In Re NCAA Student-Athlete Name & Likeness Litigation

Citation
In Re NCAA Student-Athlete Name & Likeness Litigation, 2011 WL 1642256 (N.D. Cal. May 2, 2011) (full-text).

Factual Background
This matter is a consolidation of cases involving collegiate athletes and their dispute with the National Collegiate Athletic Association (NCAA), Collegiate Licensing Company (CLC), and Electronic Arts, Inc. (EA) over the licensing and use of student names and likenesses.

Trial Court Proceedings
The Antitrust Plaintiffs (eight former college basketball players and four former college football players) brought claims based on Defendants’ alleged conspiracy to restrain trade in violation of § 1 of the Sherman Act, and Publicity Plaintiffs (four former college football players) brought claims based on Defendants’ alleged violations of their statutory and common law rights of publicity. The Defendants moved separately to dismiss and the court granted EA’s motion and denied CLC’s and NCAA’s motions.

Antitrust Claims The Antitrust Plaintiffs allege that during their collegiate careers, they were required to sign one or more release forms “that the NCAA has interpreted as a release of the student-athlete’s rights with respect to his image, likeness and/or name in connection with merchandise sold by the NCAA, its members, and/or its licensees.” One such release required student-athletes to agree to the following:

You authorize the NCAA [or a third party acting on behalf of the NCAA (e.g. host institution, conference, local organizing committee)] to use your name or picture to generally promote NCAA championships or other NCAA events, activities or programs. Antitrust Plaintiffs allege that these releases enable NCAA and CLC to execute license agreements with companies, such as EA, that distribute products containing student-athlete’s images, likenesses or names, even after the student-athletes have ended their collegiate athletic careers. According to Antitrust Plaintiffs, Defendants engaged in anticompetitive conduct by (1) conspiring to fix the prices they received for the “use and sale of their images, likenesses and/or names at zero dollars,” and (2) engaging in a “group boycott/refusal to deal” in requiring all student-athletes to sign forms to relinquish their rights in perpetuity for the use of their images, likenesses, and/or names, and to “deny Antitrust Class Members compensation in the form of royalties for the continued use of their images, likenesses and/or names for profit.”

Right of Publicity Claims Publicity Plaintiffs allege that EA misappropriates their likenesses in its NCAA Football, NCAA Basketball, and NCAA March Madness video game franchises. According to Publicity Plaintiffs, these games are distributed pursuant to license agreements with CLC, NCAA and NCAA member institutions. In the games at issue, EA omits student-athlete names and the virtual players are identified only by their jersey number. However, the games are designed to allow players to upload rosters and other third party elements that contain names of student-athletes. Section 12.5 of the NCAA bylaws prohibits the commercial licensing of a student-athlete’s “name, picture or likeness.” Publicity Plaintiffs assert seven causes of action: (1) violation of Indiana right of publicity, against EA; (2) violation of California statutory right of publicity, against EA; (3) violation of California common law right of publicity, against EA; (4) civil conspiracy, against EA, NCAA and CLC; (5) violation of California Business & Professions Code §§ 17200, et seq., against EA; (6) breach of contract, against NCAA; and (7) unjust enrichment, against EA and CLC.

EA’s Motion to Dismiss EA contends that Antitrust Plaintiffs fail to plead a sufficient factual basis to suggest that it engaged in an antitrust conspiracy with NCAA and CLC. To bring a claim under § 1 of the Sherman Act, a plaintiff must plead facts suggesting the existence of “a contract, combination or conspiracy among two or more persons or distinct business entities” that was intended to impose an unreasonable restraint on trade. The only factual evidence presented by Antitrust Plaintiffs in this regard is the license agreements entered into between EA and CLC, however Antitrust Plaintiffs disavow use of these agreements to show the price-fixing conspiracy. Because Antitrust Plaintiffs did not present sufficient factual allegations of such an agreement, the court dismissed Antirust Plaintiffs’ § 1 claim against EA. Antitrust Plaintiffs’ second claim involves an alleged conspiracy to engage in a “group boycott/refusal to deal” to deny compensation to Antitrust Plaintiffs for the use of their images, likenesses and/or names. This claim is based on the releases and other agreements Defendant NCAA required Plaintiffs to sign to participate in collegiate athletics. As such, there is no basis for a finding of EA’s participation in the alleged conspiracy and on that basis, this claim was also dismissed by the court.

CLC’s Motion to Dismiss CLC moved to dismiss Antitrust Plaintiffs’ § 1 claim and Publicity Plaintiffs’ civil conspiracy claim. CLC’s motion relied primarily on the language in its license agreements with EA that prohibited the use of NCAA athlete names and/or likenesses in NCAA branded videogames. The court declined to grant CLC’s motion to dismiss because Publicity Plaintiffs’ contentions were not based solely on CLC’s agreements with EA, but also on similar agreements for rights to televise games, DVD and on-demand sales and rentals, and sales of stock footage of competitions.

NCAA’s Motion to Dismiss The court denied NCAA’s motion to dismiss with respect to Antitrust Plaintiffs’ claims because NCAA merely submitted arguments previously made against one of the Plaintiff’s complaint before these actions were consolidated. Without providing any reason that justified reconsideration, the court denied the arguments that had previously been rejected.