O'Bannon Summary Judgment Hearing Transcript

PAGES 1 - 104 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAMUEL KELLER, ET AL.
,
PLAINTIFFS,
) ) )
) NO. C-09-1967 CW
) ) ) ELECTRONIC ARTS INC., ) ET AL., ) ) DEFENDANTS. ) ____________________________) VS.
THURSDAY, FEBRUARY 20, 2014 OAKLAND, CALIFORNIA SUMMARY JUDGMENT MOTION
BEFORE THE HONORABLE CLAUDIA WILKEN, JUDGE REPORTER'S TRANSCRIPT OF PROCEEDINGS APPEARANCES: FOR PLAINTIFFS: BY: HAUSFELD, LLP 1700 K STREET, NW, SUITE 650 WASHINGTON, DC 20006 MICHAEL D. HAUSFELD, ESQUIRE SATHYA GOSSELIN, ESQUIRE HILARY K. SCHERRER, ESQUIRE HAGENS BERMAN SOBOL SHAPIRO LLP 11 WEST JEFFERSON STREET, SUITE 1000 PHOENIX, ARIZONA 85003 ROBERT B. CAREY, ESQUIRE GRANT & EISENHOFER P.A. 123 JUSTISON STREET WILMINGTON, DELAWARE 19801 ROBERT G. EISLER, ESQUIRE
BY:
BY:
(APPEARANCES CONTINUED) REPORTED BY: DIANE E. SKILLMAN, CSR 4909, RPR, FCRR OFFICIAL COURT REPORTER TRANSCRIPT PRODUCED BY COMPUTER-AIDED TRANSCRIPTION
DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC (510) 451-2930
1 2 3 4 BY: 5 6 7 BY: 8 9 10 BY: 11 12 13 BY: 14 15 16 17 BY: 18 19 20 BY: 21 22 23 24 25 FOR DEFENDANT CLC: KILPATRICK TOWSEND & STOCKTON TWO EMBARCADERO CENTER, EIGHTH FLOOR SAN FRANCISCO, CALIFORNIA 94111 GREGORY S. GILCHRIST, ESQUIRE FOR DEFENDANT EA: KEKER & VAN NEST 633 BATTERY STREET SAN FRANCISCO, CALIFORNIA 94111 R. JAMES SLAUGHTER, ESQUIRE MUNGER, TOLLES & OLSON LLP 560 MISSION STREET, 27TH FLOOR SAN FRANCISCO, CALIFORNIA 94105 KELLY M. KLAUS, ESQUIRE ROHIT K. SINGLA, ESQUIRE CAROLYN HOECKER LUEDTKE, ESQUIRE, ESQ. FOR DEFENDANT NCAA: MUNGER, TOLLES & OLSON LLP 355 SOUTH GRAND AVENUE, 35TH FLOOR LOS ANGELES, CALIFORNIA 90071 GLENN D. POMERANTZ, ESQUIRE HEINS, MILLS & OLSON, P.L.C. 310 CLIFTON AVENUE MINNEAPOLIS, MINNESOTA 55403 RENAE D. STEINER, ESQUIRE FOR PLAINTIFFS: (APPEARANCES CONTINUED) LITE DEPALMA GREENBERG, LLC 1521 LOCUST STREET, 8TH FLOOR PHILADELPHIA, PENNSYLVANIA 19102 STEVEN J. GREENFOGEL, ESQUIRE
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THURSDAY, FEBRUARY 20, 2014 P R O C E E D I N G S THE CLERK:
2:12 P.M.
AND WE ARE CALLING C-09-1967 KELLER
VERSUS ELECTRONIC ARTS, INC., ET AL. PLEASE STEP FORWARD AND STATE YOUR APPEARANCES FOR THE RECORD, PLEASE. MR. HAUSFELD: GOOD AFTERNOON, YOUR HONOR. MICHAEL
HAUSFELD FOR THE CLASS PLAINTIFFS. WOULD YOU LIKE ME TO INTRODUCE EVERYONE AT THE TABLE? THE COURT: NOT ESPECIALLY. OKAY. THAT'S WHY I ASKED FIRST.
MR. HAUSFELD: THE COURT: HIMSELF HOWEVER. MR. CAREY: KELLER PLAINTIFFS. MR. POMERANTZ:
SOMEBODY SEEMS TO WANT TO INTRODUCE
YOUR HONOR, ROB CAREY ON BEHALF OF THE
GOOD AFTERNOON, YOUR HONOR.
GLENN
POMERANTZ ON BEHALF OF THE NCAA. THE COURT: DO WE HAVE ANYONE HERE FROM EA OR CLC? I JUST WONDERED IF
ONLY FOR CASE MANAGEMENT QUESTIONS. SOMEONE WAS HERE. MR. SLAUGHTER:
YES, YOUR HONOR.
JAMIE SLAUGHTER
FROM KEKER & VAN NEST ON BEHALF OF EA. THE CLERK: CAN I HAVE A CARD? GREG GILCHRIST FOR CLC.
MR. GILCHRIST: THE COURT:
OKAY.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 YOU.
SO, WE HAVE CROSS-MOTIONS FOR SUMMARY JUDGMENT, I GUESS, AND THE FIRST BRIEF WAS FILED BY THE PLAINTIFF, SO I GUESS WE CAN START WITH THE PLAINTIFF. ALTHOUGH, IF I COULD HAVE THE
PERSON WHO'S GOING TO ARGUE FOR NCAA TO COME UP TO THE PODIUM AS WELL. I HAD JUST ONE LITTLE FACTUAL QUESTION, WHICH IS, THERE'S AN EXHIBIT 27 TO THE SCHERRER DECLARATION WHICH IS A REPORT FROM NCAA PRESIDENTIAL RETREAT IN AUGUST OF 2011? AND IT'S
NOT CLEAR TO ME WHO SUPPOSEDLY WROTE THAT REPORT, OR WHO WAS AT THAT RETREAT, OR WHO THAT'S SUPPOSED TO BE ATTRIBUTABLE TO. DOES ANYBODY KNOW? ITSELF. IF NOBODY KNOWS, MAYBE YOU CAN TELL ME LATER. MR. HAUSFELD: WE'LL FIND OUT, YOUR HONOR. THANK ONE CAN'T TELL FROM LOOKING AT THE EXHIBIT
THE COURT:
OKAY.
SO WHAT WE HAVE BEFORE US AT THE MOMENT, AND WE'VE GOT SOME SERIOUS CASE MANAGEMENT QUESTIONS, BUT WE WILL TALK ABOUT THAT LATER, BUT WHAT WE HAVE AT THE MOMENT IS ONLY THE ANTITRUST CLAIMS, ONLY THE ANTITRUST PLAINTIFFS ONLY AGAINST NCAA AND ONLY ABOUT LIVE BROADCAST, ARCHIVAL CLIPS, AND VIDEO GAMES, AND WE HAVE CLAIMS FOR DAMAGES AND FOR INJUNCTION. MR. HAUSFELD: THE COURT: YES, YOUR HONOR.
IS THAT WHAT WE'VE GOT? YES, YOUR HONOR.
MR. POMERANTZ:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 HONOR.
THE COURT: THAN THAT?
ONLY THAT, NO MORE THAN THAT, NO LESS
MR. HAUSFELD:
I THINK YOU HAVE IT CORRECT, YOUR
THE COURT:
SO THERE WERE SOME ROP CLAIMS, AND
PLAINTIFFS AGAINST NCAA AND AGAINST EA, BUT THOSE WERE STAYED PENDING THE CERT PETITION WHICH HAS BEEN SITTING IN THE SUPREME COURT SINCE SEPTEMBER, AND WE HAVE NO WAY OF KNOWING WHEN IT MIGHT BE RULED ON. MR. POMERANTZ: THE COURT: I THINK THAT'S CORRECT, YOUR HONOR.
AND THEN WE HAVE A POTENTIAL SETTLEMENT
BETWEEN THE PLAINTIFFS AND EA AND CLC, ALTHOUGH THAT HAS NOT REALLY HAPPENED, OR HAS -- NOTHING HAS BEEN FILED. MR. HAUSFELD: THE COURT: I THINK --
I DON'T KNOW WHAT THE STATUS OF IT IS. THERE'S AN AGREEMENT IN PRINCIPLE THAT
MR. HAUSFELD:
APPARENTLY IS BEING FINALIZED -THE COURT: I'M NOT ASKING YOU TO DISCLOSE ANYTHING
CONFIDENTIAL, I'M JUST TRYING TO FIGURE OUT WHAT THE STATUS OF THINGS IS AS A MATTER OF PUBLIC KNOWLEDGE. MR. HAUSFELD: MY UNDERSTANDING IS IT SHOULD BE
FINALIZED, HOPEFULLY TO BE FINALIZED SHORTLY. THE COURT: BUT IT'S A CLASS ACTION, SO YOU NEED TO
FILE A MOTION FOR PRELIMINARY APPROVAL AND FINAL APPROVAL? MR. HAUSFELD: YES.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CASE?
THE COURT:
AND MEANWHILE YOU HAVE A CERT -- EA HAS A AND HOW WOULD THAT -- I GUESS THAT'S
CERT PETITION PENDING. NOT MY PROBLEM.
AND THEN THERE SEEMS TO BE A LAWSUIT IN GEORGIA? MR. POMERANTZ: YES, YOUR HONOR. THAT LAWSUIT THE CONTRACT
CONCERNS ISSUES BETWEEN THE NCAA AND EA AND CLC. AT ISSUE THERE REQUIRES A GEORGIA FORUM. THE COURT:
AND THAT COULD HAVE SOME EFFECT ON THIS
MR. POMERANTZ: THIS CASE, YOUR HONOR. THE COURT:
I'M NOT SURE IT WOULD DIRECTLY AFFECT
OKAY.
SO, WE'LL SET THE CASE MANAGEMENT
PROBLEMS TO ONE SIDE UNTIL LATER. IF YOU COULD JUST BEAR WITH ME AND START FROM LIKE GROUND ZERO AND TELL ME WHY THIS IS AN ANTITRUST CASE. START FROM THE BEGINNING. RESTRAINT OF TRADE? MR. HAUSFELD: THE COURT: YES, YOUR HONOR. WHOSE --
WE HAVE WHAT, AN AGREEMENT IN
WHICH IS MADE BY SOMEONE AND EFFECT --
HAS AN ANTICOMPETITIVE EFFECT BECAUSE IT HURTS SOMEONE? COULD YOU JUST TELL ME LIKE IN ONE SENTENCE, RELATE IT TO JUST BASIC ANTITRUST PARADIGMS? MR. HAUSFELD: THE COURT: IN BASIC ANTITRUST -WE'VE GOT
AND, ACTUALLY, THERE'S TWO.
YOUR -- THE ANSWER IS ONE THING WITH RESPECT TO THE COLLEGE
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MARKET -- COLLEGE ENTRANCE MARKET AND ONE THING WITH RESPECT TO THE GROUP LICENSING MARKET. SO YOUR ANSWER IS, I GUESS,
THERE'S GOING TO BE TWO ANSWERS, ONE FOR EACH. MR. HAUSFELD: THE ANSWER IS THE SAME BECAUSE THERE
IS A RESTRAINT IN BOTH MARKETS THAT DERIVES FROM THE SAME -THE COURT: RIGHT, BUT WHO'S THE MANUFACTURER, WHO'S
THE COMPETITOR, WHO'S THE CONSUMER? MR. HAUSFELD: THE COMPETITORS, THE COMPETITORS ARE
THE MEMBER INSTITUTIONS OF THE NCAA WHO, BY AGREEMENT WITH EACH OTHER, IMPOSE A RESTRAINT THAT OTHERWISE WOULD NOT BE PRESENT IN AN OPEN OR FREE MARKET. AND THAT HORIZONTAL RESTRAINT IS AN AGREEMENT AMONG THEM NOT TO DO CERTAIN THINGS, NOT TO ALLOW THE ATHLETES TO PARTICIPATE IN THE MARKET FOR GROUP LICENSE, NIL RIGHTS, NOR IN THE EDUCATION MARKET WITH REGARD TO THE RECRUITMENT OF ATHLETES. AND THE RESTRAINT, THAT HORIZONTAL RESTRAINT IS LIKEWISE IMPOSED BY THOSE COMPETING MEMBER INSTITUTIONS, NOT ONLY AMONG THEMSELVES, BUT THEN VERTICALLY ON ANY LICENSEE WHO THEY BIND TO APPLY THE NCAA RULES AND ABIDE BY THOSE RULES IN ASSURING THAT NO LICENSEE WOULD MAKE ANY PAYMENT OR ALLOW ANY ATHLETE TO PARTICIPATE IN THAT MARKET IN VIOLATION OF THE NCAA RULES. SO, IT'S A VERTICAL AND A HORIZONTAL RESTRAINT IMPOSED BY THE MEMBER INSTITUTIONS WHO OTHERWISE WOULD BE COMPETING WITH EACH OTHER IN AN OPEN MARKET.
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THE COURT:
BUT THOSE MEMBER INSTITUTIONS ARE ALSO
MEMBERS OF THE DEFENDANT, SO THEY'RE -MR. HAUSFELD: THE COURT: EACH OTHER. MR. HAUSFELD: THE COURT: YES. YEAH. THE --
-- PREVENTING THEIR OWN COMPETITION WITH
AND THE BASIS OF THE RULE THAT FIXES THE
PRICE, ORIGINALLY WE WERE TALKING A LOT ABOUT A BYLAW, AND NOW IT SEEMS THE BYLAWS ARE REALLY PRETTY MUCH IRRELEVANT, AND THE REAL ISSUE, AS YOU PUT IT, THAT THE SCHOOLS OR THE NCAA OR WHOEVER IT IS HAS CONSPIRED TO FIX THE PRICE AT ZERO FOR THE USE OF A NAME, IMAGE OR LIKENESS OF A STUDENT ATHLETE IN THESE VARIOUS MEDIA. MR. HAUSFELD: AND TO FORECLOSE THE ATHLETES FROM
PARTICIPATING IN THE MARKET FOR THOSE LICENSING RIGHTS. THE COURT: GET PAID FOR IT. MR. HAUSFELD: THE COURT: IT MEANS THERE'S A -WELL, AND WHAT THAT MEANS IS THEY CAN'T
HOW ELSE DO YOU PARTICIPATE IN THE MARKET
BESIDES TRYING TO GET SOMEONE TO GIVE YOU MONEY? MR. HAUSFELD: WELL, WHEN YOU GET EVERYONE TO DO IT,
IT BECOMES A GROUP BOYCOTT AS WELL AS A PRICE FIX. THE COURT: SO REALLY, THOUGH, IT'S NOT SO MUCH THE
BYLAWS ANYMORE, IT'S THE RULE AGAINST PAYING STUDENT ATHLETES. MR. HAUSFELD: YES.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 AFFECT --
THE COURT: LIKE THAT.
AND YOU AGREE THAT YOU DO HAVE A RULE
MR. POMERANTZ: THE COURT:
IT ACTUALLY IS --
YOU ARE CONTESTING THE BYLAWS, AND DO
THEY REALLY EXIST, AND WHAT DO THEY MEAN, AND THIS AND THAT, BUT YOU DON'T CONTEST THE FACT THAT YOU HAVE A RULE AGAINST PAYING STUDENT ATHLETES FOR THEIR NAMES, IMAGE, AND LIKENESS. MR. POMERANTZ: WE HAVE BYLAWS THAT PROHIBIT CURRENT
ENROLLED STUDENTS FROM CASHING IN ON THEIR NAME, IMAGE AND LIKENESS. GRADUATE. SO THAT, FOR EXAMPLE, THE FORMER STUDENT ATHLETES ARE TOTALLY FREE TO GO AHEAD AND LICENSE THEIR NAME, IMAGE AND LIKENESS -THE COURT: BUT COULD THE SCHOOL MAKE AN AGREEMENT THAT RULE HAS NO APPLICABILITY TO ANYONE AFTER THEY
WITH A HIGH SCHOOL SENIOR THAT THEY WOULD KEEP THE MONEY FROM THEIR USE OF THEIR NAME, IMAGE AND LIKENESS ON TELEVISION IN TRUST FOR THEM UNTIL THEY GRADUATED AND THEN THEY WOULD GIVE THEM MONEY AFTER THEY GRADUATED? MR. POMERANTZ: ELIGIBILITY RULES. THE COURT: RIGHT. SO THAT IN THAT SENSE IT DOES NO. THAT WOULD BE A VIOLATION OF THE
MR. POMERANTZ:
WELL, THAT WOULD BE DEFERRED
COMPENSATION FOR SOMEONE AGREEING UP FRONT.
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WHAT I'M SAYING IS ONCE THEY GRADUATE, INDEED MANY OF THE PLAINTIFFS IN THIS CASE HAVE GONE OUT AND LICENSED THEIR NAME, IMAGE AND LIKENESS. THERE'S NOTHING THAT STOPS THEM FROM
GOING OUT AFTER THEY GRADUATE AND LICENSING THEIR NAME, IMAGE AND LIKENESS. THE COURT: RIGHT. BUT THEY CAN NO LONGER GET ANY
MONEY FROM A REBROADCAST OF A GAME IN WHICH THEY PLAYED. MR. POMERANTZ: IF -THE COURT: HOW CAN THEY DO THAT? WELL, IF, FOR EXAMPLE -- AND THERE'S NO, NO, THEY CAN. IN OTHER WORDS,
MR. POMERANTZ:
EXAMPLES IN THE SUMMARY JUDGMENT RECORD IN FRONT OF YOUR HONOR, WHERE LET'S SAY THE NCAA OWNS THE COPYRIGHT TO SOME GAME FOOTAGE AND THEY LICENSE IT TO SOMEONE FOR A COMMERCIAL PURPOSE, AN ADVERTISEMENT. THE AGREEMENT SPECIFICALLY SAYS THE NCAA DOES NOT HAVE THE RIGHTS TO -- FOR THE INDIVIDUAL NAME, IMAGE AND LIKENESS, AND YOU NEED TO GET THOSE DIRECTLY FROM -THE COURT: OKAY. -- THE INDIVIDUALS --
FOR A COMMERCIAL. -- THEN THE ADVERTISERS GO AND GET
MR. POMERANTZ: THEM FROM THE -THE COURT:
OKAY.
FOR COMMERCIAL.
WHAT IF THEY JUST
WANT TO SHOW CLASSIC GAME ON FIFTIETH ANNIVERSARY OF THE
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FAMOUS UCL -(SIMULTANEOUS COLLOQUY.) MR. POMERANTZ: THAT'S SOMETHING THAT WOULD BE
COVERED BY THE FAIR USE COPYRIGHT OR BY THE FIRST AMENDMENT AS WELL, YOUR HONOR. THE COURT: WELL, IF CBS HAD SHOWN IT IN THE FIRST
PLACE, AND CBS OWNED THE FOOTAGE, AND CBS WANTED TO RERUN IT, CBS COULD DO THAT. MR. POMERANTZ: THE COURT: CORRECT.
AND THE STUDENT ATHLETE COULDN'T COME UP
AND SAY, EXCUSE ME, BUT I WAS IN THAT, SO I'M A FORMER STUDENT ATHLETE NOW, SO NOW PAY ME. CBS WOULD SAY --
(SIMULTANEOUS COLLOQUY.) MR. POMERANTZ: AMENDMENT -(SIMULTANEOUS COLLOQUY.) MR. POMERANTZ: USE DOCTRINE. -- CORRECT, YOUR HONOR. OR THE FAIR THEY COULDN'T DO IT UNDER THE FIRST
BOTH WOULD APPLY, YOUR HONOR. I'M SORRY. THE FAIR USE DOCTRINE UNDER COPYRIGHT
THE COURT:
MR. POMERANTZ:
LAW AND THE FIRST AMENDMENT WOULD ALLOW CBS IN YOUR HYPOTHETICAL TO GO AHEAD AND BROADCAST THAT -- REBROADCAST THAT, THAT ENTIRE GAME. THE COURT: WELL, THE FACT THAT CBS PURCHASED THE
LICENSE TO TAPE IT IN THE FIRST PLACE AND IT IS NOW THE OWNER
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OF IT IS WHAT ALLOWS IT TO -MR. POMERANTZ: THE COURT: THAT'S --
-- REBROADCAST IT. CORRECT.
AND THE STUDENT ATHLETE WHO'S IN IT, OR
FORMER STUDENT ATHLETE WHO'S IN IT, COULD NO LONGER COME FORWARD AND SAY, OH, HERE I AM, I'M IN THAT, NOW I'M A FORMER STUDENT ATHLETE SO I CAN ACCEPT MONEY NOW, SO PLEASE GIVE ME SOME. MR. POMERANTZ: THE COURT: CORRECT.
THEY WOULDN'T HAVE ANY RIGHT TO GET IT.
CBS WOULDN'T GIVE THEM ANY. MR. POMERANTZ: THE COURT: THAT'S TRUE, YOUR HONOR.
SO TO THAT EXTENT IT DOES AFFECT -RIGHT. I'M JUST SAYING THAT SOME OF
MR. POMERANTZ:
THE BRIEFING IN THIS CASE HAS, I THINK, CONFUSED THE ISSUE REGARDING WHAT THE FORMER STUDENTS ATHLETES CAN DO. AND THERE IS NO NCAA RULE, NO NCAA AGREEMENT, NO NCAA POLICY THAT PROHIBITS A FORMER STUDENT ATHLETE FROM GOING OUT AND LICENSING HIS NAME, IMAGE AND LIKENESS IN WHATEVER WAY HE WANTS TO. THE COURT: OKAY. TO THE EXTENT IT HASN'T ALREADY
BEEN GIVEN TO SOMEONE ELSE AND IS NOW GONE. MR. POMERANTZ: IT TO ANYBODY ELSE. BUT IT HAS -- NO NCAA RULE HAS GIVEN
MAYBE THE COPYRIGHT LAWS HAVE GIVEN IT,
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BUT THE NCAA RULES HAS NOT GIVEN IT TO SOMEBODY ELSE. THE COURT: SO -- WELL, THIS IS ANOTHER SIDE LINE,
BUT TO THE EXACT WE ARE TALKING ABOUT THE NCAA AND THEM MAKING DECISIONS AND SO ON, HOW DO THEY MAKE DECISIONS? MEMBER SCHOOLS; IS IT LIKE A DEMOCRACY? GET A VOTE? MR. POMERANTZ: WOULD IMAGINE. YES. IT'S EXACTLY AS YOUR HONOR THEY HAVE
DO ALL THE SCHOOLS
THAT IS, THAT THE SCHOOLS ARE, AT THE END OF
THE DAY, THE ONES WHO MAKE THE DECISIONS. CERTAIN DECISIONS HAVE TO BE MADE BY THE MEMBERSHIP AS A WHOLE. CERTAIN DECISIONS CAN BE MADE BY COMMITTEES THAT ARE AND THERE IS
MADE UP OF VARIOUS MEMBER INSTITUTIONS.
BASICALLY, YOU KNOW, GROUND RULES THAT ESTABLISH WHAT KINDS OF DECISIONS GET MADE. BUT THE BOTTOM LINE IS, YES, IT'S THE
MEMBER INSTITUTIONS THAT ARE MAKING ALL OF THE IMPORTANT DECISIONS OF THE NCAA. THE COURT: SO I KNOW THAT YOU DON'T THINK THAT THIS
DOES FIT INTO ANY SORT OF ANTITRUST PARADIGM, BUT IF IT DID, IF YOU CAN IMAGINE THAT AND THINK OF THE, FIRST, THE COLLEGE ENTRANCE MARKET, WHO WOULD BE THE MANUFACTURER, AND WHO WOULD BE THE CONSUMER, AND WHO WOULD BE THE COMPETITION? MR. POMERANTZ: QUESTION, YOUR HONOR. I THINK THAT'S A VERY IMPORTANT
I THINK THERE IS AN ANTITRUST PARADIGM THAT IS WHAT THIS
FOR THIS, AND THAT IS THE JOINT VENTURE. IS, IT'S A JOINT VENTURE.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 IS.
ALL OF THE MEMBER COLLEGES HAVE GOTTEN TOGETHER AND THEY'VE AGREED TO CERTAIN THINGS. AGREED TO IS CREATE A PRODUCT. AND ONE OF THE THINGS THEY
AND THE PRODUCT THAT THESE
SCHOOLS HAVE ALL AGREED TO CREATE IS AMATEUR COLLEGE SPORTS. AND THERE'S MANY CASES THAT SAY THAT. AND SO THAT IS -- IS WHAT IS GOING ON HERE. BODY OF LAW THAT GOVERNS JOINT VENTURES. AND THERE'S A
AND THAT'S THE LAW
THAT I THINK WILL BE GUIDING THE DECISIONS ON THE MOTIONS IN FRONT OF YOUR HONOR, PUTTING ASIDE THE FIRST AMENDMENT QUESTION, WHICH I THINK IS A DIFFERENT QUESTION THAT'S GOVERNED BY A DIFFERENT BODY OF LAW. BUT THAT'S WHAT I THINK THE RIGHT TO ANTITRUST PARADIGM
THE COURT:
WHAT IF IT WASN'T THAT?
DO YOUR BEST TO
FIT IT INTO A MANUFACTURER, CONSUMER, COMPETITOR ANTITRUST INJURY. MR. POMERANTZ: SO I THINK THAT THERE'S TWO DIFFERENT
POTENTIAL CONSUMERS IN THIS MARKET THAT'S BEEN ALLEGED BY THE PLAINTIFFS. ONE WOULD BE THE VIEWERS, THE FANS OF COLLEGE SPORTS. SO
THEY WANT TO WALK -- THEY WANT TO GET A NEW PRODUCT INTO THE MARKETPLACE. THEY WANT TO WATCH AMATEUR SPORTS AS WELL AS THEY WANT TO HAVE A CHOICE. THAT'S WHAT
PROFESSIONAL SPORTS.
THE COLLEGE -- THERE'S ONE GROUP OF CONSUMERS HERE ARE THE FANS AND THE VIEWERS.
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THE COURT:
THAT'S NOT THEIR THEORY, OF COURSE. I'M SORRY?
THAT'S NOT THEIR THEORY. WELL, IT IS RELEVANT TO THEIR THEORY.
MR. POMERANTZ:
THE OTHER IS THE STUDENT ATHLETES WHO ARE THERE, UNDER THEIR VIEW THEY ARE THE BUYERS IN THIS MARKET, AND THEY ARE BUYING EDUCATIONAL SERVICES FROM THE -- FROM THE COLLEGES. AND SO WHAT THE COLLEGES ARE DOING IS OFFERING THEM AN ARRAY OF OPPORTUNITIES FOR ALL SORTS OF STUDENT ATHLETES. BY THE WAY, YOUR HONOR, I DO WANT TO MAKE ONE CLEAR POINT. THEIR DEFINITION OF THE MARKET, AT LEAST ONE OF THEIR MARKETS, IS THE STUDENT ATHLETE DIVISION I EDUCATION MARKET. ATHLETE DIVISION I EDUCATION MARKET. EDUCATION. IT'S DIVISION I. STUDENT
IT'S ATHLETICS AND IT'S
THERE'S MANY STUDENT ATHLETES AND IT'S NOT JUST FOOTBALL AND BASKETBALL. THEY ARE ONLY HERE REPRESENTING FOOTBALL AND
BASKETBALL PLAYERS -- ACTUALLY JUST MALE BASKETBALL PLAYERS EVEN THOUGH THERE ARE WOMEN BASKETBALL PLAYERS, TOO. THE COURT: I'M AWARE OF THAT. AND SO WHEN YOU LOOK AT THIS MARKET,
MR. POMERANTZ:
YOU HAVE TO LOOK AT ALL STUDENT ATHLETES, INCLUDING THOSE WHO PLAY SPORTS OTHER THAN FOOTBALL AND BASKETBALL. THE COURT: I KNOW YOU MAKE THAT ARGUMENT. I'M
ASSUMING THAT THEY WOULD PROBABLY PUT BASKETBALL AND FOOTBALL IN THERE, WOULDN'T YOU, NOW THAT THEY HAVE POINTED THAT OUT?
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MR. POMERANTZ:
AND I'M NOT SUGGESTING THAT FOOTBALL, I'M SUGGESTING --
AND BASKETBALL ARE NOT IN THE MARKET. THE COURT:
THEY WOULD LIMIT IT --
(SIMULTANEOUS COLLOQUY.) MR. POMERANTZ: THE COURT: -- ALL THE OTHER SPORTS.
THEY WOULD LIMIT IT, I WOULD THINK. YES, I THINK --
MR. POMERANTZ: THE COURT: AND FOOTBALL. ALWAYS DONE. MR. POMERANTZ: THEIR COMPLAINT.
IN LIGHT OF YOUR ARGUMENT TO BASKETBALL
THAT SEEMS TO BE THE THRUST OF WHAT THEY HAVE
BUT IT'S NOT THEIR DEFINITION IN
THE DEFINITION IN THEIR COMPLAINT IS NOT
FOOTBALL AND BASKETBALL. THE COURT: SO IN THE COLLEGE MARKET, THE PRODUCER IS
THE COLLEGE WHICH IS MAKING AND SELLING COLLEGE EDUCATIONS, AND MAKING AND SELLING, I GUESS, ATHLETIC TEAMS. TRYING TO PURCHASE THE SERVICES OF ATHLETES -MR. POMERANTZ: THE COURT: NO, THEY ARE SELLING. TO AND THEY ARE
-- TO ENGAGE THE SERVICES OF -- NO.
SELL THEIR PRODUCT TO ATHLETES -MR. POMERANTZ: CORRECT. THAT'S THE RIGHT WAY THAT
THEY HAVE PLED THE MARKET. THE COURT: GIVE THEM MORE OR LESS MONEY, OR MORE OR
LESS PERKS, OR MORE OR LESS WHATEVER TO INDUCE THOSE ATHLETES TO COME TO THEIR COLLEGE AS OPPOSED TO SOME OTHER COLLEGE --
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A GOOD EXAMPLE, YOUR HONOR--
ANTICOMPETITIVE INJURY WOULD BE IF ONLY I
COULD OFFER MORE STUFF, I COULD -- THE ATHLETES COULD MAKE MORE MONEY BY THE OFFER THAT I COULD GIVE THEM. MR. POMERANTZ: RIGHT. I THINK WHAT THEY WOULD SAY
THE COURT:
IS THAT HOW IT GOES? -- IN ADDITION TO EVERYTHING ELSE
MR. POMERANTZ:
THAT THE COLLEGE IS ALREADY OFFERING TO THE STUDENTS, THEY WOULD ALSO OFFER THEM HUNDREDS OF THOUSANDS OF DOLLARS TO COME TO THEIR SCHOOL IN THE NAME OF SELLING NIL RIGHTS, THAT IS, THAT THE STUDENT ATHLETE WOULD SAY, HERE'S MY NIL RIGHTS, I'LL TAKE AN ADDITIONAL HUNDRED THOUSAND DOLLARS OR $250,000 FROM YOU. THE COURT: AND THAT'S AN ANTITRUST INJURY BECAUSE
IT'S AN INJURY TO THE CONSUMER, WHICH IS THE STUDENT WHO IS TRYING TO GET THE BEST DEAL POSSIBLE FOR HIS COLLEGE EDUCATION. MR. POMERANTZ: THE COURT: I THINK THAT'S THEIR THEORY.
IS THAT RIGHT? EXACTLY, YOUR HONOR.
MR. HAUSFELD:
IN TERMS OF MANUFACTURER, YOU KNOW, CONSUMER, THE MANUFACTURER IS IN THE RECRUITMENT OF ATHLETES FOR HIGHER EDUCATION IN DIVISION I MEN'S BASKETBALL AND FOOTBALL WOULD BE THE MEMBER INSTITUTIONS. THE CONSUMERS WOULD BE THE ATHLETES
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WHO WOULD HAVE AN ECONOMIC INTEREST IN RECEIVING FREE AND OPEN COMPETITION FOR THEIR RECRUITMENT. THE COURT: OKAY. SO THAT SEEMS OKAY. WHO IS --
SO THEN WHAT ABOUT THE GROUP LICENSING MARKET?
I ALREADY ASKED HIM, MAYBE YOU CAN TELL ME WHAT YOU UNDERSTAND THEIR CLAIM TO BE OR WHAT YOU CAN IMAGINE A PERSON MIGHT MAKE AS THE -- AS FITTING THE GROUP LICENSING MARKET INTO A TYPICAL ANTITRUST PARADIGM. WHO'S THE MANUFACTURER? MR. POMERANTZ: WHO'S THE CONSUMER?
I'M NOT SURE WHAT THEY WOULD SAY TO I THINK ALL THE BRIEFING IN THIS
THAT, YOUR HONOR, FRANKLY.
MOTION HAS FOCUSED ON THE FIRST MARKET THAT YOUR HONOR HAS -HAS MENTIONED. THE COURT: GROUP. OH, REALLY? TO ME IT'S ALL ABOUT THE
ALL THE COMPLICATED ISSUES HAVE TO DO WITH THE GROUP
LICENSING QUESTION. MR. POMERANTZ: I SHOULD SAY I DO BELIEVE THAT IT'S I AGREE
ALL ABOUT THE LICENSING OF NAME, IMAGE AND LIKENESS. WITH THAT, YOUR HONOR.
BUT WHAT THEY ARE TALKING ABOUT, I
THINK, IS THE EDUCATION MARKET AND THE UNIVERSITIES AND COLLEGES BEING THE SELLERS OF A -THE COURT: I DON'T THINK SO. I THINK IN THE NAME --
IN THE GROUP LICENSING IT'S MORE A QUESTION OF, OF THE STUDENT IS THE SELLER OF HIS NAME, IMAGE AND LIKENESS. AND THE NCAA
IS SORT OF AN INTERMEDIARY WHO'S FIXING THE PRICE THAT THE
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BUYER, TO WIT, CBS, OR EA, OR ESPN, OR WHATEVER WILL PAY THE STUDENT FOR SELLING HIS NAME, IMAGE AND LIKENESS. FIX IT AT ZERO. MR. POMERANTZ: THE COURT: I THINK -AND THEY
SO, AGAIN, THE STUDENT IS THE SELLER, AND
I GUESS YOU COULD HAVE SELLERS WHO WOULD BE ANTITRUST VICTIMS. MR. POMERANTZ: I THINK THEY COULD BE A SELLER OF I THINK YOU'RE
LICENSING RIGHTS IN THAT SCENARIO, YOUR HONOR. CORRECT. HERE'S -(SIMULTANEOUS COLLOQUY.) THE COURT:
-- A SELLER THAT WAS AN ANTITRUST VICTIM
IF THE PRICES WERE BEING FIXED BY THE BUYERS AND SAYING, WE'RE ALL GOING TO AGREE ONLY TO PAY "X" DOLLARS FOR YOUR GOOD AND WE WON'T PAY ANY MORE THAN THAT, AND WE'RE ALL AGREED ON THAT SO YOU'LL NEVER GET ANYONE ELSE TO PAY MORE BECAUSE WE'VE ALL AGREED TO TOP IT OFF. MR. POMERANTZ: I THINK THAT'S FAIR, YOUR HONOR. I
THINK WHAT THEY'RE SAYING -- I CAN GIVE YOU TWO EXAMPLES THAT I THINK CAPTURE THEIR GROUP LICENSING MARKET. ONE WOULD BE A SITUATION WHERE A UNIVERSITY SAYS, I'M GOING TO GO OUT AND BUY THE -- TRY TO RECRUIT STUDENTS BY GIVING THEM MONEY AND CALLING IT PAYMENT FOR NIL RIGHTS. I'M GOING TO PAY ALL OF MY RECRUITS THE SAME AMOUNT. AND SO COLLEGE NUMBER ONE SAYS, I'LL OFFER YOU A HUNDRED THOUSAND DOLLARS IF YOU COME HERE AND GIVE ME YOUR NIL RIGHTS. AND
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AND COLLEGE NUMBER TWO TRIED TO GET THOSE ATHLETES, SAY I'LL OFFER YOU 150,000. WAY TO LOOK AT IT. AND THE NEXT ONE SAYS 200,000. THAT'S ONE
AND THEN THE COLLEGES ARE FREE, IF THEY
WANT TO, TO TURN AROUND AND LICENSE THOSE NIL RIGHTS TO WHOMEVER. THE OTHER WAY, THOUGH, TOTALLY OPEN BY THEIR THEORY IS THAT A BOOSTER OF A COLLEGE DOWN THE STREET FROM THE COLLEGE OWNS A CAR DEALERSHIP. AND HE WANTS TO GET THAT REALLY STAR
ATHLETE TO COME TO HIS LOCAL COLLEGE THAT HE'S A BOOSTER OF. AND SO HE GOES TO THAT STAR ATHLETE AND SAYS, I WILL PAY YOU A LOT OF MONEY TO APPEAR IN AN ADVERTISEMENT FOR MY CAR DEALERSHIP AS LONG AS YOU GO TO THAT UNIVERSITY DOWN THE STREET THAT I SUPPORT. AND THAT'S A NIL LICENSE.
AND THEY ALSO WOULD SAY THAT THAT SHOULD BE PERMITTED UNDER NCAA RULES, AND THAT THIS RESTRAINT IN THE ELIGIBILITY RULES OF THE NCAA AND THE COLLEGES IS BARRING THAT KIND OF A TRANSACTION. THE COURT: I HAVEN'T HEARD THEM SAY THAT. I BELIEVE -WE WON'T. THAT WOULD BE A SCANDAL.
MR. POMERANTZ: MR. HAUSFELD: MR. POMERANTZ:
YOUR HONOR, IT'S -- IT'S ACTUALLY --
IF YOU LOOK AT THEIR EXPERT REPORT FROM PROFESSOR RASCHER, WHICH IS IN THE RECORD IN THE SUMMARY JUDGMENT MOTION, THEY IMAGINE TWO DIFFERENT SCENARIOS. ONE IS THE GROUP LICENSING WHERE ALL OF THE LICENSING IS
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BY -- IS ON A GROUP BASIS AND IT DOESN'T HAVE TO BE FROM THE SCHOOL. IT CAN BE FROM EA. IT CAN BE FROM ANYBODY DIRECTLY.
IT DOESN'T HAVE TO BE FROM THE SCHOOL; THEY DON'T SAY THAT. BUT THEY HAVE A SECOND DAMAGE APPROACH. AND THAT IS, THEY
SAY SOME OF IT WILL BE BY GROUP LICENSES AND SOME OF IT WILL BE PAYING A SPECIAL AMOUNT TO A REALLY STAR ATHLETE. AND THEY
CALCULATE AN ALTERNATIVE DAMAGE THEORY WHERE THERE WILL BE INDIVIDUAL LICENSES ENTERED INTO BETWEEN THE RECRUIT AND SOME THIRD PARTY, WHETHER IT BE THE SCHOOL OR IT BE A THIRD PARTY. SO MY CAR DEALERSHIP EXAMPLE IS EXACTLY WITHIN THE EVIDENCE THAT THEY HAVE SUBMITTED IN PROFESSOR RASCHER'S REPORT. THE COURT: SO DO YOU REMEMBER WHAT I SAID ABOUT THE
PARADIGM FOR THE GROUP LICENSING MARKET? MR. HAUSFELD: THE COURT: YES.
IS THAT RIGHT? YOU'RE EXACTLY RIGHT, YOUR HONOR. WELL, DON'T TELL -- TELL ME THE I DON'T WANT YOU TO TELL ME
MR. HAUSFELD: THE COURT: TRUTH.
OKAY.
I WANT TO UNDERSTAND IT.
IT'S RIGHT IF IT ISN'T. MR. HAUSFELD: THE COURT: YOUR HONOR, THAT IS THE TRUTH.
SO IF WE GO WITH THAT THEN, WE HAVE A
NUMBER OF DIFFERENT QUESTIONS THAT ARISE. ONE IS, THEY SAY SORT OF AS A FACTUAL MATTER THERE IS NO MARKET FOR GROUP LICENSING BECAUSE NO ONE WANTS TO BUY IT.
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AND THERE ISN'T MUCH EVIDENCE IN THE SUMMARY JUDGMENT PAPERS ON THAT POINT, BUT IN THE CLASS CERT THERE WERE. AND MAYBE THIS IS WHAT YOU'RE SORT OF RELYING ON, AND THAT IS, BY WAY OF ANALOGY IN PROFESSIONAL SPORTS, THAT NETWORKS DO ENTER INTO GROUP LICENSES WITH, I DON'T KNOW, NFL OR SOMEBODY LIKE THAT, AND PAY THE TEAM MONEY FOR VARIOUS AND SUNDRY RIGHTS, AND THAT THAT, AS A MATTER OF FACT, BY ANALOGY SHOWS THAT THERE IS SUCH A THING. IS THAT WHAT YOU WOULD SAY? MR. HAUSFELD: ABSOLUTELY, YOUR HONOR.
THERE IS NO DISTINCTION BETWEEN COLLEGE ATHLETICS AND PROFESSIONAL ATHLETICS WHEN IT COMES TO BROADCAST LICENSING. AND BROADCASTERS PAY FOR THE LICENSING OF THE NIL RIGHTS OF ATHLETES IN THE PROFESSIONAL LEAGUES WHO APPEAR IN BROADCASTS AND REBROADCASTS AND VIDEO GAMES. THE COURT: RIGHTS? HOW DO WE KNOW THEY ARE PAYING FOR NIL
DOES IT SAY IN THAT IN THE CONTRACTS? MR. HAUSFELD: THE COLLECTIVE BARGAINING AGREEMENTS
SAY THAT WHERE CLEARLY THERE IS AN ALLOCATION OF THE REVENUE FROM BROADCAST RIGHTS FOR THE GROUP OF ATHLETES IN THE AGGREGATE, AND THEN THE OWNERS IN THE AGGREGATE. THE COURT: BUT THE CONTRACT BETWEEN THE OWNERS AND
THE TV NETWORK, LET'S SAY, DOES THAT SAY YOU'RE GOING TO PAY US "X" DOLLARS AND WE'RE GOING TO GIVE YOU THE NAME, IMAGE AND LIKENESS RIGHTS OF OUR PLAYERS?
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MR. HAUSFELD: THE COURT:
YES.
THEY DO SAY THAT? YES.
SO THAT'S SORT OF A FACTUAL MATTER.
AND THEN AS A MATTER OF LAW, THEIR ARGUMENT IS THAT THERE CAN'T BE ANY GROUP LICENSING MARKET BECAUSE THERE'S NO RIGHT TO THE NAME, IMAGE AND LIKENESS, AND THERE'S-- THE ATHLETE HAS NOTHING TO SELL. SO THEY CAN'T, AS A MATTER OF LAW, SELL
SOMETHING THEY DON'T HAVE. MR. HAUSFELD: AND YOUR HONOR JUST HIT ON IT IN THE
WAY YOU PHRASED THE QUESTION. THERE IS NO DISTINCTION IN THE BROADCAST FIELD BETWEEN COLLEGE ATHLETES AND PROFESSIONAL ATHLETES. THE BROADCASTING OF GAME PERFORMANCES. IF THERE IS A MARKET FOR THE GAME PERFORMANCES AND THE NAME, IMAGE AND LIKENESS OF THE PROFESSIONAL ATHLETES, THEN THE SAME MARKET WOULD EXIST FOR THE COLLEGE ATHLETES IN THE SAME ENTERTAINMENT ASPECTS, BUT FOR THE RESTRAINTS. THE COURT: MAYBE THEY ARE JUST BEING OVERLY CAUTIOUS IT'S ATHLETES AND
IN THE PROFESSIONAL AREA AND THEY ARE WILLING TO PAY MONEY AND THEY DON'T REALLY CARE WHAT IT'S CALLED. MR. HAUSFELD: WITH THE EXCEPTION, YOUR HONOR, THERE
ARE A NUMBER OF DECLARATIONS FILED BY THE NCAA OF CONFERENCE COMMISSIONERS WHO SAY, FOR EXAMPLE, THE HORIZON LEAGUE, THAT WE LICENSE OUR NIL, YOU KNOW, TO THE BROADCASTERS. AND WE
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KNOW FROM THE BROADCAST CONTRACTS THAT WE'VE SEEN THAT CBS CONTRACTS WITH THE NCAA INCLUDE THOSE PROVISIONS IDENTICAL TO THOSE IN THE PROFESSIONAL LEAGUES WHICH SAY THAT THE LICENSE RIGHTS INCLUDE THE NIL OF THE ATHLETES. THE COURT: SO WHAT DO YOU THINK ABOUT THAT? I THINK HE'S GOT IT ALL WRONG. THE RECORD IS NOT -AND
MR. POMERANTZ:
NOT ONLY LEGALLY, BUT FACTUALLY. THE COURT:
THAT'S NOT -- DO YOU AGREE THAT THERE IS
EVIDENCE, AT LEAST BY WAY OF ANALOGY, THAT AT LEAST IN THE PROFESSIONAL REALM THERE IS A MARKET FOR GROUP LICENSING OF NAME, IMAGE AND LIKENESSES AND THAT THERE WAS SUCH EVIDENCE AT LEAST IN THE CLASS CERT MOTION, IF NOT THIS ONE? MR. POMERANTZ: HONOR. WHAT HAPPENS IN THE PROFESSIONAL LEAGUES IS THAT THE ATHLETES ONLY GET PAID SALARIES BY THEIR TEAMS. NETWORKS PAY THE TEAMS. SALARY. THE BROADCAST NETWORKS GET A LOT OF REVENUE IN. IT COMES FROM THE NETWORK. SALES. SOME OF THE BROADCAST NO. I DISAGREE WITH THAT, YOUR
THE TEAMS TURN AROUND AND PAY A
SOME OF IT COMES FROM TICKET AND LIKE ANY
SOME OF IT COMES FROM MERCHANDISING.
BUSINESS, THEY COLLECT ALL THEIR REVENUE, AND THEY TURN AROUND AND THEY PAY THEIR -- THEIR EMPLOYEES. THE COURT: WOULD YOU IMAGINE THOSE ATHLETES SIGN
SOME SORT OF WAIVER OR CONSENT SAYING I'M GOING TO ALLOW YOU
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TO SELL THESE GAMES TO THE NETWORKS AND SHOW THEM ON TV? MR. POMERANTZ: EVIDENCE IN THE RECORD. NO NEED FOR IT. AND I THINK MR. HAUSFELD IS CORRECT IN ONE POINT. THAT I DON'T KNOW THAT THERE'S THAT I DO KNOW THAT UNDER THE LAW THERE'S
IS, THE FIRST AMENDMENT LAW APPLIES THE SAME TO PROFESSIONAL SPORTS AS IT DOES TO AMATEUR COLLEGE SPORTS. THAT IS, THAT IF
IT IS A MATTER OF PUBLIC INTEREST AND IT IS NOT COMMERCIAL SPEECH, THEN THE FIRST AMENDMENT IS GOING TO TRUMP ANY NIL RIGHTS IN THAT EVENT, IN THE LIVE BROADCAST OF THAT EVENT. AND THAT'S WHAT WE HAVE HERE UNQUESTIONABLY UNDER THE LAW. THESE ARE LIVE FOOTBALL AND BASKETBALL GAMES. THESE ARE NOT
COMMERCIALS THAT ARE ONLY PROPOSING A COMMERCIAL TRANSACTION. AND WHETHER IT'S A PROFESSIONAL GAME OR A COLLEGE GAME, THEY ARE MATTERS OF PUBLIC INTEREST, AND THE LIVE BROADCAST IS PROTECTED BY THE FIRST AMENDMENT. THE COURT: WELL, I -- I'LL LET YOU ARGUE IT BRIEFLY
LATER, BUT I WILL SAY THAT I DON'T REALLY BUY THE COMMERCIAL SPEECH ARGUMENT. I DON'T THINK THAT NO MATTER HOW MUCH ADVERTISING ONE DOES OR HOW MANY LOGOS ARE AROUND, OR ANYTHING ELSE, THAT THAT TURNS FIRST AMENDMENT ACTIVITY INTO COMMERCIAL SPEECH ANY MORE THAN A NEWSPAPER THAT SHOWS A BUNCH OF ADS INTERSPERSED WITH ALL THE ARTICLES BECOMES COMMERCIAL SPEECH INSTEAD OF A NEWSPAPER. I KNOW THAT YOU DON'T AGREE WITH THAT, BUT THAT'S
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MY INCLINATION. BUT SETTING THAT ASIDE, THOUGH, IF IT'S -- IF A FOOTBALL GAME IS FIRST AMENDMENT ACTIVITY, HOW CAN THEY LICENSE AN EXCLUSIVE DEAL FOR ONLY ONE NETWORK TO GET TO BROADCAST IT? WHY DON'T ALL THE NETWORKS HAVE A RIGHT TO BROADCAST IT JUST LIKE THE PRESIDENT'S SPEECH OR ANYTHING ELSE? MR. POMERANTZ: WELL, JUST LIKE IN THE PRESIDENT'S
SPEECH, YOUR HONOR, THEY -- NOT EVERY SINGLE NETWORK GETS TO COME IN AND BROADCAST. THAT IS, WHOEVER IS CONTROLLING THE AND IN THE
FACILITY, ALLOWS IN WHOEVER THEY WANT TO ALLOW IN. PRESIDENT'S EXAMPLE -(SIMULTANEOUS COLLOQUY.) MR. POMERANTZ:
IN THE PRESIDENT'S EXAMPLE, HE'S NOT
GOING TO CHARGE SOMEBODY TO COME IN BECAUSE HE'S A GOVERNMENT OFFICIAL. BUT IN -- WHEN YOU'RE DEALING WITH AN NFL TEAM OR A COLLEGE TEAM, OR A CONCERT, THE -- WHOEVER IS IN CONTROL OF THE FACILITY CAN DECIDE WHO THEY ARE GOING TO LET IN. AND IF
THEY WANT TO CHARGE A PRICE FOR THEM TO COME IN, THEY CAN. THE COURT: RIGHT. WELL, LET'S SAY WE HAVE A COLLEGE
THAT HAS A STADIUM AND IT'S HAVING A FOOTBALL GAME AT IT -MR. POMERANTZ: THE COURT: CORRECT.
-- AND THEY WANT TO MAKE A DEAL THAT ONLY
CBS CAN BROADCAST IT AND NOBODY ELSE CAN. MR. POMERANTZ: EXACTLY.
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THE COURT: NBC TO COME IN?
WHAT RIGHT DO THEY RELY ON TO NOT ALLOW THEY SIT IN THE SEAT. HOW IS THAT --
NBC BUYS A TICKET.
THEY BRING THEIR CAMERA AND BROADCAST IT. MR. POMERANTZ:
BECAUSE IT'S THEIR --
(SIMULTANEOUS COLLOQUY.) MR. POMERANTZ: THE COURT: THEM FROM DOING THAT? MR. POMERANTZ: THE COURT: IT'S THEIR FACILITY. IT WOULD BE -EXCUSE ME.
WHAT RIGHT DOES THE COLLEGE HAVE TO STOP
YOU BOUGHT A TICKET. YEAH, YOU BOUGHT A TICKET, BUT THE
MR. POMERANTZ:
TICKET IS, IN EFFECT, A LICENSE INTO THE STADIUM AND IT COMES WITH TERMS. THAT IS WHAT A TICKET IS.
SO THERE, THEY ARE ALLOWING ONLY ONE BROADCASTER TO COME IN AND HAVE THE LOCATIONS ONE WOULD NEED TO BROADCAST THE GAME ON TELEVISION. THE COURT: SO THE TICKET HAS THE FINE PRINT THAT
SAYS, BY BUYING THIS TICKET YOU ARE AGREEING NOT TO BROADCAST, AND BLAH, BLAH, BLAH? AND IF NBC SHOWED UP WITH THEIR CAMERA
AND THE USHER SAW THEM, HE WOULD COME OVER AND SAY, SEE WHERE IT SAYS ON YOUR TICKET YOU CAN'T HAVE A CAMERA IN HERE? MR. POMERANTZ: AND YOU WOULD ALSO, QUITE FRANKLY, THEY ARE
YOUR HONOR, SOMEBODY OWNS THE RIGHTS TO THAT GAME.
THE OWNER OF THAT RIGHT, AND THEY CAN DECIDE WHO THEY WANT TO LET BROADCAST IT.
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THE COURT:
WHY ARE THEY THE OWNER OF THE RIGHT TO
MR. POMERANTZ:
BECAUSE THEY OWN THE STADIUM IN WHICH
THE GAME IS BEING PLAYED AND THEY OWN THE RIGHTS TO THE GAME IN THE STADIUM. THAT'S -- THE SAME IS TRUE WITH THE NFL, WITH
MAJOR LEAGUE BASEBALL, WITH SPORTS, WITH A CONCERT, WITH A THEATER. THE COURT: WHAT IF A HELICOPTER GOES OVER THE TOP OR
ONE OF THOSE HELIUM BALLOON THINGS GOES OVER THE TOP AND HAS A CAMERA AND TAPES THE WHOLE SUPER BOWL AND BROADCASTS IT ON SOME OTHER NETWORK? MR. HAUSFELD: MR. POMERANTZ: COMMERCIAL FREE. I THINK IT STILL WOULD BE A VIOLATION
OF THE RIGHTS OF WHOEVER HAS THE RIGHTS TO THE GAME. THE COURT: WHY? BECAUSE THEY OWN THE STADIUM AND THE
MR. POMERANTZ:
GAME, THE RIGHTS TO THE GAME. THE COURT: THEY OWN THE STADIUM, I'LL GO WITH YOU THAT'S FIRST
THERE, BUT IN WHAT SENSE DO THEY OWN THE GAME? AMENDMENT, YOU SAY IT IS PUBLIC DOMAIN. RIGHT TO SEE THAT GAME.
EVERYBODY HAS THE SO HOW CAN THEY
IT'S NEWSWORTHY.
STOP ME FROM GOING IN MY HELIUM BALLOON AND TAPING THE GAME AND SHOWING IT TO ALL THOSE NEWS HUNGRY FANS OUT THERE. MR. POMERANTZ: THE LAWS OF COPYRIGHT. I THINK IT'S THE LAWS OF PREMISES AND
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THE COURT:
WELL, THE PREMISES ARE SET ASIDE IF AND IT'S --
YOU'RE IN THE HELICOPTER OVER IN THE AIR SPACE. MR. POMERANTZ: THE COURT: FRANKLY --
-- YOU CAN'T COPYRIGHT A GAME, I DON'T
MR. POMERANTZ:
I'M NOT SURE ABOUT -- YES.
THINK -- THAT IS WHY CBS -THE COURT: YOU COPYRIGHT THE FILM OF THE GAME. CORRECT. I'M IN MY
BUT I'M NOT USING CBS'S FILM.
HELICOPTER AND I'M MAKING MY OWN FILM. MR. POMERANTZ: I THINK IT'S PROBABLY THE PROPERTY I DON'T KNOW -- I CAN'T REMEMBER
RIGHTS THAT COME WITH THAT.
SINCE LAW SCHOOL THE LAWS OF THE AIR SPACE ABOVE THE STADIUM. THE COURT: I DON'T THINK THAT'S IT. WHAT IF IT'S
THE CAL STADIUM, AND I GO ON THE GRASSY KNOLL BEHIND THE CAL STADIUM, AND I HAVE MY VIDEO CAMERA AND I TAPE THE GAME? MR. POMERANTZ: YOUR HONOR. I LOVE THE FACT THAT YOU USE CAL,
AS A CAL GRAD, I'M THERE WITH YOU. THEY HAVE A HILL BEHIND THEIR STADIUM AND
THE COURT:
YOU CAN SEE THE STADIUM FROM THE HILL WITHOUT BUYING A TICKET AND WITHOUT BEING ON THEIR PROPERTY. MR. POMERANTZ: I THINK THEY CALL THAT CHEAPSKATE
THE COURT:
YOU CAN SEE THE GAME FROM THERE AND FILM
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THE GAME FROM THERE AND THEN YOU COULD BROADCAST IT. MR. POMERANTZ: AND I DON'T THINK IF SOMEBODY SAT
THERE WITH A VIDEO CAMERA THEY WOULD BE VIOLATING THE RIGHTS. BUT THAT'S NOT WHAT WE ARE TALKING ABOUT IN THIS CASE. HERE, CLEARLY WHAT WE ARE TALKING ABOUT IS WHETHER THE PLAYERS HAVE NIL RIGHTS IN THE LIVE BROADCAST OF THAT GAME. AND I DON'T THINK RIGHT NOW WE ARE REALLY SAYING WHETHER IT'S ABC, OR CBS, OR THE GUY IN THE HELICOPTER, IF THAT GAME IS BROADCAST AND IT'S OF PUBLIC INTEREST, THEN THE PLAYERS DON'T HAVE ANY NIL RIGHTS IN THAT BROADCAST. IT REALLY, HERE, WE'RE NOT REALLY DEBATING WHETHER THE EXCLUSIVE RIGHT OF ACCESS IS AT ISSUE. IT DOESN'T MATTER.
HERE WHAT WE ARE TALKING ABOUT IS DO THE PLAYERS HAVE A VETO OVER ANYBODY BROADCASTING THEM -THE COURT: HORRIBLES GOES WRONG. MR. POMERANTZ: THE COURT: OKAY. SEE, THAT'S WHERE YOUR PARADE OF
IT SEEMS TO ME THAT, YES, THERE HAS TO BE
SOME KIND OF WAY THAT A SCHOOL CAN PROVIDE PERMISSION FOR AN OUTSIDE ENTITY TO FILM ITS STUDENTS, AND IT CAN'T BE THAT EACH INDIVIDUAL STUDENT HAS A VETO POWER. THEY COULDN'T GET ON THE
U.C.L.A. TEAM AND SAY, OH, BY THE WAY, I DON'T WANT TO BE ON TELEVISION, SO NONE OF YOU CAN BE ON TELEVISION. HAPPEN. THAT CAN'T
THEN YOU CAN NEVER HAVE A GAME ON TELEVISION.
SO THAT'S WHY YOU DON'T HAVE TO GET A --
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RIGHT.
-- PERMIT FROM EVERY FAN AND EVERY CANDY
CORN SELLER, AND ALL OF THAT. BUT WHY CAN'T THE SCHOOL SAY YOU HAVE TO GIVE US PERMISSION TO USE YOUR NAME, IMAGE AND LIKENESS ON TV BECAUSE THAT'S HOW WE ARE GOING TO MAKE SOME MONEY, AND WE WILL PAY YOU. AFTER YOU GRADUATE, WE WILL PUT THE MONEY IN TRUST AND OR I
GIVE YOU THE MONEY FOR YOUR NAME, IMAGE AND LIKENESS.
SUPPOSE THEY CAN GIVE IT TO THEM FOR FREE IF THEY WANTED TO. MR. POMERANTZ: THE COURT: RIGHT TO IT AT ALL? WELL, BECAUSE, YOUR HONOR --
HOW DOES THAT MEAN THEY DON'T HAVE ANY JUST BECAUSE THEY MIGHT HAVE TO GIVE IT
UP IN ORDER TO PLAY, DOES THAT MEAN THEY DIDN'T HAVE SUCH A RIGHT? MR. POMERANTZ: THERE IS NO NIL RIGHT. THE LAW SAYS THEY DON'T HAVE A RIGHT. SO IF THE SCHOOL IS CHOOSING --
(SIMULTANEOUS COLLOQUY.) THE COURT: THERE IS A RIGHT OF PUBLICITY, BOTH
COMMON LAW AND STATUTORY. MR. POMERANTZ: IT IS TRUMPED BY THE FIRST AMENDMENT AND I THINK THAT THAT LAW --
WHEN IT'S NOT COMMERCIAL SPEECH. THE COURT: NOT ALWAYS.
MR. POMERANTZ:
I THINK IN ALL THE LAW WE ARE CITING
HERE, IF IT IS NOT COMMERCIAL SPEECH AND IT'S A MATTER OF PUBLIC INTEREST, THEN THE FIRST AMENDMENT TRUMPS THE NIL
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RIGHTS OF THE INDIVIDUAL PARTICIPANTS IN WHATEVER EVENT IS OF PUBLIC INTEREST, WHETHER THAT EVENT IS A FOOTBALL GAME, OR A PARADE, OR A POLITICAL RALLY. THE COURT: IF THE PUBLIC IS SO INTERESTED IN IT, WHY WHY DOESN'T THAT MEAN
DON'T THEY -- WHY CAN ONLY CBS SHOW IT?
IF IT'S PUBLIC INTEREST AND FIRST AMENDMENT AND ALL THAT, HOW CAN WE HAVE A RULE THAT SAYS ONLY CBS GETS TO FILM IT? MR. POMERANTZ: THE SAME REASON WHY YOU HAVE TO PAY
TO GO INTO A MOVIE THEATER, EVEN THOUGH THE MOVIE IS FULLY PROTECTED BY THE FIRST AMENDMENT OR WHY YOU HAVE TO PAY MONEY TO BUY A NEWSPAPER. THE FACT THAT THE OWNER -- THAT THE SPEAKER CHOOSES TO TRY TO MAKE MONEY OFF OF THE SPEECH DOESN'T CHANGE THE FIRST AMENDMENT ANALYSIS. AND THERE'S A LONG LINE OF CASES THAT
STANDS FOR THAT PROPOSITION. SO HERE, SINCE THE STUDENT ATHLETES DON'T HAVE ANY NIL RIGHTS IN THE LIVE BROADCASTS OF THE GAME, IF THE SCHOOL NONETHELESS CHOOSES TO PAY THEM AND CALL IT NIL RIGHTS, WELL, WE ALL KNOW THEY ARE PAYING THEM FOR SOMETHING ELSE. THE LAW HAS SAID YOU HAVE NO NIL RIGHTS WHEN IT'S NONCOMMERCIAL EVENT, NONCOMMERCIAL SPEECH THAT INVOLVES A MATTER OF PUBLIC INTEREST. AND SO HERE, BECAUSE, YOU KNOW -- AND THIS, AGAIN, OUR ARGUMENT HERE, YOUR HONOR, ON THE FIRST AMENDMENT, WE ARE ONLY DIRECTING IT TO THE LIVE BROADCAST CLAIMS IN THIS CASE. WE BECAUSE
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ARE AT THIS TIME NOT DIRECTING IT TO THE REBROADCAST CLAIMS, THE USE OF GAME FOOTAGE IN ALL SORTS OF WAYS OR THE VIDEO GAME CLAIMS. THE COURT: AND THAT'S BECAUSE YOU CONCEDE THAT THOSE
COULD BE COMMERCIAL SPEECH? MR. POMERANTZ: THEY COULD BE. NO, I THINK IT'S BECAUSE -- WELL,
THAT IS, FOR EXAMPLE, I THINK IF YOU USE GAME
FOOTAGE IN AN ADVERTISEMENT FOR A PRODUCT, I THINK THAT THAT COULD BE COMMERCIAL SPEECH. AND BECAUSE THAT CATEGORY OF CLAIMS IN THIS CASE IS NOT FULLY DEFINED AND, THEREFORE, YOU'D HAVE TO ALMOST GO AT IT EACH TIME A GAME FOOTAGE IS USED AND MAKE A DECISION AS TO WHAT'S REALLY HAPPENING THERE, WE FELT THAT THAT WAS NOT THE THING THAT WE SHOULD DO HERE ON SUMMARY JUDGMENT; THAT IF WE CAN FOCUS ON LIVE BROADCAST WHERE WE THINK IT IS CRYSTAL CLEAR THAT THE LAW PRECLUDES NIL RIGHTS, BECAUSE THAT'S CLEARLY NONCOMMERCIAL SPEECH, AND, THEREFORE, ELIMINATE THE CLAIMS IN THIS CASE THAT ARE BASED ON LIVE BROADCASTS, THEN THAT LEAVES US WITH THE OTHER CLAIMS IN THIS CASE, THE GAME FOOTAGE CLAIMS AND THE VIDEO GAME CLAIMS STILL TO RESOLVE IN OTHER WAYS. THE COURT: CANNONBALL? MR. POMERANTZ: THE ZACCHINI CASE IS NOT AN NIL CASE. SO WHAT DO YOU SAY ABOUT THE HUMAN
PLAINTIFFS' CLAIM HERE IS VERY CLEARLY -THE COURT: IT'S A ROP CASE.
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MR. POMERANTZ:
BUT IT'S BASED ON THE PERFORMANCE OF IT'S VERY CRYSTAL CLEAR THAT
THE ENTERTAINER INVOLVED THERE.
WHAT THEY ARE SAYING IN ZACCHINI IS THAT WHEN YOU TAKE THE ENTIRE PERFORMANCE OF THE ACTOR AND BROADCAST IT, THAT THAT -THAT THAT'S NOT GOING TO BE PROTECTED BY THE FIRST AMENDMENT. BUT HERE -- AND BY THE WAY, HERE WHAT THEY ARE SAYING IS THAT THEIR CLAIM IS NOT -- THEY ARE NOT ASKING FOR PAYMENT FOR THE PERFORMANCE OF THE STUDENT ATHLETE, THEY ARE SAYING THEY USE HIS IDENTITY IN A COMMERCIAL WAY. AND THE CARDTOONS CASE THAT WE CITED -THE COURT: NOT IN A COMMERCIAL WAY, THEY ARE USING
HIS IDENTITY IN A LIVE BROADCAST OF A GAME. MR. POMERANTZ: COMMERCIAL SPEECH. THE COURT: RIGHT, BUT THEY CLAIM THAT THAT'S
AND AS YOUR HONOR SAID -THAT'S THEIR FALLBACK ARGUMENT. WELL, I THINK WHAT THEY'RE SAYING IS LET'S PUT
MR. POMERANTZ:
THAT IT'S USE OF THEIR NAME, IMAGE AND LIKENESS. ASIDE THE COMMERCIAL ISSUE FOR A SECOND.
SO WHAT THEY ARE
SAYING IS YOU'VE USED MY NAME, IMAGE AND LIKENESS OR IDENTITY. AND IN ZACCHINI -THE COURT: OR RIGHT OF PUBLICITY. IN ZACCHINI, IT'S PERFORMANCE. IN
MR. POMERANTZ:
THE CARDTOONS CASE IN THE TENTH CIRCUIT IS THE CASE THAT MOST CLEARLY DRAWS THE DISTINCTION BETWEEN ZACCHINI AND CLAIMS INVOLVING NIL.
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AND IN THE CARDTOONS CASE FROM THE TENTH CIRCUIT, IT STATES THE FOLLOWING: "THE DISTINCTION BETWEEN THE VALUE OF A PERSON'S IDENTITY AND THE VALUE OF HIS PERFORMANCE EXPLAINS WHY ZACCHINI, THE SUPREME COURT'S SOLE CASE INVOLVING A RIGHT OF PUBLICITY CLAIM IS A RED HERRING. ZACCHINI COMPLAINED OF THE APPROPRIATION OF THE ECONOMIC VALUE OF HIS PERFORMANCE, NOT THE ECONOMIC VALUE OF HIS IDENTITY." AND THAT'S WHAT WE HAVE HERE. IF YOU LOOK AT FOOTNOTE 10
IN ZACCHINI, FOOTNOTE 10 IN ZACCHINI SAYS: "THIS IS NOT A CLAIM INVOLVING NAME AND IMAGE. A CLAIM INVOLVING PERFORMANCE." AND THEY DRAW THAT DISTINCTION, A DISTINCTION THAT'S DRAWN UNDER OHIO LAW, WHICH WAS THE LAW THAT GOVERNED IN ZACCHINI. THAT'S WHAT WE HAVE HERE. NOW, THERE'S ANOTHER IT'S
DISTINCTION WITH ZACCHINI THAT I THINK IS IMPORTANT HERE. ZACCHINI HAS AN UNDERLYING ECONOMIC RATIONALE, THAT WHEN YOU BROADCAST THE PERFORMANCE OF MR. ZACCHINI, YOU HAVE TAKEN AWAY THE ECONOMIC VALUE OF HIS PERFORMANCE BECAUSE ONCE PEOPLE SEE IT ON TV, THEY ARE NOT GOING TO SEE THE SAME ACT AGAIN BECAUSE IT'S THE SAME ACT OVER AND OVER AGAIN. BUT THAT'S NOT TRUE WITH FOOTBALL AND BASKETBALL GAMES. THE NEXT FOOTBALL GAME IS DIFFERENT THAN THE LAST ONE. THE NEXT BASKETBALL GAME IS DIFFERENT. AND
AND IT HAS ECONOMIC
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VALUE EVEN IF SOMEONE HAS SEEN THE PRIOR GAME ON TELEVISION. AND THAT UNDERLYING ECONOMIC RATIONALE, WHERE YOU WERE BASICALLY LOOKING AT THE MOTIVATION OF THE PERFORMER, THERE MR. ZACCHINI, AND WOULD HE BE MOTIVATED TO KEEP DOING HIS PERFORMANCE IF IT'S BROADCAST ON TV, AND THAT ECONOMIC RATIONALE IS FUNDAMENTALLY DIFFERENT IN THIS CASE. SO I THINK THERE'S TWO DIFFERENT REASONS WHY ZACCHINI IS NOT PRECEDENT FOR THIS CASE, AS YOUR HONOR NOTED IN THE MOTION TO DISMISS. ONE IS THE DIFFERENCE BETWEEN PERFORMANCE AND
IDENTITY AND THE OTHER IS THE ENTIRE ECONOMICS ARE DIFFERENT, SO IT DOESN'T REALLY PROVIDE THE KIND OF TEST. WHAT WE ARE LOOKING FOR HERE IS A TEST TO BALANCE AN INDIVIDUAL'S RIGHT OF PUBLICITY CLAIM AGAINST THE FIRST AMENDMENT. THAT'S WHAT ALL OF THESE CASES ARE DOING. WHAT DO YOU THINK WOULD HAPPEN IF THERE
THE COURT:
WAS A COMMUNITY THEATER, AND PEOPLE WENT IN THERE FOR NOTHING. THEY ACTED IN A PLAY OUT IN WALNUT CREEK. AND THE OWNER OF
THE THEATER LET SOMEONE COME IN WHO FILMED IT, AND THEN THAT PERSON WENT AND BROADCAST IT ON TELEVISION WITHOUT CONSENT OR PAYMENT TO THE ACTORS IN THE COMMUNITY THEATER PRODUCTION. WHAT DO YOU SUPPOSE WOULD HAPPEN? MR. POMERANTZ: WELL, IF THE CLAIM WAS THAT YOU HAD ON
TAPED MY PERFORMANCE, THAT SEEMS VERY CLOSE TO ZACCHINI.
THE OTHER HAND, IF YOU SAID, WAIT, THAT'S MY IDENTITY ON THE SCREEN, I WANT YOU TO PAY ME FOR MY IDENTITY, NOT FOR THE
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ENTIRE PERFORMANCE -THE COURT: THAT'S A PRETTY FINE LINE TO DRAW. I
MEAN, IT'S YOUR IDENTITY DURING YOUR PERFORMANCE. JUST YOU STANDING THERE WITH A MUG SHOT. MR. POMERANTZ: THE IDENTITY --
IT'S NOT
(SIMULTANEOUS COLLOQUY.) THE COURT: YOU ARE DOING SOMETHING. I'M SORRY. I APOLOGIZE.
MR. POMERANTZ:
THE IDENTITY IS THAT'S MY NAME, THAT'S MY IMAGE, THAT'S MY LIKENESS. THE PERFORMANCE IS THE ENTIRE PERFORMANCE. IN YOUR
EXAMPLE IN THE COMMUNITY THEATER, THE ENTIRE PERFORMANCE IS FILMED. IT'S THE SAME PERFORMANCE THAT, LET'S ASSUME, THEY DO
IT WEEK IN AND WEEK OUT. THE COURT: LET'S CALL IT AN IMPROV. THAT MAY BE A LITTLE DIFFERENT. THAT
MR. POMERANTZ:
MAY BE A LITTLE DIFFERENT WITH AN IMPROV BECAUSE IT CHANGES. AND THAT WOULD PRESENT A DIFFERENT ISSUE THAT I THINK WOULD NEED TO BE EVALUATED. BUT I THINK THAT THAT WOULD BE -- I DO THINK ZACCHINI IS DISTINGUISHED BOTH ON THE PERFORMANCE VERSUS IDENTITY DISTINCTION, AND I WOULD REFER YOUR HONOR TO CARDTOONS AND FOOTNOTE 10 IN ZACCHINI, AND BECAUSE THE UNDERLYING ECONOMIC RATIONALE WAS DIFFERENT. THE COURT: SO I GUESS THE TENTH CIRCUIT HAD ITS
THOUGHTS ABOUT WHAT ZACCHINI SAID, BUT THE SEVENTH CIRCUIT DID
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AS WELL IN WISCONSIN V. GANNETT CASE. MR. POMERANTZ: HONOR. THAT'S A VERY DIFFERENT CASE, YOUR
IN THE WISCONSIN CASE -THE COURT: RIGHT, BUT THEY TALK ABOUT WHAT ZACCHINI
MEANS.
I DON'T HAVE IT WRITTEN DOWN ANYWHERE BUT THEY SAY
ZACCHINI TEACHES US TWO THINGS, ONE AND TWO. MR. POMERANTZ: RIGHT. RIGHT. AND WHAT THEY ARE
REFERRING TO THERE IS ACCESS. REMEMBER, THAT CASE INVOLVED THE STREAMING OF HIGH SCHOOL SPORTS -- SPORTING EVENTS. AND ONE COMPANY HAD THE RIGHTS TO
GO IN AND PROVIDE THE STREAMING OF THE GAMES OR THE EVENTS. THE COURT: NO. ONE COMPANY HAD THE RIGHT TO
TELEVISE IT AND THE OTHER COMPANY UNAUTHORIZEDLY STREAMED IT, SAID THEY COULD DO THAT. AND THE COURT SAID, NO, YOU CAN'T
STREAM IT BECAUSE IT WAS SOLD TO THE TV COMPANY, I THINK. MR. POMERANTZ: I'M NOT SURE. BUT IN ANY EVENT, I
THINK THE ISSUE IS A COMPANY WANTED TO COME IN AND BROADCAST IT, WHETHER IT'S STREAMING OR TELEVISION, AND COULDN'T. THAT'S AN ACCESS CLAIM. WHAT -- THAT'S VERY DIFFERENT THAN DO THE HIGH SCHOOL ATHLETES IN THAT EVENT HAVE NIL RIGHTS. THE COURT: SAID ABOUT ZACCHINI. NO. I WAS MORE INTERESTED IN WHAT THEY
YOU WERE TELLING ME WHAT THE TENTH
CIRCUIT SAID ABOUT ZACCHINI AND I WAS TRYING TO REMEMBER WHAT THE SEVENTH CIRCUIT SAID ABOUT ZACCHINI. BUT I'M NOT SURE I'M
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GOING TO BE ABLE TO FIND THE QUOTE. MR. POMERANTZ:
ANYWAY, THAT'S ALL RIGHT.
YES, YOUR HONOR.
I JUST THINK THERE'S A FUNDAMENTAL DIFFERENCE BETWEEN -THERE'S A LARGE BODY OF CASE LAW THAT HAS TO DO WITH WHEN DOES A MEDIA OUTLET HAVE THE RIGHT TO HAVE ACCESS TO A PUBLIC FORUM. SO THIS IS A -- PUBLIC HIGH SCHOOLS. AND THERE'S A
LOT OF -- WHAT THE SEVENTH CIRCUIT SAID THERE, IN PART RELYING ON ZACCHINI, IS THAT YOU DON'T -- JUST BECAUSE IT IS A PUBLIC FORUM, YOU DON'T -- ALL MEDIA DON'T NECESSARILY HAVE THE RIGHT OF ACCESS. JUST LIKE AT THE CAL'S MEMORIAL STADIUM. IT'S A PUBLIC
STADIUM, BUT NOT ALL MEDIA HAVE -- AUTOMATICALLY HAVE THE RIGHT OF ACCESS. ABOUT. AND THERE ARE MANY CASES WHERE THERE -- WHICH ARE BASED ON THE RIGHT OF ACCESS. THAT'S A TOTALLY DIFFERENT BODY OF LAW THAT'S WHAT THE WISCONSIN CASE IS TALKING
THEN THOSE CASES THAT SAY WHO -- WHEN DOES AN INDIVIDUAL HAVE NIL RIGHTS IN PUBLIC -- IN SPEECH. AND HERE WE ARE TALKING ABOUT WHEN A GAME IS BROADCAST, DO THE PARTICIPANTS IN THE GAME HAVE NIL RIGHTS SUCH THAT THEY COULD BASICALLY SAY YOU CAN'T BROADCAST THIS WITHOUT MY CONSENT. THE COURT: SO HERE IT IS. ONE, DISTINGUISHES BETWEEN
ZACCHINI TELLS US TWO THINGS.
THE RIGHT TO REPORT ON AND COVER AN EVENT, WHICH IS TO SAY,
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THE DISTINCTION BETWEEN, I GUESS, SAYING WHO WON THE GAME AND BROADCASTING THE ENTIRE GAME, AND THAT THE PRODUCER OF THE ENTERTAINMENT IS ENTITLED TO CHARGE A FEE IN EXCHANGE FOR CONSENT TO BROADCAST. MR. POMERANTZ: HONOR. RIGHT. I JUST DON'T THINK THAT, YOUR
THAT GOES TO THE QUESTION OF DOES THE INDIVIDUAL AND I
PARTICIPANT IN THE UNDERLYING EVENT HAVE NIL RIGHTS. DON'T THINK ZACCHINI GOES TO THAT ISSUE EITHER. THE COURT:
SO THERE'S OTHER THINGS THAT WE'LL GET
TO, BUT MAYBE YOU COULD JUST TALK, IF YOU WOULD LIKE TO RESPOND ON THE -- THE GROUP LICENSING MARKET AND THE NOTION AS TO WHETHER THE STUDENT ATHLETES HAVE ANY RIGHT IN THEIR NAME, IMAGE AND LIKENESS THAT THEY COULD LICENSE. MR. HAUSFELD: AND I DID NOT WANT YOUR HONOR TO TAKE
MY SILENCE AS ACQUIESCENCE. THE COURT: OH, I WOULD NEVER MAKE SUCH A MISTAKE. BUT YOUR HONOR LEFT OUT THE SECOND
MR. HAUSFELD:
PART OF THE SECOND ELEMENT THAT THE TENTH CIRCUIT SAID THAT ZACCHINI TAUGHT. AND THAT'S THE FIRST AMENDMENT DOES NOT GIVE
THE MEDIA THE RIGHT TO APPROPRIATE WITHOUT CONSENT OR REMUNERATION THE PRODUCTS OF OTHERS. THE COURT: THAT'S THE SEVENTH CIRCUIT, YOU MEAN. YES, YOUR HONOR, I'M SORRY.
MR. HAUSFELD:
I HAVE DONE A FAIR AMOUNT OF FIRST AMENDMENT WORK, AND I STRUGGLE WITH UNDERSTANDING THE ARGUMENT.
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FIRST, THE NCAA DOES NOT HAVE ANY ARGUMENT ON ANY FIRST AMENDMENT RIGHT OF THEIRS. THE COURT: AND WHAT THEY SEEM TO BE SAYING --
THE FIRST AMENDMENT RIGHT THEY CLAIM IS
THE RIGHT OF THE PRESS OF THE BROADCAST COMPANY. MR. HAUSFELD: NECESSARILY THE NCAA'S. THE COURT: RIGHT. AND SO I TRIED TO PUT THIS IN THE BUT THAT'S THE RIGHT OF THE PRESS, NOT
MR. HAUSFELD:
CONTEXT OF THE FIRST AMENDMENT, WHICH IS NOT ABSOLUTE AND IS NOT BOUNDLESS. SO, BY RECOGNIZING THE RIGHT OF AN ATHLETE ECONOMICALLY TO THEIR INTELLECTUAL PROPERTY IN THEIR NAME, IMAGE AND LIKENESS -THE COURT: HE SAYS THEY DON'T HAVE SUCH A THING.
THAT'S HIS STARTING POINT, IS THE ATHLETE HAS NO RIGHT TO HIS NAME, IMAGE AND LIKENESS, THEREFORE, HE CAN'T SELL IT BECAUSE HE DOESN'T HAVE A RIGHT TO IT. MR. HAUSFELD: THAT'S THE CIRCUITY. AND I ASK -- AS
THE SEVENTH CIRCUIT SAID IN ZACCHINI, WHERE DOES THE FIRST AMENDMENT PROHIBIT THAT? WHERE DOES THE FIRST AMENDMENT SAY
IF YOU HAVE -- IF THERE IS AN EVENT RESTRICTED AS IT IS, BECAUSE AS YOUR HONOR CORRECTLY POINTS OUT, THE FACT THAT THERE IS A LICENSE GIVEN IS A RESTRICTION ON FREE SPEECH. AND THE FACT THAT THERE IS A MARKET IN THE BROADCAST OF THE ENTERTAINMENT VALUE FOR OTHER SIMILAR SPORTING EVENTS IN
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WHICH THE -- IN WHICH THERE IS A TRANSFERENCE OR LICENSING OF THE NIL RIGHTS OF ATHLETES, WHETHER THEY BE COLLEGE OR PROFESSIONAL, UNDERCUTS THE ARGUMENT THAT THE FIRST AMENDMENT SOMEHOW PROHIBITS THE EXISTENCE OF THAT RIGHT. THE COURT: WELL, HE WOULD SAY THAT, OKAY, THESE
NETWORKS ARE PAYING FOR THE NIL OF THE PROFESSIONAL PLAYERS PERHAPS AS AN EXERCISE OF ABUNDANCE OF CAUTION. AND, YES, THEY'D SAY IN THE CONTRACT THAT THEY ARE PAYING FOR ALL KINDS OF THINGS JUST SO THEY DON'T GET SUED LATER, BUT, IN FACT, THEY WOULDN'T NEED TO BECAUSE JUST LIKE THE STUDENTS ATHLETES, THE PROFESSIONAL ATHLETES HAVE NO SUCH RIGHT. AND RATHER AN ATHLETIC CONTEST IS A MATTER OF PUBLIC IT IS A LITTLE
INTEREST, AND THE PUBLIC HAS A RIGHT TO IT.
PROBLEM THAT THEY CAN'T GO INTO IT, ONLY ONE NETWORK CAN FILM IT -MR. HAUSFELD: BEST. BUT TAKING THAT, THAT ARGUMENT, BECAUSE IT IS NOT ONLY THEIR BEGINNING POINT, IT IS THEIR END POINT. TOTAL CIRCLE. AND IT'S A I APPRECIATE YOUR BALLOON ANALOGY
AND THE CIRCLE IS YOU DON'T -- THERE IS NO
ECONOMIC VALUE TO YOUR RIGHT BECAUSE YOU DON'T HAVE A RIGHT, AND YOU DON'T HAVE A RIGHT BECAUSE WE TELL YOU YOU DON'T HAVE A RIGHT. THE COURT: OF LIKE NEWS. I'LL TELL YOU, THE THING IS IN THE CASE
IF YOU'RE A NEWSMAKER AND YOU GO OUTSIDE AND
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MAKE SOME NEWS, AND THE NEWS CAMERAS CAPTURE IT AND PUT IT ON TV, YOU DON'T HAVE A NAME, IMAGE AND LIKENESS RIGHT TO SAY, HEY, YOU CAN'T PUT ME ON TV. I MADE NEWS. THAT IF YOU
SO IT'S AN EXTENSION FROM THAT, I SUPPOSE.
ARE AN ACTOR IN MATTERS OF PUBLIC INTEREST, YOU CAN'T STOP THE NEWS FROM TELLING ABOUT IT AND USING YOUR IMAGE TO DO SO. MR. HAUSFELD: IS THE INFRINGEMENT? CONSENT. WHAT IS THE PROHIBITION HERE? WHERE
THEY SAY, WELL, WE'D HAVE TO GET THE
BUT IT'S ESTABLISHED THAT THAT CONSENT IS OBTAINED. THE COURT: I'M SORRY, CONSENT OF WHOM FOR WHAT. CONSENT OF THE ENTERTAINERS, THE
MR. HAUSFELD: ATHLETES.
AGAIN, THERE'S NO DIFFERENCE FROM THE BROADCAST OF THEY ARE BOTH
A PROFESSIONAL GAME THAN FROM A COLLEGE GAME. ATHLETES. BOTH SETS ARE ATHLETES.
IN THE PROFESSIONAL ARENA, THOSE ATHLETES ARE INCLUDED IN THE BROADCAST LICENSING. LIKEWISE, IN THE COLLEGE ARENA,
THOSE ATHLETES ARE INCLUDED IN MANY OF THE LICENSES. IN FACT, THERE'S BEEN A RELATIVELY PARADOXICAL SITUATION WHERE THE NCAA IS OBJECTING TO THE STATEMENTS OF ONE OF ITS OWN EXPERTS WHO SAYS, ATHLETES ENROLLED IN A COLLEGE ARE FORCED TO SIGN A CONTRACT IN WHICH HE LOSES, FORBIDS HIM, BASICALLY, APPROPRIATES OR GIVES THE UNIVERSITY OR THE COLLEGE THE RIGHT TO HIS NAME, IMAGE AND LIKENESS, AND THAT HE FORFEITS THE RIGHT TO THAT, AND THAT SUCH CONTRACTS ARE COMMON AMONG INDIVIDUALS IN THESE DIVISION I CONFERENCES.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CAUTION.
THE COURT:
I'M SORRY, WHAT'S THAT?
WHO SAYS THAT?
MR. HAUSFELD:
DOCTOR -- NOBEL ECONOMIST DR. HECKMAN.
IF THEY HAVE NO RIGHT, IF THAT RIGHT DIDN'T EXIST BUT FOR THE RESTRAINT IMPOSED OR THE FORECLOSURE IMPOSED BY THE NCAA, WHY IS THERE A RESTRICTION? WHY IS IT APPROPRIATED? WHY ARE
THERE BYLAWS WHICH SAYS YOU HAVE NO RIGHTS UNLESS WE GIVE THEM TO YOU. THE COURT: THEY ARE ACTING IN AN ABUNDANCE OF
MR. HAUSFELD:
IN AN ABUNDANCE OF CAUTION LET THE
MARKET DECIDE WHETHER OR NOT THERE ARE THOSE RIGHTS AS OPPOSED TO YOU SAYING TO THE MARKET, NO, WE WILL NOT LET THE MARKET TEST WHETHER THERE IS A GROUP RIGHT, THAT, BY THE WAY, DOES EXIST WITH REGARD TO PROFESSIONAL ATHLETES. THE COURT: PUBLICITY, RIGHT? WELL, THE RIGHT IS THE RIGHT OF
I MEAN, IT'S NOT A CONSTITUTIONAL RIGHT. NO. IT SAYS RIGHT?
IT'S NOT A PROPERTY RIGHT.
COMMON LAW AND POSSIBLY STATUTORY RIGHT OF PUBLICITY. MR. HAUSFELD:
IT'S A COMBINATION RIGHT, YOUR HONOR.
BECAUSE THE RIGHT OF PUBLICITY COMES INTO EXISTENCE AFTER THE BROADCAST, AFTER THE FILMING WHEN THERE'S A CLAIM FOR DAMAGE THAT YOU APPROPRIATED OR MISAPPROPRIATED MY NAME, IMAGE OR LIKENESS. THE LICENSING RIGHT COMES, AS YOU SAID, AS AN ABUNDANCE OF
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CAUTION BEFORE, BEFORE THAT PERFORMANCE OR THAT BROADCAST, YOU KNOW, IS EVER UNDERTAKEN. THAT'S THE MARKET IN WHICH THE
BROADCASTERS ARE PARTICIPATING BOTH FOR THE VALUE OF ACCESS TO THE -- EXCLUSIVE ACCESS TO THE STADIUM, THE LOGOS OF THE NCAA, AND OF THE UNIVERSITIES AND THEIR SCHOOL COLORS, AND THE ATHLETES' NAMES, IMAGES AND LIKENESSES. MARKET. IT'S PART IP, PART ROP. THE COURT: SO YOU WOULD AGREE THAT IF A COLLEGE IS IT'S A LICENSING
FIELDING AN ATHLETIC TEAM AND THEY WANT TO HAVE THEIR GAMES TELEVISED, THAT THEY WOULD HAVE A RIGHT TO TELL THE ATHLETES, BY THE WAY, WE ARE GOING TO BE TELEVISING THE GAMES, SO IF YOU WANT TO BE ON THIS TEAM, YOU'RE GOING TO HAVE TO AGREE TO BE TELEVISED, AND LET YOUR THINGS BE SHOWN. THEY COULDN'T SAY
THAT EACH NETWORK HAS TO NEGOTIATE WITH EACH PLAYER HOW MUCH THEY SHOULD PAY THAT PLAYER. MR. HAUSFELD: GAME SEPARATELY. MULTIGAMES. THE COURT: SO THAT WOULDN'T BE AN ANTITRUST NOR WOULD YOU HAVE TO NEGOTIATE EACH
THE LICENSES ARE FOR MULTIYEAR AND FOR
VIOLATION IF THE SCHOOL SAID TO ALL THE ATHLETES, YOU CAN ONLY BE ON THIS TEAM IF YOU'LL AGREE TO BE ON TELEVISION. MR. HAUSFELD: THE COURT: AS LONG AS THEY DID THAT UNILATERALLY.
I'M SORRY? AS LONG AS THEY DID THAT UNILATERALLY. THAT EACH COLLEGE DID IT?
MR. HAUSFELD: THE COURT: OH.
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YES.
I MEAN, THEY COULD EACH DO IT A DIFFERENT
YES.
THEY'D SAY, WE'RE GOING TO GIVE YOU A
HUNDRED THOUSAND DOLLARS IN YOUR TRUST FUND AFTER YOU GRADUATE -- AND BY THE WAY, THAT'S WHAT YOU'RE ASKING FOR, RIGHT? YOU'RE NOT ASKING THIS MONEY TO BE PAID THEM WHILE
THEY'RE IN COLLEGE. MR. HAUSFELD: WE'RE NOT ASKING, IN THE INJUNCTION, WE'RE ASKING FOR THE PROHIBITION
FOR ANY PAYMENTS TO BE MADE. OF THE RESTRAINT. THAT PLAYS OUT. THE COURT:
AND THEN THE MARKET WOULD DETERMINE HOW
SO, SO THEY COULD NOT RESTRAIN PEOPLE --
THEY COULD NOT RESTRAIN COLLEGES FROM NOT GIVING UNDERGRADUATES MONEY WHILE THEY WERE STILL IN SCHOOL. WOULD BE FAIR GAME. MR. HAUSFELD: THAT COULD BE ONE OF THE MEANS BY THAT
WHICH IT WAS DECIDED IN THE MARKET THOSE SCHOOLS WISH TO COMPETE. THE COURT: BECAUSE I THOUGHT -- I HAD THE IDEA
BEFORE THAT YOU WEREN'T THINKING THAT THAT SHOULD HAPPEN, BUT RATHER YOU WERE THINKING THAT IT SHOULD BE PAYMENTS THAT WOULD BE MADE, PLACED IN TRUST, AND PAID TO THEM AFTER THEY GRADUATED.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 OKAY. HAVE --
MR. HAUSFELD:
IT COULD BE, YOUR HONOR.
AND I
THE COURT:
I DON'T THINK IT WOULD BE -- THE
INJUNCTION SHOULD SAY THAT THERE CAN'T BE ANY SUCH RESTRICTION. MR. HAUSFELD: YOUR HONOR ASKED ME AT THE LAST
HEARING WHETHER WE WERE SEEKING ANY AFFIRMATIVE INJUNCTION OR, YOU KNOW, A PROHIBITORY INJUNCTION. THE COURT: RIGHT. AND YOU --
(SIMULTANEOUS COLLOQUY.) MR. HAUSFELD: HAVE A HYBRID. THE COURT: NO. WHAT WOULD YOU WANT TO PROHIBIT? WE WOULD WANT TO PROHIBIT THE WHAT YOU ARE ASKING ME NOW IS WOULD I
MR. HAUSFELD:
IMPOSITION OF THE RESTRAINT IN ITS ABSOLUTE FORM. THE COURT: SO THAT WOULD MEAN THAT THEY WOULD BE --
THAT NCAA WOULD BE PROHIBITED FROM TELLING A SCHOOL THAT IT COULD NOT PAY PEOPLE CASH WHILE THEY WERE A FRESHMAN, FOR EXAMPLE. THAT COULD NOT BE PROHIBITED. THE SCHOOL WOULD HAVE
TO BE ABLE TO BARGAIN FOR THAT. MR. HAUSFELD: THE COURT: YES. THAT WASN'T WHAT I THOUGHT, BUT
OKAY.
MR. HAUSFELD:
UNLESS YOUR HONOR, AGAIN, IS WILLING
TO CONSIDER SOME COMPROMISE INJUNCTION.
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THE COURT:
WELL -THAT WOULD BE PART PROHIBITORY AND
MR. HAUSFELD: PART AFFIRMATIVE. THE COURT:
I'M NOT ISSUING ANY INJUNCTIONS UNTIL AND IT PROBABLY WOULDN'T BE A
THERE'S A FINDING OF LIABILITY.
QUESTION OF COMPROMISING, IT WOULD BE A QUESTION OF WHAT HAD BEEN SHOWN TO BE A VIOLATION. SO IF YOU WANT TO COMPROMISE, I'M ALL FOR IT. AND WE'LL
TALK ABOUT THAT LATER, BUT I WOULDN'T BE COMPROMISING. BUT I UNDERSTOOD YOU TO BE ASKING ONLY FOR A PROHIBITORY INJUNCTION THAT WOULD TELL THEM WHAT THEY COULDN'T REQUIRE AND NOT TELL THEM THAT THEY HAD TO, FOR EXAMPLE, HAVE A 50/50 SPLIT, OR HAD TO DO THIS OR THAT. THEY SEEM TO FEEL THAT THAT WAS WHAT YOU WERE ASKING, AND I DIDN'T THINK IT WAS. MR. HAUSFELD: THE COURT: BUT I MUST SAY -IT'S NOT.
-- I ALSO THOUGHT THAT YOU WEREN'T ASKING
TO BE -- TO OPEN UP PAYMENTS DURING THE COLLEGE CAREER. MR. HAUSFELD: WE ARE NOT ASKING FOR A 50/50 SPLIT.
WE ARE NOT ASKING FOR ANY SPECIFIC ALLOCATION BECAUSE THAT WOULD HAVE TO BE A MATTER OF NEGOTIATION BETWEEN THE PARTIES. BUT IF YOUR HONOR WAS JUST TO ISSUE A STRAIGHT PROHIBITORY INJUNCTION, IT WOULD BE AGAINST THE IMPOSITION OR APPLICATION OF THE FORECLOSURE OF NIL GROUP, NIL LICENSING RIGHTS BY THE ATHLETES.
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AND I GUESS -THE COURT: WELL, GETTING BACK TO WHAT I STARTED
WITH, YOU WOULDN'T BE SAYING YOU CAN'T REQUIRE THE ATHLETES TO AGREE TO WHAT YOU'RE OFFERING AS A CONDITION OF BEING ON YOUR TEAM. YOU ANSWERED THAT. MR. HAUSFELD: THE COURT: CORRECT.
IF IT WAS UNILATERAL. RIGHT.
SO IF ONE SCHOOL WANTED TO SAY, WE'RE NOT AND IF YOU
GOING TO PAY YOU ANYTHING, YOU'VE GOT TO BE ON TV. DON'T LIKE IT, DON'T JOIN. THAT WOULD BE FINE.
AND ANOTHER
SCHOOL COULD SAY, WE'RE GOING TO GIVE YOU A HUNDRED THOUSAND DOLLARS AFTER THE FIRST GAME. MR. HAUSFELD: THE COURT: RIGHT.
AND THAT WOULD BE FINE, TOO. AND --
AS LONG AS -IT COULD EQUALLY BE FINE IF YOUR HONOR
MR. HAUSFELD:
WAS COMFORTABLE WITH AN INJUNCTION THAT SAID, YOU KNOW, THEY'RE ENTITLED TO PARTICIPATE IN THE LICENSING MARKET, BUT THEY CANNOT RECEIVE THAT COMPENSATION OR THAT ENTITLEMENT UNTIL AFTER THEY GRADUATE. BUT IT WOULDN'T RESULT IN THE SAME
SITUATION THAT YOU ASKED MY LEARNED COLLEAGUE WHERE THE ATHLETE, WHO IS NO LONGER ELIGIBLE, COULD NEVER RECEIVE ANY OF THE BENEFITS OF THE LICENSING WHILE HE WAS ELIGIBLE.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MY --
MR. POMERANTZ: RESTRAINT FOR ONE SECOND? THE COURT:
YOUR HONOR, MAY I ADDRESS THE
WAIT JUST A MINUTE.
LET ME GO THROUGH
SURE.
-- QUESTIONS FIRST.
(PAUSE IN THE PROCEEDINGS.) SO WHAT DO YOU THINK ABOUT MY COMMUNITY THEATER IMPROVISATIONAL GROUP BEING REBROADCAST ON TELEVISION? MR. HAUSFELD: I THINK, AGAIN, IF THERE WAS A
LICENSING RIGHT THAT WAS ENTERED INTO THAT THOSE ENTERTAINER/PERFORMERS WOULD HAVE A RIGHT TO PARTICIPATE WITH THE COMMUNITY THEATER IN THE SALE OF THAT LICENSING, AND IF -THE COURT: WOULD THEY HAVE A RIGHT TO SUE IF THE
COMMUNITY THEATER SOLD IT TO SOMEBODY WITHOUT THEIR CONSENT? MR. HAUSFELD: ON AN ACADEMIC BASIS, YOUR HONOR,
WHETHER AMERICANS HAVE A RIGHT TO SUE OR NOT IS A QUESTION OF HEATED DEBATE. THE COURT: RIGHT TO RECOVER, LET'S SAY. I DON'T KNOW. BUT THAT SITUATION
MR. HAUSFELD:
WOULD HAVE TO ARISE IF THOSE PERFORMERS DECIDED THAT THERE WAS A VIOLATION OF THEIR RIGHT. HERE, WE HAVE A CLEAR SITUATION WHERE WE HAVE COMPARABLE BROADCAST LICENSES ENTERED INTO BY OTHER SIMILAR ATHLETES, WITH THE SAME COMPANIES INVOLVING THE SAME NAME, IMAGE AND
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LIKENESSES. THE COURT: OKAY. SO WHAT DO YOU THINK ABOUT
ZACCHINI, THE HUMAN CANNONBALL? MR. HAUSFELD: I APOLOGIZE, YOUR HONOR, IF I
MISTAKENLY REFER TO IT AS ZUCCHINI BECAUSE I KIND OF FLIP BACK AND FORTH. THE COURT: CANNONBALL. MR. HAUSFELD: BUT IT'S AN INTERESTING ARGUMENT. THAT'S WHY I CALL IT THE HUMAN
AGAIN, WHAT MY LEARNED COLLEAGUE SAID IS THAT THERE'S NO ECONOMIC VALUE. WELL, THERE WOULD BE AN ECONOMIC VALUE IF THERE WASN'T RESTRAINT. BECAUSE ESSENTIALLY THEIR ARGUMENT IS CIRCUITOUS.
YOU HAVE NO ECONOMIC VALUE BECAUSE YOU'VE RECEIVED NO ECONOMIC VALUE BECAUSE WE HAVEN'T LET YOU GET ANY ECONOMIC VALUE, SO, THEREFORE, THERE IS NO ECONOMIC VALUE. THE COURT: NO, THAT'S NOT HIS ARGUMENT. IT'S THAT
HIS ARGUMENT IS THAT -- WELL, THAT ISN'T IT.
HE'S DRAWING A DISTINCTION BETWEEN A PERFORMANCE AND A NAME, IMAGE AND LIKENESS, AND SAYING ZACCHINI IS A PERFORMANCE AND YOU'RE ASKING FOR PAYMENT FOR A NAME, IMAGE AND LIKENESS AND NOT -- SPECIFICALLY NOT A PAYMENT FOR PERFORMANCE. MR. HAUSFELD: UM, IF, AGAIN, I HEARD CORRECTLY, HE
TALKED ABOUT THERE'S NO ECONOMIC VALUE. THE COURT: TO WHAT?
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NONE.
MR. HAUSFELD: ZACCHINI-LIKE SITUATION.
TO THE NAME, IMAGE AND LIKENESS IN THE
AND, AGAIN, THAT DEPENDS, YOUR HONOR.
FOR EXAMPLE, IF A
BROADCASTER CAME IN AND SAID TO ZACCHINI, I WOULD LIKE TO BROADCAST YOUR PERFORMANCE, BUT I WANT THE RIGHTS TO YOUR PERFORMANCE AND I WANT YOUR RIGHTS TO NAME, IMAGE AND LIKENESS BECAUSE I WANT TO CALL IT THE ZACCHINI CANNONBALL. AT THAT
POINT IT IS BEFORE THE PERFORMANCE, YOU HAVE A SEPARATE ECONOMIC VALUE IN YOUR NAME, IMAGE AND LIKENESS. AND BEFORE THE PERFORMANCE ZACCHINI CAN EXTRACT A VALUE FOR THAT ECONOMIC RIGHT IN THE LICENSING REMUNERATION. THAT'S WHAT'S INVOLVED HERE. THE COURT: HE COULD HAVE TRIED. EXACTLY. BUT YOU CAN'T SAY HE HAS IT'S A MATTER OF THE MARKET AND
MR. HAUSFELD:
IT'S NOT A MATTER OF LAW.
AND THE ECONOMICS. THE COURT: OKAY. SO I WANTED TO TALK ABOUT THE FIVE
FACTOR PROCOMPETITIVE JUSTIFICATIONS, BUT IF YOU HAD SOMETHING -MR. POMERANTZ: I'M SORRY. THE COURT: GO AHEAD. ON THE INJUNCTION, THE PROHIBITORY JUST ONE BRIEF POINT, YOUR HONOR.
MR. POMERANTZ: INJUNCTION.
SO WHAT PLAINTIFFS ARE SAYING IS THAT THE NCAA
AND THE COLLEGES HAVE A RULE THAT PROHIBITS STUDENT ATHLETES
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FROM LICENSING THEIR NAME, IMAGE AND LIKENESS AND MAKING MONEY ON THAT. AND THEY WANT TO -- AN INJUNCTION THAT PROHIBITS
THAT RULE FROM BEING ENFORCED. THE COURT: BROADER. I WOULDN'T SAY THAT. I THINK IT'S
WHAT THEY WANT IS BROADER THAN THAT, BUT IT PROBABLY
INCLUDES THAT. MR. POMERANTZ: IT'S FOCUSED ON THE LICENSING OF THAT'S WHAT THEIR THEORY OF
THEIR NAME, IMAGE AND LIKENESS. THE CASE IS NOW.
IT'S CRYSTAL CLEAR IN THE COMPLAINT AND IN
THEIR BRIEFS THAT WHAT THEY THINK THE IMPROPER RESTRAINT IS IS SOMETHING THAT STOPS STUDENT ATHLETES FROM LICENSING THEIR NAME, IMAGE AND LIKENESS. THE COURT: IS THAT RIGHT? YES.
OH, OKAY. IF THERE IS NO NAME, IMAGE AND
MR. POMERANTZ:
LIKENESS IN THE LIVE BROADCAST OF A SPORTING EVENT, THEN THE RESTRAINT DOESN'T APPLY TO THAT LIVE BROADCAST BECAUSE THE RESTRAINT THAT'S BEING CHALLENGED IS A RESTRAINT SAYING YOU CAN'T LICENSE YOUR NAME, IMAGE AND LIKENESS. THE COURT: WAIT A MINUTE. HOW COULD YOU HAVE A GAME
WITHOUT ANY NAMES, IMAGES AND LIKENESSES IN THEM? MR. POMERANTZ: OF THE FIRST AMENDMENT. IT'S THE POINT THAT YOUR HONOR MADE WITH THE -- YOU WERE THERE'S NO LEGAL RIGHT TO IT BECAUSE
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HYPOTHESIZING A NEWS EVENT.
SOMEBODY STEPS OUT OF THE HOUSE THE CAMERAS PICK IT UP. THE
AND THEY WALK INTO A NEWS EVENT.
FIRST AMENDMENT PROTECTS THE NEWS BROADCASTER SO THAT THEY DON'T NEED TO GO GET PERMISSION TO SHOW THAT FILM ON TELEVISION, THAT NEWSWORTHY FILM. THE LAW SAYS THAT IF INSTEAD OF THAT BEING NEWS, AS YOUR HONOR WAS REFERRING TO IT, INSTEAD YOU SAY IT'S ENTERTAINMENT, THE LAW SAYS THAT'S EXACTLY THE SAME UNDER THE FIRST AMENDMENT. AND THERE'S A LONG LINE OF CASES THAT SAYS WHAT IS ONE PERSON'S ENTERTAINMENT IS ANOTHER PERSON'S DOCTRINE. THERE'S
A LOT OF PEOPLE OUT THERE WHO REALLY CARE ABOUT WATCHING COLLEGE FOOTBALL THAT DON'T CARE ABOUT WATCHING THE STATE OF THE UNION ADDRESS. FIRST AMENDMENT. AND ALL -- THE POINT I WANTED TO MAKE IS THE PARTICULAR INJUNCTION THAT THEY ARE SEEKING HERE, DOES NOT ON ITS FACE APPLY TO THE BROADCAST OF A LIVE COLLEGE FOOTBALL OR BASKETBALL GAME BECAUSE THE FIRST AMENDMENT TRUMPS ANY NIL RIGHTS, AND, THEREFORE, SINCE THEIR INJUNCTION, AS THEY CONCEDE, IS TIED SPECIFICALLY TO THE EXISTENCE OF NIL RIGHTS, IT DOESN'T APPLY TO LIVE BROADCASTS. THAT WAS THE ONLY POINT I WAS MAKING, YOUR HONOR. ASKED ABOUT THE FIVE PROCOMPETITIVE JUSTIFICATIONS. THE COURT: YEAH. MY FIRST QUESTION THERE IS, IS YOU THOSE ARE BOTH FULLY PROTECTED UNDER THE
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THIS LIKE A FIVE-FACTOR BALANCING TEST OR IS IT LIKE YOU ONLY HAVE TO PROVE ONE, AND IT DOESN'T MATTER ABOUT THE OTHER FOUR IF YOU PROVE ONE OF THEM, AND, THUS, I COULD RULE ON THEM INDIVIDUALLY. AND I COULD SAY THERE'S NO EVIDENCE OF SOME OF
THEM, BUT THERE IS SOME EVIDENCE OF OTHERS OF THEM SO WE CAN GO TO TRIAL ON THE ONES AS TO WHICH THERE IS SOME EVIDENCE? MR. POMERANTZ: I THINK ALL YOU NEED TO FIND IS IF
THERE IS A DISPUTED ISSUE OF MATERIAL FACT AS TO ANY ONE OF THEM, THEIR MOTION MUST BE DENIED. THE COURT: YOUR JUSTIFICATIONS. RIGHT. BUT I COULD THROW OUT SOME OF
AND SO WE ARE NOT GOING TO TRY TWO AND
FIVE BECAUSE THERE IS NO EVIDENCE OF TWO AND FIVE, BUT WE'LL GO TO TRIAL ON -- I JUST MADE THAT UP. MR. POMERANTZ: THE COURT: I UNDERSTAND. BUT I THINK, NO --
THERE ARE A COUPLE I DON'T THINK THERE'S
ANY EVIDENCE ON, AND I WAS WONDERING IF I COULD ADJUDICATE THOSE AND STILL GO FORWARD WITH THE OTHERS. MR. POMERANTZ: MOTION, YOUR HONOR. SUMMARY JUDGMENT. I THINK THE ANSWER IS NOT ON THIS
I THINK THIS MOTION IS SIMPLY ASKING FOR THAT SEEMS TO ME TO BE MORE PROPERLY AN IN AND I
LIMINE MOTION, CERTAIN EVIDENCE CAN'T BE ADMITTED.
WOULD LIKE TO GO THROUGH THE ONES THAT YOU HAVE CONCERNS ABOUT. LET ME PUT THIS IN A STRUCTURE TO MAKE SURE WE HAVE THE RIGHT STRUCTURE HERE. THIS IS IN THE CONTEXT OF THEIR MOTION
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FOR SUMMARY JUDGMENT.
AND THEIR MOTION FOR SUMMARY JUDGMENT
ENTIRELY RESTS ON THE APPLICATION OF THE QUICK LOOK DOCTRINE. THE COURT: WELL, NOT REALLY. NO, IT DOES, BECAUSE -- BECAUSE THEY
MR. POMERANTZ:
HAVE -- THEY HAVE SAID THE QUICK LOOK DOCTRINE APPLIES, THEREFORE, WE GET TO SKIP STEP ONE OF THE ANALYSIS. STEP ONE, TYPICALLY IN A FULL RULE OF REASON CASE, IS THAT THE PLAINTIFF HAS THE BURDEN OF SHOWING ANTICOMPETITIVE EFFECTS IN A RELEVANT MARKET. AND THEY'RE SAYING WE DON'T HAVE TO DO THAT BECAUSE QUICK LOOK APPLIES. AND IF WE MOVE TO THE SECOND STEP OF THE
ANALYSIS, WHICH IS FOR THE DEFENDANT TO COME UP WITH EVIDENCE OF PROCOMPETITIVE JUSTIFICATIONS, AND SO THEY VERY EXPRESSLY IN THEIR MOTION SAY, YOUR HONOR SHOULD ADOPT THE QUICK LOOK REVIEW HERE AND THEY DON'T HAVE ANY EVIDENCE OF PROCOMPETITIVE JUSTIFICATIONS. THE COURT: WELL, I HAVE TO SAY AGAIN I'M NOT TOO
INCLINED TO FIND THAT THE QUICK LOOK APPLIES, BUT I DO THINK THAT WHATEVER THEY ASKED FOR, I CAN RULE ON SOME SUBSET OF THAT. AND IF ONE OF THE SUBSETS WAS NONE OF YOUR
PROCOMPETITIVE JUSTIFICATIONS ARE ANY GOOD, I MIGHT COULD FIND THAT THEY WERE RIGHT ABOUT ONE OR TWO OF THEM, AND NARROW THE ISSUES FOR TRIAL. SORRY. I DO BELIEVE THAT WE HAVE EVIDENCE ON
MR. POMERANTZ:
EACH OF THE FIVE PROCOMPETITIVE JUSTIFICATIONS, AND I'M HAPPY
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TO REVIEW THOSE.
I DO BELIEVE THEIR MOTION IS DENIED -EITHER THE QUICK LOOK
SHOULD BE DENIED ON ONE OF TWO GROUNDS:
DOCTRINE DOESN'T APPLY, IN WHICH CASE IT SHOULD BE DENIED OR BECAUSE THERE'S A MATERIAL ISSUE OF DISPUTED FACT WITH RESPECT TO AT LEAST ONE OF THE FIVE PROCOMPETITIVE JUSTIFICATIONS. THE COURT: BUT PERHAPS NOT ALL. GO AHEAD.
MR. POMERANTZ:
ANY ONE OF THEM AND THE MOTION SHOULD
BE DENIED, BUT I'M HAPPY TO ADDRESS -THE COURT: ADJUDICATE. WELL, I CAN ADJUDICATE, SUMMARILY
YES, IT WOULD BE DENIED IN THE SENSE THE WHOLE
CASE WOULDN'T BE OVER, BUT I COULD SUMMARILY ADJUDICATE SOME OF THESE FIVE. MR. POMERANTZ: FOR THAT. YOU KNOW, YOUR HONOR, THEY DIDN'T ASK
I GUESS YOU COULD VIEW IT AS A SUMMARY ADJUDICATION
OF AN ISSUE IN THE CASE, AND I UNDERSTAND WHAT YOUR HONOR IS GETTING AT. SO IF THERE IS A PARTICULAR ONE OF OUR FIVE PROCOMPETITIVE JUSTIFICATIONS THAT YOUR HONOR BELIEVES, YOU KNOW, EITHER -THAT THERE IS NOT A DISPUTED ISSUE OF FACT, I WOULD BE HAPPY TO ADDRESS THAT ONE. THE COURT: WELL, THE ONES I'M CONCERNED ABOUT ARE --
WELL, ON AMATEURISM, I HAVE TO SAY I DON'T THINK AMATEURISM IS GOING TO BE A USEFUL WORD HERE. BUT ON THE QUESTION OF CAN
YOU DO WHAT YOU DO, I THINK THERE'S DISPUTE OF FACT THERE. I HAVE A PROBLEM WITH THE COMPETITIVE BALANCE QUESTION.
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AND I HAVE A PROBLEM WITH THE INTEGRATION OF ATHLETICS IN EDUCATION QUESTION. THE COMPETITIVE BALANCE QUESTION I HAVE A PROBLEM WITH ANY SHOWING THAT THE -- THIS RESTRAINT, THE ONE AT ISSUE, IS -HELPS WITH COMPETITIVE BALANCE. ON THE INTEGRATION OF ATHLETICS IN EDUCATION, AND ALSO REALLY THE VIABILITY OF OTHER SPORTS, BOTH OF THOSE MANY PEOPLE MIGHT AGREE WOULD BE GOOD THINGS TO HAVE, BUT I DON'T THINK THAT EITHER ONE OF THEM IS AN ANTITRUST DOCTRINE. THEY
ARE BOTH LIKE, OH, THIS DOES A GOOD THING FOR SOCIETY, BUT THAT ISN'T, AS I UNDERSTAND IT, ANTITRUST LAW. SO I HAVE THAT PROBLEM WITH THOSE TWO. AND THEN I DO
THINK THERE'S A DISPUTE OF FACT ON THE EVIDENCE OF INCREASED OUTPUT/INCREASED CONSUMER DEMANDS. MR. POMERANTZ: HONOR, IN ORDER? THE COURT: OKAY. ON COMPETITIVE BALANCE, THE LAW IS IF I CAN ADDRESS EACH OF THOSE, YOUR
MR. POMERANTZ:
CLEAR THAT COMPETITIVE BALANCE IS A RELEVANT PROCOMPETITIVE JUSTIFICATION FOR A SPORTS LEAGUE. THE AMERICAN NEEDLE CASE THAT IS, THAT IT'S
SAYS THAT AS DOES THE BOARD OF REGENTS. PROCOMPETITIVE FOR -THE COURT: COMPETITIVE BALANCE? MR. POMERANTZ:
BUT HOW DOES YOUR RESTRAINT IMPROVE THE
SO WHAT WE ARE CONCERNED ABOUT IS IF
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SCHOOLS WERE FREE TO PAY STUDENT ATHLETES FOR THEIR NIL RIGHTS, THEN THE SCHOOLS WITH MORE REVENUE WOULD BE FREE TO PAY MORE MONEY TO THE STUDENT ATHLETES TO COME TO THEIR SCHOOL, THEY'D PAY THEM MORE FOR THEIR NIL RIGHTS. THE COURT: RIGHT, BUT SCHOOLS HAVE MORE MONEY TO PAY
COACHES AND MORE MONEY TO BUILD STADIUMS AND MORE MONEY TO OFFER PERKS, AND SO ON. SO THAT'S ONE MORE THING THAT THEY
WOULD HAVE MORE MONEY TO DO. MR. POMERANTZ: THAT IS TRUE, BUT THE PEOPLE AT THE
GROUND LEVEL HERE, WHICH ARE THE PEOPLE WHO WORK AT THE COLLEGES SAY, THIS ONE IS DIFFERENT BECAUSE THIS MONEY IS GOING STRAIGHT TO THE STUDENTS. IF YOU GO TO A HIGH SCHOOL STUDENT AND YOU SAY, IF YOU COME HERE TO THIS BIG UNIVERSITY, WE'LL GIVE YOU $250,000 A YEAR. AND IF YOU INSTEAD ARE AT UTAH STATE WHERE MR. ALBRECHT
IS THE PRESIDENT, YOU CAN'T OFFER ANYWHERE CLOSE TO $250,000 A YEAR. YOU CAN OFFER A QUALITY EDUCATION. YOU CAN OFFER ALL
SORTS OF OTHER OPPORTUNITIES, BUT IT MAKES IT MORE DIFFICULT TO GET THAT STUDENT TO COME TO YOUR SCHOOL THAN TO GO TO THAT BIG UNIVERSITY THAT CAN OFFER $250,000 A YEAR FOR NIL RIGHTS. IT'S BASIC ECONOMICS HERE. AND WE HAVE A LOT OF EVIDENCE
IN THE RECORD FROM MR. ALBRECHT, FROM MR. BANOWSKY, THE COMMISSIONER OF THE CONFERENCE U.S.A., EVEN SOME OF THE SMALLER SCHOOLS IN THE BIGGER CONFERENCES. SO, FOR EXAMPLE, MR. HATCH, PRESIDENT OF WAKE FOREST,
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TALKS ABOUT HOW WAKE FOREST, THE SMALLEST SCHOOL IN THE ACC, HAS A HARDER TIME COMPETING WITH THE BIGGER SCHOOLS. MR. HOLLIS TALKS ABOUT MICHIGAN STATE, A BIG SCHOOL, BUT NOT NEARLY AS WELL FINANCED AS UNIVERSITY OF MICHIGAN DOWN THE ROAD. AND HE SAYS THAT IF YOU'RE ALLOWED TO PAY DIRECTLY STUDENT ATHLETES HUNDREDS OF THOUSANDS OF DOLLARS TO COME TO YOUR SCHOOL AND CALL IT PAYMENT FOR NIL, MORE AND MORE OF THE MOST TALENTED ATHLETES WILL FOLLOW THE MONEY. SURPRISING. AND THAT'S NOT
I MEAN THAT IS BOTTOM LINE ECONOMICS AS OUR
ECONOMISTS TALK ABOUT. SO I DO THINK -- AGAIN, WE ARE NOT SAYING THAT WE HAVE PERFECT COMPETITIVE BALANCE TODAY, YOUR HONOR. WE UNDERSTAND
THAT SOME SCHOOLS HAVE MORE RESOURCES THAN OTHERS AND CAN USE IT IN CERTAIN WAYS, BUT THE RULES THAT ARE AT ISSUE DEALING WITH THE LICENSING OF NIL HELP TO PROTECT COMPETITIVE BALANCE TO AN EXTENT. THE COURT: MAYBE THERE'S A LESS RESTRICTIVE
ALTERNATIVE AND MAYBE IT WOULD BE MORE RESTRICTIVE, BUT YOU COULD ENFORCE MORE COMPETITIVE BALANCE BY HAVING COACHES' SALARIES ADDRESSED, BY HAVING THE MONEY TO SPEND ON STADIUMS. MR. POMERANTZ: THERE COULD BE, BUT THE QUESTION
HERE, YOUR HONOR, IS, IS THERE AT LEAST AN ISSUE OF FACT? WILL WE GET TO TEST THIS IN FRONT OF A JURY? AND COMPETITIVE BALANCE IS SUCH AN IMPORTANT ISSUE FOR A
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SPORTS LEAGUE THAT THE SUPREME COURT HAS WEIGHED IN AND SAID IT'S A RELEVANT ISSUE. AND WE HAVE PLENTY OF EVIDENCE HERE TO AT LEAST PUT OUR EVIDENCE IN FRONT OF A JURY. FRONT OF A JURY. LET THEM PUT THEIR EVIDENCE IN
AND LET THE JURY DECIDE WHETHER, YOU KNOW,
THAT'S NOT REALLY A RESTRAINT THAT'S PROCOMPETITIVE. BUT WE HAVE THE RIGHT TO PUT THAT EVIDENCE IN FRONT OF THEM. AND I THINK WE HAVE A LOT OF EVIDENCE, AS WELL AS BASIC WE ALL KNOW THAT THERE ARE PLENTY
ECONOMICS AND COMMON SENSE.
OF PEOPLE WHO WOULD GO -- IF THE DIFFERENCE WAS BETWEEN $250,000 A YEAR AND $10,000, WE KNOW THAT THAT'S GOING TO INFLUENCE SOME PEOPLE. AND IT'S GOING TO AFFECT THE BALANCE
WHERE THESE SMALLER SCHOOLS ARE GOING TO HAVE AN EVEN HARDER TIME COMPETING. AND WE HAVE SOME LEVEL OF COMPETITIVE BALANCE TODAY. THE
FBS DIVISION OF DIVISION I, FOOTBALL, HAS BEEN IN EXISTENCE FOR 35 YEARS. TWENTY-ONE DIFFERENT SCHOOLS HAVE WON THE THERE IS SOME BALANCE HERE WITH 21 EIGHTY DIFFERENT EIGHTY
NATIONAL CHAMPIONSHIP.
SCHOOLS HAVE WON IT IN JUST 35 YEARS.
SCHOOLS HAVE BEEN TO THE FINAL FOUR SINCE 1950. DIFFERENT SCHOOLS. THE COURT: THAT'S A LOT OF SCHOOLS.
WE HAVE HAD MORE RIGOROUS STATISTICAL
ANALYSIS OF ALL THESE THINGS. MR. POMERANTZ: ALL THIS IS IN THE RECORD. ALL I'M
SAYING IS, THERE'S ENOUGH IN THE RECORD ON COMPETITIVE BALANCE
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TO LET THE JURY EVALUATE WHETHER THAT IS A PROCOMPETITIVE JUSTIFICATION OR NOT. THE COURT: WHY DON'T YOU GO ON TO THE OTHERS. THE INTEGRATION OF ATHLETES IN
MR. POMERANTZ: EDUCATION.
I WOULD ASK YOUR HONOR TO FOCUS ON THE CASE OF THE
UNITED STATES VERSUS BROWN UNIVERSITY BECAUSE THAT ONE SHOWS THAT THE INTEGRATION OF THE ATHLETICS IN EDUCATION IS A VERY IMPORTANT PROCOMPETITIVE VIRTUE, NOT JUST A SOCIAL JUSTIFICATION. IN THAT CASE, IT'S A THIRD CIRCUIT CASE CITED BY THE SUPREME COURT POSITIVELY IN THE CAL DENTAL CASE. IN THAT
CASE, THE IVY LEAGUE SCHOOLS AND MIT ENTERED INTO AN AGREEMENT THAT THEY WOULD ONLY OFFER FINANCIAL AID ON THE BASIS OF NEED AND THEY WOULD NOT OFFER FINANCIAL AID ON THE BASIS OF MERIT. AND THEY WERE SUED BY THE ANTITRUST DIVISION OF THE UNITED STATES DEPARTMENT OF JUSTICE. AND THEY SAID THAT THAT'S
NOT -- THAT IS ANTICOMPETITIVE WITH RESPECT TO THE TALENTED BUT NOT NEEDY STUDENTS. BECAUSE IF YOU DIDN'T HAVE THAT
AGREEMENT, MAYBE SOME OF THEM WOULD HAVE GOTTEN A MERITS-BASED SCHOLARSHIP. AND THE THIRD CIRCUIT SAID THERE IS A PROCOMPETITIVE JUSTIFICATION FOR THAT RESTRAINT, FOR THAT AGREEMENT AMONG THE COLLEGES. IT WOULD BE ANTICOMPETITIVE IF IT WAS IN SOME OTHER BUT IN THE CONTEXT OF COLLEGES, ONE OF
CONTEXT, THEY SAID.
THE THINGS THAT YOU LOOK FOR IS WHETHER YOU CAN -- YOU ARE
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IMPROVING THE QUALITY OF YOUR PRODUCT. AND THE PRODUCT THAT'S BEING OFFERED BY A COLLEGE IS ITS EDUCATION, AND THE EDUCATIONAL OPPORTUNITY AND ENVIRONMENT. AND THE EDUCATION IS ARGUABLY IMPROVED IF YOU HAVE A MORE DIVERSE STUDENT BODY. AND SO, THEREFORE, THE THIRD CIRCUIT SAID THAT'S NOT JUST A SOCIAL JUSTIFICATION, THAT'S A PROCOMPETITIVE JUSTIFICATION IN THE CONTEXT OF A COLLEGE. THE COURT: OKAY. THEN HOW DOES THAT TRANSLATE INTO
RESTRAINTS ON ATHLETES? MR. POMERANTZ: SO HERE WHAT WE ARE SAYING IS THAT
ONE OF THE REASONS WHY THE RESTRAINT ON PAYMENTS TO STUDENT ATHLETES FOR THINGS BEYOND THE COST OF ATTENDING SCHOOL, SUCH AS NIL RIGHTS, ONE OF THE REASONS THAT THAT RESTRAINT IS IMPORTANT IS BECAUSE IT BETTER EFFECTUATES THE INTEGRATION OF ATHLETICS AND ACADEMICS INTO THE ENTIRE COLLEGE UNIVERSITY ENVIRONMENT. WE HAVE TESTIMONY FROM A NUMBER OF COLLEGE EDUCATORS, ALL OF WHOM HAVE BEEN ON THE COLLEGE CAMPUS FOR DECADES. AND WHAT
THEY SAY IS THAT IF YOU START PAYING THE COLLEGE ATHLETES, YOU ARE SEPARATING THEM FROM THE REST OF THE STUDENT BODY AND THERE IS -- AND THAT YOU ARE GOING TO HAVE AN INCREASED FOCUS ON MONEY INSTEAD OF EDUCATION. AND THEY BELIEVE THAT THAT --
THEY BELIEVE THAT'S VERY IMPORTANT. NOW, LISTEN, THEY CAN PUT ON EVIDENCE THAT DISAGREES WITH
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THAT -THE COURT: POLICY. MR. POMERANTZ: BUT THAT'S WHAT BROWN -- IN THE SO IT JUST STILL SOUNDS LIKE SOCIAL
CONTEXT OF A UNIVERSITY, THAT IS THE WAY COMPETITION PLAYS OUT. THAT IS -- BROWN UNIVERSITY SAYS -THE COURT: EDUCATION IN BROWN. THEY ARE TALKING ABOUT THE QUALITY OF THE HERE WE ARE TALKING ABOUT WHAT STUDENTS
AT COLLEGES ARE BETTER OFF IF THE ATHLETES ARE AT MCDONALD'S WITH THEM? MR. POMERANTZ: NO. THAT IS THE QUALITY OF THE -INDEED,
EDUCATION IS NOT JUST WHAT HAPPENS IN THE CLASSROOM. THAT IS WHAT BROWN UNIVERSITY IS ALL ABOUT. WHAT'S HAPPENING IN THE CLASSROOM.
IT'S NOT JUST
HERE, WHEN YOU ARE TALKING ABOUT PAYING CERTAIN ATHLETES A LOT OF MONEY AND WHEN THE COLLEGE EDUCATORS ARE TESTIFYING UNDER OATH THAT THAT REALLY COULD EFFECT THE EDUCATIONAL ENVIRONMENT, THE INTERCALATION OF ACADEMICS AND ATHLETICS, I THINK THE LAW IS CLEAR THAT THAT'S A RELEVANT PROCOMPETITIVE JUSTIFICATION, AND WE ARE AT LEAST ENTITLED TO TEST IT IN FRONT OF THE JURY. BROWN UNIVERSITY. A SUPPORT FOR OTHER SUPPORTS WAS, I THINK, THE THIRD CATEGORY THAT YOUR HONOR REFERRED TO. I THINK WHAT PLAINTIFFS BASIC ARGUMENT IS, IS, YOU KNOW, AND I WOULD ASK YOUR HONOR TO LOOK AT
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MAYBE IF HALF OF THE TELEVISION REVENUE HAD TO BE PAID TO THE STUDENT ATHLETES UNDER THE GUISE OF NIL, YOU WOULDN'T HAVE ENOUGH MONEY TO PAY FOR SOME OF THE WOMEN'S SPORTS AND MAYBE SOME OF THE MEN'S SPORTS THAT DON'T MAKE REVENUE AND -- BUT THAT DOESN'T MATTER, THEY SAY, BECAUSE THAT'S A DIFFERENT MARKET. AND, THEREFORE, YOU CAN'T SIT THERE AND TAKE AWAY
FROM THE MALE BASKETBALL AND FOOTBALL PLAYERS IN ORDER TO BENEFIT THE WOMEN'S SOCCER PLAYERS OR THE MALE TRACK AND FIELD STARS. THE COURT: MAYBE NOT, BUT WHY ISN'T IT A BENEFICIAL
SOCIAL POLICY BUT NOT ONE THAT'S COVERED BY ANTITRUST LAW? MR. POMERANTZ: WELL, THERE'S TWO REASONS.
FIRST OF ALL, IT IS ALSO PART OF THE BROWN UNIVERSITY CONCERNS THAT YOU HAVE A DIVERSE ARRAY OF STUDENTS, INCLUDING A DIVERSE ARRAY OF ATHLETES AND ATHLETIC OPPORTUNITIES. SECOND, IT FITS WITHIN THE DEFINITION OF THE MARKET. THE AND
MARKET HERE IS NOT JUST COLLEGE FOOTBALL AND BASKETBALL PLAYERS. THE COURT: RIGHT. WE TALKED ABOUT THAT.
YOU WILL HAVE TO REMEMBER TO ADDRESS THAT. MR. POMERANTZ: AND EVEN IF HE DISAGREES WITH ME, WE THE JURY AND WE
HAVE THE RIGHT TO DISAGREE WITH THEM ON THE RECORD. IS GOING TO BE ASKED TO DEFINE THE RELEVANT MARKET.
CAN PUT ON EVIDENCE THROUGH OUR ECONOMIST AND OUR FACT WITNESSES TO SAY, NO, THE RELEVANT MARKET HERE IS ALL OF THE
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COLLEGE SPORTS. THINGS.
AND I WOULD SAY -- SO THERE'S REALLY TWO
NUMBER ONE, THEY DEFINE THE MARKET IN THEIR COMPLAINT AS THE STUDENT ATHLETE DIVISION I EDUCATION. DEFINITION. THAT'S THEIR
AND, NUMBER TWO, EVEN IF THEY CHANGE IT NOW, WE
GET THE RIGHT TO DISAGREE WITH THAT AND PUT ON EVIDENCE AT TRIAL AND WE HAVE EVIDENCE IN THE RECORD TO SUPPORT THAT. THE COURT: SO, AGAIN, WITH A LESS RESTRICTIVE
ALTERNATIVE, COULDN'T YOU IMPOSE SOME REVENUE SHARING RULES ON THE SCHOOLS AND TELL THEM THEY HAVE TO PAY "X" AMOUNT OF MONEY TO OTHER SPORTS, AND WOMEN'S SPORTS AND SO ON? MR. POMERANTZ: RIGHT NOW. ACTUALLY THEY DO HAVE THOSE RULES
THAT IS, THAT IF YOU WANT TO BE A DIVISION I
COLLEGE, YOU HAVE TO OFFER A CERTAIN NUMBER OF SPORTS. SO THE RISK THAT'S GOING TO HAPPEN HERE IS THAT THE -SOME SCHOOLS, WE DON'T KNOW HOW MANY, BUT WE KNOW THERE WILL BE SOME, WILL NOT BE ABLE TO AFFORD THE NECESSARY NUMBER OF DIVISION I SPORTS AND THEY WILL DROP OUT OF DIVISION I. AND THEN THERE'S FEWER OPPORTUNITIES NOT JUST FOR THE WOMEN'S SOCCER PLAYERS OR THE MALE TRACK AND FIELD ATHLETES, BUT FOR FOOTBALL AND BASKETBALL PLAYERS, TOO, BECAUSE THERE'S NO LONGER GOING TO BE DIVISION I FOOTBALL AND BASKETBALL AT THOSE UNIVERSITIES OR COLLEGES. THE COURT: FIVE FACTORS? DID YOU WANT TO TALK BRIEFLY ABOUT THE
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MR. HAUSFELD:
YES, YOUR HONOR, IF I MAY.
CONTRARY TO THE BELIEFS APPARENTLY OF THE NCAA, I WOULD LIKE TO CITE SOME OF THE STRENGTHS OF THE BOARD OF REGENTS CASE IN WHICH THE NCAA RAISED PRECISELY ALLEGED PROCOMPETITIVE JUSTIFICATION OF COMPETITIVE BALANCE. AND THE DISTRICT COURT AND THE COURT OF APPEALS AND THE SUPREME COURT ACCEPTED OR STATED THAT THEY REJECTED AS ILLEGITIMATE THE NCAA'S PURPOSE OF PROMOTING ATHLETICALLY BALANCED COMPETITION AS A PROCOMPETITIVE JUSTIFICATION. FACT -THE COURT: FACTUALLY OR? FACTUALLY AND LEGALLY. IN
MR. HAUSFELD:
AT PAGE 126, YOUR HONOR, FIRST OF ALL, THE COURT SAID BOTH AT PAGES 126 AND AT PAGE 96, THEY SAID THAT ANY CONTRIBUTION -THE COURT: ARE YOU TALKING ABOUT THE SUPREME COURT? THE SUPREME COURT. ANY CONTRIBUTION
MR. HAUSFELD:
THAT THE PARTICULAR RESTRAINT MIGHT MAKE TO ATHLETIC BALANCE COULD BE ACHIEVED BY LESS RESTRICTIVE MEANS. AND, IN FACT, KIND OF PRESCIENT OF YOUR HONOR'S CONVERSATION, THEY SAY AT PAGE 126 THAT THE DISPARITY AND REVENUE BETWEEN SCHOOLS COULD BE REDUCED BY A PROPERLY JOINED SYSTEM OF PASSOVER PAYMENTS TO ENSURE ADEQUATE ATHLETIC FUNDING TO SCHOOLS THAT DO NOT EARN SUBSTANTIAL TELEVISION REVENUES.
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IN PRECISE LANGUAGE THAT THE NCAA SEEKS TO PROJECT HERE, THE COURT STATED THAT WITH REGARD TO THE ARGUMENT OF COMPETITIVE BALANCE, IT WAS FOUND THAT THE EVIDENCE FAILED TO SHOW THAT THE NCAA REGULATIONS ON MATTERS SUCH AS RECRUITMENT AND THE STANDARDS FOR PRESERVING AMATEURISM WERE SUFFICIENT TO MAINTAIN A COMPETITIVE BALANCE PROCOMPETITIVE JUSTIFICATION. AND THE ECONOMICS, YOUR HONOR, IS LEGION. THAT THERE HAS
BEEN NO COMPETITIVE BALANCE ACHIEVED NOR DOES THE RESTRICTION WITH REGARD TO FORECLOSING THE MARKET ON A GROUP BASIS TO ATHLETES FOR THEIR NIL'S OR SETTING THOSE NIL'S AT ZERO WOULD PROMOTE COMPETITIVE BALANCE. THE COURT: WELL, THEY SAY IT'S SELF-EVIDENT THAT
PAYING WILDLY VARYING AMOUNTS OF MONEY WOULD NECESSARILY, JUST AS A MATTER OF COMMON SENSE, MEAN LESS COMPETITIVE BALANCE. EVEN THOUGH IT'S BAD NOW, IT WOULD BE WORSE. MR. HAUSFELD: THAT'S NOT THE TEST WHETHER OR NOT
THEY SPECULATE IT WOULD BE WORSE. IN FACT, WHAT'S INTERESTING, AS, AGAIN, MY COLLEAGUE HAS SAID, HE TALKED ABOUT THE FBS, WHICH IS A SUBSET OF THE EVEN DIVISION I MEN'S BASKETBALL AND FOOTBALL, SO THERE IS KIND OF A POWER ELITE, AN IMBALANCE INHERENT IN THE SYSTEM ALREADY, AND THERE IS NOTHING TO ESTABLISH ON THE RECORD THAT THE NCAA HAS DEMONSTRATED TO SATISFY THEIR HEAVY BURDEN THAT THIS PARTICULAR NIL RESTRICTION IN ANY WAY IS NECESSARY TO PROMOTE COMPETITIVE BALANCE.
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MR. POMERANTZ: ON COMPETITIVE BALANCE? THE COURT: NO.
YOUR HONOR, IF I MAY RESPOND BRIEFLY
LET'S JUST GO THROUGH ALL OF THEM. OKAY. THEN, YOUR HONOR, I WOULD LIKE TO GET
MR. POMERANTZ: MR. HAUSFELD:
TO THE BROWN CASE AND THE ISSUE OF INTEGRATION WITH ATHLETICS. BECAUSE, AGAIN, IN THIS SITUATION, UNDER A RULE OF REASON KIND OF TENNIS MATCH WHERE THERE NEEDS TO BE ESTABLISHED A RESTRAINT IN A RELEVANT MARKET, WHICH THE DEFENDANT'S ECONOMIST, DANIEL RUBINFELD, ADMITS AND USES THE NCAA AS AN ILLUSTRATIVE OF A CARTEL WHICH RESTRAINS COMPETITION IN THE RECRUITMENT AND THE COMPENSATION -- IN THE RECRUITMENT OF AND COMPENSATION TO ATHLETES IN COLLEGE. BUT ONCE THERE IS A DEMONSTRATION OF THE EXISTENCE OF A RESTRAINT OR A CARTEL WHICH OPERATES AS A RESTRAINT, BOTH HORIZONTALLY AND VERTICALLY, THEN THE BURDEN SHIFTS TO THE DEFENDANT TO ESTABLISH THAT THERE IS A PROCOMPETITIVE JUSTIFICATION FOR THE RESTRAINT IN WHICH, IN THE MARKET IN WHICH THE RESTRAINT IS APPLIED. AND THAT'S THE DIFFERENCE, AGAIN, IN THE CHOICE OF WORDS MY COLLEAGUE USED. HE TALKED ABOUT -- AND SIMILAR TO WHAT YOU THAT'S A
SAID, THAT'S A GOOD SOCIAL, YOU KNOW, OBJECTIVE. VIRTUE.
IT'S GREAT TO WANT TO INTEGRATE ATHLETICS AND
ACADEMICS, BUT DOES THIS RESTRAINT ACTUALLY FOSTER OR PROMOTE THE INTEGRATION OF ACADEMICS AND ATHLETICS?
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DESPITE THE FACT THAT THERE ARE SOME SELF-SERVING DECLARATIONS BY CERTAIN CHANCELLORS OF UNIVERSITIES, THE OVERWHELMING TASK FORCES AND COMMISSIONS OF MULTIPLE UNIVERSITY HEADS HAVE CONCLUDED THAT THERE IS AN ISLANDIZATION OF ATHLETES FROM THE ACADEMICS. IN FACT, THE ENTIRE SYSTEM OF
THE NCAA IS INTENT ON DRIVING AN ECONOMIC PROFIT MAXIMIZATION. AND THE SUPREME COURT SAID THAT IN THE BOARD OF REGENTS CASE WHERE THEY HOLD THAT THE NCAA IS AN ASSOCIATION OF COMPETING MEMBERS WHO ARE DRIVEN BY A DESIRE TO MAXIMIZE REVENUES. AND THE NCAA HAS SAID THAT IT IS THEIR BUSINESS PLAN TO MAXIMIZE THE REVENUES OF THEIR LICENSING RIGHTS IN BROADCAST OR IN ANY OTHER COMMERCIAL VENTURE. SO UNLIKE THE BROWN
SITUATION, WE'RE TALKING ABOUT A RESTRAINT WHICH IS IMPOSED FOR PROFIT-MAXIMIZING PURPOSES. AND IF I ASKED YOUR HONOR BECAUSE I FAILED IN THIS TEST, TO NAME THE THREE PRINCIPAL AIMS, THE DRIVING AIMS OF THE NCAA, I WOULD HAVE GOTTEN IT WRONG. SAYS. BUT THIS IS WHAT THE NCAA
TO WIN GAMES, TO MAKE MONEY, AND TO ATTAIN INDIVIDUAL NOTHING TO DO WITH ACADEMICS.
OR GROUP NOTORIETY OR FAME.
STUDY AFTER STUDY, INCLUDING A MOST RECENT ONE PUBLISHED BY THE UNIVERSITY OF CALIFORNIA AT BERKELEY, FOUND THAT THE CHANGES IN THE COLLEGIATE MODEL OVER TIME HAVE BEEN SUBTLE, BUT AS BENIGN AS THESE CHANGES APPEARED AT THE TIME -- EXCUSE ME. THIS IS FROM THE PRESIDENTIAL TASK FORCE OF THE NCAA.
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THE CUMULATIVE EFFECT IS THE EROSION OF THE BOND BETWEEN ATHLETICS AND ACADEMICS. THE UNIVERSITY OF BERKELEY STUDY
RECENTLY CONCLUDED THE CURRENT STATE OF COLLEGE SPORTS NATIONALLY AND AT UC BERKELEY VALUES PROFITS ABOVE ALL ELSE. THE COURT: OKAY. AGAIN, THEY WOULD PROBABLY SAY,
OKAY, IT'S BAD NOW, BUT IT COULD BE A LOT WORSE AND WOULD BE IF THE INCOMING GAP WAS LARGER. ANYWAY, WE NEED TO MOVE ON. VIABILITY OF OTHER SPORTS. MR. HAUSFELD: WITH REGARD TO THE VIABILITY OF OTHER WHY DON'T YOU GO ON TO THE
SPORTS, AGAIN, THERE ARE LEGIONS OF STUDIES WHICH DEMONSTRATE STATISTICALLY, AND WE'VE CITED THEM IN THE MOTION FOR SUMMARY JUDGMENT, THAT IN PURSUIT OF ITS PROFIT-MAXIMIZING OBJECTIVES, THE NCAA HAS BEEN EXCLUSIVE AS OPPOSED TO INCLUSIVE. THEY
HAVE DELIBERATELY WORKED TO SUBVERT ANY FAIR DEVELOPMENT OF MINORITY -- OF WOMEN IN SPORTS OR SPORTS OTHER THAN THE REVENUE-GENERATING SPORTS. OF COURSE IT'S A VIRTUE TO SAY WE SHOULD DO THIS, YOU KNOW, IN TERMS OF HELPING TO DEVELOP UNDERDEVELOPED SPORTS. BUT EVEN WITH THE RESTRICTION IN PLACE, THOSE OTHER SPORTS HAVE BEEN CUT. NOT BECAUSE THERE WASN'T MONEY AVAILABLE TO
THEM, BUT BECAUSE THE MONEY WAS DIVERTED FOR PAYING COACHES' SALARIES, AS YOUR HONOR SAID IN TERMS OF LESS RESTRICTIVE ALTERNATIVES. SO THE FACT THAT THERE ARE OTHER SPORTS THAT
COULD BE BENEFITED BY A MORE VIRTUOUS DISTRIBUTION OF WHATEVER
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MONIES WOULD BE AVAILABLE IS NOT A PROCOMPETITIVE JUSTIFICATION IN THE MARKET IN WHICH THE RESTRAINT IS IMPOSED. THE COURT: I'M NOT EXACTLY HEARING YOU SAY THAT THE
JUSTIFICATION CAN'T JUST BE A GOOD SOCIAL POLICY JUSTIFICATION, BUT HAS TO BE SOMETHING THAT IS SHOWN TO INCREASE COMPETITION. MR. HAUSFELD: HONOR. WOULD YOU -THAT'S EXACTLY WHAT I'M SAYING, YOUR
IF I DIDN'T SAY THAT, THAT'S WHAT I MEANT TO SAY. THE COURT: OKAY. GOOD MOTIVES, AS THE SUPREME COURT HAS
MR. HAUSFELD:
SAID, AND NONCOMMERCIAL OBJECTIVES DO NOT A PROCOMPETITIVE JUSTIFICATION MAKE. THE COURT: SO YOU WANTED TO SAY SOMETHING BRIEFLY IN
RESPONSE ABOUT THE PROCOMPETITIVE JUSTIFICATION ISSUES? MR. POMERANTZ: YES, YOUR HONOR.
FIRST, ALL THAT MR. HAUSFELD JUST DID IS TO SAY, I LIKE MY EVIDENCE BETTER THAN YOUR EVIDENCE. SELF-SERVING. AND HE CALLS OUR EVIDENCE
BUT THAT'S TRUE IN EVERY CASE, YOUR HONOR.
I'M GOING TO PUT ON EVIDENCE THAT SUPPORTS MY SIDE OF THE CASE. CALL IT SELF-SERVING, CALL IT WHATEVER YOU WANT TO CALL
IT, IT'S EVIDENCE IN THE RECORD THAT WE HAVE THE ABSOLUTE RIGHT TO PUT IN FRONT OF THE JURY. NOW, ON COMPETITIVE BALANCE, I DON'T KNOW WHAT CASES HE WAS READING FROM, BUT HERE'S THE UNITED STATES SUPREME COURT IN THE AMERICAN NEEDLE CASE, A CASE INVOLVING THE NFL.
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THE COURT: AS I UNDERSTOOD IT.
HE WAS READING FROM THE BOARD OF REGENTS,
YES, YOUR HONOR.
HE WAS -THIS CITES -- QUOTES FROM THE BOARD
MR. POMERANTZ: OF REGENTS.
WE HAVE RECOGNIZED -- SAYS, OTHER FEATURES OF THE NFL MAY ALSO SAVE AGREEMENTS AMONGST THE TEAMS. WE HAVE RECOGNIZED,
FOR EXAMPLE, QUOTE "THAT THE INTEREST IN MAINTAINING A COMPETITIVE BALANCE" AMONG QUOTE "ATHLETIC TEAMS IS LEGITIMATE AND IMPORTANT", QUOTING BOARD OF REGENTS. WHAT THAT MEANS IS, OF COURSE IT'S IMPORTANT FOR A SPORTS LEAGUE TO TRY TO GET BALANCE. WE HAVE BALANCE. IT'S NOT AND WE DON'T
PERFECT BALANCE, BUT IT'S PRETTY GOOD BALANCE. WANT TO MAKE IT A LOT WORSE.
WE HAVE THE RIGHT TO PUT ON THAT EVIDENCE TO SHOW THAT WHAT THEY'RE PROPOSING WILL MAKE COMPETITIVE BALANCE A LOT WORSE AND, THEREFORE -- AND THAT IS A LEGITIMATE PROCOMPETITIVE JUSTIFICATION FOR THE RESTRAINT. WITH RESPECT TO THE SOCIAL JUSTIFICATIONS, BROWN -- THE KEY CASES ON THAT ARE PROFESSIONAL ENGINEERS AND INDIANA FEDERATION OF DENTISTS, BOTH SUPREME COURT CASES. AFTER THOSE
CASES CAME THE BROWN UNIVERSITY CASE, AND IT DISTINGUISHES THOSE TWO CASES BECAUSE IT'S IN THE CONTEXT OF COLLEGES AND UNIVERSITIES AND THE PRODUCTS THEY OFFER.
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AND THE PRODUCTS THAT THEY OFFER CALL IT A SOCIAL JUSTIFICATION; IT'S ALSO A PROCOMPETITIVE VIRTUE BECAUSE OF THE COLLEGE ENVIRONMENT AND WHAT THE COLLEGES ARE OFFERING. SO THAT SUPPORTS THE INTEGRATION OF ACADEMICS AND ATHLETICS AND IT ALSO SUPPORTS INCREASING OUTPUT WITH THE OTHER SPORTS. THE OTHER SPORTS ALSO, REMEMBER WHAT WE ARE SAYING, THERE'S MORE GAMES BY MORE STUDENTS ALLOWING MORE VIEWERS. THAT IS CLASSIC OUTPUT ENHANCEMENT, ONE OF THE MOST FUNDAMENTAL THINGS THAT COURTS AND JURIES ARE TO LOOK AT IN MEASURING WHETHER A RESTRAINT IS PROCOMPETITIVE OR ANTICOMPETITIVE. WE HAVE THE RIGHT TO SHOW THAT THE RESTRAINTS THAT WE HAVE, WHICH ARE ALL DESIGNED TO ENHANCE THE CORE PRODUCT OF AMATEUR SPORTS, WE HAVE THE RIGHT TO SHOW THAT IT'S OUTPUT ENHANCING NOT OUTPUT DECREASING. AND ONE OF THE OUTPUTS THAT
WE ARE SHOWING THAT IT'S ENHANCING IS ALL SPORTS FOR ALL STUDENTS. AND WE HAVE THE RIGHT TO SHOW THAT. THE COURT: SO, IS THERE ANY WAY YOU CAN TELL ME VERY I'M NOT
BRIEFLY WHAT YOUR STATUTE OF LIMITATIONS DISPUTE IS? SURE THERE IS A DISPUTE. MR. POMERANTZ: I THINK --
(SIMULTANEOUS COLLOQUY.) THE COURT: -- TEST YOUR VIEW. I THINK THERE IS AN EVIDENTIARY
MR. POMERANTZ: FAILURE.
SO THAT PERTAINS TO THE CLAIMS OF FORMER STUDENT
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ATHLETES, THE INDIVIDUALS, JUST THE INDIVIDUALS' CLAIMS.
AND
YOUR HONOR AT THE MOTION TO DISMISS STAGE SAID THAT THERE IS A CONTINUING -- THEY HAVE ALLEGED A CONTINUING VIOLATION, SO THE CONTINUING VIOLATION DOCTRINE APPLIES. FOR THE CONTINUING
VIOLATION DOCTRINE TO APPLY, THERE HAS TO BE AN OVERT ACT DURING THE LIMITATIONS PERIOD. AT THE MOTION TO DISMISS STAGE, YOUR HONOR ACCEPTS THEIR ALLEGATION OF A CONTINUING VIOLATION AS YOU'RE CHARGED TO DO AT THAT STAGE. AT THE SUMMARY JUDGMENT STAGE, THOUGH, IT'S
NOW THE TIME TO PUT UP SOME EVIDENCE. THERE ISN'T ANY EVIDENCE IN THE SUMMARY JUDGMENT RECORD OF AN OVERT ACT WITH RESPECT TO ANY OF THE FORMER STUDENT ATHLETES WHO ARE THE NAMED PLAINTIFFS IN THIS CASE. AND,
THEREFORE, THOSE CLAIMS MUST BE DISMISSED AS BARRED BY THE STATUTE OF LIMITATIONS. CLAIMS. THE COURT: ONE OF THEM IS PATRICK MAYNARD WHO THAT'S WITH RESPECT TO THEIR DAMAGES
APPARENTLY STOPPED COMPETING IN 2008, WHICH WAS JUST A YEAR BEFORE THE COMPLAINT WAS FILED. MR. POMERANTZ: SO HE'S OKAY. LET
THERE'S -- WELL, YES AND NO.
ME -- I AGREE WITH YOUR HONOR THERE'S A DIFFERENT QUESTION -I THINK THERE'S THREE OF THEM IN THE CATEGORY YOUR HONOR IS TALKING ABOUT, MAYNARD BEING ONE. ARE, BUT I THINK IT'S IN THE BRIEF. SO FOR ALL THE OTHERS WHO STOP -- THEIR TIME IN COLLEGE I FORGOT WHO THE OTHER TWO
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ENDED BEFORE 2005, THEY ARE BARRED. FOR THOSE THREE WHERE THEY LEFT COLLEGE SOMETIME BETWEEN 2005 AND 2009, SO IN THAT FOUR-YEAR PERIOD, THEY STARTED COLLEGE BEFORE THE LIMITATIONS PERIOD BEGAN, AND THEY WERE UNDER THE RESTRAINT THAT IS BEING CHALLENGED HERE. AND THAT,
THEREFORE, TRIGGERS THE LIMITATIONS PERIOD FOR THOSE THREE -I THINK THERE'S THREE OF THEM, THOSE THREE FORMER STUDENT ATHLETES. AND SINCE THAT FOUR-YEAR PERIOD ENDED BEFORE THEY
FILED THEIR COMPLAINT IN 2009, THEIR CLAIMS WOULD ALSO BE BARRED. THE COURT: DO YOU WANT TO RESPOND ON THAT, ON THE
STATUTE OF LIMITATIONS ISSUE? MR. HAUSFELD: THIS, YOUR HONOR, GETS US BACK TO THE
QUESTIONS THAT YOU STARTED WITH IN TERMS OF WHETHER THE FORMER ATHLETE, IN ESSENCE, IS BARRED OR FORECLOSED FROM THE REBROADCASTS THAT WERE DONE AT THE TIME THAT HE WAS ELIGIBLE FROM PARTICIPATING IN THESE -- IN THOSE REBROADCASTS, AND THE ANSWER TO THAT I HEARD WAS, YES, HE'S BARRED. A CONTINUING -THE COURT: WHAT HE'S SAYING IS YOU WOULD HAVE TO AND SO THERE'S
SHOW THAT SOME CLIP WITH A FORMER ATHLETE HAS BEEN SHOWN SINCE WHAT, 2005? MR. HAUSFELD: AND SINCE THIS IS -- WITH REGARD TO
THE INJUNCTIVE ASPECT, THAT WOULD GO TO ANY ATHLETE -THE COURT: DAMAGES.
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MR. HAUSFELD:
IN TERMS OF THE DAMAGES, YES, WE WOULD
SHOW THAT AND, YES, WE WOULD SHOW THAT -THE COURT: I THINK HE'S SAYING YOU SHOULD HAVE
ALREADY SHOWN THAT; THAT THEY POINTED OUT A LACK OF EVIDENCE ON THOSE POINTS AND YOU SHOULD HAVE PUT IN EVIDENCE THAT THERE WERE CLIPS SHOWN OF FORMER ATHLETES SINCE 2005. MR. HAUSFELD: WELL, UNTIL YOUR HONOR DISMISSED AND
THE -- DID NOT CERTIFY THE DAMAGE CLASS, IT WAS UNCLEAR.
THAT IS WHY ONE OF THE ISSUES THAT I THINK YOUR HONOR WISHES TO ADDRESS HERE IS WHAT DAMAGE CASES, IF ANY, ON AN INDIVIDUAL BASIS WILL PROCEED. AND WE CAN SHOW THEN THE INDIVIDUAL CLIPS
AS OPPOSED TO HAVING TO PULL OUT THE CLIPS FOR THE ENTIRETY OF THE CLASS AT THE TIME BEFORE YOUR HONOR DECIDED WHETHER THERE WAS OR WAS NOT A DAMAGE CLASS. THE COURT: OKAY.
WELL, I THINK MAYBE THE REST OF WHAT I WANT TO TALK ABOUT IS CASE MANAGEMENT ISSUES, AND I WANT TO TAKE JUST A TWO-MINUTE BREAK BEFORE WE GO INTO THE CASE MANAGEMENT ISSUES, BUT IS THERE ANYTHING WE'VE MISSED ON THE SUMMARY JUDGMENT ISSUES? MR. POMERANTZ: YES, YOUR HONOR, IF I MAY.
ONE, WITH RESPECT TO THE MOTION WITH -- THAT THE MOTION -COUPLE WITH RESPECT TO THE MOTION THAT WE FILED. WE FILED A MOTION FOR SUMMARY JUDGMENT NOT JUST TO KNOCK OUT THE PLAINTIFFS', INDIVIDUAL PLAINTIFFS' DAMAGES CLAIMS,
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BUT TO KNOCK OUT THE INJUNCTIVE RELIEF CLAIMS OF THE FORMER STUDENT ATHLETES. THERE IS ZERO EVIDENCE IN THE RECORD THAT THE NCAA HAS ANY RULE, POLICY, FORMAL OR INFORMAL, THAT STOPS FORMER STUDENT ATHLETES FROM LICENSING THEIR NIL RIGHTS. SO THOSE FORMER STUDENT ATHLETES HAVE NO CLAIM -- THEY HAVE NO CLAIM FOR AN INJUNCTION BECAUSE WE HAVE NO RESTRAINT ON THEM IN TERMS OF THEIR ABILITY TO GO OUT AND LICENSE THEIR NIL RIGHTS. SO WE HAVE TWO DIFFERENT ARGUMENTS WITH RESPECT TO THE FORMER STUDENT ATHLETES. ONE WAS TO GET RID OF THEIR
INJUNCTIVE RELIEF CLAIM AND ONE WAS TO GET RID OF THEIR DAMAGES CLAIMS. THE DAMAGES CLAIM IS THE STATUTE OF
LIMITATIONS ARGUMENT. THE COURT: WOULD THEY NOT BE AFFECTED -- IS THIS
YOUR ARGUMENT THAT YOU DON'T HAVE A LICENSE WITH EA NOW AND THERE'S NO SHOWING -MR. POMERANTZ: THE COURT: THAT'S A DIFFERENT ISSUE.
-- THAT YOU'LL GET ONE IN THE FUTURE?
YOU COULD GO OUT AND LICENSE SOMEBODY ELSE TO DO IT NEXT. MR. POMERANTZ: THE COURT: NO, THAT'S NOT THE ISSUE.
THE FORMER ATHLETES. NO, THAT'S NOT THE ISSUE.
MR. POMERANTZ:
THE ISSUE IS THAT WHAT THEY ARE COMPLAINING OF IS THAT WE -- THE NCAA AND THE COLLEGES RESTRAIN THE STUDENT ATHLETES
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FROM GOING OUT AND LICENSING THEIR NAME, IMAGE AND LIKENESS. THE COURT: RIGHT. LET'S FIND OUT. I'M NOT SURE THAT'S
WHAT INJUNCTION DO YOU WANT FOR THE FORMER STUDENT
ATHLETES? MR. HAUSFELD: THE SAME, YOUR HONOR, AS, AGAIN, YOU
STARTED THE CONVERSATION WITH THE NCAA'S COUNSEL. AND THAT IS, THE FORMER ATHLETES ARE PRECLUDED FROM PARTICIPATING IN THE CONTINUING REBROADCAST OR VIDEO BROADCAST OR INTERNET BROADCAST OF THOSE GAMES THAT ARE BEING BROADCAST OR STREAMED WHEN THEY WERE ELIGIBLE. THE COURT: SO --
ISN'T THAT DAMAGES? YES. AND --
WHAT ABOUT AN INJUNCTION? WELL, THE PROHIBITION IS NOT -- NOT
MR. HAUSFELD:
MANDATING THAT A LICENSEE NOT DEAL WITH THOSE FORMER ATHLETES WITH REGARD TO THOSE RIGHTS WHICH WERE ESSENTIALLY APPROPRIATED BY THE NCAA WHILE THEY WERE ATHLETES AND WERE EXTENDED TO THE LICENSEE DURING THE TERM OF THE ATHLETES' ELIGIBILITY IN PERPETUITY. THE COURT: AND THAT'S OVER WITH. HAVE THEM. SO YOU -- I DON'T KNOW, MAYBE YOU HAVE DAMAGES. BUT I WELL, THEY SOLD THESE RIGHTS TO SOMEBODY SO THOSE PEOPLE WHO BOUGHT THE RIGHTS
CAN'T ENJOIN THEM FROM DOING SOMETHING THEY HAVE ALREADY DONE. THEY ALREADY DID IT. THEY ARE GOING TO HAVE TO REAP THE
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BURDEN OF THAT IF THAT'S TRUE.
IF THEY BREACHED THE LICENSE
WITH CBS AND CBS SUES THEM, AND SAID YOU SOLD US A LICENSE AND NOW WE'VE GOT A BUNCH OF ATHLETES COMING ASKING US FOR MONEY, MAYBE THEY GET SUED BY CBS, BUT I CAN'T ENJOIN THEM FOR SOMETHING THEY HAVE ALREADY DONE. MR. HAUSFELD: FUTURE. NO. YOU ARE ENJOINING THEM FOR THE
REMEMBER THERE'S BOTH A HORIZONTAL AND VERTICAL SO YOU ENJOIN THE NCAA FROM FORCING
RESTRAINT IN PLACE HERE.
THE LICENSEES NOT TO DEAL WITH THE ATHLETES -THE DEFENDANT: MR. HAUSFELD: MANUFACTURERS. THE COURT: THEY DON'T DO THAT. YES, THEY DO. ABSOLUTELY, YOUR HONOR. LICENSEES BEING WHO? THE BROADCASTERS, THE VIDEO
MR. HAUSFELD: THE COURT: CBS WHAT? MR. HAUSFELD:
OKAY.
I TELL NCAA THAT THEY CAN'T TELL
THAT THEY CAN'T TELL CBS THAT THEY
CAN'T DEAL WITH THE ATHLETES WITH RESPECT TO THOSE RIGHTS. THE COURT: WHAT IS THE EVIDENCE THAT THE NCAA TELLS
CBS THAT THEY CAN'T DEAL WITH FORMER ATHLETES? MR. HAUSFELD: EVERY CONTRACT, YOUR HONOR, THAT IS I THINK
ENTERED INTO BY THE NCAA OR ITS MEMBER INSTITUTIONS.
IT'S BYLAW THREE IN THE REGULATIONS, WHICH STATE THAT NO INSTITUTION -- NO MEMBER INSTITUTION CAN ENTER ANY LICENSE THAT MAY USE THE NAME, IMAGE OR LIKENESS OF ANY ATHLETE WITH
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ANY BROADCASTER, WITH ANY VIDEO GAME MANUFACTURER, OR ANY OTHER SUPPLIER OF COMMERCIAL PRODUCT, AND THAT THE LICENSEE AGREES TO BE BOUND BY THAT RESTRAINT. MR. POMERANTZ: YOUR HONOR, THAT'S JUST NOT TRUE.
HERE'S WHAT THE UNDISPUTED EVIDENCE IS IN THE RECORD. WHAT HE -- WE ARE HERE ONLY TALKING ABOUT FORMER STUDENT ATHLETES. THE LICENSES IN THE RECORD ON FORMER STUDENT
ATHLETES, THE NCAA SAYS TO A THIRD PARTY, HERE'S A LICENSE TO USE SOME FOOTAGE. THAT AGREEMENT ALSO SAYS, AND ANY OF THE FORMER STUDENT ATHLETES WHO ARE IN THAT FOOTAGE, IT'S UP TO YOU TO GO OUT AND GET RIGHTS FROM THEM. IT EXPRESSLY SAYS THAT.
MANY OF THESE FORMER STUDENT ATHLETES WHO ARE NAMED PLAINTIFFS HERE, THEY HAVE ALL GONE OUT AND LICENSED THEIR NAME, IMAGE AND LIKENESS. RIGHT NOW ON TV THERE'S ADS RUNNING WITH MR. RUSSELL ON BEHALF OF -- FOR AT&T. YOU KNOW, ONE OF THOSE AT&T
COMMERCIALS WHERE THAT TERRIFIC COMEDIAN WHO IS SITTING THERE USUALLY WITH LITTLE KIDS DOING THOSE AT&T COMMERCIALS, INSTEAD IS SITTING THERE WITH MR. RUSSELL, MAGIC JOHNSON, AND LARRY BIRD. MR. RUSSELL ENTERED INTO HIS OWN DEAL TO LICENSE HIS
RIGHTS TO BE IN THAT COMMERCIAL. THE NCAA HAS NOTHING TO DO WITH FORMER STUDENT ATHLETES LICENSING THEIR NAME, IMAGE AND LIKENESS. THE COURT: OKAY. WELL, THIS IS IN SOME WEEDS THAT
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I'M NOT FAMILIAR WITH, SO I'LL JUST HAVE TO -MR. POMERANTZ: THE COURT: FOR IT AGAIN. MR. POMERANTZ: YOUR HONOR, ONE OTHER ARGUMENT IN OUR IT'S IN OUR BRIEF --
I WILL REVIEW THE BRIEFS AND I'LL LOOK
BRIEF THAT WE DID NOT ADDRESS YET? THE COURT: OKAY. WE HAVE OUR OWN MOTION THAT IS AND THE CORE OF IT IS JOINT
MR. POMERANTZ:
FOCUSED ON ANTITRUST PRINCIPLES. VENTURES.
THE JOINT VENTURE LAW IS PROBABLY MOST RECENTLY AND
BEST DESCRIBED IN THE SUPREME COURT CASE OF TEXACO VERSUS DAGHER. THE COURT: VENTURES. MR. POMERANTZ: BUT IT'S OUR AFFIRMATIVE MOTION -- WE WE HAVE A OH, I THINK WE DID TALK ABOUT JOINT
TALKED ABOUT THEIR MOTION FOR SUMMARY JUDGMENT.
MOTION FOR SUMMARY JUDGMENT, TOO, AND IT RELIES ON JOINT VENTURE LAW. AND WHAT THAT LAW MAKES CRYSTAL CLEAR IS THAT COMPANIES CAN GET TOGETHER OR BUSINESSES OR HERE, COLLEGES, AND THEY CAN CREATE A NEW PRODUCT FOR THE MARKET. THE COURT: I REMEMBER YOU ALREADY SAID THIS PART. OKAY. I JUST WANT TO MAKE SURE
MR. POMERANTZ: BECAUSE IT'S NOT JUST -THE COURT:
I KNOW.
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MR. POMERANTZ:
-- THAT THEY DON'T HAVE -- BUT WE
REALLY HAVE LINES OF CASES THAT ENTITLE US TO SUMMARY JUDGMENT BECAUSE WE HAVE A CORE PRODUCT, WHICH IS AMATEUR COLLEGE SPORTS, AND WE ARE ENTITLED TO HAVE RESTRAINTS THAT MAINTAIN THAT CORE PRODUCT. THAT HAS NOTHING DO WITH LEAST RESTRICTIVE ALTERNATIVES. YOUR HONOR MENTIONED THAT. THAT IS TOTALLY INAPPLICABLE TO A
JOINT VENTURE WHERE THE RESTRAINT GOES TO THE CORE PRODUCT THEY ARE PUTTING INTO THE MARKETPLACE. THE COURT: IF IT DOES. RIGHT. EXACTLY. IF IT DOES.
THEY WOULD SAY IT DOESN'T, AND THAT YOU
COULD DO THESE THINGS THAT THEY WANT YOU TO DO AND STILL HAVE, STILL HAVE, LET'S CALL IT COLLEGIATE ATHLETIC TEAMS. MR. POMERANTZ: THE LAW IS CLEAR THAT THE NCAA HAS THERE'S CRYSTAL CLEAR LAW
THE LATITUDE TO DEFINE AMATEURISM. ON THAT. THE COURT: YEAH.
I DON'T -- THAT'S LIKE THE NCAA SO THEY ARE
SAYS WHAT AMATEUR IS AND THAT'S WHAT IT IS.
ALLOWED TO HAVE WHAT THEY SAY THEY WANT BECAUSE THAT'S HOW THEY DEFINE -MR. POMERANTZ: NO. I WOULD SAY IF THEY SAID
AMATEURISM MEANS EVERYBODY HAS TO WEAR THE SCHOOL COLORS, THAT'S NOT AMATEURISM. SOME BOUNDARIES -I AGREE WITH YOUR HONOR THAT THERE'S
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THE COURT: YOU CAN'T GET 2000.
SO AMATEURISM MEANS YOU CAN GET 950 BUT
MR. POMERANTZ:
NO, BUT WHAT JUDGE FLAUM SAYS IN THE
SEVENTH CIRCUIT DECISION IN AGNEW, I THINK, RESONATES HERE. WHERE THE NCAA SAYS IF IT GOES TO THE COST OF ATTENDING SCHOOL BUT NOTHING BEYOND THAT, THAT IS CLEARLY WITHIN THE DEFINITION OF AMATEURISM AND IT'S PROCOMPETITIVE AS A MATTER OF LAW. JUDGE FLAUM WAS THE ONE THAT YOUR HONOR CITED WHEN IN 1992 HE WROTE THE DECISION IN BANKS WHERE HE SAYS, TIMES HAVE CHANGED, AND MAYBE THE NCAA SHOULD LOOK AT ITS BUSINESS AND COMMERCIAL ACTIVITIES AFRESH. TWENTY YEARS LATER HE WRITES AGNEW. AND IN THE AGNEW
CASE, HE SAYS THE NCAA AND COLLEGE SPORTS IS MORE COMMERCIAL THAN IT USED TO BE, AND, THEREFORE, THE SHERMAN ACT APPLIES BECAUSE IT'S COMMERCIAL ACTIVITY. BUT HE GOES ON TO SAY THAT AND SO LONG
THE RULES OF AMATEURISM ARE CORE TO THE PRODUCT.
AS THE RULES, YOU KNOW, SAY THAT YOU CAN PAY THEM UP TO THE COST OF ATTENDING COLLEGE BUT NOT BEYOND, IT'S PROCOMPETITIVE AS A MATTER OF LAW. THAT'S JUDGE FLAUM.
AND WE JUST ARE RELYING ON THAT CASE AND ASKING YOUR HONOR TO LOOK AT IT IN THE CONTEXT AT SUMMARY JUDGMENT AND IN THE CONTEXT OF A JOINT -- OF THE JOINT VENTURES CONSTRUCT THAT THE TEXACO V. DAGHER CASE REFERS TO. THE COURT: OKAY. SO DON'T GO FAR. I'M JUST GOING
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TO TAKE A FIVE-MINUTE RECESS, AND THEN I WANT TO TALK ABOUT CASE MANAGEMENT. AND IF THE EA AND CLC PEOPLE DON'T MIND, I WOULD KIND OF LIKE TO INCLUDE YOU ALL IN THAT. AND I DON'T WANT TO PUT
ANYONE ON THE SPOT IN TERMS OF CONFIDENTIAL AND PENDING NEGOTIATIONS, AND IF THERE IS SOMETHING YOU NEED TO TELL ME AT SIDEBAR, I COULD DO THAT. YOU DON'T WANT TO ANSWER. MR. HAUSFELD: THE COURT: THANK YOU, YOUR HONOR. DON'T LET ME ASK YOU SOMETHING THAT
WE DO HAVE SOME CASE MANAGEMENT PROBLEMS.
(RECESS AT 3:53 P.M.; RESUMED 4:08 P.M.) THE CLERK: YOU CAN BE SEATED. THIS COURT IS BACK IN
SESSION, THE HONORABLE CLAUDIA WILKEN PRESIDING. THE COURT: THERE'S JUST ONE LAST QUESTION ON THE
MERITS IN GOING OVER MY NOTES. WHERE DID THAT GENTLEMAN GO? I DON'T WANT TO REOPEN THIS AGAIN IN FULL, BUT I DID WANT TO HEAR YOUR EXPLANATION ONE MORE TIME ON THE MERITS ABOUT THE FIRST AMENDMENT VERSUS RIGHT OF PUBLICITY AND THE FIRST AMENDMENT VERSUS CONTRACT RIGHTS. LET'S SAY GAMES ARE OF INHERENT INTEREST AND THE FIRST AMENDMENT COVERS THEM, BUT IF A SCHOOL WANTS TO LICENSE A GAME TO A PARTICULAR NETWORK, AND THUS RESTRAIN OR LIMIT THE FIRST AMENDMENT'S APPLICATION TO EVERYONE WHO MIGHT WANT TO SEE IT, THAT'S OKAY. THE CONTRACT RIGHT TRUMPS THE FIRST AMENDMENT IN
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THAT INSTANCE. SO, HOW WOULD YOU DISTINGUISH THAT FROM THE RIGHT OF PUBLICITY? WHY WOULDN'T THE RIGHT OF PUBLICITY ALSO TRUMP THE
FIRST AMENDMENT IN INSTANCES WHERE SOMEONE HAS A VALUABLE NAME, IMAGE AND LIKENESS THAT THEY COULD OTHERWISE SELL? MR. POMERANTZ: THE ISSUE OF AN INDIVIDUAL WHO IS A
PARTICIPATE IN A NEWSWORTHY EVENT IS DIFFERENT THAN SOMEBODY WHO HAS THE RIGHTS TO A GAME. AND THAT IS CLEAR UNDER A LONG -- A BUNCH OF CASES IN OUR BRIEF, WHETHER IT'S THE DORA CASE, THE GIONFRIDDO CASE, THE JOE MONTANA CASE. IN ALL OF THOSE SITUATIONS, BECAUSE THE
INDIVIDUAL PARTICIPATED IN A NEWSWORTHY EVENT THAT WASN'T COMMERCIAL SPEECH, IT WASN'T AN ADVERTISEMENT, LIKE IN THE KAREEM ABDUL JABBAR CASE, WHICH IS A DIFFERENT CASE BECAUSE IT WAS AN ADVERTISEMENT, IN EACH OF THOSE CASES THE COURT SAID BECAUSE IT'S A NEWSWORTHY EVENT, THE INDIVIDUAL'S RIGHT OF PUBLICITY, WHATEVER THEY MIGHT BE IS COMPLETELY TRUMPED BY THE FIRST AMENDMENT -THE COURT: IN JOE MONTANA IT WAS A PICTURE OR
DRAWING OF HIM THAT APPEARED ON A NEWSPAPER ANNOUNCING THAT HE WON THE GAME OR SOME SUCH THING, WHICH WOULD SEEM TO BE SOMEWHAT DIFFERENT AGAIN FROM -- AS IN ZACCHINI, FILMING A WHOLE GAME OR A WHOLE PERFORMANCE. MR. POMERANTZ: READ MONTANA. ACTUALLY, YOUR HONOR
POINTED TO AN INTERESTING CASE, THE POOLEY CASE, THE
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HOLE-IN-ONE CASE. DISMISS RULING. IN IT.
YOUR HONOR POINTED TO THAT IN THE MOTION TO AND THE MONTANA CASE HAS A SIMILAR STATEMENT
IT IS SITTING THERE SAYING CURRENT EVENTS AREN'T THE ONLY THING PROTECTED BY THE FIRST AMENDMENT, SO IS THE RE-REPORTING OF IT LATER ON, AS IF IT IS A GIVEN THAT THE CURRENT EVENTS ARE PROTECTED BY THE FIRST AMENDMENT. AND THAT'S WHAT WAS -- THE POOLEY CASE WAS SAYING THE SAME THING, WHICH IS, THE ORIGINAL BROADCAST OF THE HOLE IN ONE IN THE PGA TOURNAMENT, THE PROFESSIONAL GOLFING TOURNAMENT, OF COURSE THAT'S PROTECTED, BUT WHEN YOU RE-USE THAT HOLE-IN-ONE BROADCAST TO PROMOTE THE COMMERCIAL INTERESTS OF THE HOLE-IN-ONE ASSOCIATION WHICH PROMOTES HOLE-IN-ONE TOURNAMENTS, THAT'S TOTALLY DIFFERENT. THAT'S WHAT WE ARE TALKING ABOUT HERE. THE ACCESS -- THE
CASES DEALING WITH ACCESS, WHETHER THE HYPOTHETICAL WE ARE TALKING ABOUT WITH TELEVISING AT A CAL GAME OR WHETHER IT'S THE WISCONSIN ATHLETIC ASSOCIATION CASE, THOSE ARE VERY DIFFERENT CASES WHERE YOU CAN LIMIT THE ACCESS OF THE BROADCAST, WHICH BROADCASTERS COME IN TO BROADCAST THE GAME, BUT WHEN THEY BROADCAST THE GAME, DO THE INDIVIDUAL PARTICIPANTS OF THE NEWSWORTHY EVENT HAVE NIL RIGHTS OR ARE THOSE NIL RIGHTS TRUMPED BY THE FIRST AMENDMENT? THAT'S THE BODY OF LAW THAT WE ARE LOOKING AT. AND THAT'S
DORA, THAT'S GIONFRIDDO, THAT'S MONTANA, THAT'S A LONG LINE OF
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CASES WHERE THE COURTS OVER AND OVER SAY THE BROADCAST, THE CURRENT EVENT, THE NEWSWORTHY EVENT CREATES A FIRST AMENDMENT RIGHT THAT TRUMPS THE NIL RIGHT. THE DRYER CASE; YOUR HONOR LOOKED AT THE DRYER CASE IN YOUR MOTION TO DISMISS RULING. THE DISTRICT OF MINNESOTA. GAME FOOTAGE. THAT'S OUT OF THE, I THINK,
FORMER FOOTBALL PLAYERS RE-USE OF
NOTHING TO DO WITH THE ORIGINAL BROADCAST OF IT'S THE RE-USE OF THE FOOTAGE.
THOSE FOOTBALL GAMES.
HERE WE ARE TALKING ABOUT THE ORIGINAL, THE LIVE BROADCAST OF THE EVENT ITSELF. IMAGINE A POLITICAL CONVENTION, THE IT'S INSIDE OF
REPUBLICAN OR DEMOCRATIC NATIONAL CONVENTION. AN ARENA. NOT EVERYBODY CAN COME IN.
AND ONLY CERTAIN
TELEVISION NETWORKS ARE ALLOWED IN TO BROADCAST THE EVENTS. BUT THE SPEAKERS ON THE PODIUM AND THE DELEGATES IN THE AUDIENCE, THEY HAVE NO NIL RIGHTS THAT AREN'T TRUMPED BY THE FIRST AMENDMENT IF THEY HAPPEN TO BE SHOWN ON TELEVISION EVEN THOUGH THERE'S A RESTRICTION ON WHO CAN GET IN AND EVEN THOUGH THERE'S A RESTRICTION ON WHICH MEDIA OUTLETS ARE INVITED IN TO TELEVISE IT. THAT'S THE SAME THING WE HAVE HERE. AND, AGAIN, IT
DOESN'T MATTER WHETHER IT'S POLITICS OR SPORTS UNDER THE FIRST AMENDMENT UNDER A LONG LINE OF CASES. THE COURT: ISSUES. WE ARE SET FOR TRIAL IN JUNE. I THINK THAT I WILL NOT BE OKAY. SO TURNING TO THE CASE MANAGEMENT
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GRANTING A DISPOSITIVE MOTION HERE.
I DON'T THINK -- YOU
HAVEN'T EVEN MOVED ON THE WHOLE CASE, SO THE WHOLE CASE ISN'T GOING AWAY ON SUMMARY JUDGMENT SO CLEARLY SOMETHING WILL BE TRIED UNLESS IT IS SETTLED. I PROBABLY CAN GET THE ORDER OUT
RELATIVELY SOON, AND MAYBE WE COULD TRY THE CASE IN JUNE IF THAT WAS ALL THAT WAS AT ISSUE. BUT I'M CONCERNED ABOUT THESE OTHER CASES THAT ARE FLOATING AROUND THAT ARE SO OVERLAPPED WITH THIS CASE, AND I'M JUST WONDERING WHETHER WE REALLY SHOULD TRY TO PRESS THIS TO TRIAL IN JUNE. FOR ONE THING, YOU WOULD -- YOU HAVE CLAIMS
AGAINST -- YOU HAVE ANTITRUST CLAIMS AGAINST NCAA FOR THE VIDEO GAMES. MR. HAUSFELD: THE COURT: YES.
BUT WE ALSO HAVE RIGHT OF PUBLICITY AND SO IF WE
CLAIMS AGAINST THE NCAA FOR THE VIDEO GAMES.
WERE THEN TO TRY THOSE LATER, HOW WOULD WE DETERMINE WHICH DAMAGES WERE ANTITRUST DAMAGES FOR THE VIDEO GAMES AND WHICH WERE STILL FAIR GAME FOR LATER WITH RESPECT TO THE ROP CLAIMS? THAT'S JUST ONE EXAMPLE. MR. HAUSFELD: THE COURT: EA? MAY I RESPOND?
WHAT ABOUT THE POTENTIAL SETTLEMENT WITH
HOW WOULD THAT -- THERE WOULD HAVE TO BE A SETOFF I HOW WOULD THAT WORK? MR. HAUSFELD: THE COURT: YES, YOUR HONOR.
SUPPOSE?
I HAVE MORE PROBLEMS.
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MR. HAUSFELD:
IT WOULD BE A SETOFF.
IT IS THE SAME
SET OF PLAINTIFF ATHLETES. AND WITH REGARD TO YOUR FIRST QUESTION, THE ONLY CLAIM AGAINST -- THE ONLY ROP CLAIM, AS I UNDERSTAND CORRECTLY, BUT COUNSEL FOR KELLER IS HERE, AGAINST -- MEANING AGAINST THE NCAA IS A CONSPIRACY WITH EA AND OTHERS TO FIX OR APPROPRIATE THE ROP RIGHTS OF THE ATHLETES. TO THAT EXTENT, THAT WOULD OVERLAP THE ANTITRUST CLAIMS AND THE DAMAGE WOULD BE THE SAME, AND THERE WOULDN'T NEED TO BE AN ALLOCATION -- BOTH -- IF WE ESTABLISH THE CONSPIRACY WITH REGARD TO FIXING THE RIGHTS OF THE ATHLETES AT ZERO -THE LICENSING RIGHTS AT ZERO, IT WOULD ALSO FIX THE DAMAGE FOR THE VIOLATION OF THE ROP. THE COURT: SO THE CASES COULD PROCEED --
WOULD EVERYONE AGREE TO THAT DO YOU
MR. HAUSFELD:
KELLER PLAINTIFFS ARE HERE.
AND SO WE
COULD ASK IF THEY COULD, BUT I DON'T THINK IN ANY WAY THAT WOULD IMPEDE THE PRESENTATION OF THE TYPE OF EVIDENCE THAT THE JURY WOULD NEED TO HEAR WITH RESPECT TO THE ANTITRUST CLAIMS AND VIDEO GAMES. THE COURT: THERE WAS AN ISSUE RAISED IN THE BRIEFING
ABOUT ENJOINING FUTURE LICENSING OF VIDEO GAMES AND WHETHER THAT WAS MOOT BY VIRTUE EITHER OF THE FAILURE OF EA TO RENEW ITS CONTRACT OR BY VIRTUE OF A POTENTIAL SETTLEMENT. I TEND TO THINK NOT; THAT THERE IS NO, YOU KNOW, THERE'S
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LAW THAT SAYS JUST BECAUSE THEY'VE CHANGED THEIR WAYS, IT DOESN'T MEAN THAT THEY COULDN'T DO IT AGAIN AND IT'S NOT A GIVEN THAT IT WOULD BE MOOT. IT WOULDN'T HAVE BEEN DECIDED. IN TERMS OF HOW THE TRIAL ITSELF WOULD WORK -- WELL, WHAT DO YOU HAVE TO SAY ABOUT WHAT COUNSEL JUST SAID? MR. POMERANTZ: I THINK IT'S COMPLICATED, YOUR HONOR, AND CERTAINLY THE ROP ASPECT OF
WITH RESPECT TO THE VIDEO GAMES CLAIMS. THE COURT: I KNEW THAT. I THINK YOUR HONOR IS RIGHT ON WITH AND WE'VE GIVEN IT
MR. POMERANTZ:
THE ISSUES THAT WE ARE ALL FACING HERE.
SOME THOUGHT AND DON'T YET HAVE A PROPOSED RECOMMENDATION, BUT I DO SEE THE STRUGGLES. THEY ARE ALL WITH RESPECT TO THE
VIDEO GAME ISSUE, THAT IS, THE KELLER CASE AND THE SETTLEMENT, THEY ALL PERTAIN TO THE VIDEO GAME ISSUE. WE WILL BE READY FOR TRIAL ON THE OTHER ISSUES IN JUNE UNDER YOUR HONOR'S CURRENT SCHEDULE. I THINK WE SHOULD HAVE
DISCUSSIONS WITH ALL PARTIES ABOUT THE SITUATION WE ARE FINDING OURSELVES IN, INCLUDING THE SETTLEMENT DISCUSSIONS THAT -- AND THE SETTLEMENT THAT HAS BEEN OUT THERE FOR QUITE SOME TIME, THE PROPOSED SETTLEMENT. BUT I THINK YOUR HONOR IS RIGHT, THAT THERE ARE SOME COMPLICATIONS RAISED BY THE VIDEO GAME PART OF THE CASE, BOTH BECAUSE OF THE KELLER CASE SITTING OUT THERE STAYED WHILE THE APPELLATE REVIEW IS TAKING PLACE, AND BECAUSE OF THE
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PROSPECTIVE SETTLEMENT AND THE TIMING OF THAT, AND THE IMPLICATIONS IT MIGHT HAVE FOR TRIALS RELATING TO THE VIDEO GAMES. THE COURT: WE HAVE ANOTHER PROBLEM. YOU SORT OF
DISCUSSED THIS, BUT I DON'T THINK ANYONE HAS REALLY GRAPPLED WITH IT, IN TERMS OF IF WE WERE TO JUST TRY THIS CASE AND NOT WORRY ABOUT THOSE COMPLICATIONS, WE WOULD, IT SEEMS TO ME, HAVE TO TRY ANTITRUST LIABILITY AS A CLASS MATTER FIRST. AND THEN IF THERE WERE LIABILITY, WE WOULD HAVE TO TRY DAMAGES AS AN INDIVIDUAL MATTER. AND THEN THE COURT WOULD
DETERMINE WHAT INJUNCTION SHOULD BE ISSUED AS A BENCH MATTER. RIGHT? I MEAN, THERE'S NO OTHER WAY TO DO IT. ONE
ONE COULD HAVE ONE JURY DO LIABILITY AND DAMAGES.
COULD BIFURCATE THAT JURY AND DO LIABILITY FIRST AND THEN GO ON TO DAMAGES. OR I SUPPOSE ONE COULD EVEN HAVE ONE JURY DO
LIABILITY AND A DIFFERENT JURY TO DO INDIVIDUAL DAMAGES. I DON'T SEE ANY NEED FOR AN ADDITIONAL TRIAL WITH RESPECT TO THE INJUNCTION BECAUSE WHATEVER FACTS COME OUT AT THE TRIAL WOULD BE THE SAME FACTS I WOULD NEED TO KNOW IN ORDER TO ENTER AN INJUNCTION, SO THAT WOULD JUST BE SOMETHING I WOULD HAVE TO THINK ABOUT AND DO AFTERWARDS. SEE TO TRY THE CASE. MR. HAUSFELD: AND WE AGREE THAT THAT MAKES THE MOST BUT THAT'S THE ONLY WAY I CAN
SENSE GIVEN ANTITRUST CASES THAT HAVE COME BEFORE COURTS IN THIS POSTURE WHERE THERE'S BOTH A DAMAGE CLAIM AND AN
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INJUNCTIVE CLAIM.
THE DAMAGE CLAIM IS TRIED TO THE JURY WITH
THE FINDINGS OF FACTS, AND THEN THE ASSESSMENT OF DAMAGE AS TO WHICH PLAINTIFFS PROCEED TO THE JURY ON THE DAMAGES, AND THEN THE COURT UTILIZES THE FINDINGS OF FACT BY THE JURY IN THE DAMAGE CASE AS THE BASIS FOR A DECISION WITH REGARD TO THE INJUNCTION. THE COURT: SO ARE YOU ENVISIONING ONE JURY FOR
ANTITRUST LIABILITY AND DAMAGES? MR. HAUSFELD: THE COURT: PROCEEDING? MR. HAUSFELD: THE COURT: ONE PROCEEDING. YES.
AND ONE PROCEEDING OR BIFURCATED
WHAT DO YOU SAY? THAT'S OUR THINKING AS WELL, YOUR
MR. POMERANTZ: HONOR. THE COURT: OH.
WELL, WHAT A SURPRISE. THE ONLY THING I WOULD SAY IS THAT
MR. POMERANTZ:
AFTER THE JURY RENDERS ITS VERDICT, WE HOPE IT'S IN OUR FAVOR. IN THE EVENT IT'S NOT, I THINK WE NEED TO PUT A PIN IN WHETHER THERE'S ANY ADDITIONAL EVIDENCE YOUR HONOR WOULD WANT IN ORDER TO ASSESS THE INJUNCTIVE RELIEF. YOU MAY BE RIGHT THAT THERE
WOULD BE NO ADDITIONAL EVIDENCE, I'M NOT CERTAIN ABOUT THAT. THE COURT: IT. MR. POMERANTZ: EXACTLY, YOUR HONOR. WELL, IF THERE WAS, I COULD ALWAYS HEAR
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THE COURT:
WELL, THEN, I GUESS THE NEXT QUESTION
THAT YOU BOTH KIND OF ADDRESS IS WHEN WOULD PLAINTIFFS DISCLOSE -- I GUESS WHICH PLAINTIFFS ARE GOING FORWARD TO ASK FOR INDIVIDUAL DAMAGES AND WHAT PRODUCTS THEY ARE MAKING THEIR CLAIMS ON? AND YOU WANT A MONTH TO DO THAT AND YOU WANT IT -I THINK WE ARE IN AGREEMENT THAT 30
MR. POMERANTZ:
DAYS FROM SOME DATE, I DON'T REMEMBER WHAT THE DATE WAS, 30 DAYS FROM SOME DATE IS ACCEPTABLE TO BOTH SIDES, I THINK. MR. HAUSFELD: THE COURT: YES, YOUR HONOR.
OKAY.
SO YOU WOULD DISCLOSE WHICH PLAINTIFFS WANT INDIVIDUAL DAMAGES AND WHAT THEY WANT THEM FOR? MR. HAUSFELD: AND WHETHER OR NOT WE COULD AGREE ON BECAUSE ONCE THERE WAS A
BELLWETHER OR TEST PLAINTIFFS.
DETERMINATION WITH REGARD TO SOME PLAINTIFFS, THAT BECOMES THE MODEL WITH RESPECT TO -THE COURT: NOT IF I HAVE TO TRY MORE. YOUR HONOR, THAT HAS NEVER BEEN
MR. POMERANTZ: DISCUSSED WITH US. THE COURT:
I DON'T SEE THAT HAPPENING.
HOW MANY INDIVIDUAL PLAINTIFFS ARE THERE? MR. HAUSFELD: PLAINTIFFS. I THINK THERE ARE 16 INDIVIDUAL
AND WE WOULD DECIDE IF YOUR HONOR'S AND THE
DEFENDANT'S ARE NOT INCLINED TO BELLWETHER TEST CASES, WHETHER ALL 16 OR SOME SUBSET.
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THE COURT:
WELL, BELLWETHER ASSUMES THAT THERE WILL
BE SETTLEMENTS AFTER THE FIRST TRIAL, AND I DON'T WANT TO ASSUME THAT BECAUSE THAT MEANS I MIGHT HAVE TO TRY 15 MORE CASES WITH BRAND NEW JURIES. IF YOU AGREED THAT YOU WOULD BE NOT IF I'M JUST GOING TO
BOUND BY IT, THAT WOULD BE OKAY.
HOPE THAT ONE TRIAL IS PERSUASIVE AND RISK THAT I HAVE TO TRY 15 MORE. MR. HAUSFELD: WHEN I REFER TO BELLWETHERS, YES, WE
WOULD BE AGREEABLE TO BEING BOUND BY THE DECISION OF THE BELLWETHER TRIAL. THE COURT: WELL, I WOULD DO THAT IF YOU DIDN'T -- IF BUT IF BOTH SIDES DIDN'T AGREE
BOTH SIDES DID AGREE TO THAT.
TO THAT, I WOULDN'T WANT TO DO IT AS AN ASPIRATIONAL MATTER. MR. POMERANTZ: FIRST I'VE HEARD OF IT, YOUR HONOR. COULD I JUST GO
I WOULD NEED TO DISCUSS IT WITH MY CLIENT. BACK FOR A SECOND?
WE DON'T ACTUALLY HAVE, I GUESS, A DATE CERTAIN WHEN THEY WILL MAKE THE DISCLOSURE ON WHICH INDIVIDUAL PLAINTIFFS WILL BE PURSUING DAMAGES ON WHICH PRODUCTS. SO WE WOULD JUST ASK
FOR A DATE CERTAIN THAT WE CAN AGREE UPON. THE COURT: WHAT IS IT? 30 DAYS FROM TODAY.
IS THAT BEFORE YOUR PRETRIAL FILINGS ARE
MR. HAUSFELD:
YES.
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MR. POMERANTZ:
YES, I THINK IT IS.
IN ADDITION TO THE WHICH PLAINTIFFS AND WHICH PRODUCTS, IT WOULD BE HELPFUL FOR US TO ALSO KNOW WHAT DAMAGES THEY ARE SEEKING. THE DAMAGES DISCLOSURE THEY HAVE MADE SO FAR HAS BEEN ON A CLASS-WIDE BASIS BECAUSE IT WAS MADE BEFORE YOUR HONOR RULED ON CLASS CERTIFICATION. AND SO WE DON'T HAVE A DISCLOSURE
THAT YOU WOULD TYPICALLY HAVE IN AN INDIVIDUAL DAMAGES CASE ABOUT WHAT DAMAGES THIS PARTICULAR PLAINTIFF IS SEEKING. WE DON'T WANT NEW EVIDENCE, WE JUST WANT TO KNOW WHAT ARE THEY SEEKING ON THAT. THE COURT: THAT SEEMS REASONABLE. WITH ONE EXCEPTION, YOUR HONOR. WE
MR. HAUSFELD:
WOULD NEED TO UPDATE THAT BECAUSE OUR MODELS WERE RUN FOR INDIVIDUAL DAMAGES AS OF 2011. WE WOULD JUST NEED TO UPDATE
THAT WITH THE INFORMATION FROM THE MEMBERS OF THE NCAA FROM 2011 TO DATE. THE COURT: OKAY. I'M NOT SURE WHAT THAT MEANS, BUT WE
MR. POMERANTZ:
WILL HAVE DISCUSSIONS OFF THE RECORD. THE COURT: SEE IF YOU CAN WORK SOMETHING OUT. I'M NOT INCLINED TO I AM INCLINED TO
I SHOULD HAVE SAID THIS FIRST.
RECONSIDER THE CLASS CERTIFICATION ORDER. RECONSIDER THE CLASS DEFINITION.
AND YOU DIDN'T REALLY
EXPRESS ANY ACTUAL OBJECTION TO THAT SINCE THE NEW CLASS --
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NEW PROPOSED CLASS DEFINITION COMPORTS WITH THE LATEST COMPLAINT AS OPPOSED TO THE EARLIER ONE THAT THE CLASS CERT WAS BASED ON. BUT IT HAS BEEN MENTIONED A NUMBER OF TIMES THAT THE CLASS DEFINITION REFERS TO ALL DIVISION I AND NOT JUST FOOTBALL AND BASKETBALL. AND I ASSUME THAT WAS AN OVERSIGHT AND YOU REALLY
MEANT TO SAY JUST FOOTBALL AND BASKETBALL. MR. HAUSFELD: MR. POMERANTZ: YES, YOUR HONOR. YOUR HONOR, I THINK THESE ARE
SUBSTANTIVE CHANGES TO THE CLASS DEFINITION. AND WHILE I UNDERSTAND THE FIRST ONE THAT IS DELETING THAT CLAUSE AT THE END, WHICH I BELIEVE IS A SUBSTANTIVE CHANGE, WE OBJECT TO IT ON THE MERITS OF OUR SUMMARY JUDGMENT MOTION, BUT NOT FOR YOUR HONOR'S ORDER, EVEN THOUGH IT IS A SUBSTANTIVE CHANGE. BUT I DO BELIEVE THAT IF THEY ARE CHANGING THEIR DEFINITION OF THE CLASS, WHICH IS STATED IN THEIR COMPLAINT CRYSTAL CLEAR -THE COURT: WHICH COMPLAINT? THE LAST ONE, THE MOST -- THE
MR. POMERANTZ: GOVERNING COMPLAINT. THE COURT: BASKETBALL? MR. POMERANTZ:
THE GOVERNING COMPLAINT. CHANGING IT TO ADD FOOTBALL AND
TO LIMIT IT FROM DIVISION I.
IT
CHANGES WHAT THEY'RE NOW FUNDAMENTALLY ALLEGING IN THE CASE.
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AND WHILE -THE COURT: THEY NEVER WERE ALLEGING ANYTHING OTHER I WAS SURPRISED WHEN YOU I WOULD HAVE ASSUMED THAT
THAN FOOTBALL AND BASKETBALL.
MENTIONED THAT IT DIDN'T SAY THAT.
IT DID, AND THAT'S ALWAYS WHAT THEY HAVE BEEN TALKING ABOUT. MR. POMERANTZ: THE COURT: NARROWS THE CLASS. MR. POMERANTZ: WELL, YES, YOUR HONOR. BECAUSE, FOR THEIR PLAINTIFFS -IT
DOES IT PREJUDICE YOU IN ANY WAY?
EXAMPLE, OUR PROCOMPETITIVE JUSTIFICATION REGARDING OUTPUT OF OTHER SPORTS FALLS SQUARELY WITHIN THEIR MARKET AS DEFINED AND WE BELIEVE SQUARELY WITHIN THE MARKET AS WE WILL PROVE IT AT TRIAL. AND THEIR PRIMARY ARGUMENT IN OPPOSITION TO THAT
PROCOMPETITIVE JUSTIFICATION -THE COURT: WHICH ONE? THE ONE DEALING WITH THE INCREASED
MR. POMERANTZ: OUTPUT OF OTHER SPORTS. THE COURT: OH.
MR. POMERANTZ:
THEIR PRIMARY ARGUMENT IN THEIR
OPPOSITION -- IN THEIR BRIEF WAS, WELL, THAT'S A DIFFERENT MARKET. THE COURT: WELL, YOUR ARGUMENT WAS MOSTLY THERE
WOULD BE MORE FOOTBALL AND BASKETBALL AND MORE DIVISION I SPORTS. MR. POMERANTZ: THAT'S WHAT WE WOULD CALL
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PROCOMPETITIVE JUSTIFICATION NUMBER FIVE. FOOTBALL AND BASKETBALL. THE COURT: RIGHT.
THERE WOULD BE MORE
MR. POMERANTZ: FOUR -THE COURT:
PROCOMPETITIVE JUSTIFICATION NUMBER
VIABILITY --
(SIMULTANEOUS COLLOQUY.) MR. POMERANTZ: THERE WOULD BE MORE WOMEN'S SPORTS,
MORE MEN'S NONREVENUE SPORTS, ALL OF THOSE. AND ALL I'M SAYING IS THAT THEIR CHANGE IN THE DEFINITION OF THEIR MARKET, OF THEIR RELEVANT MARKET IS MEANT TO TRY TO TAKE THAT JUSTIFICATION AND SAY IT'S OUTSIDE THE MARKET. AND ALL I'M SAYING IS THAT WE BELIEVE IT'S INSIDE THE MARKET AS THEY DEFINED IT. AND WE THINK EVEN IF THEY NOW
CHANGED THEIR DEFINITION, IT'S INSIDE THE MARKET AS WE WILL DEFINE IT AND PUT PROOF ON AT TRIAL. THE COURT: NOW. OKAY. WELL, I CAN'T RESOLVE THIS RIGHT
SO WHAT YOU'LL HAVE TO DO IS SEE IF YOU CAN AGREE ON
SOMETHING AS TO A NEW CLASS DEFINITION. AND IF YOU CAN'T, THEN YOU GIVE ME YOUR PROPOSED NEW CLASS DEFINITION, YOU GIVE ME TWO PAGES ABOUT WHY THEY SHOULDN'T BE ALLOWED TO DO IT, AND YOU GIVE ME TWO PAGES ABOUT WHY THEY SHOULD, IN LIKE TWO DAYS, AND TWO DAYS, AND TWO DAYS. MR. POMERANTZ: HONOR. THAT'S FINE. WE WILL TALK, YOUR
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OKAY.
THEN I WANTED TO TALK ABOUT SETTLEMENT
AND I ALSO HAD MENTIONED THAT IF THERE ARE ISSUES THAT YOU NEED TO SPEAK ABOUT CONFIDENTIALLY BECAUSE THEY ARE PENDING SETTLEMENT MATTERS OR SOMETHING LIKE THAT THAT YOU CAN'T SPEAK ABOUT PUBLICLY, I COULD ASK YOU TO COME TO SIDEBAR WITHOUT THE COURT REPORTER, AND YOU COULD TELL ME ANY CONFIDENTIAL MATTERS THAT YOU NEED. MR. HAUSFELD: YOUR HONOR, MAY I CLARIFY?
ARE YOU REFERRING TO SETTLEMENT OF THE RIGHT OF PUBLICITY CLAIMS WITH EA AND CLC, OR ANY SETTLEMENT BEYOND THOSE? THE COURT: BOTH. I THINK WITH RESPECT TO THE LATTER, WE
MR. HAUSFELD:
CAN HAVE AN OPEN DISCUSSION. WITH RESPECT TO THE FORMER, YOU KNOW, THAT'S THE EA AND CLC, I THINK WE WOULD LIKE A SIDEBAR. THE COURT: OKAY. I THINK A SIDEBAR IS APPROPRIATE,
MR. POMERANTZ: YOUR HONOR. THE COURT:
FOR BOTH ISSUES? FOR EVERYTHING BECAUSE IT'S GOING TO
MR. POMERANTZ: SPILL OVER.
IT'S NOT GOING TO BE SO CLEAR. OKAY. WE WON'T HAVE IT ON THE RECORD.
THE COURT:
MR. POMERANTZ:
THAT'S FINE, YOUR HONOR.
(DISCUSSION HELD AT SIDEBAR AND NOT REPORTED.)
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THE COURT:
OKAY.
SO, I DON'T THINK WE NEED TO PUT
ANY OF THAT ON THE RECORD. WE SET SOME DEADLINES, BUT YOU'LL -MR. HAUSFELD: THE COURT: WE'LL RESPOND TO THEM.
YOU CAN TELL ME IF SOMEONE DOESN'T.
I AM JUST LOOKING REAL QUICK TO SEE IF THERE'S ANYTHING ELSE IN THE CASE MANAGEMENT STATEMENT THAT NEEDS TO BE DEALT WITH NOW. MR. HAUSFELD: I THINK WE'VE AGREED TO EVERYTHING
ELSE IN TERMS OF THE SCHEDULE FOR THE CASE MANAGEMENT, YOUR HONOR. THE COURT: OKAY. THERE IS ONE HOUSEKEEPING, YOUR HONOR.
MR. HAUSFELD:
YOU ASKED THE QUESTION AT THE BEGINNING THAT NEITHER OF US COULD ANSWER, BUT MR. GOSSELIN DOES HAVE THE ANSWER. THE COURT: OH, ABOUT THAT EXHIBIT? IT'S EXHIBIT 27. YES, GOOD AFTERNOON, YOUR HONOR.
MR. HAUSFELD: MR. GOSSELIN:
SATHYA GOSSELIN FOR THE ANTITRUST PLAINTIFFS. YOU ASKED ABOUT EXHIBIT 27 TO THE SCHERRER DECLARATION. IT WAS PRODUCED BY THE UNIVERSITY OF WASHINGTON, AND IT WAS A COLLECTION OF MATERIALS DISTRIBUTED BY THE NCAA IN ADVANCE OF THEIR AUGUST 11TH PRESIDENTIAL RETREAT. UNDERSTANDING. THE PROBLEM WITH THE UNIVERSITY OF WASHINGTON'S PRODUCTION THAT'S OUR
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WAS THAT THEY DIDN'T DISTINGUISH BETWEEN THE VARIOUS DOCUMENTS, SO IT'S A CONTINUOUS BATES RANGE. I DON'T BELIEVE THERE'S ANY DISPUTE, BUT IF IT WOULD BE HELPFUL, WE CAN SUBMIT A PARAGRAPH LETTER TO THE COURT AFTER DISCUSSING IT WITH THE NCAA. THE COURT: SO IT'S YOUR DOCUMENT? I DON'T KNOW THE DOCUMENT, YOUR
MR. POMERANTZ: HONOR.
WE CAN DISCUSS IT OFF THE RECORD. THE COURT: YOU GOT IT BUT YOU DON'T KNOW WHO WROTE
IT BECAUSE ALL YOU KNOW IS SOMEBODY GAVE IT TO YOU. MR. GOSSELIN: IT IS AMONG MATERIALS THAT INCLUDES A
COVER LETTER DISTRIBUTING IT TO THE NCAA MEMBERS IN ADVANCE OF THE RETREAT FROM THE NCAA CENTRAL OFFICE. THE COURT: RIGHT, BUT IT DOESN'T SAY WHO WROTE IT. CORRECT.
MR. GOSSELIN: THE COURT:
WHY DON'T YOU SHOW IT TO HIM AND SEE IF
YOU CAN ALL AGREE ON -MR. GOSSELIN: THE COURT: CERTAINLY, YOUR HONOR.
-- WHO WROTE IT OR WHO WAS THERE.
SO YOUR TRIAL IS SET FOR JUNE 9TH, AND I HAVE YOU DOWN FOR 19 DAYS? YOU STILL NEED THAT MUCH TIME?
MAYBE YOU WILL SEE WHEN THE SUMMARY JUDGMENT ORDER COMES OUT YOU WILL BE ABLE TO REASSESS IT. LONG TIME. WHEN I SET IT I WASN'T TRYING CASES ON FRIDAYS. BUT I BUT THAT'S AN AWFULLY
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MIGHT WELL TRY IT ON FRIDAYS. YOURSELF AVAILABLE. MR. POMERANTZ: THE COURT: NO.
AT LEAST POTENTIALLY MAKE
WOULD YOU BE DARK ANY DAYS?
MONDAY THROUGH FRIDAY?
MONDAY THROUGH FRIDAY, 8:30 TO 1:30.
AND WE MUST HAVE A PRETRIAL CONFERENCE DATE, WHICH PRESUMABLY IS MAY 28TH, I'M GUESSING. I WILL WANT TO SEND OUT A QUESTIONNAIRE IN ADVANCE OF THE -- BOTH A TIME SCREEN, FINDING PEOPLE WHO DON'T HAVE HARDSHIPS, AND ALSO I DON'T KNOW WHAT TO DO ABOUT THAT. I'D
KIND OF LIKE TO HAVE A SUBJECT MATTER SCREEN AS WELL BECAUSE A LOT OF PEOPLE WILL HAVE HEARD OF THIS CASE. BUT ON THE OTHER HAND, I DON'T WANT TO SEND IT OUT IN ADVANCE BECAUSE THEN ALL THE ONES WHO HAVEN'T HEARD ABOUT IT YET WILL HAVE HEARD ABOUT IT BY THE TIME THEY GET IT AND WILL HAVE READ EVERYTHING ON THE INTERNET ABOUT IT. SO MAYBE WHAT WE WOULD HAVE TO DO IS HAVE A TIME SCREEN IN ADVANCE AND A SUBJECT MATTER SCREEN ONCE THEY GET HERE. MR. HAUSFELD: HONOR. THE COURT: IT NEEDS TO BE SHORT THOUGH. YES, YOUR HONOR. I THINK THAT WOULD MAKE SENSE, YOUR
OKAY. THANK YOU VERY MUCH, YOUR HONOR.
MR. HAUSFELD:
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THANK YOU.
THANK YOU.
(PROCEEDINGS CONCLUDED AT 4:45 P.M.)
CERTIFICATE OF REPORTER I, DIANE E. SKILLMAN, OFFICIAL REPORTER FOR THE UNITED STATES COURT, NORTHERN DISTRICT OF CALIFORNIA, HEREBY CERTIFY THAT THE FOREGOING IS A CORRECT TRANSCRIPT FROM THE RECORD OF PROCEEDINGS IN THE ABOVE-ENTITLED MATTER.
___________________________________ DIANE E. SKILLMAN, CSR 4909, RPR, FCRR MONDAY, FEBRUARY 24, 2014

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PAGES 1 - 104 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAMUEL KELLER, ET AL.

) ) ) ELECTRONIC ARTS INC., ) ET AL., ) ) DEFENDANTS. ) ____________________________) VS.

THURSDAY, FEBRUARY 20, 2014 OAKLAND, CALIFORNIA SUMMARY JUDGMENT MOTION

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC (510) 451-2930

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC (510) 451-2930

THURSDAY, FEBRUARY 20, 2014 P R O C E E D I N G S THE CLERK:

AND WE ARE CALLING C-09-1967 KELLER

SOMEBODY SEEMS TO WANT TO INTRODUCE

YOUR HONOR, ROB CAREY ON BEHALF OF THE

GOOD AFTERNOON, YOUR HONOR.

YES, YOUR HONOR.

MR. GILCHRIST: THE COURT:

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC (510) 451-2930

IS THAT WHAT WE'VE GOT? YES, YOUR HONOR.

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC (510) 451-2930

THE COURT: THAN THAT?

ONLY THAT, NO MORE THAN THAT, NO LESS

I THINK YOU HAVE IT CORRECT, YOUR

SO THERE WERE SOME ROP CLAIMS, AND

AND THEN WE HAVE A POTENTIAL SETTLEMENT

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC (510) 451-2930

CERT PETITION PENDING. NOT MY PROBLEM.

AND THAT COULD HAVE SOME EFFECT ON THIS

MR. POMERANTZ: THIS CASE, YOUR HONOR. THE COURT:

I'M NOT SURE IT WOULD DIRECTLY AFFECT

SO, WE'LL SET THE CASE MANAGEMENT

WE HAVE WHAT, AN AGREEMENT IN

WHICH IS MADE BY SOMEONE AND EFFECT --

AND, ACTUALLY, THERE'S TWO.

YOUR -- THE ANSWER IS ONE THING WITH RESPECT TO THE COLLEGE

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC (510) 451-2930

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC (510) 451-2930

BUT THOSE MEMBER INSTITUTIONS ARE ALSO

-- PREVENTING THEIR OWN COMPETITION WITH

AND THE BASIS OF THE RULE THAT FIXES THE

HOW ELSE DO YOU PARTICIPATE IN THE MARKET

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC (510) 451-2930

THE COURT: LIKE THAT.

AND YOU AGREE THAT YOU DO HAVE A RULE

MR. POMERANTZ: THE COURT:

YOU ARE CONTESTING THE BYLAWS, AND DO

WELL, THAT WOULD BE DEFERRED

COMPENSATION FOR SOMEONE AGREEING UP FRONT.

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC (510) 451-2930

MR. POMERANTZ: THE COURT:

FOR A COMMERCIAL. -- THEN THE ADVERTISERS GO AND GET

MR. POMERANTZ: THEM FROM THE -THE COURT:

WHAT IF THEY JUST

WANT TO SHOW CLASSIC GAME ON FIFTIETH ANNIVERSARY OF THE

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC (510) 451-2930

AND THE STUDENT ATHLETE COULDN'T COME UP

LICENSE TO TAPE IT IN THE FIRST PLACE AND IT IS NOW THE OWNER

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC (510) 451-2930

OF IT IS WHAT ALLOWS IT TO -MR. POMERANTZ: THE COURT: THAT'S --

-- REBROADCAST IT. CORRECT.

MR. POMERANTZ: THE COURT:

AND THE STUDENT ATHLETE WHO'S IN IT, OR

THEY WOULDN'T HAVE ANY RIGHT TO GET IT.

MAYBE THE COPYRIGHT LAWS HAVE GIVEN IT,

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC (510) 451-2930

DO ALL THE SCHOOLS

THAT IS, THAT THE SCHOOLS ARE, AT THE END OF

MADE UP OF VARIOUS MEMBER INSTITUTIONS.

I THINK THERE IS AN ANTITRUST PARADIGM THAT IS WHAT THIS

O'Bannon Summary Judgment Hearing Transcript

O'Bannon Summary Judgment Hearing Transcript