Distribution, Competition, and Antitrust / Intellectual Property (IP) Law

Injunctive Relief, but not Damages Class, Certified in NCAA Student-Athlete Litigation

English: National Collegiate Athletic Associat...

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In In re NCAA Student-Athlete Name & Likeness Licensing Litigation, 2013 U.S. Dist. LEXIS 160739 (N.D. Cal. Nov. 8, 2013) (Wilken, J.)., the Court certified a class of current and former student-athletes seeking injunctive relief, but declined to certify a damages class. The case illustrates the importance for plaintiffs of tying a theory of harm to damages to all purported class members – or for defendants, the importance of finding a disconnect between the two.

The plaintiffs were or are NCAA Division I football and basketball student-athletes. They allege that the NCAA misappropriated their names, images, and likenesses in violation of their statutory and common law rights of publicity. Some of the named plaintiffs also allege that the NCAA violated federal antitrust law by conspiring with Electronic Arts and the marketing firm Collegiate Licensing Company to restraint competition in the market for the commercial use of their names, images, and likenesses.

Plaintiffs allege a market for the acquisition of group licensing rights for the use of names, images and likenesses in the broadcasts or rebroadcasts of Division I basketball and football games and in videogames featuring Division I basketball and football. Plaintiffs challenge the NCAA’s rules, which allegedly prohibit student-athletes from receiving compensation for the commercial use of their names, images, and likenesses. Plaintiffs also seek monetary damages as a result of the NCAA’s alleged plan to fix at zero the price of student-athletes’ group licensing rights.

The Northern District of California had little difficulty in certifying a class of plaintiffs seeking injunctive relief against the NCAA. However, the Court declined to certify a Rule 23(b)(3) damages subclass, for several reasons.

First, in the Court’s view, the Plaintiffs had failed to satisfy the manageability requirement because they did not identify a feasible way to determine which members of the damages subclass were actually harmed by the NCAA’s allegedly anticompetitive conduct. In the Court’s view, the Plaintiffs did not address or overcome the “substitution effect” – i.e., the fact that if athletes had stayed in college because the NCAA’s rules were different, they would have displaced other student-athletes on their respective teams. Those displaced student-athletes would have either been forced to play for other Division I teams or simply lost the opportunity to play in Division I altogether. In either case, they would not have suffered injuries as members of the teams for which they actually played.

Second, the Court concluded that Plaintiffs had not adequately proposed a method to determine which student-athletes were actually depicted in videogames during the relevant class period, or which student-athletes appeared in game footage during the relevant time period.

These sorts of substitution effects occur with some frequency, and require careful attention.

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