Football isolated on a white background as a professional sport ball for traditional American and Canadian game play on a white background.
Football isolated on a white background as a professional sport ball for traditional American and Canadian game play on a white background. ()

The federal judge handling the NFL concussion case has denied preliminary approval of the $760 million settlement agreed to by the league and its former players.

U.S. District Judge Anita Brody of the Eastern District of Pennsylvania said in a short opinion issued Tuesday that she is not convinced that all of the former players who will qualify for settlement money due to various types of brain injuries sustained while they played for the National Football League will actually be able to collect from the fund.

“I am primarily concerned that not all retired NFL football players who ultimately receive a qualifying diagnosis or their related claimants will be paid,” Brody said.

She tempered her concern by saying, “There is nothing to indicate that the settlement is not the result of good-faith, arm’s-length negotiations between adversaries.

“Nonetheless, on the basis of the present record, I am not yet satisfied that the settlement ‘has no obvious deficiencies, grants no preferential treatment to segments of the class, and falls within the range of possible approval.’” Brody quoted from a Northern District of California opinion from last summer, Cordy v. USS-Posco Industries, which gave a nod to the standard under which judges are to examine settlement agreements at the preliminary stage.

The settlement was announced at the end of August, after Brody had sent the parties to mediation with a retired federal trial judge from the Tenth Circuit, Layn Phillips.

In her brief, two-page order announcing the accord in August, Brody indicated that she favored settlement of the case, saying, “From the outset of this litigation, I have expressed my belief that the interests of all parties would be best served by a negotiated resolution of this case.”

“The settlement holds the prospect of avoiding lengthy, expensive and uncertain litigation, and of enhancing the game of football,” she had said.

Then, in December, Brody appointed a special master “to perform tasks in furtherance of my assessment of the parties’ request for approval of the proposed settlement,” she said in the order appointing Perry Golkin to the position.

“The appointment is warranted because of the expected financial complexity of the proposed settlement,” she said.

Lawyers for the former football players who brought the suit characterized the settlement as being quite unique at the time it was announced. The last similarly-scaled injury classwide settlement that came through the Eastern District was the suit against the diet drug called Fen-Phen.

More than 4,500 retired players filed suits, which were consolidated by the Panel on Multidistrict Litigation in 2012 to Brody’s court, and the settlement class is likely to include more than 20,000 members, according to Brody’s opinion denying preliminary approval of the settlement.

“Despite the potential benefits of class actions, their binding effect on absentee parties remains a significant concern,” Brody said.

After the action is resolved, class members can’t litigate the same claims against the defendant, Brody explained.

Beyond that, the terms of the settlement require that “class members and their related parties will release all claims and dismiss with prejudice all actions against, and covenant not to sue, the NFL parties and others in this litigation and all related lawsuits in this court and other courts. Settlement class members who receive monetary awards will also be required to dismiss pending and/or forebear from bringing litigation relating to cognitive injuries against the National Collegiate Athletic Association (NCAA) and any other collegiate, amateur, or youth football organizations and entities,” according to Brody’s opinion.

The judge later said in a footnote that, beyond her primary concern that not all those who are eligible to collect will be able to, she is concerned about the release of the NCAA and other amateur organizations. Brody asked the parties to address that, as well as the possible inadequacy of the “baseline assessment program,” or BAP, for short.

Of the total $760 million in the settlement, $75 million is dedicated to the BAP, which offers retired players medical tests to evaluate their cognitive functions to see if they are eligible to collect from the settlement.

The bulk of the funds, $675 million, are designated for the pool from which eligible former players will draw and $10 million is set aside for an education fund that will promote safety in the sport.

Referring to the $675 million fixed fund for payment to former players, who will be able to collect various amounts depending on their diagnosis, Brody said, “in various hypothetical scenarios, the monetary award fund may lack the necessary funds to pay monetary awards for qualifying diagnoses.”

A player with a neurocognitive impairment could collect $1.5 million or $3 million, depending on the severity; a player with Alzheimer’s could collect $3.5 million; a player with Parkinson’s could collect $3.5 million; and a player with ALS could collect $5 million, according to the opinion.

Considering the size of the potential class of 20,000 members, Brody said, “Even if only 10 percent of retired NFL football players eventually receive a qualifying diagnosis, it is difficult to see how the monetary award fund would have the funds available over its lifespan to pay all claimants at these significant award levels.”

The judge asked the parties to provide the economic information they relied upon in their submissions to the court to the special master for review.

When the special master reviews the information, he will be satisfied, predicted Sol Weiss of Anapol Schwartz in Philadelphia, who is co-lead counsel for the players. There is an ample amount of money in the fund, he said Tuesday.

Robert C. Heim of Dechert, who is local counsel for the NFL, declined to comment on Brody’s opinion since he hadn’t yet consulted with his client.

Saranac Hale Spencer can be contacted at 215-557-2449 or sspencer@alm.com. Follow her on Twitter @SSpencerTLI.

(Copies of the 12-page opinion in In re National Football League Players’ Concussion Injury Litigation, PICS No. 14-0065, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.)