Marshall v. Nat'l Football League

787 F.3d 502

114 U.S.P.Q.2d 1845

James Lawrence MARSHALL;

Joseph Michael Senser;

Dante Anthony Pastorini, Plaintiffs–Appellants

Fred Barnett;

Tracy Simien;

Darrell Alexander Thompson;

James Nathaniel Brown;

Mark Gregory Clayton;

Irvin Acie Cross;

Brian Duncan;

Billy Joe Dupree;

Michael James Haynes;

Paul James Krause;

Reginald McKenzie;

Reginald Joseph Rucker;

Jackie Larue Smith, on behalf of themselves and all others similarly situated, Plaintiffs–Appellees

John Frederick Dryer;

Elvin Lamont Bethea;

Edward Alvin White;

Lemuel Joseph Barney;

Bruce Allan Laird;

Preston Pearson ;

Jim Ray Smith, Plaintiffs

v.NATIONAL FOOTBALL LEAGUE, Defendant–Appellee.

Marcus Dell Gastineau;

Abdul Salaam, Plaintiffs–Appellants

Fred Barnett;

Tracy Simien;

Darrell Alexander Thompson;

James Nathaniel Brown;

Mark Gregory Clayton;

Irvin Acie Cross;

Brian Duncan;

Billy Joe Dupree;

Michael James Haynes;

Paul James Krause;

Reginald McKenzie;

Reginald Joseph Rucker;

Jackie Larue Smith, on behalf of themselves and all others similarly situated, Plaintiffs–Appellees

John Frederick Dryer;

James Lawrence Marshall;

Joseph Michael Senser;

Elvin Lamont Bethea;

Dante Anthony Pastorini;

Edward Alvin White;

Lemuel Joseph Barney;

Bruce Allan Laird;

Preston Pearson ;

Jim Ray Smith, Plaintiffs

v.National Football League, Defendant–Appellee.

Jed Weaver, Plaintiff–Appellant

Fred Barnett;

Tracy Simien;

Darrell Alexander Thompson;

James Nathaniel Brown;

Mark Gregory Clayton;

Irvin Acie Cross;

Brian Duncan;

Billy Joe Dupree;

Michael James Haynes;

Paul James Krause;

Reginald McKenzie;

Reginald Joseph Rucker;

Jackie Larue Smith, on behalf of themselves and all others similarly situated, Plaintiffs–Appellees

John Frederick Dryer;

James Lawrence Marshall;

Joseph Michael Senser;

Elvin Lamont Bethea;

Dante Anthony Pastorini;

Edward Alvin White;

Lemuel Joseph Barney;

Bruce Allan Laird;

Preston Pearson ;

Jim Ray Smith, Plaintiffs

v.National Football League, Defendant–Appellee.

Nos. 13–3581

13–3582

13–3666.

United States Court of Appeals, Eighth Circuit.

Submitted: Dec. 10, 2014.

Filed: May 21, 2015.

Rehearing and Rehearing En Banc Denied July 15, 2015.

Eric John Magnuson, argued, Michael Vincent Ciresi, Jan Marie Conlin, Minneapolis, Robert A. Stein, Eden Prairie, Minneapolis, MN, Thomas Ward, Washington, DC, on the brief, for Plaintiffs–Appellants in 13–3581.

Eric Lechtzin, argued, Sherrie R. Savett, Philadelphia, PA, Jacqueline J. Williams, Minneapolis, MN, on the brief, for Plaintiffs–Appellants in 13–3582.

Jon T. King, argued, Steve W. Berman, Berkely, CA, David F. Herr, Michael C. McCarthy, Jesse D. Mondry, Minneapolis, MN, on the brief, for Plaintiff–Appellant in 13–3666.

Daniel E. Gustafson, argued and on the brief, Minneapolis, MN, for Plaintiffs–Appellees.

Aaron Daniel Van Oort, argued, Daniel Joseph Connolly, Minneapolis, MN, Bruce P. Keller, New York, N.Y., on the brief, for Defendant–Appellee.

Before BYE, SMITH, and KELLY, Circuit Judges.

Opinion

BYE, Circuit Judge.

Six former National Football League (“NFL”) players (“Appellants”) appeal the district court's approval of the class-action settlement between nearly 25,000 class members and the NFL. The negotiated settlement agreement resolves the litigation surrounding the NFL's use of former NFL players' likenesses and identities. The complex settlement—a product of numerous settlement conferences and years of litigation—provides two unique benefits to the class: (1) the establishment of a licensing agency to assist former NFL players in marketing their publicity rights with the support of the NFL; and (2) up to a $42 million payout by the NFL for the benefit of the class. Appellants contend the district court¹ abused its discretion in approving the settlement because it does not provide for a direct financial payment to each class member and is not fair, reasonable, and adequate. We affirm.

I

The class action complaint alleges that for many years NFL Films—the commercial filmmaking wing of the NFL—has used the names, images, likenesses, and identities of former NFL players in its various videos to generate revenue and promote the NFL. The NFL Films videos are “promotional film productions with scripts, music, editing, direction and production completely independent of the play and production of the games themselves.” They seek to provide fans with the story of the game, such as the “perspective of the game that perhaps [fans] were not aware of when they watched the broadcast on network television.” According to Appellants, the use of the players' likenesses and identities has helped the NFL gain substantial profits and improve its brand.

In 2009, Appellants brought this class action against the NFL on behalf of a class of former NFL players whose name, voice, image, or likeness was used by the NFL to gain profit or promote the NFL. The class asserted claims for false endorsement under the Lanham Act, 15 U.S.C. § 1125, common law and statutory rights of publicity claims under several states' laws, and unjust enrichment. The NFL moved for judgment on the pleadings, contending the claims failed because they were either precluded by the First Amendment, preempted by the Copyright Act, or were insufficient to constitute false endorsement. At the pleadings stage, the district court denied the motion, and the parties proceeded to discovery. More than two years into the litigation, the NFL moved for partial summary judgment on issues regarding choice of law and the applicable statute of limitations. The district court held that all claims prior to August 23, 2003, were time-barred, all claims arising between August 23, 2003, and August 1, 2004, were governed by Minnesota's statute of limitations, and that it was premature to determine the choice of law and applicable statute of limitations for all remaining claims.

On December 12, 2012, pursuant to Federal Rule of Civil Procedure 23(d) and (g), the Magistrate Judge² appointed a lead settlement counsel to act as a single representative for the class in settlement discussions. See Dryer v. Nat'l Football League, No. 09–2182 (PAM/AJB), Dkt. No. 250, at *1 (D.Minn. Dec. 12, 2012). The Magistrate Judge explained that lead settlement counsel was necessary because the settlement discussions and settlement process stalled due to “serious disagreements among the three lead counsel for Plaintiffs.” Id., Dkt. No. 252, at *1. The Magistrate Judge hoped to “restart the settlement negotiations without the distractions presented by Plaintiffs' co-lead counsel's disagreements and to protect the interests of the putative class as a whole.” Id. at *2.

On March 18, 2013, the plaintiffs filed a second amended complaint, adding other named plaintiffs, and a motion for preliminary approval of the settlement agreement. In summary form, the complex sixty-page settlement agreement provides for the following:

(1) The creation of the Common Good Entity, a non-profit organization;(2) Payment of up to $42 million by the NFL to the Common Good Entity over eight years;

(3) The establishment of the Licensing Agency;

(4) Payment of $100,000 worth of media value to the Licensing Agency each year until 2021;

(5) Payment of attorneys' fees and settlement administration expenses;

(6) A reserve for the NFL's potential fees and costs of litigation involving class members who opt out of the settlement; and

(7) The class members' perpetual release of any claims and all their publicity rights for the NFL and its related entities to use.

The Common Good Entity is “dedicated to supporting and promoting the health and welfare of Retired Players and other similarly situated individuals.” Under the settlement, the NFL is obligated to pay up to $42 million over eight years to the Common Good Entity, which will then disburse the money to charitable organizations or health and welfare organizations for the benefit of class members. Disbursement from the Common Good Entity may only be for (1) medical research; (2) short-term and long-term housing; (3) health and dental insurance coverage; (4) medical screening and evaluations; (5) mental health programs; (6) wellness programs; (7) career transition programs; (8) any medical costs not covered by health insurance; and (9) other uses as approved by the Board of Directors of the Common Good Entity. After ten years, any remaining funds initially contributed by the NFL revert back to the NFL for its charitable use. The NFL may also deduct up to $13.5 million from the $42 million obligation for any expenses related to litigation involving class members who opt out of the settlement.

The Licensing Agency created by the settlement allows for one-stop shopping for those seeking to purchase the publicity rights of former NFL players. Like the Common Good Entity, the Licensing Agency is an organization with a Board of Directors that includes class members. Class members may provide authorization (or withdraw it at any time) for the Licensing Agency to license the player's publicity rights to opportunities identified by the Licensing Agency. The Licensing Agency has selected IMG, one of the largest and most successful sports marketing firms in the world, to assist its operations and identify marketing and business opportunities. Under the settlement, the NFL is obligated to provide $100,000 worth of media value each year until 2021 for the Licensing Agency's commercials. The NFL is also obligated to work cooperatively with the Licensing Agency for referral business and opportunities and, in good faith as it would with any other licensee, provide any potential licensee of the Licensing Agency with licensing for the NFL shield trademark or copyrighted game footage. Proceeds from the Licensing Agency will be divided between the Common Good Entity and the class member whose rights are sold, with the class member receiving seventy-five percent of the proceeds. The Licensing Agency is expected to significantly reduce transaction costs and unlock the value of the group publicity rights of the class members.

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