ST. LOUIS – A federal court was correct in approving a class action settlement between the NFL and former players over use of players’ likenesses, an 8th Circuit panel ruled.
In 2009, former players filed a class action objecting to the NFL’s use of their likenesses without compensation. The complaint claimed NFL Films videos are promotional film productions that are completely independent of the play and the production of games themselves.
Instead, the class claimed the NFL used their likenesses and identity in the videos to improve profits and its brand.
The settlement, involving 25,000 former players and the NFL, establishes a licensing agency to assist former NFL players in marketing their publicity rights with the support of the NFL. It also includes a $42 million payout by the NFL to its Common Good Entity, which provides charitable contributions for the benefit of former players for health-related, housing and career-transition issues.
Six former players challenged the approval of the settlement, claiming a federal judge abused his discretion because the settlement does not provide a direct financial payment to each class member and is not fair, reasonable and adequate.
The players claimed the settlement is simply a way of the NFL giving away their proceeds to a third-party charity.
But a three-judge panel of the 8th Circuit was not swayed.
“Here, the financial payment to the third-party organization is not the only, or perhaps even the primary, benefit of the settlement agreement,” Circuit Judge Kermit Bye wrote for the panel. “All class members receive a direct benefit from the settlement: the opportunity to license their publicity rights through the established licensing agency, as well as the payments by the NFL to the licensing agency. If the players’ publicity rights are as valuable as appellants claim, the players should be able to realize the value of their publicity rights through the licensing agency.”
The appeals court used the traditional four-point analysis in rejecting the players’ arguments that the settlement was not fair, reasonable or adequate.
According to that analysis the panel found that the NFL was in good enough financial condition to pay its obligation of the settlement; the complexity and cost of further litigation would be too much of a burden; less than 10 percent of the class opted out of the settlement minimizing the amount of opposition; and the value of the settlement outweighed the merits of the plaintiffs’ claims.
Circuit Judges Lavenski Smith and Jane Kelly concurred.
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