By Matthew Ganas, of DLA Piper LLP
On April 11, 2014, a California federal court issued a First Amendment ruling that has potentially significant implications for broadcasters in the sports-media industry. Specifically, the Northern District of California’s Judge Claudia Wilken held that “the First Amendment does not guarantee media organizations an unlimited right to broadcast entire college football and basketball games” “without regard for the participating athletes’ rights of publicity.” Order at 19, 16, In re NCAA Student-Athlete Name & Likeness Licensing Litigation (“In re NCAA”), Case No. 09-1967 (N.D. Cal. Apr. 11, 2014), ECF No. 1025.
Led by former UCLA basketball player Ed O’Bannon, a group of class plaintiffs in In re NCAA (the “Antitrust Plaintiffs”) allege that defendant National Collegiate Athletic Association (“NCAA”) has violated federal antitrust laws by administering rules that prevent former and current Division I football and basketball players from licensing their names, images and likenesses for commercial purposes. The court’s recent ruling came in response to NCAA’s cross-motion for summary judgment, which sought dismissal of Antitrust Plaintiffs’ “live broadcast” liability theory on First Amendment grounds. The court found that the First Amendment does not preclude any of Antitrust Plaintiffs’ claims as a matter of law and has scheduled trial to commence on June 9, 2014.
Antitrust Plaintiffs allege that, absent the challenged NCAA restrictions, a market would exist for “group licenses” to use current student-athletes’ names, images and likenesses in live game broadcasts.
In their operative Third Amended Consolidated Class Action Complaint (“TCAC”), Antitrust Plaintiffs assert that NCAA’s prohibition on student-athlete compensation for the use of their names, images, and likenesses harms competition in two separate markets:
the “college education” market (in which Division I universities compete to recruit football and basketball players); and
the “group licensing” market (in which broadcasters and videogame makers would allegedly compete for group licenses to use the names, images and likenesses of Division I football and basketball players in live game broadcasts, archival footage, and videogames).
The court has recognized, on multiple occasions, that Antitrust Plaintiffs’ theory of a “group licensing” market “rests on the assumption that student-athletes, absent the challenged restraint, would be able to assert cognizable right of publicity claims against broadcasters who depict them in live game broadcasts or archival game footage without a group license or consent.” Id. at 15. Thus, while Antitrust Plaintiffs do not assert right of publicity claims directly against the NCAA, current student-athletes’ legal ability to bring right of publicity claims arising from live broadcasts is essential to their antitrust claims related to the so-called “group licensing” market.
In terms of relief, the Antitrust Plaintiffs request an injunction that would bar the NCAA from enforcing any rules or policies that prohibit current and former student-athletes from seeking compensation for the commercial use of their names, images, or likenesses (including in connection with live broadcasts).
NCAA seeks dismissal of the TCAC on the basis that — even absent the challenged NCAA restraints — no market would exist for “group licenses” to use current student-athletes’ names, images and likenesses in live broadcasts, because event participants have no legally cognizable publicity rights associated with such broadcasts.
In September 2013, NCAA moved to dismiss the TCAC, arguing that Antitrust Plaintiffs’ claims concerning alleged restrictions on the ability of current student-athletes to enter into “group licenses” for use of their names, images and likenesses in live broadcasts of men’s basketball and football games fail as a matter of law. See Motion to Dismiss at 2, In re NCAA, Case No. 09-1967 (N.D. Cal. Sep. 17, 2013), ECF No. 857. According to NCAA, the Antitrust Plaintiffs possess no legally cognizable right to their names, images and likenesses in connection with live broadcasts, because the law does not recognize a right of publicity for persons appearing in such broadcasts. See id. NCAA relied on three legal principles to support this argument:
First Amendment preemption;
Copyright Act preemption; and
State statutory and common law exceptions to right of publicity causes of action.
The court denied NCAA’s motion to dismiss in October 2013. Order, In re NCAA Case No. 09-1967 (N.D. Cal. Oct. 25, 2013), ECF No. 876. It specifically rejected NCAA’s copyright preemption argument. The court reasoned that the Copyright Act does not preempt Antitrust Plaintiffs’ claims because “the rights Plaintiffs seek to assert in the present case are fundamentally different from those protected by the Copyright Act” and because “Plaintiffs’ underlying claims…are based principally on an injury to competition, not simply misappropriation.” Id. at 23.
The court also rejected NCAA’s state law arguments. It recognized that state right of publicity statutes, including California’s, carve out express exceptions for sports broadcasts. See id. at 17; Cal. Civ. Code § 3344(d) (providing that individuals have no right of publicity “in connection with any news, public affairs, or sports broadcast or account.”) But because Antitrust Plaintiffs “allege harm to a national market for the licensing rights to their names, images, and likenesses in game broadcasts,” the court reasoned that “[t]o disprove the existence of this market at the pleading stage, the NCAA would have to identify a law or set of laws that precludes student-athletes from asserting publicity rights to game broadcasts in every state.” Id. at 17-18 (emphasis in original). On this basis, the court concluded that state-specific exceptions to right of publicity causes of action do not warrant dismissal of Antitrust Plaintiffs’ “live broadcast” claims brought under the Sherman Act.
Judge Wilken also refused to dismiss the TCAC on First Amendment grounds. She acknowledged that the U.S. Supreme Court and the federal circuit courts have never “squarely addressed whether the First Amendment bars athletes from asserting a right of publicity in the use of their names, images, or likenesses during sports broadcasts.” Id. at 18. But after analyzing the framework adopted in other right of publicity cases, Judge Wilken recognized that “the central question in determining whether the First Amendment bars an athlete’s right-of-publicity claim is whether the defendant’s use of the athlete’s name, image, or likeness is primarily ‘commercial.’” Id. at 20.
The court went on to conclude that “[e]ven though the commercial speech determination is a question of law,” it could not make this determination on the pleadings. Id at 21. The court specifically reasoned that, when construing the TCAC’s allegations in the light most favorable to Antitrust Plaintiffs, “it is plausible at least some of the broadcast footage described in the complaint — particularly the promotional highlight films and the ‘stock footage’ sold to advertisers — was used primarily for commercial purposes.” Id.
The court thus held that the First Amendment did not mandate dismissal of Antitrust Plaintiffs’ “broadcast-related claims” at the pleading stage. Id. But it did not foreclose the NCAA from subsequently moving for summary judgment on its First Amendment defense and provided the following suggestion for how it might address the First Amendment question on summary judgment: “Should the NCAA raise this issue again at summary judgment, Plaintiffs will need to submit evidence that the relevant broadcast footage on which their claims are based — including both the archival game footage and the live game broadcasts — was used primarily for commercial purposes.” Id. at 22.
NCAA moves for summary judgment on Antitrust Plaintiffs’ “live broadcast” claims on the basis that student-athletes’ names, images and likeness are not used in live sporting event broadcasts for commercial purposes, and thus the First Amendment shields such broadcasts from right of publicity liability.
In late 2013, both parties moved for summary judgment on the asserted antitrust claims. NCAA again argued that the First Amendment bars Antitrust Plaintiffs’ “live broadcast” claims. See Memorandum in Support of Motion for Summary Judgment, In re NCAA Case No. 09-1967 (N.D. Cal. Dec. 12, 2013), ECF No. 926. Expressly relying on language from the court’s prior motion to dismiss order, NCAA asserted that the use of players’ names, images and likenesses in live broadcasts of men’s basketball and football games is not primarily commercial in nature, and therefore entitled to full First Amendment protection against right of publicity claims. Id. at 3. To support this argument, NCAA emphasized that the Ninth Circuit defines speech as “commercial” when it “propose[s] a commercial transaction” with respect to a “particular product.” Id. at 5 (quoting Hunt v. City of Los Angeles, 638 F.3d 703, 715 (9th Cir. 2011)). NCAA characterized college sporting events, by contrast, as “matters of intense public interest,” which deserve the broadest scope First Amendment protection. Id. at 4.
The district court denies NCAA’s summary judgment motion, ruling that — even though live broadcasts of Division I football and basketball games are not commercial speech — the First Amendment does not preclude student-athletes from asserting rights of publicity in live broadcasts.
In its April 2014 summary judgment ruling, the district court rejected NCAA’s argument that the First Amendment necessarily shields broadcasters from liability for right of publicity claims asserted by participants in live sporting events. Even though the U.S. Supreme Court has never ruled on this specific issue, Judge Wilken found that its decision in Zacchini v. Scripps—Howard Broadcasting Co., 433 U.S. 562 (1977) “strongly suggests that the First Amendment does not guarantee media organizations an unfettered right to broadcast entire sporting events without regard for the participating athletes’ rights of publicity.” Order at 16, ECF No. 1025.
In Zacchini, the Supreme Court determined that the First Amendment did not protect a television station from the unauthorized broadcast of the plaintiff’s entire fifteen-second “human cannonball” routine performed at an Ohio county fair. In drawing this conclusion, the Zacchini court emphasized that the defendant decided to broadcast theperformer’s entire act without his consent, thus undermining his economic interest in attracting viewers to attend his live show. Judge Wilken found that this analysis “provide[d] useful guidance in balancing a performer’s right of publicity against First Amendment considerations.” Id. at 16. Applying similar standards, Judge Wilken concluded that “the First Amendment does not guarantee media organizations an unlimited right to broadcast entire college football and basketball games.” Id. at 19.
On the other hand, the California district court went on to find that “broadcasts of entire Division I football and basketball games do not constitute commercial speech.” Id. at 24. Yet, this finding did not impact Judge Wilken’s ultimate conclusion — that the First Amendment does not necessarily bar live sporting event participants from asserting right of publicity claims in connection with live broadcasts.
This article was originally prepared for and published in DLA Piper’s “Sports, Media and Entertainment Online.” See http://blogs.dlapiper.com/mediaandsport/?p=2382
