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Monday, June 02, 2008

Supreme Court Denies Cert in Baseball Fantasy Case

I was surprised by the Supreme Court's decision not to grant cert in the so-called "fantasy baseball" case, officially known as C.B.C. Distribution v. Major League Baseball Advanced Media (MLBAM). The facts have been discussed in Rick's excellent prior blog and the failure of the high court to consider the case means: (1) a confused right of publicity standard with varying standards and "tests" in jurisdictions all over the country; (2) a confusion of whether right of publicity claims in similar to unfair competition clause to be "pre-empted" by federal law; (3) a lack of national standard; and (4) no precise balancing test between the First Amendment and the right of publicity.

I was one of those who agreed with the Eighth Circuit's ruling, which noted the existence of publicity rights in a player's identity under Missouri law, but concluded that the First Amendment took precedence. Despite the not-quite-ethical conduct by the fantasy league distributor (which decided to create a game after it lost its license), it still seems like a stretch for the economic rights to trump free expression. However, the opinion was unusually short for an issue of this magnitude, with little discussion of the precise standard of review in such a case.

The subject is important because of the expansion of the right over the last quarter century and the greater potential to utilize one's name and likeness in new media. What may be needed is for a similar case to occur in another jurisdiction producing a contrary result. With an open split of opinion, then the Supreme Court may be compelled to take up the case.

[Additional note: I am presenting a paper at the on the subject, proposing some new ideas to deal with this vexing question. The presentation takes place at the 2nd International Conference on Business, Law and Technology (http://www.iblt.eu/), which will be held at the Touro Law Center, Long Island, New York on June 17-19, 2008. I will summarize my ideas in a separate post.]

-- Posted by Mark Conrad @ 6/02/2008 06:17:00 PM -- Comments (10) -- Post a Comment

10 Comments:

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Anonymous -- 6/03/2008 1:23 AM

I'm not surprised the Supreme Court denied cert. Although fantasy sports leagues generate a lot of revenue, this case involved rather unique facts and wasn't the appropriate one for the Court to create a general legal standard balancing First Amendment rights with state right of publicity laws. There is, of course, sharp disagreement regarding where to draw the line in this case, as evidenced by the commentary Rick's post generated.

Matt Mitten

Anonymous -- 6/03/2008 10:29 AM

The question to me is what real impact, if any, the Eighth Circuit's decision will ultimately have on the ability (or lack thereof) of MLBPA and NFLPA to continue to extract licensing fees. The unions are going to take the position with their licensees (Yahoo, ESPN, CBSsportsline, etc.) that the Eighth Circuit's decision is merely one circuit's opinion.

The $2 to $3 million licensing fee these companies currently pay (which is significant to the players) is a very small percentage of overall revenue these companies generate in the fantasy league industry. So it will be interesting to see if these companies try to fight this battle with the unions. Also, the licensing fees related to fantasy league use are being negotiated and packaged as part of a platform that includes other rights.

The Eighth Circuit is merely the first circuit to deal with the interplay between technology and rights of publicity. It's just the beginning.

Rick Karcher -- 6/03/2008 11:17 AM

I agree we're still in the early innings regarding this issue, but the result of this litigation is a significant victory for fantasy sports league operators. My prediction is that MLBAM (or the NFL and NFLPA)will file suit in another circuit against a former licensee who continues to use statistics and player names without authorization. This would enable another circuit court to weigh in on the First Amendment and licensee estoppel issues,thereby creating the possibility of a circuit split that would increase the odds the Supreme Court would grant cert to resolve the conflict. We'll see . . .

Matt

Anonymous -- 6/03/2008 11:56 AM

Power to the People (uh, non-millionaires)!

Anonymous -- 6/03/2008 5:09 PM

Yes, that's certainly true and the argument I make in my forthcoming article, A Triple Play for the Public Domain: Delaware Lottery to Motorola to C.B.C, to be published in a symposium issue by the Chapman Law Review. Because C.B.C. holds that a league and its players do not have exclusive ownership of statistics and player names in connection with fantasy league games, this ruling should benefit the public by increasing the total number of fantasy sports leagues and reducing the entry fees for officially licensed fantasy sports leagues (whose operators likely will pay reduced future royalties).

Matt

Anonymous -- 6/03/2008 6:52 PM

Legalese aside, it is just another bad business decision by MLB. Labor issues, institutional blindness (or worse) with regard to steroid use and they pick on fantasy leagues after almost 20+ years of operation? How long can you know about something before you cry foul?

I did read some documents of the case and baseball actually had a case where they were using names, statistics and likenesses without licensing and argued it was OK. See below:

ADVANCED MEDIA’S FORMER POSITION THAT STATISTICS ARE NOT
OWNED BY ANY PARTY WAS FURTHER ARTICULATED BY MAJOR LEAGUE
BASEBALL IN A CASE DECIDED IN THE CALIFORNIA COURTS. SEE
GIONFRIDDO V. MAJOR LEAGUE BASEBALL, 94 CAL. APP. 4TH 400 (2001).

IN THAT CASE, MAJOR LEAGUE BASEBALL, WITHOUT PERMISSION, USED
THE NAMES, PHOTOGRAPHS AND PERFORMANCE RECORDS OF FORMER
MAJOR LEAGUE BASEBALL PLAYERS ON THEIR WEBSITE AND IN PRODUCTS
SUCH AS PROGRAM BROCHURES AND VIDEOTAPES, SEVERAL OF WHICH
WERE SOLD FOR PROFIT. ID. AT 406. WHEN THE FORMER PLAYERS SUED
MLB AND OTHERS FOR VIOLATING THEIR RIGHTS OF PUBLICITY, MLB
ARGUED THAT THE USE OF PLAYERS’ STATISTICS WAS PROTECTED BY THE
FIRST AMENDMENT AND THE CALIFORNIA COURT AGREED. ID.

You would think that former players would have a stronger case as likenesses were used in addition.

I think the names and statistics argument is a loser for baseball, regardless where they file this again as this set of cases will likely be an influencer.

Anonymous -- 6/03/2008 9:36 PM

Mark,

I agree with your assessment of the implied confusion left by the the Supreme Court in its decision not to address the 8th Circuit's ruling. However, I am not all that surprised given the narrow aspects of the case. On a broader view, and as a possible adjunct to your paper, you may consider the issue as it affects thoroughbred and quarterhorse race riders (jockey's).

As independent contractors, jockey's are not compensated by the race tracks for the use of their image, likeness and name. And yet, the betting public utilizes this information in making its wagering decisions. As such, jockey's are being robbed of their right of publicity at a time (prior to any giving race) when the information is most valueable.

Albert Fiss -- 6/04/2008 1:44 PM

Albert,

As someone who is not that well versed in the thoroughbred racing business, I did not think about the issue of jockeys and race information. However, my gut tells me that it would be a stretch to consider that information under a right of publicity issue, especially after the MLBAM decision.

Mark Conrad -- 6/04/2008 6:20 PM

Mark,

It is not the use of racing information (historical or otherwise) that I am talking about. Rather, it is the image, likeness, and name of jockey's (being used without consideration) that I am concerned with.

The economics of racing is driven by betting activity. Betting activity is generated (in part) by the use of the image, likeness, and name of the jockey riding the horse.

Hence, is it reasonable to assume that the race track and Off-Track betting facilities (that simulcast races) are gaining a commercial advantage by using a jockeys' image, likeness, and name.

Albert -- 6/09/2008 4:13 PM