Brady et al v. National Football League et al

Filing 142

DOCUMENT FILED IN ERROR, CAPTION INCORRECT, WILL RE-FILE. MOTION to Alter/Amend/Supplement Pleadings Leave to Amend and Crossclaim by Obafemi Ayanbadejo, Ryan Collins, Carl Eller. (Attachments: # 1 Second Amended Complaint, # 2 Exhibit(s) Index, # 3 Exhibit(s) A, # 4 Exhibit(s) B, # 5 Exhibit(s) C, # 6 Exhibit(s) D, # 7 Exhibit(s) E, # 8 Exhibit(s) F, # 9 Exhibit(s) G, # 10 Exhibit(s) H, # 11 Exhibit(s) I, # 12 Exhibit(s) J, # 13 Exhibit(s) K, # 14 Exhibit(s) L, # 15 Exhibit(s) M, # 16 Exhibit(s) N, # 17 Exhibit(s) O, # 18 Exhibit(s) P, # 19 Exhibit(s) Q, # 20 Exhibit(s) R, # 21 Exhibit(s) S, # 22 Exhibit(s) T, # 23 Exhibit(s) U, # 24 Exhibit(s) V, # 25 Exhibit(s) W, # 26 Exhibit(s) X)(Stuckey, Shawn) Modified on 7/7/2011 (JME).

Case3:07-cv-00943-WHA Document605

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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For the Northern District of California

United States District Court

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BERNARD PAUL PARRISH, HERBERT
ANTHONY ADDERLEY, WALTER
ROBERTS III, on behalf of themselves
and all others similarly situated,
Plaintiffs,

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v.
ORDER DENYING ALL
POST-TRIAL MOTIONS

NATIONAL FOOTBALL LEAGUE
PLAYERS INCORPORATED, et al.,
Defendants.
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No. C 07-00943 WHA

The jury returned a verdict for the plaintiff class of retired NFL players who had signed

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a “Retired Player Group License Agreement” during the class period, finding that defendants

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had breached a duty to market their likeness and names. The verdict was for $7.1 million in

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compensatory damages and $21 million in exemplary damages. Defendants have now moved

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for judgment in their favor. A hearing has been held. Briefing before and after the hearing

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have been considered.

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The Court is satisfied that the jury instructions were correct and fairly covered the issues

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submitted to the jury (or that any problem with them was not preserved). So much has already

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been said on the record as to the reasons for the instructions that more is unnecessary, although

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it is worth adding that on a majority of legal issues, the instructions favored the defense view of

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the law. The punitive damage instruction, for example, was exactly as requested by the defense.

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The only other question is whether under the law as stated in the instructions, the trial

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evidence was sufficient to support the verdict. No doubt, defense counsel made a fine closing

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to the jury. Had the verdict been the other way, it would have been supported. But that is not

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the test. Given the deference we must accord jury verdicts, the test is whether the verdict as

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rendered was supportable. The answer is yes. Nor was the verdict so far against the weight

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of the evidence as to warrant a new trial.

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The jury could reasonably have accepted the view of the evidence that defendants

RPGLAs — yet made no effort to do so — and that defendants’ true commercial motive was

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to create an illusion of representation so that no one else would seek to sign up the RPGLA

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For the Northern District of California

undertook a fiduciary duty to promote and to market all retired players who had signed

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United States District Court

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class and to market them. While defendants offered vague verbal testimony of passing

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attempts to market the RPGLA group as a whole, the jury could have easily rejected those

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snippets as self-serving “double talk.” Not a single offer to market the entire group was ever

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in writing; nor was there ever any documentary corroboration of any such verbal group offer.

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To the contrary, the only writings showed the opposite of marketing — for example, that

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defendants told Electronic Arts to “scramble” the identities of retired players in the lucrative

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Madden vintage-team game. This game would have been a golden opportunity for defendants

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to have offered to license the entire group of RPGLA members but, significantly, no such

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offer was made — or so the jury could reasonably have found. Instead, defendants told EA

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to “scramble” the names and identities of retired players and the class received zero from this

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potential bonanza. What is more, the Hall of Fame evidence showed that defendants were

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willing to “sell out” the RPGLA class members in order to curry favor with EA (by keeping

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a competitor of EA out of the market) — or so the jury could have reasonably concluded.

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And, the “escrow account” referenced in the RPGLA (supposedly to be set up to hold revenues

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for class members) was never even established by defendants, from which it could reasonably

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have been inferred that the escrow account was never intended to be anything more than an

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illusion.

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The multi-factor test for the existence of a fiduciary duty arguably favored defendants

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on some points but overall there was sufficient evidence that defendants took on a fiduciary

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duty to market the RPGLA class as a group. For example, defendants’ own website (TX 5)

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held themselves out as “representing” both active and retired players with respect to their

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images and identities, saying that Players, Inc., was formed “to generate revenue for the

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players . . .” and that it had been “aggressive in its efforts to expand player marketing

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opportunities.” Other such supportive evidence is cited in plaintiff’s memorandum.

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A monumental fact was never adequately explained by defendants — how could it

for defendants’ RPGLA “program,” yet never paid one cent to any retired player under the

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For the Northern District of California

have been that defendants lobbied thousands of retired players for fourteen years to sign up

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United States District Court

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program? Put differently, if retired players’ images and identities were really the undesirable

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“dog food” contended by the defense, then why did they try so hard to sign up the RPGLA class

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members for so long — only to never pay a penny? Given the golden opportunity presented

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by the Madden vintage-team game, the jury could reasonably have concluded that the true

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motive was to deter or to head off any competing effort by any third-party promoter (or by

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the retired players themselves) to license them as a group and to lull the retired players into

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misbelieving that defendants were out on the hustings trying to generate revenue for them.

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Instead, defendants gave complete priority in their group efforts to marketing active players.

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Defendants got to keep a large share of the active player group money (and very little of any

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retired player group money) so the incentives were skewed to favor marketing the active players

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to the exclusion of the retired players.

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It is, of course, true that one can acquire a license to use a name and likeness without

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also undertaking to be a marketing agent. Put differently, a bare licensee may use or not use

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the rights as it wishes — even to the point of ignoring them. A marketing agent, by contrast,

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takes on an affirmative duty to promote the name and likeness. This distinction was carefully

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explained in the final charge to the jury. The jury plainly decided that defendants were more

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than bare licensees and, indeed, had undertaken to be marketing agents under its “program” for

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RPGLA class members. The evidence supported this conclusion. Again, defendants’ website
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(TX 5) specifically boasted that defendants “represented” thousands of retired football players

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with respect to their names and likenesses. In context, this meant that defendants were publicly

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acknowledging their role as marketing agents for retired players. We must also remember that

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defendants paid nothing for the RPGLAs, so retired players could have received compensation

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only if defendants made an effort to market the rights. The players could reasonably have

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expected that defendants would do so. This was thus unlike the situation where an investor

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pays cash up front for name and likeness rights and then has the right, as a bare licensee, to

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market or not to market as it wishes — or so the jury could reasonably have found.

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Defendants’ most vigorous attack is on the $7.1 million compensatory award. This was
for breach of the fiduciary duty to market RPGLA class images and identities. The defense

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For the Northern District of California

United States District Court

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contends that the award was utterly speculative and merely a number snatched from the ether.

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The defense correctly points out that plaintiff’s ambitious damage theory at trial was that the

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retired players were entitled to share equally and shoulder to shoulder with the active players

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in dividing up the huge GLR revenue pool. This theory was presented for both the contract

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claim and the fiduciary duty claim. Plainly, it was rejected by the jury on both counts.

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Instead, the jury awarded a far more modest amount, $7.1 million. That leads to the question

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of whether there was a viable basis in the record to sustain the $7.1 million verdict for the

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breach of fiduciary duty.

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While it is true that plaintiff’s counsel presented a luxurious damage theory, the

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instructions themselves supplied the correct measure. The jury was instructed (¶ 50) that

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“the measure of damages for breach of fiduciary duty is the amount of money necessary to

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place RPGLA class members in the same economic position they would have been in if

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defendants’ fiduciary duty had not been breached.” The jury was further instructed that

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plaintiff had to first prove economic injury as a result of any breach, and that plaintiff had to

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prove damages with reasonable certainty. The jury was told that “Plaintiff is not entitled to

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recover damages which are speculative, remote, imaginary, contingent, or merely possible.

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Your award must be based upon evidence and not from speculation, guesswork or conjecture”

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(¶ 51). They were further told that if they found plaintiff’s proof to be vague or speculative,

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then the jury could award nominal damages.

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So the correct measure of damages was before the jury. Was there evidence from which

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the jury, following this measure, could assemble its own calculation? The defense is correct in

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that no expert testimony addressed the range of prices a group license for all 2074 class

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members might have commanded in the market during the times in question. In this regard, it is

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even true that the Court itself noted this omission before the case went to the jury and heard

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argument on its significance. Possibly, the better plaintiff’s practice would have been to have

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called a sports agent to advise the jury on what the plausible range of prices that might have

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For the Northern District of California

United States District Court

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been fetched had defendants complied with their fiduciary duty.
In the end, the Court decided to let the issue go to the jury. The Court determined that

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despite this circumstance, there was sufficient other evidence from which the jury could

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construct a reasonable damage award, applying the correct measure stated in the instructions.

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For example, the jury was aware of the massive dollars paid for the group license for active

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players and the separate more modest dollars garnered by the various ad hoc license agreements

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for retired players. Plaintiff’s memorandum references other benchmarks and evidence on the

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subject. The verdict is sufficiently low in relation to the vast sums negotiated for the active

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players and was sufficiently close to the ad hoc totals for retired players that by these

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benchmarks the verdict was reasonable.

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While the $7.1 million number was never testified to by any expert, such testimony is

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not a prerequisite. Otherwise, virtually all verdicts would have to be tossed aside, for juries are

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supposed to exercise their own critical judgment and not simply rubber-stamp the theories of

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retained “experts.” The evidence as a whole supported the conclusion that had defendants

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tried to market the RPGLA class members rather than letting EA scramble their identifies, a

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group royalty in the general vicinity of the verdict would have been obtainable. When viewed

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against the massive amounts paid for active player group rights, the $7.1 million was reserved.

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The verdict was within the bounds of reasonableness and the law does not require that the dollar

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amount be amenable to reverse engineering to trace the exact methodology used by the jury.
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Under our jury system, jury verdicts must be accorded great deference and a jury is permitted

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“to do its own math.” City Solutions, Inc. v. Clear Channel Communications, Inc., 365 F.3d

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835, 840–41 (9th Cir. 2004) (reversal of Rule 50 JMOL in analogous circumstances). In sum,

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in light of these cautionary instructions, the comparable moderation of the verdict, and the

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plausible benchmarks in the evidence, the verdict will be sustained as anchored in the evidence,

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even if not in the stratospheric range requested by counsel for the class.

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The punitive damages award will not be set aside. The jury could reasonably have

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found an intentional and calculated breach of a fiduciary duty by defendants, for the reason

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stated. The amount was not disproportionate to the wrong done or to the compensatory award.

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For the Northern District of California

United States District Court

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Viewed in a light most favorable to the verdict, the evidence was clear and convincing.
With respect to the separate contract claim (on which no damages were awarded but

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a breach was found), defendants had no one to blame but themselves for the confounded

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wording of the RPGLA which, as was earlier said, was a “masterpiece of obfuscation.”

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While defendants presented a plausible “understanding” of it, the jury could reasonably have

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rejected that interpretation, especially given that it was so lacking in any contemporaneous

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written support.

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All other grounds asserted are denied as without merit or having been waived. As to any

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other specific point raised by the motion, this order is in agreement with the memorandum filed

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by plaintiff. All defense post-trial motions are DENIED.

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With respect to a plan of distribution of the recovery to the class members, all

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proceedings to collect the judgment and to devise a plan of allocation shall be STAYED

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pending resolution of all appeals, subject to the inquiry below. If the judgment is affirmed,

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then defendants must then promptly pay the judgment into registry of the court (with statutory

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interest from the date of judgment) and then a plan of allocation shall be devised. This is

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without prejudice to a motion for security for the judgment should the finances of defendants

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deteriorate but such circumstances seem unlikely at present. Plaintiff, however, shall be entitled

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to quarterly inquiry into defendants’ financial condition, failing cooperation on which the Court

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shall, on motion, consider a bond requirement.

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So too as to any award of attorney’s fees. It is unseemly to immediately lop a large

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percentage off the top for the lawyers until the plan of distribution is determined and the Court

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can see how prejudiced class members would be by any large fee award. The attorney’s fee

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motion and the motion for a side bonus payment to the class representative are DENIED

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WITHOUT PREJUDICE

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take place after all appeals of the main judgment.

to renewal in connection with the plan of distribution, which shall all

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By this order, the Court requests counsel to submit short memoranda on the issue of

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For the Northern District of California

United States District Court

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whether it is necessary to approve a plan of distribution or take any further action before the

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case can go on appeal. Please submit the memoranda within FOURTEEN CALENDAR DAYS of

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this order. The same memoranda should address also whether notice and opportunity to be

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heard should be given to the class as to the proposed plan of distribution and as to any

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attorney’s fee motion and/or a side bonus payment to the class representative.

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IT IS SO ORDERED.

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Dated: January 13, 2009.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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