Fantasy Sports Leagues Get Another Victory Against Player’s Union

Jul 3, 2009

A federal judge from the District of Minnesota has granted CBS Interactive’s motion of partial summary judgment in a case in which CBS Interactive claims it should not have to pay licensing fees to the NFLPA and Players Inc. in exchange for operating its fantasy football games.
The court also declined the defendants’ bid to have the case moved from Minnesota to Florida.
CBS Interactive sued the NFLPA last fall, alleging that it was being wrongly pressured into paying licensing fees to operate its fantasy football games. The CBS suit was filed in Minnesota, a state which is part of the Eighth Circuit for the U.S. Court of Appeals, the same venue in which the CDM case was decided.
Through the collective bargaining agreement with NFLPA and separate Group Licensing Agreements, the individual players assign their Group Licensing Rights to the NFLPA and its licensing affiliates, such as Players. Inc.. In exchange for the right to use and sublicense the Group Licensing Rights, Players Inc. pays NFLPA a percentage of the gross licensing revenues.
Prior to the NFL 2008/2009 regular season, CBS Interactive entered into licensing agreements with Players Inc, which authorized CBS Interactive to use the “names, likenesses, pictures, photographs, voices, facsimile signatures and/or biographical information” of the individual NFL players who had entered into the Group Licensing Agreements. The last of the licensing agreements involving CBS Interactive expired on February 29, 2008.
The court then gave a history lesson about past litigation involving fantasy sports leagues. “In 2005, the fantasy baseball industry began litigation regarding the rights and obligations implicated by licensing agreements similar to the licensing agreements at issue here,” wrote the court, citing C.B.C. Distrib. & Mktg, Inc. v. Major League Baseball Advanced Media, L.P., 443 F. Supp. 2d 1077, 1080-81 (E.D. Mo. 2006). “The plaintiff, a provider of fantasy baseball games, sought a declaratory judgment to establish its right to use, without a license, the baseball players’ names and statistics in connection with its fantasy baseball products. Id. at 1081-82. Finding in favor of the plaintiff, the district court determined that the plaintiff’s use of the players’ names and playing records did not violate any right of publicity held by the defendants, but that even if it did, the plaintiff enjoyed a First Amendment right to use the players’ names and playing records that prevailed over any right of publicity. See id. at 1082-83, 1100. The Eighth Circuit affirmed the district court’s decision on October 16, 2007, C.B.C. Distrib. & Mktg, Inc. v. Major League Baseball Advanced Media, L.P., 505 F.3d 818 (8th Cir. 2006), and the United States Supreme Court denied certiorari on June 2, 2008, Major League Baseball Advanced Media v. C.B.C. Distrib. & Mktg., 128 S. Ct. 2872, 171 L. Ed. 2d 831 (2008).”
Shifting back to the CBS Interactive case, the court noted that the plaintiff refused to engage in talks about a licensing agreement when Players, Inc. approached it in the spring of 2008. “Players Inc. informed CBS Interactive that the Eighth Circuit’s decision in the fantasy baseball litigation was wrongly decided and that if CBS Interactive failed to pay the licensing fees, Players Inc. would file a lawsuit,” according to the court.
CBS Interactive initiated this action against the NFLPA on September 3, 2008, seeking a declaratory judgment extending the Eighth Circuit’s ruling in the fantasy baseball litigation to CBS Interactive’s use of the football players’ names and statistics in connection with its fantasy football games. On September 9, 2008, Players Inc. filed its own lawsuit against CBS Interactive in the United States District Court for the District of Southern Florida. NFLPA then moved, on September 30, 2008, to transfer venue of this case to the United States District Court for the Southern District of Florida. That same day, CBS Interactive filed its First Amended Complaint, adding Players Inc. as a defendant.
In siding with the plaintiff on the most pivotal issues, the court noted the similarities between the instant case and C.B.C. Distribution. Further, “having reviewed the voluminous record and thoroughly considered the legal issues, the Court concludes that Defendants have not carried their burden of showing that delaying the ruling on the summary judgment motion would enable them to discover evidence that might rebut CBS Interactive’s showing of the absence of a genuine issue of material fact.”
Fantasy Sports Trade Association President Paul Charchian was quick to claim victory, suggesting that the decision “further cements the autonomy of fantasy sports operators from sports leagues and player unions. The ruling ensures that the industry’s hundreds of fantasy companies will continue creating wide ranging products to serve the needs of fantasy players.”
Glenn Colton, a partner in the New York office of Sonnenschein, Nath & Rosenthal who authored amicus briefs on behalf of the FSTA in the CDM case, said the ruling is “yet another victory for fantasy sports players and businesses, and most importantly for all of our First Amendment freedoms. The decision is yet another brick in the wall that will insure that the millions of fantasy sports players continue to be able to enjoy the game and the innovations and improvements that come with freedom to operate and invent without fear of players associations swooping in at the 11th hour and wresting control of the benefits of those inventions and innovations.”
CBS Interactive Inc. v. National Football League Players Association, Inc. and National Football League Players Incorporated; D. Minn.; Civil No. 08-5097 ADM/SRN, 2009 U.S. Dist. LEXIS 36800; 4/28/09
A PDF of the opinion can be found here:
Attorneys of Record: (for plaintiff) Bradley T Smith, Michael A Lindsay, LEAD ATTORNEYS, Dorsey & Whitney LLP, Mpls, MN; Kara R Yancey, Rudolph A Telscher , Jr, LEAD ATTORNEYS, PRO HAC VICE, Harness, Dickey & Pierce, PLC, St Louis, MO; Molly-NA B. Edwards, LEAD ATTORNEY. (for defendant) Anthony N Kirwin, Edward M Glennon, Mark A Jacobson, LEAD ATTORNEYS, Lindquist & Vennum PLLP, Mpls, MN; David G Feher, Eva W Cole, Frank C Salzano, Jeffrey L Kessler, L Londell McMillan, LEAD ATTORNEYS, PRO HAC VICE, Dewey & LeBoeuf, LLP, New York, NY.


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