Keller v. Electronic Arts Inc. et al

Filing 893

ORDER by Judge Claudia Wilken GRANTING in part and DENYING in part #651 Motion to Certify Class; DENYING #881 Motion for Leave to File Supplemental Memorandum (cwlc3S, COURT STAFF) (Filed on 11/8/2013)

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1 2 IN THE UNITED STATES DISTRICT COURT 3 FOR THE NORTHERN DISTRICT OF CALIFORNIA 4 5 6 No. C 09-1967 CW IN RE NCAA STUDENT-ATHLETE NAME & LIKENESS LICENSING LITIGATION ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR CLASS CERTIFICATION (Docket No. 651) 7 8 ________________________________/ 9 United States District Court For the Northern District of California 10 Plaintiffs, a group of current and former college athletes, 11 move for class certification to pursue their antitrust claims 12 against Defendant National Collegiate Athletic Association 13 (NCAA).1 The NCAA opposes the motion. 14 parties’ submissions and oral argument, the Court grants in part 15 the motion for class certification and denies it in part. After considering the BACKGROUND 16 17 The procedural history and factual background of this case 18 are described at length in the Court’s order denying the NCAA’s 19 motion to dismiss. 20 order provides only the background necessary to resolve the 21 instant motion. 22 Docket No. 876, at 1-7. Accordingly, this Plaintiffs are twenty-five current and former student- 23 athletes who played for NCAA Division I men’s football and 24 basketball teams between 1953 and the present. 25 Third Consol. Class Action Compl. (3CAC) ¶¶ 25-233. Docket No. 832, Four of these 26 Plaintiffs initially also filed suit against the videogame developer, Electronic Arts, Inc. (EA), and the marketing firm, Collegiate Licensing Company (CLC), but subsequently agreed to settle their claims against those parties. 1 27 28 Plaintiffs (Right-of-Publicity Plaintiffs) allege that the NCAA 2 misappropriated their names, images, and likenesses in violation 3 of their statutory and common law rights of publicity. 4 twenty-one Plaintiffs (Antitrust Plaintiffs) allege that the NCAA 5 violated federal antitrust law by conspiring with EA and CLC to 6 restrain competition in the market for the commercial use of their 7 names, images, and likenesses. 8 Plaintiffs2 seek class certification to pursue their claims 9 arising under the Sherman Antitrust Act, 15 U.S.C. §§ 1 et seq. 10 United States District Court For the Northern District of California 1 Plaintiffs’ antitrust claims arise from the NCAA’s written The other In the pending motion, Antitrust 11 and unwritten rules, which allegedly prohibit student-athletes 12 from receiving compensation for the commercial use of their names, 13 images, and likenesses. 14 these rules preclude student-athletes from entering into group 15 licensing arrangements with videogame developers and broadcasters 16 for the use of their names, likenesses, and images. 17 allege that these rules restrain competition in “two relevant 18 markets: (a) the student-athlete Division I college education 19 market in the United States (the ‘education market’); and (b) the 20 market for the acquisition of group licensing rights for the use 21 of student-athletes’ names, images, and likenesses in the 22 broadcasts or rebroadcasts of Division I basketball and football 23 games and in videogames featuring Division I basketball and 24 football in the United States (the ‘group licensing market’).” 25 Id. ¶ 391. 3CAC ¶¶ 12-15. According to the 3CAC, Plaintiffs 26 27 28 All subsequent references to “Plaintiffs” in this order allude specifically to the twenty-one Antitrust Plaintiffs and not to the four Right-of-Publicity Plaintiffs, whose claims are not at issue here. 2 2 1 Plaintiffs seek monetary damages to compensate them for the 2 financial losses they claim to have suffered as a result of the 3 NCAA’s alleged plan to fix at zero the price of student-athletes’ 4 group licensing rights in videogames and game broadcasts. 5 addition, Plaintiffs seek to enjoin the NCAA from restraining 6 competition in the group licensing market for student-athletes’ 7 name, image, and likeness rights in the future. In 8 LEGAL STANDARD 9 Plaintiffs seeking to represent a class must satisfy the United States District Court For the Northern District of California 10 threshold requirements of Rule 23(a) as well as the requirements 11 for certification under one of the subsections of Rule 23(b). 12 Rule 23(a) provides that a case is appropriate for certification 13 as a class action if 14 (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. 15 16 17 18 19 20 21 22 23 24 25 26 27 Fed. R. Civ. P. 23(a). Plaintiffs must also establish that one of the subsections of Rule 23(b) is met. In the instant case, Plaintiffs seek certification under subsections (b)(2) and (b)(3). Rule 23(b)(2) applies where “the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole.” Fed. R. Civ. Proc. 23(b)(2). 28 3 1 Rule 23(b)(3) permits certification where common questions of 2 law and fact “predominate over any questions affecting only 3 individual members” and class resolution is “superior to other 4 available methods for the fair and efficient adjudication of the 5 controversy.” 6 intended “to cover cases ‘in which a class action would achieve 7 economies of time, effort, and expense . . . without sacrificing 8 procedural fairness or bringing about other undesirable results.’” 9 Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 615 (1997) (quoting United States District Court For the Northern District of California 10 Fed. R. Civ. P. 23(b)(3). These requirements are Fed. R. Civ. P. 23(b)(3) Adv. Comm. Notes to 1966 Amendment). 11 Regardless of what type of class the plaintiff seeks to 12 certify, it must demonstrate that each element of Rule 23 is 13 satisfied; a district court may certify a class only if it 14 determines that the plaintiff has borne this burden. 15 Co. of Sw. v. Falcon, 457 U.S. 147, 158-61 (1982); Doninger v. 16 Pac. Nw. Bell, Inc., 564 F.2d 1304, 1308 (9th Cir. 1977). 17 general, the court must take the substantive allegations of the 18 complaint as true. 19 Cir. 1975). 20 analysis,’” which may require it “‘to probe behind the pleadings 21 before coming to rest on the certification question.’” 22 Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011) (quoting 23 Falcon, 457 U.S. at 160-61). 24 will entail some overlap with the merits of the plaintiff’s 25 underlying claim. 26 2551. 27 court may consider material beyond the pleadings and require 28 supplemental evidentiary submissions by the parties. Gen. Tel. In Blackie v. Barrack, 524 F.2d 891, 901 (9th However, the court must conduct a “‘rigorous Wal-Mart “Frequently that ‘rigorous analysis’ That cannot be helped.” Dukes, 131 S. Ct. at To satisfy itself that class certification is proper, the 4 Blackie, 524 1 F.2d at 901 n.17. “When resolving such factual disputes in the 2 context of a motion for class certification, district courts must 3 consider ‘the persuasiveness of the evidence presented.’” 4 v. Verizon Cal., Inc., 2012 WL 10381, at *2 (C.D. Cal.) (quoting 5 Ellis v. Costco Wholesale Corp., 657 F.3d 970, 982 (9th Cir. 6 2011)). 7 whether a class should be certified. 8 937, 946 (9th Cir. 2003); Burkhalter Travel Agency v. MacFarms 9 Int’l, Inc., 141 F.R.D. 144, 152 (N.D. Cal. 1991). Ultimately, it is in the district court’s discretion Molski v. Gleich, 318 F.3d DISCUSSION 10 United States District Court For the Northern District of California Aburto 11 Plaintiffs seek to certify a class to pursue injunctive 12 relief under Rule 23(b)(2) and a subclass to pursue monetary 13 damages under Rule 23(b)(3). 14 is defined as follows: 15 All current and former student-athletes residing in the United States who compete on, or competed on, an NCAA Division I (formerly known as “University Division” before 1973) college or university men’s basketball team or on an NCAA Football Bowl Subdivision (formerly known as Division I-A until 2006) men’s football team and whose images, likenesses and/or names may be, or have been, included in game footage or in videogames licensed or sold by Defendants, their co-conspirators, or their licensees after the conclusion of the athlete’s participation in intercollegiate athletics. 16 17 18 19 20 21 22 23 24 25 26 The proposed Injunctive Relief Class Docket No. 651, Mot. Class Cert., at 2. This class shall not include any officers, directors, or employees of the NCAA nor of any Division I colleges, universities, or athletic conferences. Id. The proposed Damages Subclass is defined as follows: 27 28 All former student-athletes residing in the United States who competed on an NCAA Division 5 I (formerly known as “University Division” before 1973) college or university men’s basketball team or on an NCAA Football Bowl Subdivision (formerly known as Division I-A until 2006) men’s football team whose images, likenesses and/or names have been included in game footage or in videogames licensed or sold by Defendants, their co-conspirators, or their licensees from July 21, 2005 and continuing until a final judgment in this matter. 1 2 3 4 5 6 Id. at 1-2. 7 Injunctive Relief Class and the proposed Damages Subclass is that 8 the subclass excludes current student-athletes and former student- 9 athletes whose names, likenesses, and images were featured in United States District Court For the Northern District of California 10 Thus, the only difference between the proposed videogames or game broadcasts before July 21, 2005. For reasons explained more fully below, the Court certifies 11 12 the Injunctive Relief Class but declines to certify the Damages 13 Subclass for failure to satisfy the requirements of Rule 23(b)(3). 14 I. Rule 23(a) Requirements 15 A. Numerosity 16 Plaintiffs assert that the Injunctive Relief Class and the 17 Damages Subclass each contain several thousand potential class 18 members. 19 sufficiently large to satisfy the numerosity prerequisite. 20 Accordingly, Plaintiffs have met this requirement. 21 Citric Acid Antitrust Litig., 1996 WL 655791, at *3 (N.D. Cal.) 22 (finding that plaintiffs in a nationwide antitrust class action 23 satisfied the numerosity requirement by asserting that “the total 24 number of class members will be in the thousands”). The NCAA does not dispute that these classes are See In re 25 B. Commonality 26 Rule 23 contains two related commonality provisions. Rule 27 23(a)(2) requires that there be “questions of law or fact common 28 to the class.” Rule 23(b)(3), in turn, requires that these common 6 1 questions predominate over individual ones. 2 addresses only whether Plaintiffs have satisfied Rule 23(a)(2)’s 3 requirements, which are “less rigorous than the companion 4 requirements of Rule 23(b)(3).” 5 F.3d 1011, 1019 (9th Cir. 1998) (“Rule 23(a)(2) has been construed 6 permissively.”). 7 This section Hanlon v. Chrysler Corp., 150 3 The Ninth Circuit has made clear that Rule 23(a)(2) may be 8 satisfied even if fewer than all legal and factual questions are 9 common to the class. Meyer v. Portfolio Recovery Associates, LLC, United States District Court For the Northern District of California 10 707 F.3d 1036, 1041 (9th Cir. 2012) (“‘All questions of fact and 11 law need not be common to satisfy the [commonality requirement].’” 12 (citations omitted; alterations in original)), cert. denied, 133 13 S. Ct. 2361 (2013). 14 divergent factual predicates is sufficient, as is a common core of 15 salient facts coupled with disparate legal remedies within the 16 class.’” “‘The existence of shared legal issues with Id. (citing Hanlon, 150 F.3d at 1019). Plaintiffs have satisfied this requirement with respect to 17 18 both the Injunctive Relief Class and Damages Subclass. They have 19 identified several common questions of law and fact that must be 20 resolved to determine whether the NCAA violated federal antitrust 21 law. 22 “group licensing” markets identified in the complaint; whether 23 NCAA rules have harmed competition in those markets; and whether 24 the NCAA’s procompetitive justifications for its conduct are 25 legitimate. These questions include: the size of the “education” and These types of questions, all of which may be 26 Because Plaintiffs only need to satisfy the commonality requirements of Rule 23(b)(3) with respect to the proposed Damages Subclass, those requirements are addressed in a separate section of this order. 3 27 28 7 1 resolved by class-wide proof and argument, are typically 2 sufficient to satisfy commonality in antitrust class actions. 3 See, e.g., In re TFT-LCD (Flat Panel) Antitrust Litig., 267 F.R.D. 4 583, 593 (N.D. Cal. 2010) (finding questions of market size and 5 anticompetitive effects, among others, sufficient to satisfy 6 commonality), amended in part by 2011 WL 3268649 (N.D. Cal. 2011). 7 Indeed, commonality is “usually met in the antitrust [] context 8 when all class members’ claims present common issues including 9 (1) whether the defendant’s conduct was actionably anticompetitive United States District Court For the Northern District of California 10 under antitrust standards; and (2) whether that conduct produced 11 anticompetitive effects within the relevant product and geographic 12 markets.” 13 Cir. 2011) (Scirica, J., concurring), cert. denied, 132 S. Ct. 14 1876 (2012). 15 Sullivan v. DB Investments, Inc., 667 F.3d 273, 336 (3d Although the NCAA notes that some of the “common” questions 16 that Plaintiffs identify in their brief -- such as certain damage- 17 related questions -- are not actually amenable to class-wide 18 proof, this is not sufficient to defeat commonality. 19 above, “all that Rule 23(a)(2) requires is ‘a single significant 20 question of law or fact.’” 21 Inc., 2013 WL 5383225, at *3 (9th Cir. 2013) (emphasis in 22 original; citing Mazza v. Am. Honda Motor Co., 666 F.3d 581, 588 23 (9th Cir. 2012)). 24 re NCAA I-A Walk-On Football Players Litig., 2006 WL 1207915, at 25 *5 (W.D. Wash.) (“[T]he Court notes that common issues here 26 include: whether Bylaw 15.5.5 is a horizontal restraint of trade 27 in violation of the Sherman Act; whether there is a relevant 28 market for antitrust purposes; whether the NCAA and its members As noted Abdullah v. U.S. Sec. Associates, Plaintiffs have met that burden here. 8 See In 1 have improperly monopolized Division I-A college football; [and] 2 whether there has been injury to competition.”). 3 C. Typicality 4 Rule 23(a)(3) requires that the “claims or defenses of the 5 representative parties [be] typical of the claims or defenses of 6 the class.” 7 class and possess the same interest and suffer the same injury as 8 the class members.” 9 Motor Freight Sys., Inc. v. Rodriguez, 431 U.S. 395, 403 (1977)) Thus, every “class representative must be part of the Falcon, 457 U.S. at 156 (quoting E. Tex. United States District Court For the Northern District of California 10 (internal quotation marks omitted). 11 satisfied if the named plaintiffs have suffered the same or 12 similar injuries as the unnamed class members, the action is based 13 on conduct which is not unique to the named plaintiffs, and other 14 class members were injured by the same course of conduct. 15 v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992). 16 Typicality is not met, however, “where a putative class 17 representative is subject to unique defenses which threaten to 18 become the focus of the litigation.” 19 Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 20 903 F.2d 176, 180 (2d Cir. 1990). 21 This requirement is usually Hanon Id. (quoting Gary Plastic In this case, the named Plaintiffs’ interests are closely 22 aligned with those of absent class members. 23 Plaintiffs play or played for a Division I men’s football or 24 basketball team; all were depicted, without their consent and 25 without payment, in videogames or game broadcasts; and all 26 complied with NCAA rules that allegedly barred them from selling 27 or licensing the rights to their names, images, and likenesses. 28 These characteristics are common to every putative class member 9 All of the named 1 and form the basis for the antitrust injuries that Plaintiffs 2 assert in this case. 3 members’ injuries, claims, and legal theory is typically 4 sufficient to satisfy Rule 23(a)(3). 5 Football Players, 2006 WL 1207915, at *6 (finding Rule 23(a)(3) 6 typicality satisfied where “the legal theory to be advanced by all 7 class members -- that the NCAA and its members violated the 8 Sherman Act -- is identical”); White v. NCAA, Case No. 06–999, 9 Docket No. 95, slip op. at 3 (C.D. Cal. Dec. 19, 2006) (finding In antitrust cases, this uniformity of class See NCAA I-A Walk-On United States District Court For the Northern District of California 10 Rule 23(a)(3) typicality satisfied where former college athletes 11 “allege[d] a horizontal agreement by the NCAA in violation of the 12 Sherman Act” and asserted that “they were all affected by the 13 [challenged NCAA rule] in the same way”). 14 The NCAA has not identified any defense that applies uniquely 15 to the named Plaintiffs nor any other barrier to Rule 23(a)(3) 16 typicality. 17 23(a)(3) in either of its briefs.4 18 claims and interests are common to the class, they have satisfied 19 the typicality requirement here. In fact, it fails to cite, let alone discuss, Rule Thus, because Plaintiffs’ 20 D. Adequacy 21 Rule 23(a)(4) establishes as a prerequisite for class 22 certification that “the representative parties will fairly and 23 adequately protect the interests of the class.” 24 23(a)(4). Fed. R. Civ. P. Rule 23(g)(2) imposes a similar adequacy requirement on 25 26 27 28 Although the NCAA contends that “[i]ndividual defenses will predominate,” Docket No. 789, NCAA Sur-Reply, at 22, it raises this argument under Rule 23(b)(3), not Rule 23(a)(3). Accordingly, these “individual defenses” are addressed separately below, in the section discussing the requirements of Rule 23(b)(3). 4 10 1 class counsel. 2 adequacy: (1) do the named plaintiffs and their counsel have any 3 conflicts of interest with other class members and (2) will the 4 named plaintiffs and their counsel prosecute the action vigorously 5 on behalf of the class?” 6 “Resolution of two questions determines legal Hanlon, 150 F.3d at 1020. The NCAA contends that there are conflicts of interest among 7 class members that preclude class certification here. It points 8 specifically to the fact that, in an unrestrained market for 9 publicity rights, some putative class members -- such as star United States District Court For the Northern District of California 10 athletes -- would command a higher price for their name, image, 11 and likeness rights than others. 12 Plaintiffs were to prevail in this case, those high-value class 13 members would be entitled to a larger share of damages than others 14 because they would have suffered greater economic losses from the 15 NCAA’s ban on student-athlete compensation. 16 proposed model for allocating damages fails to account for these 17 differences between class members. 18 proposes that damages be allocated equally among the members of 19 every football and basketball team. 20 Noll, describes the process as follows: 21 22 23 24 25 26 According to the NCAA, if Yet, Plaintiffs’ Instead, Plaintiffs’ model Plaintiffs’ expert, Dr. Roger First, all revenues [from videogame and broadcast licenses] are allocated to either basketball or football at a college. These revenues are then multiplied by the appropriate sharing formula between colleges and student-athletes. For each college, each revenue stream is further divided between current and former teams. Reflecting the common practice in group licenses, the revenue that is assigned to current players is divided equally among all members of the current team. 27 28 11 1 Docket No. 651-3, Expert Report of Roger Noll, at 107. 2 contends that this proposal for allocating damages benefits 3 lesser-known athletes at the expense of more popular athletes. 4 This argument is not persuasive for several reasons. 5 The NCAA First, the supposed intra-class conflict that the NCAA has 6 identified here is illusory. Although it is true that class 7 members’ publicity rights vary widely in value, it does not 8 necessarily follow that a model of equal sharing among team 9 members would inevitably create a conflict of interest. As noted United States District Court For the Northern District of California 10 above, Plaintiffs allege harm to competition within a group 11 licensing market, not an individual licensing market. 12 distinction is important because it renders irrelevant any 13 differences in the value of each class member’s individual 14 publicity rights. 15 greater economic losses than others because the NCAA prevented 16 them from licensing their individual publicity rights, those 17 losses would have no bearing on this case, where Plaintiffs seek 18 compensation only for losses suffered in the group licensing 19 market. 20 This After all, even if some class members suffered Courts have highlighted this distinction in other cases where 21 plaintiffs sought class certification to pursue claims based on 22 group licensing rights. 23 court in this district certified a class of retired professional 24 football players who charged the NFL with breaching a series of 25 group licensing agreements that the players had previously signed. 26 2008 WL 1925208, at *9 (N.D. Cal.). 27 the NFL’s argument that class certification was inappropriate 28 because the players’ publicity rights varied in value. In Parrish v. NFL, for instance, another 12 The court expressly rejected Id. at *3 1 (“Despite the varying celebrity of retired players, the proposed 2 class as a whole has a common interest in determining what, if 3 any, rights they have under the [group licensing agreements].”). 4 The court reasoned that, because the players’ claims were not 5 based on individual licensing rights, the “star athletes of the 6 class would [] still be able to license their celebrity on an 7 individual basis for whatever amount they choose. 8 would have no effect on the class. 9 group license.” Such licensing What is at stake here is the Id. at *6 (emphasis in original); accord Brown v. United States District Court For the Northern District of California 10 NFL Players Ass’n, 281 F.R.D. 437, 442-43 (C.D. Cal. 2012).5 11 same principle applies here and illustrates that Plaintiffs’ 12 proposed model for allocating damages does not create a real 13 conflict of interest among class members. 14 The Even if Plaintiffs’ method of allocating damages did create 15 such a conflict, this would not be sufficient to prevent class 16 certification. 17 calculations alone cannot defeat certification” and the “potential The Ninth Circuit has made clear that “damage 18 19 20 21 22 23 24 25 26 27 28 Like Parrish, Brown involved claims by a group of retired football players seeking to assert their group licensing rights under a series of agreements with the NFL. In considering the plaintiffs’ class certification motion, the Brown court explained, 5 Contrary to Defendants’ assertions, [the named plaintiff]’s relative lack of celebrity does not cause his damages claim to conflict with the claims of absent class members. In their Complaint, Plaintiffs do not allege that Defendants failed to honor individual licensing agreements, where the players’ relative celebrity would likely affect how much Defendants owed each retired NFLPA member. Instead, Plaintiffs allege that Defendants failed to license the group of retired NFLPA members in the proposed class and to distribute group licensing revenue to them. 281 F.R.D. at 442-43. 13 1 existence of individualized damage assessments . . . does not 2 detract from the action’s suitability for class certification.” 3 Yokoyama v. Midland Nat’l Life Ins. Co., 594 F.3d 1087, 1089, 1094 4 (9th Cir. 2010). 5 potential for intra-class conflicts would arise only at the final 6 stage of damage allocation, when damages would be divided among 7 the members of each team. 8 that stage, the entire class would still share an interest in 9 establishing that the NCAA restrained competition in the relevant This is especially true here, where the No matter how damages were divided at United States District Court For the Northern District of California 10 markets and that it lacked a procompetitive justification for 11 doing so. 12 not tied to their expert’s proposed method for dividing damages 13 among team members,6 their expert’s proposed method will not 14 prevent them from adequately representing the class’s most 15 important interest: to wit, establishing the NCAA’s liability. 16 Finally, to the extent that Plaintiffs’ damages model did Because Plaintiffs’ underlying theory of liability is 17 create the potential for any conflicts of interest, those 18 conflicts would only affect class members seeking monetary 19 relief -- that is, members of the Damages Subclass. 20 of the broader Injunctive Relief Class would not be affected by 21 any conflicts that could arise at the damages stage of the 22 23 24 25 26 27 28 The interests Indeed, Plaintiffs’ expert could propose a different model for allocating damages among team members without altering his substantive analysis of the NCAA’s impact on the relevant markets. This is one reason why Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013), which the NCAA cites for support, is inapposite here. In Comcast, the Supreme Court decertified a class of antitrust plaintiffs because their expert’s damages model was based, in part, on a theory of antitrust liability that the trial court had rejected. Id. at 1433. Here, in contrast, not only is Plaintiffs’ damages model based on a permissible theory of antitrust liability but, what’s more, the NCAA has attacked an aspect of Plaintiffs’ damages model that could be altered without changing their underlying theory of antitrust liability. 6 14 1 litigation. Thus, Plaintiffs’ proposed damages model does not 2 defeat certification here under Rule 23(a)(4). Plaintiffs have therefore satisfied all of the Rule 23(a) 3 4 requirements with respect to both the Injunctive Relief Class and 5 the Damages Subclass. 6 II. Rule 23(b) Requirements 7 A. 8 A court may grant certification under Rule 23(b)(2) “if class 9 Rule 23(b)(2): Injunctive Relief Class members complain of a pattern or practice that is generally United States District Court For the Northern District of California 10 applicable to the class as a whole. 11 have not been injured by the challenged practice, a class may 12 nevertheless be appropriate.” 13 1047 (9th Cir. 1998); see also 7A Wright, Miller & Kane, Federal 14 Practice & Procedure § 1775 (2d ed. 1986) (“All the class members 15 need not be aggrieved by or desire to challenge the defendant’s 16 conduct in order for some of them to seek relief under Rule 17 23(b)(2).”). 18 the viability or bases of class members’ claims for declaratory 19 and injunctive relief, but only to look at whether class members 20 seek uniform relief from a practice applicable to all of them.” 21 Rodriguez v. Hayes, 591 F.3d 1105, 1125 (9th Cir. 2010). 22 Even if some class members Walters v. Reno, 145 F.3d 1032, Rule 23(b)(2) does not require a court “to examine Here, the NCAA contends that certification under Rule 23 23(b)(2) is inappropriate because Plaintiffs’ “demand for damages 24 predominates over any request for injunctive relief” and 25 “‘individualized monetary claims belong in Rule 23(b)(3)’” rather 26 than Rule 23(b)(2). 27 22 (citing Dukes, 131 S. Ct. at 2558). 28 the nature of the relief that Plaintiffs seek. Docket No. 677, NCAA Opp. Class Cert., at 21- 15 This argument misstates As previously 1 explained, Plaintiffs seek to certify one class under Rule 2 23(b)(2) to pursue declaratory and injunctive relief and another 3 class under Rule 23(b)(3) to pursue monetary relief. 4 the federal rules or existing case law prevents them from seeking 5 certification under both of these provisions. 6 AT&T iPad Unlimited Data Plan Litig., 2012 WL 2428248 (N.D. Cal.) 7 (explaining that “a court may certify a Rule 23(b)(2) class for 8 injunctive relief and a separate class for individual damages or, 9 if the damage claims do not meet Rule 23(b)(3) standards, certify Nothing in See In re Apple, United States District Court For the Northern District of California 10 the Rule 23(b)(2) class alone” (citing Schwarzer, Tashima & 11 Wagstaffe, Cal. Practice Guide: Federal Civil Procedure Before 12 Trial § 10:404 (2011))). 13 With respect to the Rule 23(b)(2) class, Plaintiffs seek 14 certification to pursue an injunction barring the NCAA from 15 prohibiting current and former student-athletes from entering into 16 group licensing deals for the use of their names, images, and 17 likenesses in videogames and game broadcasts. 18 this injunction is not merely ancillary to their demand for 19 damages. 20 restraints that the NCAA has allegedly imposed on competition in 21 the relevant markets. 22 all class members -- including both current and former student- 23 athletes -- would potentially be subject to ongoing antitrust 24 harms resulting from the continued unauthorized use of their 25 names, images, and likenesses. 26 all class members “uniform relief” from this harm, Rodriguez, 591 27 F.3d at 1125, class certification is appropriate under Rule 28 23(b)(2). Their request for Rather, it is deemed necessary to eliminate the Without the requested injunctive relief, Because an injunction would offer 16 1 B. Rule 23(b)(3): Damages Subclass 2 To qualify for certification under Rule 23(b)(3), “a class 3 must satisfy two conditions in addition to the Rule 23(a) 4 prerequisites: common questions must ‘predominate over any 5 questions affecting only individual members,’ and class resolution 6 must be ‘superior to other available methods for the fair and 7 efficient adjudication of the controversy.’” 8 1022 (quoting Fed. R. Civ. P. 23(b)(3)). 9 the court to take into account the “likely difficulties in Hanlon, 150 F.3d at The rule also requires United States District Court For the Northern District of California 10 managing a class action.” 11 together, these requirements impose “an obligation on the court to 12 make findings that will demonstrate the utility and propriety of 13 employing the class-action device in the case before it.” 14 Wright, Miller & Kane, Federal Practice & Procedure § 1777 (3d ed. 15 2013). 16 Fed. R. Civ. P. 23(b)(3)(D). Taken 7AA Plaintiffs have not presented sufficient evidence here to 17 establish that certification is appropriate under Rule 23(b)(3). 18 In particular, they have failed to satisfy the manageability 19 requirement because they have not identified a feasible way to 20 determine which members of the Damages Subclass were actually 21 harmed by the NCAA’s allegedly anticompetitive conduct. 22 have recognized that, in price-fixing cases such as this one, 23 where the “fact of injury” cannot be determined by a “virtually 24 mechanical task,” class manageability problems frequently arise. 25 See, e.g., Windham v. Am. Brands, Inc., 565 F.2d 59, 67-68 (4th 26 Cir. 1977) (recognizing “respectable authorities in which 27 certification of an anti-trust action was denied because of the 28 complexity of, and the difficulties connected with, the proof of 17 Courts 1 individual injury”); In re Graphics Processing Units Antitrust 2 Litig., 253 F.R.D. 478, 489 (N.D. Cal. 2008) (“Direct-purchaser 3 plaintiffs have failed to supply a class-wide method for proving 4 ‘impact’ on a class-wide basis.”). 5 The first barrier to manageability here is the so-called 6 “substitution effect,” which stems from Dr. Noll’s opening expert 7 report on the economic impact of the NCAA’s rules. 8 customary in antitrust cases, Dr. Noll’s report described how the 9 relevant markets would be expected to function in the absence of As is United States District Court For the Northern District of California 10 the challenged restraints on competition -- in this case, without 11 the ban on student-athlete compensation. 12 Meritor, LLC v. Eaton Corp., 696 F.3d 254, 292 (3d Cir. 2012) 13 (noting that, in antitrust cases, “an expert may construct a 14 reasonable offense-free world as a yardstick for measuring what, 15 hypothetically, would have happened ‘but for’ the defendant’s 16 unlawful activities” (citations omitted)). 17 that, because student-athletes are often motivated by financial 18 concerns when choosing whether and where to attend college, “the 19 expected effect [of the ban on student-athlete pay] is to change 20 the identities of the students who accept an athletic 21 scholarship.” 22 illustrate this point, Dr. Noll examined the experiences of more 23 than one hundred Division I basketball players who left college 24 early between 2008 and 2010 to seek out opportunities to play 25 professionally. 26 these players “plausibly would have stayed in college” if they had 27 been permitted to participate in a competitive group licensing See generally ZF Dr. Noll explained Docket No. 651-3, Noll Expert Report, at 58-59. Id. at 61-63, Ex. 9B. 28 18 To He concluded that many of 1 market, because the financial costs of staying in school would 2 have been lower. Id. at 62. 3 Critically, however, Dr. Noll also notes that if these 4 athletes had stayed in college -- as they might have done if not 5 for the alleged restraints on competition in the group licensing 6 market -- they would have displaced other student-athletes on 7 their respective teams. 8 Feb. 2013 R. Noll Depo., at 364:13-:24. 9 athletes would have either been forced to play for other Division Docket No. 683, Wierenga Decl., Ex. 4, Those displaced student- United States District Court For the Northern District of California 10 I teams or simply lost the opportunity to play Division I 11 basketball altogether. 12 suffered injuries as members of the teams for which they actually 13 played because, as Dr. Noll suggests, they would never have been 14 able to play for those teams in the absence of the challenged 15 restraints. 16 (“[T]he NCAA rules simultaneously caused dead-weight loss for 17 students who decided not to accept a scholarship for Division IA 18 football or Division I basketball because of the price increase 19 [in the cost of attendance] and an inefficient substitution 20 because students of lesser athletic ability substituted for 21 students of greater athletic ability.”). 22 individuals -- all of whom are putative members of the Damages 23 Subclass -- may have even benefitted from the challenged 24 restraints by earning roster spots that would have otherwise gone 25 to more talented student-athletes. 26 In either case, they would not have See Docket No. 651-3, Noll Expert Report, at 59 Indeed, many of these Plaintiffs have not proposed any method for addressing this 27 substitution effect among individual student-athletes. 28 they proposed any method for addressing the related substitution 19 Nor have 1 effect among Division I schools. One of Plaintiffs’ central 2 contentions in this case is that, without the ban on student- 3 athlete pay, competition among Division I schools for student- 4 athletes would increase substantially. 5 for student-athletes, combined with the potentially higher costs 6 of recruiting and retaining those student-athletes, would have 7 likely driven some schools into less competitive divisions, 8 thereby insulating entire teams from the specific harms that 9 Plaintiffs allege in this suit. That increased competition Wierenga Decl., Ex. 2, Expert United States District Court For the Northern District of California 10 Report of Daniel L. Rubinfeld, at ¶¶ 185-86. 11 provided a feasible method for determining which members of the 12 Damages Subclass would still have played for Division I teams -- 13 and, thus, suffered the injuries alleged here -- in the absence of 14 the challenged restraints. 15 to the impossibility of determining which class members were 16 actually injured by the NCAA’s alleged restraints on competition 17 and, as such, precludes certification under Rule 23(b)(3). 18 NCAA I-A Walk-On Football Players, 2006 WL 1207915, at *8-*9 19 (denying class certification to a group of student-athletes who 20 challenged the NCAA’s cap on team scholarships because raising the 21 scholarship cap would increase the level of competition for those 22 scholarships and thus require every putative class member to prove 23 individually that he would have obtained a scholarship and others 24 would not). 25 Plaintiffs have not This shortcoming likewise contributes See Another barrier to manageability here is determining which 26 student-athletes were actually depicted in videogames during the 27 relevant class period and, thus, members of the Damages Subclass. 28 See Rowden v. Pac. Parking Sys., Inc., 282 F.R.D. 581, 585 (C.D. 20 1 Cal. 2012) (“A class action is not manageable if membership of the 2 class cannot be sufficiently well-defined at the outset.”); Chavez 3 v. Blue Sky Natural Beverage Co., 268 F.R.D. 365, 376 (N.D. Cal. 4 2010) (stating that class certification is not appropriate unless 5 it is “administratively feasible to determine whether a particular 6 person is a class member”). 7 Bowl Subdivision (formerly known as Division I-A) is allowed up to 8 105 players -- eighty-five scholarship players and twenty non- 9 scholarship players. Every team in the NCAA’s Football Wierenga Decl., Ex. 4, Feb. 2013 R. Noll United States District Court For the Northern District of California 10 Depo., at 102:18-103:2. In contrast, the football teams depicted 11 in NCAA-licensed videogames have only sixty-eight players each. 12 Docket No. 703, Slaughter Decl., Ex. 69, R. Harvey Depo. 24:15- 13 :21. 14 NCAA-licensed videogames is considerably smaller than the number 15 of student-athletes who actually played for a Division I football 16 team during the class period. 17 feasible method for determining on a class-wide basis which 18 student-athletes are depicted in these videogames and which are 19 not.7 20 the Damages Subclass without conducting thousands of 21 individualized comparisons between real-life college football 22 players and their potential videogame counterparts. As a result, the number of student-athletes depicted in Plaintiffs have not offered a This makes it impossible to determine who is a member of 23 Plaintiffs have also failed to present a feasible method for 24 determining on a class-wide basis which student-athletes appeared 25 in game footage during the relevant period. 26 proposed class definition, the only student-athletes who belong in Under Plaintiffs’ 27 Using players’ jersey numbers is not an option because NCAA teams frequently allow multiple players to wear the same jersey number. 7 28 21 1 the Damages Subclass are those who appeared in game footage 2 licensed after July 21, 2005. 3 straightforward method for identifying this subset of student- 4 athletes. 5 containing information such as team rosters, game summaries, 6 televised game schedules, and broadcast licenses, they have not 7 provided any formula for extracting the relevant information from 8 each of these resources and using that information to identify 9 putative subclass members. Plaintiffs have not proposed a Although they point to various third-party resources In particular, Plaintiffs have not United States District Court For the Northern District of California 10 explained how they would determine which of the student-athletes 11 listed on team rosters actually appeared in televised games. 12 have they explained how they would determine which games were 13 broadcast pursuant to licenses issued after July 21, 2005. 14 Without a means of accomplishing these tasks on a class-wide 15 basis, Plaintiffs would have to cross-check thousands of team 16 rosters against thousands of game summaries and compare dozens of 17 game schedules to dozens of broadcast licenses simply to determine 18 who belongs in the Damages Subclass. 19 system for identifying class members. Nor This is not a workable 20 In light of these obstacles to manageability, class 21 resolution does not provide a superior method for adjudicating 22 this controversy. 23 Subclass under Rule 23(b)(3) is denied. 24 III. Evidentiary Objections 25 Accordingly, certification of the Damages The NCAA’s objections to the testimony of Plaintiffs’ 26 experts, Dr. Noll and Larry Gerbrandt, are overruled. 27 these witnesses offered relevant testimony regarding whether the 28 question of antitrust liability can be resolved through class-wide 22 Each of 1 proof and analysis and each witness based his opinions on a 2 sufficiently reliable methodology. 3 Federal Rule of Evidence 702. 4 (9th Cir. 2010) (requiring the trial court to “assure that the 5 expert testimony ‘both rests on a reliable foundation and is 6 relevant to the task at hand’” (citations omitted)). 7 NCAA may question the strength of their analyses, the Ninth 8 Circuit has made clear that, under Rule 702, “Shaky but admissible 9 evidence is to be attacked by cross examination, contrary This is enough to satisfy Primiano v. Cook, 598 F.3d 558, 564 While the United States District Court For the Northern District of California 10 evidence, and attention to the burden of proof, not exclusion.” 11 Id. CONCLUSION 12 13 For the reasons set forth above, Plaintiffs’ motion for class 14 certification (Docket No. 651) is GRANTED in part and DENIED in 15 part. 16 23(b)(2): The Court certifies the following class under Rule 17 All current and former student-athletes residing in the United States who compete on, or competed on, an NCAA Division I (formerly known as “University Division” before 1973) college or university men’s basketball team or on an NCAA Football Bowl Subdivision (formerly known as Division I-A until 2006) men’s football team and whose images, likenesses and/or names may be, or have been, included in game footage or in videogames licensed or sold by Defendants, their co-conspirators, or their licensees after the conclusion of the athlete’s participation in intercollegiate athletics. 18 19 20 21 22 23 24 25 26 27 Further, Antitrust Plaintiffs’ attorneys are certified as class counsel. The NCAA’s motion for leave to file a supplemental memorandum regarding new evidence (Docket No. 881) is DENIED. 28 23 The NCAA has 1 not explained why it was unable to obtain and present this 2 evidence during the extensive briefing on class certification. 3 addition, the NCAA’s request to present this evidence is moot 4 because the evidence pertains to the calculation and allocation of 5 damages, which is no longer relevant in light of the Court’s 6 denial of class certification under Rule 23(b)(3). 7 In Plaintiffs shall submit any dispositive motions, including 8 any Daubert motions, in a single twenty-five page brief within one 9 week of this order. The NCAA shall file its opposition and any United States District Court For the Northern District of California 10 cross-motions in a single twenty-five page brief, including any 11 evidentiary objections it intends to raise, on or before December 12 5, 2013. 13 single fifteen-page brief on or before January 6, 2014. 14 shall file its reply in a single fifteen-page brief on or before 15 February 3, 2014. 16 including all evidentiary objections, and hold a case management 17 conference at 2:00 p.m. on February 20, 2014. 18 Plaintiffs shall file their reply and opposition in a The NCAA The Court shall hear all dispositive motions, IT IS SO ORDERED. 19 20 21 Dated: 11/8/2013 CLAUDIA WILKEN United States District Judge 22 23 24 25 26 27 28 24

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