Some movement, but no ruling in Ed O'Bannon v. NCAA hearing

Friday June 21st, 2013

No ruling was issued on Thursday as to whether O'Bannon's case will be certified as a class action suit.

OAKLAND, Calif. -- Ed O'Bannon played for a national championship in front of a packed domed stadium and several million television viewers. He played in the NBA. Clearly, he knows something about pressure.

On Thursday, however, standing outside the federal courthouse where a judge had just spent about 90 minutes drilling lawyers on both sides of the much-chronicled antitrust suit bearing his name, O'Bannon seemed slightly dazed.

"It was pretty intense," said the former UCLA star, who watched the proceedings from the galley. "I don't go through this every day, I don't do this all the time. It was pretty intimidating."

Mind you, this was not the actual trial in O'Bannon v. NCAA. That's at least a year away, if the case even gets that far. But on Thursday, after months of cumbersome motions and rebuttals, attorneys for all parties finally stood before Judge Claudia Wilken and argued why she should or shouldn't grant the plaintiffs' motion to certify a class of several thousand current and former college athletes. Her eventual decision carries significant implications, as the potential damages in a successful class action suit could reach billions -- not millions -- of dollars.

The crux of the plaintiffs' argument is that the NCAA and co-defendants EA Sports and Collegiate Licensing Company violated antitrust law by conspiring to fix a price of zero for use of college athletes' likenesses in their products. They did this, the plaintiffs argue, by effectively forcing athletes to sign a waiver at the start of their careers releasing their likeness rights for perpetuity.

The NCAA counters that it has never controlled athletes' likenesses following their careers, and that former athletes routinely license their own rights for paid endorsements, movie deals and the like.

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Critics of the NCAA have rallied behind O'Bannon's case because of its prospect to blow up the organization's rigid stance on amateurism. But first, as legal expert Michael McCann wrote, the plaintiffs must prove that their proposed class meets a set of defined criteria. And while legal experts expect Wilken will in fact certify the class, some of her questions on Thursday signaled she may have some reservations.

While the case originated out of O'Bannon's frustration at seeing his likeness used in one of EA's video games without his permission, only about the final 15 minutes of Thursday's hearing dealt with video games. Wilken was far more concerned with the NCAA's contention that the plaintiffs unfairly "changed their theory" behind the case last year when they broadened it to include athletes' rights to a share of the television revenue generated from game broadcasts.

Wilken spent a significant portion of the proceedings asking plaintiffs' attorney Michael Hausfeld to respond to specific arguments by the NCAA against class certification. The plaintiffs are relying heavily on the testimony of expert witness Roger Noll, an economist and former Stanford professor who has testified in numerous sports labor cases. In a paper filed with the court, he argued that athletes should be entitled to 50 percent of broadcast revenue, split evenly among every member of a roster. Wilken raised an obvious counterpoint: If athletes are given the opportunity to license their own broadcast rights, wouldn't the star quarterback garner a higher share than "a benchwarmer?"

This is a significant issue, because one of the criteria for certifying a class is commonality. The notion that certain members of the proposed class might benefit more than others is one of the NCAA's chief arguments against certification.

"There would be a big problem," said Wilken, regarding a scenario in which the case went to trial and a jury ultimately rejected the plaintiffs' equal revenue-sharing model. "The class would have to be decertified," she said.

Hausfeld defended the equal-sharing model on the grounds it parallels the NCAA's policy of uniform scholarship limits. Gregory Curtner, lead attorney for the NCAA, countered by noting that certain athletes are on full scholarships, others are on partial scholarships, and still others are walk-ons.

"[The NCAA] just got sued for violating antitrust laws, and now they're going to pass a rule that demands equal revenue sharing [among athletes]?" asked defense attorney Gregory Curtner. "Why would they do that? That's the next lawsuit."

The NCAA also feels the issue is moot because, they argue, most states' publicity rights allow broadcasters to televise live events without attaining every single participant's permission. "If you go in front of a camera and know you're going in front of a camera ... you're fair game for TV," Curtner said. "Cheerleaders, mascots, lots of people appear in these broadcasts, and there's a uniform practice in this country that these rights are not individually sold."

Curtner, in turn, drew a skeptical chuckle from the judge when Wilken subsequently asked, "So what is it the colleges are selling when they sell rights to show their games?"

"They are selling exclusive access to their stadium or arena," Curtner responded. "They're telling CBS, you can come in and broadcast this, and no one else can. ... That's all they're selling. They're not selling individual [players'] rights."

Sonny Vacarro, the former basketball sneaker impresario and outspoken NCAA critic who has been quietly driving O'Bannon's case, was still smarting over that line an hour later. "Empty stadiums? That's the dumbest thing I've ever heard," he said. "Yeah, go tell them to televise [an empty] Rose Bowl."

A significant moment occurred late in the hearing when Wilken raised the topic of injunctive relief (as opposed to damages), which would more directly impact current athletes. While O'Bannon has been joined over the years by high-profile co-plaintiffs like Oscar Robertson and Bill Russell, Wilken noted to Hausfeld that he didn't have any current students. "Do you have a student that could represent the class?" she asked.

In court, Hausfeld hinted that he did have one (or more) lined up, but wanted to discuss the matter privately because "we wouldn't want any current student retaliated against [by the NCAA]" for participating. Wilken scoffed, sarcastically raising the possibility of a John Doe plaintiff.

However, asked outside of court afterward whether he would in fact be adding a current student or students, Hausfeld flatly said: "Yes."

Considering EA Sports' once-prominent role in the case (former Arizona State quarterback Sam Keller's suit against the video-game manufacturer was merged with O'Bannon's), it was interesting that lawyers for that company and fellow co-defendant CLC were only briefly questioned at the end of the hearing. Robert Van Nest, representing EA, essentially argued that the company should no longer be included in the suit because the plaintiffs' case has evolved into a crusade against the NCAA's amateurism policy.

"Neither EA or CLC have anything to do with [NCAA] rules," Van Nest said. "They don't create or enforce them." Hausfeld countered that the parties actively worked with the NCAA to subvert those rules (by allowing players' likenesses in the games) and remain antitrust co-conspirators. Wilken seemed largely skeptical of EA's argument.

Wilken ended the hearing by instructing the plaintiffs to file a slightly amended complaint that addresses some of her questions about their proposed theory. She stressed that they keep it simple. That may mean she's already leaning toward certifying the case so long as the plaintiffs appease her reservations. As McCann wrote, Wilken rarely rules against certification in these types of cases.

Both Curtner and Donald Remy, the NCAA's Executive Vice President and Chief Legal Officer, declined to comment afterward. "We said everything in there," Curtner said. The plaintiffs, on the other hand, lingered for nearly half an hour in a courtyard outside the federal building, bantering with reporters.

Vacarro has long loved the limelight, and he loves seeing the NCAA sweat. This case is his baby, and this was its biggest moment to date. Meanwhile, the man with his name on the case dutifully answered questions, too, but he hasn't fully grasped the potential enormity of his undertaking.

"Initially when we filed the lawsuit, I was told it was going to get pretty big," O'Bannon said. "I didn't realize it would get as big as it has. I'm excited. People are talking. People are looking at what's going on [with the NCAA] and see there's a better way of doing business."

Sometime in the next few weeks, Wilken will issue her class certification ruling, at which point we'll get a better gauge of just how radically that business might change.

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