Sports Litigation Alert


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Holt Hackney
Editor & Publisher
Sports Litigation Alert

Volume 15, Issue 14 August 3, 2018

Table of Contents

Case Summaries

Articles

News Briefs

Sports Litigation Alert is proud to offer an Expert Witness Directory at our website. SLA subscribers are entitled to be listed in that directory, please email your details to us and we will include you in the listing. Here is this issue's featured expert:

Timothy Liam Epstein, Esq.
Expertise: Disappointment Lawsuits, Multipliers and Similar Measures in High School Sports, Injuries on the Athletic Field, Sports Venue Construction, Sports Venue Liability
312-263-8603
Duggan Bertsch, LLC
Adjuncts Professor of Law - Loyola University Chicago School of Law (Sports & Entertainment Law)

Case Summaries

Appeals Court Agrees With Denial of Summary Judgment in Snow Tubing Incident

A New York State Appeals Court has affirmed the ruling of a trial court, which denied the Windham Mountain Adventure Park’s motion for summary judgment in a case in which it was sued for negligence by a plaintiff who was injured while snow tubing down the mountain. In so ruling, the appeals court agreed that it was too early in the case to decide about whether the lane attendants enhanced the risk of injury, which would undercut the defendant’s argument that the plaintiff assumed the risk of injury.

In December 2011, while snow tubing at Windham Mountain Adventure Park, Cynthia Thompson sustained injuries when her snow tube, which was linked to the snow tubes of her two daughters, slid up and over the outer barrier of her snow tubing lane and ultimately collided with a padded metal pole situated some 30 to 70 feet away. Thompson subsequently sued the owners and operators of Windham. After discovery, the defendant moved for summary judgment, based on the assumption of risk doctrine.

Under the doctrine, a voluntary participant in a recreational activity, such as snow tubing, "consents to those commonly appreciated risks which are inherent in and arise out of the nature of the sport generally and flow from such participation" (Morgan v State of New York, 90 NY2d 471, 484, 685 N.E.2d 202, 662 N.Y.S.2d 421 [1997]; see Connolly v Willard Mtn., Inc., 143 AD3d 1148, 1148, 40 N.Y.S.3d 236 [2016]; Tremblay v West Experience, 296 AD2d 780, 780-781, 745 N.Y.S.2d 311 [2002]).

However, the “participant will not be deemed to have assumed the risks of reckless or intentional conduct or concealed or unreasonably increased risks" (Morgan v State of New York, 90 NY2d at 485 [internal citations omitted]; accord Anand v Kapoor, 15 NY3d 946, 948, 942 N.E.2d 295, 917 N.Y.S.2d 86 [2010]; see Youmans v Maple Ski Ridge, Inc., 53 AD3d 957, 958-959, 862 N.Y.S.2d 626 [2008]).

Further, “application of the doctrine generally presents a question of fact for a jury to resolve.” (Hope v Holiday Mtn. Corp., 123 AD3d 1274, 1275, 999 N.Y.S.2d 211 [2014]; see Maddox v City of New York, 66 NY2d 270, 278, 487 N.E.2d 553, 496 N.Y.S.2d 726 [1985]).

In support of their motion, the defendants submitted, among other things, photographs of the snow tubing hill and the deposition testimony of Windham's project manager, the plaintiff and one of the plaintiff's companions on the day in question. The project manager's testimony established that, on any given day, there could be between six and 10 snow tubing lanes open at Windham and the lanes were separated by manufactured snow berms, which could range in height from 1 1/2 feet to 2 1/2 feet. He asserted that the height of the berms could decrease over the course of a day as a result of melting or tubes wearing them down and that, although tubers generally should not be able to go over the top of the berms, he had occasionally seen this happen. The project manager also testified that, at the time of plaintiff's injury, there was no policy prohibiting lane attendants from spinning patrons prior to their descent. He further stated that the number of tubes, if any, that could be linked together was determined by lane safety attendants at the bottom of the hill based on their observations and assessments of the weather and resulting lane conditions.

Additionally, the photographs and the testimony of the project manager and the plaintiff's companion demonstrated the existence of several padded poles, which were situated between 30 and 70 feet away from the plaintiff's lane and were readily observable from both the hill and the lift line to the top of the hill. The plaintiff's testimony established that she had some experience with snow tubing before her accident, having snow-tubed three years earlier and completed several prior runs without incident on the day in question. Further, with respect to the injury-producing run, which occurred around 3:00 p.m., plaintiff stated that she and her daughters had decided to ride tandem and that, when asked if they wanted to be spun, she had said yes. This evidence was sufficient to satisfy defendants' burden of demonstrating that plaintiff — who had prior experience snow tubing and who had occasion to observe the hill's conditions during her prior snow tubing runs on the day in question — assumed the inherent risk that her snow tube would spin out of control, go over the top of the snow berm and collide with one of the nearby padded poles (see Connolly v Willard Mtn., Inc., 143 AD3d at 1149; Youmans v Maple Ski Ridge, Inc., 53 AD3d at 959; Tremblay v West Experience, 296 AD2d at 781; see generally Morgan v State of New York, 90 NY2d at 484).

The burden thus shifted to the plaintiff to demonstrate "facts from which it could be concluded that defendant concealed or unreasonably enhanced the danger . . . or created conditions which were unique or above those inherent in (the) activity" (Youmans v Maple Ski Ridge, Inc., 53 AD3d at 959; accord Connolly v Willard Mtn., Inc., 143 AD3d at 1149; see Morgan v State of New York, 90 NY2d at 485). To that end, the plaintiff primarily relied on the deposition testimony of her companion and the project manager to argue that the weather and the condition of the lanes and snow berms on the day in question were such that spinning and in tandem tubing were contraindicated and, therefore, should not have been allowed. In particular, the plaintiff's companion testified that she walked from the plaintiff's lane to the pole with which the plaintiff collided and found the terrain to be "icy" and "hard." Additionally, based on his examination of the glare and shadows in the photographs taken on the day of the accident, the project manager testified that the lanes and snow berms appeared "icy" and that the lanes were "probably getting a bit frozen over" and "fast." He stated that when the lanes "iced up" and became too fast, the lane safety attendants at the bottom of the hill were supposed to either cut down the number of tubers that were permitted to ride together or prohibit tandem riding altogether. He further stated that he had previously observed snow tubers leave their lanes as a result of being spun. In our view, the foregoing proof, considered in the light most favorable to plaintiff (see Lau v Margaret E. Pescatore, Inc., 30 NY3d 1025, 1027, 68 N.Y.S.3d 405, 90 N.E.3d 1276 [2017]; Daigle v W. Mountain, 289 A.D.2d 838, 840, 734 N.Y.S.2d 715 [2001]), raises a factual issue as to whether the risk of injury was unreasonably increased by the actions of the lane attendants — namely, allowing plaintiff and her daughters to ride tandem and spinning their tubes prior to their descent — under the particular weather and terrain conditions at the time of plaintiff's injury (see Connolly v Willard Mtn., Inc., 143 AD3d at 1150; Huneau v Maple Ski Ridge, Inc., 17 AD3d 848, 849, 794 N.Y.S.2d 460 [2005]; Daigle v W. Mountain., 289 AD2d at 840). Accordingly, Supreme Court properly denied defendants' motion for summary judgment dismissing the complaint.

Cynthia Thompson v WINDHAM MOUNTAIN PARTNERS, LLC, et al.; S.Ct.N.Y., App. Div., 3d Dept.; 525721, 2018 N.Y. App. Div. LEXIS 3344; 2018 NY Slip Op 03415; 5/10/18

Attorneys of Record: (for appellants) Roemer Wallens Gold & Mineaux LLP, Albany (Matthew J. Kelly of counsel). (for respondent) Law Office of Gary A. Cusano, PC, Bedford Hills (Gary A. Cusano of counsel).

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The Electric Seventh Circuit and Its Impact on Sports Law

By Adam Epstein

Since 2016, there have been several significant decisions emanating from the Seventh Circuit involving the NCAA as a named party. Naturally, given that the NCAA’s headquarters are in Indianapolis, Indiana, the fact that litigation appears in the Seventh Circuit should be no surprise since it consists of Illinois, Indiana and Wisconsin. The following three recent cases represent noteworthy Appellate and District Court decisions involving the NCAA within this Circuit.

Deppe

In Deppe v. NCAA, No. 17-1711, 2018 U.S. App. LEXIS 17244 (7th Cir. June 25, 2018), the Seventh Circuit Court of Appeals affirmed the dismissal of punter Peter Deppe’s claim that the NCAA’s “year in residence” rule violated § 1 of the Sherman Act. The rule requires student-athletes who transfer from one FBS Division I college to another to wait one full academic year before they can play for their new school in competition.

Deppe originally walked-on to Northern Illinois University in June 2014, as a preferred walk-on. He redshirted his first season and a coach promised he would receive an athletic scholarship in January 2015. Unfortunately for Deppe, not only did that coach leave NIU, but the head coach then informed Deppe that he would not receive a scholarship. To add insult to injury, NIU then offered a scholarship to another punter in the fall, 2015. Deppe attempted to transfer to the University of Iowa which had shown an interest, but only if Deppe could play in the fall, 2016.

Citing NCAA Bylaw 14.5.5.1, the NCAA remained steadfast that Deppe would have to sit out another year in accordance with its rules. While there are a few exceptions to the transfer rule in which the transfer school could seek a waiver, the University of Iowa decided to offer a scholarship to another punter with immediate eligibility instead and therefore did not seek a waiver for Deppe at all. As a result, Deppe sued the NCAA under antitrust law and his class-action claim was dismissed by the District Court for the Southern District of Indiana on March 6, 2017.

The 2018 affirmation of the 2017 dismissal came as no surprise. Historically, the NCAA has been quite successful in defending its bylaws which relate to student-athlete eligibility. Citing the U.S. Supreme Court decision in NCAA v. Bd. of Regents of Univ. of Oklahoma, 468 U.S. 85 (1984), the Seventh Circuit in Deppe’s case opined that the “...year-in-residence requirement is an eligibility rule clearly meant to preserve the amateur character of college athletics and is therefore presumptively procompetitive...” Throughout the Deppe decision, the Seventh Circuit cited the Bd. of Regents decision in addition to its own decision a few years prior in Agnew v. NCAA, 683 F.3d 328 (7th Cir. 2012).

In Agnew, the plaintiff unsuccessfully attempted to show that the NCAA’s limit on the numbers of scholarships and the prohibition (at that time) of multi-year scholarship offers violated §1 the Sherman Act and had an “anti-competitive on the market for student-athletes...” However, the Seventh Circuit Court of Appeals in Deppe-as in Agnew-affirmed the dismissal of the case and reminded the parties that the “...year-in-residence requirement is an eligibility rule clearly meant to preserve the amateur character of college athletics and is therefore presumptively procompetitive...”

Kizzang

In NCAA v. Kizzang LLC, No. 1:17-cv-00712-JMS-MPB, 2018 U.S. Dist. LEXIS 83180 (S.D. Ind. May 17, 2018), the District Court for the Southern District of Indiana awarded a reduced amount of $220,988.05 in attorneys’ fees to the NCAA after the NCAA was previously granted a default judgment by order and opinion January 18, 2018 against Kizzang and its founder Robert Alexander for using the marks “FINAL 3” and “APRIL MADNESS.” Obviously, these expressions mimicked the NCAA’s trademarked phrases “Final Four” and “March Madness.”

According to the NCAA’s original complaint of March 8, 2017, Kizzang and Alexander were “...in the business of marketing and providing nationwide Internet-based promotions that award prizes for predicting the results of sporting events, including the results of college basketball games played by and between NCAA member schools, and in particular games played during the NCAA's Division I Men's Basketball Championship.” Not surprisingly, the NCAA filed suit alleging federal trademark infringement, trademark dilution and unfair competition alleging that Kizzang and Alexander’s use of the use of the marks were “likely to cause confusion or mistake, or to deceive as to Defendants’ affiliation, connection, or associate with the NCAA, or as to the origin, sponsorship, or approval of Defendants’ services.”

The defendants did not answer by the July 15, 2017 deadline, and the NCAA moved for an “Entry of Default.” The defendants somehow reappeared on August 10, responding to the Entry of Default, and then on August 31 filed a motion to dismiss or, alternatively, to transfer the case to the District of Nevada. The District Court for the Southern District of Indiana denied the defendants motions and, in fact, found that the circumstances presented an “exceptional case” for the NCAA under the Lanham Act and therefore it was entitled to attorney’s fees accordingly under the Act.

Though the Kizzang case only reached the District Court level, the two orders and opinions presented a solid discussion of the role and significance of trademark law and unfair competition, a discourse of civil procedure and also a formidable analysis on calculation of attorney’s fees using the lodestar method. The decision also, permanently enjoined Kizzang and Alexander from “using the NCAA's FINAL FOUR or MARCH MADNESS marks and any colorable imitation or simulation of them, including FINAL 3, FINAL THREE, or APRIL MADNESS...doing any act or thing likely to induce the belief that Defendants' products or services are in any way legitimately connected with, or sponsored or approved by, the NCAA; and doing any act or thing that is likely to dilute the distinctiveness of the NCAA’s FINAL FOUR or MARCH MADNESS marks or that is likely to tarnish the goodwill associated with those marks...”

Berger

In the Seventh Circuit Court of Appeals decision Berger v. NCAA, 843 F.3d 285 (7th Cir. 2016), the Court affirmed the decision of the District Court to dismiss the claims against the NCAA and holding that former student-athletes at the University of Pennsylvania were not employees though the plaintiffs claimed that they and others at more than 120 other NCAA Division I members should be classified as such and therefore were entitled to a minimum wage under the Fair Labor Standards Act (FLSA). Simply put, the Court of Appeals held that “student athletes are not employees and are not covered by the FLSA.”

The Berger decision provided a succinct opinion and analysis of how courts-including the Supreme Court of the United States-have interpreted the definition of employer and employee. Indeed, Berger cited numerous NCAA-related decisions including the Bd. of Regents case (1984),its own Agnew decision (2012),and O’Bannon v. NCAA, 802 F.3d 1049 (9th Cir. 2015) to support the proposition that NCAA eligibility rules are designed to maintain the “tradition of amateurism” and “the reality of the student-athlete experience.” The Berger court went further and provided a list of state worker’s compensation cases in which student-athletes attempted to characterize themselves as employees but failed. Berger also looked to the Department of Labor’s Field Operations Handbook which “indicated that student athletes are not employees under the FLSA.”

These three decisions were not the only decisions since 2016 in which the NCAA was a named party in a decision in the Seventh Circuit. Another includes the District Court decision in Pugh v. NCAA (2016) in which Devin Pugh unsuccessfully challenged the “year-in-residence” requirement after losing his one-year football scholarship at Weber State University, transferring to an FCS school and then challenging the NCAA bylaws under the Sherman Act by “prohibiting multi-year Division I football scholarships and capping the number of athletic scholarships that could be awarded by Division I member institutions.” As the Deppe case noted-a year later as it was at the District Court level-Pugh’s case was “virtually identical” to Deppe’s and that there were “no legal issues that distinguish” the two cases. Accordingly, Deppe-just like Pugh- had his claimed blocked.

For now, the NCAA and its eligibility rules appear to be on solid ground from legal challenges under violations of antitrust law. There is no doubt that the Seventh Circuit will continue to address major NCAA-related decisions in the future, and this Circuit is not exclusive to hearing NCAA decisions. After all, in 2017 the Ninth Circuit’s Northern District of California in Dawson v. NCAA dismissed the FLSA claim by former University of Southern California football player Lamar Dawson. Similarly, the Third Circuit’s Eastern District of Pennsylvania in Livers v. NCAA dismissed on May 17, 2018, an FLSA case brought by Villanova University’s Lawrence “Poppy” Livers. Both decisions cited the Seventh Circuit’s 2016 Berger decision. This fall, the Ninth Circuit will introduce us to a former Clemson University football player Martin Jenkins who seeks to challenge the legitimacy and value of NCAA scholarship limits and-in essence-the NCAA’s definition of “amateurism” itself.


Adam Epstein

Epstein in a Professor of Business Law and Regulation at Central Michigan University.

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NHL Secures Federal Court Victory As Class Action Status Denied In Concussion Case

By Gregg E. Clifton, of Jackson Lewis

U.S. District Court Judge Susan Richard Nelson has denied the class-action status sought by a potential class of several thousand current and former players suing the National Hockey League (NHL) alleging that the league was negligent in its care and prevention of head trauma and that it fraudulently concealed the long-term impact of head injuries while promoting violent play.

The decision is a significant victory for the NHL.

In a 46-page order, Judge Nelson acknowledged the potential costs and duplication of effort in pursuing individual claims but focused on the ”widespread differences” in the various state laws regarding the subject and standard for medical monitoring.

She concluded that this issue would “present significant case management difficulties.”

Judge Nelson’s opinion stated that the class could contain up to 5,000 players, and depending on the history of and state of legal residence for each player, the judge said she would be forced to apply a wide range of legal standards based upon the distinct variances of applicable state laws.

Noting that a player who played for a New York franchise like the New York Rangers or New York Islanders would have to show proof of current injury to state a medical monitoring claim, while players who played for a Florida team, or those who have retired there, would not, Judge Nelson concluded, “Given those differences, the court finds that resolving these claims in a single class action would present significant case management difficulties.”

In another victory for the NHL, Judge Nelson also rejected the players’ argument that New York law should be applied for the entire class because that is where the NHL is headquartered.

Rather than one state law applying, the judge found instead that the law of the state where a player spent most of his career — or for players who moved around often, the state where they currently live — should be applied.

The players had also proposed a class of living players who had been diagnosed with a degenerative neurological condition, such as Alzheimer’s. Similarly, the judge found that the legal issues for this proposed class were also too varied and individual.

Responding to the decision, Attorney Charles Zimmerman, an attorney for the players, asserted that the ruling was only procedural and that the individual players are prepared to move forward. Commenting on the future status of the cases, Zimmerman stated, “We will continue to litigate....on a case-by-case basis. Players with traumatic brain injuries ...will prevail as we move forward.”

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Jury Sends a Message in the Reggie Bush Negligence Case

By Gil Fried

Former star running back Reggie Bush suffered a season-ending knee injury in a 2015 game between the St. Louis Rams and the San Francisco 49ers at the Edward Jones Dome in St. Louis. Bush was pushed out of bounds by opposing players, then slipped and fell on a strip of exposed concrete. The concrete encircled the entire outside part of the field, behind the field and player benches. Bush’s lawsuit called that strip a “concrete ring of death.”

The suit was filed in 2016. It claimed that the Rams (who are now based in Los Angeles) were negligent in keeping that ring of concrete exposed. The suit alleged it was even more egregious because the team should have known that players regularly go beyond the out of bounds lines — in this case 35 feet outside the lines. Shortly after Bush’s injury, the Rams covered the exposed concrete with rubber.

A St. Louis jury agreed with the claim and they awarded Bush $4.95 million in compensatory damages and $7.5 million in punitive damages. The jury found the Rams’ organization 100 percent liable for the incident. Originally, the public agencies that own and operate the stadium were also sued, but they were dismissed from the suit after successfully arguing that the Rams control the stadium on game days.

According to a St. Louis paper, Dan Allmayer, a lawyer for the team, said they plan to file a motion for a new trial. According to the St. Louis Post-Dispatch, Allmayer indicated that "[F]ootball is risky and being pushed out of bounds is a risky part of the game.... Reggie Bush is one of the most talented running backs in the NFL. Why didn't he swerve or do something to avoid the concrete? .... Why in 20 years had all sorts of running backs who had been pushed out of bounds not reach the concrete?"

Every facility executive needs to carefully review their facility as part of a risk management effort. The facility director should take into consideration not just the number of injuries, but possible severity, ease of correcting a problem, and other variables when exploring risks/solutions. While a risk matrix (examining likelihood and severity) can provide some insight, it is not the end of the analysis if the potential harm is something that should be analyzed in light of new technologies, new facility designs, or other variables that might need to be considered.

This brings me back to my law school days where we reviewed Learned Hand’s decision in T.J. Hooper v. Northern Barge Corp. 60 F.2d 737 (1932). One line in particular from the case reads: Courts must in the end say what is required; there are precautions so imperative that even their universal disregard will not excuse their omission.

Thus, if most in the industry do something one way, and there is a safer way that should/could be followed, then maybe the courts will intervene and force our industry to act in a given way. The more we can show that we are doing everything possible to make a facility safe, taking into account facts known to one facility or even facts known at other facilities or even throughout the world, we should try to see if we are providing as safe a facility as possible. There is no guarantee of safety, but we have an obligation to try and address issues that are or might represent a concern (or safety solution) before the issue of liability goes to a jury that might award millions of dollars.

Gil Fried is a sports law professor at the University of New Haven and Editor in Chief at Sports Facilities and the Law.

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Three Stripes and You’re Out in Adidas-Skechers Sneaker Trademark Row

By Robert E. Freeman, of Proskauer

Since at least 2004, Adidas has proclaimed “Impossible is nothing ,” and has showcased various athletes’ determination in overcoming adversity to achieve excellence.  Sprint forward to February 2016: impossible apparently was not a barrier for Adidas America, Inc. (“Adidas”), as Adidas convinced an Oregon district court to issue not one, but three preliminary injunctions in a trademark dispute against another footwear company Skechers USA, Inc. (“Skechers”).  Each preliminary injunction banned the sale of a certain Skechers shoe that allegedly infringed Adidas’s marks or trade dress. Considering that a preliminary injunction is considered an “extraordinary remedy” by the U.S. Supreme Court, the securing of three preliminary injunctions really made the “impossible” slogan a representation of reality for Adidas.  However, this past May, the Ninth Circuit showed Adidas that not everything was possible, as it affirmed in part, but also reversed in part the lower court’s injunctions.  (Adidas Am., Inc. v. Skechers USA, Inc., No. 16-35204 (9th Cir. May 10, 2018)).  How we got here requires a long walk in several pairs of shoes.  

The home court for this trademark dispute was the district court of Oregon, and the case involved two of Adidas’s registered trademarks, the Three-Stripe mark and the Supernova mark, as well as Adidas’s unregistered Stan Smith sneaker trade dress. Adidas, as we know, is “the Brand with the Three Stripes.”  It began using the Three-Stripe logo on its shoes in the 1950s and, by the late 1960s, Adidas started to use the logo on apparel and other merchandise as well.  The Supernova mark, although not as famous as the Three-Stripe mark, is also a well-known mark that Adidas has used to name and promote specific types of running shoes and apparel.  Last but not least, the Stan Smith is a shoe line Adidas launched in 1973, which was named after an American tennis player who in the 70s was ranked number one in the world and won both the U.S. Open and the Australian Open.  The sneakers were originally produced as tennis sneakers, but they eventually moved from the court to the street and runways — and, according to Adidas, have sold more than 40 million pairs worldwide since its introduction.

For you sneaker fans out there, you may be a bit surprised to learn that Skechers is one of the largest footwear companies in the U.S.  As noted by the lower court, one major reason for its success has been its “serial branding strategy.”  The strategy includes a process the brand calls “Skecherizing,” whereby, as the court quoted, “its designers transform market trends into unique footwear products... prominently featuring Skechers’ famous marks, brands and logos.”  Adidas has not always looked favorably upon Skecherizing, and has sued Skechers or sent a demand letter multiple times over the past two decades claiming that Skechers’s shoes were infringing Adidas’s own trademarked designs.  

Most recently, the battle reignited over three Skechers shoes that Adidas believed were confusingly similar imitations of the Three-Strip mark, the Stan Smith trade dress, and the Supernova mark (see below).  Adidas argued that Skechers Relaxed Fit Cross Court TR was a “knockoff” of Adidas’s famous Three-Stripe mark, that Skechers “blatantly” copied Adidas’s famous Stan Smith trade dress in producing the Onix, and also claimed that Skechers Relaxed Fit Supernova infringed Adidas’s registered Supernova mark.  Adidas firmly believed that Skechers had infringed its IP and asked the district court for a preliminary injunction that would prevent Skechers from selling the shoes in question.

A party seeking a preliminary injunction must establish that it is likely to succeed on the merits and that it is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in its favor, and that an injunction is in the public interest. In February 2016, Team Adidas successfully convinced the lower court that it was likely to succeed in showing that the Skechers shoes at issue infringed Adidas's Three-Stripe mark, Supernova mark, and Stan Smith trade dress because the Skechers shoes were likely to cause consumer confusion about the source of the products.  In granting Adidas’s motion, the court ruled that Adidas produced sufficient evidence of irreparable harm and the other elements required to warrant injunctive relief.  In finding the requisite harm, the lower court held that Skechers’s attempts to “piggy back” off of Adidas’s efforts by imitating Adidas’s marks meant that Adidas would lose control over its trademarks, reputations, and goodwill — “a quintessentially irreparable injury.”

On appeal, Skechers lodged two coach’s challenges, one against the Onix-Stan Smith trade dress ruling and another against the Cross Court — Three-Stripe ruling.  Skechers argued that the lower court presumed irreparable harm even though Adidas failed to present sufficient evidence of existing or future harm.  In May 2018, the Ninth Circuit affirmed the preliminary injunction related to the Onix-Stan Smith, ruling that there was ample evidence that Adidas would be irreparably injured by the Onix, but reversed in part, overturning the sales ban on the Skechers Cross Court, stating that there was no comparable evidence supporting the likelihood of irreparable injury.  In short, one of the challenges was accepted and the other reversed, making the final score Adidas 2, Skechers 1.

Judge Nguyen, who presided over this battle between the two shoe brand giants and who wrote for the Ninth Circuit majority, provided her explanation of what constitutes sufficient evidence for irreparable injury.  On the Onix-Stan Smith trade dress dispute, the appeals court first affirmed the ruling that the Stan Smith trade dress acquired distinctiveness and was an enforceable trade dress under the Lanham Act due to its commercial success, robust marketing efforts and wide media coverage.  The court then affirmed that the Skechers Onix shoe, although containing some minor differences with regard to non-functional design elements, likely infringed Adidas’s Stan Smith trade dress and presented an “unmistakable” overall impression that these were nearly-identical shoes.  As the court summarized, those striking similarities suggested Skechers's intent to create an association between its marks and Adidas's IP.  The Ninth Circuit also found sufficient evidence for irreparable harm to the Stan Smith brand because, among other things, Skechers's likely infringement undermined Adidas's substantial investment in building the Stan Smith brand reputation through specific media campaigns and market scarcity strategies.

In comparison, the Ninth Circuit held that the lower court’s analysis over the Skechers Cross Court — Adidas Three-Stripe mark claim went over the line.  The Ninth Circuit, while agreeing with the lower court’s reasoning that Adidas showed a likelihood of success on the merits of its infringement claim (given Adidas’s strong mark and the Cross Court’s similar stripe design), nevertheless found that the lower court erred in finding that Adidas made a requisite showing of irreparable harm.  Adidas’s irreparable harm argument, in a shoebox, was that “Skechers harmed Adidas’s ability to control its brand image because consumers who see others wearing Cross Court shoes associate the allegedly lesser-quality Cross Courts with Adidas and its three-stripe mark.”  However, the appeals court ruled that Adidas did not present evidence sufficient to show its efforts to cultivate a supposedly premium brand image for itself.  It also did not help, according to the appeals court, that Adidas did not set forth “evidence probative of Skecher’s allegedly less favorable reputation” or how it would suffer irreparable harm especially when consumers viewing the Skechers Cross Court from afar could not tell the shoes were not Adidas or low quality to begin with.  The court’s ultimate post-sale confusion question went unanswered: “If the ‘misled’ consumers could not assess the quality of the shoe from afar, why would they think any differently about Adidas's products?”

Having been denied a preliminary injunction in its trademark infringement dispute, one may assume Adidas’s disappointment with the Ninth Circuit ruling.  Regardless, Adidas, already seems to have moved forward.  Another battle line emerged between Adidas and Skechers as Adidas filed a motion for contempt sanctions after allegedly discovering another Skechers copy of the Stan Smith, called Ironwood (which Skechers claims it had voluntarily suspended sales of following notice from Adidas).  The parties settled twelve days after that filing, on May 30, 2018, and on undisclosed terms. But judging by the trend, we may be seeing another judicial playoff series between the two brands soon.

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Articles

The Murphy Decision Legalizing Sports Betting ‘Could Fundamentally Alter’ the Sports Industry — an Analysis

By Ronald Gaither and Elizabeth McCurrach, of BakerHostetler

On May 14, 2018, after years of litigation on the legality of sports betting, the Supreme Court delivered a groundbreaking decision in Murphy v. NCAA, 138 S.Ct. 1461 (2018). The decision, authored by Justice Alito, struck down the Professional and Amateur Sports Protection Act of 1992 (“PASPA”), 28 U.S.C. § 3702 (1), as unconstitutional and opened the way for legalized sports betting in every state. Although just the opening salvo on this issue, the decision in Murphy has the potential to profoundly change sports in America.

Murphy v. NCAA Overview

The origins of the Murphy decision date to a 2011 New Jersey state referendum. As a way to increase the state’s revenue, New Jersey passed a referendum to legalize sports betting in the state, formally passed into law by the New Jersey Legislature in 2012. The NCAA, NFL, NBA, MLB, and NHL all sued to prevent its enactment. After an unsuccessful run through the lower courts and refusal to grant certiorari by the Supreme Court, the New Jersey Legislature passed a revised law in 2014. Again, the leagues opposed and sought injunctive relief. The sports leagues’ main argument was that the New Jersey law violated PASPA, which specifically prohibited states from licensing or authorizing sports betting. New Jersey argued that PASPA was an unconstitutional infringement on New Jersey’s sovereign authority to repeal its anti-gambling laws. Both the District Court and the United States Court of Appeals for the Third Circuit found for the leagues on this issue. After granting certiorari, the Supreme Court disagreed with the lower courts, delivering a 6-3 decision in favor of striking down PASPA in its entirety.

Specifically, Justice Alito based his decision on certain provisions of PASPA violating the anti-commandeering doctrine. The anti-commandeering doctrine relates to the unconstitutionality of federal statutes compelling states to enforce federal law and was previously examined by the Court in New York v. United States, 505 U.S. 144 (1992) and Printz v. United States, 521 U.S. 898 (1997). While the leagues argued that the anti-commandeering principle does not apply since PASPA’s prohibitions do not command states to take affirmative actions, the Court disagreed. Justice Alito held that, since PASPA specifically prohibited state authorization of sports gambling, it “unequivocally dictates what a state legislature may and may not do.” The Court explicitly rejected the leagues’ argument, finding no distinction between precluding action and requiring affirmative action. Finding that no provisions of PASPA were severable from any others, the Court held that PASPA was unconstitutional in its entirety. The decision concluded with Justice Alito’s explanation that the legalization of sports gambling is an important decision but is not specifically within the court’s purview—this power belongs to the states.

Writing an impassioned dissent, Justice Ginsburg disagreed with the Court’s decision to take a “wrecking ball” to PASPA. Her dissent, joined by Justice Sotomayor and in part by Justice Breyer, expressed concern at the lack of deference paid to congressional authority to regulate interstate commerce, as well as a disagreement with the majority’s severability decision. In closing, Justice Ginsburg offered her alternative vision of severing the commandeering directions from the rest of PASPA, while retaining an instruction to states and private parties to abstain from operating sports betting organizations. Whether or not this alternate framework could have succeeded is now irrelevant. With PASPA upended, a myriad of legal issues now surround almost every facet of the sports industry with everyone from state legislatures to the leagues to gaming companies attempting to figure out the appropriate way forward.

Data Rights and the Integrity Fee

Although the Supreme Court entirely striking down PASPA left some surprised, the sports leagues themselves had started to prepare for the possibility. In a prescient move, NBA Commissioner Adam Silver penned an op-ed for the New York Times in November 2014, specifically calling on Congress to legalize and regulate sports betting. Building on this proactive approach, the NBA, in concert with MLB, publicly undertook a cross-country effort to lobby for certain structures to help effectively protect the integrity of their sports. To that end, the leagues are lobbying for permitted mobile betting, influence over the types of betting offered by bookmakers, required bookmaker cooperation with league investigations, required sharing of real time betting data to facilitate the leagues’ monitoring of suspicious activity, required league notification if bookmakers have information suggesting an integrity issue, and the required use of official league data. What has garnered the most media attention is the leagues’ request for an “integrity fee.” As presented to various state legislatures, an integrity fee would be an additional fee due to the sports leagues that operates as a royalty since the leagues’ product is the primary input into sports betting. Although one could gamble on nearly anything, the sports leagues argue that their sports and the resultant data are foundational to sportsbooks. According to the leagues, the fee would operate as an insurance premium, to compensate the leagues for the increased risk as legalized gambling becomes more widespread. Since increasing revenue within the states was the main catalyst to overturn PASPA, states are still deciding whether or not to incorporate the fee into law. If the legislative angle fails to yield a favorable result for the leagues, it seems likely that litigation is bound to ensue over the critical issue of who owns the intellectual property that forms the basis of any gambling activity.

Since the Murphy decision, the leagues have been cautious when releasing public statements. While each has a different approach, the NFL, NBA, and MLB have each referred to the importance of protecting their intellectual property. What precisely constitutes this intellectual property remains up for debate. In what many consider to be the definitive ruling on the matter, NBA v. Motorola, Inc., 105 F.3d 851 (2d Cir. 1997), the Second Circuit explicitly found that the actual performances of basketball games do not deserve federal copyright protection as they are not “original works of authorship.” As recently as March 2014, the Solicitor General filed an amicus brief to the Supreme Court in American Broadcast Companies Inc. v. Aereo, Inc., 134 S.Ct. 2498 (2014), stating that, in the case of a televised live sporting event, “the telecast itself is the only copyrighted work.”

Each league’s respective ownership of proprietary systems of data collected during games will likely be a critical issue going forward. In Morris Communications v. PGA Tour, 364 F.3d 1288 (11th Cir. 2004), the plaintiffs argued that the PGA Tour violated federal antitrust laws through the tour’s compilation and sale of golf scores on the internet. Ruling on narrow antitrust grounds, the 11th Circuit held that the PGA met the business justification burden of the Sherman Act by preventing the plaintiffs from “free-riding” on its Real-Time Scoring System (“RTSS”). The court elaborated on the extensive and proprietary nature of the RTSS while noting some of the distinctions of golf itself, namely that no spectator could simultaneously spectate each competitor in a tournament. The decision specifically states that “[t]he compiled real-time golf scores acquired through RTSS are not a product that Morris has a right to sell because they are a derivative product of RTSS, which PGA owns exclusively.” The court held that the PGA has a right to sell or license championship golf and the corresponding RTSS product on the internet, just as the PGA can sell and license television broadcasting rights. The court explicitly rejected the plaintiffs’ attempts to recast the PGA’s arguments as the futile copyright defense “sweat of the brow,” noting again the antitrust thrust of the case. The court noted that “[t]he preventing of free-riding, which is an inherently economic motivation, provides a valid business justification on the facts presented here.” Although a narrow holding, Morris still provides some guidance the legal rights that exist for the data collection and analysis conducted by the leagues and teams.

While the data referenced in Morris concerned the raw data of a golf match, this is only one type of data now at issue. Performance data measures the performance of individual athletes during a game. Many leagues and clubs now use advanced camera and sensor-based technology to track players’ performances. While still banned in games themselves, the Golden State Warriors openly use two pieces of wearable technology, Blast Motion and Shot Tracker, to aid in their perpetual quest for on-court dominance. Refined data concerns the further statistical refinement of the raw data provided by the game performance. The greater the refinement of the data, the greater the legal argument that it is proprietary. Perhaps no game represents the collection and aggregation of performance and refined data more than baseball, with batting average, on base percentage, slugging average, and walks plus hits allowed per inning being standard lay vocabulary. Refining this raw data into sophisticated metrics to predict a team’s value entered the mainstream consciousness in Michael Lewis’s Moneyball and has been perhaps most successfully executed by Theo Epstein with his historic Boston Red Sox and Chicago Cubs World Series wins. MLB itself currently uses the Statcast system, a tracking technology that runs on Amazon Web Services. Statcast records players’ every movement in the field in addition to capturing the flight of the baseball itself, including both pitch rotation and hit velocity information. On July 17, 2018, MLB and Amazon Web Services announced their continued relationship and commitment to the ongoing innovation of Statcast’s metrics. While certain statistics have always permeated baseball, the success of these more advanced statistical methods has led to an advancement and proliferation of an analytics-based approach across sports. Sportradar and Stats LLC are two well-known operators in this field of data metrics, and each has significant licensing deals with the major sports leagues. Unlike the raw data in the public domain examined in prior jurisprudence, the compilation and analysis of performance data and refined data is far more likely to be considered proprietary information.

Leagues and teams now thrive on this information to efficiently run successful operations, and correspondingly, so do gambling houses. More information provides a greater ability to value and weight players and teams and thus accurately determine a spread. In 2016, the NBA entered into a multi-year partnership with Sportradar, resulting in immediate distribution of data and audio visual game feeds to gaming operators outside of the United States. Another aspect of the deal was the incorporation of Sportradar’s Integrity Services into the NBA’s current platform, providing the NBA an extraterritorial look at preserving the sport’s integrity. On July 31, 2018, Commissioner Adam Silver announced a historic partnership between the NBA and MGM Resorts International, marking a historic first in the post-Murphy era and making MGM the NBA’s official gaming partner. As the wider betting market opens up in America and other leagues follow suit, this imprimatur may likely create a massive pendulum swing in revenue for companies who reach these deals. One recent analogous situation was AT&T’s exclusive deal for the iPhone in 2007. This exclusivity raised AT&T’s revenue 41% in the quarter of its release and helped the company effectively compete with Verizon over the years. It follows that the NBA’s relationship with MGM may well result in an immediate profit surge as well as a competitive edge for the foreseeable future. While a sponsorship deal could provide additional revenue for the leagues to defray the costs of new gambling-focused departments, the sheer level of influence requires careful consideration of the terms of a sponsorship deal.

Should the other leagues and the gambling community reach deals concerning the use of official real-time league raw and refined data, the practice of courtsiding could undermine the leagues’ advantages while aiding gambling institutions who refuse to negotiate. Courtsiding is the practice of transmitting information directly from sporting events by taking advantage of the delay between live action and digital television broadcasts. While some courtsiders are employed to give individual gamblers a competitive edge, the main beneficiaries of the practice have traditionally been gambling houses who retain these services to avoid paying a premium for official league data. For the most part, gambling institutions are incentivized to receive the most updated, real-time data from the leagues themselves. With official league data, bets can be closed out more quickly and lead to a lower latency. Yet, certain gambling operations find it more profitable to simply pay someone to sit in the stands and relay the information, thereby bypassing both the need to deal with the leagues and the issue of a television delay. The action has most prominently happened during tennis, but with the advent of Murphy, will undoubtedly spread to other sports, presenting a major issue for leagues, teams and event owners. The practice gained some notoriety after a British man, Daniel Dobson, was arrested for courtsiding at the Australian Open. Dobson had a special device sewn into his shorts, allowing him to tap one of two buttons to relay instantaneous information on who had won each point. Within the international gambling community, it is not uncommon to bet not only on the outcome of matches but on the outcome of points themselves, and a few seconds could have large consequences. While not a per se illegal activity, the practice likely violates the language of most ticket agreements. Leagues, teams and event owners would be wise to carefully review their ticket terms and conditions to discern what legal remedies currently exist and should exist in the future. For example, at the 2016 U.S. Open, the Tennis Integrity Unit expelled twenty courtsiders and punished each with a twenty year ban on attendance. When one attended the following year, authorities had an act of trespass against the violator and the authority to arrest him. Although not entirely apposite, the case of Johnston v. Tampa Sports Authority, 530 F.3d 1320 (11th Cir. 2008), provides some further legal guidance on the limited rights of ticket holders. While dismissing a challenge to the Tampa Bay Buccaneers’ stadium’s authority to conduct pat-down searches mandated by the NFL, the Eleventh Circuit specifically noted that “[h]is purchase of a ticket granted him at most a revocable license to a seat. As is typical of sporting events, the NFL and the Buccaneers explicitly retained the right to exclude him from the Stadium for any reason.” If leagues and teams decide to aggressively revise these rights of exclusion, they can expand their rights and remedies. Appropriately training staff to correctly spot violators will be necessary to ensure the integrity of the games and to fully protect the intellectual property at issue.

Advertising

Absent the integrity fee, the most direct route for leagues to receive financial benefits would be the creation of their own casinos and sportsbooks. Short of wading into this thicket, leagues now face a major decision about whether or not any gambling organizations will be allowed to advertise in the stadiums and during games.

With gambling legal in Britain, an analysis of the relationship to advertising may portend what is on the horizon for the American market. Those watching the 2018 World Cup in Britain were bombarded with betting advertisements, each fighting for market share. While regulations attempt to clamp down on the pervasive nature of ads during games, jerseys themselves are inescapable ads. Gambling houses accounted for nine different team jersey sponsorships in the 2017-2018 Premier League, giving each continuous exposure on every pitch. Currently, the NBA is the only American professional sports league to allow advertisements on jerseys. Most of the deals thus far have had some hometown, cross-marketing appeal, but it seems likely that gambling houses, if allowed, would be the next frontier.

Apart from ads in stadiums and during games, there is the possibility of sportsbooks operating within the stadiums themselves. Last fall, betting house William Hill announced a two year partnership with BD Stadia, a large in-stadium betting provider. This partnership includes plans to work together in a number of Premier League and English Football League stadiums, opening up a new revenue stream for William Hill. BD Stadia is also known for its streamlined online technology, potentially providing William Hill a more robust entrée into the world of online gaming.

Despite these opportunities for increased revenue, Britain is taking a hard look at its relationship with the gambling industry and the consequences of this approval. In June 2017, after years of partnerships with various betting houses, the governing body of football in England, the Football Association (“FA”), abruptly cancelled its sponsorship deal with Ladbrokes. The move occurred after a string of high profile punishments were doled out against footballers for betting on matches, most prominently Joey Barton. Over the decade from 2006 through 2016, Barton, a former Burnley midfielder, placed 1,260 bets on football matches, a clear breach of FA rules. Many decried Barton’s 18 month ban as hypocritical, with Barton himself proclaiming that the FA’s deals with betting houses amounted to “hush money.” Although the FA was guarded about its motivations to end its deal with Ladbrokes, increased credibility was almost certainly amongst them. The FA’s about-face presents a cautionary tale for any leagues considering a direct sponsorship with gambling houses and may sway some to stay away entirely.

While the pressure to deal directly with gambling houses holds some appeal, leagues would be wise to carefully consider the effect on their respective regulation efforts. The ability to properly regulate sport may well outweigh the arguments for consumer ease.

Casinos and Fantasy: Strange Bedfellows?

Although the Murphy decision opens the door for sportsbooks to legally open in a number of states, most gaming companies will be hard pressed to do this without the blessing and cooperation of the casinos. Through their historic relationship with their respective state’s gaming commissions, most casinos enjoy a monopoly on gambling activity. As brick and mortar enterprises, the casino industry is ripe for disruption. However, with PASPA in effect, and, as the only licensed gambling operators, casinos had no reason to invest in online technology. Murphy changes that. Although newcomers would still need to attempt to receive the appropriate gaming licenses, casinos are now incentivized to stake their claim in the developing world of e-gambling.

One immediate result is an uptick in M&A activity between online fantasy and tech companies and casinos. Within weeks of the Murphy decision, both DraftKings and FanDuel announced deals. On June 1, 2018, DraftKings announced a partnership with Resorts Atlantic City to enter the New Jersey market under Resorts’s land-based casino license. This sort of partnership may provide a model for casinos and fantasy companies to utilize each other’s strengths — respectively, a gaming license and a streamlined online experience — while overcoming inherent weaknesses — namely, archaic technology and the lack of appropriate licenses. Similarly, on May 23, 2018, Paddy Power Betfair, a U.K. based sports betting house, acquired FanDuel to capitalize on what it sees as a huge sports betting market in the United States. In addition to providing a built-in customer base, both deals provide potentially advantageous technology to the gambling organizations. Gambling houses are undoubtedly reviewing these deals closely and considering the best acquisitions to benefit and modernize their current operations. Tech and fantasy companies would be wise to consider the most strategic alliances to maximize their online expertise.

State Analysis

While the Murphy decision did strike down PASPA as unconstitutional, it did not per se legalize gambling. Instead, it opened the door for states to choose to legalize gambling through their state legislatures. Certain states already had their laws in near final form, perhaps most obviously New Jersey. While each state’s law is unique, certain patterns are beginning to emerge, most specifically, casino control of the industry.

Nearly twenty states introduced bills in the lead-up to the Murphy decision to get gambling legalized as soon as practicable. New Jersey, Mississippi, and West Virginia all acted aggressively to implement their gambling laws. Each sets the legal betting age at 21 and allows betting on all professional sports. Notably, New Jersey’s law does prohibit betting on any collegiate sports occurring in New Jersey, with additional prohibitions on high school athletics. To encourage traffic at casinos in New Jersey, the tax rates will include an 8.5% tax on gross revenue from bets placed at casinos or racetracks, and a 13% tax on gross revenue from online betting. In a similar pro-casino nod, Mississippi’s law, effective as of July 21st, 2018, has even more restrictive language concerning online gaming. Online and app-based betting is allowed but only within the walls of a brick and mortar casino. All Mississippi betting revenues will be taxed at a 12% rate. While West Virginia will require mobile users to register with casinos using computer or smartphone apps, the user can place bets anywhere within the West Virginia borders. West Virginia casinos will pay $100,000 for a five year sports gaming license, with a 10% tax on gross gaming revenue. Despite lobbying efforts from the leagues, thus far, none of these states have included the integrity fee as part of the legislation.

Indiana and New York, while actively pursuing the legalization of gambling, are following a more cautious route than some of their peers. While two separate bills appeared in this year’s Indiana legislative session, neither garnered enough support for a vote. Almost immediately after the Murphy decision, Indiana’s Legislative Council announced a summer study on the potential impact of legalized gambling on college and professional sports within the state. While representatives hope to be in a position to tackle the issue when the legislature meets again in January, the influence of the Indianapolis-based NCAA may play a larger role in the state’s considerations. Notably, the most recent version of the Indiana house bill did include a 1% integrity fee on money wagered for the sports leagues. The bills under consideration during New York’s 2018 legislative session also included an integrity fee for the leagues, albeit a much reduced fifth of a percent of all wagers. However, New York closed their legislative session on June 20th, 2018, without passing a new sports betting bill. While it is possible that four New York upstate casinos could be approved for sports betting under existing law, many New York residents will likely flock to New Jersey to wager.

Certain states are currently refusing to even consider the option of legalizing sports gambling. In order to legalize gambling in the state of Texas for example, the Texas Legislature would need to change state criminal laws that currently prohibit gambling, adopt new regulatory schemes, and decide on the appropriate tax structure. The Texas Constitution also bans gambling so a constitutional amendment might be necessary as well. While unlikely in Texas, perhaps no state presents as many uphill battles for the pro-gambling lobby as Utah. A prohibition on gambling is currently written into the state’s constitution, barring any form of gambling, including lottery tickets, table games, and sports betting.

One of the main arguments to legalize gambling was an increase in state revenue. Proponents frequently pointed to the American Gaming Association’s estimate of the illegal sports betting market at $150 billion to bolster arguments in favor of legalization. Considering this figure is based on a shadow economy, it is difficult to predict its accuracy as well as the actual effects of taxed gambling on the overall figure. Prognosticators looking for guidance could look to states’ experiences with both legalized marijuana and lotteries to predict the effect on state revenue.

For the state of Colorado, legalizing marijuana has been a tremendous monetary success. Through taxes and fees, the state has raised over half a billion dollars since marijuana’s legalization in 2014. The state levies three separate cannabis taxes: a 2.9% sales tax on medical marijuana; a special 15% sales tax on retail marijuana; and a 15% excise tax on retail marijuana. These taxes feed into the state’s marijuana tax fund which then go to public schools, substance abuse prevention and treatment services, affordable housing, and law enforcement. Additionally, an unspecified amount fills in state budget gaps. While these financial figures are promising, certain other problems persist. Seeing a drop in marijuana profits, cartels are reportedly focusing on the manufacture of heroin and other highly addictive drugs, compounding America’s growing opioid crisis. Additionally, the number of taxes levied on marijuana means that a black market remains alive and well. While arrests for distribution are drastically down in the state as a whole, in urban areas, such as Denver, the decrease has not been quite as pronounced. While the revenue increase is undeniable, not every effect has been positive. If Colorado’s experiences can provide any guidance as state lawmakers navigate the legalization of gambling, the tension will be to find the correct taxation structure that both benefits the state and decreases the black market.

Lotteries are another source of state revenue that may prove instructive for lawmakers. Americans spent over $70 billion on traditional lottery tickets last year alone. While prize money accounts for approximately 60% of this number, the majority of the remainder went to education, state funds, and social programs for the homeless and substance abusers. In New York alone, over $64 billion has gone towards funding New York State K-12 public education since 1967. Similar to marijuana legalization, the basic financial success of lotteries is undeniable as well as the publicized positive impact on public education.

Both marijuana and lotteries have moral hazard elements in common with gambling that will present a dilemma for state lawmakers. With increased availability and profitability, the dangers of both gambling addiction and youth gambling become more prevalent. Lawmakers need to carefully analyze all available facts as they balance the potential profitability of such ventures for their states with the resultant ethical considerations.

Corruption

Although the federal government is free to draft a new regulatory framework to replace the unconstitutional aspects of PASPA, for the moment, it appears likely that a loose framework of state laws will compose the legal landscape. As each state moves to legalize gambling, it will need to establish proper compliance and anti-money laundering controls.

One major area of concern is money laundering. The impetus will now fall to casinos to have proper “Know Your Customer” and “Early Warning Systems” in place to detect irregular betting patterns or potential attempts to fix games. Even assuming the competence of respective state gaming institutions to properly spot illegal activity, jurisdictional questions loom. For example, presume a sportsbook based in Mississippi suspects an NBA game in Los Angeles was fixed. The sportsbook’s investigative capabilities as well as the jurisdictional capacity to properly regulate offenders outside of state lines remain unknown. Referring back to the current league lobbying effort, assuming the sportsbook alerted the appropriate authorities and the league, it seems likely that the NBA would bear the costs of properly investigating this infraction.

While many have viewed the Murphy decision as a fatal blow to organized crime’s longstanding presence in the illegal gambling realm, it would be premature to assume criminal elements would simply let go of one of its primary revenue streams. The International Centre for Sport Security estimates that $140 billion is laundered through global sports betting, with match fixing the primary means. In November 2017, the United Nations Convention Against Corruption convened in Austria to discuss the ways organized crime has invaded international competitive sports. The discussion centered on the problem of match fixing and the resultant manipulation across the betting markets, with the end goal of laundering money internationally. The advent of online sports betting sites has led to a startling criminal presence in the expanding global sports market, providing organized crime the opportunity to launder money and maintain a positive margin. The UN Convention adopted Resolution 7/8 on Corruption in Sport, specifically calling on member states to adopt a proactive legal stance to combat corruption. How to best effectuate this remains unclear. Certain sports leagues are focusing their efforts on educating their athletes and officials on possible sanctions of match fixing, with FIFA even offering players who have been pressured to fix a match potential whistleblower protections. Others are looking to the predictive value of refined data to isolate potential cases of match fixing. As the law changes, criminal enterprises will continue to adapt. A coordinated effort amongst the gambling industry, law enforcement, and the leagues will be the only path forward to ensure honesty in sport.

NCAA Issues

With gambling’s legalization, there is an additional irony that college players could make millions for others while receiving no formal compensation apart from their educational fees. On July 19, 2018, the NCAA announced that it would be creating a team of experts to determine how the integrity of games can be protected and betting can best be monitored. With gambling legalized, the NCAA’s mission to protect the “amateur” athlete is exponentially harder.

The NCAA was originally founded in 1906 to determine the relevant safety standards of college football. It is currently an association of 1,061 colleges and universities who must adhere to its regulations in order to retain membership. While the games they regulate have altered, amateurism was foundational to the NCAA’s mission. At its inception, the vision of the student-athlete was a well-rounded gentleman who played sport purely for entertainment with no designs (or need) for compensation. These historic sensibilities were then ingrained in the rules themselves. The relevant NCAA rule, Bylaw 12, mandates that athletes must be student-athletes, explaining “[t]he student-athlete is considered an integral part of the student body, thus maintaining a clear line of demarcation between college athletics and professional sports.” The NCAA’s main argument for the procompetitive aspects of Bylaw 12 is the importance of “integrating academics with athletics” and “preserving the popularity of the NCAA’s product by promoting its current understanding of amateurism.” An understanding of the actual finances at stake brings this second argument concerning the dilution of the product into focus. As just one example of the money currently on the table, in 2016, the NCAA and CBS reached an extension of their deal for the licensing rights to March Madness, bringing the total payout to the NCAA of over $1 billion a year. Despite the NCAA's explanation that this money goes entirely to funding programs for student athletes, the sheer numbers have drawn skepticism of whom the NCAA’s amateurism rules truly benefit. Whether or not the NCAA is formally violating the federal antitrust laws will take center stage in December 2018 in Judge Claudia Wilken's court in the Northern District of California, Jenkins et al. v. National Collegiate Athletic Association, et al., 4:14-cv-02758.

The austere nature of the NCAA's system overlooks the more unseemly side of college athletics in which schools face an agonizing decision on how to recruit top talent. Whispers of under the table pay-for-play echo throughout the top programs. This issue came front and center in September 2017 when the FBI and the DOJ launched full criminal investigations into certain Division I programs. Two different schemes were at play in the FBI's investigation. The first involved the Louisville men's basketball program in which recruits were guaranteed post-graduation contracts with Adidas if they committed to Louisville, an Adidas-sponsored school. The ongoing investigation led to the almost immediate ouster of Coach Rick Pitino. Although Pitino survived a prior scandal concerning providing prostitutes to recruits a few years prior, the evidence concerning the Adidas situation proved too overwhelming. The second part of the FBI's investigation concerned actual pay for play routed through certain assistant coaches to star players. While the schools themselves are not specifically facing federal charges, the implicated assistant coaches were employed at Arizona, University of Southern California, Oklahoma State, and Auburn. These targets send a strong message that the federal government is prepared to step in when the NCAA has not acted.

With legalized gambling looming, the potential for manipulation by athletes in need of pay is rife. Point shaving scandals permeated college basketball in the 1980s and 1990s. In 1985, three basketball players and five others at Tulane were indicted for bribery related to point-shaving, resulting in the termination of the basketball program. In 1997, two former Arizona State players were convicted of taking bribes to fix games during the 1994 season. In 1998, two former Northwestern basketball players were indicted after charges that they took bribes to ensure the spread was covered during Big Ten games in the 1994-1995 season. As some of sport’s most vulnerable athletes, the NCAA will have to seriously contemplate the best path forward to protect their athletes and their games.

Conclusion

The effect of the Supreme Court’s recent decision in Murphy v. NCAA remains largely unknown. It may sound hyperbolic, but the decision could fundamentally alter the way sport is played and consumed in American culture. With some state laws already in effect and others currently being drafted, states hope that legalized gambling will be the revenue success they need. States made a big bet that it will be to their advantage, but the spread is unclear.


Ronald
Gaither
 
Elizabeth McCurrach

Ronald Gaither is a partner in BakerHostetler’s Atlanta office. He regularly provides counsel to professional athletic teams on a wide range of issues concerning litigation, trademark, employment and real estate.

Elizabeth McCurrach is a senior associate in BakerHostetler’s New York office. In addition to a general litigation practice, Elizabeth provides counsel to sports leagues, teams and players.

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Male Swimmer Alleges Gender Biased Treatment in Violation of Title IX at Texas A&M

By Ellen J. Staurowsky, Senior Writer & Professor, Sport Management, Drexel University, ejs95@drexel.edu

Issues

In Van Overdam v. Texas A&M (2018), a male swimmer argues that the University’s approach to the investigation, adjudication, and appeal of sexual assault allegations against male students at the University is riddled with gender bias effectively creating an environment that leads to a foregone conclusion that male students are responsible for sexual misconduct once accused. The lawsuit contends that sexual assault investigation procedures at Texas A&M fall short of minimum due process standards that assure accusers and accused are treated in a manner that is “adequate, reliable, and impartial”. Van Overdam claims that a result of the alleged failure of Texas A&M to uphold the mandate that all students be treated fairly and in a non-sex discriminatory fashion under Title IX, he was wrongly disciplined and suffered an interruption to his swimming career and educational pursuits as well as reputational harm.

Background

In the fall of 2015, NCAA Division I swimmer Austin Van Overdam transferred from the University of Arizona and enrolled at Texas A&M, joining the Aggies men’s swim team. In the early weeks of the semester, during the month of September, Van Overdam became acquainted with a female student named Hannah Shaw through the social search application Tinder[1]. After private messaging one another a few times, they agreed to meet at Van Overdam’s on-campus residence for a sexual encounter. Seven or eight months after their encounter, Shaw filed a complaint with the Texas A&M Student Conduct Office alleging that she had not given her consent to some of the acts engaged in and that the accused had caused her pain when he held her down by her wrists.[2]

Considering four violations of the Texas A&M Student Rules, specifically sections pertaining to sexual abuse, sexual contact, and dating violence, an administrative hearing panel listened to testimony offered by both parties during a student conduct conference. The panel found, using a preponderance of the evidence standard, that information shared in the hearing by Shaw supported a finding of responsibility on Van Overdam’s part on one of the four charges (penetration without consent). Explaining the rationale for the one finding of responsibility in a letter regarding the outcome of the conference to Shaw, the Program Coordinator for Student Conduct Office wrote, “The panel believes the information provided by the complainant is more credible due to consistency and plausibility when compared to the information from the charged student” (Program Coordinator Letter, 2016). Van Overdam’s subsequent appeal was unsuccessful.

Van Overdam was suspended from the institution immediately following the finding of responsibility on June 21, 2016 through December 16, 2016. Upon his re-enrollment in the spring of 2016, he was required to serve a semester-long probationary period and to participate in education on the topic of sexual well-being and consent through the Consensual Language, Education, Awareness, and Relationships (CLEAR) office.

According to Van Overdam’s complaint and a press release issued by his attorney, Van Overdam initially intended to quietly comply with the sanctions. Ms. Shaw, however, took to Twitter in June of 2018, sharing her discomfort with him being back on campus as part of the #MeTooMovement[3]. Van Overdam sought relief through Texas A&M’s Student Conduct Office alleging that Shaw retaliated against him through public disclosure of her concerns on Twitter. When Texas A&M administrators dismissed his retaliation complaint, Van Overdam filed suit.

Allegations of Disparate Treatment & Disparate Impact

According to the lawsuit, Van Overdam claims that he was “...stigmatized as a result of his gender while Shaw was viewed as a ‘victim’ even before any adjudication of the sexual misconduct allegations against Van Overdam took place” (Van Overdam v. Texas A&M, 2018, p. 4). Describing the nature of the testimony offered before the student conduct conference as being nothing more than a “swearing match” where parties disagreed, Van Overdam asserts that there was no rational explanation to support a finding that Shaw’s testimony was any more reliable or trustworthy than his. The sole distinguishing factor between the two, Van Overdam argues, was the fact that his accuser was a female and her testimony was given weight solely for that reason, constituting disparate treatment under Title IX. Citing that in all instances males are accused of sexual misconduct at Texas A&M, Van Overdam further argues that the sexual misconduct disciplinary process in place has a disparate impact on male students.[4]

This alleged sex discriminatory treatment and impact according to Van Overdam has deprived him of immediate and long-term benefits deriving from his educational experience. In addition to a denial of an opportunity to go to school and pursue his academic interests without the burden of being labeled a rapist, Van Overdam reports that he has lost scholarship funding and faced difficulties in transferring to other institutions. He further argues that the manner in which he has been treated by Texas A&M has resulted in a loss of career opportunities and negatively impacted his future earnings potential. More generally, Van Overdam claims that he has suffered humiliation and embarrassment along with mental and emotional distress.

Ongoing Issues at Texas A&M

In the aftermath of Shaw’s posting expressing frustration that Texas A&M’s policies led to a circumstance where her alleged attacker was permitted to return to campus and compete on the swim team with little consequence, and his decision to file a lawsuit claiming that he had been subjected to sex discrimination in the adjudication of the case, commentary in the public sphere escalated. A graduate of Texas A&M, Abbie Hillis, who alleges that she was raped by a male student in 2010, used social media to gather similar stories from other female students (The Associated Press, 2018). This then led to a petition, signed as of this writing by more than 1800 people, calling for Texas A&M administrators to review its procedures to ensure that victims of sexual assault are supported; to dismiss rather than suspend students who are found to be responsible for sexual abuse; to ensure that athletes are not given preferential treatment; and to bar athletes from continuing to compete in their sports during investigations (Aggie Students, 2018).

Brenda Tracy, a sexual assault victim’s advocate who has worked extensively with college and university athletic departments in recent years, wrote on Twitter: “@TAMU you committed to ‘Step In Stand Up’ but when title ix finds an athlete responsible for rape you suspend him for ONE semester and let him back on the swim team? This is UNACCEPTABLE & does nothing to support a safe culture on your campus or in athletics” (Brown, 2018a).

In response to the calls from all parties on the issue of how sexual misconduct is handled at Texas A&M, president Michael Young issued three statements (Oliver, 2018). In the most recent one dated June 21, 2018, the University announced the formation of an internal task force to review policies and the commissioning of an external third-party review.

References

Aggie Student. (June 2018). Demand Texas A&M administrators be accountable and keep sexual abusers off our campus. Change.org. Retrieved from https://www.change.org/p/demand-texas-a-m-administrators-be-accountable-and-keep-sexual-abusers-off-our-campus

Brown, T. (2018a, June 12). Sexual assault survivor, advocate speak out on Texas A&M allegation. The Eagle. Retrieved from https://www.theeagle.com/news/a_m/sexual-assault-survivor-advocate-speak-out-on-texas-a-m/article_357f2610-6ea3-11e8-b6f5-374c0b21dc6e.html

Brown, T. (2018b, June 20). Texas A&M swimmer files Title IX lawsuit against university. The Eagle. Retrieved from https://www.theeagle.com/news/texas-a-m-swimmer-files-title-ix-lawsuit-against-university/article_7a6eba84-7343-11e8-a248-7ff078ee31d9.html

Garner, D. (2018, June 14). The #MeToo Movement targeting Texas A&M University. Education Reviews. Retrieved from http://www.educationviews.org/the-me-too-movement-targeting-texas-am-university/

Langone, A. (2018, March 22). #MeToo and Time’s Up founders explain the difference between the 2 movements — and how they’re alike. Time. Retrieved from http://time.com/5189945/whats-the-difference-between-the-metoo-and-times-up-movements/

Oliver, B. (2018, June 22). Texas A&M president announces review of sexual assault investigations. WTAW.com. Retrieved from http://wtaw.com/2018/06/22/texas-am-president-announces-review-of-sexual-assault-investigations/

Program Coordinator. (2016, June 21). Letter to Hannah Shaw. College Station, TX: Texas A&M Student Conduct Office. [initially posted to Twitter and on file with author]

Seidman, G. (2017, June 11). Is Tinder really a hookup app? Psychology Today. Retrieved from https://www.psychologytoday.com/us/blog/close-encounters/201706/is-tinder-really-hookup-app

Student Conduct Office (20188). Website. Retrieved from https://studentlife.tamu.edu/sco

Texas A&M Sports Information. Bio — Austin Van Overdam. Retrieved from https://12thman.com/roster.aspx?rp_id=5115

The Associated Press. (2018, June 14). Texas A&M criticized for handling of sex assault claims. The New York Times. Retrieved from https://www.nytimes.com/aponline/2018/06/14/us/ap-us-texas-am-sex-assault-allegations.html

Van Overdam v. Texas A&M University. (2018). Case 4:18-cv-02011. Retrieved from https://cdn.swimswam.com/wp-content/uploads/2018/06/Van-Overdam-lawsuit-announcment.pdf


[1] Seidman (2017) describes Tinder as a mobile dating app that is designed to facilitate meetings between singles within a particular geographical location. In the complaint filed by Van Overdam, Tinder is credited with fueling a “hooking up culture”. While Tinder is known in part for this, research reported by Seidman (2017) indicates that 5% of Tinder users identify “hooking up” as the reason they are on the site.

[2] Shaw appeared on the NBC Today Show on June 13, 2018. That interview can be found here. https://www.today.com/video/texas-a-and-m-under-fire-after-allegations-of-sexual-assault-against-athletes-1254650947780

[3] Langone (2018) explains that the #MeTOO Movement is a movement started more than a decade ago to break the silence around sexual violence given a national spotlight in the aftermath of public testimonies from numerous alleged victims that movie mogul Harvey Weinstein regularly sexual assaulted and harassed women working in the film industry.

[4] Van Overdam offers this as a matter of belief with no documentation.

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Key Area of Title IX Compliance Can Help HBCUs on Pathway to Growth

By Montoya M. Ho-Sang

It comes as no surprise that some Historically Black Colleges and Universities (“HBCUsˮ) are in desperate need. Several high-profile headlines have highlighted the budgetary and enrollment concerns that many HBCUs face. These issues are so prominent that even the President is paying attention: recently, many HBCU leaders landed in the Oval Office to express the importance of HBCUs and the challenges they face in the current political and economic landscape. We all remember that awkward photo.

While there have been numerous stories publicizing the dwindling number of male students and financial despair of some institutions, a practical solution may be right in front of us: Athletics. In order to fully utilize athletics to help with financial and enrollment stability, HBCUs should focus on and even embrace what some see as a legal obstacle to expanding men's athletics- Title IX. Although it may seem counterintuitive that a federal regulation focused on providing equal opportunities for female students can be used to increase male enrollment, allow me to explain.

Title IX Athletics Overview

Title IX prohibits discrimination on the basis of sex in any federally funded education program or activity, which includes college athletics. The athletic provisions of Title IX are enforced by the Office for Civil Rights of the Department of Education (“OCR”). There are three parts to Title IX as it applies to athletics programs: (1) effective accommodation of student interests and abilities (participation), (2) athletic financial assistance (scholarships), and (3) equitable treatment components (the “laundry list” of benefits to and treatment of athletes).

OCR evaluates equitable athletic participation opportunities under a test commonly referred to as the “Three Prong Test.” Schools have three alternate ways of demonstrating compliance:

  • Prong One: A school complies with Prong One if it provides athletic participation opportunities for male and female students in a ratio substantially proportionate to their full-time undergraduate enrollment ratio.
  • Prong Two: A school complies with Prong Two if it demonstrates a history and continuing practice of program expansion demonstrably responsive to the athletic interests and abilities of its underrepresented students (usually female students within an athletics program).
  • Prong Three: A school complies with Prong Three if it can demonstrate that its current athletic program fully and effectively accommodates the athletic interests and abilities of its underrepresented students.

As a part of the push for transparent gender equity in athletics, the Equity in Athletics Disclosure Act (“EADAˮ) was passed in 1994. The EADA mandates that institutions self-report statistics regarding gender equity in their intercollegiate athletics programs. This database is maintained by the U.S. Department of Education, posted online, and readily accessible to the public. It contains information about each school's athletics department separated by gender: the number and type of varsity teams, the number of athletes for each team, athletically-related financial aid, coaching staff and salaries, and revenues and expenses. However, it can also expose a school's Title IX shortcomings.

Aggregate HBCU Compliance

The 2016-2017 HBCU EADA data reveals that 83 percent of HBCUs have majority female undergraduate populations[5]. For many HBCU campuses, the male to female ratio is 1-to-3. Although male enrollment ratios are low, male students account for the majority of student-athletes at 82 percent of HBCUs. While women represent the majority of the undergraduate population, they receive far fewer athletic participation opportunities than men.

More than 75 percent of HBCUs have an athletics participation gap of 10 percent or more, and nearly half of HBCUs have a gap greater than 20 percent. For perspective, a two percent Prong One deviation is typically acceptable, and only 6.7 percent of HBCUs are within this two percent range. These numbers demonstrate the hard reality that most HBCUs are too far out of range to obtain Title IX compliance under Prong One, which is not surprising given the large female undergraduate enrollment. As a result, the majority of HBCUs are exposed to legal complaints that their own publicly-reported numbers suggest they are non-compliant with Title IX.

Prong Two requires expansion of athletic programs to satisfy underrepresented students. This is not a realistic option for many HBCUs because it requires expenditure of additional financial resources, which is not a luxury enjoyed by many cash-strapped HBCUs. Additionally, this would most likely result in the addition of women's sports (as the underrepresented gender), which would not aid in many HBCUs' goal of increasing their male student population.

Thus, the best option for an HBCU to ensure its athletic program is compliant with Title IX is through a proactive Prong Three strategy.[6] A school is considered in compliance with Prong Three unless a sport exists for the underrepresented gender for which all three of the following conditions are met: (1) unmet student interest in a particular sport; (2) sufficient ability to sustain a team in that sport; and (3) a reasonable expectation of competition for a team in that sport.

Prong Three requires that schools take a proactive approach to Title IX compliance by obtaining feedback from prospective students, current students, coaches, and administrators. This information is typically gathered through publicly accessible databases and institution-initiated questionnaires and interviews. While there is always the risk that one can collect "bad" data through questionnaires and interviews suggesting non-compliance, athletic administrators should typically know if there is unmet athletic interest on campus. Further, if there is such interest on campus, it is better for administrators to learn about it through proactive efforts and then be able to plan towards it. Often times, the Prong Three criteria will not be met, so no obligation to add a particular sport will be triggered. In my experience, many schools have been able to find Title IX compliance through Prong Three and mitigate their legal exposure for possible gender discrimination.

Turning to Offense

Once a school proactively establishes its compliance with this aspect of Title IX, focus can shift to using the same data to increase male enrollment and financial stability, develop strategic goals, and become more competitive both academically and athletically.

Further, once Prong Three compliance is established, the Prong One gap becomes legally irrelevant, so schools are free to consider adding male sports teams to try to drive enrollment and tuition dollars. Given each school's unique circumstances, deciding which male sports teams to add should be specifically tailored to each school's needs and interests. For example, while adding football could significantly increase male enrollment and possibly student-fan engagement, it is an extremely expensive start-up sport and thus, is only a viable option for a small number of HBCUs. Similarly, Prong Three data may reveal viable club sports or recreational opportunities to better engage with students based on their interests.

HBCUs were established to ensure equality in educational opportunities, and that spirit of equality applies likewise to gender equity in athletics. As demonstrated above, an athletics department is uniquely positioned to drive enrollment and potentially infuse substantial financial resources into its institution. Therefore, it is imperative that HBCUs ensure their athletic departments are Title IX compliant, so that they can then drive male enrollment and augment the school's tuition funding. Once Title IX athletic compliance is secured, it can be a critical component in solving the current HBCU financial and male enrollment crises. Therefore, HBCUs should take the time to evaluate their athletic programs, compose a team of Title IX individuals, and get to work!

Montoya M. Ho-Sang is an associate in Baker Donelson's Atlanta office. She represents higher education institutions in the areas of Title IX athletics and sexual misconduct. 


[5] The percentages included in this article were derived from the 2016-2017 Equity in Athletics Disclosure Act Title IX data. Single sex HBCUs have not been included in the figures, given that they are not subject to Title IX gender equity regulations.

[6] Of course, each school is unique, and its unique needs must be taken into consideration when determining the best route for Title IX compliance. Prong Three is the appropriate route to Title IX compliance for many, but not all, schools.

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Parents of High School Football Player Brutally Hazed in Locker Room Sue Alabama School District

By Michael S. Carroll

Parents of a high school football player in Alabama have brought a $12-million-dollar lawsuit against the Mobile Board of Education and called for the school to fire all coaches involved with the team and forfeit all wins from 2018. The suit also names Mobile County Superintendent Martha Peek, Davidson Principal Lewis Copeland, and football coach Fred Riley.

Background

The lawsuit arose in response to an alleged hazing beating of a freshman football player in the team locker room in April 2018. On the day in question, 14-year-old freshman quarterback Rodney Kim Jr. was on the way to the team locker room following practice when he paused, fearful of the older players waiting. The previous day, another younger player had been attacked by the older players in the locker room, being struck repeatedly with shoulder pads and helmets, while being called “Fruit Fruit,” allegedly a common term for a younger player on the team that was to be hazed by older players. This particular day, an older player was lurking outside the locker room and remarked to Kim Jr., “Fruit Fruit, we are going to get you.” Kim Jr. decided to wait outside of the locker room, but an older player snuck up behind him and picked him up. The player subsequently carried him into the locker room and threw him onto the floor. Approximately 20 older players then all began hitting and kicking Kim Jr. as he lay on the floor, attempting to protect himself. The incident, caught on cellphone video, quickly went viral and sparked outrage across the country. In the 1-minute video, Kim Jr. can be seen lying on the locker room floor while being repeatedly pummeled and kicked by other players on the team. School employees allegedly reported to Kim Jr.’s parents that he had been injured not in a hazing incident involving other players on the team but instead in a football practice. The school contacted Kim Jr.’s father, who arrived and found his son bloodied, with a broken arm, and sitting alone on the curb outside of the school. All school officials had left for the day, and no one had called 911 to report the assault or the injuries. Kim Jr. suffered a broken arm as a result of the beating, after the boys intentionally took his throwing arm and bent it behind his back while another boy jumped onto him. Kim Jr. suffered other multiple injuries, including the broken arm, which required surgery. He continues to suffer from constant pain, mental trauma, and concussion-like symptoms, making it impossible for him to continue to attend school or participate in football.

Aftermath

In the wake of the video, the school district suspended four players, all who have been subsequently charged with 3rd degree assault for their participation in the hazing-related beating. The parents of Kim Jr. claim that Davidson High School officials were aware of, and allowed, a type of hazing ritual among the team to happen on a consistent basis without attempting to stop it, despite the danger it possessed. In support of this, the mother of Kim Jr., Mary Rayford-Kim, stated that at least 10 other parents and six school employees had notified them of previous similar incidents. Mobile County Superintendent Martha Peek disputes this, stating that she was unaware of any previous assaults such as the one involving Kim Jr., but Coach Riley admits that he was aware of “rough housing” in the locker room at times.

Anti-Hazing Legislation and Alabama

Currently, 44 states in the U.S. have hazing prevention statutes, commonly referred to as “Anti-Hazing Laws.” Alabama is one such state, and this statute should serve prominently in this particular case. Alabama Statute §16-1-23 states as follows:

Hazing prohibited; penalty.

(a) Hazing is defined as follows:

(1) Any willful action taken or situation created, whether on or off any school, college, university, or other educational premises, which recklessly or intentionally endangers the mental or physical health of any student, or

(2) Any willful act on or off any school, college, university, or other educational premises by any person alone or acting with others in striking, beating, bruising, or maiming; or seriously offering, threatening, or attempting to strike, beat, bruise, or maim, or to do or seriously offer, threaten, or attempt to do physical violence to any student of any such educational institution or any assault upon any such students made for the purpose of committing any of the acts, or producing any of the results to such student as defined in this section.

(3) The term hazing as defined in this section does not include customary athletic events or similar contests or competitions, and is limited to those actions taken and situations created in connection with initiation into or affiliation with any organization. The term hazing does not include corporal punishment administered by officials or employees of public schools when in accordance with policies adopted by local boards of education.

(b) No person shall engage in what is commonly known and recognized as hazing, or encourage, aid, or assist any other person thus offending.

(c) No person shall knowingly permit, encourage, aid, or assist any person in committing the offense of hazing, or willfully acquiesce in the commission of such offense, or fail to report promptly his knowledge or any reasonable information within his knowledge of the presence and practice of hazing in this state to the chief executive officer of the appropriate school, college, university, or other educational institution in this state. Any act of omission or commission shall be deemed hazing under the provisions of this section.

(d) Any person who shall commit the offense of hazing shall be guilty of a Class C misdemeanor as defined by Title 13A.

(e) Any person who participates in the hazing of another, or any organization associated with a school, college, university, or other educational institution in this state which knowingly permits hazing to be conducted by its members or by others subject to its direction or control, shall forfeit any entitlement to public funds, scholarships, or awards which are enjoyed by him or by it and shall be deprived of any sanction or approval granted by the school, college, university, or other educational institution.

Claims

Of particular interest to this current case is the aforementioned section (e) that discusses an organization associated with a school that, “knowingly permits hazing to be conducted.” In this case, it is alleged that multiple parties associated with the school and the football team were well aware of the hazing activities that went on with the team, in which older players would beat and humiliate younger players. In support of application of this to the current case, the complaint cites Davis v. Monroe County Board of Education (1999), in which the Supreme Court ruled that a Title IX recipient, such as a school district, can be found liable in the event of deliberate indifference to known acts of peer harassment and discrimination that are so severe and pervasive that they bar the victim from an educational benefit. As such, the complaint cites a violation of Title IX Civil Rights (42 U.S.C. § 1983). Additionally, the complaint argues that Kim Jr. had a Liberty interest under the 14th Amendment of the U.S. Constitution to body integrity and safety. Defendants deprived Kim Jr. of this right by concealing, hiding, and covering up their policy and custom of promoting, encouraging, authorizing, and permitting hazing on school premises. The complaint also states a Monel Claim against the Mobile County Board of Education, under which local governments and agencies can be sued as persons under § 1983 and may face liability when a government policy or custom gives rise to constitutional deprivation. Here, the argument is that the school was not only aware of the hazing but condoned it, perhaps implicitly, by their lack of doing anything to stop it, and that the hazing resulted in a deprivation of Kim Jr.’s constitutional rights.

The complaint also lists a variety of state-level claims, including a negligence per se violation of Alabama’s Anti-Hazing Law; negligent infliction of emotional distress; premises liability; negligent training, hiring, supervision, and retention; respondeat superior liability of the Mobile County Public School System; and a violation of Education Code Safety Laws. The suit is seeking $6 million in compensation for Kim Jr. and $3 million for each of his parents, as well as attorney’s fees and costs.

Michael S. Carroll is an Associate Professor of Sport Management at Troy University specializing in research related to sport law and risk management in sport and recreation.

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Commissioner Goodell Announces Findings in Carolina Panthers Workplace Investigation

NFL Commissioner Roger Goodell announced earlier this summer the findings and conclusions in the investigation conducted by former U.S. Attorney and SEC Chairman Mary Jo White into allegations of workplace misconduct by Carolina Panthers owner Jerry Richardson. The Commissioner appointed White to serve as the independent investigator following the public disclosure in December of 2017 of allegations of improper workplace conduct by Richardson, a claim the NFL investigation corroborated.

Following those disclosures Richardson announced his intention to sell the Carolina Panthers and removed himself from day-to-day operations of the club in favor of Panthers Chief Operating Officer Tina Becker. NFL owners ultimately approved the sale of the Panthers to David Tepper.

White's investigation, conducted over a period of several months, “resulted in a detailed understanding of the scope and substance of the claims made by current and former Carolina Panthers employees,” according to the league.

White wrote that, "the findings and recommendations that I have shared with the Commissioner are the product of an extensive review, including interviews with club executives, current and former employees, analysis of documents, electronic records, and other sources of information. I particularly appreciate the work of the club employees in assessing the need for enhancing the club's workplace policies, procedures, and training and implementing appropriate changes."

After advising that she had completed her investigation, White met with Commissioner Goodell to review her findings, which the league detailed as follows:

“First, the review identified each of the allegations that has been publicly reported as well as similar matters that have not been the subject of public discussion.

“Second, while the investigation was not limited to the matters that have been publicly reported, and did not seek to confirm or reject the details of each specific allegation made regarding Richardson, it did substantiate the claims that have been made, and identified no information that would either discredit the claims made or that would undermine the veracity of the employees who have made those claims.

“Third, the improper conduct was limited to Richardson. No other employee of the Panthers is alleged to have engaged in such conduct, and the review did not discover evidence of similar conduct by other employees of the club.

“Fourth, the investigation also confirmed that the Panthers and its ownership did not report the claims, or any agreements to resolve those claims, to the League Office and that neither the League Office nor the club's limited partners were aware of these matters until they became public in December of 2017.”

Based on White's findings, the Commissioner imposed a fine on Richardson of $2.75 million, most of which will be used to support the work of organizations dedicated to addressing race and gender-based issues in and outside of the workplace. Initial commitments have been made to the following organizations:

  1. Beauty for Ashes Ministry, Inc. — This Charlotte, North Carolina organization provides faith-based resources and spiritual support to survivors of domestic violence, sexual assault, and other trauma and provides training for clergy and lay leaders in these issues.
  2. Black Women's Blueprint — This national organization, based in Brooklyn, New York, focuses exclusively on issues of concern to black women, and operates an Institute for Gender and Cultural Competence that delivers prevention education and intervention curricula that addresses the spectrum of discrimination and oppression that affects lives.
  3. Women of Color Network, Inc. — This national grassroots non-profit organization, based in Harrisburg, Pennsylvania, is dedicated to building the leadership and capacity of women of color advocates and activists to respond to violence against women in communities of color through training, technical assistance, and advocacy.

A group including the NFL's Social Responsibility advisers — Tony Porter, Jane Randel, Dr. Beth Richie, and Rita Smith — will work with League staff to recommend other recipient organizations in the coming months. A portion of this fine will also be used to fund league-wide programs to ensure state-of-the-art workplace policies, and related training.

White has also made a number of specific recommendations regarding issues of workplace conduct at the Panthers and has advised the Commissioner that the Panthers have recently developed and implemented enhanced policies, procedures, and training. For example, the club has now implemented a robust anti-harassment and discrimination policy and retained outside experts to do workplace training throughout the club. White advised the Commissioner that these steps, in conjunction with a strong and supportive ownership, should go a long way both to avoiding a recurrence of the problems that her review found to have occurred in the past and to enhance what is already for many employees a positive workplace. White recommended that the Panthers be required to report by the end of the year on the club's ongoing work on its internal workplace policies and procedures that address claims of racial discrimination, sexual harassment and related workplace issues, and the Commissioner has adopted that recommendation.

In addition, White made a number of recommendations of broader applicability for the League, which will be presented to the Conduct Committee for consideration in advance of the 2018 season.

Those recommendations include:

  • A specific prohibition of using Non-Disclosure Agreements to limit reporting of potential violations or cooperation in League investigations under the Personal Conduct Policy.
  • A specific requirement that claims of workplace misconduct issues be reported to the League Office under the Personal Conduct Policy.
  • Establish a hotline or other system to allow League and club employees to report issues of workplace conduct on a confidential basis.
  • Review workplace best practices and policies with owners, club counsel, and club human resource executives.

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Former Assistant Track Coach at the University of Missouri Sues Current Head Coach, Associate AD for Compliance and Others for Racial Discrimination

Former University of Missouri (MU) assistant track coach Carjay Lyles has sued the school’s current head coach (Brett Halter), associate athletic director for compliance (Mitzi Clayton), and the Missouri Board of Curators in the Boone County Courthouse in Missouri.

Lyles, who is black, was an assistant at Missouri from 2013-17. His lawsuit, which came after “intolerable working conditions” led to his “constructive discharge,” named Brett Halter (head coach) and Mitzi Clayton (compliance) as individual defendants.

Lyles alleged that the defendants “instituted a continuous practice of exhibiting discriminatory and demeaning behavior toward black athletes and staff members,” including Lyles. For example, Halter allegedly referred to black athletes and staff members as “you people.”

Lyles also claimed that Halter wanted him to lay sod at his house. Lyles turned him down, leading Halter to allegedly reply: “I live at MKT and KT Trail and if I have one more K, you sure won’t be coming because three Ks in a row, there won’t be any of you coming.”

Clayton, a former MU athlete who has been in the school's compliance office for two decades, also allegedly played a role in the discriminatory actions. Lyles alleged that she, along with Halter, warned people to stay away from Lyles. Then, after Lyles began seeing a team psychiatrist about the behavior, Clayton “immediately told the psychiatrist to stop seeing” him, according to the complaint.

Lyles also noted that he, allegedly, was the only track coach to not receive a title promotion, pay raise or contract extension, while his responsibilities for academic supervision and international recruiting were taken away.

Divisive Practice of Protecting the Head Coach Is Alleged

According to the suit, Halter told Lyles he was “siloing” himself by reporting the alleged racial discrimination. That term allegedly surfaced in the summer of 2017 when Lyle applied for a job at the University of North Carolina, where a school official reportedly told him that the school’s athletic department employees pride themselves “on not siloing ourselves here, being team players, and not overstepping a head coach and reporting them.”

In the lawsuit, Lyles claimed that he reported the conduct to the school’s human resources department and met with MU’s Office of Civil Rights and Title IX Office.

Missouri issued the following statement in response to the lawsuit: “The University of Missouri does not tolerate any form of discrimination or harassment and actively seeks to build an inclusive culture in which all differences among us — whether they be racial, intellectual, physical or based on gender, religion, sexual preference, age, ability or geographic origin — are valued,” the university said in the statement. “It is our strong belief as a university that the diversity of our students, faculty and staff makes us stronger and contributes to the success of our entire community.

“We deny that there was any racial discrimination or retaliation, and we will respond to Mr. Lyles’ claims in court.”

Lyles, who is represented by Kansas City-based Cornerstone Law Firm, is seeking back pay, lost benefits, front pay, compensatory damages for emotional distress, punitive damages and attorneys' fees.

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Mother of Football Player Who Died from Cardiomyopathy Sues School, Claiming Failure to Test

When Winona State University (WSU) football player Shawn Afryl collapsed and died during a preseason conditioning session on July 21, 2014, the WSU community and family were initially consumed with the tragic circumstances associated with death of a 22-year-old young man,

Now the two sides are consumed with litigation.

Afryl’s mother, Susan Afryl, has claimed in a lawsuit that WSU failed to require her son to complete a medical exam before participating in team workouts, which she charged is a requirement by the NCAA. Had Afryl had the exam, she alleged, a heart condition called cardiomyopathy would likely have been detected and he would have been prevented from participating in the workout. Cardiomyopathy makes it difficult for the heart to pump blood to all parts of the body.

The Minnesota Attorney General’s Office, which is representing WSU issued the following statement: “At Winona State University, the health and safety of all students and student athletes is our top priority. Our athletics programs follow NCAA rules and guidelines as well as WSU policies and procedures, and we have a full-time athletic trainer who provides dedicated service and coverage for our student athletes. We are confident that all efforts are made to ensure and protect student safety at WSU.”

One twist associated with the story is that Afryl, who was 22, was a three-year member of the Illinois football team through 2012 when he earned his college degree. Afryl then took a year off before deciding to pursue his football career at WSU.

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Drake Reaches Settlement with Athletic Trainer, Who Claimed School Failed to Accommodate His Medical Condition

Drake University and its former head athletic trainer have reached a settlement, ending a legal dispute that centered on whether the school sufficiently accommodated an athletic trainer’s medical condition and then overreacted when it fired him because of an alleged byproduct of that medical condition.

Scott Kerr, 61, was fired on Sept. 2, 2016 after he urinated in a whirlpool tub in the training room, which is used by student-athletes.

After his termination, Kerr filed a complaint with the Iowa Civil Rights Commission, claiming he was terminated because of a medical condition. Kerr claimed that in 2010 he was diagnosed with neurally mediated syncope. This, he claimed, requires him to drink copious amounts of water to stay hydrated. Kerr also alleged he suffers from an enlarged prostate. Combined, both factors cause a frequent urge to urinate, according to the complaint.

The school issued the following statement: "Drake University and its former Head Athletic Trainer, Scott Kerr, have reached a mutually-agreed upon settlement. The agreement provides for no admission of liability or wrongdoing by either party, and avoids further litigation between them."

Financial terms weren’t disclosed.

"Drake University appreciates the many years of service Scott Kerr provided the University," said Drake University President Marty Martin. "We wish him well in his future endeavors."

Kerr responded with his own statement:

"I loved my time at Drake. I made many good friends through the Department of Athletics, and wish those friends nothing but the best."

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Former Sports Law Professor Named Dean of FSU College of Education


Damon Andrew

Florida State University has named alumnus Damon Andrew as dean of the College of Education, effective Aug. 7.

Andrew, who earned a doctorate in sport administration from Florida State in 2004, has served as the first permanent dean of Louisiana State University’s College of Human Sciences and Education and the E.B. “Ted” Robert Endowed Professor since 2013.

Andrew will succeed Marcy Driscoll, who concludes her 13-year tenure as dean June 30.

The FSU College of Education, established in 1905, is the oldest college of education in Florida and highly respected nationally.

“My experience as a student at FSU was most certainly life changing,” Andrew said. “I encountered faculty and staff across the university that took a personal interest in me and challenged me to improve in a variety of areas. I took so many of those lessons into my career, and I am very excited to return to my alma mater to serve the many constituents of Florida State University.”

In his role as dean at LSU, Andrew was responsible for 5,800 students, 250 full-time faculty members and more than 100 full-time staff. He led the college to new heights in a number of important areas, including student enrollment and retention, grant funding and faculty diversity.

Prior to his tenure at LSU, Andrew served as dean of the College of Health and Human Services at Troy University from 2008-12.

Andrew, a native Floridian, also holds degrees from the University of South Alabama and the University of Florida and three postgraduate certificates from Harvard University and Vanderbilt University.

Andrew is a member of the Sports and Recreation Law Association and a frequent attendee of SRLA’s conference.

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News Briefs

Mintz Levin Member Tyrone Thomas Recognized Among Savoy Magazine’s Most Influential Black Lawyers

Mintz Levin has announced that Tyrone P. Thomas has been recognized by Savoy Magazine among the 2018 Most Influential Black Lawyers. Savoy recognizes the “best of the best” of Black lawyers who are partners within leading national law firms and also corporate counsel from Fortune 1000 corporations. Thomas has become a leading attorney on complex legal issues in athletics and is nationally recognized for his experience in the sports industry. In intercollegiate athletic matters, his experience includes NCAA enforcement investigations and infraction appeals. He advises on employment contracts and policies for athletics personnel. In professional sports matters, he has advised teams on league compliance issues and other legal matters.

Sports Law Professor Dennis Phillips to Retire as Full-Time Professor at USM


Dennis Phillips

Dr. Dennis Phillips, who has been a college professor and administrator for 40 years — the past 24 at the University of Southern Mississippi, is retiring from full-time status. Over the years, he has taught undergraduate and graduate courses in Sport Law, Policy & Governance of Sport, Sport Psychology, Organizational Leadership, Facility Management, Sport Marketing, Policy and Governance in Sport, Sport Finance and Economics, Sport Ethics, and Coaching, in the Sport Coaching Education, and Sport Management program at USM. He has also held numerous administrative positions, including most recently the Faculty Athletic Representative (FAR) for Southern Miss to Conference USA and the NCAA. Dr. Phillips has been very active in the Sport and Recreation Law Association (SRLA), where he has been a frequent presenter. He will teach as an adjunct next spring. Taking over his duties as sports law professor is Dr. John Miller, formerly of Troy University.

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Sports Lawyer in Duke Athletics Department Named to Division I Women's Basketball Committee

Duke University Deputy Director of Athletics Nina King has been named to the Division I Women’s Basketball Committee as announced by the NCAA. A member of the Duke staff since 2008, King serves as the department's Deputy Director of Athletics for Administration/Legal Affairs and Chief of Staff. In this capacity, she facilitates daily operation/oversight of the department, is responsible for development of special projects within the department, coordinates strategic planning initiatives, and supervises the creation and execution of all department contracts while serving as the liaison to the University Senior Administration, Board of Trustees and Legal Counsel Office. A native of Tampa, Fla., and 2000 graduate of Notre Dame, King went on to earn a juris doctor degree and sports law certificate from Tulane Law School in 2005. She is a member of Women Leaders in College Athletics, Sports Lawyers Association, University of Notre Dame National Monogram Club and Florida Bar Association while serving on the Arizona State University College of Law “Sports Law and Business Program Advisory Board.”

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