2014.10.31 robins kaplan file stamped opening brief

Appeal No. 13–3581 ____________________________________

In The United States Court of Appeals

For the Eighth Circuit James Lawrence Marshall, Joseph Michael Senser, and Dante Anthony Pastorini,

Plaintiffs – Appellants

Fred Barnett et al., on behalf of themselves and all others similarly situated Plaintiffs – Appellees

John Frederick Dryer et al. Plaintiffs

v.

National Football League. Appellee

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MINNESOTA

Case No. 0:09–CV–02182–PAM–AJB ____________________________________

BRIEF OF APPELLANTS JAMES LAWRENCE MARSHALL, JOSEPH MICHAEL SENSER, AND DANTE ANTHONY PASTORINI

ROBINS, KAPLAN, MILLER & CIRESI L.L.P. Michael V. Ciresi (No. 16949) Jan M. Conlin (No. 192697) Eric J. Magnuson (No. 66412) 2800 LaSalle Plaza 800 LaSalle Avenue Minneapolis, MN 55402–2015 Tel: 612–349–8500 Fax: 612–339–4181

BOB STEIN LLC Robert A. Stein (No. 104930) 6473 Beach Road Eden Prairie, MN 55344 Tel: 952–829–1043

WARD & WARD, PLLC Thomas J. Ward 2020 N Street NW Washington D.C., 20036 Tel: 202–331–8160

Attorneys for Appellants Marshall, Senser, and Pastorini

Appellate Case: 13-3581 Page: 1 Date Filed: 02/03/2014 Entry ID: 4120132

Summary and Request for Oral Argument

The district court approved a class-action settlement that lacks any

certain economic benefit — direct or indirect — to class members. Instead,

the settlement distributes all funds to third-party organizations, who may or

may not distribute the settlement funds to charities that, in turn, may or may

not provide benefits to some of the class members.

The district court’s approval of the settlement was erroneous in at least

three respects: First, Rule 23 and class-action principles do not allow

distribution of class-settlement proceeds to third parties instead of class

members — outside of narrow circumstances not present here. Second, the

settlement does not guarantee any benefit to class members. Third, the

district court approved the settlement without any evidence or analysis of the

value of the claims the class was surrendering, or any consideration of the

value to the defendant of the rights it was allegedly misappropriating. The

district court approved the settlement despite prohibiting discovery on

damages. Thus, neither the court nor the parties were able to state with any

assurance whether the amount the settlement is reasonable, adequate, and

fair.

Oral argument will assist the court in considering the issues presented

by the district court’s approval of this unprecedented class-action settlement.

Appellants request thirty minutes to present their case.


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Table of Contents

Jurisdictional Statement .................................................................................... 1

Statement of Issues ............................................................................................ 2

Statement of Case .............................................................................................. 4

A. NFL’s use of retired players’ identities in videos. ................................. 5

B. Retired players’ claims: Lanham Act, publicity rights, and unjust enrichment. ........................................................................................... 6

C. Settlement by certain plaintiffs: all funds would go to third parties, the “remedies” do not relate to publicity rights, and the record lacks evidence of damages. ........................................................ 7

1. Terms of the settlement .................................................................. 9

(a) Common Good Entity .......................................................... 10

(b) Licensing Agency ................................................................... 12

2. Value of the settlement ................................................................ 14

(a) The retired players release past and future publicity-rights claims against the NFL. ......................................................... 14

(b) The district court prohibited damages discovery, leaving the value of the class members’ released claims unknown. .. 16

3. Lead Settlement Counsel ignored the Appellants’ expressed concerns. ....................................................................................... 17

4. The district court approved the settlement, despite acknowledging that this “unique” agreement has “little precedent.”.................................................................................... 18

Summary of Argument .................................................................................... 21

Argument ........................................................................................................ 22

I. Rule 23 does not allow the distribution of class-settlement funds to third parties except in limited circumstances not present here. .. 23


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II. The settlement is not fair, reasonable, and adequate under Rule 23 because it does not guarantee a benefit to each or any class member in exchange for releasing his claims. ........................... 31

A. The class members’ claims have value. ....................................... 32

B. The Common Good Entity does not guarantee any economic benefit to any class member. ........................................................34

C. The Licensing Agency does not guarantee that any class members will receive an economic benefit. ................................. 37

1. The Licensing Agency provides no direct benefit to class members. ................................................................................ 37

2. The Licensing Agency lacks the authority to fully license publicity rights. ..................................................................... 39

3. The Licensing Agency is not a unique proposal; it would duplicate a program that already exists. ............................... 39

D. The settlement permits disparate treatment of class members with identical claims. .................................................................... 41

E. The district court did not properly balance the merits of the plaintiffs’ claims against the amount offered in the settlement. 43

F. The recent denial of preliminary approval for the NFL’s concussion settlement highlights the deficiencies in the settlement here. ........................................................................... 44

G. The district court erred in approving the settlement. ................ 46

III. The record does not contain sufficient information relating to the value of the released claims to determine whether the settlement is fair, reasonable, and adequate. ........................................................... 47

A. Measures of the value of the released claims exist....................... 47

B. The district court had no information on these measures, and no basis to place a value on the released claims. ........................ 48

C. Lead settlement counsel shirked his duty to evaluate and disclose the released claims’ value. .............................................. 51

Conclusion ..................................................................................................... 53


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Table of Authorities Cases

Airline Ticket Comm’n Antitrust Litig. Travel Network v. United Air Lines, 268 F.3d 619 (8th Cir. 2001) ........................................................... 24, 26

Alexander v. Nat’l Football League, No. 4–76–Civil–123, 1977 U.S. Dist. LEXIS 14685, (D. Minn. 1977) ..................................................................................... 49

Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) .................................................................................. 2

City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974) ........................................................ 3, 48, 49

Contreras v. PM Beef Holdings, LLC, No. 07–CV–3087, 2008 U.S. Dist. LEXIS 73800, (D. Minn. Sept. 18, 2008) ...................................................................... 49

Day v. Persels & Assocs., LLC, 729 F.3d 1309 (11th Cir. 2013) .............................................................. 37

Ferrington v. McAfee, Inc., No. 10–CV–01455–LHK, 2012 U.S. Dist. LEXIS 49160, (N.D. Cal. Apr. 6, 2012) .................................................................. 42, 43

Free v. Abbott Lab., 953 F. Supp. 751 (M.D. La. 1997) .................................................... 44, 51

Grunin v. Int’l House of Pancakes, 513 F.2d 114 (8th Cir. 1975) .................................................. 3, 22, 31, 46

In re Airline Ticket Comm’n Antitrust Litig., 307 F.3d 679 (8th Cir. 2002) ............................................................. 2, 26

In re Baby Prods. Antitrust Litig., 708 F.3d 163 (3d Cir. 2013) ............................................................ 24, 30

In re GMC Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768 (3d Cir. 1995) .................................................................... 42

In re Pet Food Prods. Liab. Litig., 629 F.3d 333 (3d Cir. 2010) ..................................................................... 3


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In re Pharm. Indus. Average Wholesale Price Litig., 588 F.3d 24 (1st Cir. 2009) .................................................................... 26

In re Uponor, Inc., 716 F.3d 1057 (8th Cir. 2013) ................................................................ 22

In re: NFL Players’ Concussion Injury Litig., MDL No. 2323, 2014 U.S. Dist. LEXIS 4300, (E.D. Pa. Jan. 14, 2014) .......................................................................... 45

Klier v. Elf Atochem N. Am., Inc., 658 F.3d 468 (5th Cir. 2011) ........................................................... passim

Lane v. Facebook, 696 F.3d 811 (9th Cir. 2012) .................................................................. 27

Marek v. Lane 134 S. Ct. 8 (2013) ..................................................................... 24, 25, 27

Mirfasihi v. Fleet Mortg. Corp., 356 F.3d 781 (7th Cir. 2004) ............................................................. 3, 43

Oglala Sioux Tribe v. C & W Enters., Inc., 542 F.3d 224 (8th Cir. 2008) ................................................................. 22

Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) ............................................................................... 26

Powell v. Georgia-Pacific Corp., 119 F.3d 703 (8th Cir. 1997) ............................................................. 2, 26

Powell v. Georgia-Pacific Corp., 119 F.3d 703 (8th Cir. 1997) ................................................................. 26

Six Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301 (9th Cir. 1990) ......................................................... 26, 30

Sobel v. The Hertz Corp., No. 3:06–CV–00545–LRH–RAM, 2011 U.S. Dist. LEXIS 68984, (D. Nev. June 27, 2011) .......................................................................... 48

Van Horn v. Trickey, 840 F.2d 604 (8th Cir. 1988) ........................................................... 22, 48

Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96 (2d Cir. 2005) .................................................................... 23


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Rules

Fed. R. Civ. App. P. 4 ........................................................................................ 1

Fed. R. Civ. P. 23 ...................................................................................... passim

Statutes

15 U.S.C. § 1525 .............................................................................. 1, 7, 29, 48

28 U.S.C. § 1291 ............................................................................................... 1

28 U.S.C. § 1331 ............................................................................................... 1

28 U.S.C. § 1332 ............................................................................................... 1

28 U.S.C. § 1367 ............................................................................................... 1

28 U.S.C. § 2072 .................................................................................. 2, 28, 29

Other Authorities

2 J. THOMAS MCCARTHY, THE RIGHTS OF PUBLICITY & PRIVACY, § 11:34 ..................................................................................................... 47

AM. LAW INST., PRINCIPLES OF THE LAW OF AGGREGATE LITIG. § 3.07 (2010) ............................................................................................ 24

M. Redish et al., Cy Pres Relief & The Pathologies of the Modern Class Action, 62 FLA. L. REV. 617 (2010) ..................................................................... 29

RESTATEMENT (THIRD), UNFAIR COMPETITION § 49 (1995) .......................... 47


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Jurisdictional Statement

Appellants James Lawrence Marshall, Joseph Michael Senser, and

Dante Anthony Pastorini appeal from an order of the United States District

Court for the District of Minnesota, the Honorable Paul A. Magnuson,

granting Lead Settlement Counsel’s Motion for Final Approval of Settlement

dated November 4, 2013, as well as the final judgment also entered on

November 4, 2013. The district court had diversity jurisdiction pursuant to

28 U.S.C. § 1332; subject-matter jurisdiction pursuant to 28 U.S.C. § 1331

because this action arose under the Lanham Act, 15 U.S.C. § 1525; and

jurisdiction over plaintiffs’ state and common-law claims under 28 U.S.C.

§ 1367 because those claims were so related to the federal claims that they

formed part of the same case or controversy. Appellants filed a timely appeal

on November 22, 2013. Fed. R. Civ. App. P. 4 (a)(1). This Court has

jurisdiction pursuant to 28 U.S.C. § 1291.


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Statement of Issues

1. Does Rule 23 permit a class-action settlement where all settlement funds are distributed to third parties, but with no finding that settlement funds could not have been distributed to class members?

The district court approved a settlement that it described as “unique” and with “little precedent.” Under that settlement, class members cannot receive direct compensation, and all funds are instead distributed to third parties. The district court made no finding that the funds could not be distributed to class members.

Apposite Authorities:

Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997).

Airline Ticket Comm’n Antitrust Litig. Travel Network v. United Air Lines, 307 F.3d 679 (8th Cir. 2002).

Klier v. Elf Atochem N. Am., Inc., 658 F.3d 468 (5th Cir. 2011).

Powell v. Georgia-Pacific Corp., 119 F.3d 703 (8th Cir. 1997).

Rules Enabling Act, 28 U.S.C. § 2072

2. Is a class settlement “fair, reasonable, and adequate” under Rule 23 where it does not guarantee any benefit to class members?

The distribution of the settlement funds to third parties does not guarantee benefits to class members. Moreover, the charitable purposes for which the funds may be used do not relate to the class members’ publicity claims released in the settlement, and class members with otherwise identical claims have no guarantee of equal treatment.


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Grunin v. Int’l House of Pancakes, 513 F.2d 114 (8th Cir. 1975).

Mirfasihi v. Fleet Mortg. Corp., 356 F.3d 781 (7th Cir. 2004).

3. Does Rule 23 allow approval of a class settlement without an evaluation of the potential value of the claims released by the class members?

The district court prevented class members from obtaining discovery regarding the NFL’s profits from using the players’ images. The court nonetheless approved the settlement, releasing all class members’ past and future claims without any record evidence of the value of those claims.


In re Pet Food Prods. Liab. Litig., 629 F.3d 333 (3d Cir. 2010).

City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974).

Grunin v. Int’l House of Pancakes, 513 F.2d 114 (8th Cir. 1975).


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Statement of Case

Overview

This case turns upon whether Rule 23 permits a class-action settlement

that provides for no direct benefit to any class members, but instead provides

solely for distributions to third parties without safeguarding class members’

right to any compensation for releasing their claims. Over the objection of

Appellants, named plaintiffs in the litigation, the district court approved a

settlement that it acknowledges was “unique” and without precedent.

Proceedings Below

Appellants are class-action plaintiffs — former professional football

players — who claimed that the National Football League (“NFL”) illegally

used players’ identities to promote the NFL, violating the players’ common-

law and statutory rights of publicity.1 The NFL used the players’ names and

likenesses from archival video footage, particularly in NFL Films

productions,2 the promotional videos deemed “the most effective

propaganda organ in the history of corporate America.”3

Nearly all of the putative class members played long before the days of

multimillion-dollar contracts. The NFL earns record revenues by continuing

1 A–67; A–165. 2 A–165; A–123 – A–131. 3 A–124 ¶ 23.


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to use their identities in media presentations and promotions. This class-

action suit sought to right a fundamental wrong: the NFL uses its retired

players’ identities to bolster its profits without providing the players fair

compensation.

A. NFL’s use of retired players’ identities in videos.

The NFL has used players’ identities in NFL Films’ videos — including

its “History” series that included videos called “The Fabulous Fifties” and

“Sensational 60s” — to build the NFL’s brand, sell products, and otherwise

generate revenue.4 The NFL has promoted itself by using the retired players’

names and images from their playing days.5

One of the NFL’s key marketing strategies has been to appeal to

consumers’ sense of nostalgia through retired players.6 Using the retired

players’ identities, the NFL has bolstered its brand by reminding consumers

of the league’s history.

The NFL’s primary use of retired players’ identities has been through its

NFL Films division,7 which markets the NFL in documentary-style films that

convert raw game footage into promotional films.8 The videos’ stars are

4 A–67. 5 A–67 – A–68. 6 A–116; A–123 – A–128; A–140 – A–141. 7 A–123 – A–141; A–139 – A–141. 8 A–124 – A–125; A–140 – A–141.


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retired players: the NFL uses their names to sell its products and to

strengthen its brand.9 The NFL disseminates these promotional films in

many ways, including through its own NFL Network.10 NFL Films’ self-

described mission is promoting the NFL,11 a mission that generates

substantial revenues.12 In 2008 alone, the NFL’s revenues were estimated to

be $6.9 billion.13

To the extent the retired players’ contracts even addressed publicity

rights, they excluded endorsement of commercial products, and no contract

permitted the NFL to use any player’s publicity rights after the contractual

expiration date.14

B. Retired players’ claims: Lanham Act, publicity rights, and unjust enrichment.

In 2009, the retired players sued the NFL in this class action, seeking to

stop the NFL’s continued unauthorized use of their identities.15 The retired

9 A–116; A–123 – A–127. 10 A–126, A–131. 11 A–124. 12 A–124 – A–127. 13 A–134. 14 A–170. 15 A–117.


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players’ claims included false endorsement under the Lanham Act, violations

of the players’ rights of publicity, and unjust enrichment.16

The NFL sought to defeat the retired players’ claims through two

dispositive motions. But the district court first denied the NFL’s motion for

judgment on the pleadings,17 and later denied the NFL’s motion for

summary judgment.18 In both motions, all class-action plaintiffs were

represented by a group of three Co-Lead Plaintiffs’ Counsel.19

C. Settlement by certain plaintiffs: all funds would go to third parties, the “remedies” do not relate to publicity rights, and the record lacks evidence of damages.

On December 12, 2012 — the day after the district court denied the

NFL’s request for summary judgment — Chief Magistrate Judge Arthur

Boylan appointed a single attorney20 as Plaintiffs’ Lead Settlement Counsel

to negotiate a potential settlement with the NFL. That counsel worked

independently of the Co-Lead Plaintiffs’ Counsel.21 The magistrate judge

16 A–68. 17 A–83 – A–84. 18 A–165 – A–172. 19 See A–110 – A–114 (Appointing as Plaintiffs’ Interim Co-Lead Class

Counsel: Hausfeld LLP, Bob Stein LLC, and Zimmerman Reed PLLP)). 20 A–173 – A–174 (appointing Daniel E. Gustafson of Gustafson Gluek,

PLLC as Plaintiffs’ Lead Settlement Counsel). 21 A–173; A–177.


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refused to require Lead Settlement Counsel to advise, consult, or otherwise

discuss the settlement with Co-Lead Plaintiffs’ Counsel.22

On March 18, 2013, Lead Settlement Counsel filed an amended class-

action complaint, naming 14 new plaintiffs not previously involved in the

case.23 The same day, all of those 14 new plaintiffs and 3 others previously

named (“Settling Plaintiffs”) asked the district court to approve a proposed

settlement.24 Five of those new plaintiffs ultimately opted out of the

settlement.25 All of the six named plaintiffs who had initiated the suit

opposed preliminary approval of that settlement.26 Their opposition

included the issues now on appeal. Over the opposition, the district court

granted preliminary approval of the proposed settlement and certified a

settlement class under Rule 23(b)(3).27

22 A–177 (stating “Plaintiffs Lead Settlement Counsel shall not be

required to consult, provide information to or solicit or secure approval from any other Plaintiffs’ counsel, including the three co-lead litigation counsel previously appointed”).

23 A–181. 24 A–224; Memorandum in Support of Motion for Preliminary

Approval of Settlement, Dkt. #261. 25 Dkt. #446–1 at 4 (Lemuel Barney), 38 (Paul Krause, Bruce Laird), 49

(Preston Pearson), 59 (Jim Ray Smith). 26 Mem. in Opp’n to Mot. for Prelim. Approval of Settlement, Dkt.

#264; Letter to District Judge in Resp. to Settling Pls’. Mar. 29, 2013 Submission, Dkt. #269.

27 A–392 – A–412.


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That settlement, discussed in more detail below, is significant in several

respects. Foremost among those is the distribution of the settlement

proceeds solely to third parties, without any safeguards that would ensure

that class members receive compensation. Class members cannot seek direct

compensation, and for any individual class member, compensation is not

guaranteed. The benefits provided by the third parties do not relate to the

class members’ claims, which seek to remedy violations of their publicity

rights. And the record fails to reflect that the district court or any plaintiff

has ever considered any evidence of the potential value of the claims released

by the class in the settlement, such as the value of the NFL’s film library, the

NFL’s profits, and other economic benefits from the promotional use of the

films.

1. Terms of the settlement

The settlement allocates up to $50 million among the following:

(1) A 501(c)(3) organization called the Common Good Entity,

(2) Costs for establishing a Licensing Agency,

(3) Attorneys’ fees,

(4) Settlement administration expenses, and

(5) The NFL’s fees and costs for litigation with class members who exclude themselves from the settlement class.28

28 A–242 – A–244 (¶¶ II.A.1; II.A.3); A–246 (¶ II.B.1); A–261

(¶ IV.F.1); A–267 (¶ IX).


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The settlement does not allocate any of the funds for direct distributions to

class members. Further, neither the Common Good Entity nor the

Licensing Agency guarantees that any particular class member will receive

any economic benefit.

(a) Common Good Entity

The first third-party recipient of settlement funds is a new 501(c)(3)

organization called the “Common Good Entity,” ostensibly “dedicated to

supporting and promoting the health and welfare of Retired Players and

other similarly situated individuals.”29 But the Common Good Entity’s focus

on promoting “health and welfare” will not remedy violations of retired

players’ claims: publicity rights.

The amount available for use by the Common Good Entity is

uncertain. The settlement provides that the NFL will pay $42 million over

eight years to the Common Good Entity, but if the NFL incurs opt-out

litigation expenses, the settlement permits the NFL to deduct up to

$13.5 million of the $42 million — leaving the Common Good Entity only

$28.5 million.30 If the Common Good Entity does not distribute all funds

29 A–261 (¶ IV.F.1). 30 A–243 – A–246 (¶¶ II.A.1–4).


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within ten years, then the remaining funds revert to the NFL to disburse for

similar charitable purposes.31

Nor is the amount of the distribution to the Common Good Entity

tied to the damages that the class members claim to have sustained. The

Common Good Entity’s authority is limited to distributing settlement funds

only to other third-party organizations.32 The Common Good Entity’s

proposed seven-member Board of Directors would have discretion to

disburse funds to third-party charities for a group of approved uses — such as

medical research, housing, insurance, medical evaluations, mental health,

wellness, and employment training.33 But the approved uses do not include

any compensation for the NFL’s use of retired players’ images and other

publicity rights. Further, the settlement does not guarantee that funds in the

Common Good Entity will ever reach any class member. It contemplates that

the funds received by the Common Good Fund may be disbursed for the

charitable benefit of “similarly situated individuals” in addition to the

benefit of retired players.34

31 A–264 (¶ IV.F.9). 32 A–262 – A–263 (¶ IV.F.5). 33 A–263 (¶ IV.F.5.(c)). 34 A–262 (¶ IV.F.5).


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This chart illustrates the distribution of the settlement.35

Thus, people not in the class may end up receiving funds through the

Common Good Entity’s distributions, while class members may receive

nothing if they do not qualify for the benefits offered by the charities that

ultimately receive the money.

(b) Licensing Agency

The second third-party recipient of settlement funds is a newly created

Licensing Agency, which would seek to license class members’ publicity

rights to third parties.36 The Licensing Agency can license retired players’

publicity rights to third parties, but not to the NFL, which receives a

complete release under the settlement to use those rights in promoting the

35 A–261 – A–265 (¶¶ IV.F.1–10). 36 A–254 (¶ IV.A).


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NFL.37 The actions of the Licensing Agency therefore do not relate to the

NFL’s use of class members’ publicity rights, and the agency will not generate

or receive any compensation for the NFL’s continued use of those rights.38

Under the settlement, the Licensing Agency lacks authority to license

NFL game footage to third parties.39 It also lacks authority to license any

NFL intellectual-property rights, such as logos, to third parties without the

NFL’s consent.40 The NFL and its assigns receive the uncompensated,

worldwide, perpetual right to commercially exploit “Player Identity

Elements”41 in any media or format, “(whether now known or hereinafter

developed) that publicize, promote, market or advertise the NFL.”42 This

includes the personal identity rights of virtually all class members; the grant

is not even limited to football-related rights. Thus, NFL sponsors and

broadcasters, as Released Parties,43 could use class members’ identity rights

in competition with the Licensing Agency.

The Licensing Agency and the Common Good Entity are closely tied.

The Common Good Entity’s Board of Directors and the Licensing Agency’s

37 A–248 (¶ III.A); A–252 – A–253 (¶ III.C.4). 38 Id. 39 A–252 (¶ III.C.4). 40 A–257 (¶ IV.C.3). 41 A–240 (¶ I.E.38); A–249 (¶ III.A.2). 42 A–249 (¶ III.A.2). 43 A–241 (¶ I.E.43).


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Board of Directors will share identical members.44 The “proceeds” that the

Licensing Agency generates will be divided between the Common Good

Entity and the class members whose rights are licensed.45 The settlement

does not contain any revenue projections, nor does the settlement ensure

that the Licensing Agency will generate revenue — or even have sufficient

funding to remain in operation. The settlement does not guarantee that any

class member will receive licensing revenue through the Licensing Agency.

2. Value of the settlement

(a) The retired players release past and future publicity-rights claims against the NFL.

In exchange for the creation of the third-party Common Good Entity

and Licensing Agency, the settlement requires class members to abandon

their claims and release the use of personal identity rights never before

assigned to the NFL. Under the settlement, class members must release their

claims against, and covenant not to sue, the NFL, or any third party

authorized to use NFL game footage — including all past and future claims

regarding players’ publicity rights.46

44 Id. at 19–20. 45 Id. at ¶ IV.E.1. 46 A– 241 (¶ I.E.43); A–248 – A–250 (¶ III.A.1–3); A–252 – A–253

(¶ III.C.4).


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The settlement’s release is both broad and perpetual. The released

publicity rights broadly include each player’s name, nickname, initials,

likeness, image, picture, photograph, animation, persona,

autograph/signature, appearance, voice, personal or biographical

information, or any other identifying or personal characteristic.47 The

settlement’s release covers all of the class members’ claims in perpetuity.48

The settlement also prohibits class members from contesting the NFL’s

“exclusive right” to broadcast, license, or otherwise disseminate NFL game

footage.49 As a result, the settlement secures the NFL’s unfettered use of its

game-footage library — without fear that its use will be challenged by the

retired players featured so prominently in that footage. Although the retired

players’ released claims and covenant not to sue are broad, the settlement

and the entire district-court record are silent about the value of those claims.

Regarding future disputes, the settlement includes a fee-shifting

provision that favors the NFL alone.50 If a class member sues any Released

Party (that is, any NFL entity), and the Released Party prevails “based on the

Release or Covenant,” then the class member must pay the Released Party’s

costs and expenses, including attorneys’ fees.51 But if the class member

47 A–240 (¶¶ I.E.38, I.E.40); A–248 – A–250 (¶ III.A.1–3). 48 A–249 – A–250 (¶ III.A.2). 49 A–252 – A–253 (¶ III.C.4). 50 A–253 (¶ III.D). 51 Id.


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prevails, the fee-shifting provision does not apply.52 This provision effectively

ensures that in the future, retired players will not contest the NFL’s use of

their images, potentially even in contexts not contemplated by the settlement

agreement.

(b) The district court prohibited damages discovery, leaving the value of the class members’ released claims unknown.

The district court approved the settlement of the class members’ claims

even though the court barred the class members from obtaining damages

discovery. Early in the case, the district court prohibited damages discovery

until discovery on the named plaintiffs’ claims and class certification had

been completed.53 The NFL meticulously redacted its production to omit

references to financial information.54 The district court upheld the NFL’s

redactions when challenged by plaintiffs.55 As a result of these actions, at the

time of the settlement approval, the record contained no information

relating to the potential damages for the claims released by the class.

52 Id. 53 A–86. 54 A–155, A–163, A–164. 55 A–153, A–164.


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3. Lead Settlement Counsel ignored the Appellants’ expressed concerns.

After the class received notice of the settlement, Appellants’ counsel

wrote to Lead Settlement Counsel, noting the risks of the settlement and

requesting information about the settlement’s economics.56 That letter

requested information regarding (1) certainty that class members would

receive an economic benefit, (2) potential revenue of the Licensing Agency,

and (3) the value of the class members’ released claims.57 The letter also

raised concerns that the class had not received information about the

settlement’s risks.58 After seven weeks of non-response, followed by a

reiterated request from Appellants’ counsel,59 Lead Settlement Counsel still

refused to provide any of the requested information,60 writing that he saw

“little purpose” in responding.61

56 A–417 – A–423. 57 Id. 58 A–421. 59 A–425 – A–427. 60 A–429 – A–430. 61 A–429.


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4. The district court approved the settlement, despite acknowledging that this “unique” agreement has “little precedent.”

In granting final approval, the district court acknowledged that this

settlement was a “unique” and “one-of-a-kind” agreement that had “little

precedent.”62 Indeed, the district court expressed uncertainty — at both the

preliminary and final approval hearings — about whether several of the

agreement’s deficiencies rendered the settlement unfair, unreasonable, or

inadequate.

At the preliminary approval hearing, the district court expressed

concern that this Court would reject the settlement as “violat[ing] the public

policy issues that have been developed with respect to cy-pres funds.”63 It

acknowledged that courts “are not very excited about cy-pres funds.”64 At the

final approval hearing, the district court again expressed doubts about the

settlement, noting that it was “struggling” with the issue of whether a class

settlement must provide “direct benefit to class members.”65 The district

court then suggested that this could become the first settlement to be

approved without guaranteeing any direct benefit to class members.66

62 A–459 – A–460. 63 Dkt. #267, Prelim. App. Tr. at 46:13–19. 64 Id. at 12:20–21. 65 Dkt. #426, Final App. Tr. at 34:21–35:2. 66 Id. at 34:24–35:8.


19

The district court also said that it was “struggling” with whether it

could approve the settlement despite not knowing the value of the claims.67

After hearing Appellants’ argument — that the district court, as the class

members’ fiduciary, must know the claims’ value before approving any

settlement — the district court indicated that it did not need to know the

claims’ value, so long as some of the lawyers had “made a decision that [the

settlement amount] was sufficient.”68 The district court also appeared to

indicate that it did not need to make an inquiry independently, but that it

could merely “be comfortable that the people that were looking at this had

sufficient information to which they could make a knowledgeable

decision.”69 Such information, whatever it may be, is not in the record.

On November 4, 2013, the district court granted final approval and

confirmed certification of the settlement class under Rule 23(b)(3).70 In the

memorandum accompanying its order, the court noted its role as a

“fiduciary” and “guardian” of the absent class members’ rights.71 The court

rejected objectors’ arguments regarding cy pres principles without

explanation, simply stating that “[t]he settlement is not a cy pres

67 Id. at 40:19. 68 Id. at 40:8–13. 69 Id. at 26:7–10. 70 A–472; A–478 – A–479. 71 A–458.


20

distribution.”72 The court also rejected the idea that the settlement was

unfair because it failed to guarantee any class member any direct benefit.73

The court gave short shrift to the former players’ argument — “that a

settlement that does not include direct financial benefit to the class is

impermissible” — opining only that the objectors “are wrong.”74 Lastly, the

district court rejected the objectors’ argument that to evaluate the proposed

settlement, the court must know the value of the claims. The district court

relied upon the magistrate judge’s apparent satisfaction with damages

representations; the district court did not state that it analyzed — or even

viewed — any damages information to determine the claims’ value.75

The district court acknowledged that if it granted final approval, “not

only would [the order] be appealed, it should be appealed, I don’t make any

bones about that.”76

72 A–459. 73 A–459; A–469. 74 A–459. 75 A–470. 76 Dkt. #426 at 32:8–10 (emphasis added).


21

Summary of Argument

The settlement now before the Court is not reasonable, adequate, or

fair; it should be rejected. The settlement provides no certainty that any class

member will receive any economic benefit. It lacks any claims process that

would permit class members to request settlement proceeds. Instead, all

settlement funds go to third-party organizations, not class members. Equally

problematic, the record contains no information about damages and the

value of the released claims, preventing the district court from making the

requisite assessment of whether the proposed settlement is reasonable,

adequate, and fair. The district court’s approval of the proposed settlement

should be reversed, and the case should be remanded for further

proceedings.


22

Argument

The payment of settlement proceeds only to third parties, the lack of

direct compensation of any kind to class members, and the lack of a

sufficient record upon which fairness can be evaluated make the settlement

fundamentally unfair to the class and not lawful under Rule 23.

Standard of Review

A class settlement may not be approved unless it is “fair, reasonable,

and adequate.” Fed. R. Civ. P. 23(e). “[T]he district court acts as a fiduciary

who must serve as a guardian of the rights of absent class members.” Grunin

v. Int’l House of Pancakes, 513 F.2d 114, 123 (8th Cir. 1975). The district court

must consider four factors in its analysis: “[1] the merits of the plaintiff’s

case, weighed against the terms of the settlement; [2] the defendant’s

financial condition; [3] the complexity and expense of further litigation; and

[4] the amount of opposition to the settlement.” Van Horn v. Trickey, 840

F.2d 604, 607 (8th Cir. 1988). “The most important factor is the strength of

the case for plaintiffs on the merits, balanced against the amount offered in

the settlement.” Grunin, 513 F.2d at 124 (quotation omitted).

The district court’s decision to approve the settlement is reviewed for

abuse of discretion. In re Uponor, Inc., 716 F.3d 1057, 1063 (8th Cir. 2013). A

district court abuses its discretion when it “rests its conclusion on clearly

erroneous factual findings or erroneous legal conclusions.” Oglala Sioux Tribe


23

v. C & W Enters., Inc., 542 F.3d 224, 229 (8th Cir. 2008). Circuit courts

review both questions of law raised in an appeal and district court

interpretations of settlement agreements de novo. Wal-Mart Stores, Inc. v. Visa

U.S.A., Inc., 396 F.3d 96, 106 n.12 (2d Cir. 2005); Klier v. Elf Atochem N. Am.,

Inc., 658 F.3d 468, 474 (5th Cir. 2011). Under these standards, the district

court’s decision should be reversed.

I. Rule 23 does not allow the distribution of class-settlement funds to third parties except in limited circumstances not present here.

No appellate court has approved a class settlement in which the settling

parties agreed to distribute all funds to third parties without seeking to

compensate class members directly — or demonstrating that such distribution

would be impossible or infeasible. In this case, the settling parties have

attempted exactly that. This case presents a significant test of the boundaries

of Rule 23’s mechanism for resolving class claims. Appellants respectfully

submit that the settlement here has exceeded those boundaries and is

impermissible under Rule 23.

Cases addressing distributions of class funds to third parties have

typically referred to such distributions as cy pres. That label, however, has not

been applied consistently or given a specific definition. Rather, it is a term

used for describing the very narrow circumstances in which courts have

approved distributions to third parties instead of class members: where class

members have been fully compensated, where they cannot be identified, or


24

where their individual distributions would be economically infeasible. It is

an exception — indeed, the only exception recognized in caselaw applying

Rule 23 — to the principle that class proceeds should compensate class

members directly:

If individual class members can be identified through reasonable effort, and the distributions are sufficiently large to make individual distributions economically viable, settlement proceeds should be distributed directly to class members.

AM. LAW INST., PRINCIPLES OF THE LAW OF AGGREGATE LITIG. § 3.07 (2010)

Courts have criticized all varieties of third-party distributions as inferior

to direct distributions to class members. See Airline Ticket Comm’n Antitrust

Litig. Travel Network v. United Air Lines, 268 F.3d 619, 625 (8th Cir. 2001)

(“Airline I”); In re Baby Prods. Antitrust Litig., 708 F.3d 163, 173 (3d Cir. Pa.

2013) (cautioning that “direct distributions to the class are preferred over cy

pres distributions,” and that Congress created the class action’s private causes

of action “to allow plaintiffs to recover compensatory damages for their

injuries”). The policy against third-party distributions protects class members

from releasing their claims for a “benefit that is at best attenuated and at

worse illusory.” In re Baby Prods., 708 F.3d at 173.

The U.S. Supreme Court has not yet addressed the circumstances, if

any, under which Rule 23 allows class-settlement distributions solely to third

parties. The Supreme Court denied certiorari recently in Marek v. Lane, a

case in which the Ninth Circuit approved a class settlement that distributed


25

the majority of the settlement funds to a newly created third-party entity.

Marek v. Lane, 134 S. Ct. 8 (2013) (Roberts, C.J., denying certiorari). Chief

Justice Roberts wrote a statement accompanying the denial of certiorari,

explaining that the petitioner’s challenge was “focused on the particular

features of the specific cy pres settlement at issue,” and further:

Granting review of this case might not have afforded the Court an opportunity to address more fundamental concerns surrounding the use of such remedies in class action litigation, including when, if ever, such relief should be considered; how to assess its fairness as a general matter; whether new entities may be established as part of such relief; if not, how existing entities should be selected; what the respective roles of the judge and parties are in shaping a cy pres remedy; how closely the goals of any enlisted organization must correspond to the interests of the class; and so on.

Id. at 9. Chief Justice Roberts concluded “[i]n a suitable case, this Court may

need to clarify the limits on the use of such remedies.” Id.

The present case presents the fundamental concerns identified by Chief

Justice Roberts. The settlement distributes funds only to third parties. It

makes no attempt to compensate class members directly. It establishes new

third-party entities to receive the funds. The third-party recipients may

distribute the funds only to other, unspecified third parties for charitable

distribution. The funds may be used only for charitable purposes that have

nothing to do with the class members’ released claims.


26

The courts of appeal have approved distributions of class-settlement

proceeds to third parties only in narrow circumstances not present here. This

Court has explained that class-settlement funds may be distributed to a third

party only when such funds are “unclaimed” funds to which no party has a

legal right. In re Airline Ticket Comm’n Antitrust Litig., 307 F.3d 679, 680–83

(8th Cir. 2002) (“Airline II”). Such “unclaimed” funds generally arise only

from two circumstances: (1) where class members are difficult to identify or

change constantly, or (2) where funds remain after distributions to the class

members. Airline I, 268 F.3d at 625 (citing Powell v. Georgia-Pacific Corp., 119

F.3d 703, 706–07 (8th Cir. 1997)). Neither circumstance applies here.

The reason that only “unclaimed” funds may be distributed to third

parties is that class members have property rights in the proceeds, which

serve as consideration for the class members’ release of their claims. Klier,

658 F.3d at 474 (citing Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 807–08,

812–13 (1985)). When no party has a remaining legal right to settlement

proceeds, the proceeds may be distributed to a third party. See Powell, 119

F.3d at 706–07.

Other courts of appeal have narrowly allowed distributions to third

parties in circumstances where funds might be considered “unclaimed,” such

as when class members cannot be identified or administration costs of

distribution would exceed individual recoveries. In re Pharm. Indus. Average

Wholesale Price Litig., 588 F.3d 24, 34 (1st Cir. 2009); see also Six Mexican


27

Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1305 (9th Cir. 1990). These

conditions also are not present here.

Marek v. Lane is an example of a case where distribution to third parties

was approved because “direct monetary payments to the class of remaining

settlement funds would be infeasible given that each class member’s direct

recovery would be de minimis.” Lane v. Facebook, 696 F.3d 811, 821 (9th Cir.

2012). Thus, the petition for certiorari “focused on the particular features of

the specific cy pres settlement at issue” rather than the broader concerns

articulated by Chief Justice Roberts regarding the circumstances where

Rule 23 allows distribution of class-settlement funds to a third party. Lane,

134 S. Ct. at 9.

This case differs from Lane because the record here contains no

indication that the settlement funds can be considered “unclaimed.” Over

24,000 class members have been identified.77 None will be compensated

directly. All will release their past and future publicity-rights claims against

the NFL. Nothing in the record suggests that administrative costs of direct

distribution would exceed the awards. In these circumstances, Rule 23 does

not allow the settlement funds to be distributed to the third-party Common

Good Entity and Licensing Agency.

77 Dkt. #262–2 at 4.


28

The district court stated that the settlement here is not a cy pres

distribution.78 Appellants wholeheartedly agree that the distribution here

cannot be considered a proper cy pres distribution. A cy pres distribution is a

last-step measure to which courts resort when they cannot provide any

further compensation to class members. Cy pres principles provide a narrow

justification for paying settlement proceeds to someone other than class

members when there is no other alternative. And if a third-party distribution is

not properly cy pres (that is, does not fit into the highly circumscribed

justifications for a cy pres distribution), then it cannot be allowed under

Rule 23 because it disposes of the class members’ property to a third party

without any justification.

Applying Rule 23 to distribute all class-settlement proceeds to third

parties without attempting to compensate class members directly for

releasing their claims violates the Rules Enabling Act, 28 U.S.C. § 2072.

Class members have a right to the settlement funds as compensation for

their underlying substantive claims. See Klier v. Elf Atochem N. Am., Inc., 658

F.3d 468, 474 (5th Cir. 2011). Procedural rules like Rule 23, promulgated

under the Rules Enabling Act, may not “abridge, enlarge, or modify any

substantive right” of any party. 28 U.S.C. § 2072(b). Thus, “Rule 23 . . .

must be interpreted with fidelity to the Rules Enabling Act and applied with

the interests of the absent class members in close view.” Amchem Prods., Inc. v.

78 A–460.


29

Windsor, 521 U.S. 591, 629 (1997). The Rules Enabling Act does not allow

settling parties and the district court to modify class members’ rights by

abridging their right to a remedy of compensation, instead creating a new

remedy that does not exist in the underlying substantive law. See 28 U.S.C.

§ 2072(b); M. Redish et al., Cy Pres Relief & the Pathologies of the Modern Class

Action, 62 FLA. L. REV. 617, 644–48 (2010).

Here, the settlement creates a new remedy by directing compensation

solely to two third parties: a charitable Common Good Entity and a

Licensing Agency. These third parties have suffered no injury under the class

members’ Lanham Act or publicity-rights claims; they have no standing in

this lawsuit. This remedy would not be available through the class members’

substantive claims, and the class members’ available remedy — compensation

— has not been fulfilled or shown to be impossible or infeasible. The Rules

Enabling Act prohibits the creation of a new remedy through the procedural

vehicle of Rule 23.

The settlement here also brings into focus the reasons for prohibiting

the distribution of funds to third parties before class members, as discussed

in more detail below. It does not guarantee that any particular class member

— or any class member at all — will receive an economic benefit after the

funds are routed through multiple charitable organizations. It does not

guarantee that the Licensing Agency will generate any revenue, nor does it

guarantee any royalties for any particular class member. Because the


30

charitable purposes of the third-party charities bear no relation to the

released publicity-rights claims, the settlement almost certainly will result in

disparate treatment for class members with identical legal claims.

Courts have relied upon similar considerations to deny approval to

distributions of class funds to third parties, even where the prerequisite

circumstances have been met. For example, the Third Circuit vacated

approval of a settlement because of questions about the fairness of

distributing $18 million to third parties while only distributing $3 million

directly to class members. In re Baby Prods. Antitrust Litig., 708 F.3d 163, 173

(3d Cir. 2013). The Ninth Circuit set aside a distribution to a third party

because “there is no reasonable certainty that any [class] member will be

benefited.” Six Mexican Workers, 904 F.2d at 1308. The Fifth Circuit set aside

a third-party distribution, explaining that unused funds should have been

distributed directly to class members rather than to third parties. Klier, 658

F.3d at 474.

Neither the district court nor the proponents of the settlement were

able to cite a single case that has approved a class settlement that distributes

funds to third parties in the first instance, without attempting to compensate

class members — or in the alternative determining that such compensation

would be impossible, impracticable, or infeasible. This settlement lacks

precedent because what it attempts to do cannot, and should not, be done.


31

Rule 23 cannot bear the burden that the Settling Parties have placed

upon it: that rule does not permit this settlement. The district court abused

its discretion by approving the class settlement, and the approval should be

reversed and the judgment vacated.

II. The settlement is not fair, reasonable, and adequate under Rule 23 because it does not guarantee a benefit to each or any class member in exchange for releasing his claims.

Beyond the impermissible distribution of settlement funds to third

parties, the district court’s approval of the settlement should be reversed

because the settlement does not guarantee an economic benefit to any class

member, making it unfair under Rule 23. The district court and Settling

Plaintiffs could not list a specific benefit that any individual class member

would receive; the record lacks any evidence that eligible class members will

receive any benefit at all. The record contains no evidence that the Licensing

Agency will generate revenue at any point, nor does the record show which

class members (if any) might expect royalties from the Licensing Agency. The

amount offered in the settlement is effectively zero to the members of the

class, because no class member is guaranteed to receive any benefit.

Therefore, under “the most important factor” in the fairness evaluation —

“the strength of the case for plaintiffs on the merits, balanced against the

amount offered in the settlement,” Grunin, 513 F.2d at 124 (quotation

omitted) — the balance cannot weigh in favor of approval. The settlement is

fundamentally unfair.


32

A. The class members’ claims have value.

The district court recognized that the claims released by the settlement

agreement have value and are not worthless. The district court acknowledged

that “[e]ach individual appearing in a game clip has publicity rights in his or

her image.”79 The district court further explained, using Fred Dryer as an

example, that class members featured in NFL Films productions, if successful

on their claims, could have “relatively substantial” damages.80

The district court also articulated potential difficulties with the claims

released by the settlement, but did not conclude that the difficulties were

insurmountable.81 The primary difficulties identified were (1) statute of

limitations and (2) manageability of a class action based on choice-of-law

issues and proving damages.82 Neither of these provides a sufficient basis to

conclude that the amount offered in the settlement — effectively zero —

outweighs the value of the released claims.

The district court suggested that, under the relevant limitations period,

the class members’ claims could not go back farther than 2003.83 This

79 A–468. 80 A–467. 81 Indeed, the Court previously denied the NFL’s motion for judgment

on the pleadings and motion for partial summary judgment. See A–67 – A–84; A–85 – A–109.

82 A–463 – A–469. 83 A–463.


33

period, however, now includes more than ten years of potential damages.

The district court did not find that the claims would be barred; instead, only

that they might be limited in value.84 But limited value is still value.

Concerns relating to manageability of a class action also do not negate

the value of the individual claims released under the terms of the settlement.

The issues discussed by the district court — choice of law and damages — have

not been resolved against the class members. Appellants described in their

objections a basis upon which the law of a single state could be applied to all

class members’ claims.85 Appellants also submitted an expert declaration

describing how a single apportionment methodology likely could be applied

on a formulaic basis to distribute damages to each class member.86 These

issues have not yet been decided, and the district court’s concerns about

manageability do not establish that the released claims have no value.

In sum, the district court recognized that the claims released in the

settlement have value. While the district court stated that the claims have

“many difficulties,”87 it did not quantify those potential difficulties or

attempt to balance the potential risk against the class members’ potential

84 Id. 85 Objection to the Fairness, Reasonableness, and Adequacy of the

Proposed Settlement by Plaintiffs Marshall, Senser, and Pastorini, Dkt. #327–1 at 32–34.

86 A–439 – A–444 (¶¶ 9–20). 87 A–463.


34

recovery. Under the proper balancing test, the settlement should not have

been approved.

B. The Common Good Entity does not guarantee any economic benefit to any class member.

The settlement does not guarantee that each identified class member —

or any individual class member — will receive any benefit. No class member

will receive a payment directly out of the settlement proceeds. The third-

party Common Good Entity has discretion to distribute the proceeds for

charitable uses — but only to other third parties, not class members. If the

Common Good Entity fails to distribute the settlement funds, they revert to

the NFL to disburse for similar charitable purposes. The settlement’s

distribution structure does not permit class members to request payment,

and the settlement does not guarantee that any class member will receive any

benefit; as a practical matter, the settlement guarantees that some class

members will not. This is unfair to the class.

All settlement funds initially go to the third-party Common Good

Entity, then flow to other third-party charities. Under the settlement, class

members may never see any proceeds. Instead, the proceeds may revert to the

NFL for similar charitable purposes or may be distributed to charities that

benefit only those “similarly situated” to class members, not class members


35

themselves. The settlement’s list of permitted charitable uses88 shows that

class members who do not qualify for benefits from various charities will

never receive any benefit.

The Common Good Entity selects charities to fund, and those charities

will provide benefits consistent with their purposes — but none of the

charities limits its service to benefitting former NFL players. Instead, to

receive benefits from the charity, a former player who has lost his claim

under the settlement must first qualify for eligibility for a charitable benefit

under the rules and bylaws of each charity. That former player has no

guarantee that he will receive any benefit, or even if he does, that it will bear

any relationship to the value of his claim.

The Common Good Entity is not an “administrative vehicle” that

distributes settlement funds to class members: it has no claims process, and

it lacks authority to distribute funds to class members. The Common Good

Entity is a charitable organization, not a settlement administrator. It does

not assure that the settlement will compensate class members’ valid claims in

any form.

The record reflects the settlement’s uncertainty and risks. The Settling

Plaintiffs argued that the settlement funds “potentially will benefit all Retired

88 A–263 (¶ IV.F.5.(c)) (listing permitted uses that include medical

research, housing, insurance, medical evaluations, mental health, wellness, and employment training).


36

Players who are eligible for the support from the organizations supported by

the Fund.”89 That promise is hardly compelling. Logically, the contributions

also “potentially” will not benefit even those class members who are eligible.

And they “potentially” will benefit individuals not in the class. Class

members whom the Common Good Entity or its recipient charities decide

are ineligible will receive nothing. Indeed, if the recipient charities are not

restrained in their use of funds — and there is no indication that they will be

so restrained — none of the funds may end up being distributed to class

members.

The district court erroneously concluded that the settlement

guaranteed direct benefits to all class members.90 To support that

conclusion, the district court cited no record evidence. Instead, the district

court merely asserted that “[The Common Good Fund] will provide

substantial benefits to the class as a whole.”91 The district court also simply

concluded, without evidence, that the Common Good Fund will give money

to other charities for uses that will be “directly beneficial to class

members.”92 The district court’s failure to ground its interpretation of the

settlement upon anything in the record raises red flags about the accuracy of

89 Dkt. #261 at 8 (emphasis added). 90 A–469 – A–471. 91 A–471. 92 Id.


37

that interpretation. See, e.g., Day v. Persels & Assocs., LLC, 729 F.3d 1309,

1327 (11th Cir. 2013) (holding that granting final approval to class-action

settlement constitutes reversible error, where record contains no support for

district court findings).

Under the settlement, any class member may get nothing in exchange

for releasing his past and future claims. Indeed, all class members may get

nothing. This risk makes the settlement unfair under Rule 23.

C. The Licensing Agency does not guarantee that any class members will receive an economic benefit.

The settlement agreement also contemplates the formation of a new

entity, the Licensing Agency, which will ostensibly facilitate the licensing of

former players’ publicity rights.93 But like the Common Good Fund, the

Licensing Agency also does not guarantee any economic benefit to class

members in exchange for the release of their past and future claims.

1. The Licensing Agency provides no direct benefit to class members.

The district court incorrectly suggested that the Licensing Agency

constituted a “direct” benefit to class members, noting that the Licensing

Agency could permit class members to be “paid directly” for their publicity

rights.94 This is wrong, first because the Licensing Agency is a third party,

93 A–254 (¶ IV.A.3). 94 A–470.


38

and no distribution to a third party can properly be considered a “direct”

distribution to class members. Second, the Licensing Agency does not

guarantee royalties to any class member, and the record contains no

indication that it will be successful (despite Appellants’ requests for

additional information95) — thus, its creation does not “directly” compensate

class members for releasing their claims. Speculative and uncertain benefits

cannot compensate class members for giving up their past and future rights.

The Licensing Agency also is not a proxy for the value of the players’

released publicity-rights claims against the NFL. The Licensing Agency can

license publicity rights only to non-NFL parties to promote non-NFL brands,

products, and services. In contrast, the players’ released claims arise from the

NFL’s use of their publicity rights to promote NFL football — a use to which

retired NFL players’ publicity rights are uniquely suited. For example, if the

NFL uses retired players’ likenesses to promote its upcoming 100th

anniversary, the Licensing Agency will not compensate those players. The

Licensing Agency’s proposed, untested, and unguaranteed revenue has

nothing to do with the players’ settled claims against the NFL.

95 A–413 – A–430.


39

2. The Licensing Agency lacks the authority to fully license publicity rights.

The Licensing Agency also lacks the authority to complement its

licensing of retired players’ publicity rights with either (1) NFL intellectual

property (IP), such as logos; or (2) NFL game footage.96 If a Licensing Agency

customer wants to use NFL IP, the settlement provides only that the NFL

“will not unreasonably hold its consent” and “will apply in good faith the

same standards that it ordinary employs in deciding whether to grant licenses

for that type of NFL IP Rights.”97 In other words, the customer must pay the

NFL at market rates. The settlement agreement does not provide Licensing

Agency customers with any access to NFL game footage — a right retained by

the NFL for itself alone.98

3. The Licensing Agency is not a unique proposal; it would duplicate a program that already exists.

The Licensing Agency’s model is not new, and it would not provide

class members with any benefit beyond those that already exist. The district

court believed that the Agency permits players to license their publicity rights

96 A–239 (¶ I.E.28) (defining “NFL IP Rights”); A–252 (¶ III.C.4)

(articulating NFL’s “exclusive rights” to license game footage); A–257 (¶ IV.C.3.b) (specifying process for Licensing Agency customers to request NFL intellectual-property rights from NFL).

97 A–257 (¶ IV.C.3.b). 98 A–252 (¶ III.C.4).


40

“[f]or the first time.”99 But the idea of creating a licensing program is not

new; in fact, such a program already exists. And that already-existing program

provides larger royalties than the newly formed Licensing Agency — for which

the retired players are giving up all of their past and future claims.

In 2011, the NFL Alumni Association created a group-licensing

program for retired players.100 Like the Licensing Agency, the Alumni

licensing program divides licensing revenue between players and charity —

but the amounts differ:

Alumni Licensing Program101 Settlement Licensing Agency102

80 percent to players 75 percent to participating players, minus operating expenses of up to 15%

20 percent to “promote the health and welfare of retired National Football League players”

25 percent to the Common Good Entity for charitable benefits

The settlement will provide the retired-player class an even smaller share of

licensing revenue than the existing Alumni licensing program: at least 5%

less. This settlement’s “new” option — a lesser share of any licensing revenue,

in exchange for releasing all past and future claims — cannot constitute fair

and adequate consideration.

99 A–469 – A–470. 100 A–432. 101 A–434 (¶ 3). 102 A–260 (¶ IV.E.1.a).


41

The Licensing Agency’s duplication of already-existing efforts provides

class members with no new benefit; instead, its promised individual revenue

is even smaller. It is not a fair trade for the retired players, who under the

settlement will give up all of their past and future claims. The License

Agency’s creation does not constitute consideration that could justify the

settlement’s approval. Like the Common Good Entity, the Licensing Agency

allows the possibility that the class members will receive nothing. Indeed, the

record contains no evidence suggesting that this will not occur. The

Licensing Agency cannot cure the settlement’s many deficiencies.

D. The settlement permits disparate treatment of class members with identical claims.

If the settlement provides class members with any benefit, it will almost

certainly treat identically situated class members differently. Although all

class members will release identical past and future claims, some class

members might receive a benefit, while others will receive nothing.

The Settling Plaintiffs acknowledge this disparate treatment,103 which

arises under the settlement because the permitted charitable uses and the

class members’ underlying released publicity-rights claims have been

completely untethered. Thus, when the district court approved the

settlement, it discussed the purported benefits to the class, but did not link

103 Dkt. #261 at 8 (admitting that the Common Good Entity will

“potentially” benefit only “eligible” retired players).


42

those benefits to the class members’ publicity-rights claims. Instead, the

district court stated that the third-party entities could help retired players

“who may suffer physical and mental injuries from their time in the NFL.”104

This lack of connection between the class members’ publicity rights and

the measuring stick for benefits almost certainly ensures that the settlement

will provide class members with identical publicity-rights claims with

disparate benefits. The settlement’s alleged benefits relate to individualized

characteristics that bear no relation to the players’ claims.

In class settlements, disparate treatment among identically situated class

members reflects inherent unfairness. In re GMC Pick-Up Truck Fuel Tank

Prods. Liab. Litig., 55 F.3d 768, 808–09 (3d Cir. 1995) (“[T]he relative

inability of class members to use the [settlement] militates against settlement

approval.”); Ferrington v. McAfee, Inc., No. 10–CV–01455–LHK, 2012 U.S.

Dist. LEXIS 49160, at *26 (N.D. Cal. Apr. 6, 2012) (“[D]isparate treatment

between class members increases the likelihood that the settlement

agreement does not meet the Rule 23(e) standard.”).

Courts have refused to approve settlements under which some class

members receive a benefit, while others receive nothing. For example, the

Seventh Circuit reversed a negotiated settlement that benefited one subclass,

while the other subclass received nothing — yet both subclasses released all

104 A–456.


43

their claims. Mirfasihi v. Fleet Mortg. Corp., 356 F.3d 781, 782–86 (7th Cir.

2004). One reason that the court reversed the final approval was lack of

parity: some class members’ claims had value, but they were released for

essentially no consideration. Id. at 783–85. This reasoning was also the basis

for the rejection of another settlement, where a subclass “releas[ed] all of

their claims without any compensation,” and the court held that lack of

consideration to be “unfair and unreasonable.” Ferrington, 2012 U.S. Dist.

LEXIS 49160 at *30–32.

Here, the class members’ releases are identical. But because the

settlement untethers third-party distributions from released claims, similarly

situated class members will be treated disparately. That result is unfair,

unreasonable, and inadequate — and makes the approval of the settlement

inappropriate as well.

E. The district court did not properly balance the merits of the plaintiffs’ claims against the amount offered in the settlement.

Although the district court acknowledged that the released claims had

value, it discounted the retired players’ likelihood of success, stating the

former players would face “many difficulties” if they continued to litigate.

But the court failed to properly balance any potential risk with the retired

players’ potential recovery.105 A court cannot justify a class settlement by

105 A–462 – A–468.


44

looking to the case’s merits, essentially stating that settling under any terms

is better than the possibility of losing the case. Free v. Abbott Lab., 953 F.

Supp. 751, 753 (M.D. La. 1997). The possibility of no recovery “is always

present in litigation.” Id. Pointing to that possibility — without quantifying

risk and discounting potential recovery — adds nothing to the analysis. Id. at

753–54.

In sum, the record demonstrates (1) the class members’ released claims

have value, (2) the Common Good Entity does not guarantee compensation

to class members for releasing their claims, and (3) the Licensing Agency

does not guarantee compensation to class members for releasing their claims.

Therefore, the balance between the terms of the settlement and the merits of

the released claims tilts entirely against approval under the requisite

standards.

F. The recent denial of preliminary approval for the NFL’s concussion settlement highlights the deficiencies in the settlement here.

Class settlements should compensate individual class members for

releasing their individual claims, but this settlement thwarts that basic

objective. The district court’s order acknowledged that the NFL’s settlement

here is “not the usual resolution of class claims.”106 A recent proposed class

settlement of the concussion cases against the NFL was denied preliminary

106 A–460.


45

approval and yet still provides sharp contrast to the fundamentally unfair

distribution of the settlement here.

Class counsel recently moved for court approval of a settlement in the

concussion lawsuits filed against the NFL. In re: NFL Players’ Concussion Injury

Litig., MDL No. 2323, 2014 U.S. Dist. LEXIS 4300, at *5–8 (E.D. Pa. Jan.

14, 2014). That proposed settlement contained several hallmarks of class-

action settlements, highlighting the deficiencies here:

NFL Concussion Litigation This Case: Publicity Rights

Direct “cash” payments to qualifying class members (including at least $675 million to compensate individual class members)107

Class members cannot receive direct payments

Claims process for class members’ submission to a settlement administrator

Class members cannot submit claims to any administrator (none exists)

Settlement covers costs of determining whether class members have compensable claims

Settlement disposes of all class members’ past and future claims without guaranteed compensation

Only about 1% of settlement funds — $10 million out of $765 million — go to third-party entities for the indirect benefit of the class

100% of settlement funds go to third-party entities

Even though the NFL concussion settlement provided for direct payment to

class members based on the nature of their individual claims, the district

court still denied preliminary approval. Id. at *17–20. The court’s order

107 In re: NFL Players’ Concussion Injury Litig., 2014 U.S. Dist. LEXIS

4300, at *17–20.


46

focused on its concern “that not all Retired NFL Football Players who

ultimately receive a Qualifying Diagnosis or their related claimants will be

paid.” Id. at *17. The court also found that the distributing entity “may lack

the necessary funds to pay Monetary Awards.” Id. Noting that the record

lacked any economic analysis justifying the sufficiency of class-member

compensation, the court rejected the proposed settlement and ordered the

parties to submit that analysis. Id. at *18–19.

The concussion settlement did not obtain even preliminary approval

because the record did not demonstrate that all class members with

qualifying claims would be compensated. Id. at *17–19. In this case, there is

no certainty that all or any class members will be compensated. The district

court’s approval should be reversed.

G. The district court erred in approving the settlement.

Evaluating “the strength of the case for plaintiffs on the merits,

balanced against the amount offered in the settlement,” Grunin, 513 F.2d at

124 (quotation omitted), the balance tips completely in favor of the strength

of the case for plaintiffs because the class members release valuable claims

but are guaranteed nothing. The district court therefore abused its discretion

by concluding that the settlement provided benefits to class members and by

approving the settlement.


47

III. The record does not contain sufficient information relating to the value of the released claims to determine whether the settlement is fair, reasonable, and adequate.

A. Measures of the value of the released claims exist.

The district court could not properly approve the settlement because

the record before it contained no information relating to the potential value

of the class members’ released claims. In right-of-publicity cases, an ordinarily

available remedy is monetary relief by recovering the infringer’s resultant

profits. RESTATEMENT (THIRD), UNFAIR COMPETITION § 49, cmt. d (1995);

see id. at § 40, cmt. d (noting that plaintiffs need only prove gross sales;

defendants must establish what portions of profits do not stem from

infringement); see also 2 J. THOMAS MCCARTHY, THE RIGHTS OF PUBLICITY

& PRIVACY, § 11:34, at 781 (Rev. 2013) (“Recovery of the infringer’s profits is

usually regarded as an option open to plaintiff, in addition to recovery of

plaintiff’s own losses and damages, so long as there is no double recovery.”).

If the plaintiff’s identity (a property right) contributes to a defendant’s

profits, then that share of the profits is the plaintiff’s property — so

recapturing a defendant’s wrongful gains often requires an accounting of the

defendant’s resultant profits. RESTATEMENT (THIRD), UNFAIR COMPETITION

§ 49, cmt. c. This is true even if a defendant’s conduct has “caused no

identifiable loss to plaintiff,” because the defendant has been unjustly

enriched. MCCARTHY § 11:34, at 780. Defendant’s profits also are available


48

as damages for the class members’ Lanham Act claims. Masters v. UHS of Del.,

Inc., 631 F.3d 464, 474 (8th Cir. 2011).

B. The district court had no information on these measures, and no basis to place a value on the released claims.

Without any information relating to the value of the released claims,

the district court cannot evaluate any “balance” between the merits of the

plaintiffs’ claims and the amount offered in settlement; thus, before

approving settlements, courts must have information about the released

claims’ value. In re Pet Food Prods. Liab. Litig., 629 F.3d 333, 350, 355–56 (3d

Cir. 2010) (vacating approval because “the settling parties failed to provide

the District Court with estimations of recoverable damages”); accord Van

Horn v. Trickey, 840 F.2d 604, 607 (8th Cir. 1988) (settlement approvals must

rest on “well-reasoned conclusions” and not “mere boilerplate”). Failing to

obtain critical damages discovery prevents settling plaintiffs and reviewing

courts from evaluating whether a settlement is adequate and fair. Sobel v. The

Hertz Corp., No. 3:06–CV–00545–LRH–RAM, 2011 U.S. Dist. LEXIS 68984

at *42–43 (D. Nev. June 27, 2011) (noting court’s inability to determine

settlement’s reasonableness because the record lacked evidence regarding the

claims’ value).

A well-established method for evaluating settlements includes the “best

possible recovery” metric, which is laid out in City of Detroit v. Grinnell Corp.,

495 F.2d 448, 463 (2d Cir. 1974). The Grinnell factors include: “the range of


49

reasonableness of the settlement fund in light of the best possible recovery;

[and] . . . the range of reasonableness of the settlement fund to a possible

recovery in light of all the attendant risks of litigation.” Id. The factors have

been applied by many courts across the country, including courts in this

circuit. See, e.g., Alexander v. Nat’l Football League, No. 4–76–Civil–123, 1977

U.S. Dist. LEXIS 14685 at *36, n.9 (D. Minn. 1977); see also Contreras v. PM

Beef Holdings, LLC, No. 07–CV–3087, 2008 U.S. Dist. LEXIS 73800, at *3

(D. Minn. Sept. 18, 2008) (approving a settlement “in light of . . . the range

of reasonableness of the settlement in light of the best possible recovery” and

other factors).

Here, the district court’s order approving the settlement conceded that

“[d]iscovery has not yet been fully accomplished.”108 That is because the

district court prohibited the retired players from seeking any damages

discovery.109 The NFL meticulously redacted relevant financial information

in its document productions and refused to answer discovery relating to

damages.110 As such, the record is barren of any discovery on damages.

Therefore, the record is also devoid of information that would permit the

district court and the parties to sufficiently analyze the settlement’s fairness.

108 A–461. 109 See Dkt. #40 at 5; see also A–86, A–94 (“As Judge Magnuson has

directed, full damages discovery will occur later.”); A–164. 110 A–87; A–155, A–163, A–164.


50

The district court’s order made no specific finding on damages, instead

making the tenuous connection that if its magistrate judge “did not

admonish or sanction the NFL” for failing to provide financial information,

then the NFL must have “fully complied” with its obligation to disclose its

finances.111 But the NFL never provided that financial information to

Appellants for their review. More importantly, no such information is in the

record.112 The district court could not have independently evaluated the

settlement value’s fairness, reasonableness, and adequacy.

Obtaining damages discovery — including the NFL’s profits — is

essential to determine the value of the retired players’ claims. Without

damages discovery, the district court could not ascertain the true value of the

class members’ released claims. Lead Settlement Counsel suggests that it

once had access to some financial information,113 but even if it did, none of

this information was submitted to the Article III district court, and none of

it is in the record. The record contains nothing that would allow a

comparison between the settlement amount and the potential value of the

retired players’ released past and future claims.

111 A–461 – A–462. 112 A–462 (implicitly acknowledging that the financial information was

not filed with the district court). 113 Mem. of Law in Supp. of Settling Pls.’ Mot. for Final Approval of

Settlement and Class Certification, Dkt. #407 at 3, 32.


51

Properly measuring the damages stemming from the NFL’s violation of

class members’ publicity rights would require analyzing the NFL’s profits that

are directly and indirectly attributable to those publicity-right violations. As

such, damages discovery and analysis must occur before the district court —

or class counsel — would be able to evaluate whether the settlement is fair,

compared to the potential value of the released existing and future claims.

Without damages discovery from the NFL, the district court could not have

properly evaluated the value of the settlement’s released claims.

C. Lead settlement counsel shirked his duty to evaluate and disclose the released claims’ value.

Because class counsel is the main source of information about the

settlement, a court’s assessment of a settlement requires class counsel to

furnish adequate information — including information about the possible

range of recovery. Free, 953 F. Supp. at 753. But here, Settlement Counsel

claimed that the class members’ potential recovery was “essentially

irrelevant,”114 contending that given the litigation risks, the settlement is fair

“[n]o matter how large the perceived potential damages to the Class may

be.”115 Cf. Free, 953 F. Supp. at 753 (rejecting this excuse for failing to

provide necessary information about the value of class members’ claims). But

114 Settling Pls.’ Reply in Supp. of Preliminary Approval of Settlement,

Dkt. #268 at n.3. 115 Id.


52

neither the district court nor Settlement Counsel has indicated what this

“range” might be; the record is silent.

Lead Settlement Counsel also refused to satisfy his duty to provide class

members with information about their claims’ value.116 In response to letter

requests seeking information about the NFL’s profits, Settlement Counsel

responded that he “saw little purpose” in responding to Objecting Counsel’s

letters117 In sum, Settlement Counsel refused to answer any questions about

the released claims’ value.

The district court and Settlement Counsel were both unable and

unwilling to demonstrate that the settlement is fair. They have not compared

the settlement’s value with the potential released claims’ potential value.

Without knowing the value of the class members’ claims, neither the court

nor the class members can properly evaluate the settlement’s adequacy.

116 A–417 – A–430. 117 A–429 – A–430.


53

Conclusion

The district court improperly approved a “unique,” “one-of-kind,” and

unprecedented settlement that eviscerates the class members’ protections

under Rule 23. The settlement distributes funds only to third parties and

not to class members. The third-party distribution does not guarantee

compensation to class members. This “remedy” bears no relation to the class

members’ publicity-rights claims. Lastly, the district court’s prohibition on

seeking damages discovery suppressed information about the released claims’

value — preventing analysis of whether the settlement is reasonable,

adequate, and fair. The district court’s ruling should be reversed, the

settlement should be rejected, and the case should be remanded for further

proceedings.


54

February 3, 2014 By: ________________________________ ROBINS, KAPLAN, MILLER & CIRESI L.L.P. Michael V. Ciresi (No. 16949) Jan M. Conlin (No. 192697) Eric J. Magnuson (No. 66412) 2800 LaSalle Plaza 800 LaSalle Avenue Minneapolis, MN 55402–2015 Tel: 612–349–8500 BOB STEIN LLC Robert A. Stein (No. 104930) 6473 Beach Road Eden Prairie, MN 55344 Tel: 952–829–1043


Attorneys for Appellants James Lawrence Marshall, Joseph Michael Senser, and Dante Anthony Pastorini.


Certificate of Brief Length

The undersigned counsel for Appellants James Lawrence Marshall,

Joseph Michael Senser, and Dante Anthony Pastorini, certifies that this brief

complies with the requirements of Fed. R. App. P. 32(a)(7)(B) in that it is

printed in 14–point, proportionately spaced typeface utilizing Microsoft

Word 2010 and contains 10,735 words, including headings, footnotes, and

quotations.

February 3, 2014 By: _________________________________ ROBINS, KAPLAN, MILLER & CIRESI L.L.P. Michael V. Ciresi (No. 16949) Jan M. Conlin (No. 192697) Eric J. Magnuson (No. 66412) 2800 LaSalle Plaza 800 LaSalle Avenue Minneapolis, MN 55402–2015 Tel: 612–349–8500 BOB STEIN LLC Robert A. Stein (No. 104930) 6473 Beach Road Eden Prairie, MN 55344 Tel: 952–829–1043




Certificate of Service

I hereby certify that on the 3rd day of February, 2014, I electronically

filed the Brief of Appellants with the Clerk of the Court for the United

States Court of Appeals for the Eighth Circuit by using the CM/ECF

system. Participants in the case who are registered CM/ECF users will be

served by the appellate CM/ECF system. I certify that all participants in the

case are registered CM/ECF users and that service will be accomplished by

the CM/ECF system. The Brief of Appellants has been scanned for viruses

and is virus-free.

February 3, 2014 By: _________________________________ ROBINS, KAPLAN, MILLER & CIRESI L.L.P. Michael V. Ciresi (No. 16949) Jan M. Conlin (No. 192697) Eric J. Magnuson (No. 66412) 2800 LaSalle Plaza 800 LaSalle Avenue Minneapolis, MN 55402–2015 Tel: 612–349–8500


84426206.47


2014.10.31 robins kaplan file stamped opening brief

Documents

class members

settlement funds

settlement proceeds

distribution of class

united states district

classaction principles

district of minnesota

statement of case