Ed O'Bannon v. NCAA class certification hearing primer

Wednesday June 19th, 2013

Ed O'Bannon leads a suit challenging the NCAA's right to use student-athletes' likenesses without pay.

The uneasy marriage between big-time college sports and amateurism may be headed toward divorce. On Thursday in an Oakland courthouse, U.S. District Judge Claudia Wilken will hear arguments on whether to certify a class action suit, which would allow Ed O'Bannon to sue the NCAA on behalf of current and former Division I men's basketball and football players over the commercial use of their identities. If Wilken certifies the class, the NCAA would face a multibillion dollar trial next year that could change the landscape of college sports.

Here's a comprehensive breakdown of where the case stands in advance of Thursday's hearing.


Four years ago, O'Bannon sued the NCAA and the Collegiate Licensing Company (CLC) for using his likeness in video games, television programs, trading cards and other commercial ventures without pay. These unpaid appearances stem from student-athletes signing Form 08-3a, which grants the NCAA permission to use their images and likenesses as a condition of participating in college sports. O'Bannon contends that the NCAA manipulates 08-3a and other amateurism policies to deceive student-athletes out of just compensation.

O'Bannon asserts two basic legal theories. First, O'Bannon contends that the NCAA, its member schools and its conferences have joined hands with CLC and Electronic Arts (EA) to prevent student-athletes from getting paid. O'Bannon argues that this alleged conspiracy violates antitrust laws because the marketplace would be more competitive if student-athletes could enter into license agreements. Second, O'Bannon contends injury to the right of publicity, which is a property interest in one's image, voice and other unique characteristics. The NCAA insists that these claims are frivolous, maintaining it neither licenses student-athletes' likenesses nor prevents student-athletes from licensing likenesses.

O'Bannon v. NCAA has grown since 2009. Bill Russell, Oscar Robertson and other high-profile athletes have joined as named plaintiffs, and the suit was consolidated with a similar suit brought by former Nebraska quarterback Sam Keller against EA and the NCAA. O'Bannon wants Wilken to certify the class action so the lawsuit can be brought on behalf of tens of thousands of others.

The significance of Thursday's hearing

The build-up to Thursday's hearing has been intense, but the hearing will not determine who ultimately wins the case. Rather, it will only help Wilken decide whether to certify the class. Although she would not acknowledge this, Wilken may have already made up her mind on certification after reading written materials submitted by both sides. In that case, she would use Thursday's hearing to test her conclusions. During the hearing, attorneys for each side will answer Wilken's questions. O'Bannon -- who SI.com has learned will be in attendance along with several prominent athletes -- will not testify.

Wilken's questions may signal which way she is leaning. If her questions seem particularly hostile to one side, chances are she disfavors that side. But be careful attempting to read the tea leaves: Judges sometimes ask tough questions to test a position with which they agree. Wilken's reputation is that she's an even-handed jurist whose questions tend not to reveal her leanings.

STAPLES: What does Thursday's hearing mean for NCAA, college athletes?

The judge

The 63-year-old Wilken is no stranger to this case, sports law or class certification hearings. She denied the NCAA and EA's attempts to have O'Bannon's case dismissed, though she did reject several of O'Bannon's claims in the process. On balance, her pretrial rulings have favored O'Bannon.

Wilken also presided over a recent settlement in Pecover v. EA. In that class action, consumers sued over EA's exclusive licensing deals with the NFL, NCAA and the Arena Football League. Those deals prevented rival video game publishers from releasing their own football games with real teams and players. The case was recently settled, with EA agreeing to pay $27 million into a fund that can be claimed by consumers of EA football games. The fact that the parties reached a settlement under Wilken's watch bears notice, as O'Bannon and the NCAA could ultimately do the same.

Wilken usually certifies classes. SI.com conducted an analysis of her 29 orders on class certification from 1998-2013. It found that she denied certification only six times (21 percent), while she granted certification 18 times (62 percent) and partially granted it five times (17 percent). Keep in mind, these orders concerned facts and claims mostly dissimilar from those raised by O'Bannon. Thus they may not be accurate predictors. Still, Wilken's history is a good sign for O'Bannon.

The key arguments for and against class certification

O'Bannon has to convince Wilken that his class satisfies four key elements: numerosity, commonality, typicality and adequacy. O'Bannon then has to assure Wilken that the common issues binding the class predominate over individual issues. He must convince Wilken of all of these points by a preponderance of evidence -- meaning more likely than not. Here's a closer look at each element.

1. Numerosity: Numerosity is the easiest element for O'Bannon to satisfy. He has to show that current and former Division I men's basketball and football players would be a sufficiently numerous class and that it would be impracticable to individually join them. There are tens of thousands of current and former college athletes -- living all over the United States -- whose rights are implicated by O'Bannon's suit. If these players sued individually, their lawsuits would likely tie up courts for years and it would be costly for courts to then join their claims into one suit. Also, classes much smaller than O'Bannon's have been certified by judges. All of these points favor O'Bannon.

Instead of attacking the numerosity of O'Bannon's class, the NCAA contends no such class exists. Chiefly, the NCAA attacks the assumptions of Stanford economist Roger Noll, an expert for O'Bannon. Noll envisions college athletes joining hands to negotiate group licensing contracts and teammates agreeing to split proceeds evenly -- concepts the NCAA dismisses as unworkable "under real world market conditions." While Noll's analysis would trigger lively debate during a trial, O'Bannon maintains the advantage for showing numerosity.

2. Commonality: O'Bannon will have a more difficult time prevailing on commonality, which measures whether there are questions of law or fact common to current and former players. The NCAA benefits from the U.S. Supreme Court's 2011 decision in Wal-Mart Stores v. Dukes. Judges are now required to undertake a "rigorous analysis" of certification elements. This standard requires O'Bannon to show more evidence of commonality than would have been required before the '11 ruling.

O'Bannon argues that all parties in his class received no pay for their image and likeness, and thus all suffered the same type of alleged harm. All persons in his class have also been subject to amateurism rules that O'Bannon argues were exploitative. These factors point in the direction of class commonality. In a case last year -- Gopi Vedachalam v. Tata Consultancy -- Wilken found commonality in part through employees signing forms that impacted their compensation.

The NCAA, however, insists it never blocked players from licensing their image and that some former players -- including Peyton Manning and Bo Jackson -- were compensated for their college identities. Moreover, the NCAA took no action to stop Johnny Manziel from filing a trademark infringement suit over the moniker "Johnny Football" and has said it will let him keep any proceeds. Also, an NCAA expert report submitted by Cal Berkeley economist Daniel Rubinfeld highlights that individual players' values vary widely. These are key points: If the NCAA can persuade Wilken that O'Bannon's class would include very different types of members, it would make her less likely to certify the class. Still, O'Bannon probably can show enough commonality to advance.

3. Typicality: Like commonality, typicality presents a real challenge for O'Bannon. Typicality essentially asks: Are the alleged injuries suffered by the named plaintiffs generally typical to the tens of thousands of players who would be in the class?

O'Bannon stresses that all persons in his class were not paid in accordance with their rights under the law. He also points to White v. NCAA, an antitrust case that focused on aid awarded to student-athletes and ultimately settled. White's class was certified despite student-athletes ranging in skill.

The NCAA attacks typicality by emphasizing that players' economic values range not only by conference or school, but also by player, and there is no "typical" injury. The NCAA also distinguishes the legal interests of current and former players, particularly given favorable court holdings for the NCAA's amateurism mission.

As with other elements, whether Wilken focuses on how the class is united or divided will be key.

4. Adequacy: O'Bannon has to show that the interests of the named plaintiffs and class members are mostly aligned. The NCAA hopes to make headway here by amplifying potential conflicts of interest among members of a huge class. Some players would be very marketable, while others wouldn't be, and if a walk-on player were to be paid the same as a star, there would be potential conflict between them. O'Bannon counters by asserting that all players are harmed and thus adequacy is met.

Class considerations v. individual considerations: Lastly, O'Bannon has to show that common issues link all of the class members. The leading one, according to O'Bannon, is that players should have been compensated for the use of their image and likeness. The NCAA, in contrast, will want Wilken to focus on how athletes vary in marketability based on their performance and where and when they played.

Timing and possible outcomes in Wilken's decision

Wilken will take the necessary time to draft an order that will probably be dozens of pages long and should be issued by the end of the summer. Here are three possible outcomes:

1. Wilken denies certification: If Wilken rules in favor of the NCAA, the O'Bannon litigation would suddenly become significantly less threatening. While O'Bannon and the other named plaintiffs could still sue the NCAA, they would not be able to do so on behalf of thousands of others. Those other players would have to file separate lawsuits, which could take years to play out. O'Bannon's case would morph from one that threatens the NCAA's very existence to a manageable obstacle.

2. Wilken partially grants and partially denies certification: Wilken, as she has done in other cases, could give neither side the certification order it wants. Instead, she could split the difference by certifying O'Bannon's class for former players but not current ones, or by certifying O'Bannon's class for some of his legal claims but not others. If Wilken excludes current players from O'Bannon's class, it would be perceived as a victory for the NCAA's "amateurism" policies. But thousands of former players would still be allowed to sue the NCAA together.

3. Wilken grants certification: If Wilken certifies O'Bannon's class, O'Bannon would have to provide notice, through websites and in publications, to the tens of thousands of current and former Division I men's basketball and football players. They would receive instructions on how to opt out of the litigation and thus preserve their legal rights; if they don't opt out, they would be presumed members of the class. Most would not opt out, meaning thousands of people would be suing the NCAA and seeking damages.

At that point, the NCAA's litigation strategy would likely turn to aggressively seeking a settlement with O'Bannon. The NCAA would want to avoid a trial -- currently scheduled for June 2014 -- that, if the NCAA loses, could lead to it paying billions of dollars in damages to current and former athletes. The idea of a settlement where the NCAA pays into a fund administered by a third-party would gain traction. Fast.

MANDEL: USC's Pat Haden: Ed O'Bannon case could cause seismic change

STAPLES: What's at stake? Who's involved? A complete O'Bannon case primer

Michael McCann is the founding director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law and the distinguished visiting Hall of Fame Professor of Law at Mississippi College School of Law.

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