Madden NFL game (Credit: Electronic Arts)
Correction: The original version of this story misspelled Jordan Ludwig’s name.
A class of retired NFL players who claim they were wrongfully denied licensing revenues should be allowed to pursue common claims based on their membership in the players union, their lawyer argued on Tuesday before a federal appeals panel.
Two proposed class actions claim that the NFL Players Association failed to pursue licensing opportunities for the players and that, when it did, the union didn’t compensate them for revenues generated from third parties including Electronic Arts Inc. The company makes the Madden NFL football video games, which used their names and likenesses.
A panel of the U.S. Court of Appeals for the Ninth Circuit, sitting at the University of California, Los Angeles School of Law, focused on whether an agency relationship existed in order to prove that the union and its licensing arm, NFL Players Inc., breached their fiduciary duties.
“Why is it not enough that they’re all members of the group?” Judge Alex Kozinski, a UCLA law school graduate, asked defense attorney Daniel Schecter.
Schecter countered that union membership wasn’t sufficient to establish an agency relationship. “That is a critical point,” he said, noting that the group’s constitution guaranteed benefits generally to retired players but said nothing specific about licensing opportunities.
In both cases, the membership debate became the focus because the players had not signed group licensing authorization forms with the union. In contrast, a group of retired players who had signed those documents reached a $26.25 million settlement in 2009 with the union on similar claims.
In one case, the lead plaintiffs—retired NFL players Bob Grant, Dr. Clinton Jones, Walter Roberts III, Marvin Cobb and Bernard Parrish—were denied class certification on procedural ground and lost on summary judgment. In the more recent case, Ronald Brown, Charles Detwiler and Dwight Hicks challenged a ruling denying class certification. In that case, the parties reached a stipulated judgment in the defendants’ favor, given Klausner’s summary judgment against the players in the earlier case.
Schecter, a partner in the Los Angeles office of Latham & Watkins, said there was no evidence that Electronic Arts, as the largest licensee, paid royalties to the union to use the names and likenesses of the plaintiffs who hadn’t signed a group licensing form.
But plaintiffs attorney Jordan Ludwig of Los Angeles-based Blecher Collins Pepperman & Joye said: “The real crux of this case is they never went out to license these players.” He insisted that paying membership dues was enough consent for the union to pursue licensing opportunities on behalf of the players.
Kozinski agreed in part, but noted that not all the named plaintiffs had paid those dues. “Some of your clients didn’t,” he said to Ludvig.
Ludwig acknowledged that point but insisted that all of his clients paid membership dues at some point.
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