10 days since the trade, and since then there have been a number of people who are downplaying the trade as a PR stunt, and speculating whether Tebow will even play or if he was only drafted to neutralize the Jets' "bad boy" image (Associated Press Mar. 30, 2012 available at: http://espn.go.com/new-york/nfl/story/_/id/7757218/new-york-jets-tim-tebow-unsure-ever-starting-quarterback-again, Davenport, Gary, "Tim Tebow to Jets is Nothing More Than Publicity Stunt," Mar. 30, 2012, available at: http://bleacherreport.com/articles/1125723-tim-tebow-to-jets-is-nothing-more-than-publicity-stunt).

In the trend-driven environment that we all live in, instant gratification seems to drive the market. What makes this lawsuit intriguing is that Nike probably did not suffer so much from the sales as Reebok gained. This is because it is not clear that Nike would have actually kept the Tebow hype up until after its scheduled April 3rd grandiose jersey unveiling ceremony and it could not have sold the Jets-Tebow gear until April 1st. Additionally, it may be that the new style of Nike jerseys will lead to consumers throwing out those Reebok threads in favor of a newer sleek style. Of course that fact is somewhat irrelevant, as the claims are based on the unjust enrichment of Reebok, but it is interesting that where there was a market demand, legally speaking, these two parties cancelled each other out and could have prevented consumers from obtaining the product they wanted in that small window of opportunity. It will undoubtedly be interesting to see how Reebok responds as its answer is due on April 18, 2012.

April 12, 2012

The Right to Remain Silent

By Steven A. Adelman
http://adelmanlawgroup.com/

There is an old saying, "Better to remain silent and be thought a fool than to open your mouth and remove all doubt." Recent events involving the Miami Marlins' new manager Ozzie Guillen allow us to test this. In the wake of his "I love Fidel Castro" line, there has been much discussion about what Americans loosely refer to as the right of 'free speech.' Since this subject has come up before regarding venue employees and students' right to say and post things, let's see what that right really is.

We begin where most rants on this subject begin, with the First Amendment to the United States Constitution. Here is what it actually says: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

Congress shall make no law? Why, this doesn't say anything about the right of a professional sports team to make rules "abridging the freedom of speech" of club employees, does it? To anyone venting about the Marlins trampling on their manager's rights as an American, I say, READ THE CONSTITUTION -- then be quiet.

What about Mr. Guillen's employer? Does it have the right to suspend him for five games, or even to fire him, just for his words? Of course it does. Why? Because it is his employer, a private company for which the manager serves at its pleasure. Do the Marlins have the right to be politically correct, if that's what you want to call not deeply offending Miami's large population of potential Marlins fans who fled Castro's Cuba? Yes!(Does the context make "I love Fidel Castro" sound any better? Ozzie's next sentence was, "A lot of people have wanted to kill Fidel Castro for the last 60 years, but that (expletive) is still here." In other words, he is impressed with Castro's resilience, not his politics. On the other hand, the context also includes that the Marlins' brand new ballpark is located in an area called "Little Havana.")

Do the Marlins have the right to cut an employee loose who hurts their bottom line? Sure! Ozzie Guillen has the same free speech rights that you do relative to your workplace. If you say something that hurts your employer's ability to sell tickets, licensed merchandise, or personal seat licenses, then you can be disciplined. The only difference for most readers is that Ozzie Guillen has a multi-year contract which the Marlins must honor whether it lets him manage or not. Likely you are an employee at-will, meaning that you can be fired for good cause (you do a lousy job) or no cause (the bosses don't like your hair), just not bad cause (you require an ADA accommodation).

America is, as people say, a "free country." We are free to speak our minds, to post comments or pictures on social media, to express ourselves in the marketplace of ideas. But these are not unlimited rights. To the contrary, our individual liberties are balanced against the rights of other individuals (which is why you can be arrested for causing a stampede by yelling "Fire" in a crowded movie theater), and even against the interests of corporate entities like employers.

So Ozzie Guillen can say what he wants, so long as he is prepared to deal with the consequences. Just like all of us. If we all had four-year, $10 million guaranteed contracts.

July 4, 2012

United States Anti-Doping Agency Formally Charges Lance Armstrong

By Jennifer N. Graham

The United States Anti-Doping Agency (USADA) formally charged seven time Tour de France winner Lance Armstrong with violating anti-doping policies that could ultimately cause him to forfeit his titles and ban him from cycling for life. As an immediate result of the charges, Armstrong is unable to compete in Ironman Triathlons, which he has been competing in and winning since he retired from cycling in 2012.

In a 15 page charging letter dated June 12, 2012, the USADA accuses Armstrong of using, possessing and trafficking the blood booster erythropoietin (EPO), blood transfusions, testosterone and masking agents from 1998 to 2011.

The USADA further alleges that Armstrong was involved in a doping conspiracy from 1998 to 2007, along with several members of his cycling team, including Armstrong's team manager, Johan Bruyneel, and Michele Ferrari, Armstrong's former trainer. The USADA claims to have at least 10 former teammates and associates of Armstrong willing to testify before the arbitration panel in support of these charges. The USADA also states that Armstrong's blood samples obtained by Union Cycliste Internationale (UCI), the world governing body for cycling, from 2009 and 2010 are consistent with blood doping.

Armstrong's attorney, Robert D. Luskin of Patton Boggs, responded to the charges as baseless and without merit and a product of a malicious campaign led by USADA's chief executive, Travis Tygart, against Armstrong. Armstrong maintains his innocence and on his website, www.lancearmstrong.com, asserts he has passed more than 500 drug tests over the course of his career and has never failed one.

Armstrong's attorneys affirm that they are exploring all legal options and have hinted at filing federal charges against USADA investigators for compelling false testimony from witnesses in exchange for promises that those witnesses would avoid facing their own doping charges.

In February 2012, U.S. Attorney Andre Birotte Jr. ended a two-year long investigation of Armstrong involving doping allegations without filing criminal charges against the 40 year old iconic athlete. While the USADA cannot bring criminal charges against Armstrong, the 12 year old agency, which is funded jointly by the U.S. Olympic Committee and the federal government, has authority to suspend athletes from competition and to rescind awards.

The USADA is a signatory of the World Anti-Doping Agency (WADA) and adheres to its World Anti-Doping Code. Article 17 of the World Anti-Doping Code sets forth the statute of limitations and requires actions to be commenced within eight years from the date of the alleged violation.

United States Anti-Doping Agency Formally Charges Lance Armstrong

By Jennifer N. Graham

The United States Anti-Doping Agency (USADA) formally charged seven time Tour de France winner Lance Armstrong with violating anti-doping policies that could ultimately cause him to forfeit his titles and ban him from cycling for life. As an immediate result of the charges, Armstrong is unable to compete in Ironman Triathlons, which he has been competing in and winning since he retired from cycling in 2012.

In a 15 page charging letter dated June 12, 2012, the USADA accuses Armstrong of using, possessing and trafficking the blood booster erythropoietin (EPO), blood transfusions, testosterone and masking agents from 1998 to 2011.

The USADA further alleges that Armstrong was involved in a doping conspiracy from 1998 to 2007, along with several members of his cycling team, including Armstrong's team manager, Johan Bruyneel, and Michele Ferrari, Armstrong's former trainer. The USADA claims to have at least 10 former teammates and associates of Armstrong willing to testify before the arbitration panel in support of these charges. The USADA also states that Armstrong's blood samples obtained by Union Cycliste Internationale (UCI), the world governing body for cycling, from 2009 and 2010 are consistent with blood doping.

Armstrong's attorney, Robert D. Luskin of Patton Boggs, responded to the charges as baseless and without merit and a product of a malicious campaign led by USADA's chief executive, Travis Tygart, against Armstrong. Armstrong maintains his innocence and on his website, www.lancearmstrong.com, asserts he has passed more than 500 drug tests over the course of his career and has never failed one.

Armstrong's attorneys affirm that they are exploring all legal options and have hinted at filing federal charges against USADA investigators for compelling false testimony from witnesses in exchange for promises that those witnesses would avoid facing their own doping charges.

In February 2012, U.S. Attorney Andre Birotte Jr. ended a two-year long investigation of Armstrong involving doping allegations without filing criminal charges against the 40 year old iconic athlete. While the USADA cannot bring criminal charges against Armstrong, the 12 year old agency, which is funded jointly by the U.S. Olympic Committee and the federal government, has authority to suspend athletes from competition and to rescind awards.

The USADA is a signatory of the World Anti-Doping Agency (WADA) and adheres to its World Anti-Doping Code. Article 17 of the World Anti-Doping Code sets forth the statute of limitations and requires actions to be commenced within eight years from the date of the alleged violation.

July 23, 2012

The NCAA Sanctions Penn State

By Jordan Walsh

It is undoubtedly true that the full impact of the sanctions levied upon Penn State University by the NCAA in the wake of the Freeh Report and Sandusky verdict will not be understood for years to come. Yet a few things are certain. One of these is that the forfeiture of the program's 112 wins between the years 1998-2011 and the removal of Joe Paterno from the record books as the NCAA's winningest football coach in Division 1-A football is more severe than the so-called "death penalty" alone would have been. If, as NCAA President Mark Emmert stated "[t]he sanctions needed to reflect our goals of providing cultural change," the removal of the football wins from the record books is quite possibly the most appropriately tailored portion of a punishment, which also includes a 4-year postseason ban -- championship games and Bowl games --and a scholarship reduction of 10 scholarships per year for 4 years for the football team, a five-year probation for all Penn State sports, the hiring of an academic monitor by the NCAA, and a $60 million fine.

Leading up to today's press conference, much had been made of the so-called NCAA "death penalty," or the elimination of the football program for a set number of years -- considered to be the ultimate punishment. Taken together, though, the NCAA's sanctions will hurt more than a so-called "death penalty." The sanctions have in fact, ended Penn State's football program as we knew it, as the forthcoming cover of Sports Illustrated has so aptly depicted it.

A one-year ban on play would have been less effective in changing the culture of Penn State. As little as a mere 365 days later, it would have been business as usual in Happy Valley. New recruits could simply choose to red-shirt one season and play for a national title the very next year. The NCAA protected the local economy, which needs football game weekends, and the student athletes affected, who were given a choice -- to stay at PSU and keep their scholarships whether they play or not as long as they maintain their grades, or transfer to another school. Perhaps most importantly, the NCAA has waived the one year of lost eligibility usually required of transfers, allowing them to play immediately.

A choice is something that Sandusky's child victims certainly never had, and it is important --particularly for the native Pennsylvanians on the roster -- that the NCAA recognized in some fashion that these kids (ages 17-21 or so) currently at PSU deserved one. Now these athletes have a choice, and further, Penn State football must deal with an entire roster of what are essentially immediate free agents.

True, a "death penalty" would mean lost revenue -- television and otherwise -- for Penn State for that year or years, but the NCAA at least symbolically addressed this concern by making the fine amount of $60 million equivalent to one year's gross revenue for the football program. The $60 million(to be paid over 5 years) is to be used to start an endowment to help child abuse victims nationwide. There is some degree of poetic justice in the Penn State football team literally playing for the survivors for a year. Further, the loss of post-season eligibility and the overall tarnish on the brand will cost Penn State plenty in revenue for far longer than even the 4 year post-season ban. The only people buying Penn State memorabilia now will be the diehards. Further, the Big 10 conference has barred Penn State from its Bowl revenue sharing program, and will also be donating PSU's share to child abuse advocacy organizations for 4 years.

As for long-term effects, there is no single greater punishment than the forfeiture of the football wins from 1998-2011 inclusive. Pennsylvania bleeds blue and white as a state, and the NCAA has erased part of its history. There is no greater institution for most Pennsylvanians than Penn State, and during the time period in question most Penn State fans cared about nothing more than "Joe Pa" passing Bobby Bowden of Florida State for winningest Div. 1-A football coach (or subsequently Eddie Robinson of Grambling, in 2011, for winningest football coach ever). The battle for winningest coach was most certainly on the radar of Penn State in 1998 -- it was part of the national discourse. Penn State and Florida State had winning seasons and played in bowl games in 1998 -- it would have been very inconvenient for Coach Paterno and the program to turn in Sandusky in 1998. Instead, Sandusky retired.

Before the 1998 season, Paterno had (and now in fact has again) 298 wins. He won 111 games between 1998-2011, although there were several lean losing seasons between 2000-2004 where the main argument for Joe Paterno keeping his job was to pass Bobby Bowden in the record books. Many commentators openly pondered if Paterno was too old, and whether he had lost the ability to motivate his team to compete at a championship level. Had Penn State reported Sandusky to the police during any of these losing years, it likely would have tipped the tide in favor of Paterno needing to retire then as well. A major child abuse scandal going on under the longtime coach's nose while the team languished in the Big 10 cellar would have been the last straw. Bobby Bowden's team was winning regularly during these years, and Bowden took back the overall wins lead for a time. The flip-flopping of the coaches for most wins overall was fodder for major national media coverage throughout the early 2000s. Paterno did not finally pass Bobby Bowden for overall wins for the last time until 2008, at 383 wins. (Bowden himself then forfeited 6 wins due to an ineligible player on the field. Bowden retired with 377 wins in 2009 -- he earned approximately 108 of those wins in the years between 1998 and his retirement in 2009.) Thus, it is not a stretch to say that without the cover-up of Sandusky's abuse by Paterno and PSU administrators in the years of 1998-2011, he never would have remained head coach at Penn State long enough to become the winningest coach in NCAA Div-1, much less all of NCAA football history. It was always about the wins for Penn State and Paterno. The wins are the symbol of shame, of the culture that put the institution before the vulnerable. Only with the wins and Paterno's record erased can Penn State ever hope for a clean slate.

Jordan Walsh, Cardozo School of Law 2011, is a Graduate Fellow to Professor Marci Hamilton and a native Pennsylvanian. She can be reached at jordan.walsh610@gmail.com.

August 26, 2012

Eastern District Deals Bad Hand to Government in Poker Game

By Gordon M. Daniell

Required card play references aside, Hon. Jack B. Weinstein of the Eastern District ruled on Tuesday that Texas Hold'Em- a style of poker which has grown exponentially in popularity in recent years, is not gambling under the Illegal Gambling Business Act (18 U.S.C. 1955), because it is a game of skill, rather than one of chance.

The court in United States v. DiCristina (1:11-cr-00414-JBW) dismissed the defendant's indictment under the statute, and overturned his conviction after a lengthy analysis. The opinion, running to nearly 120 pages, features a detailed discussion of poker, its history, and its play, as well as graph featuring an analysis of winnings by skilled players versus unskilled players over time, the chance of winning with a particular hand given a player's skill level, and the percentage of the time a skilled player would defeat a lesser skilled player after a given number of hands. Further analysis is given to both the history of the statutes involved, and the reasoning behind each respective piece of legislation (Including pre and post IGBA laws, and the Indian Gambling Regulatory Act, among others).

It is the court's analysis of the statute that holds the best cards. In analyzing the IGBA and its application to the facts of the case, the court first found that while the statute did criminalize the running of "gambling businesses", it was unclear as to what "gambling" actually was. As an aside, it is not the gambling itself which the IGBA makes illegal, simply the running of the game; the business of gambling. The court first began with an analysis of the statute itself, and determined that the text makes it illegal to operate a gambling business that is illegal under the laws of the state where it takes place, has more than five participants who direct, manage and supervise the business, and is undertaken for more than 30 days or nets more than $2,000 in a single day. It also includes a non-exclusive list of activities, including "pool-selling, bookmaking, maintaining slot machines, roulette wheels, or dice tables and conducting lotteries, policy, bolita or numbers games, or selling chances therein." Judge Weinstein ruled that the language of the statute, pegging illegal gambling businesses to the state in which they are active, but also including a non-exhaustive list of activities, was ambiguous, because it could be read to limit the list of what constituted gambling (as the Defense contended) or expanded the activities violating the statute to all of those violating state law, as the Government contended. The court next analyzed the legislative history of the statute, and finding no clear indication of whether poker was a) included or b) a game of chance or one of skill. Finding no help from other statutes as well, Judge Weinstein determined that the rule of lenity must favor the defendant - in other words that a draw must favor the accused.

When considering the statute for itself, the court reasoned that Congress, when drafting, could have included poker as part of its list of activities that constitute gambling. Citing to numerous and varied authority for this point, including Bilski v. Kappos (a recent patent case from the U.S. Supreme Court) the court determined that to be gambling, poker must fall under the general definition of the list of games in the statute, but that it does not. Judge Weinstein, in the absence of controlling case authority, and because the statute is unclear as to whether poker is a game of skill or of chance, conducted a thorough analysis of poker. The judge largely adopted the position offered by the defense, that poker is a game of skill because it is not "house banked" and requires skill to play successfully, rather than chance. Summarizing its earlier difficulty in finding a firm definition of what constitutes gambling in the statute and the legislative history, the court returned largely to the testimony of defense and prosecution expert witnesses, a large portion of which is included in the earlier sections of the opinion itself. The court compared poker to golf or the card game Bridge, and found that while some degree of chance is inherent in all three (weather conditions produce harder greens or a more difficult shot in golf, the draw of cards introduces the chance into bridge, as it does to an extent in poker), the major question is one of whether skill or chance predominates the game in question.

As is clear from its outcome, Judge Weinstein found that evidence introduced by the defense expert Dr. Heeb (himself a poker player) was persuasive. In poker, Dr. Heeb was able to demonstrate, skill can affect the outcome more than 50% of the time in as many as 240 hands - the number typically played in a social game of poker - or the amount played in a single session at the defendant's location. According to the evidence, skillful players earn more than unskilled players, and are more successful than unskilled players with every starting hand. Despite evidence from the prosecution's expert, Dr. DeRosa, that the proper data set was a single hand, rather than a longer set of games, the court ruled in favor of the defense, finding that overwhelmingly poker was a game of skill.

The question remains in the ruling: that of its impact. While it dealt federal prosecutors a bad hand in their attempts to include poker in the list of prohibited activities under the IGBA, the court noted that there are still other laws that may be used to bring the power of the federal government to bear against illegal activity; including RICO laws and other legislation designed to prevent organized crime from infiltrating card games. Of course, it need not be mentioned that the opinion is one of a single court in a single judicial district, but it is worth considering the element of territoriality inherent in the decision. Finally, consider also that Mr. DiCristina had already been convicted of running an illegal poker game in Richmond County Supreme Court under a New York law which includes poker in its list of prohibited games of chance.

Yet it is no bluff to say that, at least for now, and at least in the Eastern District of New York, poker is a game of skill, and that those who run poker games may not be charged under the IGBA. That, they can bet on.

August 29, 2012

Hero Takes a Fall: Armstrong v. Tygart and United States Anti-Doping Agency


By Carter Anne McGowan

When, in February 2012, the U.S. Justice Department quietly ceased its investigation into whether Lance Armstrong and several other cyclists on the U.S. Postal Service cycling team had engaged in prohibited blood doping and steroid use while receiving U.S. government funds, one chapter in the ongoing saga of Armstrong's did-he-or-didn't-he doping scandal came to a close.

Yet that was far from the end of the story. The next chapter in the confused morality tale seemingly came to an abrupt and unexpected halt last week when Armstrong, after receiving an unfavorable ruling from U.S. District Judge Sam Sparks in the case of Armstrong v. Tygart and the United States Anti-Doping Agency, announced that he would no longer fight the U.S. Anti-Doping Agency (the "USADA") in its attempts to prove him a doper and strip him of his Tour de France victories and Olympic medal. At the same time, Armstrong maintained his innocence and decried what he called an "unconstitutional witch hunt" by the USADA.

Before discussing the specifics of Judge Sparks' decision, a brief description of the many different agencies involved in cycling at the national and international levels, and the role of various anti-doping agencies in the sport, may prove useful. As an Olympic sport, cycling is governed by national and international bodies. At the very top of the control pyramid for Olympic sports sits the International Olympic Committee (the "IOC"). The IOC recognizes the World Anti-Doping Agency ("WADA") and its World Anti-Doping Code ("WADC," which went into effect in 2004) as its chosen means of promoting harmonized rules prohibiting doping and regulating testing therefor across the Olympic movement.

Beneath the IOC sit the International Federations ("IF"). The IF for cycling is the International Cycling Union (known by its French acronym, "UCI"). The UCI maintains a set of anti-doping rules similar to those of WADC. Finally, each nation has a National Governing Body ("NGB") for each Olympic sport; in this case, USA Cycling, a member of UCI, controls competitive cycling. Under the Ted Stevens Olympic and Amateur Sports Act, 36 U.S.C. §§22051-220529, U.S. NGBs, among other responsibilities, conduct competitions among eligible athletes and determine which athletes meet the sport's eligibility standards. The anti-doping rules set out by the USADA, the respondent in the Armstrong case, are incorporated by reference into USA Cycling's regulations, and the USADA is explicitly given authority for drug testing and test results in USA Cycling-controlled events.

The USADA first charged Armstrong and five other members of his team in June 2012 with blood doping and steroid use for the period dating back to 1998 and gave the charged parties the choice of admitting to the charges (and facing severe penalties) or going to arbitration to fight the charges. Three members of the team chose arbitration (those arbitrations have not yet taken place); two members chose not to fight the charges and received lifetime bans from the sport of cycling. Armstrong, understandably discontent with the choice of arbitration or banishment, brought a civil action against USADA alleging a violation of his due process rights and a lack of a valid agreement between himself and the USADA to arbitrate. Judge Sparks disagreed with Armstrong on both theories.

With regard to the due process claims - based on the comparative narrowness of discovery during the arbitral process, the lack of options available for judicial review, and the possibility of bias in the arbitrators - Judge Sparks followed significant Supreme Court precedent in rejecting due process challenges to arbitration. The charging document provided by USADA, however, did give Judge Sparks pause, as he described it as both deficient and "woefully inadequate." Despite these concerns, the court found that, even if the charging document as written did violate due process, the USADA could simply issue a more substantial document, and, furthermore, Armstrong was entitled to receive "more detailed disclosures regarding USADA's claims against him at a time reasonably before arbitration." Armstrong at 17. Therefore, Sparks found that Armstrong had received "all the process to which he was due" at the time of the lawsuit, but fired a shot across the USADA bow, warning that if it didn't follow through on providing additional information in a timely fashion, and Armstrong refiled suit, the "USADA is unlikely to appreciate the result."Armstrong at n. 26.

With regard to the additional jurisdictional and contractual claims, the court found that the Ted Stevens Sports Act and the USA Cycling licenses signed by Armstrong barred these claims. In his reliance on the Ted Stevens Sports Act, Sparks followed significant precedent tending to keep courts out of amateur sports. The court found that the Sports Act granted NGBs themselves the right to set procedures for determining eligibility. Therefore, the court found, "Congress intended for eligibility questions to be decided through arbitration, rather than federal lawsuits," unless the NGB acted with wanton disregard for its own rules.Armstrong at 20.

Finally, the court found that Armstrong, by agreeing to abide by the rules of USA Cycling in some of his cycling licenses (which rules incorporate USADA Protocols), agreed to that portion of the USADA Protocol which set out arbitration - including arbitration with regard to the arbitrability of the dispute - as the appropriate dispute resolution mechanism.

Despite ruling entirely against Armstrong, Judge Sparks indicated throughout his ruling that he was troubled by the USADA's behavior, which included consolidating Armstrong's case with those of several other athletes over whom neither USA Cycling nor the USOC had any jurisdiction and allegedly promising lesser penalties to other cyclists in return for their testimony against Armstrong. This sympathy, however, did nothing to change the fact that, once the decision was handed down, Armstrong had three days to elect arbitration or sanctions. By refusing to carry the fight to arbitration, Armstrong in effect accepted the sanctions...

...or so it seems. As Judge Sparks noted in his concluding words on the case, while the USADA was fierce in its determination to force Armstrong to arbitrate or accept sanctions, UCI desired that proceedings against Armstrong be discontinued. USA Cycling, breaking with its own anti-doping agency, sided with UCI. Therefore, although the USADA has now banned Armstrong for life and stated that he will be stripped of his titles, UCI - the actual keeper of the record books - has not yet agreed. Instead, UCI is requiring that USADA submit a "reasoned decision" explaining the actions it has taken, as Article 8.3 of WADC requires that when no hearing is held regarding a doping sanction, the anti-doping agency submit its decision to UCI, WADA, and the alleged wrongdoer before UCI will take any action. See Press Release: UCI's Statement on Lance Armstrong's Decision; http://www.uci.ch/Modules/ENews/ENewsDetails.asp?source=SiteSearch&id=ODYzOA&MenuId=MTI1ODA&CharValList=&CharTextList=&CharFromList=&CharToList=&txtSiteSearch=Lance+Armstrong&LangId=1

If the Floyd Landis case serves as precedent, UCI will accept USADA's decision and write Armstrong out of the record book. As of today however, there may yet be another chapter in the saga of Lance Armstrong.

September 28, 2012

NFL Referees Get Standing Ovation for Ending Labor Dispute with NFL

By Jennifer N. Graham, Esq.

NFL referees received a standing ovation in Baltimore as they returned to the field for the Baltimore Cleveland matchup on Thursday after the NFL and the NFL Referees Association (NFLRA), the union that represents on field officials, agreed to the terms of a new eight-year collective bargaining agreement late Wednesday.

The three-month lockout wreaked havoc on the League, as inexperienced officiating led to numerous controversial calls and arguable victories during the first three weeks of season play. Several coaches, including New England coach Bill Belichick, were fined for interactions with the replacement officials after disputed calls.

Peter Donatello and Scot Beckenbaugh of the Federal Mediation and Conciliation Service aided the parties in reaching the agreement. It is the longest agreement with game officials in NFL history.

NFLRA membership must ratify the document. The officials will meet Friday and Saturday to vote on the agreement.

Highlights of the agreement include:

• Eight year term--2012-2019 seasons.

• The current defined pension plan will remain in effect for current officials through the 2016 season (or until the official earns 20 years of service). The defined benefit plan will then be frozen.

• Retirement benefits will be provided for new hires, and for all officials beginning in 2017, through a defined contribution arrangement.

• Increase in officials' compensation from an average of $149,000 a year in 2011 to $173,000 in 2013, rising to $205,000 by 2019.

• Beginning with the 2013 season, the NFL will have the option of hiring some officials on a full-time basis to work year-round, including on the field.

Complete details of the agreement are available at: http://www.nfl.com/news/story/0ap1000000066739/article/nfl-nflra-reach-eightyear-agreement

October 22, 2012

Symposium And Call For Papers

The Rutgers Conflict Resolution Law Journal is hosting a symposium on April 4th, 2013 at 4:00 PM to be held at the Rutgers School of Law - Newark. The theme will be alternative dispute resolution in the field of sports
law. We invite submissions of papers on a sports law topics with a conflict resolution nexus for potential publication in our Spring issue.

1-2 manuscripts will be accepted for publication. Topics of special interest include, but are not limited to, sports negotiations and contracts. Selected authors will also be invited to speak at our symposium.

Submissions should be between 15-25 pages and submitted electronically by 12/25/2012 to the following address: rcrlj@pegasus.rutgers.edu.

January 21, 2013

Armstrong Comes Clean; The Legal and Economic Fallout of an Athlete's Mea Culpa

By Jason Rindenau
New York Law School, Class of 2013

While it is difficult to know exactly what motivates a star as singularly driven as Lance Armstrong, it is not hard to predict the fallout from his decision to come clean to doping in a "no holds barred" interview with Oprah this week. As any fan of entertainment and sports can tell you, the mea culpa has become increasingly popular. What drives such ubiquitous celebrities as Michael Vick, Tiger Woods, and Arnold Schwarzenegger to commit gross iniquities and then come crawling back to their constituents (some with more convincing apologies than others) is a subject worth exploring in its own right; however, the fervor with which Lance Armstrong denied using performance-enhancing drugs in the midst of collecting seven Tour de France titles and establishing a hugely important cancer-fighting organization places him in a league of his own.

Armstrong's stellar track record in defending his poster boy-for-perfection reputation has come crashing down on top of him. With an estimated net worth of $125 million, legal experts say immediately filing for bankruptcy could be the price of coming clean, and the vultures are already circling. Sponsors and media outlets as diverse as The Times of London, who long accused the seemingly superhuman Armstrong of doping, and the U.S. Postal Service, want Armstrong to pay for his digressions. Rupert Murdoch, who paid Armstrong fortunes over the years in settlement payouts, is particularly interested. According to Eriq Gardner, reporting for The Hollywood Reporter, even cycling event organizers could sue for fraud in the collection of prize money.

According to the media, one of the reasons why Armstrong's confession is so significant is because of his iconic status. This is not a Barry Bonds or Mark McGwire-type scenario, where perhaps fans expect this type of behavior from their athletes. This is, indeed, a no holds barred retaliation against Armstrong where supporters, journalists, and fans invested in him as an individual and not merely as a member of a sport. Armstrong's admission goes beyond a simple violation of the morals clauses he undoubtedly signed with his sponsors. It represents a violation of trust by all of the supporters who stuck by him during one cancer diagnosis after another, and they want their money back.

Individual cyclists are getting in on the action, as well, as those Armstrong publicly criticized over the years in response to doping allegations could sue for defamation. Perhaps the most sensitive questions involve the future of Livestrong, the charity Armstrong founded in his home state of Texas in 1997. What is important to keep in mind is that the 501(c)(3) non-profit now operates entirely independent of Armstrong. As a result of the doping scandal, he is no longer chairman of the group, formerly known as the Lance Armstrong Foundation, nor does he maintain a seat on the board of directors.

Despite Livestrong's obvious willingness to keep Armstrong at arm's length, sponsors are still balking. Major League Soccer's Sporting Kansas City announced on Thursday, the day Part 2 of Oprah's interview aired, that it would cut ties with Livestrong and drop the organization's name from its masthead, a move that is likely to send both companies to court. Robb Heineman, CEO of Sporting Kansas City, denies that the scandal had anything to do with breaching its contract with the mega-non-profit. It was, he insists, economic.

In a deal which guaranteed Livestrong a percentage of ticket sales, concessions, and other revenue, Heineman says that Sporting Kansas City had no choice but to modify key terms of its contract, which became necessary when Livestrong could not uphold its end of the bargain. Heineman argues it was, in fact, the doping scandal which distracted Livestrong from fulfilling its obligations, a sentiment which is likely to be echoed in the coming months by nearly all of Armstrong's former business partners.

January 23, 2013

Lance Armstrong

By Suzanne Bagert
sb@sbagertlaw.com

Last week, Lance Armstrong ended an over 15-year cover up, and confessed to doping throughout his preeminent cycling career to Oprah Winfrey. Until now, the legal system has proven powerless to reign in Armstrong and his cohorts, and in fact, was often used as their sword against his detractors. Yet this confession promises to change that, and potentially gives rise to complex litigation by dozens of plaintiffs, numerous causes of action -- both civil and potentially criminal -- and even to defendants other than Armstrong himself.

To understand how one cyclist's doping confession can lead to complex litigation with international implications, we have to consider many factors. These include Armstrong's legendary story, the multi-million dollar business relationships that followed and reinforced it, the insiders club of wealthy pro cycling enthusiasts who finance and govern the sport, and the lengths and ferocity of the doping cover up that was led by Armstrong for many years in order to protect them all.

From the 1990s until last week, Armstrong had always vehemently and aggressively denied ever doping, and he viciously attacked anyone who suggested otherwise. We now know, by his own admission, that Armstrong was systematically doping all along - before he had cancer, through all seven Tour de France victories, and throughout the entire era of his cycling dominance. For all those years, Armstrong doped and covered it up with impunity from any sanction or liability imposed by any of cycling's governing bodies, or by the law. Why is he "coming clean" now?

In 2012, the United States Anti Doping Agency (USADA) commenced an investigation into the longstanding allegations that Armstrong had doped throughout his cycling career. Last October, USADA issued a detailed and reasoned decision finding Armstrong guilty of serial cheating through the use of performance enhancing drugs, and of being the ringleader of a massive doping conspiracy among those involved with his team. Based on this conclusion, USADA stripped Armstrong of all of his competitive results since August 1, 1998, and gave him a "life sentence" under the World Anti-Doping Code, making him ineligible to compete in sports that are signatories to the Code. This renders Armstrong ineligible to compete in pro cycling, and in elite triathlons, where he has recently set his sights for future competition.

USADA finally caught up with Armstrong, where the legal system never could. In fact, the legal system had failed miserably along the way, having allowed Armstrong to collect many millions of dollars in settlements as he abused the process to defend his realm. For example, when SCA Promotions refused to pay him, due to accusations of his doping, a bonus payment for winning the Tour that it had guaranteed, Armstrong sued and ultimately received a $7.5 million settlement. Armstrong also sued the Sunday Times for libel for referencing a 2004 book about Armstrong's doping, based largely upon interviews with Armstrong's former masseuse and assistant Emma O'Reilley. The case was settled in 2006, with the Sunday Times paying Armstrong almost $500,000, and after reportedly taking a terrible emotional toll on O'Reilley. Further, in 2012, the U.S. Justice Department (DOJ) suddenly dropped a two-year investigation into allegations of fraud, trafficking and witness tampering against Armstrong. The DOJ has never explained its reasoning for dropping the investigation.

The USADA report may have begun to clear the path for the legal system to finally handle Armstrong. However it is still difficult to win a case, no matter the other evidence, against a larger-than-life sport figure who aggressively maintains his innocence. One cannot help but wonder whether the DOJ lost its appetite for pursuing sports dopers after it lost the second Roger Clemens trial in 2012, and barely won its case against Barry Bonds the prior year with a one count conviction and a slap on the wrist.

Yet now, Armstrong's confession changes everything. The would-be plaintiffs do not have to prove the hardest part of the case. Armstrong has admitted it. There has been much speculation about Armstrong's motivations in admitting to doping at this point in time. It may be that he wants to compete in elite triathlons, and he hopes that coming clean will lead to a reduction in the USADA lifetime ban from competition. It may be that he has some true desire for authentic redemption. Whatever Armstrong's reason for coming clean, it is hard to imagine that any of Armstrong's lawyers advised that this would be a good move from a legal point of view.

The legal fallout from the USADA report and Armstrong's confession looks like the many-headed hydra of litigation:

• SCA Promotions wants its money back. SCA has announced that it will file suit for $12 million, to recover the $7.5 million settlement it paid Armstrong after insuring his bonus for winning the Tour de France, plus interest and attorney's fees. Armstrong lied under oath in the course of this case.

• The Sunday Times wants its money back. The paper is considering a suit to recover the monies it paid to Armstrong to settle the libel suit, which would presumably be on the order of $1-2 million.

• The U.S. Postal Service (USPS) wants its money back, times three. The USPS reportedly expended $32 million in its sponsorship of the Thom Weisel/Armstrong owned team from 2001 - 2004. Floyd Landis, one of Armstrong's former teammates and the stripped winner of the 2006 Tour, has brought a qui tam suit under the False Claims Act to recover these monies on behalf of USPS. The False Claims Act provides for treble damages, bringing the value of this suit to well over $100 million with interest. Additionally, the DOJ has the option of joining this civil suit, which seems probable, considering that Armstrong's confession makes the case considerably easier to win.

• It is unclear which of Armstrong's other personal and team sponsors will want their endorsement payments back. For years, big brands lined up to stand with Armstrong, including Nike, Giro, Trek, Oakley, Credit Lyonnais, Anheuser-Bush, the USPS, the Discovery Channel, Radio Shack, FRS energy drinks and Honey Stinger energy foods. These sponsors generally have the right to recover their sponsorship dollars based on a "morals clause" that is typically included in a sponsorship contract. This category of contingent liability could easily exceed $100 million.

• In the criminal realm, based on what Armstrong actually admitted, there is a statute of limitations issue regarding Armstrong's culpability for crimes such as perjury, witness tampering, and fraud. However, because of the multiple jurisdictions at work and numerous instances of wrongdoing, it would be difficult to flatly conclude that the statute of limitations will shield him across the board. Moreover, Armstrong's confession was extremely damaging to his credibility in an environment where there is evidence that of more recent crimes. Will the DOJ revive its criminal investigation? Are there any other criminal claims that survive? If the government were to make a conspiracy or RICO claim, could a more recent "last act" in the conspiracy be used to net the whole lot of defendants?

• Armstrong maintains that he did not dope in the 2009 and 2010 Tours, but there is blood evidence that indicates that he did, and after his years of belligerent lies regarding the 1999 - 2005 Tours, why would anyone believe him? Allegations arising from those more recent tours might not be protected by the statute of limitations.

• Who else will get caught up in the Armstrong juggernaut? What we do not know from Armstrong's confession is who helped him, who knew, and who was complicit in the deceit. In his confessional, he refused to name any of the others who knew about the epic doping program, or those who made it possible by financing, providing, procuring, and disappearing the necessary drugs and the apparatus. There are also aspects of Armstrong's confession that seem implausible, and many believe that aspects of his confession still echo significant untruths. If Armstrong does testify before USADA or in a criminal investigation, where will it lead?

• Could Nike and Oakley be viewed as complicit in the doping? Did Nike make a $500,000 payment to the Union Cycliste Internationale (the UCI), to cover up a positive EPO test? Did Nike know about the doping all along? Does an Oakley employee making threatening phone calls to a witness about baseball bats to the head mean that Oakley is implicated in the cover up?

• Who at the team level was complicit? How aware of the massive doping operation was team owner and Silicon Valley bigwig Thom Weisel? Could knowledge of the doping program be used to pierce the corporate veil?

• Was UCI complicit? Was it bribed by Armstrong and Nike?

• Finally, how many individuals who Armstrong tried to ruin will bring defamation suits against him?

This outline of potential cases clearly represents hundreds of millions of dollars in potential civil liability, through dozens of different lawsuits filed in different venues, courts and jurisdictions, against potentially multiple defendants. If such litigation proceeded on a disjointed basis, the inefficiency would likely be debilitating to the resources available in Armstrong's estate, and the team's. It would also leave the existing resources increasingly diminished for the most personally aggrieved plaintiffs, who are least able to aggressively pursue their cases. It seems that consolidation of the cases, which all arise out of the same general set of facts, may be appropriate, and would be a reasonable way to protect the interests of all the plaintiffs. This could conceivably be accomplished through the guidelines of the Manual for Complex Litigation, the operation of Bankruptcy, or both working in concert.

As for Armstrong, his confession has set table for his own financial ruin and that of his team through civil liability, and he has exposed himself to potential criminal liability. Meanwhile, if what he wants is to be reinstated and allowed to compete in pro sports, he has not gone far enough. Both USADA and the World Anti-Doping Agency (WADA) have stated, in no uncertain terms, that reinstatement is not even on the table for discussion unless Armstrong testifies under oath, and undoubtedly, unless he gives a full and unfettered testimony, giving up his many enablers and co-cheats, a direct vector to some very powerful captains of industry and regulators of the sport at its highest level.

February 1, 2013

How to Value a Celebrity Athlete's Right of Publicity

Beyond the Field of Play:
Analyzing and Valuing a Celebrity Athlete's Rights of Publicity

By CONSOR Intellectual Asset Management

The Right of Publicity (ROP) is "the inherent right of every human being to control the commercial use of his or her identity." (Thomas McCarthy, Rights of Publicity and Privacy, 1:3)

However, unlike patent,trademark, and copyright law, ROP is governed by a patchwork of state statutes and common-law decisions, rather than by a single federal statute (Thomas McCarthy, Rights of Publicity and Privacy, 6:3, 6:8); and unlike trade secret law, ROP is not the subject of a uniform state law adopted in the vast majority of states.( Roger M. Milgram, Milgram on Trade Secrets 1.01[2][b]) As with the analysis of other intellectual property assets, ROP valuations need to consider the unique characteristics of the subject asset and the context of the valuation assignment.

Typically, ROP valuation assignments are needed for one of three reasons: when negotiating a transaction (such as endorsements and licensing); calculating infringement damages for ROP violations; or valuing celebrity estates and trusts. Each ROP asset is unique and each of these contexts varies, posing some unique challenges for reasonable analyses of ROP assets.

Read the complete article (PDF)

April 1, 2013

Rountree v. Boise Baseball, LLC, et al.

By Steven A. Adelman

Although I am a lousy baseball player, I have always been a baseball fan. As a kid, I loved listening to the radio broadcasters wax eloquent on warm summer nights. Now I enjoy that baseball cases validate what I teach at Facility Management Law School and in my other risk management presentations. Recently, the Idaho Supreme Court issued an important ruling not only for the future of the "Baseball Rule," but also for the enforceability of disclaimer language on the back of event tickets. To add a little law to your Opening Day festivities, here is the story.

FACTS: In Rountree v. Boise Baseball, LLC, et al., a man sued a baseball stadium operator and 16 other defendants when he was struck by a foul ball and lost an eye while he sat in one of the few parts of the ballpark not protected by vertical netting.

The back of his ticket included this language: "THE HOLDER ASSUMES ALL RISK AND DANGERS INCIDENTAL TO THE GAME OF BASEBALL INCLUDING SPECIFICALLY (BUT NOT EXCLUSIVELY) THE DANGER OF BEING INJURED BY THROWN OR BATTED BALLS." Mr. Rountree said he never read it.

LEGAL ISSUES: The Idaho Court held that the Baseball Rule, which limits stadium owners and operators' legal duty to fans hit by foul balls so long as screened seats are available for as many spectators as may be reasonably expected to request them on any ordinary occasion, does not bar Mr. Rountree from arguing that the venue failed to behave reasonably in his particular case. The idea behind the Rule is that it is common knowledge that baseballs are hard, move fast, and travel beyond the playing field, so venues completely extinguish their legal liability so long as they provide fans who choose not to pay attention enough screened areas to sit in the grandstand.

Here, however, the Court wrote that the litigants had presented evidence of so few instances of similar injuries that it could not draw a bright line where the stadium's duty begins or where netting should be placed. So the Court left it to a jury to decide the reasonableness of each party based on the facts to be presented at trial.

Regarding the ticket disclaimer language, the Court refused to enforce it as a contract against Mr. Rountree, even though it does have all three elements of a valid contract: offer, acceptance, and consideration. Instead, consistent with courts' general disfavor of "contracts of adhesion," the Idaho Court decided that the jury should consider the ticket language when deciding what percentage of Mr. Rountree's injuries are his own fault.

CONCLUSIONS: This case illustrates the legal trend away from bright line tests in favor of allowing juries to weigh all of the evidence in order to assign percentages of comparative fault. This is why I emphasize the importance of acting like a "reasonable person under the same or similar circumstances." When something goes wrong, your salvation will come from doing the right thing and documenting it clearly, not in old time laws that place all the blame on some other guy.

The decision is available at: http://library.constantcontact.com/download/get/file/1104263796310-93/2013-02-22+Rountree+v.+Boise+Baseball+decision+-+no+highlights.pdf

Steven A. Adelman is the head of Adelman Law Group, PLLC in Scottsdale, Arizona. His practice focuses on safety and security issues at live entertainment venues throughout North America. http://www.adelmanlawgroup.com/

May 13, 2013

Athletes Fined Over Tweets in the U.S. and in Europe

By Marie-Andree Weiss

A British soccer player playing for the French Olympique de Marseille team, Joey Barton, was suspended last week over tweets directed at Thiago Silva, a Brazilian player from rival team Paris Saint Germain. The sentence was handed down by the National Ethics Committee of the French Soccer League which found, rather surprisingly, that calling a player an "overweight ladyboy" and asking whether he was "Pre-Op or Post-Op" were inappropriate but not homophobic. Barton also called Thiago Silva a "pussy" and a "FatBoy". Inappropriate indeed, and completely devoid of any sportsmanship.

Joey Barton has often voiced negative comments about fellow players on Twitter, using the micro-blogging site as a platform to broadcast his opinions to his two-million plus followers, making him one of the most successful athletes on social media.

Many Athletes Have Twitter Accounts

It is now common for athletes to have a Twitter account, but not all of them are as prolific as Barton, nor, fortunately, as rude. In the U.S., many NFL, MLB, and NBA athletes have Twitter accounts, and social media use is even encouraged by their professional associations. Several baseball teams are organizing social media nights, inviting fans to live tweet from the stadium and showcasing their tweets on big screens. Following the Twitter account of a favorite player allows fans to gain some understanding of his or her personality or to learn more about his or her involvement in charities, which in turn, benefit the overall public image of the team.

However, Twitter is not a placid media, and firing a 140-character message while angry is easy.

Fast Pitched Tweets

The Cy Young winner and star pitcher of the Tampa Bay Rays, David Price, two of his teammates, and one MLB empire were all fined $1,000 after an incident that happened on April 28th during a game against the Chicago White Sox. According to David Price, MLB umpire Tom Hallion told him, after calling one of his pitches a ball, "Throw the ball over the [expletive] plate." The Rays dugout reacted to whatever was said and Rays pitcher Jeremy Hellickson was ejected from the bench by Hallion.

Tom Hallion reacted after the game, telling the press that David Price was a liar, and that he had only told him to throw the ball. David Price reacted to that statement on Twitter, tweeting: "Think our entire dugout would ERUPT cause an ump told me to throw the ball over the plate? No, I'm sorry that wouldn't happen #accountability."
David Price is an enthusiastic Twitter user and he regularly posts from his @DAVIDprice14 account to his over 155,000 followers. He also posted on April 28th: "Someone give me the definition of a coward please" and "1. I am not a liar 2. I would not make that stuff up 3. My own dad doesn't speak to me that way 4. Again I am not a liar #accountability" and tweeted that teammate Jeremy Hellickson was ejected because he "[h]ad my back after what everyone in dugout heard what the ump said."

Jeremy Hellickson tweeted the same day from his Twitter account: "There's only one person lying about all this and his name starts with a T and rhymes with pom." Pitcher Matt Moore also tweeted on April 28th his opinion about what happened: "Lies! lies i tell you! RT @TBTimes_Rays: Umpire Hallion said to Price: "I said, "Just throw the ball." That's all I said to him'" and "Unbelievable someone would mis remember so quickly. Stay in your lane. Nobody cares what you have to say. #tom."

Why were the Rays players fined?

Social Media Policies of Sports Organizations

It was because their tweets had breached the MLB social media policy, first published in March 2012. The policy prohibits players from "[d]isplaying or transmitting [c]ontent that questions the impartiality of or otherwise denigrates a Major League umpire." The social media policy is enforced, and a player violating it may be disciplined by his Club or the Commissioner in accordance with Article XII of the Basic Agreement, which recognizes that a player may be subjected to disciplinary action for just cause.

The NFL and the NHL both have social media policies which prohibit players from tweeting during a game. The social media NFL ban starts 90 minutes before a game, and ends once the media interviews are over. The NHL Social Media Policy for League and Club Personnel, first issued in 2011, bans social media posts two hours before the start of a game until the end of all post-game media obligations. Players are advised to exercise good judgments before posting.

Social Media is Just Another Media

Lack of sportsmanship is not illegal, but defamation and invasion of privacy are. In that regard, social media is just another media. This was acknowledged by the International Olympic Committee Social Media, Blogging and Internet Guidelines for participants and other accredited persons at the London 2012 Olympic Games. It stated that social media posts "should at all times conform to the Olympic spirit and fundamental principles of Olympism as contained in the Olympic Charter, be dignified and in good taste, and not contain vulgar or obscene words or images," and noted that social media users can also be personally liable for any defamatory, obscene, or proprietary commentary, or commentary intruding upon the privacy of another. (http://www.olympic.org/Documents/Games_London_2012/IOC_Social_Media_Blogging_and_Internet_Guidelines-London.pdf )

Indeed, posting on Twitter that somebody is a liar or implying that somebody else is a transvestite may have legal consequences, regardless of whether one's employer has a social media policy. In the Joey Barton case, Thiago Silva and his Club had stated that they reserved their right to take legal action. Being called a 'liar' on social media is a cause of action for defamation in the U.S.

If anything, social media policies may play an educational role for all players, but especially for younger ones who may not have the resource of family guidance as they suddenly become famous. Watching their older colleagues be fined or benched over tweets may be the learning experience needed for the next generation (a/k/a next season) of athletes to demure their tweets.

May 14, 2013

In the Arena - EASL's Newest Handbook

In the Arena reflects the issues facing the sports lawyer today. Whether the reader is a novice to the sports industry or a seasoned veteran, he or she will find this book to be a valuable resource.

http://www.nysba.org/AM/Template.cfm?Section=Shop&template=/Ecommerce/ProductDisplay.cfm&ProductID=5694

For a list of contributors and Table of Contents, visit http://www.nysba.org/AM/Template.cfm?Section=Shop&ContentID=235488&Template=/CM/ContentDisplay.cfm

June 24, 2013

While a Quarterback Looper tries to take down the NCAA Football, National Collegiate Athletic Association is on the Defensive for Publicity Right Violations

By Irina Tarsis

Contrary to popular belief, IP law does not protect our rights to exploit our own likenesses for commercial purposes. Celebrities like David Beckham, Angelina Jolie, Justin Bieber and Bruce Willis cannot trademark, patent or copyright their names, likeness, voices, or mannerisms. However, individuals may preclude others from using these personal attributes for commercial exploitation without their consent under the right of publicity doctrine. Most states have codified their privacy laws to classify appropriation of another's likeness as a form of an invasion of privacy. Thus, under rights of publicity, companies are required to obtain permission from individuals, including celebrities, for using their attributes in promoting a commercial product.

On May 21st, the U.S. Court of Appeals for the Third Circuit handed down a long anticipated decision in Hart v. Elec. Arts, Inc., 2013 U.S. App. LEXIS 10171 (3d Cir. N.J. May 21, 2013). It reversed the granting of summary judgment and held that the First Amendment does not shield Electronic Arts, Inc.'s (EA) unlicensed use of college football players' likenesses in NCAA Football sports videogames. Ryan Hart, Plaintiff/Appellant, is but one member of a Class made up of dozens of athletes whose identities and likenesses were incorporated into the game without authorization.

Originally released in the early 1990s, the NCAA Football videogame has been revamped and re-released annually to work with different game consoles and their next generation models. It evolved to include several Division I-A teams, as well as offer gamers options to recruit players, customize interfaces and offer trophies. Only the players who were chosen to adorn the covers of the game boxes were compensated for their participation. Historically, EA was careful not to use official logos of individual teams or the names of the actual players; however, college teams are listed by city and players are identified and identifiable by their actual numbers, class year, home team and vital statistics.

Ryan Hart is a former Rutgers college football player whose avatar is recognizable on the Rutgers virtual team as player number 13. However, EA did not license his likeness. In his original complaint, Hart alleged misappropriation of his likeness and biographical information, and sought, among other forms of relief, actual damages, statutory damages, punitive damages, disgorgement of all profits, enjoining future use of his and other class members' identities and likenesses in videogames, legal fees and destruction of all the copies of the videogame to the extent permitted by law. The case was initially dismissed on a summary judgment motion on First Amendment grounds.

A reversal in Hart may bolster another pending rights of publicity class action case brought by former NCAA athletes against the NCAA and Collegiate Licensing Company, alleging that the defendants violated sections of the Sherman Act, the federal antitrust laws, and unlawfully used the athletes' likeness and images in videogames produced by EA, television contracts, rentals and on-demand streaming, apparel and other products. O'Bannon, et al., v. N.C.A.A., 4:09-cv-01968-CW (Argued June 20, 2013). Before addressing the merits of the allegations in O'Bannon, U.S. District Judge Claudia Wilken first will need to decide whether to certify for a class action suit the former basketball and football players, including lead plaintiff O'Bannon, a former University of California basketball player.. The class suit would proceed under the legal theory that O'Bannon and other similarly situated athletes were injured in their right of publicity while the NCAA was unjustly enriched from retention of proceeds from sale of the products depicting the uncompensated athletes.

In Hart, EA conceded that NCAA Football infringed on the right of publicity as recognized in New Jersey. Thus, Judge Greenaway, writing for the majority, focused only on "whether the right to freedom of expression overpowers the right of publicity." Hart v. Elec. Arts, Inc., 2013 U.S. App. LEXIS 10171 (3d Cir. N.J. May 21, 2013).

Presented with a case of first impression, in Hart the Court relied heavily on a number of other states' decisions, including Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. N.Y. 1989) and Comedy III Productions v. Gary Saderup, Inc., 21 P.3d 797 (Cal. 2001), both which had more general IP holdings. Comedy III Productions in particular was important to the Hart Court because there, the California court introduced a balancing test to determine when individuals may or may not be allowed to demand payment or deny permission for depicting them in commercial projects. Specifically, the test focused on "whether the work in question adds significant creative elements so as to be transformed into something more than a mere celebrity likeness or imitation." 21 P.3d 797, 799. There the court inquired as to "whether a product containing a celebrity's likeness is so transformed that it has become primarily the defendant's own expression rather than the celebrity's likeness." Id.

The test that the Saderup case ultimately formulated would favor the celebrity "when an artist's skill and talent is manifestly subordinated to the overall goal of creating a conventional portrait of a celebrity so as to commercially exploit his or her fame, then the artist's right of free expression is outweighed by the right of publicity." In Hart, as in Saderup, the "marketability and economic value of [an offensive] work derives primarily from the fame of the celebrities depicted." Hart v. Elec. Arts, Inc., 2013 U.S. App. LEXIS 10171 (3d Cir. N.J. May 21, 2013) citing Comedy III, 21 P.3d at 810.

In applying the Transformative Use Test to the instant case, the Court decided that mere creation of a virtual Hart did not satisfy the test, and the game did not sufficiently transform Hart's physical and biographical attributes. It believed that NCAA Football sought to create a realistic depiction of college football, and thus a purposeful depiction of athletes.

In Hart, dissenting Judge Ambro posits that the majority's application of the Transformative Use Test "underplays the creative elements of NCAA Football by equating its inclusion of realistic player likenesses to increase profits with the wrongful appropriation of Hart's commercial value." Therefore, "[t]his approach is at odds with the First Amendment protection afforded to expressive works incorporating real-life figures."

Judge Ambro also writes that "The Transformative Use Test I support would prevent commercial exploitation of an individual's likeness where the work at issue lacks creative contribution that transforms that likeness in a meaningful way. I sympathize with the position of Hart and other similarly situated college football players, and understand why they feel it is fair to share in the significant profits produced by including their avatar
likenesses into EA's commercially successful video game franchise. I nonetheless remain convinced that the creative components of NCAA Football contain sufficient expressive transformation to merit First Amendment protection."

Unless the parties settle now, Hart will proceed to discovery and trial to determine whether and to which extent Hart's privacy was violated. As for O'Bannon, Judge Wilken is likely to grant class certification, which too would probably lead to settlement. In the world where winning is gold, settlement of legal dispute may be platinum.



November 26, 2013

Leeman v. NHL: Former NHL Players File Lawsuit Against the NHL for Damages Stemming From Head Injuries

By Michael Furlano

On Monday November 25th, 10 former National Hockey League (NHL) players filed a class action lawsuit against the NHL for damages stemming from the latter allegedly misrepresenting and concealing the effects of repetitive head impacts on long term health.

The suit alleges fraudulent misrepresentation and concealment by the NHL for neither publicizing the link between head impacts and long term brain trauma, nor taking effective action to reduce head impacts during the game.

The plaintiffs argue that:

1. The NHL knew or should have known about the link between repetitive head impacts and an increased risk in neuro-cognitive disability;

2. The NHL, by adopting safety protocols and programs, had voluntarily assumed the duty to protect and inform players of this link;

3. The NHL did not inform players;

4. The NHL did not take sufficient action to reduce head trauma, such as banning fighting and body-checking; and

5. This concealment and misrepresentation led to uninformed players and resulting in reduced interest in player safety initiatives.

The plaintiffs also seek an injunction creating a "court-supervised, NHL-funded medical monitoring program" facilitating the "diagnosis and adequate treatment of Plaintiffs for neuro-degenerative disorder or disease."

The plaintiffs admonish the NHL for creating and promoting a culture of violence/NHL-procured highlights of physical play, players afraid of losing their position if injured, and even third-party produced media focusing on fighting. The complaint states that the NHL should have banned fighting and body checking because the actions create dangerous head impacts and increase the risk of long-term brain injury. It alleges that the NHL is at fault because it did not ban such physical play.

The class action seeks to include all former NHL players as of February 14, 2013 suffering from injuries associated with concussions and sub-concussive events sustained while playing in the NHL. The plaintiffs state that this number could include over 10,000 former players.

The 10 former NHL players named as plaintiffs are: Gary Leeman, Bradley Aitken, Darren Banks, Curt Bennett, Richard Dunn, Warren Holmes, Robert Manno, Blair James Stewart, Morris Titantic, and Rick Vaive. Rick Vaive and Gary Leeman are the most prominent plaintiffs; both are the only Toronto Maple Leaf players to have scored over 50 goals in a single season.

Read the complaint here: NHL-Concussion-Litigation-Complaint-filed.pdf

December 3, 2013

Judge Ronald M. Whyte Issues a Ruling in San Jose v. MLB Lawsuit

By Benjamin Clack

A decision has already been issued in San Jose's case against Major League Baseball (MLB), less than four months after the lawsuit was filed. In June, the city of San Jose asserted federal and state antitrust law and tort claims against MLB. This was relating to MLB's failure to approve the proposed relocation of the Oakland Athletics. Thereafter, MLB moved to dismiss the suit citing to its long standing exemption from antitrust law. Judge Ronald M. Whyte issued a decision in this case last week.

Primarily focusing on the antitrust issue, Judge Whyte's opinion granted MLB's motion to dismiss in part, but also denied it in part. Specifically, although Judge Whyte was quick to criticize baseball's unique antitrust immunity, he concluded that the exemption ultimately precluded San Jose's claims under the Sherman Act. Following a thorough review of the applicable case law, Whyte adopted a broad view of the baseball exemption, concluding that it protected the business of baseball, which includes franchise relocation issues from antitrust law. In the process, he rejected San Jose's claim that the exemption only applied to labor disputes.

Judge Whyte then held that San Jose's state antitrust and unfair competition claims also should be dismissed because the Supreme Court effectively preempted the application of such to professional baseball in its 1972 decision Flood v. Kuhn 407 U.S. 258 (1972). However, Whyte did conclude that San Jose had sufficiently pled its tortious interference claim under state law, insofar as MLB's delay in resolving the proposed relocation had, in and of itself, arguably harmed the city aside from any antitrust concerns. However, the opinion was clear to note that the ultimate decision of whether to allow the Athletics to move was still MLB's alone. It also stated that San Jose could only pursue damages arising from MLB's delay in resolving the dispute, and not the potential rejection of the relocation itself.

Interestingly, despite deciding the merits of the substantive legal claims, Judge Whyte opted not to resolve the issue of whether San Jose lacked standing to pursue the case. Although one would typically expect a court to determine whether standing exists before ruling on the merits of the underlying case, Judge Whyte instead concluded that the city could potentially possess standing under Section 16 of the Clayton Act. However, he felt that he did not have to decide the issue at the current time, in light of his ruling on the antitrust exemption issue.

Consequently, although San Jose can proceed with one of the tort claims in its suit, Judge Whyte's decision is nevertheless a big win for MLB. The most serious claims in the case were dismissed pursuant to the sport's antitrust exemption, and the lone remaining claim can only result in a damages award, and not a court order mandating that the Athletics be allowed to move to San Jose.

Although San Jose would like to seek an immediate, interlocutory appeal of the ruling, Judge Whyte failed to certify the antitrust issues for an immediate, interlocutory appeal in his decision. Therefore, under 28 U.S.C. 1292(b), San Jose is currently unable to appeal the decision immediately to the Ninth Circuit.

The mere fact that many believe that baseball's antitrust exemption should be overturned would not constitute a "substantial ground for difference of opinion," and therefore would not warrant an immediate, interlocutory appeal under 28 U.S.C. 1292(b). Even if Judge Whyte were to believe otherwise and certify the appeal, the Ninth Circuit would still have to agree to take the case in order for it to be appealed immediately under 1292(b). Therefore, unless Judge Whyte were to decline to exercise his jurisdiction over the remaining tortious interference claim, and thus enter a final judgment in the case, San Jose may very well be unable to pursue an appeal on the antitrust exemption issue until the conclusion of a trial on the tort claim.

Meanwhile, in addition to the continued threat to baseball's antitrust exemption, San Jose's remaining tort law claim could also give the city some leverage over MLB as the case moves forward. MLB would undoubtedly prefer not to proceed with discovery in the case in order to avoid publicly airing the details of its internal deliberation process. Therefore, the tort claim could further help encourage MLB to resolve the Athletics' situation.

All in all, though, MLB certainly has to be happy with Judge Whyte's decision.

Thus, San Jose appears to have a difficult decision to make in the case. In order to pursue an immediate appeal on the antitrust issue, the city could presumably request that Judge Whyte dismiss the remaining tort law claim and issue a final judgment on the antitrust-related issues, but in the process temporarily forgo the opportunity to pursue discovery against MLB. Alternatively, the city could press the tortious interference claim through to trial, but that claim would not result in an order forcing MLB to approve the Athletics' relocation, and would require San Jose to indefinitely postpone its appeal on the antitrust exemption issue. In hindsight, San Jose may thus wish that it had requested a preliminary injunction in the case. If it had, and Judge Whyte declined to issue such an order, the city could then have immediately appealed under 28 U.S.C. 1292(a).

San Jose v. MLB: Judge splits decision on claims over A's South Bay plans
http://www.mercurynews.com/politics-government/ci_24290747/judge-dismisses-san-jose-antitrust-claims-against-mlb

San Jose v. MLB Case No. C-13-02787 RMW
http://www.scribd.com/doc/175439480/San-Jose-v-MLB-District-Court-Opinion

Jimmy Graham and The Franchise Tag

By Matthew Luchs

Under the current National Football League (NFL) Collective Bargaining Agreement (CBA), a franchise tag is defined as a contractual tool that allows a team to keep a pending unrestricted free agent, on its roster for an additional year with a guaranteed contract. The value of the contract is determined by "summing the amounts of the Franchise Tags for players at that position for the five preceding League Years; (2) dividing the resulting amount by the sum of the Salary Caps for the five preceding League Years (using the average of the amounts of the 2009 and 2011 Salary Caps as the Salary Cap amount for the 2010 League Year); and (3) multiplying the resulting percentage by the Salary Cap for the upcoming League Year." (CBA, Article 10, Section 1-2) This provision allows for small market teams to keep players who often desire to move to big city franchises that pay more, for an additional year.

Tight end Jimmy Graham, who at 6'7" and 265 lbs., also totes a 4.53 second 40-yard dash time, is a force with which to be reckoned on the football field and is closing in on the last year of his rookie contract. Graham is on pace to set records for the most receiving yards, touchdowns, and receptions by a tight end in a single season this year in the NFL. It is likely that the New Orleans Saints will use its franchise tag on him, even if a deal cannot be reached by this February, before he hits the open market. Graham may attempt to be categorized as a wide receiver for franchise tag purposes because wide receivers have a higher franchise tag salary than tight ends. "If the 2014 salary cap is around $127 million, then the tight end tag would be $6.7 million, while the receiver tag would be $11.6 million. That's a staggering difference on a one-year deal." (http://www.cbssports.com/nfl/writer/jason-la-canfora/24036481/what-happens-if-the-saints-decide-to-franchise-jimmy-graham)

Although Graham is registered by the New Orleans Saints as a tight end, it has often been a point of debate on whether he truly fits that designation. Recently, an NFL analyst stated the following, "Though he plays tight end, Graham is at the vanguard of the growing trend of spread formations with tight ends in the slot or out wide, and not used nearly as much in the traditional role of engaging as a blocker at the point of attack." (http://www.cbssports.com/nfl/writer/jason-la-canfora/24036481/what-happens-if-the-saints-decide-to-franchise-jimmy-graham) The National Football League Player Association (NFLPA) sources indicate that consideration for player positions are determined by positional distinction in the playbook; such as how often a player blocks and is involved in the run game, and what percentage of the time he lines up outside the hash marks. (http://www.sportingcharts.com/dictionary/nfl/franchise-tag.aspx)

This is not the first time that this issue has been brought before the NFL. In the past, both Terrell Suggs of the Baltimore Ravens in 2009 and Jared Cook of the Tennessee Titans in 2012 had similar issues with position designations. Cook argued that he should be entitled to the franchise tag of a wide receiver, because he spent more than half of his offensive plays lined up in that position. Cook believed that the likelihood of success that the NFL characterized him as a tight end was small. Therefore, Jared Cook and the Tennessee Titans never reached an agreement, and the franchise tag was never applied to him as a tight end. Cook elected to test free agency before any further agreements could be made. The St. Louis Rams subsequently signed him this year. Tennessee was not willing to offer Cook, beyond the lower salary of a franchise tagged tight end, the type of contract that a franchise tag of a wide receiver would guarantee him. His argument was never officially brought before the NFL.

Similarly, Suggs was a linebacker for the Ravens, but argued that since he played more time at the defensive end position, he should get the franchise tag of a defensive end. (http://sports.espn.go.com/nfl/news/story?id=3394771) Suggs filed a grievance asking a Special Master to determine his true position, but the Ravens and Suggs agreed separately that he would be paid half the difference of what a linebacker and a defensive end made as a franchise tag player. The NFL never officially ruled on the matter as well. However, the NFL has made it very clear that the Suggs case is in no way a precedent for future issues that may arise for player definitions and the franchise tag application. (http://www.cbssports.com/nfl/writer/jason-la-canfora/24036481/what-happens-if-the-saints-decide-to-franchise-jimmy-graham)

Sean Peyton, the head coach of the New Orleans Saints, has indicated that the Saints are not going to change the way they are using Jimmy Graham to help get around the player designation issue. Instead, Peyton stated that he is "going to do whatever we have to do to win games, whether that's line [Graham] up wide, in the slot, three yards off the tackle, five yards off the tackle or right next to the tackle..." (http://sports.yahoo.com/news/nfl--potential-contract-ramifications-will-have-no-impact-on-how-saints-use-jimmy-graham-013308568.html).

At this current moment, six weeks into the 2013-2014 NFL season, it is difficult to tell whether this issue will need to be brought before the NFL. Maybe the Saints will be able to work out a contract extension to the liking of Graham. Perhaps there will be a settlement between the two parties, similar to the Ravens and Suggs that would allow the NFL to abstain from answering this perplexing question. It is unlikely that the Saints will let Graham walk like the Titans did with Cook. Come February, however, it should be clearer on whether the NFL will have to take a stance on Graham's situation and similar issues.

December 5, 2013

Dominican Court Throws MLB a Curve

By Daniel R. Secatore

A recent ruling by the Dominican Republic's highest court has put the citizenship status of hundreds of thousands of people of currently living in the Dominican Republic in a state of legal limbo. The United Nations and humanitarian organizations across the world have condemned the ruling and warned that it could render a significant population of the Dominican Republic stateless. Reverberations from this ruling could potentially be felt throughout the Americas, and in the world of sports, as it threatens to complicate the long relationship between Major League Baseball (MLB) and the Dominican Republic, and put yet another obstacle before the dreams of thousands of Dominican baseball players, for whom the national pastime provides a path out of poverty.

On September 23rd, the Dominican Supreme Court of Justice ruled that anyone who was born after 1929 and who does not have at least one parent of Dominican ethnicity is not entitled to Dominican citizenship, regardless of where he or she lives or was born. Reuters estimates that as many as 250,000 people presently living in the Dominican Republic fit this classification. http://www.reuters.com/article/2013/10/12/us-dominicanrepublic-citizenship-idUSBRE99B01Z20131012 Most of these people are of Haitian descent and many were born in the Dominican Republic and have known no other home. The New York Times reports that the Dominican government is working on a plan to grant these people temporary residence permits, but without citizenship, they may still be unable to receive many government benefits including public health insurance, voting rights, and -- most importantly for hopeful ballplayers and MLB -- passports. http://www.nytimes.com/2013/10/24/world/americas/dominicans-of-haitian-descent-cast-into-legal-limbo-by-court.html?_r=0

Eighty-nine players born in the Dominican Republic were on MLB rosters on Opening Day of the 2013 season and, according to Alicia Jessop of Forbes, Dominicans make up an estimated one-fourth of all minor league rosters (approximately 1,800 players). http://www.forbes.com/sites/aliciajessop/2013/03/19/the-secrets-behind-the-dominican-republics-success-in-the-world-baseball-classic-and-mlb/ The vast majority of these players enter the United States on nonimmigrant temporary work visas; however, federal law also requires possession of a valid passport for admission into the United States on such visas. (8 USCA § 1182(a)(7)(B)) Thus, if a player is rendered stateless by this ruling, he may not be able to enter the United States to play professional baseball, regardless of his talent. This could impact not only young players who are trying to break into the game for the first time, but also established MLB players who returned to the Dominican Republic after the 2013 season and now lack valid documentation.

Faced with this possible disruption, MLB must be proactive in using the law to protect its stateless players.

There are a number of waivers to the requirement that non-immigrant aliens possess valid passports in order to obtain entry visas. Few of these avenues will be open to stateless players, however. Many of the waivers, for instance, apply only in very specific circumstances, such as the waiver for a landed immigrant in Canada who is traveling to the United States only in emergent circumstances. (22 CFR 41.3(f))

A review of the law does show that a few of the waiver provisions could potentially apply to stateless players.

First, the passport requirement may be waived by the joint action of Attorney General and Secretary of State on the basis of an "unforeseen emergency in individual cases." (8 U.S.C.A. § 1182(d)(4)) The statute does not define "unforeseen emergency", so it is unclear on the face as to whether people who find themselves suddenly stateless are helped by this provision. The Customs and Border Patrol Inspector's Field Manual, however, elaborates on what "unforeseen emergency" may mean, defining it very narrowly such that it only covers things like medical emergencies, natural disasters, and passport theft. (Inspector's Field Manual § 17.5(d)(3)) Thus, while on first glance it appears that this statute may apply to stateless players, it is unlikely to provide relief as it is currently interpreted.

A more promising option is found in a statute granting the State Department discretion to authorize individual consular offices to waive the documentary requirements in the event of "unusual circumstances" prevailing within the consular district. (22 CFR 41.3(g)) Though there is little caselaw elaborating this statute, theoretically it could apply to the stateless players. As this avenue requires discretionary action on the part of the State Department, it is incumbent upon MLB and its lobbying arm in Washington D.C. to be proactive in protecting its Dominican players and the interests of the teams for which they play. The U.S. government may be weary of appearing to show favor to athletes over other categories of nonimmigrant aliens, however MLB may be faced with few other viable options when spring training resumes in February.

As the Dominican government is still reacting to this ruling, it is not yet clear exactly what impact it will have on MLB, the thousands of Dominicans already under contract with MLB teams, and the countless younger Dominican players who are still dreaming of playing in America. Dominican baseball players, including many of Haitian descent, have been a blessing to baseball, as they have come to excel in the game in recent years. MLB must do everything it can to ensure that they are given the chance to continue to do so for years to come.

January 13, 2014

The NFL Concussion Litigation: Settlement Hits a Snag

By Carter Anne McGowan

On Monday, January 6th, attorneys in the consolidated NFL Concussion Litigation (In Re: National Football League Players' Concussion Injury Litigation, No. 2:12-cv-03224-AB (E.D. Pa. Mar. 6, 2012)) (Concussion Litigation) submitted a motion to the court requesting approval of the terms of the settlement agreement (the Settlement Agreement) reached by the player-plaintiffs in the class action suit and the NFL. This Settlement Agreement, revealed in detail for the first time as an Exhibit appended to the motion, immediately resulted in controversy among the players.

The Settlement Agreement proposes a fairly complicated methodology of compensating former players suffering from some form of neurocognitive impairment greater than Level 1 Neurocognitive Impairment (i.e. the neurocognitive impairment must amount to at least early dementia in order to be compensable under the Settlement Agreement). Amyotrophic Lateral Sclerosis (ALS, or Lou Gehrig's Disease), Chronic Traumatic Encephalopathy (diagnosed post-mortem), Parkinson's Disease, Alzheimer's Disease, and Levels 1.5 and 2 Neurocognitive Impairment (early or moderate dementia) are compensable under the Settlement Agreement, with ALS eligible for compensation at a maximum amount of $5 million dollars, and the maximum compensation for Level 1.5 Neurocognitive Impairment being $1.5 million dollars. If players played in the NFL for fewer than five years or were over 45 years of age at diagnosis, they are not eligible for maximum compensation, and the Settlement Agreement sets forth in chart form the reductions in compensation for impairments diagnosed in former players over 45 years and in players who played fewer than five "Eligible Seasons" (seasons in which the player was on the active list or out with a head injury for a combination of three regular season or post-season games or on the practice squad for eight games, which earns a player half an eligible season).

While this structure does provide predictability with regard to the amount of compensation players and their families can expect, the Settlement Agreement faced immediate criticism, as the amounts to be received by most players will be far lower than the $5 million per player bandied about in early press regarding the settlement. In addition, legal fees will further reduce those amounts received by players who sued the NFLe, while those players who did not sue, but who remain beneficiaries of this Settlement Agreement, do not bear legal fees; already one attorney has indicated that he will file an objection to this perceived inequity. (Ken Belson, With NFL Concussion Deal, Two Tiers of Payouts, N.Y. TIMES, January 11, 2014. http://www.nytimes.com/2014/01/12/sports/football/with-nfl-concussion-deal-two-tiers-of-payouts.html?_r=0. The NFL has in addition agreed to pay $112.5 million in legal fees; however, these fees are intended to pay the lead attorneys on the case, and not all the attorneys, many of whom were working on contingency, and represented individual players before they joined the class action.) This alone could create a conflict of interest between the players who sued (numbering 4,500) and the number of beneficiaries of the Settlement Agreement (numbering 18,000) which could result in the settlement being struck down on appeal. (Id., quoting Prof. Lester Brickman of Cardozo Law School.)

Once Judge Anita B. Brody approves the Settlement Agreement, the player-plaintiffs will have 60 days to opt in or opt out of the settlement. With some players unhappy about the lower-than-expected payouts or the lack of NFL admission of responsibility for the players' neurocognitive impairments, it is possible that there will be a large number of opt-outs. At some point, then, this settlement may become irrational for the NFL, as the NFL would be left in the position of having settled one case for a large sum of money while still having to defend numerous lawsuits from former players. Under Paragraph 16.1 of the Settlement Agreement, the NFL does have the "absolute and unconditional right... to unilaterally terminate and render null and void this Class Action Settlement and Settlement Agreement for any reason whatsoever following notice of Opt Outs and prior to the Fairness Hearing."(Concussion Litigation, Document 5634-2.)

While it is still much too early to determine whether this settlement will fail, the warning signs are there, and this case - initially thought to be settled quickly and elegantly by the NFL and the plaintiffs - may still have some rough going in the months ahead.

January 14, 2014

Update on NFL Concussion Settlement

By Carter Anne McGowan

Today, Judge Anita B. Brody issued a preliminary denial of the motion to approve the settlement reached by the NFL and its retired players in the lawsuit relating to neurocognitive impairments suffered by retired NFL players (In Re: National Football League Players' Concussion Injury Litigation, No. 2:12-cv-03224-AB (E.D. Pa. Mar. 6, 2012). In her denial of the motion, the judge cited concerns about whether the amount to be funded by the NFL in order to compensate neurocognitively impaired former NFL players would be adequate to pay all potential claimants. For example, if only 1,000 members of the possibly 20,000-strong class were able to prove Level 1.5 Neurocognitive Impairment, the amount allocated to the compensation fund would fall far short of the $1.5 billion necessary to compensate the impaired players. Judge Brody was unconvinced by representations from both the plaintiffs and defendants, as well as the declaration of the mediator on the case (retired U.S. District Judge Layn Phillips), that the analysis of independent economists justified the parties' belief that the fund would be adequate, as the statements made were conclusory and the record lacked supporting evidence. Therefore, Judge Brody ordered the parties to provide additional documentation supporting their conclusions.

Perhaps this is a minor snag in the process or perhaps - given that the standards for preliminary approval of a class action settlement are fairly low - it signals something more, but for now, the settlement recently presented is on hold.

Yet Another Fight in Hockey

By Jonathan Goeringer

The Official 2012-2013 National Hockey League (NHL) Rulebook has dedicated an entire rule, Rule 46, with 22 provisions stipulating how, when, and with whom fighting may occur during an NHL contest. (http://www.nhl.com/nhl/en/v3/ext/pdfs/2012-13_RuleBook.pdf) With only a minor change to its 2013-2014 Rulebook, which has not been publicly released in its entirety, the NHL has made every effort to ensure that fighting, a long-standing component of this sport, remains firmly entrenched in hockey culture.(http://espn.go.com/blog/nhl/post/_/id/26690/2013-14-season-new-rules-defined) Surely the fans, who derive only an enjoyable, entertainment-based benefit from watching the combative game within a game will continue to support and encourage fighting's presence in the NHL. However, for those players that have felt the tangible, negative impact of hand-to-hand combat, the fighting has only just begun, and this time, the opponent is the NFL.

In August 2013, the National Football League (NFL) settled a widely publicized lawsuit involving thousands of former NFL players to compensate those players' damages incurred as a result of playing in a league without adequate protective measures and safety information provided (http://nysbar.com/blogs/EASL/2014/01/update_on_nfl_concussion_settl.html, http://nysbar.com/blogs/EASL/2014/01/the_nfl_concussion_litigation_.html). Prior to its settlement, the impending ramifications of resolution with those former players brought with it a wave of changes to current NFL policy so as to thwart future issues of the same ilk. One of those changes, enacted prior to the 2011-2012 NFL season, involved moving kickoffs forward five yards and reducing the distance between defensive players and such kickoffs. In doing so, the NFL was able to reduce both the amount of speed defensive players could build in anticipation of the kick and the liklikehood that a receiver of the kick would chose or have the ability to physically engage in the play. As a result, in a sport where concussions had been on the rise since 2006, the rule change was vastly effective for its purpose. That season, the NFL saw an overall decline in the amount of concussions sustained across the league, and a steep 46% decline in the amount of concussions on kickoffs specifically. (http://www.nfl.com/news/story/0ap1000000047303/article/concussions-decline-after-change-to-kickoff-rule) Still, despite the coinciding uproar from fans who relished the opportunity to witness the unparalleled excitement that kickoffs used to bring, the NFL managed to increase revenues by over 5%, showing that doing so could still leave owners and the likes financially unaffected in the face of fan disapproval.(http://www.businessinsider.com/sports-chart-of-the-day-nfl-revenue-still-dwarfs-other-major-sports-2012-10) However, even with a safer environment in which to play this sport, some of the players themselves were left with no sport to play.

For players like Devin Hester, kick return extraordinaire for the Chicago Bears, their livelihoods have been dramatically affected by such rule changes. In response to disallowing return men from earning a Pro Bowl (all star) selection,and thereby making the earning of bonuses in satisfaction of that condition impossible, Hester said, "they are trying to change up the whole game of football and they're messing with people's jobs and lives." In response to the same rule change, Joshua Cribbs, another of the NFL's best return men said, "we have a great league filled with tradition and history but I'm not sure about that now." In support of Cribbs, punter Chris Kluwe said, "[I] wonder if NFL teams are planning on altering any contracts of kick returners who have Pro Bowl contingent bonuses. Only seems fair." While these players represent a small sample of those visibly affected by policy changes, their plight does not even come close to accounting for the countless others who can no longer find employment as members of the NFL due to their irrelevant but once coveted skill-set. For those that currently find themselves in the employ of the NHL due to their ability to literally beat opponents, that same concern may very well be shared in due time.

Former NHL player Jim Thomson, a self-proclaimed enforcer during his heyday, had this to say about fighting in hockey: "Todd Ewen, an enforcer who had more fights than I did said, 'take it out'...I was friends with Bob Probert, maybe the best fighter of all time. He hated it. He hated what it did to him; he hated the demons he had to live with. I could go through the list." Those "demons," or symptoms about which Thomson spoke, reside in many former NHL and NFL players who suffer from chronic traumatic encephalopathy (CTE), a degenerative disorder spurred on by multiple concussions that can cause severe depression, confusion, memory loss and aggression. The very demons that haunt these players through retirement are the same demons that may now haunt the NHL. On November 25, 2013, 10 former NHL players filed a lawsuit, Leeman v. National Hockey League, citing many of the same issues raised in the NFL lawsuit. The players intend to argue that by creating safety protocols, the NHL assumed the duty to protect the players from injury, and that they further failed to adequately inform the players of the potential risks involved in the playing, among other issues. With the threat of litigation as much a reality now as it was when the NFL instituted its policy changes, the likelihood of the NHL taking the same course of action becomes greater with each punch. General Manager of the Tampa Bay Lightening and former Detroit Red Wings legend Steve Yzerman, supported by a contingent of other NHL General Managers, released this statement mere weeks after the NFL settlement: "either anything goes and we accept the consequences, or take the next step and eliminate fighting." While Yzerman's statement may echo the sentiment of former players, including Thomson, now united in their potential opportunity to cash in on former league policy, it equally demonstrates the disconnect between NHL officials and those who still rely on their league's current policy.

In 2011, the National Hockey League Players Association (NHLPA) and CBC Sports conducted a poll of 318 current NHL players, which yielded a telling result-- 98% of players are opposed to a ban on fighting.(http://www.thestar.com/sports/hockey/2013/11/07/nhl_fighting_survey_shows_canadian_hockey_fans_want_ban_players_dont.html ) According to the 6'8", 260 pound Buffalo forward John Scott, "[t]here are not many concussions if you watch fighting. I think it's the easiest target that people go after: Get fighting out of the game and it'll solve everything. I think when fighting's out of the game then everyone's going to be taken off on stretchers because of hits from behind and high-sticks and dirty checks. It'll be a little different story." Of course, Scott, currently serving a suspension for an illegal check of his own, makes his living by dropping the gloves and would instantly feel the direct affect of any change in policy. However, Scott raises the valid point that may be the lone differentiating factor between what has taken place in the NFL and what may transpire in the NHL, that eliminating fighting affects all players on the ice. Georges Laraque, Yzerman's former teammate may have stated it best when he said: "Because of them [tough players], Steve Yzerman had all the room he needed to be a successful player. [They] put him on the road to the hall of fame...And he's spitting on that job [by saying], 'lets take fighting out of the game.'" According to Laraque, one of the most notorious fighters NHL fans have ever seen, the skill players require a certain level of protection from the brutality of an already contact-driven and ruthless game. In removing that level of protection, the NHL runs the very real risk of having to supplement fighting with far-reaching and imposing protective measures that might forever change the face of hockey as its loyal fans have known it.

The debate currently permeating the NHL can be synthesized into this question-- is protection of league image through policy changes and compensation of its former players worth a change in culture that has the potential to affect the viewers, current players and the game in a way that could prove far more detrimental than was seen in the NHL? The answer is yet to be written.

Alex Rodriguez's Ongoing Legal Battle to Overturn His MLB Suspension

By Danielle Browne

On January 11th, Fredric Horowitz, an independent arbitrator, upheld the majority of a 211-game suspension levied against New York Yankees' Alex Rodriguez. Rodriguez's suspension is based on his role in the Biogenesis performance enhancing drug (PED) scandal. Horowitz ruled there was "clear and convincing evidence" that Rodriguez used three banned substances (testosterone, Insulin-like Growth Factor-1, and human growth hormone) in violation of the Joint Drug Agreement (JDA), and twice tried to obstruct Major League Baseball's (MLB) drug investigation in violation of the Collective Bargaining Agreement (CBA). Horowitz's ruling stated that "[d]irect evidence of [the JDA] violations was supplied by the testimony of Anthony Bosch [Biogenesis founder] and corroborated with excerpts from Bosch's personal composition notebooks, BBMs [Blackberry messages] exchanged between Bosch and Rodriguez and reasonable inferences drawn from the entire record of evidence."

Although Horowitz trimmed the suspension to 162 games (the entire 2014 regular season and postseason), it remains the largest penalty for PED use in MLB history. In his decision, Horowitz wrote, "[w]hile this length of suspension may be unprecedented for a MLB player, so is the misconduct he committed."

Just two days after Horowitz's ruling, Rodriguez filed a lawsuit in U.S. District Court against MLB and the Major League Baseball Players Association (MLBPA), seeking to overturn the season-long suspension. Specifically, the lawsuit seeks to vacate Horowitz's decision, hold the MLBPA responsible for its alleged breaches of the duty of fair representation, and hold the MLB responsible for violating the CBA by imposing a suspension on Rodgriguez without just cause.

Vacating the Arbitration Award

Rodriguez's complaint alleges that Horowitz's ruling must be vacated for four reasons:

(1) It "does not draw its essence from the collectively bargained agreements." Rodriguez argues that the 162 game suspension disregards the "progressive, disciplinary framework set forth in the JDA." The JDA establishes a 50-game suspension for the first doping offense, 100 games for the second offense and a lifetime ban for the third. While Rodriguez proclaims his innocence, he argues that he should have been suspended for 50 games, at most, as a first-time offender under the JDA;

(2) Horowitz "exhibited a manifest disregard for the law." Rodriguez claims that Horowitz denied his legal team the opportunity to cross-examine Bosch and Selig. Additionally, Rodriguez's legal team was denied the right to examine the BlackBerry devices that MLB alleges were used to transmit incriminating text messages between Rodriguez and Bosch;

(3) Horowitz "acted with evident partiality"; and

(4) Horowitz refused to "entertain evidence that was pertinent and material to the outcome."

Courts, generally, review arbitration awards with great deference. If the arbitration proceeding is conducted in a fair and impartial manner, courts do not vacate the ruling or interfere with the arbitrator's relaxed evidentiary standard. The U.S. Court of Appeals for the Second Circuit has held that an arbitral decision may be vacated when an arbitrator has exhibited a manifest disregard for the law (i.e. something beyond and different from a mere error in the law or failure on the part of the arbitrators to understand or apply the law.) This is difficult standard to meet. Although Rodriguez's legal team has alleged that Horowitz's conduct meets the standard, it is not clear that this is true.

Duty of Fair Representation

The duty of fair representation obligates unions to represent its members fairly, in good faith, and without discrimination. Rodriguez's complaint alleges that the MLBPA "completely abdicated its responsibility to Rodriguez to protect his rights" by failing to stop MLB from leaking prejudicial information and using abusive investigative tactics. Further, the complaint alleges that"[t]his inaction by the MLBPA created a climate in which MLB felt free to trample" on Rodriguez's confidentiality rights.

Like challenges to arbitration awards, the courts have taken a deferential approach when reviewing union-member conduct. The courts have held that a union only breaches the duty of fair representation when it acts arbitrarily, discriminatorily or in bad faith. Furthermore, the courts have refused to classify union decisions as arbitrary as long as they were based on a reasoned decision by the union. Therefore, Rodriguez will likely have a difficult time proving his duty of fair representation claim.

Barring success in the federal court, Rodriguez stands to lose $25 million in salary for 2014, lost opportunities for bonuses, and playoff money. Additionally, Rodriguez will be turning 40 years old in the 2015 season, and there are substantial doubts that he can return to the plate with success after this suspension.

The complaint: https://s3.amazonaws.com/s3.documentcloud.org/documents/1004908/ar-complaint-1.pdf

February 3, 2014

Northwestern University Men's Football Team Files For Union Designation From NLRB

By Mike Furlano

On January 28th, the Northwestern University Men's NCAA Division One Football team filed a petition with its local National Labor Relations Board seeking union status. The proposed union, named the College Athletes Players Association (CAPA), argues that the Northwestern football players are more like "employees" than "student-athletes," and should be treated as such. The NCAA publicly opposed the players' unionization attempts, stating that "student-athletes are not employees within any definition of the National Labor Relations Act (NLRA) and that there is no existing relationship between the NCAA, its affiliated institutions, or student-athletes."

According to the CAPA President Ramogi Huma, the proposed union's main goal is to give college athletes a voice "when it comes to their physical, academic, and financial protections." The union is initially concerned with medical treatment and tuition after a player stops playing his or her sport. Currently the CAPA is only representing Division One Football Bowl Subdivision players and men's basketball players.

The main challenge for the CAPA is reversing 50 years of National Labor Relations Board (NLRB) precedent refusing to consider student-athletes as employees -- mostly for worker compensation issues. Since 1953 when the Colorado Supreme Court ruled that a University of Denver football player was an "employee" for purposes of Colorado's workers compensation laws, the NCAA has diligently worked to separate athletes from employees. The NCAA thereafter started using the term "student-athletes," calling scholarships "grant-in-aid," and enacting other procedures to further the distinction between athletes and employees.

Two notable decisions that may guide the NLRB involve graduate teaching assistants. In 2004, the NLRB concluded that graduate teaching assistants could not unionize because the assistants' relationship with Brown University (Brown) was more educational than economical. In 2011, however, the NLRB cast doubt on its earlier ruling when it considered a New York University (NYU) graduate assistants' union petition. While the Regional Board ultimately rejected the petition, it noted that the 2004 Brown decision was ripe for reconsideration because the graduate assistants' relationship with the school was both educational and economic. Indeed, in 2012 the National Board voted to reconsider the Brown decision. The Board did not get a chance, though, because NYU and its graduate assistants came to an agreement and withdrew the petition. The CAPA would likely rely on these recent developments to establish that the student-athletes are employees under the NLRA.

A ruling in the CAPA's favor would apply to all private universities across the United States. Public universities, however, are not bound by NLRB rulings because the NLRA does not apply to public entities. Instead, public universities are bound by state labor laws. This is problematic for the union movement because many states have "right-to-work" laws that limit unionization by public employees.

Unionizing college athletes can have widespread effect on the collegiate sports landscape. A successful petition could affect everything from NCAA antitrust violation claims to individual universities' tax-exempt status. Even if the petition is initially denied, the final matter will take years to play out in administrative hearings and the courts.

April 3, 2014

NFL Athletes' IPOs

By Matthew Luchs

In 1997, musician David Bowie pioneered the use of Bowie bonds, which were some of the first bonds to represent intellectual property as the underlying collateral. It was an asset-backed security, which used current and future revenue from albums recorded by Bowie to pay investors. (http://www.investopedia.com/terms/b/bowie-bond.asp). However, these ventures to sell future earnings are not always favorably looked upon within different organizations.

In 2010, the Motion Picture Association of America lobbied Congress to make the use of the Hollywood Stock Exchange (a place where investors could buy stock in exchange for future box office earnings of motion pictures) illegal. (http://nymag.com/movies/theindustry/67275/). Now, companies like Fantex have begun to sell stocks of athlete's future earnings. (http://profootballtalk.nbcsports.com/2013/10/18/more-details-emerge-on-arian-foster-stock-sale/).

In October 2013, Fantex announced that Houston Texan's running back, Arian Foster agreed to trade 20% of all future National Football League (NFL) related earnings for $10 million from investors. To avoid potential action from the NFL, Fantex filed a Form S-1 with the SEC, warning potential investors that "Our business model depends on the cooperation of various third parties... There may be influential parties with interests that are adverse or perceived to be adverse to our business, such as sports leagues, sports teams, fantasy sports networks or gambling institutions." (http://profootballtalk.nbcsports.com/2013/10/18/more-details-emerge-on-arian-foster-stock-sale/).

Fantex also released a number of disclaimers and warnings about the high risks associated with buying stocks in professional athletes. Foster himself indirectly expressed concerns about whether he would make more than $10 million over the course of his career. He agreed to give up $2 million of his next $10 million and 20% of any other profits made beyond that. The Form S-1 also explained that, if Foster retired before October 17, 2015, he would be required to pay back $10.5 million, minus any money paid to Fantex over the course of those two years. (http://profootballtalk.nbcsports.com/2013/10/18/more-details-emerge-on-arian-foster-stock-sale/).

Although it may seem that investors are buying stock directly in the professional athletes through Fantex, that is technically untrue. In reality, it is Fantex stock, with performance and perceived value tied directly to the amount of money Foster pays back to Fantex over the balance of his career, that investors are buying. (http://profootballtalk.nbcsports.com/2013/10/18/more-details-emerge-on-arian-foster-stock-sale/). The deal only proceeds if all stocks are sold. Fantex would then make a one percent commission on all sales and purchases of the stock. Once the $10 million is raised the risks pass to the investors. Fantex also maintains the right "to dissolve the tracking stocks at any time and convert them into shares of the management company." (http://dealbook.nytimes.com/2014/01/28/fantex-moves-forward-with-football-player-i-p-o/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1). Fantex's stock will be traded on an exchange operated by Fantex, where there is no guarantee of liquidity.

In November 2013, before the official release of Fantex stock, Arian Foster was placed on injured reserve and required back surgery. Fantex's CEO, Buck French, released a statement saying that it was postponing itsventure with Foster. In the statement, French expressed that he felt this was a prudent course of action under the current circumstances. He further stated that Fantex continues to support Foster and his brand, and wish him well in his recovery. Fantex vowed to continue to work with him through his recovery and intends to continue with this offering at an appropriate time in the future based on an assessment of the events. (http://profootballtalk.nbcsports.com/2013/11/12/fantex-postpones-arian-foster-stock-offering/). Buck French believes that the injury to the athlete made prospective investors more aware of the risks of purchasing Fantex's stock. There has been no attempt to renovate the planned stock offering of Arian Foster, but Fantex has moved forward with other ventures. (http://dealbook.nytimes.com/2014/01/28/fantex-moves-forward-with-football-player-i-p-o/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1).

Currently, Fantex has agreed to a similar arrangement with San Francisco 49ers tight end Vernon Davis. Davis has agreed to receive $4 million up front in exchange for 10 percent of his future earnings, as long as Fantex sell enough stock to finance the $4 million investment. (http://dealbook.nytimes.com/2014/01/28/fantex-moves-forward-with-football-player-i-p-o/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1). However, what makes this deal different from Foster's, is that Davis agrees not only to pledge 10% of his future earnings from playing contracts, but he also agrees to offer another 10% of his corporate endorsements and appearance fees. Fantex expects to sell 421,100 shares at $10 each, raising $4.2 million. For investors to make money, the total value of Davis's future income has to be more than $4.2 million. The company has valued that potential money pot at $51 million. (http://dealbook.nytimes.com/2014/01/28/fantex-moves-forward-with-football-player-i-p-o/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1).

There are many growing concerns that come with the introduction of a business of this type. This may very well be a way for teams and players to circumvent the salary cap system. Through such investments, players can receive more money earlier in their career than their team's salary cap would ordinarily permit. There also exists the possibility that if the endeavor with Davis is successful, Fantex will not only target other current NFL members, but also begin to pursue younger players entering the NFL. These rookies have a potentially long and hopefully successful careers ahead of them, with more earnings and profits to come, making them attractive for investments.

This could lead to the manipulation of young talent, as it may be seen as a way for them to receive guaranteed money up front. Making more money early in their careers may entice these individuals, but it may very well end up hurting them in the long-term. If these athletes do not become as successful as projected, or if they do not attain a certain contract or salary, they may find that they owe money back to Fantex under certain provisions. This may sway public opinion and appeal against it, causing its stock to heavily plummet, and hurting its chance of future earnings. Whatever the consequences of Fantex's operations are, its first official offering and its success, or failure, will weigh heavy on the minds of investors and future athletes, and it may very well force the NFL to take action.

The Dispute of Financial Fair Play in European Soccer

By Maximilian Querci

"The Beautiful Game" known as soccer has evolved over the past century from a recreational sport to matches being played in astounding stadiums and observed worldwide. Today, soccer clubs dominate lists of the most valuable franchises in the world, Manchester United is at the top, valued at $2.32 billion. The soccer market is progressively expanding. Soccer's appeal in North America has reached an all time high. As result, monetary figures for players are constantly reaching new heights. Record transfer fees are constantly being broken with each transfer season. However, with this influx of money, there are concerns about how exactly teams are able to make such high-profile purchases while complying with the fair and competitive nature of the sport. The Union of European Football Associations (UEFA) has taken a stance against the increased spending with the implementation of the Financial Fair Play Rules ("the Rules"), bywhich all European Union (EU) soccer clubs must abide.

The Rules were created to curb overspending by EU soccer clubs in order to insure their own financial stability. The Rules were implemented to stop what UEFA General Secretary Gianni Infantino referred to as "greed, reckless spending and financial insanity within European football." (Richard Conway, UEFA Investigates 76 clubs over Financial Fair Play, ((Feb. 29,2014), http://www.bbc.com/sport/0/football/26390770) The Rules put into effect a "break-even" requirement where a club's expenses must not exceed its income and a club must not record losses of more than €45 million over a three-year period.( Ed Thompson, Financial Fair Play, (Feb. 29,2014), http://www.financialfairplay.co.uk/financial-fair-play-explained.php) Failure to meet the "break-even" requirement may lead to serious fines, player transfer bans, or even possible denial of a license to compete in UEFA competitions, namely the Champions League and Europa League tournaments, which generate high revenues for its participants. (Are UEFA's Financial Fair Play Rules headed for an early bath?, Taylor Wessing LLP (Feb. 29, 2014), https://www.taylorwessing.com/news-insights/details/are-uefa-s-financial-fair-play-rules-headed-for-an-early-bath-2013-12-18.html).

According to Infantino, 41 clubs have been excluded from European Competition, and five have been excluded in the current season for failing to meet the strict criteria since 2009. (Joe Wright, Financial Fair Play Is Working Insists UEFA, (Feb. 28, 2014), http://www.goal.com/en-us/news/1956/europe/2013/08/08/4174569/financial-fair-play-is-working-insists-uefa?ICID=AR_RS_1) Yet many in the game feel this is not enough.

International law firm Taylor Wessing LLP serves as advisor on competition law and free movement rules. The firm reports that the Rules resemble similar salary cap programs in place in North American sports leagues, but do differ in some respect. Salary caps in American leagues place limitations on how much money a club may spend on the wages of individual players and total wage expenditures. (Taylor Wessing LLP., https://www.taylorwessing.com (Feb. 29, 2014)) The purpose of a salary cap is to promote protection of a competitive balance by limiting the amount of money a team can pay its players in salary. Yet representatives from smaller EU clubs criticize the Rules for promoting the opposite, as the Rules do not curb or limit player transfer fees or the salaries clubs pay their players. They only require teams to meet the "break-even" provisions, which many of the richer clubs have no problem doing, especially with the backing of wealthy owners and investors.

The limitations on spending established by the Rules unfortunately make it difficult for financially inferior clubs to challenge against powerhouse teams who "bought their success" prior to the implementation of the Rules. This is why many opponents of the Rules claim that they may "institutionalize the competitive imbalance that currently exists," because they do not really directly attack the problem. Id. Infantino has insisted, however, that the Rules were not created to isolate clubs. He claims that the Rules are about financial sustainability, which will lead to a more competitive and economically sound region of soccer, as prominent teams cannot "break the bank" to bring in top talent without regard to accumulating large amounts of debt. (Enis Koylu, FFP Not Out to Isolate Clubs, Say UEFA, (Feb. 28, 2014), http://www.goal.com/en us/news/1956/europe/2014/03/03/4659515/ffp-not-out-to-isolate-clubs-says-uefa?ICID=HP_BN_8)

Another notable complaint, made by a prominent agent, is that the Rules breach fundamental EU laws on competition and free movement. The complaint also alleges that the Rules may reduce high profile big-money transfers in the EU. As a result this will make it more difficult for European agents to earn commissions from player transfers. (Taylor Wessing LLP., https://www.taylorwessing.com (Feb. 29, 2014)) The most important issue stemming from the complaint is the risk that the Rules may violate European laws. The complaint asserts that the Rules contravene the EU Treaty principles protecting the free movement of workers (reduction in the number of player transfers), capital (reduction in club investment amounts), and services (reduction in sports agents abilities to generate revenue through transfers). (Id.) The Rules also have been alleged to be in breach of Article 101 of the EU Treaty, constituting anti-competitive agreements between competing firms to reduce their spending and investing to pre-determined levels. Anti-competitive agreements may be permitted as long as the restriction constitutes a pursuit towards a legitimate aim, and the restriction must be no more restrictive than is required to achieve that aim. (Id.)

Unfortunately for UEFA, there are doubts as to whether the Rules could satisfy such a standard. While protecting the financial stability of European soccer would be considered a legitimate aim, there are other less restrictive approaches UEFA could adopt in place of the Rules. One example is revising the revenue sharing model, where smaller EU clubs could have a greater proportion of broadcasting and sponsorship revenues allocated to them, which could aid financial stability amongst all clubs. Another alternative could be to adapt a salary cap system like American professional sports leagues. However, this could lead to a hampering of transfer activity and potential earnings, which would raise similar concerns to those present with the Rules. (Id.)

Vice President of the European Commission and Commissioner for Competition, Joaquin Almunia, has already given his full support for the Rules, despite the legitimate concerns. However, the Commission has still set a goal of responding to any claims within four months of receipt. If the Commission gives an inadequate response, any aggrieved club or agent could try an alternative process, mainly by bringing an action in a domestic court. This may prove a viable option because the domestic courts of EU member countries are obliged to apply the provisions of the EU Treaty and may deem certain rules unenforceable. (Taylor Wessing LLP., https://www.taylorwessing.com (Feb. 29, 2014))

UEFA announced in February that currently in the 2013/2014 season, 76 clubs are being investigated for possible breaches of the Rules. Surprisingly, soccer conglomerates such as Chelsea F.C. and Real Madrid C.F., both of whom are known for their over spending habits, are not on the list. Real Madrid made world history this year by having the biggest transfer signing to date with Gareth Bale's €100 million transfer fee from Tottenham Hotspurs. Infantino asserts that while such a signing does raise questions with regards to compliance with the Rules, Real Madrid is matching its expenses in revenues annually, and thus is in compliance with the break-even requirement. Chelsea has a different source of its funds and its ability to spend; it is due to its billionaire owner Roman Abramovich constantly injecting money into his team. Thus, keeping debt low and matching expenses is not an issue for Chelsea. Many smaller clubs see this as loophole and unfair advantage.

Smaller teams further question whether clubs like Real Madrid and Chelsea are actually adhering to the Rules, because it appears unlikely that a purchase of a single player for €100 million can be made without incurring debt. This also calls into question whether the Rules are beneficial in promoting financial fairplay in any regard. Yet despite the criticism, clubs are being investigated. For example, a new financial powerhouse, A.S. Monaco F.C. of France, has recently seen an enormous spike in its spending on players with new ownership. "Questions have been asked as to how Monaco, with its modest crowds, pulls off big-money transfers and salaries for stars like Radamel Falcao, Joao Moutinho and James Rodriguez without overstepping UEFA's 45 million euro deficit limit." (Kris Voakes, A political and legal minefield awaits the continent's best sides this summer as FFP laws finally kick in. But will members of the elite really be ousted from the UCL?, (Feb. 29, 2014), http://www.goal.com/en-us/news/86/italy/2014/02/16/4623745 /champions-league-in-the-courtroom-how-europes-biggest-clubs?ICID=SP_FT_2)

After the investigations are thoroughly conducted, actions will be brought against any teams who have breached the Rules. Clubs will have the right to appeal decisions against them to the Court of Arbitration for Sport, who will then make judgments between July and mid-August of 2014. At the beginning of the 2014/2015 season, UEFA shall have the right to exclude non-complying teams from both the Champions League and Europa League. (Richard Conway, http://www.bbc.com (Feb. 29,2014)) With the passion that surrounds the beautiful game today, such exclusion would not only be a disappointment to any club, but a sword in the heart of its fans.

April 8, 2014

Minor League Baseball Players File Suit

By Jeffrey Biel

On February 7, 2014, three former prospects, Aaron Senne of the Miami Marlins, Oliver Odle of the San Francisco Giants, and Michael Liberto of the Kansas City Royals filed a federal lawsuit against Major League Baseball (MLB), commissioner Bud Selig, the Royals, Marlins and Giants for violations of federal and state wage and hour laws (Senne v. MLB). While Minor League Baseball has been in existence since the 1800's, this will mark the first time that MLB will have to answer and defend the low wages it pays to Minor League players. While elite prospects receive large bonuses to cover their expenses throughout the year, most players must work second and third jobs to make ends meet and cover the training expenses expected in the off-season.

Sports law professor and Sports Illustrated columnist Michael McCann recently wrote an article for Sports Illustrated detailing the paltry salaries earned by typical Minor Leaguers. In fact, most players earn between $3,000 to $7,500 for a five-month season. In comparison, a typical fast food worker earns between $15,000 and $18,000 a year. With the federal poverty level at $11,490, most Minor League players are consistently below this level. Although many players do receive a signing bonus, the complaint alleges that the average signing bonus is only $2,500. Minor Leaguers do receive a salary increase as they climb the ladder from AA to AAA teams, but many players will never reach those levels and could remain playing A ball for a substantial amount of time.

Minor League Players typically sign contracts in the six-year range, which gives players no leverage to renegotiate until they becomes free agents. For the lowest level of the Minor Leagues, the maximum that players can earn is $1,100 per month. The federal minimum wage is $7.25 per hour and over a typical 40-hour work week, that totals $1,160. Thus, even the players that are making the maximum (excluding signing bonuses) at the lowest levels are being paid below the federal minimum wage.

Critics of the complaint argue that unhappy Minor League players should quit and find other jobs, but this does not answer the facts alleged in the lawsuit. Minor League players have been unable to form a player's union like their Major League counterparts, which is part of the reason that these conditions still exist. Additionally, baseball is the only sport that still enjoys a blanket antitrust exemption, making it very difficult to sue the MLB for issues of salaries or unfair working conditions. In this new case, the players are attempting to bring a class action lawsuit alleging violations under the Fair Labor Standards Act, which guarantees minimum wage and overtime pay. It will be extremely interested to see how MLB answers this complaint.

For more reading on the case and MLB's possible defenses, please see: http://sportsillustrated.cnn.com/mlb/news/20140212/minor-league-baseball-players-lawsuit/

April 13, 2014

Second Concussion-Related Lawsuit Filed Against the NHL

By Carrie Anderer

On April 8th, the National Hockey League (NHL or the League) was hit with a second concussion-related class action lawsuit brought by nine former players (Plaintiffs) in Manhattan federal court. While this second lawsuit is substantively similar to the lawsuit filed in November 2013, it notably places more emphasis on what it deems to be the League's unique culture of extreme violence, alleging that the NHL fostered violent fighting between players during games and sold this "commodity" of violence to its fans to help generate billions in revenues. The complaint ultimately alleges that the NHL acted negligently, intentionally and fraudulently in its failure to protect its players from head injuries, and seeks, inter alia, compensatory and punitive damages, as well as medical monitoring for the Plaintiffs' brain injuries sustained during their NHL careers.

The Plaintiffs argue that the NHL knew about the linkage between repeated blows to the head and debilitating brain injuries, and yet took no affirmative steps to adequately and meaningfully address the issue. Furthermore, the Plaintiffs claim that the League intentionally concealed what it knew about these devastating and long-term negative health consequences from players. The complaint criticizes the NHL's self-initiated Concussion Program, which was implemented by the League in 1997 to research and study brain injuries affecting players. The Plaintiffs allege that the first written report issued by the Concussion Program in 2011 "amounted to little more than a statistical analysis of concussions suffered and time lost by players." The Plaintiffs also contend that the League has not implemented any effective rule changes aimed at reducing head injuries sustained by players on the ice. For example, in 2011, Rule 48 was amended to ban all deliberate blows to the head. However, as the complaint points out, this rule change only prohibits hits which result in contact with an opponent's head "where the head is targeted and the principal point of contact." According to the Plaintiffs, Rule 48 is ineffective because it does not prohibit a player from deliberately targeting the head of another player during a body check.

Many of the complaint's substantive allegations center on the NHL's "inextricable ties to extreme violence" and its "sophisticated use of extreme violence to bring fans to the game of hockey." The Plaintiffs allege that the NHL has historically fostered a culture in which fights between players, typically instigated by players known as "enforcers," are an acceptable outlet for players' emotions, a means for players to protect their teammates and an expected element of play. As a result, players who already faced the risks of incurring concussions due to the inherently dangerous aspects of playing in the NHL are also exposed to non-inherent risks as a result of "unnecessary violence, including brutal fighting." The complaint describes the traumatic brain injuries suffered by some of the League's most iconic players, several of which were the result of blows to the head during a fight with another player.

The Plaintiffs face a difficult road ahead in terms of legal obstacles. First, they face the threat that their claims are preempted by federal labor law because they are arguably dependent upon or inextricably intertwined with an interpretation of the collective bargaining agreements. Second, it will be difficult for the Plaintiffs to prove causation by establishing that their long-term injuries were the direct result of concussions sustained while playing in the NHL. Third, they may face difficulty certifying the class since it is arguable that their individual injuries and unique factual circumstances will predominate over common questions of fact. Fourth, the Plaintiffs will likely face the argument that they assumed the risks associated with playing in the NHL, and that the medical evidence linking head injuries and neurological diseases has long been publicly available. Finally, the NHL will certainly argue that it took appropriate measures to protect players, including the implementation of the Concussion Program and certain rule changes.

Given that the complaint was recently filed, it is currently unclear what strategy the NHL will adopt; whether it will choose to defend itself in court, or whether it will consider reaching some type of settlement with players. One thing is clear: these types of lawsuits will continue to be filed, and the safety of players must become a number one priority.


May 23, 2014

A Tough Pill to Swallow: Retired Players' Suit Raises Questions About NFL's Safety Record

By Alexandra Goldstein

Former National Football League (NFL) players filed suit in the U.S. District Court for the Northern District of California on Tuesday, May 20th, alleging that the NFL encouraged rampant painkiller use for players, at the expense of players' long-term health and well being. The suit, Dent et al v. National Football League (Case Number 4:14-cv-02324), comes on the heels of a class action concussion suit from retirees that similarly took aim at the NFL's safety record. Dent names eight plaintiffs and notes that more than 500 additional retirees have signed retention agreements to join the suit against the NFL.

The complaint points to a series of increasing demands on players, including a shorter off-season, the emergence of Thursday night games, and a longer season, all of which they claim have resulted in greater strain on players' bodies and less recovery time. In 1966, each of the NFL's 15 teams and the AFL's nine teams played a 14 game schedule, preceded by four pre-season games; only six teams advanced to the playoffs, making the post-season relatively short by today's standards. The suit contrasts the modest 1966 schedule with the NFL's current scheme, noting that the NFL has "expanded to 32 teams, each of which played a four game pre-season, 16 regular season games . . . and could face up to four post-season games if they played in the Wildcard game before advancing to the Super Bowl." The complaint alleges that the increased scheduling demands have given rise to a surge in injuries, leaving the NFL with the choice of benching players or leveraging their on-field time with the aid of prescription medications.

The players further assert that they were given little to no choice in the administration of various painkillers, and even less information about what they were ingesting. They point to the NFL's bottom line as a motivating factor: "[T]he NFL has illegally and unethically substituted pain medications for proper health care to keep the NFL's tsunami of dollars flowing." Former NFL defensive end and named plaintiff, Richard Dent, reveals a startling pattern of injury and medication throughout his 14-year career. He divulges that he "received hundreds, if not thousands, of injections from doctors and pills from trainers" and that "[n]o one from the NFL ever talked to him about the side effects of the medications he was being given." After breaking a bone in his foot during the 1990 season, team doctors advocated that he forego surgery, opting instead to increase his supply of painkillers, in order to keep him on the field. The complaint alleges that he now suffers from permanent nerve damage in the injured foot.

Former San Francisco 49er Jeremy Newberry, also a named plaintiff of the suit, alleges that the NFL administered a similar cocktail of prescription medication to keep him on the field; as a result, Newberry "has Stage 3 renal failure and suffers from high blood pressure and violent headaches for which he cannot take any medication that might further deteriorate his already-weakened kidneys." The complaint proceeds in detailing the starkly similar circumstances of the six additional named plaintiffs. While their individual claims arise from different time periods over the last 50 years, they allegedly "involve common questions of law and fact that predominate over individual issues."

The suit wades through a list of medications administered to players; while the plaintiffs acknowledge that "the specific medications have changed", the NFL has consistently administered opioids, non-steroidal anti-inflammatory medications (NSAIDs), and local anesthetics, namely Lidocaine. The alleged flagrant uses were done without prescriptions or consideration for any of the players' medical histories, in direct violation of the (1) Comprehensive Drug Abuse Prevention and Control Act, codified as 21 U.S.C §801 et seq., (2) Foods, Drug, and Cosmetic Act which gave rise to prescription-based medications, and (3) ethical obligations governing doctors.

To that end, the nine-count complaint includes counts of fraud, fraudulent concealment, negligent misrepresentation, negligence per se, loss of consortium, and negligent retention. The plaintiffs seek compensatory and punitive damages, as well as a court-supervised and "NFL-funded testing and medical monitoring program to help prevent the occurrence of [m]edication-caused addictions and other injuries."

To overcome the applicable statute of limitations, the plaintiffs point to the NFL's "intentional, reckless and negligent omissions" that concealed the underlying foundation for the suit. As a result, they assert that the statute is tolled.

The case has been assigned to Magistrate Judge, Kandis A. Westmore. The parties are due in court later this summer for a case management conference, scheduled for August 19, 2014 at 1:30PM PDT.

The complaint is available at: http://cbssanfran.files.wordpress.com/2014/05/2014-05-20-nfl-complaint.pdf

June 22, 2014

Washington Redskins' TM Issues

By Mike Furlano

On June 18th, the Trademark Trial and Appeal Board of the Patent and Trademark Office (the TTAB) cancelled the National Football League's (NFL) Washington Redskins' trademark registrations for the mark "Redskins", because it determined that Redskins was disparaging to Native Americans. This is the biggest development in a long line of controversy surrounding the NFL team's use of the Redskins name.

The six Native Americans Petitioners tasked the TTAB with determining whether the name Redskins was, at the times of registration, disparaging to Native Americans under Section 2(a) of the Trademark Act. Section 2(a) prohibits the registration of a mark that may disparage persons or bring them into contempt or disrepute. The TTAB found that the name Redskins was indeed disparaging, and must be cancelled.

Legal Analysis

Whether a mark is disparaging requires a two-step inquiry. The TTAB first determines the meaning of the mark before asking whether that meaning may disparage a person or group. Intent plays no role in the analysis if the mark refers to the group claiming disparagement. The TTAB used this two-step inquiry to find that the term redskins disparaged Native Americans during 1967-1990, when the Washington Redskins' trademark registrations were filed and re-filed.

Step 1: Meaning of the mark Redskins

The TTAB quickly determined that the mark Redskins refers to both the Washington Redskins football team and Native Americans. The TTAB referenced the team's use of its Native American chief logo, marching band's headdress costumes, and various team promotional materials depicting Native Americans. It was clear that the mark Redskins referred to, in part, Native Americans.

Step 2: Does the mark's Native American meaning disparage Native Americans?

This was the crux of the issue. The TTAB determines whether a mark disparages a group by looking at the views of that group rather than the American public as a whole. A sizeable portion, or substantial composite, of a group is sufficient for the TTAB's purposes.

Here, the TTAB determined that a substantial composite of Native Americans are disparaged by the Redskins mark. It cited two evidential categories in its determination: First, the TTAB looked at redskins as a dictionary entry. From 1967-1983, most redskin entries label the term offensive, disparaging, contemptuous, or not preferred. After 1983, all entries include these labels. Second, the TTAB referenced a resolution passed by the National Congress of American Indians (NCAI), the oldest and largest nationwide organization representing Native Americans. In 1993 the organization passed a resolution identifying the term redskins as "pejorative, derogatory, denigrating, offensive, scandalous, contemptuous, disreputable, disparaging, and a racist designation" towards Native Americans. It identified the Washington Redskins' usage as having been, and continuing to be, offensive, disparaging, scandalous and damaging to Native Americans. The TTAB noted that because the NCAI is a democratic organization consisting of over 30% of Native American tribes, it constituted a substantial composite of Native American views.

Honorable intent and the way the Washington Redskins used the term was inconsequential, because the analysis hinges on what Native Americans felt about the term. Moreover, the Washington Redskins' argument that some tribes do find the term endearing and honorable failed, because a substantial composite need not be a majority. The TTAB noted that 30% is a sufficient number, because otherwise it would be acceptable for a mark to disparage 1 out of every 3 individuals in a group.

Thus, because the term redskins refers to Native Americans, and a substantial composite of Native Americans finds the term disparaging, the TTAB cancelled the Washington Redskins' trademarks.

What does this mean?

Not as much as you would think. The TTAB only has the power to cancel trademark protection. It cannot prohibit or enjoin the use of the mark. The Washington Redskins are still free to use the name. The cancellation, however, removes the federal protections enjoyed by federal trademark owners, such as enforcement mechanisms concerning counterfeit and import issues. Yet even federal cancellation does not, by itself, invalidate the Washington Redskins' state and common law trademarks. These will also have to be litigated to determine their validity. Finally, the Washington Redskins has 60 days to appeal the TTAB's decision. If the team decides to appeal, and it is likely that it will, then the cancellation is frozen until the appeal's conclusion.

September 15, 2014

Ray Rice video shows: Cameras should do the talking

By Jaimie McFarlin

Jaimie McFarlin is a third-year student at Harvard Law School and member of the Harvard Black Law Students Association, which launched the #HandsUpDontShoot Campaign.

In both tragedies of domestic violence and alleged police brutality, the victim can be silenced. Cameras can't. In a domestic violence incident, the victim can be silenced through the psychological trap of the relationship. In cases of alleged police brutality, victims can be silenced through death. So let the cameras talk.

On July 24th, the National Football League (NFL, the league) suspended Ray Rice for two games in the wake of aggravated assault charges stemming from domestic violence against his then-fiancee, now-wife Janay Palmer. On Sept. 8th, the NFL banned him indefinitely from the league. Only one thing changed after the NFL had completed its initial investigation -- TMZ released the video of Rice's knockout punch in the hotel elevator to the public. Pressured to take further action, the Ravens and the NFL punished re-punished Rice to avoid a public relations nightmare. For once, the executives doling out the repercussions could not ignore the realities of domestic violence.

While domestic violence is an inherently vicious act, the visual accompaniment exposed the ruthlessness of Rice's actions. The words "domestic violence" are now accompanied by an image of brutality. The camera spoke to the violence of Rice's punch in a way that mere words could not.

As the investigation into the death of Michael Brown in Ferguson, Missouri, unfolds, the lack of video evidence is unsettling, as police officer and witness testimony are creating a disputed timeline of events. Darren Wilson, the police officer who shot and killed the 18-year-old Brown, says Brown bum-rushed him, fought over his gun, and was then preparing to attack again. One witness says that the officer was the aggressor, and that the unarmed Brown turned to surrender before he was shot six times while his hands were raised. Although cameras may not be completely objective, they provide independent evidence, integral to a comprehensive investigation.

The Rice domestic violence incident and the Brown death have their differences. First, even before the video was released, the Rice incident involved substantially less disagreement over the events in the elevator. In both instances, the victims cannot be vocal advocates for their cases. So it is only the presence of a video that allows one of those voices to be heard.

Cameras have been playing an increasingly critical role in changing interactions between law enforcement and the community. A 2013 study revealed that wearing cameras was associated with dramatic reductions in complaints against officers and use-of-force in the Rialto, California, police department. The authors concluded: "The findings suggest more than a 50 percent reduction in the total number of incidents of use-of-force compared to control-conditions, and nearly 10 times more citizens' complaints in the 12-months prior to the experiment."

A small number of police departments across the country utilize body-worn cameras. But 39% of local police departments lack the less intrusive dashboard cameras. While a few of the 18,000 police departments across the country have started to equip their officers with body-worn cameras, municipally instituted policies are not enough.

In counties like St. Louis, with over 80 police departments, local departments have taken a haphazard and unsupervised approach to using camera technology. The Ferguson police department had dashboard cameras, but due to installation costs, they sat in storage. Furthermore, local policies provide insufficient oversight to mitigate privacy concerns that accompany camera-related police tactics. Instead of patchwork policies, state and federal legislation is necessary to ensure that all police departments are equipped with dashboard and body worn cameras.

The footage of Ray Rice's brutal assault reveals the urgent need for body-worn cameras on cops to capture independent, visual evidence in incidents that usually hinge on testimonial proof. This incident has made it clear: Cameras matter.


September 18, 2014

Ray Rice's Appeal Could Be One of NFLPA's Biggest Victories to Date: Here's Why

By Max Horowitz
http://sportslawsays.wordpress.com/2014/09/18/ray-rices-appeal-could-be-one-of-the-nflpas-biggest-victories-to-date-heres-why/

Let's be clear about something up front: At this point, it would be approaching futility to try and find anyone who wants to defend Ray Rice.

However, as of Tuesday, the National Football League Players' Association (NFLPA) became tasked with one of the more difficult assignments in its 58 year history: it has to defend him. Not his actions (those are indefensible), but rather his rights.

The NFLPA's formal filing of an appeal of Ray Rice's indefinite suspension to the National Football League's (NFL's)offices in New York City comes as no surprise to those familiar with the law. Yes, Rice's actions have sparked intense reaction and debate across "NFL Nation" about exactly to what sort of standard of personal conduct that professional sports leagues should hold their player-employees, but that is not the issue at hand for the NFLPA. As the legal representative of the NFL players as a whole, it is the job of the NFLPA to ensure that each and every player is secure in his rights under the Collective Bargaining Agreement (CBA), federal labor law, and general principles of constitutional law as a whole. Based on NFL Commissioner Roger Goodell's responses to the Rice situation, coupled with the evidentiary timeline and the relevant provisions of the CBA, it seems almost certain that the NFLPA will be able to do just that.

The Evidentiary Timeline

The most critical piece of the Ray Rice appeal is the evidence that will be presented to the neutral arbitrator at the upcoming hearing of this case (the date will be set within 10 days from Tuesday's filing, pursuant to the CBA). Pending any sudden surprise reveals by either party, the following timeline lists the compelling components of the Rice-Goodell saga:

• February 15: An altercation in a casino elevator between Ray Rice and Janay Palmer occurs in Atlantic City, New Jersey. A police complaint says that Rice "attempted to cause bodily injury" to Palmer, and that Palmer "attempted to cause bodily injury" to Rice. Both are charged with simple assault-domestic violence, though Atlantic City prosecutors would later drop Palmer's charge.
• February 19: TMZ Sports releases security video showing Rice dragging Palmer out of an elevator.
• March 27: A New Jersey grand jury indicts Rice on the charge of third degree aggravated assault. At the time, the Baltimore Ravens release a statement supporting Rice.
• April 9: A law enforcement officer allegedly sends NFL executives a video of Rice striking Palmer. In an interview with The Associated Press on September 10th, the officer reveals this information, and also plays a 12-second voicemail from an NFL office number confirming that the video arrived, in which the caller allegedly says "You're right, it's terrible."
• May 1: Rice pleads not guilty and applies for the state's pretrial intervention program. Prosecutors offer Rice a plea bargain, sparing him jail time in exchange for anger management counseling. Prosecutor Diane Ruberton claims that the State has video beyond the February 19th TMZ video that, along with other evidence, would "confident[ly]...secure a conviction at trial."
• May 20: Rice is approved into the state intervention program.
• July 24: The NFL suspends Rice for two games for domestic violence.
• August 28: After significant backlash from public criticism of the NFL's handling of Rice's incident, the NFL's Personal Conduct Policy is changed. First-time domestic violence offenders are to be given an automatic six-game suspension.
• September 8: TMZ Sports releases the full video from inside the Atlantic City casino elevator, which showed Rice punching Palmer in the face, rendering her unconscious, and dragging her out of the elevator. That same day, the Ravens terminate Rice's contract, and the NFL increases Rice's suspension to indefinite. Both Ravens Head Coach John Harbaugh and NFL Vice President of Corporate Communications Brian McCarthy assert that their organizations had only that day seen the video from inside the elevator.
• September 10: CBS News airs interview with Commissioner Goodell in which he says he cannot rule out Rice never playing in the NFL again. That same day, Goodell sends a memo to all NFL team owners that the NFL asked law enforcement officials for the video from inside the elevator on multiple occasions, but that the office was told that releasing evidence from an ongoing criminal investigation was illegal in New Jersey. This is also the day that a law enforcement official told The Associated Press that someone in the NFL received the elevator interior video back in April.
• September 16: The NFLPA files an appeal to the NFL offices, seeking a hearing to overturn the indefinite suspension by the NFL.

The Legal Arguments: What Evidence Will Rule the Day?

The relevant provision of the 2012 NFL-NFLPA CBA in this case comes from Article 46, entitled "Commissioner Discipline." Section 4, entitled "One Penalty," states: "The Commissioner and a Club will not both discipline a player for the same act or conduct. The Commissioner's disciplinary action will preclude or supersede disciplinary action by any Club for the same act or conduct (emphasis added)."

Looking directly at strict textual interpretation, the CBA's only express prohibition of multiple punishments for the same conduct is between the Commissioner and the Club, in this case Goodell and the Ravens, respectively. Some, including those within the NFLPA who are addressing Rice's options, might argue that the Commissioner's decision to increase the two-game suspension to an indefinite period would trump the Ravens' decision to terminate Rice's contract with the team. Though a plausible argument based on what the text offers, it is less likely to succeed based on what the Ravens did in this case.

The Club decided to back its player at the outset of this case in March, and maintained that position up until the September 8th release of the elevator interior, at which point it terminated his contract. Granted, it was a sudden decision by the team, one which came a few hours after the TMZ video was released and which was handed down before the NFL decided to increase the length of Rice's suspension. Nevertheless, to say that the termination of a player's contract for conduct detrimental to the team --- a fixed condition of employment found in every Standard Player Contract -- is equivalent to "discipline" or "disciplinary action" under Article 46, Section 4 would be a logical, yet easily deflected argument. Think of the difference this way: releasing a player from his contract would be the equivalent of the dropping of a bad habit altogether, whereas imposing discipline on a player would be the equivalent of punishing a player for that bad habit. The former is a contract law principle, one that the CBA's reach skims but does not control, while the latter is a provision born and cemented into the CBA's language, and therefore has compelling control. That likely explains why the NFLPA is planning to take Rice's appeal on a different, more fundamental route, and not the one offered in the CBA text.

The other route, which the NFLPA will likely argue at the upcoming hearing, is that of traditional federal constitutional law: the Double Jeopardy Clause of the Fifth Amendment. Article 70 of the CBA, entitled "Governing Law and Principles," makes it clear that the CBA is to be construed pursuant to governing federal law, and if not covered by such law, then the laws of the State of New York, where the NFL's offices are located (New York constitutional law does not differ from federal law when it comes to Double Jeopardy, so it will not be discussed as it is implied from this article's federal law treatment). Note, however, that the CBA in Article 46, Section 4 does not specifically condemn the practices of federal Double Jeopardy as stated in the U.S. Constitution, which prohibits a criminal defendant from being punished twice for the same offense.

The reconciliation between the CBA's version of "One Penalty" and the Federal Constitution's version of "Double Jeopardy" is where this appeal will achieve precedent status. As the CBA states in Article 70, the default governing law for CBA disputes is that of federal law. Due to the CBA's lack of a rule to apply when a final NFL punishment decision for a personal conduct violation is later increased, the CBA would therefore impliedly be interpreted to include the principle of federal Double Jeopardy in order to fill that gap. This would mean that once Commissioner Goodell and the NFL executives made the decision in July to suspend Ray Rice for two games under the Personal Conduct Policy, it became the final decision on the matter. Concurrently with the NFL's decision, Rice's New Jersey criminal case and resulting penalty were also finalized. Therefore, once that sequence of activity ended, that theoretically should have been the end of the discipline, regardless of how fans and media personnel may have reacted to the NFL's decision.

However, as the story goes, public outcry became too much for the NFL to handle. The policy change on August 28th was a clear example of Goodell and the NFL attempting to slap a Band-Aid on a punctured artery. Nevertheless, despite the fact that first-time offenders would now be subject to an automatic six-game suspension, such an increase in punishment could not have been, and was not in actuality, applied to Ray Rice's two-game suspension. Rice had already been tried criminally by the State of New Jersey and investigated privately by the NFL, so his punishment could not be overturned under federal Double Jeopardy principles.

In the same vein, the NFLPA will seek to argue that the increase of Rice's suspension from two games to indefinitely is a similar violation of federal Double Jeopardy. Although the NFL may argue that it never saw the elevator interior video of Rice punching Palmer unconscious until September 8th, the NFLPA will likely counter with evidence of the law enforcement officer's September 10th interview with The Associated Press, which alleged that the NFL knew of and viewed that same interior elevator video earlier on April 9th, three months before the two-game suspension was assessed. In other words, the window for discovery and investigation was wide open by the time Rice was investigated by the NFL for this incident. It would therefore be crippling for the NFL (and, conversely, clinching for the NFLPA) if a neutral arbitrator were to find that the NFL did in fact know about and/or view the graphic elevator interior video when they gave Rice his two-game suspension, as the increase in punishment on September 8th would be clearly violative of Double Jeopardy principles if that were the case.


Where Do We Go From Here?

The hearing to come will be one to pay close attention to, as it will become the starting point for future NFL Player Conduct Policy violations down the line. While both disregarding and recognizing how impressively vague the textual construction of that policy had been for years, there is still a sign for hope out of this appeal. Granted, there is an inherent systemic problem in the NFL culture that it took this long, vast and varying public outcry, and a slowly forming lynch mob forming around Roger Goodell's tenure as Commissioner to finally get an appropriate policy advancement for domestic violence abuse by NFL players. Still, progress is progress, and this appeal will hopefully provide some sort of benchmark with which a standard can be set as to what professional sports leagues expect of the personal conduct of their player-employees.

It also must not be forgotten that this ruling will have immediate effect on the Player Conduct Policy's implementation, as more and more personal conduct incidents have been coming out of the NFL woodwork as of late. Minnesota Vikings Running Back Adrian Peterson's two child abuse allegations, Carolina Panthers Defensive End Greg Hardy's assault and death threat conviction and appeal, San Francisco 49ers Defensive End Ray McDonald's domestic violence allegation, and others are currently awaiting the resolution of their criminal cases, but they all are in the Ray Rice boat as well: they are waiting to see what the NFL, their employer, does with them. This appeal, the starting point, will be the immediate catalyst to the NFL's personal conduct problems, and will be helpful in allowing a league historically relaxed on player off-field conduct to finally get on the proper track back towards a positive reputation.


Max Horowitz is a graduate of the Syracuse University College of Law, Class of 2014, where he obtained a Certificate of Completion for the Entertainment and Sports Law Certificate Program. He graduated from Florida State University in 2010 with a Bachelor of Arts in Creative Writing. Max blogs about any and all sports law topics, but his true specialty lies within the legal issues surrounding the National Hockey League.

September 19, 2014

An Examination of the Legal Issues Surrounding Ray Rice's Indefinite Suspension and Contract Termination

By CHRIS HELSEL

On February 15th, Baltimore Ravens running back Ray Rice and his then-fiancée, Janay Palmer, were involved in a physical altercation in a casino elevator in Atlantic City, New Jersey. The fallout from this incident has dominated headlines in recent weeks, culminating with the announcement that the Ravens have terminated Rice's contract and National Football League (NFL, the league) Commissioner Roger Goodell has suspended the running back indefinitely. This saga presents a plethora of moral and legal questions -- many of which are addressed below -- but before we get to those, take a brief review of the events that led us to this point.

Background

Following the altercation, which occurred at the since-closed Revel casino, Atlantic City police arrested both Rice and Palmer (http://www.baltimoresun.com/sports/ravens/ravens-insider/bal-ravens-running-back-ray-rice-arrested-after-incident-in-atlantic-city-20140216,0,132362.story) and charged them with Simple Assault-Domestic Violence. Shortly after the incident, leaked casino security footage hit the internet, showing Rice dragging his unconscious fiancée out of the elevator. Charges against Palmer were ultimately dropped, but a grand jury indicted Rice on third-degree aggravated assault in March (http://espn.go.com/nfl/story/_/id/10960822/ray-rice-baltimore-ravens-accepted-pretrial-diversion-program), and he pleaded not guilty in May. Rice was accepted into a pretrial intervention program, avoiding trial. Upon completion of the program (a minimum of one year), the charges against him will be dismissed.

On July 24th, the NFL announced that after meeting jointly with Rice and Palmer, who had by then married, Commissioner Goodell had informed Rice in a letter that he would be suspended without pay for two games, and fined one additional game check. (http://espn.go.com/nfl/story/_/id/11257692/ray-rice-baltimore-ravens-suspended-2-games) This decision was met with nearly universal criticism (http://espn.go.com/espnw/news-commentary/article/11245489/espnw-baltimore-ravens-ray-rice-nfl-domestic-violence-problem), as most observers considered the punishment far too lenient (http://baltimore.cbslocal.com/2014/08/01/u-s-senators-criticizing-nfls-2-game-punishment-for-ray-rice/), particularly in light of the heavy-handed suspensions the league hands down for lesser offenses (more on this below). (http://www.myfoxtwincities.com/story/26104180/comparing-ray-rices-2-game-suspension-for-punching-fiancee)
In the wake of the public outcry over Rice's two-game suspension, the NFL announced that it was enacting a new, stricter domestic violence suspension policy. (http://www.nytimes.com/2014/08/29/sports/football/roger-goodell-admits-he-was-wrong-and-alters-nfl-policy-on-domestic-violence.html?_r=2) The policy, which also covers assault, battery and sexual assault involving physical force, calls for first time offenders to receive a six game suspension. Second time offenders are to be banned indefinitely, but can apply for reinstatement after one year.

In a letter to all 32 NFL owners, Commissioner Goodell addressed the Rice suspension:
"I take responsibility both for the decision and for ensuring that our actions in the future properly reflect our values. I didn't get it right. Simply put, we have to do better. And we will." Then, on Monday, TMZ released a "new" security video recording of the assault. This recording, taken from a security camera inside the elevator, showed Palmer strike (and perhaps spit on) Rice, who immediately responded with a devastating punch to her face. Palmer flew backwards into the elevator wall and was left unconscious. Seconds later, the door opened and Rice dragged her out of the elevator.

Unsurprisingly, this video created an immediate media firestorm. Commentators renewed their harsh criticism of Commissioner Goodell's decision to suspend Rice for only two games. The reaction of the NFL, and of the Ravens, to the release of this video was swift. By midday, the news broke (http://espn.go.com/nfl/story/_/id/11489134/baltimore-ravens-cut-ray-rice-new-video-surfaces) that Rice had been released by the Ravens and suspended indefinitely by the NFL.

Shortly after announcing the increased suspension, the NFL released a statement declaring that:"We requested from law enforcement any and all information about the incident, including the video from inside the elevator. That video was not made available to us and no one in our office has seen it until today." (http://www.nfl.com/news/story/0ap3000000391538/article/ray-rice-released-by-ravens-indefinitely-suspended)
The commissioner, in an interview on CBS This Morning with co-host Norah O'Donnell, reiterated the NFL's denial that anyone within the league office had seen the video showing the punch prior to its public release, and that its gruesome nature, combined with Rice's allegedly misleading testimony, prompted him to dramatically increase the suspension. (http://www.cbssports.com/nfl/eye-on-football/24703865/roger-goodell-no-one-in-the-nfl-saw-second-ray-rice-video) He told O'Donnell that the league office "assumed that there was a video. We asked for video but we were never granted that opportunity." (http://www.cbssports.com/nfl/eye-on-football/24703147/goodell-on-rice-nfl-asked-for-didnt-receive-surveillance-video)

The Ravens, who had not taken any disciplinary action against Rice until this point (and were prohibited from doing so by the Collective Bargaining Agreement (CBA) - see below), promptly released its starting running back once the video became public. The video "changed things," said the team's head coach, Jim Harbaugh(http://www.cbssports.com/nfl/eye-on-football/24701716/john-harbaugh-seeing-the-ray-rice-video-changed-things)
In the wake of these events, numerous stories have emerged regarding what the NFL office knew, when its people knew it, and whether the commissioner or anyone else saw the video prior to its release. On Thursday, the NFL announced that it had ordered an independent investigation to be conducted by former FBI director Robert S. Mueller. (http://espn.go.com/nfl/story/_/id/11505460/former-fbi-director-probe-rice-case) The investigation is to be overseen by two prominent and well-respected NFL owners, Art Rooney of the Pittsburgh Steelers and John Mara of the New York Giants.

On Tuesday, the players' union, the NFL Players Association (NFLPA, the union), announced that it is appealing Rice's suspension. (https://abcnews.go.com/Sports/union-appeals-ray-rices-suspension-nfl/story?id=25552666) The appeal would normally be heard by Commissioner Goodell, though in this case because the commissioner will serve as a witness, it is expected that an outside arbitrator will be appointed.

This case raises a plethora of interesting legal questions, such as:

• Why was Rice initially suspended for only two games, when players who commit far less serious infractions are handed much stiffer penalties?

• Does the commissioner have the power to suspend a player twice for the same infraction, or to modify an existing suspension? Does that violate the protection against double jeopardy afforded by the Fifth Amendment?

• Under the terms of the CBA, can Rice be punished by both his club (release) and the league (suspension)?

• Finally, when it levied the initial two-game suspension, did the NFL already know exactly what had occurred in that elevator? Had league executives already seen the video? Does it matter?


Personal Conduct v. Drug Policies

As alluded to above, the NFL's initial two-game suspension of Rice was met with stinging criticism from fans and media members alike. Many were quick to point out that seemingly minor infractions, such as testing positive for marijuana or Adderall, can carry much harsher penalties than the one Rice received.

It is important to note, however, that not all suspensions are created equal. Violations of the NFL's recreational and performance-enhancing drug policies carry uniform suspensions that have been negotiated and defined through collective bargaining between the league and the NFLPA. The league's Personal Conduct Policy (http://www.cbssports.com/nfl/eye-on-football/24703147/goodell-on-rice-nfl-asked-for-didnt-receive-surveillance-video), on the other hand, does not carry uniform punishments for specific infractions. Rather, it grants the commissioner broad power to consider each case individually and determine the proper sanction given the facts at hand. This all-encompassing policy covers criminal acts as well as other conduct deemed below the standard expected by the league.

While criminal activity is clearly outside the scope of permissible conduct, and persons who engage in criminal activity will be subject to discipline, the standard of conduct for persons employed in the NFL is considerably higher. It is not enough simply to avoid being found guilty of a crime. Instead, as an employee of the NFL or a member club, one is held to a higher standard and expected to conduct oneself in a way that is responsible, promotes the values upon which the league is based, and is lawful.

Regarding punishment, the policy grants the commissioner enormous leeway in determining the proper discipline in each case. The specifics of the disciplinary response will be based on the nature of the incident, the actual or threatened risk to the participant and others, any prior or additional misconduct (whether or not criminal charges were filed), and other relevant factors.

The vagueness of this policy, and the fact that Commissioner Goodell himself (or his appointee) hears all appeals under it, has come under intense criticism from players and observers alike. This tension memorably came to a head in 2012, during the infamous New Orleans Saints bounty scandal. (http://www.si.com/more-sports/2012/09/07/saints-suspensions-overturned) Regardless, the terms of the policy in effect at the time of the original two-game suspension did give Commissioner Goodell free reign to determine for how long Rice would be suspended. Conversely, as mentioned above, drug policy violations carry well-defined punishments, negotiated between the league and union, which explains why Cleveland Browns wide receiver Josh Gordon received a one-year suspension for his third marijuana violation.( http://espn.go.com/nfl/story/_/id/11418388/josh-gordon-cleveland-browns-suspended-one-year)

The Commissioner's Power to Modify an Existing Suspension, and the Prohibition on Double Penalties

The NFL Personal Conduct Policy, to which the players contractually assented through collective bargaining, grants the commissioner the power to discipline a player for "conduct detrimental to the integrity of and public confidence in the National Football League." Article 46 of the 2011 NFL CBA (http://nfllabor.files.wordpress.com/2010/01/collective-bargaining-agreement-2011-2020.pdf), which outlines the commissioner's disciplinary authority, limits the extent to which a player may be disciplined more than once for the same "act or conduct": "Section 4. One Penalty: The Commissioner and a Club will not both discipline a player for the same act or conduct. The Commissioner's disciplinary action will preclude or supersede disciplinary action by any Club for the same act or conduct."

Importantly, while this clause does prohibit the discipline of a player by both his club and the commissioner, it does not include a "double jeopardy" clause (prohibiting prosecution for the same offense twice following acquittal or conviction) like the one found in the Fifth Amendment of the U.S. Constitution. Therefore, the commissioner is not expressly barred from revisiting an existing suspension (or other discipline) in the event that new facts or evidence come to light. Further, because the suspension of a player is not a criminal matter tried in a court of law, but rather an employer-employee disciplinary matter governed by a CBA, the Fifth Amendment's protection against double jeopardy does not apply.

Therefore, in the event that the league discovers evidence that the player lied, his conduct was more reprehensible than originally thought, or of a separate infraction entirely, the commissioner can impose increased discipline. Here, the question of whether Rice was entirely truthful and forthcoming in his June disciplinary meeting with Commissioner Goodell remains unresolved, and NFL and club sources have given conflicting answers when asked just that.

Commissioner Goodell told CBS that details of Rice's story were "not consistent" with what appears on the video (http://www.cbssports.com/nfl/eye-on-football/24704435/roger-goodell-ray-rices-original-story-not-consistent-with-second-video), and that "it was ambiguous about what actually happened." (http://www.cbsnews.com/news/ray-rice-controversy-commissioner-roger-goodell-defends-nfl-says-league-didnt-see-second-video/) In even stronger terms, Commissioner Goodell's letter to the NFLPA outlining the justification for Rice's increased suspension stated that the new video "shows a starkly different sequence of events" than what Rice told him during his June disciplinary meeting. (http://nymag.com/daily/intelligencer/2014/09/report-ray-rice-will-appeal-his-suspension.html) Conversely, Ravens General Manager Ozzie Newsome -- who was in the room when Rice met with Goodell -- publicly declared that the story Rice told to Ravens officials matched the video. "What we saw on the video was what Ray said. Ray didn't lie to me," Newsome said. (http://www.cbssports.com/nfl/eye-on-football/24704595/ravens-gm-ray-rice-didnt-lie-to-me-goodell-says-rice-story-not-consistent)

As noted above, while the commissioner does have the authority to modify an existing suspension in light of new facts or previous false testimony, Article 46 of the CBA prohibits the discipline of player by both the league and his club for the same act or conduct. Here, Rice was ultimately suspended indefinitely by the commissioner and released from his contract by the Ravens. At first glance it appears that he was disciplined by both the league and his club for the same act or conduct. However, "discipline" imposed by a team refers to monetary fines or suspensions. A club is permitted to terminate a player's contract for any lawful reason, and conclusive video evidence of domestic violence is certainly a lawful justification for releasing a player. Therefore, Rice's release likely did not constitute "discipline," and did not violate Article 46 of the CBA. Nonetheless, NBC Sports' Mike Florio reported on Sunday night that Rice has not ruled out the possibility of filing a Non-Injury Grievance against the club under CBA Article 43, alleging that the Ravens improperly terminated his contract.

What the NFL Knew, When, and Why it Matters

Upon announcing Rice's increased suspension, and in the days that followed, Commissioner Goodell maintained that no one in the NFL had seen the elevator video, or knew exactly what transpired that night, at the time the initial two-game suspension. However, mounting evidence indicates that this is not entirely true.

In February, one day after the assault, Deadspin reported: "A witness who saw the altercation at Revel claimed that Rice hit Palmer 'like he punched a guy, knocked down and dragged her out of the elevator by his feet' before security arrived." (http://deadspin.com/ray-rice-arrested-in-atlantic-city-after-altercation-wi-1524046109) Further, the Atlantic City Police Department's report from the time of the incident noted: "After reviewing surveillance footage it appeared both parties were involved in a physical altercation. The complaint summons indicates that both Rich [sic] and Palmer struck each other with their hands."

The criminal complaint, filed in Atlantic City Municipal Court on February 15th, alleges Rice committed "assault by attempting to cause bodily injury to J. Palmer, specifically by striking [her] with [his] hand, rendering her unconscious, at the Revel casino." The complaint is a public record. (http://www.espn.go.com/pdf/2014/0818/otl_rayrice_complaint.pdf)

Additionally, contrary to what the commissioner told CBS, ESPN Outside the Lines reported last week that at his June 16th disciplinary hearing with Goodell, Rice confessed to hitting his fiancée in the face, knocking her unconsciousness. (http://espn.go.com/espn/otl/story/_/id/11509397/ray-rice-told-nfl-roger-goodell-june-had-hit-wife)
Finally, a law enforcement official speaking on condition of anonymity told the Associated Press last week that he had sent the video showing the punch to an NFL executive in April (http://www.cbssports.com/nfl/eye-on-football/24704465/ap-nfl-executive-was-sent-copy-of-ray-rice-video-in-april), and that the league had acknowledged its receipt and contents. It should be noted that in a letter to NFL owners last Wednesday, the commissioner emphasized that: "Once a criminal investigation begins, law enforcement authorities do not share investigatory material (such as the videos here) with private parties such as the NFL . . . As the New Jersey Attorney General's office said yesterday, 'It would have been illegal for law enforcement to provide [the] Rice video to [the] NFL.'"( http://static.nfl.com/static/content/public/photo/2014/09/10/0ap3000000392546.pdf)

Similarly, in a statement released the day after the announcement of the increased suspension, the league said:
We do not interfere with law enforcement investigations. We cooperate with law enforcement and seek any information that can be appropriately provided. (http://www.nfl.com/news/story/0ap3000000391538/article/ray-rice-released-by-ravens-indefinitely-suspended)

The commissioner stated in the letter to the owners that the NFL did not request the video directly from the casino because New Jersey law prohibited the casino from turning over material to a third party during a law enforcement proceeding. His emphasis that New Jersey law prohibited the league from obtaining the video from either the police or the casino perhaps implies that even if the NFL did receive the video from a rogue law enforcement source (as the Associated Press story alleges), he and his fellow high-ranking NFL executives intentionally did not view it.

Regardless, whether or not league officials saw the video prior to Rice's initial suspension, there was little doubt about what occurred in the elevator that night. In fact, Rice himself told Commissioner Goodell as much back in June, and the police report and criminal complaint are quite clear.

Clearly, questions abound as to who, if anyone, inside the NFL office knew what -- and when. Whether Rice chooses to challenge the suspension through a grievance under the CBA, a petition for a court injunction lifting the suspension, the NFLPA filing an unfair labor practices charge, or even suing the league for monetary damages, the critical questions will be whether the second video actually revealed any new information to the league office, and whether Rice lied or left out crucial details when he met with the commissioner in June.

If the NFL truly had no knowledge of what transpired inside the elevator -- or at least cannot be proven to have known -- Rice will have a very difficult time getting his suspension overturned. However, there is considerable evidence that the second video did not in fact shed any new light on the incident at all. Certainly, public outrage reached a boiling point in the hours following the video's release. However, whether or not anyone within the league office had seen the video prior to the decision to only suspend Rice for two games, it can hardly be argued that the new video revealed any additional material facts of the case, considering the content of the first video, witness statements, police report, criminal complaint, and Rice's June admission.

If it turns out that NFL executives were already aware of what happened in the elevator when levying the original suspension, Rice may well succeed on his anticipated challenge to the indefinite suspension. In that case, a judge could reasonably declare that the commissioner's actions were "arbitrary and capricious," and award Rice monetary damages and/or grant him an injunction lifting the indefinite suspension. Similarly, an arbitrator could overturn the suspension on appeal, holding that the video did not provide sufficient additional evidence to warrant the drastically increased suspension. That is, of course, unless the NFL can demonstrate that Rice lied to or misled the commissioner during their June disciplinary meeting.

Did the NFL Fail to Adhere to Its Own New Policy?

Another question regarding the NFL's handling of the Ray Rice case relates to the league's new domestic violence policy, enacted in the wake of the public outcry against Rice's initial two-game suspension. The new policy calls for a six-game suspension for a player's first offense. Left unanswered to this point is why, so soon after enacting the new policy, Commissioner Goodell declined to follow it when Rice had no recorded history of domestic violence. It has been suggested that the act of dragging Palmer from the elevator could be considered a separate violation -- different "act or conduct" -- than punching her just moments before. (http://www.si.com/nfl/2014/09/10/ray-rice-roger-goodell-nfl-suspension-elevator-video-legal-options) That argument is, I believe, unconvincing.

A more convincing argument could be made that the act of assaulting his fiancée constituted the first offense, and lying to the commissioner constituted the second offense. This seems to be the justification offered in Commissioner Goodell's letter to the NFLPA explaining the basis for the increased suspension. However, as described above, the extent to which Rice lied to or misled the commissioner is in question, as league and club officials have offered conflicting reports.


Courts' Deferential Standard of Review

Were Rice to seek an injunction lifting the indefinite suspension, it is important to remember that courts employ an extremely deferential standard when reviewing an organization's interpretation and enforcement of its own rules. The NFL would argue, as it has successfully in the past, that as a member of the NFLPA, Rice has contractually assented to resolve disputes through the league's collectively bargained rules and appeals process, rather than through challenges in court. (http://www.si.com/nfl/2014/09/10/ray-rice-roger-goodell-nfl-suspension-elevator-video-legal-options)

To secure an injunction, Rice would need to demonstrate that the NFL had abused its power, rendering its actions "arbitrary and capricious." This would likely require a showing that one or more high-ranking league executives exhibited flagrant dishonesty or deception, and that his increased suspension was not based on reasonable grounds. Mere ineptitude does not suffice.

Therefore, should Rice bring his case to the courts (as he has indicated he might http://www.baltimoresun.com/sports/ravens/ravens-insider/bal-sources-ray-rice-nflpa-contemplating-legal-grievance-options-20140914,0,905928.story), he will have to clear a very high threshold to convince a judge to intervene and issue an injunction. Without conclusively demonstrating that Goodell or other high-ranking league executives had viewed the elevator video and therefore flagrantly abused their power and acted arbitrarily in increasing his suspension, it seems unlikely that such a claim will succeed.

Moving Forward

Clearly, this situation is not going away any time soon. A plethora of unanswered questions remain, and more information should surface in the coming days and weeks. It will be fascinating to learn what the NFL-ordered internal probe directed by former FBI director Mueller will uncover, and how the arbitrator appointed to hear Rice's appeal will rule. Seemingly, the ultimate resolution to the saga will come down to whether the NFL saw the video and lied about it, and/or whether Rice was dishonest in his meeting with Commissioner Goodell -- and whether either side can prove any of it.

September 23, 2014

Long-Awaited NFL Drug Policy to be Put to the Test

By Alexandra Goldstein

Last week the National Football League (NFL, League) and NFL Players Association (NFLPA) unveiled a series of improvements to overhaul the League's performance enhancing substance and substance abuse policies, including the addition of human growth hormone (HGH) testing.

I. Performance Enhancing Substance Policy.

The new performance enhancing substance policy is the culmination of over three years of negotiations, which began just prior to the 2011 NFL season when the parties were negotiating a new collective bargaining agreement (CBA). At the time, the NFL pushed to implement HGH testing; the NFLPA countered that there was not a reliable test for HGH and any testing would therefore be premature. In order to ratify the CBA and move forward with the 2011 NFL season, the parties agreed to HGH testing in principle, tabling a discussion of specific methods. The final 2011 CBA codified the parties' intentions to collectively develop an HGH testing protocol over "several weeks," however once the CBA was signed, negotiations on HGH testing stalled.

The new policy ushers in changes in disciplinary procedures and appeals. A player's first violation of the policy will result in suspension without pay for up to six games. The length of the suspension will depend on the violation: a player will receive a two game suspension for the use of masking agents, such as diuretics; a four game suspension for testing positive for HGH or other banned substances; and a six game suspension in the event that the player attempts to tamper with the test. After a player's first violation, they are subject to escalating suspensions; a second violation will result in a player being suspended without pay for 10 games, and in the event of a third violation, a player will be banned from the League for a minimum of two years.

Previously, a player who tested positive during the off-season was subject to the same suspension lengths as in-season violations. Under the new policy, a player who violates the policy during the off-season will be referred to the League's substance abuse program. Due to the change to how off-season violations are handled, the NFL and NFLPA announced that three players who had previously been suspended for four games under the League's old performance enhancing substance policy had been reinstated. The suspensions of Wes Welker of the Denver Broncos, Orlando Scandrick of the Dallas Cowboys, and Stedman Bailey of the St. Louis Rams were retroactively shortened, which made them eligible to return to their teams and play in week three.

The League's new policy brings the NFL closer to being in-line with the existing Major League Baseball (MLB) and International Olympic Committee (IOC) HGH testing. The IOC began implementing HGH testing during the 2004 Athens Olympics. At the time, testing was limited to detecting HGH use within hours; in 2012, they implemented a new biomarker test capable of detecting HGH use within weeks. In January 2013, the MLB and MLB Players Association announced that they would begin random in-season HGH testing, as well as testing all players for baseline testosterone levels that could help identify changes indicative of HGH use. The NBA and NHL have yet to implement HGH testing, but both leagues have expressed interest in revising their drug policies to include HGH.

II. Substance Abuse Policy.

The NFL and NFLPA also announced updates to their substance abuse policy, which notably includes marijuana and alcohol use. While marijuana rules have been relaxed, the League is toughening-up on DUI offenses.

Under the new policy, the threshold for a positive marijuana test has been raised from 5 nanograms per milliliter (ng/ml) to 35 ng/ml. Despite more than doubling the threshold, 35 ng/ml still sits on the low-end of the spectrum for sports-based marijuana testing; the MLB rules only kick-in at 50 ng/ml and the IOC allows athletes to skate on anything below 150 ng/ml.

The new policy also adds two stages to the previous series of suspensions. Under the old substance abuse policy, a player was referred to the League's substances abuse program for his first violation of the marijuana policy, with subsequent violations receiving a four game fine, a four game suspension, and a one-year ban from the NFL. The new policy adds a two game fine before a four game fine, and a 10-game suspension will be levied before a player received a one-year banishment. Due to the implementation of additional stages, previously banned Cleveland Brown's wide-receiver, Josh Gordon, will receive a retroactive 10-game suspension, making him eligible for play beginning in week 11.

While marijuana rules have been relaxed, more stringent policies have been implemented for a DUI. A player's first offense will result in a two game suspension without pay, whereas a player will be suspended without pay for at least eight games for a second DUI. In either event, a player can be suspended for additional games, where there are extenuating circumstances, such as a death or the egregious nature of the DUI offense.

III. Impact.

Despite the lengthy negotiation period, fines and suspensions under the new policies will be implemented immediately. Under the performance enhancing substance abuse policy, HGH testing is set to begin as soon as the end of this month, though more likely during the first few weeks of October.

Reaction to the new policies has been mostly positive, with many seeing it as a long overdue response to broader attitudes about drug and alcohol use. The new policies also mark a shift in power - while under most circumstances, Commissioner Roger Goodell retained the exclusive power to hear appeals under the old policy, appeals will now be put before "third-party arbitrators jointly selected and retained by the NFL and NFLPA."

October 28, 2014

A Beneficial Partnership

By Matthew Luchs

American sports have tried to cross the plane into the international market for years and have had some instances of positive results. For example, many international National Basketball Association (NBA) players, like Dallas Mavericks' Dirk Nowitzki, attribute the rise in international interest in NBA basketball to the 1992 United States Men's Olympic basketball team, also known as the "Dream Team." (http://projectspurs.com/2012-articles/ginobili-parker-influenced-by-92-dream-team.html). Since the "Dream Team," international interest in basketball has been at an all time high. Although the International Basketball Federation Basketball World Cup displayed that the USA is still the leading powerhouse in the basketball world, there are also a number of other countries that possess serious talent, such as Spain and France. The NBA has taken the next step toward continuing the success of their international programs, while increasing fan interest to an already strong international market. For example, on October 13th2, the NBA and China's Ministry of Education formed a joint partnership to implement basketball development curriculums throughout China. (http://probasketballtalk.nbcsports.com/2014/10/18/nba-announces-groundbreaking-partnership-to-implement-basketball-development-curriculum-in-chinese-schools/).

This agreement represents the first partnership that China's Ministry of Education has undertaken with an American professional sports league. (http://www.usatoday.com/story/sports/nba/2014/10/17/nba-china-education-basketball-training/17457813/). The NBA released a statement indicating that "[t]he groundbreaking partnership [will] focus on basketball participation in elementary, middle and high schools across China and... provide enhanced basketball training to at least 3 million students by 2017." (http://probasketballtalk.nbcsports.com/2014/10/18/nba-announces-groundbreaking-partnership-to-implement-basketball-development-curriculum-in-chinese-schools/). Although three million people, relative to China's 1.35 billion person population, would seem small, the nature of the program speaks to how large a step this is for relations between China and the NBA. (http://www.geoba.se/population.php?pc=world). The NBA will be sending a combination of NBA players, alumni legends and coaches to educate and inform Chinese coaches and physical education teachers on the experience they gained during their employment with the NBA. (http://probasketballtalk.nbcsports.com/2014/10/18/nba-announces-groundbreaking-partnership-to-implement-basketball-development-curriculum-in-chinese-schools/). In addition, the NBA has agreed to help the Ministry of Education with China's youth basketball leagues. (http://www.foxnews.com/sports/2014/10/17/nba-announces-partnership-to-expand-basketball-development-and-training-in/)

The partnership makes sense from a relationship perspective. The NBA has been involved with China "for decades," but the NBA's growth in popularity has occurred since the formation of NBA China. (http://www.nba.com/news/nba_china_080114.html). On January 14, 2008 the NBA "announced the formation of NBA China, which [was] a new entity that [would] conduct all of the leagues business in greater China." Id. The then-NBA Commissioner, David Stern, thought that "the opportunity for basketball and the NBA in China [was] simply extraordinary . . . ." Id. He believed that by "working with the General Administration of Sports and the Chinese Basketball Association," the NBA could continue to "emphasize, in both rural and urban Chinese communities, its contribution to fitness, healthy lifestyle and an appreciation of teamwork." Id. Basketball is now the most popular sport in China, with more than 300 million participants. (http://www.nba.com/2014/news/10/13/nba-china-anta-partnership/).

Although it appears that this new partnership with the Chinese Ministry of Education is solely in furtherance of the goal of healthy living set by David Stern, there may be other underlying motivations as well. On the same day that the deal with China's Ministry of Education was announced, the NBA revealed that ANTA Sports Products Limited (ANTA) would be "an Official Marketing and Merchandising Partner of NBA China...The announcement was made at a press conference in Beijing by NBA Commissioner Adam Silver and ANTA Sports Chairman and CEO Ding Shizhong . . . ." Id. This deal allows ATNA to launch a "complete line of ATNA and NBA co-branded league and team-identified footwear and accessories..." Id. They will be "available online and in over 2,000 ATNA stores around the country." Id. The NBA's current commissioner, Adam Silver, sees this as an opportunity to give Chinese fans a chance to connect with their favorite team via ATNA's products. Id.

In addition to the NBA's deal with ATNA, "[t]he NBA currently has relationships with a strong network of television and digital media outlets in China, including a partnership of more than 25 years with national broadcaster CCTV." (http://www.nba.com/2014/news/10/17/nba-ministry-of-education-in-china-join-to-push-basketball-fitness-in-chinese-schools/). The NBA hosts hundreds of touring basketball events for fans, conducts community enrichment programs, and maintains marketing partnerships with a combination of world-class Chinese-based corporations and U.S.-based multinationals. Id.

Some believe this may be step for the NBA to introduce an official Chinese team that would play in its American league. However, there are a number of complications with that proposition. How much time would teams need off to adjust to the time difference and the trip length from China to the United States? At what time would the games be shown to maximize viewership when there is a 12-hour time difference? What is clear, however, is that the NBA is years from making such a project a reality. Yet this partnership with ATNA and China's Ministry of Education will not only provide a great outlet for Chinese students interested in basketball, but will also continue to increase the NBA's international revenue.

October 29, 2014

Wage Discrimination in Minor League Baseball

By Daniel Oresajo

Baseball was once America's favorite pastime, so many wonder why baseball's popularity has faded. One possible answer is that little has changed since baseball's inception; even the once beloved nostalgia of baseball, still in its "purest form," seems outdated. While many players long for the days of playing for the love of the game, some players, such as minor league baseball (MiLB) players, do not make enough money to sustain playing solely for the love of the game.

Lucas Mann of Slate describes the minor leaguers' plight, writing, "[[m]inor leaguers are] paid just like they were paid half a century ago. They find off-season work to get them from September to March, just like major leaguers did before their salaries exploded." 

"Over the course of a five month season, the average MiLB player earns between $3,000 and $7,500, a salary well below the federal poverty level of $11,490. By comparison, the average fast food worker earns between $15,000 and $18,000 per year, which is two to three times greater than a minor league player's salary." 

As a result of this seemingly unjust scenario, three former MiLB players, Aaron Senne, Michael Liberto and Oliver Odle, have sued Major League Baseball (MLB), which governs the MiLB, MLB Commissioner Bud Selig, the Kansas City Royals, Miami Marlins, and the San Francisco Giants in a California district court for an alleged violation of antitrust laws, and in particular, wage and overtime laws. Through this action, the plaintiffs mean to "expand the lawsuit into a class action on behalf of thousands of former minor league players." Id.

The plaintiffs argue that the MLB violated the Fair Labor Standards Act (FLSA) and state laws guaranteeing citizens minimum wage and overtime pay. According to the United States Department of Labor,"[t]he FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments."  Moreover, "[c]overed nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009," as well as "[o]vertime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek." Id.

Players work between 60 and 70 hours per week, which includes playing six or seven games per week and participating in conditioning. Yet they earn meager wages. In addition, the players' wages do not cover participating in instructional leagues and extended spring training. Thus, "[t]he players believe that they, and other current and former minor leaguers, are owed back wages for uncompensated and under-compensated labor."  At first glance, it is difficult to dispute the plaintiffs' arguments. However, the MLB has a number of defenses at its disposal.

First, the MLB can argue that it possesses an FLSA exemption, which "does not require amusement and entertainment businesses operated on a seasonal basis (seven months or less) to pay its employees minimum wage or overtime pay."  As the span of a MiLB season is five months, which includes spring training (team mandated workouts), the MLB can argue that minor leaguers' status as seasonal employees precludes them from FLSA coverage. However, sports law expert Nathanial Grow states that "the decision will come down to which side of the argument the court favors: that baseball is a year-round business or that it is a seasonal operation that does most of its business during a baseball season." Id.

Second, baseball has historically been allowed an antitrust law exemption, which the MLB will contend might give it legal authorization to continue paying MiLB players such low wages. As distinguished sports attorney Michael McCann writes, "[t]he exemption allows baseball to unilaterally set salaries and working conditions for minor league players. Without this exemption, minor league players could theoretically sue under the Sherman Act, and argue that big league and minor league owners have conspired to unreasonably limit salaries."

A third argument that the MLB may present is that MiLB players cannot form a union. The lack of a union leaves no formal representative body to "advocate for higher player compensation and hold leverage through the power to strike."  Further, unless they have appeared on a MLB team's 40-man roster, MiLB players are also not members of the MLB Players' Association, which is another missing layer of protection.

Additionally, the MLB may argue that MiLB players voluntarily agreed to the terms of their employment by signing their contracts. MiLB players can't argue that they are disadvantaged in negotiations because they have the power to retain agents. In addition to their agents, the MLB Players Association negotiates on behalf of current and prospective MiLB players.

Finally, the "MLB plans to argue that the hours worked and salaries of players are not uniform and therefore should be considered by the court on an individual basis."  However, even if a court disregards this argument, and allows for a class action, "[t]he statute of limitations [for FLSA lawsuits] could limit the ability of minor leaguers who have been retired for several years from joining a class." 

The court has not yet determined whether the class action can go forward. Nevertheless, this case has the potential to significantly impact the MLB's and MiLB's future. If the MiLB players succeed in raising wages, will MLB teams find cheaper alternatives for training their prospects? Increasing MiLB players' salary and benefits could translate into higher ticket prices for fans, which could cause some MiLB teams to file for bankruptcy, taking away the very means by which these players earn a salary (small may it be) in the first place. Put simply, by succeeding, MiLB players could unintentionally end the system they are trying to fix. One thing is clear, America's once favorite pastime may never be the same.

November 26, 2014

Match-Fixing and Corruption in Professional Tennis

By Cecilia Ehresman

The Tennis Integrity Unit (the "TIU") was established in 2008 by the Association of Tennis Professionals, the Women's Tennis Association, the International Tennis Federation, and the Grand Slam Committee. (Richard H. McLaren. Symposium: Doping in Sports: Legal and Ethical Issues: Corruption: Its Impact on Fair Play. 19 Marq. Sports L. Rev. 15, (2008)). It was created in response to the highly and negatively publicized investigation of Nikolay Davydenko, ranked fourth in the world, for allegedly fixing his August 2, 2007 match at the Prokom Open against Martin Arguello, ranked 87th. Id. Since its creation, the TIU has established and enforced a uniform regulatory structure for anti-corruption, the Tennis Anti-Corruption Code (the "Code"). This Code is used to handle match-fixing allegations across the sport. However, in the past three years, only nine players have been found guilty of match-fixing across the sport. (tennisintegrityunit.com). All of those players were low-ranking, with the only prominent player ever to be linked to match-fixing being Davydenko. Id.

Many argue that the TIU has solely sanctioned low-ranking players because it is only they who participate in match-fixing. This assertion is supported by the financial situation of such players (low-ranking players' tournament checks often do not cover the costs of their participation, causing them to have thousands of dollars in out-of-pocket costs per tournament), which explains why match-fixing is appealing to them. However, recent findings and events suggest that this might be a false assertion. A 2014 study, written by Ryan Rodenberg, an assistant professor of Sports Law at Florida State University, and Elihu Geustel, an Indiana-based professional tennis gambler, utilized two predictive models to track the betting market price against the "correct" price. (http://www.bloomberg.com/news/2014-09-01/tennis-betting-study-finds-unusual-patterns-in-23-matches.html). The 'correct' price was measured using data from previous matches in order to analyze each players' odds of winning the present match. Id. Under this model, betting patterns for a match were labeled suspect if there was a 16% to 29% difference between the market's and the model's price, since such a deviation could only be the result of an approximate $100,000 swing in wagering before the match even started. Id. Based on these measures, the study found that at least three matches at Wimbledon, this year alone, illustrated suspicious betting patterns which warranted an investigation. Id. This was also true of at least one match at the 2012 London Olympics and several opening-round matches at the 2011 French Open and 2012 Australian Open. Id. Yet none of these matches were ever investigated by the TIU.

Furthermore, in 2013 and 2010 respectively, a veteran sports corruption investigator (the "Investigator") and a Florida-based lawyer who represented the banned Italian players in 2000 (the "Lawyer") came forward to assert that the TIU continually targets low-ranking players for match-fixing, while purposefully allowing big-name players to slide under the radar. (http://www.sportsonearth.com/article/51670382/as-wimbledon-begins-does-tennis-have-a-gambling-problem). The Investigator was further quoted stating that as many as a dozen top-50 tennis players, including several who are included in the top 10, have been privately warned about their involvement in suspicious matches rather than being formally investigated. Id. Some of these suspicious matches included matches played at Wimbledon in 2013. Id.

These recent allegations should raise suspicion concerning the recent April 14, 2014 arrest of six men, four of whom were Southern Star players, and none of whom ranked above the top 200, for allegedly conspiring to fix several national and international matches. (http://espn.go.com/tennis/story/_/id/11230234/australia-police-arrest-6-tennis-match-fixing-ring). The information which led the TIU to investigate these men was never released, but Australian police did come forward to state that a number of bets were placed on tennis matches where the outcome seemed to be predetermined by at least one of the players. Id. The Australian police then reassured the public that none of these fixings related to the big-matches on the ATP World Tour at the Australian Open. Id.

In light of the recent allegations directed at the TIU and the way in which this most recent arrest was handled, one should ask why the TIU would refrain from going after big-name players. Would it be to ensure the integrity of the "big money" matches? According to the Lawyer, it is because going after "low-hanging fruit" does not jeopardize the TIU's "bottom line." (http://www.sportsonearth.com/article/51670382/as-wimbledon-begins-does-tennis-have-a-gambling-problem). In other words, by covering up the names of the top players who partake in gambling and match-fixing, the TIU insures income for the sport as a whole. Id. Tennis, like most professional sports, generates much of its income from fans and sponsors. Id. For this reason, it is in the sport's best interest to sanction lower ranking players to show that its anti-corruption system is working, as opposed to sanctioning big-named players, which would result in negative media attention and the loss of fans and sponsorships (as it did when Davydenko was accused of match-fixing in 2008). Id. Moreover, such negative attention would likely injure sports gambling companies who, for tennis alone, generated a total of $58 billion in gross profit in 2012. (http://www.bloomberg.com/news/print/2014-09-01/tennis-betting-study-finds-unusual-patterns-in-23-matches.html).

If the TIU is in fact only targeting low-ranking players while allowing higher-ranking players to slide under the radar, one must question if the TIU is "smart" for doing so. In other words, does this method best balance the integrity of the sport with fan happiness? Similar to what occurs in Major League Baseball (MLB), Article V of the Code ensures player confidentiality throughout an investigation. (http://mlb.mlb.com/pa/pdf/jda.pdf; http://www.itftennis.com/media/161972/161972.pdf). However, MLB superstars have been convicted of crimes. For example, Alex Rodriguez was convicted in 2014 of using steroids, and the Chicago White Sox were even convicted of fixing the World Series in 1919. (http://www.cnn.com/2014/01/11/us/alex-rodriguez-suspended/index.html; http://mlb.mlb.com/mlb/history/postseason/mlb_ws_recaps.jsp?feature=1919). So why would the TIU be afraid of going after big-named players when the MLB does it quite frequently regarding equally serious allegations? Again, perhaps it is to protect the sport as a whole from scandal in order to ensure tennis' financial stability. However, the TIU must recognize that such a method can only be a short-term fix. Allegations of corruption within the TIU itself are already becoming more frequent. Thus, if these allegations are true, it is only a matter of time before the truth is exposed. For this reason, if it is not doing so already, it is best for the TIU to equally target all players. While this may hurt sponsorship in the short-term, it will ensure that the public does not lose faith in the sport. As Warwich Barlett, chief executive officer of Isle of Man, a U.K. based Global Betting and Gambling Consultants firm, stated: "credibility is everything in sports...[and] people don't want to be on roulette if the wheel is rigged."

February 10, 2015

Ed O'Bannon Antitrust Lawsuit

By Matthew Sledzinski

Under current National Collegiate Athletic Association (NCAA) rules and regulations, college student-athletes are not entitled to financial compensation for the NCAA's commercial use of their names, images or likeness via jersey sales, live television, video games and other merchandise. Ed O'Bannon, former UCLA basketball star, is leading an ongoing antitrust class action lawsuit in California challenging the NCAA's use of the images of its current and former athletes for commercial purposes. http://www.si.com/college-football/2013/06/19/ed-obannon-ncaa-hearing. The NCAA argues that its restraints on student-athletes' names and likeness are imperative to maintaining a competitive balance in college sports, and that if these restraints were overturned, it would financially destroy college sports for the majority of student-athletes. http://www.lawinsport.com/articles/regulation-a-governance/item/expansion-of-o-bannon-a-threat-to-the-ncaa

The original defendants in this suit, alongside the NCAA, included popular video game company Electronic Arts (EA) Sports and the Collegiate Licensing Company (CLC). Ed O'Bannon first filed suit in 2009, alleging violations of the Sherman Antitrust Act and the deprivation of his right of publicity by the NCAA and CLC. He noticed that an EA sports college basketball videogame, under contract with the NCAA, allowed its users to play with his classic 1995 UCLA championship team. The team featured a power forward that matched O'Bannon's height, weight, bald head, skin tone, jersey number and left-handed shot. http://espn.go.com/espn/otl/story/_/id/11255945/washington-attorney-michael-hausfeld-most-powerful-man-sports. EA sports and CLC settled their case for nearly $40 million. This money will be disbursed to nearly 100,000 current and former athletes whose likenesses had appeared in football and basketball video games since 2003. EA Sports has since ceased its annual release of both NCAA football and basketball games.

The O'Bannon class action plaintiffs continued their antitrust suit against the NCAA and gained momentum with the addition of basketball icons Oscar Robertson and Bill Russell. The class was certified by Judge Claudia Wilken to include current men's Division 1 football and basketball players. The inclusion of current student-athletes opened the door for the trust to claim a stake of the revenue derived from live event broadcasts and their billion-dollar television contracts in addition to jersey, merchandise and other commercial components containing the image or likeness of student-athletes. http://espn.go.com/espn/otl/story/_/id/8895337/judge-rules-ncaa-athletes-legally-pursue-television-money. Another major component of the suit revolves around NCAA Form 08-3a. Each year every athlete must sign this form, which authorizes the NCAA to enter into licensing agreements with companies that use student images perpetually. O'Bannonespn.go.com/espn/otl/story/_/id/11045682/ed-obannon-lawsuit-ncaa-paying-players-set-begin.

Unlike the Northwestern suit against the NCAA regarding athletes who wish to form a union and receive salaries, this suit is not about seeking labor payment for athletes as employees of the NCAA. Rather, the O'Bannon proposal is the establishment of a temporary trust for the licensing revenue earned by student-athletes. Players would be entitled to a portion of television rights deals, videogame sales, jersey and merchandise sales that the NCAA and universities currently receive. The trust would allow student-athletes to receive their money upon completion of their collegiate careers. http://www.si.com/college-football/2014/06/30/obannon-ncaa-antitrust-case-next-steps. The argument is that student-athletes would bypass NCAA regulations restricting compensation as amateurs, but be entitled to the profits they directly earned through their likenesses upon graduation. The inclusion of current players opens the door to tap the billion dollar television contract market that comprises various companies across the NCAA. The NCAA argues that an imbalance among conferences and universities would be created as power conference schools receive the vast majority of national television coverage and media attention. It fears that top tier talent would not be as diluted among universities, as athletes would flock to a small handful of schools to receive more exposure to receive compensation off their names and likenesses. Currently the Big Ten, ACC and SEC all have created their own conference television network. The plaintiffs argue that a competitive imbalance would not be created, because schools with more resources and a winning tradition already dominate the recruiting of top talent athletes. http://espn.go.com/espn/otl/story/_/id/11131166/all-need-know-ed-obannon-v-ncaa-trial.

Additionally, the NCAA argues the element of "student" in student-athlete. As this compensation would apply only to Division 1 male basketball and football players, other student-athletes would be adversely affected. The NCAA fears that if basketball and football players were allowed to be compensated, they would be unfairly distinguished from their peers and isolated from the values and benefits of their academic programs. http://espn.go.com/espn/otl/story/_/id/11131166/all-need-know-ed-obannon-v-ncaa-trial.

The O'Bannon camp argues that this NCAA landscape is not the same one that existed at the creation of these regulations. At stake is millions, if not billions of dollars. The NCAA and present day universities bring in millions upon millions of dollars in revenue every year via ticket sales, merchandise and major deals with networks, such as ESPN and CBS. The universities benefit from the names, images and likenesses of the players by paying out million dollar salaries to head coaches and building lavish stadium/training facilities while the student-athletes receive no compensation.

In August 2014, Judge Wilken ruled against the NCAA and in favor of the ED O'Bannon class. A prolonged appeals process of the ruling is currently being filed and litigation over this matter is likely to drag out for months, as this contentious issue is far from settled.

February 12, 2015

Penn Law Sports Law Symposium

On Friday, February 13th, the University of Pennsylvania Law School Entertainment and Sports Law Society (ESLS) and the Heisman Trust are presenting the Penn Law Sports Law Symposium.

This year, the symposium will address the intersection of the sports and entertainment industries in relation to business and law. As currently planned, the symposium will be composed of three panels:

1) Broadcasting & Media Rights: Negotiations Between Professional Sports Leagues/Teams and Television Networks
2) The Emergence of Conglomerate Sports Agencies Including those with an Entertainment Representation Component
3) Challenges of Managing Facilities and Entities with a Cross-Appeal Between Sports and Entertainment

Adam Schefter, ESPN NFL Insider, will be delivering the keynote address. The event will also feature more of the top names in the sports and entertainment industries, including: Executive VP of Business for Major League Baseball Tim Brosnan, Founder/President of Octagon Phil de Picciotto, Executive VP of Corporate Strategy and General Counsel for Fenway Sports Group Ed Weiss, and CEO of Relativity Sports Happy Walters, among many other extremely well respected practitioners and academics.

Attorneys will be able to obtain 5.0 CLE credits for New York State.

Tickets can be purchased at:
https://www.eventbrite.com/e/the-penn-law-sports-law-symposium-presented-by-the-heisman-trust-tickets-15388311855

February 18, 2015

Old Rules, New Enforcement

By Angele Chapman

On March 24, 2014, the Bose Corporation extended its contract as a sponsor with the National Football League (NFL, league). The implications of this contract have changed the face of the NFL and how its players use products that are shown on television. On October 5, 2014, Business Insider reported that players were barred from wearing any non-Bose headphones during televised broadcasts.

Beats Electronics, a rival of the Bose Corporation, is a division of Apple Inc., which produces audio products. It gained its popularity and was co-founded by rap producer Dr. Dre and Interscope-Geffren-A&M Records chairman Jimmy Lovine. Many NFL players have contracts with Beats Electronics, commonly known as "Beats by Dre." Most recently, the public has been seeing star players like 49ers quarterback Colin Kapernick and Seahawks cornerback Richard Sherman, wearing "Beats by Dre" headphones during warm-ups and games.

The NFL released a statement confirming Bose's relationship as a sponsor. It was reported that: "Under the terms of its agreement with the league, the NFL confirmed, Bose received a broad set of rights that entitle it to prevent players (or coaches) from wearing any other manufacturer's headphones during televised interviews." The ban includes pre-season interviews and remains in effect until 90 minutes after a play has ended. An NFL spokesperson stated that:"The NFL has longstanding policies that prohibit branded exposure on-field or during interviews unless authorized by the league. These policies date back to the early 1990s and continue today." In 2006, running back Reggie Bush was fined $10,000 for wearing Adidas cleats because of the NFL's contractual partnership with Nike and Reebok that prohibited any other brand to be worn during games. This type of enforcement is similar to what occurred during the 2014 FIFA World Cup, when Beats headphones were banned because of FIFA's contractual agreement with Sony.

The question is: If the NFL had these brand exposure policies since the 1990s, why is it only recently enforcing them? Perhaps the league's new legal issues and criticism make it an easy target for heavy sponsors to void their contracts. After the recent incidents with Ray Rice's alleged domestic violence caught on video and Adrian Peterson's child abuse allegations, many sponsors like Procter & Gamble have taken the sidelines when it comes to supporting the NFL's decisions. While Procter & Gamble remains an NFL sponsor, it issued a statement that: "Domestic violence is completely unacceptable and we have strongly urged the NFL to take swift and decisive action to address this issue, and we will determine future actions as needed." This statement comes after Procter & Gamble decided to remove itself from the NFL's Breast Cancer Awareness campaign with its Crest Toothpaste brand. Other companies, such as Anheuser-Busch InBev, PepsiCo and Radisson Hotels, have questioned the NFL's handling of its recent legal issues with the players. The possibility of losing millions of dollars in sponsorships could be a reason why the NFL wants to hold on dearly and enforce the contracts with the sponsors that remain.

Another reason as to why the NFL may be enforcing this policy is because Bose sued Apple's Beats Electronics in July 2014 for patent infringement for allegedly infringing on its noise-cancelling technology. In the complaint filed in the United States District Court in Delaware, Bose Corporation alleges that Beats Electronics infringes on five patents, and seeks an injunction and damages for all infringing sales. Although the NFL denies that Bose's contract has influenced its enforcement policies, upcoming litigation may play an underlying role in NFL's decision. This theory is in comparison with Microsoft, which had a $400 million agreement for the NFL to exclusively use the Surface tablet on the field, but announcers and players are still referring to the tablets as "iPads", according to Business Insider.

Whatever reason the NFL gives for enforcing its branding policies, one can expect to see a difference in advertising among players (and coaches) and the technology they use during Monday night football and the upcoming season. While this level of brand enforcement is emerging, players such as Colin Kapernick decided to test how stringent the NFL is willing to go with its rules. After being fined $10,000 for wearing his Beats by Dre headphones during a conference, Kapernick decided to keep his headphones on, but put tape over the logo. So far, it seems as though the NFL is willing to accept the tape as conforming with the regulations and contractual obligations to its sponsors.

Sources:
https://globalpressroom.bose.com/uk-en/pressrelease/view/1318/FALSE/1

http://recode.net/2014/10/04/nfl-bans-beats-headphones-on-camera/

http://www.washingtonpost.com/blogs/early-lead/wp/2014/10/05/nfl-bans-players-beats-by-dre-headphones-on-camera-because-of-its-bose-deal/

http://bostinno.streetwise.co/2014/07/25/bose-suing-beats-by-dr-dre-bose-suing-apples-beats/

http://www.washingtonpost.com/blogs/early-lead/wp/2014/10/14/colin-kaepernick-sticks-with-beats-by-dre-with-a-little-tape-over-the-logo/

Bose Corporations v. Beats Electronics Complaint: https://docs.rpxcorp.com/lits/641/94801/dedce-55457.pdf?Signature=PoTMsCH7QY29PagvVajsar%2BnEmo%3D&Expires=1412564095&AWSAccessKeyId=AKIAI2UWKALIEYBVOKDA

March 2, 2015

Getting Gambling Wrong: Broadway's Golden Age Lyricists Roll Snake Eyes

By Bennett Liebman
Government Lawyer in Residence, Albany Law School

In the pantheon of Broadway lyricists, names don't come higher than Steven Sondheim and the team of Betty Comden and Adolph Green. Yet when it came to describing the world of gambling in their shows in the 1950's, these writers threw snake eyes.

Sondheim was the lyricist for the iconic musical "Gypsy", which had its premiere in 1959. "Gypsy" retells the story of the famed burlesque performer Gypsy Rose Lee. The focus of the story is on Gypsy's mother Rose - played initially by Ethel Merman. Mama Rose, simply put, is a monstrosity of a stage mother.

In her first number, Rose's personality is revealed through the song, "Some People." The song starts off with Rose's assertion that: "Anyone that stays home is dead." Roses goes on to add, "Some people can be content playing bingo and paying rent..."
Yet playing bingo was not a possibility for anyone at the time. Based on Lee's life, the time of the song would likely have occurred before 1920, before Gypsy Rose Lee's ninth birthday. Even if you can place the song in the early 1920's (The Internet Broadway Database suggests that Gypsy starts in the 1920's. See http://ibdb.com/production.php?id=2743), this cannot make the bingo lyric work.

While it may seem that bingo has been around forever, its commercial start in the United States has an actual time and date. Toy salesman Edmund Lowe in December of 1929 visited a carnival in Georgia, where he saw patrons getting excited over a game called "beano." People played a lottery-style game where they covered a card with beans. Lowe talked to the person who ran the game and took it back to New York to share with his friends. (See generally Robert Daley, "Bingo Binge Is Big Business," New York Times, December 8, 1957 and Art Harris, "The Bingo Baron," Washington Post, February 26, 1986) He instructed people with the winning card to shout out, "Beano!" Allegedly, the name of the game came about when a friend of Lowe's with a winning hand got so excited, that he or she yelled out "Bingo" instead of "Beano." (Richard C. Firstman, "Original Bingo Promoter Dead at 75," Newsday, February 25, 1986. See also "The Biography of Bingo," New York Herald Tribune, March 16, 1962)

Lowe developed additional cards and "hired a Columbia University, math professor, named Carl Leffler, to help him increase the amount of number combinations in Bingo cards. By 1930, Leffler had invented 6,000 different bingo cards." (Jan Evans, "A Brief History of Indian Gaming," Oklahoma Indian Times, February 29, 2000) Lowe soon began marketing the game, and after he began licensing the game to churches in the early 1930's, the game took off in popularity. Therefore, bingo is a game which popularity dates to 1930.

Nobody in 1920 could have been content playing bingo, because there simply was no such game known as bingo in 1920. While given her threatening personality, many people might have been reluctant to call her on it, Mama Rose got bingo wrong.

"Bells Are Ringing"

"Bells Are Ringing" was another popular Golden Age musical from 1956. The lyrics and the book were again written by Comden and Green. Julie Styne, who also wrote the music for "Gypsy", wrote the songs. In the show, Ella Peterson is an extremely well -meaning, pleasant, but also meddlesome, employee of a phone answering service who gets involved with helping to better the lives of the service's clients.

One of the clients of the answering service is Sandor, who is, "in fact, a bookmaker... he is able to do this by the ingenious means of providing his clients with musical codes - for example, Beethoven is the pseudonym for Belmont Park Race Course, Puccini is the code for Pimlico Race Course, Tchaikovsky means Churchill Downs, etc. Therefore, when the message is received, 'Order 500, 6th Symphony, Beethoven, Opus 3,' it actually means ' Bet 500 dollars, sixth horse, Belmont, 3rd Race.'"

To explain how the bookmaking service works, Sandor sings the number, "It's a Simple Little System," to his employees. He lists the composers and tells his employees the names of the tracks they stand for. Thus, "Berlioz is Bainbridge, Hindemith is Hawthorne, Offenbach is Omaha." (As the song goes: "The composers' names, we list them with the racetracks of the land." The design of the scheme is accomplished by: "We will take those record orders in a very cultured tone. While we're really booking horses over at Susanswerphone." See http://lyricsplayground.com/alpha/songs/i/itsasimplelittlesystem.shtml).

Business for poor Hector Berlioz had to be extremely slow. Bainbridge Park was once a thoroughbred racetrack in northeastern Ohio in Geauga County southeast of Cleveland. The track got its start on July 8, 1928 and ran for a grand total of eight seasons, closing in 1935. By that year, Bainbridge Park had only 15 days of racing distributing purses of $3,113 per race day.(American Racing Manual, 1936) Even for a racetrack in the Depression, this was an incredibly low amount of money. It could hardly be surprising that the track would not be in operation after 1935.

Nobody was betting on Bainbridge in 1956. They weren't even betting on Bainbridge by 1936.

Offenbach probably wasn't getting much play either at the answering service. The racetrack in Omaha was traditionally (See generally http://www.ak-sar-ben.com/), and certainly by 1956 (American Racing Manual, 1957), known universally as Ak-Sar-Ben, which is Nebraska spelled backwards. In its earlier days, the track was occasionally known by a few as Omaha, but even then most everybody called in Ak-Sar-Ben. At the time that "Bells Are Ringing" purports to take place, in 1956, almost nobody would have called it Omaha.

The naming of the tracks is extremely puzzling in "Bells Are Ringing". By all accounts, Julie Styne was a race track regular. Styne, unlike Sandor, actually knew the all the racetracks of the land (albeit it's difficult to believe that most anyone remembered Bainbridge). Why not call Berlioz, Bowie, a track in Maryland that was certainly popular in 1956? Similarly, why couldn't Offenbach be Oaklawn Park in Arkansas?

Spoiler alert. Given the fact that Sandor was arranging for people to wager on defunct racetracks, it should not be a surprise that he eventually gets busted by the police.

It may be hard to dislike Golden Age musical comedy, but couldn't someone have sprung for a gambling dramaturge?

March 5, 2015

Cardozo Sports Law Symposium

This year the Cardozo Sports Law Symposium will take place on Friday, March 13th.

For more information and to purchase tickets, visit: http://www.eventbrite.com/e/3rd-annual-cardozo-sports-law-symposium-tickets-15823837524

EASL is a sponsor of the event, and all EASL members will receive a discounted rate at $45 for 6 CLE credits.


March 15, 2015

O'Bannon Made Simple

By, Justin P. Sievert

O'Bannon made simple (as simple as possible). Let's get right down to business.

1: The Appeal: The NCAA appealed the ruling, and the injunction imposed by Judge Claudia Wilken (Chief Federal Judge on the United States District Court for the Northern District of California) to the 9th U.S. Circuit Court of Appeals, and oral arguments are scheduled to begin on March 17th.

2: The Law: The Sherman Antitrust Act (the Sherman Act) essentially prevents business activities deemed to be anti-competitive. Section 1 of the Sherman Act, which prohibits unreasonable restraints on trade, requires plaintiffs to demonstrate that there was (1) an agreement (2) which unreasonably restrained competition (3) which affects interstate commerce. Here we are going to focus on the second element, which was the element at issue when we finally arrived at trial.

In order to demonstrate an unreasonable restraint on competition, the 9th Circuit stated that a restraint is unreasonable if its harm to competition outweighs its pro-competitive effects under a "burden-shifting framework". What is a "burden-shifting framework?" Basically, one party is first required to prove something and then the burden shifts to the other party to prove something, so on, and so forth. Here, the plaintiffs first have to prove that the restraints (NCAA legislation) produced significant anti-competitive effects within a relevant market. If demonstrated, the burden would then shift to the NCAA to show sufficient evidence of pro-competitive benefits (how the NCAA legislation actually promotes competition). If the NCAA met this burden, the burden would then shift back to the plaintiffs to show there was a less restrictive alternative available for the NCAA to achieve its objective.

3: The Ruling: Fast-forwarding to trial, and here is how the court analyzed the issues we began to discuss above. The 9th Circuit ruled for the plaintiffs and decided that the NCAA legislation unreasonably restrained trade in the market for certain educational and athletics opportunities. It also held that the NCAA's pro-competitive justifications did not justify its legislative restraints, and that these restraints could have been justified through less restrictive means. Here is an explanation of the ruling:

Plaintiff's Burden (Anticompetitive Restraints in Relevant Markets): First, as stated above, the plaintiffs first needed to demonstrate that NCAA legislation had significant anti-competitive effects on relevant markets. The court concluded that the plaintiffs presented evidence that demonstrated NCAA legislation restricting student athlete pay produced significant anti-competitive effects in two markets; the market where schools compete for football, and men's basketball student athletes, by offering reduced-cost education (athletics scholarships) and the market where colleges compete for the football and men's basketball student athletes' agreement to allow their names, images and likenesses (NILs) to be used by third parties. These markets come together because, essentially,the student athletes are granting the use of their NILs for the athletic scholarships. The court determined that without NCAA legislation, football and men's basketball student athletes would be able to sell their services without a market restraint (i.e., scholarship cap at tuition, room, board and required textbooks and not being able to receive compensation for NILs).

Defendant's Burden (Pro-competitive Effects): Once the plaintiffs met the above burden, the NCAA needed to show that its legislation offered pro-competitive benefits within that same market. The NCAA offered five such benefits, two of which were immediately rejected. The 9th Circuit did, however, take a close look at two of the NCAA's proposals. Basically, the NCAA could prevail if it could factually prove that maintaining amateurism increased overall consumer demand for college sports (amateurism defense) or that NCAA legislation restricting payment promoted the integration of education and athletics and enhanced the student athletes' educational experience (student athlete educational experience defense). Regarding the amateurism defense, the 9th Circuit essentially stated, "hey we see what you are saying, but we don't necessarily buy it" (i.e., this is limited at best, and it may justify restricting a ton of compensation, but we don't necessarily see a problem with some compensation). Regarding the student athlete experience defense, the 9th Circuit bought this argument to an extent. It could see how a cap on compensation would allow student athletes to be more integrated into the general student population, and how that enhances the student athlete experience. However, the court went on to say that this doesn't mean that a total prohibition is the best idea (or least restrictive alternative...foreshadowing!). The end result, yes we have some pro-competitive goals, but they aren't necessarily the best ways to do it.

Plaintiff's Burden (Less Restrictive Alternatives): So we know that the 9th Circuit seems to be teetering on the brink towards changing the game. The plaintiffs proposed three less restrictive alternatives: (1) raising the permissible grant in aid limit that schools can award; (2) allowing institutions to hold in trust for their student athletes a limited and equal share of licensing revenues; and (3) permitting student athletes to receive compensation from third-party endorsements. The 9th Circuit found the first option doable, because capping scholarships at cost of attendance doesn't hurt amateurism (all the money is still for education or things that a normal student would be doing) and there was no evidence that this cap would hurt customer demand (sidebar: do a lot of people subscribe to this notion? I mean, many seem fine watching pro sports, even though the athletes make a ton of money, and people support a university team because they went there, live close to the institution, or for some familial affiliation, among other reasons). The 9th Circuit also found the second option doable because the NCAA didn't provide much evidence that a limited amount, spread equally, would limit consumer demand. The court further found holding this amount in trust until the student athletes graduated or their eligibility expired would not create any issues with academic integration. The court didn't buy the third option. Why? It did not because the belief that this could cause the commercial exploitation of a kid isn't quite dead yet (insert everyone who hates on the NCAA's (no matter what they do, right or wrong) argument here..."the NCAA exploits these kids worse than anyone").

4: The Outcome: So what's the result of those findings? No more unreasonable restraints limiting pay in NCAA legislation. Well, what does that mean? It basically means that NCAA Division I football and men's basketball recruits can receive full gift in aid, and there can't be legislation that says they can't receive a limited share of NIL revenues. The injunction did, however, allow the NCAA to cap grant in aid at full cost of attendance and allowed the NCAA to offer the limited share of NIL revenues in a trust rather than immediate payment. The 9th Circuit also allowed this limited share to be capped by institutions at $5,000 and allowed institutions to create legislation that would disallow disproportionate NIL amounts to different student athletes (i.e., an institution cannot give the star football player the $5,000 while giving a third-string scholarship student athlete nothing).

March 16, 2015

Players Need for Protection or a Piece of the Pie

By Zachary Nastro

The treatment of college athletes by the NCAA has been a contentious topic for fans, students, universities, and now the National Labor Relations Board (NLRB). The NCAA rakes in billions of dollars in revenue, while the athletes are compensated through conditional athletic scholarships. Last March, the NCAA men's basketball Final Four brought in $198.5 million in advertising revenue, which is eclipsed by the $10 billion contract CBS and Turner Sports signed for the broadcasting rights until 2024. http://money.msn.com/top-stocks/post--march-madness-is-the-new-super-bowl. This fiscal oil well is contingent on one crucial factor, the athletes' performance. If the athletes do not perform, the NCAA money machine ceases to exist. In light of this well-known dependent relationship, shouldn't these student athletes be entitled to more than the scholarships that are currently distributed? The Northwestern Wildcats Football program seems to think so. The College Athletes Players Association (CAPA), on behalf of the football players at Northwestern, challenged the athletes' status in an effort to establish their role as employees of the university.

Northwestern football players petitioned the NLRB so that CAPA may represent them in their effort to evince their "employee" status under the National Labor Relations Act (NLRA). The court adopted the common law definition, which defines employee as a person whom under contract and control of an individual performs a service in return for compensation. William B. Gould IV et. al., Full Court Press: Northwestern University, A New Challenge to the NCAA, 35 Loy. L.A. Ent. L. Rev. 1, 30 (2014). The athletes demonstrated how their payment derived from their athletic scholarship awards. Of the 112 members of the Northwestern football team, 85 of them are on scholarship for approximately $61,000 per academic year. Id. Put another way, the university spends over $5 million dollars each year on scholarships. The court noted that these scholarships are awarded after considering the athlete's football abilities and not the individuals' academic performance. Id. This point is furthered by the fact that these players' scholarships can be cancelled if the player fails to perform, suffers injury, engages in any restricted activity, or anything else that may prevent the athlete from participating on the field. Moreover, this exchange of value for service establishes the employer-employee relationship. Id.

Next, the players moved to demonstrate their employment by showing how they are subject to the control of the university. Id at 31. Once the athletes commit to Northwestern's football program, they are immediately exposed to a myriad of rules and regulations. For instance, players must be pre-approved by the athletic department before they can seek outside employment; players must live on campus for their first two years; players are regularly tested for drugs and alcohol; there is a strict dress code players are required to follow; and players are also expected to participate in a certain amount of hours in conditioning and game preparation outside of scheduled practice. Id. On average, players are expected to dedicate 45 hours a week to football related activities. Id. In other words, this "extra-curricular" commitment is equivalent in time to a full time job with overtime. Thus, the requisite level of control to fit the common law definition of "employee" has been established.

The university responded by arguing that the athletes were comparable to graduate assistants as decided in the 2004 Brown University dispute. http://www.aaup.org/brief/northwestern-university-and-college-athletes-players-association-capa-case-no-13-rc-121359. That case held that teaching assistants are not employees, instead are more closely associated with the educational institution. Gould, supra at 32. Therefore, the NLRB made a distinction between graduates who possessed a direct connection with the university and athletes who were subject to the control of non-academic university employers. Id. After considering the facts, the NLRB decided that it is permissible for football players awarded scholarships to be represented by the CAPA and negotiate in collective bargaining with the university. Id. The players could use collective bargaining as a way to improve their schedules, gain outside employment, and eventually argue for additional monetary compensation.

The NLRB's decision now begs the question of whether the ruling was the "right" move. Experts have mixed views on whether allowing scholarship athletes in private universities to unionize will see positive results. With an employee relationship established and scholarships viewed as compensation, how will taxes work for these players? The IRS will certainly hold an interest in the millions of dollars in scholarships distributed to incoming athletes every year. It is also likely that taxation on players' scholarship awards will affect the amount of money school are willing to award players. 21 No. 2 Miss. Emp. L. Letter 1. When considering taxes, the question of whether the players will be entitled to workers compensation is also at issue. Id. Furthermore, Title IX requires equal treatment among male and female athletes. Id. Thus, if Northwestern allows its football players to negotiate for benefits through collective bargaining, then female athletes must be provided the same opportunities at an unknown cost. Id. With all these unanswered questions following the NLRB's decision, the future treatment of college athletes remains uncertain. One resolution to this conflict that has been gaining popularity involves the university instituting a trust fund for athletes that can be procured upon their graduation. The trust fund could comprise of revenue percentages generated by television, radio, licensing contracts, as well as other royalties from advertisements and other forms of compensation that players may have been entitled to otherwise. http://www.usnews.com/debate-club/should-ncaa-athletes-be-paid/ncaa-amateurism-is-an-illusion. This compromise will protect the players and the sanctity of college athletics.

It is apparent that some larger degree of reform within the NCAA will stem out of the NLRB's recent decision. However, this reform needs to be approached prudently, and all potential ripples must be considered to avoid a complete deconstruction of the NCAA. Innovative ideas such as setting up trust funds for the athletes can serve all interested parties and aid in mending the disconnect between the players and their institutions.

March 24, 2015

Fordham/EASL Section Sports Law Forum

The Fordham Sports Law Forum, along with the New York State Bar Association-Entertainment, Arts & Sports Law Section, is hosting the 19th Annual Sports Law Symposium on Wednesday, April 1st from 9:15-5:00 in Fordham's new law school building (150 West 62nd Street, New York, NY).

This year, three panels will focus on current policies and practices in sports law, in the areas of taxation, domestic and sexual violence, and the fan's effect on team and league discipline. Attendees will receive 4.5 transitional and nontransitional professional practice credit hours, and can register here: law.fordham.edu/sportslaw. NYSBA-EASL members will receive a substantial discount on the registration cost!

Please email the event chair, Katie Rosenberg (krosenberg4@law.fordham.edu) with any questions. We look forward to seeing you there!

April 16, 2015

The National Football League and the "Blackout Rule"

By Thomas Carter

Football is a predominant force within our country's athletic culture, with the National Football League (NFL) at the forefront. Watching football on television has remained a constant over the years, and competitive online gambling and fantasy football have ushered in an entirely new perception of the game and its components. However, unbeknownst to many NFL consumers, the Federal Communications Commission (FCC) is in control of regulating the broadcast of live games. Lately, the FCC has done away with a regulation over television known as the "blackout rule." (http://www.huffingtonpost.com/ken-reed/sports-blackout-rule-on-i_b_5830880.html).

The blackout rule is a method used by the FCC to withhold the broadcasting of games under particular circumstances. According to the FCC's website, "[a] 'sports blackout' occurs when a sports event that was scheduled to be televised is not aired in a particular media market. A blackout may prevent transmission of sports programming on local broadcast networks and/or non-broadcast platforms such as cable and satellite television." (http://www.fcc.gov/guides/sports-blackouts). Additionally, sports blackouts occur when a franchise does not sell a "certain percentage" of its tickets for its games. Id. "Notably, the NFL is the only league whose local blackout rule centers around stadium attendance." (http://www.forbes.com/sites/aliciajessop/2014/09/30/the-fccs-elimination-of-the-sports-blackout-rule-is-not-a-touchdown-for-nfl-fans/). Generally, teams determine the threshold ticket sales required to avoid blackout. Id. Franchises generally determine this required percentage at "between 85 and 100 percent." Id. Ralph Nader, a staunch opponent of this practice, believes that the NFL has held the fans "hostage" for years through the rule. (http://www.huffingtonpost.com/ken-reed/sports-blackout-rule-on-i_b_5830880.html).

The FCC is working to ensure that consumers are constantly given a steady stream of games, regardless of regional ticket sales. The main argument made before the FCC encapsulated the beliefs of "thousands of everyday sports fans," as well as sports economists, Congressmen, business associations, and academics. (http://www.huffingtonpost.com/ken-reed/sports-blackout-rule-on-i_b_5830880.html). These advocates suggested that blackouts do not accomplish the primary objective of improving ticket sales, and, as a result, "hurt fans." (http://www.huffingtonpost.com/ken-reed/sports-blackout-rule-on-i_b_5830880.html).

While the blackout rule has many advocates, there may be potential problems with entirely eliminating it For instance, franchise owners may support the reinforcement of the rule, as it may cause greater demand for tickets. Further, fear of broadcast blackout may draw more fans to their teams' games on game days. Additionally, these ticket purchasers may become eager customers for merchandise and refreshment shops located throughout the NFL stadiums. This could potentially generate even greater revenue to the teams, which could be used in drawing popular athletes to such financially high-generating franchises. Further, the NFL has expressed concern that completely eradicating the blackout rule "would lead to the NFL fleeing free TV generally." (http://profootballtalk.nbcsports.com/2014/09/30/after-fcc-vote-nfl-reiterates-its-commitement-to-free-tv/).

At the present time, it appears that the blackout rule is mostly gone. While the ultimate results in revenue and ratings are yet to be determined, millions of fans will ultimately benefit in knowing that their home teams' games will be broadcast each Sunday, regardless of ticket sales. However, NFL franchises have a potential countervailing interest in continuing enforcement of the blackout rule, as they want to maximize ticket and merchandise sales. Whether the abolition of the blackout rule will lead to increased happiness for both parties is yet to be determined.

April 20, 2015

Arizona Lawmaker Looks to Make Fantasy a Reality

By Jonathan Goeringer

When fantasy football season is in full swing, for those of us that live to incessantly and insatiably make waiver moves, trades and lineup changes, the excitement could not be greater. For one state in particular, Arizona, participation in fantasy sports is without one all-important element that even the competitive nature of sports alone cannot replace; playing for financial reward. It sounds shallow to think of playing fantasy football solely for financial gain, and it may just be equally as superficial as it sounds, but even professional sports are played with the ultimate and underlying desire to receive a return on investment; all the way from the management down to the players themselves. For years, fantasy participants in Arizona have been without this added element because of "vague language" in Arizona's current gambling law. Recently, an Arizona Senator tried to add more clarity to this vague law; unfortunately, his proposed bill failed.

Currently, Arizona is one of seven states, Iowa, Louisiana, North Dakota, Montana, Tennessee, and Washington included, that does not allow playing fantasy sports for money. In fact, under Arizona law, anyone found to be doing so could be convicted of a Class Five felony, punishable by up to six months in prison and a $150,000 fine. The relevant sections of the current law read as follows: "'Amusement gambling' means gambling involving a device, game or contest which is played for entertainment if all of the following apply: (a) The player or players actively participate in the game or contest or with the device, (b) The outcome is not in the control to any material degree of any person other than the player or players, (c) The prizes are not offered as a lure to separate the player or players from their money." (Ariz. Rev. Stat. Ann. § 13-3301.)

In analyzing the statute, it is clear that playing fantasy sports for money meets prong (a) of the state law test for whether an activity constitutes amusement gambling. By allowing a computer to draft his/her team or set his/her lineup, even the most negligent and careless of owners actively participates in the game to alter the outcome, and certainly, those who are diligent in their management are active participants as per the statute, as well. As for prong (b), its language seems to encompass the inherent aspect of fantasy sports. While it may not be the traditional card dealer with house imposed standards materially controlling the outcome of an event, the athletes of these sports themselves materially control the outcome of a fantasy season with their individual production, far more than the management of those athletes by fantasy owners. However, (a) and (b) are not collectively dispositive, and require prong (c) as well, the application of which is not as clear, and warrants a deeper analysis.

The language of prong (c), though vague, has been supplemented by an Arizona case. In Chenard v. Marcel Motors (387 A.2d 596, 601 (Me. 1978)), the court held that an automobile offered to the defendant as a prize in a contest requiring an entrance fee did not constitute a "lure." The court further explained that because the fees did not constitute a portion of the prize, rather the automobile was the prize, entirely separate from the fees, the prize was not a lure. (Id.) That being the case, it was clear to the court that the participants in this contest were not primarily risking their fees in the hope of making a return on their money as in a wagering transaction, but were paying the fees for the privilege of participating in the tournament. (Id.) To further clarify the language of prong (c), a judicial opinion was issued to answer questions regarding the legality of certain gambling activities under the state's criminal gambling law. In the opinion, Judges Sossaman, Stephens, and West interpreted legislative intent to mean that, to be a non-gambling activity, "the potential winning of the prize must not be the primary motivation for the player to play the game [in question]." (Ariz. Op. Att'y Gen. 161 (1987).) They further provided that "the more skill involved in a game, the more likely it is that the player gives his consideration primarily for the privilege of playing and demonstrating his skill rather than for winning the prize." (Id.)

In light of the guidance provided therein, it seems that whether fantasy sports constitutes gambling, under current state law, is still entirely subject to opinion and interpretation. Taking what the court expressed in Chenard, it seems that fantasy sports could be considered as such. As entrance into some fantasy leagues requires fees that, themselves, constitute not only a portion of, but the whole prize, and because participants are risking those fees primarily in hopes of making a return on that investment, the money sought when playing fantasy sports can be seen as a lure. However, taking direction from the judicial opinion in Chenard, the monetary aspect of fantasy sports actually may not be a lure. For many, the potential for winning money is not the primary reason for choosing to play in fantasy leagues. The major deciding factor may be whether fantasy sports require enough skill that, according to those judges, they rise to the level of a game people would play to demonstrate that skill, rather than to win a prize. When compared to other games with a clear gambling orientation such as roulette or craps, it is obvious that fantasy sports require a greater and more focused skill in order to achieve success. However, does that mean it requires enough skill to pass muster as a non-gambling activity under Arizona law? Though current precedent says it does not, and the recently failed bill, SB 1468 (proposed to amend Ariz. Rev. Stat. Ann. § 13-3301) attempted to put this question to rest.

The bill attempted to explicitly preclude fantasy sports from that which had been deemed "amusement gambling" by statute. According to Senator Adam Driggs, R-Phoenix, the man spearheading this effort, "right now there are tens of thousands, hundreds of thousands of Arizonans playing fantasy sports. And I think it's kind of inconsistent to kind of discriminate against them." In further support, Stacie Stern, General Manager of Head2Head Fantasy Sports in Scottsdale, Arizona, cites the economic benefits of allowing the full access to an industry that is worth more than $1 billion, stating, "[i]t would really open up business for other companies to be able to come to Arizona and feel like they're in an environment that would be conducive to fantasy sports." Finally, trying to comply with interpretation of the current law, Stern posits that, "most people, when they're playing, they're playing for fun, they're playing for bragging rights and are very engaged in various games." Stern continued, stating, "the prizing is third or fourth on the list, but it's still important. People like to say that they're a winner, they like to brag about it."

Due to the ambiguity of the statute, it has been argued by people like Stern and Briggs that precluding fantasy sports from non-gambling activity would comply with proper interpretation and intention of the statute. Further, based on how few states still enforce a policy against allowing fantasy sports for money, and the lack of actual substantive policy behind its enforcement, in light of such ambiguity, it seems curious that Arizona did not pass this bill and conform to a more national sentiment. The reason is simple, really; though there was no opposition at the outset of the bill's proposition, the Arizona Indian Gaming Association eventually objected to the potential impact the approval of the bill might have on the tribal gaming compacts. Still, Briggs pledges to continue to push this issue in later sessions, despite this objection from the Native American community and its business associations.

June 23, 2015

Russian Moves to Limit Participation in the Olympic Games

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)

On April 7, 2015, a State Deputy introduced Bill No.763029-6 "On the amendments to Article No.36 of Federal Law on Physical Culture and Sport in the Russian Federation" (Russian Law on Sport, Bill), to limit the participation of the Russian athletes in the Olympic Games. (http://asozd2.duma.gov.ru/main.nsf/%28SpravkaNew%29?OpenAgent&RN=763029-6&02)

In accordance with its Explanatory Note (Note), the Bill is aimed at stopping injured and older athletes from occupying places of younger promising athletes. The Note posits that some athletes monopolize their rights to take part in the Olympic Games. Apparently, it claims, repeat Olympic champions continue participating and do not provide an opportunity to younger athletes who want to prove themselves on the international level. The Note also emphasizes that sometimes an athlete who represents the Russian Federation on the international level withdraws his or her participation immediately before a particular race, and cites an incident that occurred at the Sochi Winter Olympic Games when Russian figure skater Evgeni Plushenko withdrew his participation due to the back injury.

If the Bill becomes law, the proposed changes will have a significant impact on the Russian sport and negatively affect the rights of athletes.

The Bill proposes an amendment to Article No.36 of the Russian Law on Sport, which is labelled as follows: Formation of sport teams, sport delegations of the Russian Federation. The Bill provides for the following provision to be included: "Athlete's participation in the Olympic Games for more than 2 (two) consecutive times is prohibited"

On its face, it is reasonable to provide more opportunities for young athletes. In the meantime, nobody can be restricted from practicing a sport that includes the training procedure and participation in a wide range of sporting competitions, including the Olympic Games.

As a general rule, nobody can be restricted from practicing a sport. Each athlete has the right to participate in the election procedure regardless of his or her age and other criteria. However, if the Bill is adopted, many athletes will be prohibited from the Olympics.

Most of the Russian Olympians practicing summer sports already participated in the summer Olympic Games in Beijing 2008 and London 2012. They therefore would fall under the provisions of the Bill and be deemed ineligible.

To help provide more opportunities for young athletes, sports federations should address this issue. Each sports federation could create a special committee which role is to evaluate a particular athlete and to deliver an opinion as to whether he or she meets the eligibility requirements, based on analysis of the following criteria:
• results of an athlete, and his or her performance in the last or/and current season;
• dedication of the athlete to the training procedure;
• evolution and projection of the athlete in the future (i.e. potential results);
• universality of the athlete i.e. an ability to compete in a number of sporting events (for example, in swimming this means an ability to compete in the Breaststroke, Freestyle, Individual Medley etc.); and
• the health of the athlete.

It is to be noted that the Court of Arbitration for Sports (CAS) has confirmed the use of the abovementioned criteria (see http://www.tascas.org/fileadmin/user_upload/DOC.pdf).

Therefore, the election procedure should be based not only on the prohibition of athletes' participation, but also on the election criteria. If a 30 year old athlete who has been participated in four Olympic Games meets the eligibility requirements, then he or she should be elected, regardless of the fact of past participation.

It is to be noted that several Russian high-level athletes have commented on the Bill. Two-time Olympic pole vault champion Yelena Isinbaeva said that the Bill bears no relation to real life, and was proposed by an individual who does not know sport. Isinbaeva emphasized that each athlete has the right to compete for as long as he can qualify for the Olympic Games, and that the Bill will deprive athletes from their dreams (see http://m.sovsport.ru/news/text-item/794190).

Russian figure skater Evgeni Plushenko is confident that the Bill will not be adopted (see http://super.ru/news/113732).

As of today, nobody knows whether the Bill will be adopted by the Russian Parliament. However, the fact that it was introduced into shows that there: 1) is a misapprehension of the basics of sports law, and 2) a miscommunication among athletes, sports federations, the Russian Ministry of Sport and the Russian Parliament. There is no common approach on the eligibility issues, as Russian sports bills are often prepared by officials who do not have special sports law knowledge. Consequently, they propose vague and controversial bills.

As of May 18, 2015 the Bill has been adopted by the responsible committee of State Duma - Physical Culture, Sports and Youth Affairs Committee (Committee). More importantly, the Bill has been included into the legislative program of State Duma for the spring session of 2015. The Committee also decided to send the Bill to other committees of the Russian Parliament, the Russian President, the Audit Chamber of the Russian Federation, and other subjects of the Russian Federation for the submission of reviews and suggestions. The deadline for reviews and suggestions was June 18, 2015.

It is expected that State Duma will consider the Bill in the first reading in July 2015.

June 28, 2015

Who Is The Owner of Alex Rodriguez's 3,000th Hit Milestone Ball?

By Daniel S. Greene

Reaching the 3,000 hit mark is one of the greatest accomplishments for career baseball players. Every player to reach the "3,000 Club" has been elected the National Baseball Hall of Fame, with the exceptions of Pete Rose (banned from baseball), Rafael Palmeiro (steroid allegations), Derek Jeter (not eligible yet), and Alex Rodriguez (still active). Hence, joining "the club" makes one a lock for "the Hall." The importance of this honor was featured in the 2004 sports comedy film "Mr. 3000", staring Bernie Mac.

Jeter obtained his 3,000th hit on July 9, 2011, by knocking a home run into the left field bleachers at Yankee Stadium. On June 19th of this year, Rodriguez reached the 3,000 hit plateau by depositing a home run into the right field bleachers in the Bronx. Jeter and Rodriguez became the 28th and 29th members of the 3,000 hit club, respectively, and the second and third players to record their 3,000 hits via home runs (the first being Wade Boggs in 1999).

While Jeter and Rodriguez have this feat in common (as well as being All-Star infielders for the Yankees), the big difference between these historic events involved the men who caught each respective milestone ball. Jeter's ball was caught by Christian Lopez, a 23-year-old cellphone salesman from Highland Mills, New York. Lopez immediately returned the historic ball back to Jeter, and in return, the Yankees rewarded him with luxury suite tickets for the remainder of home games that season (valued at $32,000), autographed balls, bats, and jerseys, and a 2009 World Series ring (http://www.nydailynews.com/sports/baseball/yankees/guy-caught-derek-jeter-3-000th-hit-no-zack-hample-article-1.2265253).

The man who caught Rodriguez' ball, Zack Hample, is not your average baseball fan. Hample is a professional baseball snatcher, having caught approximately 8,000 baseballs throughout many Major League Baseball (MLB) games. He even has his own website where he updates his latest ball-hawking exploits (http://zackhample.mlblogs.com/2015/06/20/a-rods-3000th-hit/#comments). Further, Hample has refused to give Rodriguez the baseball despite Yankees personnel trying to negotiate with him by offering a plethora of merchandise and publicity. Shortly after seizing the ball, Hample stated, "[Rodriguez] will not be in possession of this ball tonight, unless he personally mugs me outside on 161st Street." (http://www.nydailynews.com/sports/baseball/yankees/famous-ballhawk-snags-a-rod-3-000th-hit-won-return-article-1.2264699).

As expected, Rodriguez was disappointed that he would not be receiving the historic ball. "The thing I was thinking about is, where's [Jeter's] guy," said Rodriguez after the game. "The guy that caught [his] ball? That's the guy that I needed here. Where is that guy? I wasn't so lucky." Some Yankees fans were also upset, including Bald Vinny, the leader of the Yankees fan group the "Bleacher Creatures". He proclaimed, "That guy sucks. He pushes little kids out of the way. He is the worst ever. That guy is the worst ever. There is literally-- nobody worse could've gotten that home run ball than that [expletive] guy." (http://www.nydailynews.com/sports/baseball/yankees/famous-ballhawk-snags-a-rod-3-000th-hit-won-return-article-1.2264699).

While fans have discussed among themselves as to whether they would return the ball to Rodriguez, others have mentioned that Hample should return it, as he is not truly the rightful owner. Whomever owns the ball is likely to make a pretty penny if he or she decides to sell it. This ball does have tremendous value, as one auctioneer estimates that Rodriguez' ball could be worth $500,000 (http://www.foxsports.com/buzzer/story/alex-rodriguez-zack-hample-3000-hit-ball-062315). Other historic balls have been bought for even higher prices (http://www.forbes.com/sites/davidseideman/2014/04/13/historic-home-run-balls-keep-smashing-auction-records/), including Barry Bonds' record-breaking 756th home run ball that was sold for $752,467 about 10 years ago (http://www.nytimes.com/2008/07/02/sports/baseball/02ball.html?_r=2&).

Hample does not technically have to return the ball to Rodriguez, the Yankees, MLB, or anyone else. While there is no true legal doctrine on the ownership of home run balls, it does seem that Hample is likely the legal owner this one.

There is very little case law on these types of situations, but in 2002, the Superior Court in San Francisco County (California) decided a similar issue regarding the ownership of Barry Bonds' record breaking 73rd home run, which set the mark for most home runs in a season. In Popov v. Hayashi, the issue regarded which fan (Popov or Hayashi) gained rightful possession to the milestone home run ball when one man caught it, but the ball was knocked out and rolled over to another man. While the Rodriguez-Hample situation is different, the court did lay down some legal principles, though while not binding in New York, can help us figure out ownership under these circumstances.

First, it was agreed the before the ball was hit, MLB owned it, and that once the ball was hit it became intentionally abandoned property. Therefore, the person who came into possession of this abandoned property became the new owner. (Popov, 2002 WL 31833731, at *3.) Second, the court formulated a definition of possession under baseball circumstances. It stated that the legal question in this situation is whether the person "did enough to reduce the ball to his exclusive dominion and control. Were his acts sufficient to create a legally cognizable interest in the ball?" (Popov, 2002 WL 31833731, at *4.)

Here, in accordance with the Popov court's ruling, the ball became abandoned property when it was hit by Rodriguez. In addition, since Hample reduced the ball to his exclusive dominion and control and created a legally cognizable interest in the ball when he caught and held onto it, and then had it authenticated by MLB officials, he became its new owner. Therefore, under the principles set by Popov, Hample has the right to do whatever he wants with the ball.

However, some may argue that the person who hit the ball is the rightful owner, since he is the reason why that specific ball is so valuable, and without the hitter, the ball has no significance. This argument has been made by Professor Steven Semeraro, who stated that the doctrine of accession applies to these types of milestone situations. This is so because when the batter "combines his labor with an ordinary baseball owned by the home team to create a ball worth potentially thousands or even tens of thousands of times the value of the original ball . . . This increase in value is more than sufficient to trigger the doctrine of accession." (Steven Semeraro, An Essay on Property Rights in Milestone Home Run Baseballs, 56 SMU L. Rev. 2281, 2293-94 (2003).)

Professor Semeraro also argues that a home run ball cannot be abandoned property since it doesn't satisfy the legal elements of abandonment, mainly that the home team did not have the intent to abandon the ball. (Id. at 2286.) Further, he discusses that allowing fans to keep milestone baseballs goes against competing common baseball practices. (Id. at 2290.) For example, Professor Semeraro notes that when a pitcher strikes out his 3,000th batter, the home team gives him the ball. (Id. at 2291.)

These issues have also been discussed by Professor Paul Finkelman, who has taken an opposing stance to Professor Semeraro in a law review article entitled "Fugitive Baseballs and Abandoned Property: Who Owns the Home Run Ball?" In the article, Finkelman argued that the batter has the weakest claim to the ball. (Paul Finkelman, Fugitive Baseballs and Abandoned Property: Who Owns the Home Run Ball?, 23 Cardozo L. Rev. 1609, 1611 (2002).) Here, he analyzes this situation under traditional property law, the "common law of baseball," and contract law associated with purchasing a ticket. In doing so, Finkelman notes that the batter "never had [the ball] in the first place; did not want it; and used all his might and skill to make it go away." (Id. at 1612.) He further compares the idea of the batter increasing the value of the ball to that of art, an autograph, a discovery, or an invention, noting that the connection between the batter and the ball is more similar to a celebrity's connection to a place or event. Finkelman uses the example of an inn that claims that "George Washington slept here," which, he argues, does not give Washington (or his heirs) property claims in the inn. (Id.)

As seen by the stances taken by these two professors, legal minds have different opinions on this specific issue. While there is no clear-cut answer to this question, one must also look to the common practices among MLB teams. Many not only allow fans to keep home run balls (http://newyork.mets.mlb.com/nym/ballpark/information/index.jsp?content=guide), but some openly promote it (the Arizona Diamondbacks allow those "who catch D-backs' home run balls arrange to have the ball autographed by the player who hit it." http://arizona.diamondbacks.mlb.com/ari/ballpark/information/index.jsp?content=guide). It essentially seems that, along with statements like the one made by the Diamondbacks, once a patron buys a ticket, there is a binding contract between the person and the franchise that allows the person to keep any ball to come out of play. This notion is even seen by Professor Semeraro as the patron's strongest argument. (See Semeraro at 2292-93.) However, he does note that this claim is different when a milestone ball is at issue, proclaiming, "one should not extrapolate an agreement contemplating $12 souvenirs to extremely valuable pieces of memorabilia. Is a ball a ball when the value differs by a factor of 10,000?" (See Semeraro at 2292.)

Yet what is the definition of a milestone ball? Some balls are small milestones and some balls don't become valuable until many years later. Does it depend on projected value? If so, what is the cutoff number? While Professor Semeraro makes a strong argument, it is difficult to know what constitutes a milestone ball. Basically, any ball hit out of play is up for grabs. If a team really wants to own a milestone ball, it must make it very clear before a game where a milestone can occur that the fans do not have the right to own the ball if anyone catches it. Figuring out how this could be done is another story.

So, what should the next player to reach 2,999 hits do when he is up next? Don't hit it over the wall. A chopper up the middle will do just fine. Oh, and make sure you know where Zach Hample (or Christian Lopez) is sitting, just in case you do hit a home run.

UPDATE: http://sports.yahoo.com/blogs/mlb-big-league-stew/alex-rodriguez-will-receive-his-3-000th-hit-ball-from-zack-hample-164901812.html.

June 30, 2015

MMA Remains Illegal in New York

By Daniel S. Greene

Mixed Martial Arts (MMA) supporters in New York thought that this was the year they would go the distance-- the year when MMA would finally be legalized in the Empire State. Yet once again, the bill legalizing MMA in New York failed, leaving the state with the World's Most Famous Arena (Madison Square Garden) as the only place in North America where professional MMA is illegal (http://www.newsday.com/sports/mixed-martial-arts/mma-in-new-york-a-timeline-of-events-1.5515307). "It boggles your mind," said Brandon Muecki, a manager of the Buffalo Brazilian Jiu-Jitsu Academy in West Seneca, New York. "Take a strict religious state like Utah. Legal. Montana. Legal. Florida, Hawaii, it's all legal. But New York state . . . you have an event at Madison Square Garden or at the First Niagara Center, that's gonna generate millions of dollars" (http://www.wgrz.com/story/news/politics/2015/06/26/mma-bill-fails-again/29310161/).

New York enacted the Combative Sports Ban in 1997 (the Ban), prohibiting any "combative sport" within the state's boundaries. While the term "combative sport" included MMA, it excluded boxing, wrestling, judo, karate, and tae kwon do. (N.Y. Unconsolidated Laws, Section 8905-a). In the hearings held by the New York State Legislature leading up to the Ban of "extreme fighting," those in support of the bill based their disapproval of the sport on two reasons: "(1) MMA fights posed a health and safety risk to fights, and (2) MMA fights undermined public morals and had a negative influence on New York youths" (Jones v. Schneiderman, 974 F. Supp. 2d 322, 328-29 (S.D.N.Y. 2013)).

In 2013, the Ban was challenged in federal court by prominent figures in the MMA community, alleging that the law violated the First Amendment, Due Process Clause, Equal Protection Clause, and Commerce Clause (Id. at 326). However, the Southern District of New York dismissed all but one of the plaintiffs' claims, holding that MMA was not expressive conduct or protected speech, the statute was neither overbroad nor vague facially or as applied to bar and gym owners, and did not violate the dormant Commerce Clause. While the court did not dismiss the plaintiffs' as applied vagueness challenges to the Ban, it later found in March 2015 that the plaintiffs did not have sufficient standing to bring their vagueness claim, essentially ending the challenge in court at that time. (See generally Jones v. Schneiderman, No. 11-CV-8215 KMW (S.D.N.Y. Mar. 31, 2015)).

Just a few months ago, the State Senate passed the bill ending the Ban of mixed martial arts for the sixth straight time. In addition, Assembly support seemed higher than ever, considering that former New York State Assembly Speaker Sheldon Silver, who has blocked the vote on the bill in the past, was no longer in power due to corruption charges (http://sports.yahoo.com/news/new-york-appears-close-to-legalizing-pro-mma--but-ufc-isn-t-celebrating-yet-221539557-mma.html). However, the bill never reached the Assembly floor for a vote on the last day of the legislative session on June 25th, which was surprising, since current Assembly Speaker Carl Heastie was its sponsor in prior years (http://www.reviewjournal.com/sports/mma-ufc/proposed-mma-bill-fails-again-new-york-legislature). All that was needed was 76 delegates of the 150-seat Democrat-controlled Assembly to vote "yes" (https://sports.yahoo.com/news/mma-denied--new-york-legislature-once-again-acts-like-loons-211821728.html). On the last day of the legislative session, the bill's sponsor, Majority Leader Joseph Morelle (D-Irondequoit), noted that his biggest challenge to getting the bill passed that day, despite the support, was "that a number of members who are counted as supporters were just unavailable . . . because of the of the scheduling, that we weren't expected to be here this long" (http://polhudson.lohudblogs.com/2015/06/25/mma-expected-to-falter-in-assembly/?utm_source=dlvr.it&utm_medium=twitter). In the end, there was not enough support and the bill lifting the Ban failed.

The major question among New York MMA fans is why hasn't the State legalized this sport, one that is one of the fastest growing in the United States? For starters, some people, including Assemblywoman Deborah Glick (D-Manhattan), find the sport to be extremely barbaric, noting that MMA is all about inflicting the most amount of harm on the opposition (http://www.newsday.com/sports/mixed-martial-arts/mma-bill-faces-familiar-foe-the-new-york-state-assembly-1.10116493). Further, some find MMA to be "anti-woman," which is a bit peculiar since Ronda Rousey, the undefeated UFC Women's Bantamweight Champion, is arguably the biggest name in the sport today and has lobbied for support of the bill in Albany (http://www.reviewjournal.com/sports/mma-ufc/proposed-mma-bill-fails-again-new-york-legislature).

In another issue, the Ultimate Fighting Championship (UFC), the biggest MMA promotion company in the world, believes the lack of support is partly due to Las Vegas Culinary Union Local 266 (the Union) using its "political muscle" to block the legalization of MMA in New York. The theory is that the Union, which represents workers in the Las Vegas hotel and restaurant industry, is afraid that it would be losing money, since more fights would be taking place in New York (http://www.reviewjournal.com/sports/mma-ufc/ufc-president-blames-culinary-union-blocking-mixed-martial-arts-new-york-state). When Silver was arrested on corruption charges in February, many MMA supporters believed that their suspicions about the Union were actually true.

Just by looking at the reasoning and arguments for why this bill was not passed, it is remarkable that MMA still remains illegal in New York. First, on the argument that the sport is brutal and barbaric, it should be noted that boxing, a similar and equally brutal sport, is legal in the state. While MMA has been banned in New York since February 1997, boxing has been a legally sanctioned sport for many years. In addition, in the 23-year existence of the UFC, there have been no fatalities That is not a claim that boxing or football can make (https://sports.yahoo.com/news/mma-denied--new-york-legislature-once-again-acts-like-loons-211821728.html).

Further, there are numerous MMA matches that take place in New York, but they are unregulated amateur and underground pro matches. This makes an already dangerous sport even that more unsafe. With a lack of regulation, there are no medical exams of the fighters before or after matches, no drug testing, unqualified referees, no emergency personnel at events, and no pregnancy testing for female participants (http://sports.yahoo.com/news/new-york-appears-close-to-legalizing-pro-mma--but-ufc-isn-t-celebrating-yet-221539557-mma.html). Since the New York State Athletic Commission has no power to halt these unsanctioned fights, and with no alternative to see MMA in the State, these risky events will continue to take place. Therefore, the danger of the sport argument is a relatively weak one, and the complete opposite argument actually holds stronger. In order to make the sport safer in New York, the bill must pass so that it can be regulated.

With the arguments about barbarism and sexism of the sport being relatively weak, what else is holding back the State Assembly? This leaves us with the corruption allegation. While there is no way know if there is corruption here a this point, it is curious why the vote hasn't even reached the floor. For instance, just a few days ago, the New York legislature and Governor Andrew Cuomo passed a bill declaring July 29th as "Chicken Wing Day" (http://sports.yahoo.com/news/mma-denied--new-york-legislature-once-again-acts-like-loons-211821728.html). I love chicken wings as much as the next New Yorker, but it's odd that voting on a bill about chicken wings was more important than voting on the legalization and regulation of a popular sport that would generate about $70 for the New York economy (http://www.wgrz.com/story/news/politics/2015/06/26/mma-bill-fails-again/29310161/). Yahoo Sports columnist Kevin Iole has proclaimed that this process has shown "the seamy underbelly of state politics" (http://sports.yahoo.com/news/mma-denied--new-york-legislature-once-again-acts-like-loons-211821728.html).

New York MMA fans will have to wait at least another year for the sport to arrive in the sports capital of North America, which is extremely disappointing, since UFC 194 was slated to take place in December at Madison Square Garden (http://www.newsday.com/sports/mixed-martial-arts/ufc-reserves-december-date-at-madison-square-garden-in-case-mma-becomes-legal-in-new-york-this-year-1.10280488). Yet this is not the end of the fight, as UFC refuses to tap out. "We're a fighting organization and we're going to keep fighting," said Marc Ratner, Vice President of UFC. "We're not going to give up. It's still a question of when, not if" (http://www.nydailynews.com/news/politics/mma-supporters-fail-legalize-sport-assembly-wraps-article-1.2272107). There seems little holding the passage of the bill back at this point, so don't be surprised if the Empire State catches up with the rest of the continent very soon.

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

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 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 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.

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.

August 7, 2015

The Most Turbulent Professional Sports League Of Which You've Never Heard

By Daniel S. Greene

It has been a very busy off-season for North America's biggest and most popular professional sports leagues. The National Basketball Association had the DeAndre Jordan fiasco (http://grantland.com/the-triangle/sorting-out-the-deandre-jordan-carnival/), the National Hockey League (NHL) has been handling its latest expansion efforts in Las Vegas and Quebec (http://sports.yahoo.com/blogs/nhl-puck-daddy/las-vegas--quebec-city-hit--phase-ii--of-nhl-expansion-process-191056907.html), and, of course, the National Football League has been engulfed with "Deflategate" (http://www.usatoday.com/story/sports/nfl/patriots/2015/08/04/tom-brady-new-england-deflategate-testimony-phone-records/31126443/). Yet these leagues have not had as tumultuous and interesting off-season as the Federal Hockey League (FHL, league), the little known professional hockey league mainly based in small cities of the northeastern United States.

The league, which played its first season beginning in 2010, is essentially a Single-A minor league (below the East Coast Hockey League (AA) and American Hockey League (AAA)), but has no affiliation with any of the NHL franchises. While this season will mark the five year anniversary of the FHL, it is honestly amazing that it has lasted this long, considering that it has followed the script of the classic hockey film "Slap Shot" (https://www.youtube.com/watch?v=TJ2L2SgPldU).

The league has seen numerous teams start up and fold within a year, move, not complete a full season, and be taken over by league management due to financial issues. Teams have struggled to draw fans over the years, but have drawn some spectators due to the rough and tumble brand of hockey played. Furthermore, in the 2013-14 season, two players even staged a "hug and beer fight" to try to gain some publicity (http://www.si.com/nhl/home-ice/2014/04/01/hockey-fight-with-hug-and-beer-stunt-falls-flat-with-players-suspended). Other notable moments in FHL history include: Questionable player transactions (http://espnwilliamsport.com/opinion-the-fhl-finals-are-now-officially-a-joke/); the commissioner's daughter owning and coaching one of the teams (http://sports.yahoo.com/blogs/nhl-puck-daddy/nicole-kirnan-first-woman-coach-men-pro-hockey-130716495--nhl.html); and the creation of a website criticizing the league, along with details of certain incidents (http://thefhltruth.blogspot.com/).

Per FHL tradition, there has been no shortage of fireworks this summer. First off, the Berkshire (MA) Battalion moved to become the Dayton (OH) Demolition, and the Danbury (CT) Whalers moved to become the Stateline (NY) Whalers. The off-season also saw the folding of the Dayton (OH) Demonz and Steel City (PA) Warriors, along with the Watertown (NY) Wolves suspending its operation (but saying that the team will come back next season after construction on its rink is finished). However, the Berlin (NH) River Drivers, Danbury (CT) Titans, and Port Huron (MI) Prowlers joined the league as new franchises. So, for those of you keeping score at home, the Danville (IL) Dashers will be the only "non-new" team for the 2015-16 season.

In addition, before the Stateline Whalers even played a game, it changed its name to the Brewster (NY) Bulldogs. While there has been no officially stated reason for the quick name change, it is likely that it was due to trademark issues. The New England Whalers of the World Hockey Association (WHA) first used the "Whalers" nickname in 1972. The team's owner, Howard Baldwin, moved the franchise to Hartford, where it played in the NHL as the Hartford Whalers from 1979 to 1997, before moving to North Carolina to become the Carolina Hurricanes (http://www.courant.com/sports/hockey/hartford-whalers/hc-whalers-historical-timeline-story.html#page=1). The Whalers name remained dormant until 2009, when Baldwin founded Hartford Hockey LLC (also known as Whalers Sports & Entertainment), which was hired a year later by the NHL's New York Rangers to manage the day-to-day operation of its AHL franchise, the Hartford Wolf Pack. As a part of this agreement, the team was renamed the Connecticut Whale, until the Rangers terminated the company's contract in 2013 (http://articles.courant.com/2010-09-20/sports/hc-baldwin-wolf-pack-0920-20100920-5_1_whalers-sports-entertainment-new-logo-hockey-fest). The Connecticut Whale recently returned in the form of the one of the founding members of the National Women's Hockey League in 2015 (http://www.courant.com/sports/hockey/hc-connecticut-whale-women-hockey-0327-20150326-story.html). It is therefore likely that the team in Brewster would have needed permission to use the Whalers moniker, and even if it asked for such, it would have been odd for Baldwin to allow two teams to use the same name. There could have also been issues with the former Danbury Whalers management. Yet, like most things with the FHL, we will probably never find out the true answer.

While the league has survived many changes and financial hardships thus far, it might have finally met its match: a default judgment against the league to the plaintiff for $800,000. The suit, filed on January 23, 2014, stems out of an on-ice incident on February 10, 2012 that caused former Danville Dashers player Kyler Moje to become legally blind in one eye. According to the plaintiff: "Michael Stacey, a player for the Akwesane Warriors, made an illegal maneuver by lifting his hockey stick and thrusting the blade end forcefully under Kyler Moje's helmet" (http://www.courthousenews.com/2014/01/28/64882.htm). In addition to suing Oakley, Inc., the manufacturer of the visor he was wearing, Moje claims that the FHL was negligent in allowing the Warriors to play the game, since the league allegedly had "knowledge of the Akwesane Warriors' history of violent and illegal game play, although it knew or should have known that permitting game play on the day in question could cause injury to persons lawfully participating in league play therein." Stacey claims that he did not intend to injure Moje, stating: "I went to lift his stick in the corner and missed. I high-sticked him. No question. The puck left the zone and the ref left. No one saw it happen. I stayed with the kid and called for their trainer and after the game I went over and talked to their coach" (http://www.tsn.ca/hockey-league-loses-court-appeal-in-player-blindness-case-1.329444).

Now, this is where the suit gets interesting, since the court did not reach the issue of liability. According to court records, the FHL hired a Syracuse-based attorney named John LoFaro, who had provided legal services to Commissioner Don Kirnan in the past. Then in March 2014, the league was told that no defense had been filed despite LoFaro showing Kirnan documents that were allegedly the answer to the complaint. However, on October 9, 2014, National Casualty Co., the league's insurance company, notified Kirnan that the United States District Court (Northern District of Illinois - Eastern Division) issued a default judgment against the FHL for $800,000. Approximately two months later, the league asked an appeals court to vacate the judgment, claiming that LoFaro misled it by showing Kirnan fake legal papers (http://www.tsn.ca/hockey-league-loses-court-appeal-in-player-blindness-case-1.329444).

The United States Court of Appeals, Seventh Circuit filed its decision on July 7, 2015, and did not vacate the judgment. Within the opinion, the Court stated that LoFaro has never been asked to explain his conduct and the FHL has not filed a complaint with the legal-ethics panel in New York. The latter issue likely wouldn't matter, as LoFaro is not in good standing because of nonpayment of dues. The Court further held that the FHL did not deserve a ruling in its favor for two reasons: "first, the League failed to tender the defense of Moje's suit to its insurer when it received the complaint; second, the League failed to act prudently after being alerted by Oakley that there was a problem." It was also noted that the league should have approached its insurer first instead of hiring LoFaro, who seems to only provide legal services in Personal Injury law relating to DWI, speeding, and traffic matters, and is not admitted to the bar in the Northern District of Illinois. Overall, Judge Easterbrook noted that the league "did nothing to protect its interests" (http://caselaw.findlaw.com/us-7th-circuit/1706898.html).

Meanwhile, while the league has been preparing to play the 2015-16 season, there seems to be a discrepancy as to whether it can afford to go ahead with the schedule. Kirnan has said that the FHL could fold and reform under a different name to avoid paying the judgment, stating that, "we are a limited liability corporation... It's not like we have any real estate" (http://www.watertowndailytimes.com/sports/pro-hockey-federal-hockey-league-says-it-may-be-forced-to-fold-20150417). However, it has also been reported that Kirnan claims that the league "has $1 million worth of insurance and the legal wrangling would only be a temporary hiccup" (http://www.thetimesherald.com/story/sports/2015/04/20/fhl-rocky-week-holds-onto-hope/26058215/). At this moment, it seems like the latter is true, considering the 2015-16 FHL schedule has been released (http://www.federalhockey.com/view/thefederalhockeyleague/news-739/news_313776).

So, while you should be able to see one of these games this winter, you might be more inclined to follow the FHL from afar and keep tabs on its off-ice situations.

October 1, 2015

Certain Open Water Swimming Rules Need To Be Amended

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)

This blog will consider the issue of physical contact in open water swimming competitions, and what measures should be taken to prevent further disputes, such as the one that occurred at the FINA 2015 World Championship in Kazan. There, Eugene Dratsev, an elite open water swimmer from Russia, took fourth place in the 5 kilometer race. He filed a protest alleging that he had been physically assaulted by another swimmer at the finish of the race. However, a panel of judges ruled that the competition had been conducted in due course.

According to the current version of FINA Open Water Swimming Rules (Rules) the following sanctions must be applied to a swimmer who intentionally contacts another one:
• For the first violation - competition officials show a yellow flag to indicate that the swimmer is violating the Rules; and
• for the second violation - by showing a red flag, competition officials disqualify the swimmer. (http://www.fina.org/H2O/docs/rules/2015/disciplines/FINAowrules_20152017.pdf)

Do these sanctions sufficiently protect the integrity of open water swimming?

It appears that the Rules should be amended by introducing new sanctions, such as adding seconds to a swimmer's time and bans for longer time periods, and by strengthening control over the athletes, as sometimes competition officials and judges cannot detect violations of the Rules. In those cases, the officials need to rely on the participants' reports as to what occurred.

Introducing New Sanctions

Article 6.3.1 of the Rules should provide for punitive seconds on a swimmer's time bans from one to three years, depending on the violation.

Adding seconds to a swimmer's time would be a penalty imposed for the first violation, along with the yellow flag. The time period it should vary from one minute to 10 minutes. Competition judges would have discretion in the length of this penalty. It is unlikely that a violator will continue infringing the Rules after the imposition of such a penalty.

The Rules should also provide for some types of bans, as it appears that the disqualification from a particular event has not been a sufficient deterrent. A violator should be banned from open water swimming competitions for six months for the first act, for a year for the second, and for three years for the third infraction. This penalty should be imposed along with the red flag. If a swimmer thereafter commits any further violation, then FINA should consider adopting a life ban.

Strengthening Control over Swimmers

In some cases, competition judges cannot exercise control over swimmers, and therefore are unable to detect violations of the Rules. It is clear that FINA should increase the quantity of the race judges (see Articles 3.27-3.30 of the Rules) supervising swimmers' compliance with the Rules.

At present, all violations are being recorded in writing only. Instead, the race judges should be provided with photo and video cameras to keep a record of a particular race. With this technical equipment, the race judges will detect more violations and have an opportunity to determine whether the Rules are violated.

October 25, 2015

The Baseball Rule and Fan Safety At The Ballpark


By Michael Galati

According to analysis conducted by Bloomberg News, over 1,700 spectators per season are injured by baseballs that come whizzing off the bats of Major League Baseball (MLB) players. (http://www.bloomberg.com/news/articles/2014-09-09/baseball-caught-looking-as-fouls-injure-1750-fans-a-year). Unfortunately, foul balls routinely result in severe injury to fans. For example, in 2014, Stephanie Taubin was struck in the face while attending a game at Fenway Park. She suffered facial fractures and neurological damage. (https://www.bostonglobe.com/metro/2015/08/27/brookline-woman-suing-john-henry-after-foul-ball-injury-fenway-park/fBmQGQZKh6ntVD55JrljvL/story.html). This year, Tonya Carpenter was hit in the face by the shard of a shattered bat, causing what police initially described as "life-threatening injuries." (http://www.dailymail.co.uk/news/article-3122448/Baseball-fan-seriously-hurt-hit-face-shards-shattered-bat-Fenway-Park-leaves-hospital-week-treatment.html). Further, a foul ball also struck Stephanie Wapenski in the face, requiring at least 30 stitches. When asked for her recollections of the incident, Wapenski stated that she recalled seeing the ball, but had no time to react. (http://abcnews.go.com/US/quiet-woman-struck-baseball-fenway/story?id=32408853).

Many of the fans struck by bats and balls in the course of a game end up paying large medical bills for their injuries, but very few sue the teams and stadiums for damages. The "Baseball Rule," as it has become known, is responsible for making fans forgo litigation in these situations; as when Monte Hoskey decided not to sue the Kansas City Royals after his four-year old daughter suffered a skull fracture from a foul ball. The Baseball Rule releases stadium owners from liability for injuries caused by balls or bats flying into the stands, so long as screened seating is available for a reasonable number of spectators. It relieves stadium owners of almost all liability for foul ball and broken bat-related injuries. Moreover, the Baseball Rule has been an accepted defense by most courts. (https://www.bostonglobe.com/metro/2015/06/07/woman-injured-fenway-friday-remains-serious-condition/vtiDNIz51ruBsxTpd0BJwM/story.html).

Given the severity of the injuries sustained by fans, the inevitable question arises: Should the Baseball Rule continue to be allowed to protect ballpark owners from liability, or should MLB step in and mandate that ballparks implement further safety precautions? Players are taking notice of the injuries, and have requested additional protective netting when negotiating the last two collective bargaining agreements. (http://hardballtalk.nbcsports.com/2015/06/07/report-players-requested-more-protective-netting-but-were-denied-by-owners/). After a fan was struck with a foul ball and carted off the field at a Detroit Tigers' game, ESPN.com quoted Detroit Tigers' pitcher Justin Verlander as saying: "It seems like something happens once a game, where a ball just misses a fan and, inevitably, it's always small kids or women, you know. It's just something that needs to be looked at, and hopefully it doesn't get to the point where something really serious happens before there's an adjustment made." (http://espn.go.com/mlb/story/_/id/13486481/fan-hit-foul-ball-detroit-tigers-home-game-texas-rangers).

Attorneys familiar with the Baseball Rule and the role it plays in lawsuits over the years think its time for a change. Martin Healy, chief legal counsel for the Massachusetts Bar Association said: "the Baseball Rule is ripe for change . . . it has to be tossed out. " (http://sportslawinsider.com/baseball-and-broken-bats-woman-injured-at-fenway-park-may-have-limited-recovery-rights/). Steven Adelman, a venue safety attorney, described the Baseball Rule as "harsh and old fashioned." Id. These comments from Healy and Adelman could signify a changing of the tide for the Baseball Rule. Id.

Perhaps these cries for change have not fallen upon deaf ears. While the Baseball Rule is widely accepted and has provided protection for most stadium owners, a few fans have attained small victories against the odds. In Rountree v. Boise Baseball, LLC, the plaintiff, who was seated in a screened in area, got up to talk to another fan in a non-screened area and lost his eye after being hit in the face by a foul ball. (154 Idaho 167, 170-73, 296 P.3d 373, 376-79 (2013)). The Idaho Supreme Court stated that while it had the authority to adopt the Baseball Rule, the court felt it more prudent for the adoption of such a rule to be left to the legislature. Id. A jury will decide the stadium owner's liability for Rountree's injuries in an upcoming trial.

Similarly, the Georgia Court of Appeals declined to adopt the Baseball Rule where a six-year old girl suffered a skull fracture and brain injuries as a result of being hit with a foul ball. (Atlanta Nat. League Baseball Club, Inc. v. F.F., 328 Ga. App. 217, 217-18, 761 S.E.2d 613, 614 (2014)).

With both fans and players speaking out about the issue, MLB commissioner Rob Manfred has said that he and the owners have examined the relevant information and are discussing the possibility of additional protective netting. (http://m.mlb.com/news/article/145776688/rob-manfred-discusses-ballpark-safety-netting). Unfortunately, this promise of action may have come too late. A class action lawsuit has been filed against the MLB and Commissioner Manfred for their failure to implement measures to better protect fans. The class action suit, which seeks only injunctive relief, alleges that anyone who is not in screened seating is in the "Zone of Danger." Those individuals within the Zone of Danger have sufficient standing to join the lawsuit. The lead plaintiff in the case wishes to force MLB to install netting from foul pole to foul pole in all major and minor league parks. (http://hardballtalk.nbcsports.com/2015/07/13/a-class-action-law-suit-was-filed-against-mlb-today-seeking-the-installation-of-more-netting/).

While the class-action suit's Zone of Danger concept may be far reaching, the suggested remedy could be the one sought by all parties; as by adding netting from foul pole to foul pole, owners will face even less liability. As a result, the court system will be able to prevent horrible injuries to and frivolous negligence claims by fans of America's pastime.

October 28, 2015

90 Miles Too Many



By Nicolas Berg

Some of the best players in Major League Baseball (MLB) call Cuba their home, including the reigning American League's Most Valuable Player, Jose Abreu. However, for these Cuban stars to be able to play in the MLB, they have to do much more than simply travel the 90 miles to the United States. Due to decades of political tension between the two nations, it is nearly impossible for a Cuban player to become a Major League player. The current system is nearly impassable and, often times, extremely dangerous. However, with relations between the two nations improving, many hope that this process will become easier.

Typically, for a Cuban player to become eligible for MLB, he must endure a lengthy, complicated and dangerous process. Initially, the player must defect from Cuba and establish residency in a different nation. Next, he must apply to the Treasury Office of Foreign Asset Control (OFAC) for a license to move to the United States. This process usually takes at least a year. If he is lucky enough to obtain a license, he may move to the United States and apply for free agency with MLB. Once he is cleared as a free agent, every MLB franchise is free to bid for his services. At this point, luck begins to swing in the player's favor. During this bidding process, competition among clubs usually drives the prices for these young players through the roof. This was evidenced by the record high fee paid for Yoan Moncada just this past offseason. Although Moncada had to endure a long arduous process before being able to collect on that fee, he is still very lucky that he did not experience a life-threatening journey, as do many other Cuban players. (http://www.latinpost.com/articles/40918/20150305/mlb-immigration-news-cuban-players-seeking-major-league-baseball-career-no-longer-need-license-to-play-from-us-government.htm).

The most famous, and probably most dangerous of these stories, is that of Yasiel Puig. To hurdle the necessary barriers to play in MLB, Puig first took a treacherous boat ride to Mexico to establish residency. While in Mexico, he was taken hostage by a Mexican drug cartel, where he was routinely threatened with attempts on his life and physical well-being. He had to promise the cartel 20% of his future MLB contract to ensure his safe passage into the United States. Once in the U.S., he reached a deal with the Los Angeles Dodgers, becoming one of the game's best young talents. (http://www.huffingtonpost.com/tom-hayden/us-trafficking-in-cuban-p_b_5207377.html).

With the recent opening up of trade relations between the U.S. and Cuba, there is hope that this inefficient and dangerous process may soon be a thing of the past. With increased trade relations, there is the possibility that players will no longer need to defect. This could subject Cuban players to a foreign players draft, like those from the Dominican Republic and Puerto Rico, or, alternatively, the U.S. could adopt the same system that is used to acquire Japanese players. In that system, clubs pay the entity who owns the rights to the player, which would likely be the Cuban government, a fee to buy the right to negotiate a contract with the player. (http://www.nydailynews.com/sports/baseball/cuban-field-dreams-decision-opens-new-baseball-world-article-1.2049350). Either way, horror stories like Yasiel Puig's will likely be a distant memory.

When human lives are jeopardized as a result of the current legal regime while in pursuit of something as trivial as playing a sport, the system has failed. Hopefully, as these legal barriers between the United States and Cuba start to fall, MLB can use that momentum to reform its admission policies for admitting Cuban players.

October 29, 2015

The Unionization of College Sports?



By Michael DeBenedetto

In recent years, the debate surrounding student-athlete compensation has become a fixture in college sports. The most recent development in this discussion has been the attempted unionization of the Northwestern University football team. In August, the National Labor Relations Board (NLRB) refused to recognize the proposed unionization by choosing not to exercise its jurisdiction there. (http://espn.go.com/college-football/story/_/id/13455477/nlrb-says-northwestern-players-cannot-unionize). In reaching its decision, the NLRB noted that much of the nation's schools, especially in the Big 10, are state operated. For this reason, exercising its jurisdiction over a private institution, to decide its labor status, would be unfair to the rest of the conference. (http://www.si.com/college-football/2015/08/17/northwestern-football-players-union-nlrb-ruling-analysis). This ruling overturned the NLRB Regional Director's decision finding that Northwestern University players met the criteria of a union and could be considered employees based on (1) the expanded development of television contracts and (2) the day-to-day influence of coaches over each player's activities. (http://espn.go.com/college-football/story/_/id/13455477/nlrb-says-northwestern-players-cannot-unionize).

This ruling shed light on the labels of "student" and "employee." There is a strong argument that the athletes are students before anything else. They are not working for a business like a professional athlete, but rather studying at an institution of higher learning. To quote Clemson's head football coach Dabo Swinney: "To say these guys get nothing totally devalues an education. It just blows my mind people don't even want to quantify an education." (http://bleacherreport.com/articles/2020286-making-the-case-against-a-college-football-players-union). The compensation they receive for participation in an athletic program offered by the school is a free education; this includes tuition, books, and meals. (http://espn.go.com/college-football/story/_/id/13455477/nlrb-says-northwestern-players-cannot-unionize). The school, on its own merits and principles, along with its respective conference, negotiates with various outlets to gain its students and school exposure on the national stage. Compensation is then awarded to the school, which, in turn, uses it to fund its institution and the various programs it sponsors, including football scholarships.

If a student-athlete is found to be an "employee," the school, through collective bargaining, would have to obey minimum wage laws and deal with larger issues such as work week hours, overtime, and worker's compensation should injuries occur. These facets, among others, would likely undermine the players' role as student-athletes and challenge the amateur label under which they function.
(http://www.si.com/college-football/2015/08/17/northwestern-football-players-union-nlrb-ruling-analysis). Furthermore, other sports may be impacted and programs that do not generate the same level of profit may be forced to be cut because of the larger allocation provided to the more popular programs. (http://www.chicagotribune.com/sports/college/ct-paying-college-athletes-20150822-story.html).

With this ruling regarding Northwestern University, a private institution, the focus now shifts to public universities and their programs. As recognized in the decision, public universities answer to their states' rules on unionization rather than to the NLRB, which concerns itself with private employers. Thus, there is potential for further litigation concerning the state arena. However such litigation would create unrest. This is because some states bar unionization of college athletes through their "right to work standards" and will not recognize college-athletes as employees, while other states may be more friendly to unionizing. This could create problems within a conference should some schools prohibit unionization, while others do not. (http://www.si.com/college-football/2015/08/17/northwestern-football-players-union-nlrb-ruling-analysis).

Overall, the most recent major battle in the college-athlete struggle to unionize has gone in favor of the universities. The NLRB's refusal to grant jurisdiction over Northwestern University's claim will have repercussions in the struggle to define the status of college-athletes. While the issue is far from resolved, the current climate seemingly favors the universities. This, arguably, could be for the betterment of college sports.


December 8, 2015

Russia Is Developing An Anti-Doping Program

By Sergey Yurlov

Russia is developing its anti-doping program as a result of a ban imposed by the International Association of Athletics Federations on the Russian Athletics Federation.

On November 23rd, Draft Law No. 936021-6 "On the amendment to the Criminal Code of the Russian Federation" (the Bill), was introduced into the State Duma (http://asozd2c.duma.gov.ru/addwork/scans.nsf/ID/6CD0A0EDCECA6CBA43257F0600527CF3/$FILE/936021-6.PDF?OpenElement). The Bill imposes criminal liability for the following actions:

• Inducing the commission of anti-doping rules violations: Punishable by a fine of 500,000 Rubles ($7,500), or the amount of wages or income of a convicted person for a period to six months with or without the prohibition to hold certain offices or carry on certain activities for a term up to three years; and

• fraud of an athlete consisting in the transfer of prohibited substances or in the application of prohibited methods under the guise of permitted medicines or methods: Punishable by a fine in the amount to 2 million Rubles ($29,555.28), or in the amount of wages or income of a convicted person for a period up to three years, or imprisonment for a period of up to three years with or without the prohibition to hold certain offices or carry certain activities for a term up to three years.

According to the Bill, the inducers are coaches, doctors and other persons responsible for the training procedure of a particular athlete. To be sentenced by a court, those subjects should commit the above mentioned actions before, during or after a sporting competition.

Thus, the Bill imposes criminal liability of support personnel, but not athletes. In accordance with its Explanatory Note (Note), the Bill is aimed at combating doping, especially with people who induce athletes to take prohibited substances or/and use prohibited methods.

According to the Note, inducing constitutes intentional actions (persuasion, offers, counseling or fraud), even just once, intended to create a desire to use prohibited substances or methods. On its face, it is a good idea to criminalize inducing the commission of anti-doping rules violations. However, it appears that the Bill has the following disadvantages:

1) It provides for criminal liability of sports personnel only. In order to clean up modern sports, we should take certain measures aimed at educating and guiding athletes in doping issues. For example, we should organize meetings to discuss how to avoid taking prohibited substances when choosing sport nutrition.

2) It imposes criminal liability of support personnel. We should keep in mind that some athletes take prohibited substances or/and use prohibited methods without notifying their coaches, doctors and other officials. In such cases, those athletes are personally liable for anti-doping rules violations. Unfortunately, the Bill is silent about this.

3) It is impossible to eradicate doping only by putting into force new laws. Recent doping and corruption scandals have evidenced that there is a deep problem with sports governance on both national and international levels. Therefore, the problem should be resolved by taking both organizational and legal measures.

As of today, it is not clear when the Bill will be enacted. In the meantime, it appears that the Russian government will pushing the Parliament to enact the Bill as soon as possible.

April 17, 2017

The National Hockey League Pulls Its Players from the 2018 PyeongChang Winter Olympics

By Tyler A. Sims, Associate
Littler Mendelson, P.C.
One Newark Center
1085 Raymond Blvd., 8th Floor
Newark, NJ 07102
Direct: 973.848.4747
Email: tsims@littler.com
*The views expressed herein are those solely of the author.

The National Hockey League (NHL) announced on April 3rd that its players will not play in the 2018 Pyeongchang Winter Olympic Games. This ended a five-year run of NHL participation in the Olympics. (https://www.nhl.com/news/nhl-will-not-participate-in-2018-winter-olympics/c-288385598)

It is no secret that the overwhelming majority of NHL owners have been strongly opposed to interrupting the NHL season again to allow its players to represent their respective countries in the Olympics. Surprisingly, a majority of fans in the USA and Canada disapprove of interrupting the NHL season to allow NHL players to play in the Olympics (73% and 53%, respectively). The bottom line is that the NHL owners do not see the benefit to hockey or the NHL. (https://www.nhl.com/news/history-shows-olympics-dont-help-nhl/c-288389004)

While the NHL Players' Association (NHLPA) harshly criticized the NHL for this decision, the NHLPA rejected the NHL's offer to continue Olympic participation in exchange for an extension of the current Collective Bargaining Agreement (CBA) for three years to 2025, plus the elimination of the opt-out clause in the fall of 2019 (for more on the NHLPA's reason for declining the NHL's offer in December of 2016, see http://www.nhlpa.com/news/nhlpa-rejects-nhls-offer-of-olympics-for-cba-extension, and see its statement here: http://www.nhlpa.com/news/nhlpa-statement-on-nhls-2018-olympic-winter-games-decision.).

NHL players are overwhelmingly disappointed in the NHL's decision. As a result, some forecast future labor strife. One high-profile NHL player, Alex Ovechkin (Russia), stands behind his commitment to participate in the 2018 Winter Olympics, regardless of the NHL's position. NHL coaches and executives are also voicing their disappointment. (http://www.sbnation.com/nhl/2017/4/4/15176386/players-reactions-nhl-skip-2018-winter-olympics-south-korea-nhlpa-gary-bettman-lundqvist-ioc)

Many interesting questions are raised if NHL players leave their teams mid-season to join their respective countries in the Olympics:

-What are the consequences if the players leave their NHL teams to compete for their countries in the Olympics?
Can they be suspended?

-Can NHL teams void their contracts?

-Will the NHL teams take them back?

In another blog post I will look at the options that NHL owners and teams have in addressing these questions under the CBA.

This author believes that the NHLPA did not protect the players' interest in the CBA when addressing Olympic participation. Therefore, the NHL was well within its right to cancel its Olympic participation. However, as a former player and fan of the game, I enjoy watching the best players in the world compete in the Olympics. This issue should be revisited during the next round of CBA negotiations.

I first wrote about this topic in a post entitled "Does the return of the World Cup of Hockey signal the end of NHL players competing in the Olympics?" posted on September 9, 2016. (http://community.njsba.com/entertainmentartsandsportslawsection/blogs/tyler-sims/2016/09/09/does-the-return-of-the-world-cup-of-hockey-signal-the-end-of-nhl-players-competing-in-the-olympics?ssopc=1)

July 10, 2017

New National Basketball Association Collective Bargaining Agreement in Effect

By Michael Kusi

The National Basketball Association (NBA) Collective Bargaining Agreement (CBA) terms went into effect on July 1st. This was after intense negotiations between the NBA and the National Basketball Players Association (NBPA). The CBA is a seven year deal, but the players or the NBA can opt out a year before the end of the deal. Among the points of agreement in the new CBA, is one that concerns when a team and player agree on a contract buyout, to limit the compensation in conjunction with the basketball team submitting a request that this player be waived. In such a case, the team will not be able to consequently sign the player to a new contract with new teams, or get the player off waiver, before the end of one year after the contract is terminated or the July 1st after the final season of the player's contract, whichever is later.

Another provision of the CBA is that the NBA provides worker's compensation to both NBA and Two-Way Players, the latter of whom are players who have played both in the NBA and in the NBA G-League.

The CBA also retained the one and done provision that allows college basketball players to go to the NBA after a year of playing college basketball. This was a compromise between the NBA's position, which wanted a zero or two position, where a high school basketball player could come into the NBA after high school or would have to play two years in college, and the NBPA's position, which wanted the one and done rule entirely eradicated.

Additionally, in the CBA a contract might be voided if, among other reasons: A player cannot pass his physical examination, the contract is not approved by the NBA, the player is disqualified from playing because he failed a drug test, or makes an assault on NBA officials, players or people in attendance at the game. The NBA has said that it had the power to void all player contracts during negotiations with the previous CBA, but had never exercised that power.

July 12, 2017

California Travel Ban Could Affect College Football

By Michael Kusi

California created a travel ban on January 1, 2017 against eight states: Texas, Kansas, Mississippi, North Carolina, Tennessee, Alabama, Kentucky, and South Dakota, for what it claims are discriminatory laws that violate LGBT rights. For example, a Texas law grants an exemption for adoption agencies to deny services or refuse to allow LGBT couples to adopt. Any football contracts signed before January 1, 2017 for college football games are not affected by the California ban.

The travel ban prevents state-funded travel for employees from traveling these eight states. It does not, however, impact travel to these states by private citizens.

This travel ban could affect much college football, because California coaches and staff would not be able to recruit prospective high school football players from the eight banned states using state-funded travel. However, coaches and staff would be able to travel using funds from non-government sources. Public colleges in California, such as UCLA, would not be able to play football in any of the eight states, either for the regular season or the post-season, whereas football games between the USC and Texas football teams would still be played, because private colleges are not affected by this ban.

UCLA officials state that they will not schedule games in Texas in the upcoming football season, because of the California travel ban. Whether UCLA, or other California public colleges would be able to go to bowl games in the postseason, remains to be seen.

August 10, 2017

OJ Simpson Granted Parole By The Nevada Board of Parole

By Michael Kusi

OJ Simpson was granted parole by the Nevada Board of Parole, after serving 9 of a 33 year sentence on July 20th. During his hearing, Simpson said that he did not have bad intentions, but was only trying to reclaim his possessions. He is scheduled for release in October 2017.

Simpson was convicted in 2008 by the Nevada District Court of 12 criminal counts, including conspiracy to commit a crime, conspiracy to commit kidnapping, conspiracy to commit robbery, and burglary with a deadly weapon. He filed a motion for retrial which was heard in May 2013. In this motion, Simpson stated that he had ineffective assistance of counsel that resulted in his conviction. This motion was denied. In July 2013, Simpson was granted parole on the charges of armed robbery, kidnapping, and burglary, by the Nevada Board of Parole. However, the Board did not parole him of all charges, and said that there had to be a separate parole hearing in 2017. The same people who reviewed his parole in 2013 also reviewed it in 2017. These board members voted unanimously to grant parole, and Simpson apologized for his part in the 2007 armed robbery.

OJ Simpson is best known as a college and professional football player, and as an actor. Simpson won the Heisman Trophy in 1968, which is awarded to the best college football player. He was also the first running back to run for more than 2,000 yards in a season, which he did in 1973, and the only running back to run for that yardage in 14 games. Simpson also appeared in movies like the Naked Gun comedies, and was an analyst on Monday Night Football. He was acquitted in 1995 of the murders of his ex-wife Nicole Simpson and Ronald Goldman. However, Simpson was found liable in a civil case and had to pay $33.5 million to his children, as well as the Simpson's and Goldman's families.

September 14, 2017

Charles Oakley Files Lawsuit Against President James Dolan of the New York Knicks and Madison Square Garden Company

By Michael Kusi

Former NBA power forward Charles Oakley, who played for the New York Knicks from 1988-1998, filed a complaint in the Southern District of New York against James Dolan and Madison Square Garden (MSG). Oakley demanded a jury trial, and alleged that defendant James Dolan had always displayed animus toward Oakley from the beginning of Dolan's tenure as president of the Knicks.

Oakley claims that on February 8, 2017, he was watching a Knicks game, when Madison Square Garden security approached him and asked him to leave. Oakley began to argue and tried to go back to his seat. A scuffle ensued, and Oakley was escorted out of the MSG arena.

Oakley's complaint alleges 10 different causes of action, including defamation per se (for the Dolan's accusations against Oakley), libel (for statements made by MSG Networks on Twitter), slander (for accusing Oakley of assault and alcoholism), assault (for removing Oakley from the MSG arena), battery (for harmful and offensive contact sustained while at MSG), false imprisonment (for unlawful detention after the security asked him to leave), abuse of process (for causing Oakley to receive criminal charges), denial of a public accommodation under the ADA, for removing him under the pretense of alcoholism, and denial of a public accommodation in violation of New York State Human Rights Law.

In the Prayer for Relief, Oakley asks for a declaratory judgment and an injunction against the defendants. However, the complaint requests that the amount of damages would be awarded at trial.

As part of Oakley's plea deal with New York prosecutors in August stemming from this incident, he was barred from coming to MSG for one year under a trespass order. He also had an adjournment in contemplation in dismissal, which means that the charges against Oakley would be dismissed in six months if there are no additional criminal charges against him.


September 25, 2017

Aaron Hernandez's Estate Sues the National Football League for Lack of Parental Consortium

By Michael Kusi

Aaron Hernandez was a tight end who played for the New England Patriots of the National Football League (NFL) from 2010 to 2013. He was arrested on June 26, 2013 for the murder of Odin Lloyd, who was a semi-professional football player. The New England Patriots released Hernandez from the team after this arrest.

Hernandez was convicted on April 15, 2015 of first-degree murder for Lloyd's death, and was sentenced to life without the possibility of parole. He was also charged in the murders of Safiro Furtado and Daniel De'abreu. On April 14, 2017, Hernandez was found not guilty of those murders. On April 19, Hernandez was found dead in his prison cell. On May 9, Massachusetts Superior Court Judge Susan Garsh vacated Hernandez's murder conviction on the grounds of abatement ab initio, which is a legal doctrine that mandates dismissal of a conviction when the defendant has not finished his appeal when he dies.

On September 21, Hernandez's estate sued the NFL and the New England Patriots for Lack of Parental Consortium on behalf of his daughter, Avielle Hernandez. In the Complaint, filed with the United States District Court for State of Massachusetts, the plaintiff requests a jury demand and states that Aaron Hernandez had severe Chronic Traumatic Encephalopathy (CTE) as a result of playing in the NFL. The CTE was diagnosed by the School of Medicine at Boston University.

The Complaint states that there is a correlation between Aaron Hernandez's CTE and his actions leading up to his death. It also alleges that the NFL did not take sufficient remedial measures to combat the potential for CTE in its athletes. The Complaint asserts that the NFL was negligent in managing existing CTE cases, and that it knew the dangers of football, but misled the public and its athletes.

The plaintiff alleges that because of Aaron Hernandez's death, his daughter suffers from a loss of parental consortium, which is when a child suffers from a lack of parental relationship and injury occurs as a result. The Complaint states that the NFL should have stopped Aaron Hernandez from playing football due to its dangerous nature, and that because of his playing football, he was subjected to head trauma, which gave him CTE. The Complaint also depicts the link between the CTE and Aaron Hernandez's erratic behavior leading up to his death.

The Complaint requests a judgment against the defendants, compensatory and punitive damages, and attorney's fees and costs.

Continue reading "Aaron Hernandez's Estate Sues the National Football League for Lack of Parental Consortium" »

February 26, 2018

New Decisions Affecting the Participation of the Russian Athletes in the Pyeongchang 2018 Winter Olympic Games: Are the Strongest Sporting Sanctions Still To Come?

By Sergey Yurlov

Introduction

The recent decisions of the International Olympic Committee ("IOC") and World Anti-Doping Agency ("WADA"), with regard to the participation of the Russian national team in the Pyeongchang 2018 Winter Olympic Games triggered a new flurry of discussions as to the legality of sporting sanctions being imposed by sporting organizations. On November 16, 2017, WADA decided not to reinstate the Russian national anti-doping agency ("RUSADA") until the government publicly accepted the conclusions of the McLaren Investigation, and provided access for appropriate entities to the stored samples and electronic data in the Moscow Laboratory. On December 5, 2017, the IOC suspended the Russian Olympic Committee.

WADA Decision

According to WADA, to be reinstated and compliant with the World Anti-Doping Code ("WADC"), RUSADA must accept the main finding of the McLaren Investigation that a state-backed doping system covered up positive doping samples. More importantly, RUSADA must provide access to the samples stored and electronic database of the Moscow laboratory.

From a legal perspective, the McLaren Investigation's core conclusion cannot be seriously considered without being proven by reliable evidence.

The Investigation was based on unproven allegations, assumptions, hearsay evidence and passing references to the Russian government officials. The key whistleblower, who already fled the country, was Grigory Rodchenkov. Other individuals are supporting his claim of systematic doping, including filmmaker Bryan Fogel, who suggested in his documentary "Icarus" that the Russian doping system harked back to Soviet times. However, Fogel does not introduce any reliable evidence.

The IP Evidence Disclosure Package (the "Disclosure Package"), publicly available at https://www.ipevidencedisclosurepackage.net, is no more than a set of unrelated documents the bulk of which are e-mails. From a legal perspective, this bundle of data appears to be inflated, and would not succeed in an independent court of law. Having reviewed those "documents" and not having any other data (for example, adverse analytical findings, doping samples, and forms), to this author, it is impossible to associate them with any particular athlete, and/or review any of the athlete's doping records. More importantly, no one can determine whether the emails are authentic, and from which source the McLaren team acquired them.

Upon reviewing the Disclosure Package, one may conclude that Russian anti-doping officials were corresponding between each other with regard to doping control issues. However, it does not prove that any athlete committed an anti-doping rules violation by taking a prohibited substance.

One can argue that admissible evidence is not always necessary in doping cases. However, the WADC stipulates that "the Code has been drafted giving consideration to the principles of proportionality and human rights". (https://www.wada-ama.org/sites/default/files/resources/files/wada-2015-world-anti-doping-code.pdf.) More importantly, Article 8 of the WADC presupposes that all hearings should be fair. If WADA takes into account human rights, then it should conduct its proceedings and sanction athletes fairly based on reliable evidence. Otherwise such a procedure cannot be deemed as legally valid and fair with regard to athletes.

It appears that the McLaren Investigation understands the frailty of evidence collected, which is why many documents (for example, laboratory data, documents relating to collected samples, doping control forms, statements, correspondence certified by a notary etc.) prepared by McLaren have not been disclosed. However, the IOC and WADA are satisfied with the results of the McLaren Investigation. It is clear that if one party to a dispute adduces certain evidence, the other should, at the latest, have the right to review this evidence and provide its own. Why, then, do they not disclose all documents relating to doping records of the Russian athletes?

Given the existing state of things, it appears that the McLaren Investigation's conclusions will stand in the Court of Arbitration for Sport ("CAS") if any Russian athlete files an appeal against the WADA and/or IOC decision. However, this evidence would be inadmissible if the case was considered by an independent and impartial state court of law, where the standards of proof are higher than those being employed by private sports tribunals.

Article 3.2 of the WADC prescribes that "facts related to anti-doping rule violations may be established by any reliable means, including admissions".

Pursuant to the comment to Article 3.2 of the WADC "for example, an Anti-Doping Organization may establish an anti-doping rule violation under Article 2.2 based on the Athlete's admissions, the credible testimony of third Persons, reliable documentary evidence, reliable analytical data from either an A or B Sample as provided in the Comments to Article 2.2, or conclusions drawn from the profile of a series of the Athlete's blood or urine Samples, such as data from the Athlete Biological Passport". (emphasis added)

Here, the issue is contrary to how evidence is handled in court, where evidence is analyzed and estimated collectively. For example, why does the McLaren Investigation do not refer to reliable analytical data from either A or B samples, athletes' blood, and/or urine samples, or to their biological passports?

Only reliable evidence could confirm the use of prohibited substances and/or methods by athletes (i.e. adverse analytical findings, any documents related to review those findings in order to determine whether a particular athlete had a therapeutic use exemption, any notifications and/or forms). However, in this situation, all charges are based on allegations and assumptions. The circumstantial evidence should be confirmed by reliable evidence.

IOC Decision

The IOC decision is based on the IOC's Disciplinary Commission's Report ("Report") from December 2, 2017. Before reviewing the IOC Decision, we will briefly comment on the Report.

The Report is a document consisting of 30 pages that describe systemic manipulation of the anti-doping rules and system in Russia. In reviewing the Report, the following should be noted: Paragraph 1.1 contains the following statement: "it was decided to reverse the rule of the presumption of innocence for the Russian athletes." Can the IOC, a non-governmental organization, do this? Does this actually mean that athletes are treated less favorably than hardcore criminals who enjoy legal protection and are innocent until proven guilty in a court of law?
Pursuant to Article 3.1 of the WADC, it is usually WADA that proves when an anti-doping rules violation occurred. Although the same Article prescribes that in some cases an athlete should rebut a presumption of guilt, the issue is whether such a provision is lawful and/or needs to be amended.

Since WADA binds itself with the basic principles of law (as proscribed by the WADC provisions), all WADA proceedings should be based on them. It appears illogical that criminals have more rights than athletes. In this author's opinion, an athlete may be considered guilty of doping when his or her guilt is established in due course and decided by a respective authorized legal body.

The WADC's provisions cannot contradict the basic principles of law, and should be in strict compliance with the provisions of well-known international treaties, declarations, and conventions containing explanations of human rights. Any investigation conducted in violation of those provisions is unlawful, and its findings should not be taken into account when taking the decision to sanction any athlete.

Paragraph 1.2 reads as follows: "the IOC DC reminds that is has no investigation power similar the one of the law enforcement agencies. Thus, it is dependent on the information available in the public domain, the elements published by the IP and the information shared voluntarily by the persons concerned." Having read the above text fragment, one could conclude that the Report is based exclusively on (i) publicly available information; (ii) certain information and documents provided by the McLaren Investigation; and (iii) information obtained from certain whistleblowers and former sports officials. It must be noted that there is no information as to whether such evidence was verified by independent experts and officials.

In Paragraphs 1.2 and 2.2.6, continues: "the IOC DC also interviewed orally/or in writing some of these main actors involved in order to better understand their respective involvement...after having conducted a number of witness interviews..."

It does not contain a named list of those "main actors". More importantly, the Report is unclear as to whether anyone was keeping records when interviewing those actors. Even if it was the case, such records, or at least their transcriptions, are not attached to the Report.

Given the above it is impossible to define whether information obtained from those "main actors" is true or false. In any case, such information cannot be presented as evidence in proceedings based on the rule of law and conducted by an impartial and independent body, as the sources of this information are not defined.

The Report refers to many documents as "written affidavit" (Paragraph 2.2.9), "report" (Paragraph 2.3.1), "all the independent and impartial evidence" (Paragraph 3.1). Notwithstanding that the Report refers to the affidavit provided by Rodchenkov, it does not contain any list of documents.

Now to take a closer look at the IOC decision, which is headlined as follows: "IOC suspends Russian NOC and creates a path for clean individual athletes to compete in Pyeongchang 2018 under the Olympic flag." The first sentence reads as follows: "the conclusions of the Schmid Report, on both factual and legal aspects, confirmed the systemic manipulation of the anti-doping rules and system in Russia". However, it must be noted that the Schmid Report's findings were based on the McLaren Investigation, which, at the latest, is unpersuasive. In addition, the Schmid commission failed to find "any documented, independent and impartial evidence confirming the support or the knowledge of this system by the highest State authority".

Thus, the IOC believes in the existence of so-called state-backed doping system has been proven by reliable evidence. As a result, the IOC suspended the Russian NOC with immediate effect. According to the IOC decision, the Olympic door may be theoretically opened for those Russian athletes who meet the following requirements:

 an athlete should be eligible pursuant to rules of a particular sport;
 an athlete should have not been committed any anti-doping rules violations;
 an athlete should have been tested and should meet all testing requirements as defined by respective sporting organizations.

This decision clearly points out that the IOC reserves the right to take any measures aimed at sanctioning athletes who participated in the so-called state backed doping system. Although Russian athletes have the right to file entry forms for the IOC's consideration, the IOC decision precisely stipulates that a final list of the athletes having the right to participate in the Olympic Games will be determined exclusively by an IOC panel chaired by Valerie Fourneyron.

Having reviewed the requirements prescribed by the IOC decision, many disputes may arise with regard to the enforceability of the requirement relating to "clean" athletes' doping records, especially because this requirement was declared invalid last year by CAS violating athletes' right of natural justice. (Any athlete who has been convicted of a prior ADRV is not allowed by the Russian Olympic Committee to be entered for the Rio Games. It is therefore difficult to reconcile this paragraph with the stated aim to provide the athletes with an opportunity to rebut the presumption of guilt and to recognize the right to natural justice. As a consequence, the CAS Panel found that Paragraph 3 of the IOC Decision is unenforceable, as it does not respect the athletes' right of natural justice. (The press release is available at: http://www.tas-cas.org/fileadmin/user_upload/Media_Release__English__Karabelshikova_final.pdf.) The existence of the requirement means that athletes are punished twice for one violation.

The third requirement is too broad and unclear. It appears that before applying it, it should be clarified.

It must also be noted that any requirements imposed by the IOC cannot be stronger than those being applied to other athletes. Otherwise, this would contradict the principle of equal treatment.

The IOC already announced that every eligible Russian athlete must undergo anti-doping tests with higher benchmarks than for athletes from other countries in the period leading up to the Pyeongchang 2018 Winter Olympics. (http://www.sportsintegrityinitiative.com/wada-warned-ifs-insufficiency-mclaren-report-evidence/.) This means that higher standards are being applied, even to those innocent athletes who have never been found guilty of doping.

Conclusion

The existing "evidence" relating to the use of prohibited substances and/or methods by the Russian athletes would be deemed insufficient in a court of law. However, given the existence of decreased standards of proof, the IOC, WADA, and most international sporting federations are satisfied with such evidence, and already sanction athletes.

The existing situation highlights the following issues: To what extent are sports governing bodies entitled to define the procedure for resolving sport related disputes? Is it lawful to sanction athletes based on weak and actually unproven evidence? Is it possible not to apply the basic principles of law?

Finally, fortunately for some athletes, there are a few, federations that do look further into doping matters, and therefore disagree with the IOC's decision regarding sanctioning athletes. Thus, on January 2, 2018, the Disciplinary Commission of the International Luge Federation refused to sanction Tatyana Ivanova and Albert Demcehnko. (http://www.fil-luge.org/en/news/disciplinary-commission-of-the-fil-to-proceedings-against-ivanova-and-demchenko.)

Hopefully, there will be a light at the end of the tunnel soon.

March 13, 2018

Constructing a Sports Gambling System for New York

By Bennett Liebman
Government Lawyer in Residence
Government Law Center, Albany Law School
Edited by Elissa D. Hecker

It is now conventional wisdom that the U.S. Supreme Court will soon find the 1992 Professional and Amateur Sports Protection Act ("PASPA") unconstitutional. PASPA is the federal law that requires states (except for those that had sports gambling before 1992) to make sports gambling illegal. If PASPA is unconstitutional, then the individual states would be free to determine whether to legalize sports gambling.

However, it's not that easy in New York State. Key and complex decisions need to be made by the legislature and the electorate before New York can establish a comprehensive system to legalize sports gambling.

The initial hurdle is New York State's constitution, which bans all of forms of gambling with certain specified exceptions. In terms of sports, the key exceptions are pari-mutuel horse racing and casino gambling. Since casino gambling can be viewed in the U.S. to encompass sports gambling, in 2013, as a part of the casino authorization legislation, New York State authorized the four upstate casinos to have sports gambling if PASPA were to be amended or found unconstitutional. Thus, if the Supreme Court finds PASPA unconstitutional, once the Gaming Commission establishes regulations, the four upstate casinos could begin sports gambling. For all the other entities in the state, sports gambling would need a constitutional change. If both the Senate and Assembly pass a sports gambling authorization in 2018, a newly elected legislature could then pass a second authorization in 2019. The amendment would then be submitted to the electorate in November of 2019. Full sports gambling could conceivably begin in 2020.

What, then, would occur? Who will be able to offer sports gambling, besides the casinos? Could the racinos, combined tracks and casinos, the individual racing associations, Off Track Betting ("OTB"), the state lottery, or the fantasy sports groups? The OTBs have been requesting sports gambling for over 40 years, and the fantasy sports companies would be harmed significantly from direct competition from sports gambling. Using the lottery system would bring a virtual army of retailers to sell sports gambling products. Perhaps individual bars, taverns, and even airport terminal managers would want to be part of any sports gambling network.

How would the federal and state governments tax revenue resulting from sports gambling? The federal government already taxes it. Some of the sports leagues are suggesting that they receive funds to preserve the integrity of their sports. What would the state tax rate be? Would state tax revenue, like the lottery, be funneled to education? If the state's tax is too high, would this open the way for tribal sports gambling to offer better odds and services to bettors?

How would revenues to OTBs make their way to local governments? Further, how would revenues from Video Lottery Terminals operated by racetracks be distributed to horsemen and to the state's horse breeders?

Would there only be in-person betting from individual tellers, or could there be slot-like machines that offer sports bets? Would telephone wagers and computerized bets be authorized, and would exchange wagering, where individual bettors offer their own lines to other bettors, be allowed? The state could authorize only one technology operator, or it could license several technology companies to oversee sports gambling.

What sports would be authorized as wagering products? Will games played by in-state colleges be the subject of bets? How about betting on minor league professional sports or on non-U.S. sports leagues? Will there be in-game wagering? Must one bet on individual games, or could one bet on the potential Super Bowl or World Series champion?

There is also the issue of proposition wagering, which involves betting on events not directly connected with the outcome of the event. Who wins the coin toss? How many completions will Tom Brady have? What's the over and under for the length of the national anthem? A decision will be needed regarding what proposition bets will be allowed.

On its face, sports gambling looks like the easiest game to operate. It should be a mortal lock for any operator to make money. However, legalizing sports gambling is actually a labyrinth. Given its past performances, it is even money that the state government will get tangled up in this maze. Mistakes in the maze have consequences. It can be a cruel game, with winners and losers. Authorizing sports betting is far closer to Jumanji than to Candyland.


May 14, 2018

U.S. Supreme Court Rules That the Professional and Amateur Sports Protection Act is Unconstitutional

By Barry Skidelsky

In Murphy v. NCAA, a hot-off-the-presses decision of the United States Supreme Court dated May 14, 2018 (https://www.supremecourt.gov/opinions/17pdf/16-476_dbfi.pdf), SCOTUS declared that a federal statutory ban relating to sports gambling known as the Professional and Amateur Sports Protection Act (PASPA) is unconstitutional.

Effectively ending prohibitions on a $100 billion industry, this decision reverses that of the Third Circuit below, which previously upheld the restrictions on wagering outside of Nevada. Several states and others have been eagerly awaiting this decision, which in part is also relevant to the limits of the federal government over states' regulatory powers.

The decision will be an extremely relevant topic of discussion among our sports law panelists during EASL's Spring Meeting afternoon program on May 15th. The cost for EASL members to attend is only $50, and includes 5 hours of CLE credit and a post-program networking reception.

I look forward to seeing you then. For more information and to register, visit www.nysba.org/easl.

Barry Skidelsky
Chair NYS Bar Association, Entertainment Arts and Sports Law section (EASL)
bskidelsky@mindspring.com

June 5, 2018

What Is the Status of New York Sports Gambling?

By Bennett Liebman
Edited by Elissa D. Hecker

I. Current New York State Constitutional Provisions involving Sports Gambling

In a Constitutional provision that dates from 1894, the New York State Constitution (the Constitution) specifically makes gambling illegal. No form of gambling "shall hereafter be authorized or allowed within this state." (New York State Constitution, Article 1, §9.1. Very few states have specific provisions in their constitutions that make all gambling illegal, except for certain exceptions. These states would include Delaware, (Del. Const. art II, § 17) Idaho, (Idaho Const. Art. III, § 20) New Jersey (N.J. Const., Art. IV, Sec. VII, Para. 2), and Wisconsin (Wis. Const. Art. IV, § 24.))

In the years since 1894, the Constitution has permitted certain exceptions to the general prohibition on gambling. These include pari-mutuel betting on horse racing, bingo, a state-operated lottery and games of chance. The exceptions for bingo and games of chance are only for the benefit of certain "bona fide religious, charitable or non-profit organizations", and the exception is intended to "prevent commercialized gambling," (New York State Constitution, Article 1, §9.2.)

Over the years, efforts in New York have been made to authorize sports gambling; basically, the use of parlay cards. In 1984, after Governor Mario Cuomo advocated for the lottery's use of parlay cards in the state budget, Attorney General Robert Abrams issued an advisory opinion finding that sports parlay card betting was not authorized as a lottery. (1984 N.Y. Op. Att'y Gen. 1.) The Attorney General stated: "We find that the Constitution, both through its specific bans on bookmaking and pool-selling and through its general ban on all forms of gambling not expressly authorized, forbids the kind of gambling involved in the proposed sports betting game."

In 1991, a proposed sports lottery came very close to being passed by the state legislature. The plan was thwarted when Senator Majority leader Ralph Marino, who had earlier agreed to the sports lottery, withdrew his support.

In 2013, the Constitution was amended to include an exception for "casino gambling at no more than seven facilities as authorized and prescribed by the legislature." The question has become whether casino gambling is sufficiently broad to encompass sports gambling. Certainly, in the state of Nevada, casino gambling facilities have long been able to offer sports wagering. The New York State legislature in the 2013 legislation, designed to implement the casino gambling amendment, contained a provision specifically providing an opportunity for the casinos to have sports wagering. (Chs. 174 and 175, L. 2013.)

II. Current New York Statutory Provision on Sports Gambling

Outside of Nevada and the grandfathering of limited sports wagering in several other states, 1992's Professional and Amateur Sports Protection Act (PASPA) banned sports gambling throughout the U.S. When the Supreme Court on May 14th decided in Murphy v. National Collegiate Athletic Association ruled that PASPA was unconstitutional (Murphy v. National Collegiate Athletic Association 138 S.Ct. 146 (2018).), §1367 of the Racing, Pari-Mutuel Wagering and Breeding Law (Racing Law) went into effect.

Section 1367 was the provision in the Upstate New York Gaming Economic Development Act of 2013 (UNYGEDA) that dealt specifically with the issue of sports gambling in New York State. The UNYGEDA was designed to be the implementing statute that would provide the regulatory framework for New York's constitutional approval of casino gambling.

Section 1367 was based on New Jersey's law signed by Governor Chris Christie in January of 2012 that authorized sports wagering in that state. (N.J.P.L.2011, c.231.) Unlike New Jersey, which directly legalized sports gambling and challenged PASPA, New York's law was only intended to provide an indirect challenge to PASPA. The New York law was designed to go into effect only at "such time as there has been a change in federal law authorizing such or upon a ruling of a court of competent jurisdiction that such activity is lawful." The sports gambling provision was basically an attempt to prevent New Jersey from establishing a monopoly on Mideast sports gambling. If PASPA were ever found unconstitutional or amended, New York, as well as New Jersey, would have legalized sports gambling.

Section 1367 allows sports gambling only in person at the state's four private upstate casinos. Bettors need to be age 21 or older. Betting is not allowed on collegiate sports played in New York State, and similarly not ever permitted on games - regardless of the location - in which New York colleges are playing.

The State Gaming Commission is given significant power not only to license sports wagering operators, but also to establish the rules under which sports wagering is to be operated. According to recent newspaper accounts, the State Gaming Commission is currently in the process of drafting these regulations. Ron Ochrym, its interim director, has stated that draft rules will be available for "review in the near term." (Jon Campbell. "Rules Being Crafted for Sports Betting in New York," Westchester Journal News, May 22, 2018.)

III. Legislative Developments after Murphy

The existing New York sports wagering provision in §1367 is obviously not beneficial to much of the gambling industry in New York State. It only benefits the current four private upstate casinos, which are located in Monticello, Schenectady, Tioga and Waterloo. None of these locations are particularly close to metropolitan New York. Thus, the in-person sports wagering business at these locations does not figure to be overwhelming.

As only these four casinos can offer sports gambling, the other parts of the gambling industry in New York are shut out; including the nine video lottery (VLT) facilities, the state's horse racing industry, including the racetracks, horsemen and breeders, the off-track betting (OTB) corporations, and the fantasy sports corporations. While not technically excluded, the major corporations outside New York that offer sports gambling in Nevada and in Europe obviously do not see a huge market for in-person wagering at four upstate casinos.

In New York, there is also a long tradition of trying to craft gambling legislation that tries to benefit all participants in the gambling industry. Everyone gets a carrot in the omnibus goulash that constitutes the world of New York State gambling legislation.

In order to increase the betting market and to make the other elements of the New York gambling industry full participants in sports gambling, Senator John Bonacic, who chairs the Senate Racing, Gaming and Wagering Committee, introduced legislation to expand the existing scope of sports wagering. His initial bill (Senate Bill No. 7900) was introduced in March of 2018 before the decision in Murphy. Minor amendments were made to the bill after Murphy. (Senate Bill No.7900 A.) The purpose of the bill, per Senator Bonacic, is "to update the existing provisions of law which allow the four upstate casino gaming resorts to conduct sports betting in the event of a change in the federal law which currently prohibits it." (New York State Senate Introducer's Memorandum in Support S7900A.) This bill is an attempt to bring all players into the big tent of sports wagering.

IV. Questions on the Bonacic Bill

The best way to analyze the bill is to respond to certain questions on its effect.

A. With whom can a sports wager be placed?
The four casinos control this process. Individuals can wager at the casinos, through affiliates with whom they contract through self-service wagering kiosks. Affiliates are the VLT operators, OTB branch offices and the New York Racing Association. In addition, each casino can offer mobile sports wagering platforms through no more than three independent entities. Mobile sports wagering means that a bet can be placed through a computer or a similar device anywhere in New York State.

This is certain to raise significant constitutional questions. What is the purpose of having a limited number of casino facilities (a maximum of seven is authorized in the Constitution.) if people can bet away from the facilities of the casino? Do the mobile betting platforms make the constitutional facility limitation meaningless? Surely, the casinos can take a roulette bet or a baccarat wager from a mobile platform just as easily as they can take sports wagers. Would anyone think that a roulette wager placed via a phone in Suffolk County into Tioga Downs would constitute a wager lawfully placed at Tioga Downs? Simply trying to claim in legislation that the situs of a bet is considered to be placed at the casino misses the reality that the bet is actually being made away from the casino. Would any court agree to this fiction?

B. Where can one fund or establish an account?
One can fund or establish an account at the casinos, the offices of the affiliates and on the Internet through mobile sports wagering platforms.

C. On what can be bet?
Bets can be placed on almost every sporting event, except for high school events. Unlike current law, one can bet on New York college sports teams and college events played inside New York. Bets can include straight bets, propositions, over-under bets, parlays, exchange wagers and in-game wagers. Bets cannot include horse racing wagers, which are only authorized via traditional pari-mutuel wagering. (This might prove harmful in the long run to horse racing, since it prevents fixed odds wagering and exchange wagering. It would likely prevent most future books on major races, proposition wagers, and in-race wagers. It is short-sighted for a sport that has been suffering from a long slide in popularity to shut itself off from future types of wagers.)

D. Who can wager?
Bettors must be age 21 or older. They must be physically in New York. The proposal has an extremely detailed list of individuals who are barred from wagering. The list of banned individuals includes people with access to non-public confidential information and amateur athletes where the wager is based on an event overseen by that athlete's governing body. (That would mean that a collegiate water polo athlete could not wager on a collegiate lacrosse game since both sports are governed by the NCAA. Similarly, how during a collegiate sport's off-season would one make a determination that the potential bettor is still classified as an athlete? Can a college field hockey player, when school is out of session in the summer, place a bet on the Bowl Championship Series in football?) It may be that this is a subject handled far better by regulation than by legislation.

E. Who will regulate sports wagering?
Sports wagering will be regulated by the State Gaming Commission, but the Gaming Commission is to designate the State Police to have primary responsibility for conducting investigations into abnormal wagering activity and the possibility of corruption in the sport.

F. What role will the sports leagues have in sports wagering?
There is considerable involvement with the sports leagues. The sports governing body is to receive an integrity fee of "up to one-quarter of one percent of the amount wagered on sports events, however, in no case shall the integrity fee be greater than two percent of the casino's sports wagering gross revenue." The proposal defines a sports governing body to be "the organization that prescribes final rules and enforces codes of conduct with respect to a sporting event and participants therein." This is a potentially problematic definition. For Mixed Martial Arts fights in New York, who is the governing body: the promoter, or the State Athletic Commission that establishes the rules? The same holds true for boxing? Individual sports, such as tennis and golf, have major tournaments that are run by different organizations. The PGA Tour runs the PGA Championship, Augusta National runs the Masters, and the United State Golf Association runs the US Open. How is it determined what is the sports governing body when a casino takes a wager on individuals trying to win the grand slam in golf? What is the governing body in the Davis Cup? When there are European soccer matches between teams in the Premier League and the Bundesliga, what is the governing body? What is the sports governing body when a casino takes a parlay wager on two different sports?

In-play wagering is only permissible if the casinos operate and their agents use "official league data" and the league "possesses a feed of official league data." The leagues are supposed to provide the data at a commercially reasonable rate.

Sports governing bodies are able to petition the Gaming Commission to force the casinos to use official league data for "tier three wagers", which are neither in-play events nor wagers determined by the final score or outcome. A sports governing body may also apply to the Gaming Commission "to restrict, limit, or exclude wagering on its sporting events." No standards are set for how the Commission is to make this decision.

G. Where does the money go from sports gambling?
Typically, the Nevada gambling establishments have gross gaming revenues of between 4-5% of handle, which is the actual amount wagered. (In Nevada in 2017, this hold percentage was 5.11%.) From this amount, they pay a federal tax based on .25% of handle. Assuming a 5% gambling hold, this represents a tax of 5% on gambling revenue. The Bonacic bill adds an 8.5% State tax on this gambling revenue. On top of that, the casinos are to pay an integrity fee of a maximum of 2% of gaming revenue. Thus, assuming a 5% gambling hold rate, the casinos would be subject to an effective tax rate (including the integrity fee) of 15.5%. That does not include any amounts that the casinos would pay the sports leagues for "official league data." Assuredly, the casinos would also need to pay their affiliates and mobile agents for taking the wagers. At what point does the tax imposed on the casinos become too high?

The money from the taxes paid to the state is to be distributed as follows: 85% to the commercial gaming fund - much of which goes to education, 5% to problem gambling education and treatment, 5% to the Gaming Commission for its costs, and 5% to the racing industry. Given the estimates that Senator Bonacic has made for revenue from sports gambling - $10 million to $30 million, it is unlikely that a 5% allocation to all of the racing industry will provide much assistance. That would mean that a maximum amount of $1.5 million would be shared by all racetracks, their horsemen, and the OTB's.

V. Is There Sports Wagering Legislation in the Assembly?

Assemblyman Gary Pretlow, who chairs the Assembly Racing and Wagering Committee, had promised has own bill on sports wagering for several months. While no bill has yet been formally introduced yet, in the last week of May, Assemblyman Pretlow released a draft of his bill. It is a somewhat underwhelming copy of Senator Bonacic's amended bill with the nomenclature of the "integrity fee" changed to a "sports wagering royalty." (https://www.legalsportsreport.com/wp-content/uploads/2018/05/Pretlow-sports-betting-draft-1.pdf)

VI. The Effect on New York's Native American Tribes

New York has eight federally recognized tribes. Three of these, the Oneidas, Senecas, and St. Regis Mohawks, run gambling operations and have gambling compacts with the state. The Senecas appear to be monitoring the situation. There has been little word from the St. Regis Mohawks. The Oneida Nation has said that it will pursue sports wagering. The exact details of how this would occur are uncertain. Can the Oneida Nation's compact with the State be read to authorize sports gambling, or is there a need for a new compact? The Oneida Nation surely would not be bound by the state's requirement of any integrity fee payment.

Secondly, if mobile sports wagering is authorized throughout all locations within the state, will this break the exclusivity arrangements that New York State has with the three gambling tribes? Based on giving the tribes gambling exclusivity in the counties near their casinos, New York is paid exclusivity fees by the tribes. (New York and the Seneca Nation are currently in arbitration over the exclusivity payment, and the Nation has stopped making its payments.) For the 2017 fiscal year, the tribal exclusivity payments amounted to $206.8 million. That is far more revenue to New York than the $10 to $30 million that sports gaming could be expected to bring in. Can the state and the local governments that share in these payments risk losing them?

Finally, strong geo-fencing of the tribal reservations would be needed to make sure that bets on sports gambling were not accepted inside tribal reservation lands. Otherwise, New York State would likely be violating the terms authorizing class III gaming under the Indian Gaming Regulatory Act.

VII. What is the likelihood of passage?

There would appear to be an excellent chance that the sports wagering bill would pass the Senate. The Bonacic bill has generated little opposition thus far from inside the Senate. The unamended initial version was included and technically passed in the Senate as part of its one-house budget bill in March. There is an ongoing dispute in the Senate over which party controls the leadership of the chamber, but if this is resolved, the Bonacic bill is likely to pass.

The fate of sports gambling is uncertain in the Assembly, as Speaker Carl Heastie, who controls the Assembly, has expressed doubts and reservations over whether the bill's issues can be resolved. In his statements last week, the Speaker, however, indicated that he will let his colleagues decide the issue.

Governor Cuomo has also added that the issue is too complicated to decide in the current legislative term. Yet if the legislature passes a sports wagering bill, will the Governor veto a very popular bill in an election year?

VIII. Other Concerns

It has been surprising that nobody in the legislature has introduced a Constitutional amendment that would clearly authorize sports gambling. An amendment, if given first passage this year could be on the books by January 1, 2020. Passage of this amendment would give the legislature cover and assure that sports wagers placed by bettors outside the physical confines of the casinos could be considered valid sports wagering bets. Furthermore, if there is a constitutional challenge to expanded sports wagering, this amendment might be in place before the courts actually ruled on the legalities of sports wagering

There is only a limited leakage to other states if New York State fails to authorize further sports wagering. Federal law would prevent New Yorkers from betting electronically into other states. New Yorkers would need to physically cross the border and wager in a state like New Jersey. This places Tioga Downs owner Jeffrey Gural in an odd position. Gural is the owner of the Meadowlands in New Jersey, which would most likely be the spot where New Yorkers would place sports bets.

If sports wagers in New York can only be made within the confines of a casino, will this hasten the process to have casinos in downstate New York? Currently, casinos could not be operational downstate until 2023.


July 5, 2018

National Football League Files Motion for Summary Judgment to End Colin Kaepernick's Collusion Case

By Michael Kusi
Edited by Elissa D. Hecker

Colin Kaepernick, a former San Francisco quarterback and unrestricted free agent, is suing the National Football League (NFL, league) for collusion, alleging that the NFL willfully kept him from playing after his public national anthem protests before NFL games. The NFL filed a Motion for Summary Judgment with arbitrator Stephen Burbank, requesting him to examine the 14 depositions that Kaepernick's legal team had taken to determine where there is adequate evidence to support any finding. The NFL also cited Article 17, Subsection 5, which states that if the complainant's evidence was insufficient, the arbitrator may dismiss the claim.

In Kaepernick's collusion filing, the plaintiff argues that he was blackballed from the league because of his anthem protest. Kaepernick's proposed visit with the Seattle Seahawks was abruptly ended when Kaepernick would not say that he would stand for the anthem. The NFL owners had approved a new national anthem policy requiring players to stand for the anthem, or as an alternative, to be in the locker room during the anthem.

February 12, 2019

Sports Wagering in New York: What Can New York Learn from the 2018 New Jersey Experience?

Bennett Liebman
Government Lawyer in Residence, Government Law Center, Albany Law School

When New York Governor Andrew Cuomo's proposed budget for the New York State 2019-2020 fiscal year was announced last month, it was accompanied by the news that the state's four upstate private casinos would be authorized to take sports wagers. Sports wagering would be authorized once the state's Gaming Commission finalizes its rules governing the subject.

The Gaming Commission took the first steps to promulgating these rules at its January 28, 2019 meeting, where it gave first passage to the sports wagering rules. These rules are now subject to the public comment and publication procedures established under the State Administrative Procedures Act. Final passage of such rules would be expected to come in mid-spring, and sports wagering would need to be approved at each facility.

Who Gets Sports Betting in New York?

Sports wagering was authorized for the commercial casinos under the Upstate NY Gaming Economic Development Act, which passed in 2013 as the accompanying legislation to the state's Constitutional amendment authorizing casino gambling. The 2013 legislation authorized sports wagering at casinos if federal legislation banning sports gambling was either amended or found to be unconstitutional. In May of 2018, the United States Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992, which had banned sports gambling in most of the United States, outside of Nevada. Based on this decision, the states of Rhode Island, Delaware, Mississippi, New Jersey, Pennsylvania, New Mexico, and West Virginia all began sports gambling in 2018. New York State did not need new authorizing legislation, since the 2013 legislation already legalized sports wagering.

The four private casinos in upstate New York that could be licensed to conduct sports wagering are del Lago in Seneca County, Rivers in Schenectady County, Resorts World Catskills in Sullivan County, and Tioga Downs in Tioga county. Besides the four privately owned casinos, there is the potential -- depending on the wording of the individual compacts -- for the New York tribes with casinos; the Seneca, Oneida, and St. Regis Mohawks, to operate sports wagering facilities at their casinos. Currently, there are seven tribal casinos in New York State, with the Oneidas and the Senecas running three apiece.

The New Jersey 2018 Experience

The experience in New Jersey should be instructive as to how the casinos in New York might fare. It is a neighboring state in the Mid East Coast region, which made the full dive into sports gambling in 2018. New York sports gamblers could reasonably travel and bet at the New Jersey facilities at the Meadowlands Racetrack and at Monmouth Park. New Jersey began sports wagering in June of 2018 and has sports wagering onsite at two racetracks and at seven of the nine Atlantic City casinos. Five of the casino licensees and the two racetrack licensees offer sports wagering to New Jersey residents through the Internet.

The 2018 calendar year numbers for New Jersey show sports wagering gross revenues of $94 million for a period of 6 ½ months. (This revenue is somewhat overstated, since New Jersey currently considers gross sports wagering revenues as including the gross dollar amount of wagers subtracted by payouts to bettors. Thus, wagers placed in 2018 on future sports events, such as those placed on the 2019 Super Bowl, would be considered 2018 gross revenue. The actual revenue on completed sports events in New Jersey in 2018 was $72 million.)

The tax revenue return to New Jersey from sports wagering in calendar year 2018 was $10.4 million. Using the December 2018 monthly numbers (which are more reflective of a more mature market and assuming based on Nevada sports wagering numbers that December wagering constitutes about 11% of annual sports wagering handle), the anticipated annual New Jersey tax revenue would be $21.8 million. The tax revenue numbers ought to be considered a disappointment. New Jersey officials have been using the number of $100 million as the estimated tax revenue from sports wagering for more than a decade, well before any thought had been given to the potential of Internet sports wagering. A $20 million number is hardly what was anticipated. While there clearly is room to grow, it is a long way from $100 million.

Sports wagering constituted 3.2% of the general casino wagering market in New Jersey for 2018. In Nevada, where sports wagering revenues increased by more than 20% in 2018, it only constitutes 2.5% of casino revenue.

62.5% of New Jersey's sports wagering handle in 2018 was placed through the Internet. In order to place a legal Internet wager, the bettor needs to be physically situated in New Jersey. In December of 2018, the percentage of Internet bets reached 75.5%. The Internet sites in New Jersey did not begin operation until August, with all sites in operation by the commencement of the National Football League season in the first week of September. It is certainly likely that in the future, the Internet handle will continue to be at least 3/4 of the total sports wagering handle. Starting in December of 2018, Pennsylvania began its sport wagering operation. Thus, bettors in the Philadelphia area no longer needed to travel to the to the Atlantic City casinos to place legal sports wagers.

Of the on-site gambling, much of it was conducted at the Meadowlands Racetrack, the site closest to New York City. In December of 2018, 58% of the on-site sports wagering wins were at the Meadowlands. 16.7% was at Monmouth Park in Oceanport, New Jersey, leaving 25.3% to be shared by the seven Atlantic City casinos that conduct on-site sports gambling. Using the December 2018 sports wagering statistics as the basis for an annual projection for sports wagering revenue, on-site sports wagering annual revenue in New Jersey would be $14 million for the Atlantic City casinos, $9.3 million for Monmouth Park, and $32 million for the Meadowlands.

Lessons for New York

The obvious lesson for New York is to not anticipate much revenue for the casinos from sports gambling. The New Jersey onsite numbers are not particularly encouraging, and the New Jersey sites are generally in more populated areas than the four upstate casinos. Tioga Downs is in a rural area on the Pennsylvania border. Pennsylvania now has Internet wagering on sports. There is little reason to expect much sports gambling revenue there. The same should hold true for del Lago, which is located between Syracuse and Rochester. It is not a big population center, and if the Senecas and the Oneidas Nation offer sports wagering, del Lago could find itself in a difficult commercial environment.

Rivers Casino would not have much nearby competition, but it is not in a more desirable location than Monmouth Park in New Jersey, or Charles Town in West Virginia, both of which are doing modest in-person sports wagering business. Monmouth Park, as stated previously, could be presumed to have in-person sports gambling revenue of less than $10 million. Assuming that Rivers did bring in that much revenue, it would increase its current total gaming revenue by about 6% or 7%. It would be helpful, but not a game changer.

Resorts Worlds Catskills would be the closest sports wagering facility in New York to the New York City market, and it would have good access to the northern suburbs of New York City. However, it would compete with the Meadowlands for in-person gambling, and the Catskill region has proven a disappointing area, thus far both for video lottery gambling and for casino gaming. It could potentially perform better than Rivers, but it is unlikely to do much better than that.

The Seneca Nation has the best opportunity for in-person sports wagering. It has the greatest exposure to a population center, with a facility in downtown Buffalo. Its Niagara Falls facility is on the Ontario border and ought to be able to attract Ontario sports bettors as well. Currently, Ontario sports bettors only can legally wager on sports through the Pro-Line lottery offered through the Ontario Lottery and Gaming Corporation, which offers only parlay wagers and less than desirable odds. The Niagara Falls casino could attract Ontario sport bettors.

The Mohawk Akwesasne Mohawk Casino, operated by the St. Regis Mohawks, is near the Canadian border in northern Franklin County. While it is close to a potential sports betting market in Canada served by the sub-optimal Pro-Line game, it is basically not near any area that can be considered a center of population. Unless people will drive about an hour and a half from Ottawa, there ought to be limited St. Regis Mohawk revenue from sports betting.

The three Oneida Nation gambling properties are between Utica and Syracuse. Again, this is hardly the most desirable environment for sports gambling. The most interesting issue is whether the Oneida Nation will take wagers on games played by Syracuse University. New York law bans the private commercial casinos from taking bets on New York university and college sports teams, but the tribes would not be bound by this rule. If the Oneidas take wagers on Syracuse games, they could potentially have a market for sports betting in New York.

Tax Revenue in New York

If one optimistically assumes that the four commercial casinos in New York would bring in at most $25 million in sports gambling revenue, the tax revenues to the state-- with a tax rate of 10% on sports wagering revenues -- would be $2.5 million. It is hardly a large amount of revenue and is actually half the amount that the state receives from daily fantasy sports.

What if New York Went Full New Jersey?

What would happen in New York State following the lead of New Jersey - besides allowing sports wagering at its four commercial casinos -- passed legislation allowing these casinos to use the Internet to take wagers from everyone residing in New York? One could assume that the state would claim that the situs of the wager would be a server located on the casino property and thus would be open to everyone geographically located inside the state.

New Jersey has 45% of New York's population and would (using December 2018 figures) likely have $187 million in annual sports wagering revenue. That number in New York State would equate to $416 million in sports wagering revenue. New York's current 10% tax rate would yield $41.6 million in tax revenue. Under the bills that have been introduced on sports wagering in the state in 2018 and 2019, the tax rate would be set at the lower rate of 8.5%. At an 8.5% tax rate, the yield to the state would be $35 million.

The initial $35 to $41 million dollar amount does provide some tax revenue. It is more than the $5 million that New York State receives from daily fantasy sports and the $15 million it receives annually from pari-mutuel taxes. Yet it is a drop in the budget -- not only compared to the overall state budget - but to the $2.4 billion the state receives from the traditional lottery and from the $950 million from video lottery terminals. To put this in perspective, it is considerably less than what the state receives from video lottery proceeds at the racinos at Saratoga Harness ($62 million in FY 2018) and at Finger Lakes ($48.7 million in FY 2018). A game changer, this isn't.

What ought to be most troublesome for New York is the potential claims from the Indian tribes. The most recent state budget indicates that the tribes, from their exclusivity fees -- the tribes pay fees to New York based on the state agreeing to keep areas near the tribe's casinos free from casino gambling -- are scheduled to pay about $212 million annually to the State. If there is Internet betting authorized in New York State, the tribes are certain to argue that a bettor placing a sports wager from inside their exclusivity zone to a commercial casino is violating their exclusivity rights. In the case of the Seneca Nation, the exclusivity rights include much of western New York, from the suburbs, to the east of Rochester, to the state's southern and western borders with Pennsylvania. The Oneidas have exclusivity in 10 counties in central New York. If New York authorizes Internet sports wagering, the tribes will certainly put that $212 million into question. The state might not be willing to take any action that would threaten the exclusivity payments. If New York sports wagering, even assuming significant growth in the wagering market, could produce a maximum of $100 million in government revenue, it will not come close to making up for a loss of the exclusivity payments. The state will need some arrangement with the gaming tribes before it can reasonably decide to make any significant expansion into the field of Internet sports wagering.

Current New York Loss of Sports Gambling Revenue to New Jersey

This issue should be a non-starter. New York is not losing significant revenue to New Jersey due to sports betting. It would be likely that the one site that New York bettors would be wagering at in New Jersey would be the Meadowlands. If New Yorkers constituted 1/3 of the in-person sports bettors in the Meadowlands in December of 2018, that would account for $1.2 million in gross revenue. Assuming again that December accounts for about 11% of overall sports gambling, that would equate to about $10.9 million of gross sports wagering revenue annually from New Yorkers. Under New York's current 10% tax rate for sports wagering, that would be a loss of $1.09 million annually. Under the bills that have been introduced on sports wagering in the state setting the tax rate at 8.5%, that would make the lost tax revenue $926,000. That is not a large amount of money that New York has arguably lost to New Jersey on account of sports wagering. It really should not merit any discussion. The share of toll revenue paid to the Port Authority from New Yorkers using the Lincoln Tunnel or the George Washington Bridge (with a $12.50 toll for EZ pass users in peak times) to get to the Meadowlands might by itself make up for this minimal loss of revenue.

Summary

In short, there ought to be one simple lesson to New York from the New Jersey experience: Don't get your hopes up too high. There will be no financial windfall for either the casinos or the state from in-person sports betting conducted at the four upstate casinos. Expansion of sports wagering to the Internet would be needed to make sports wagering a significant success. Even with Internet sports wagering, tax revenues to New York would not increase markedly, and the expansion to Internet sports wagering could lead to significant issues -- and potential revenue losses -- in dealings with the tribes that have gambling facilities in New York.

The one thing not to worry about is New Yorkers driving to New Jersey to bet on sports. This is probably not costing New York State anything.

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