Goldberg Segalla’s Sports and Entertainment Law Insider brings you the latest and breaking news in the sports and entertainment world. Whether you’re legal counsel for a professional sports team or represent entertainers in the film industry, we keep you up-to-date on the legal battles, developments, and trends impacting all aspects of sports and entertainment — including the NFL, NCAA,..
New Jersey sports memorabilia dealer, Eric Inselberg, had established himself as a committed collector of New York Giants football mementos. He acquired countless items and donated more than $1 million worth of collectables to the team museum. However, his relationship with the team soured in the years leading up to a 2014 lawsuit between himself, the Giants, and Eli Manning. Days before the case was set to hit trial, an agreement was reached to settle the dispute arising out of the sale of Eli Manning memorabilia. The case has shined a light on “an unregulated, billion-dollar industry of game-worn collectibles” and “a marketplace rife with fraud”.
In 2014, Inselberg sued the Giants and Eli Manning, alleging that the team had conspired against him to cover up a scheme leading to the circulation of memorabilia falsely labeled as “game-worn”. Inselberg was exposed to criminal charges when the team claimed he was responsible for marketing and selling the falsely labeled collectibles. The charges against Inselberg were later dropped but his credibility and business had already suffered.
Inselberg, joined by the buyers of the items, sued for losses incurred after Inselberg sold them helmets that were allegedly falsely authenticated as used by Manning during the Giants’ 2007 Super Bowl season. The plaintiffs asserted evidence of emails sent by Manning in an attempt to prove that the quarterback had participated in a scheme to distribute fraudulent memorabilia. The most prominent piece of evidence was an email sent by Manning to a team equipment manager, asking him to get “2 helmets that can pass as game used.”
The Giants and Manning have steadfastly denied any wrongdoing since the inception of the case. The Giants have argued that the plaintiffs’ “photomatching” technique used to identify the fraudulent helmets is unreliable. Manning has maintained his position that he was asking the equipment manager for helmets that “satisfy the requirement of being game-used”, not to create any fraudulent memorabilia.
“[Plaintiffs] Eric Inselberg, Michael Jakab and Sean Godown have resolved all claims in their pending litigation against the New York Giants, Eli Manning, John Mara, William Heller, Joseph Skiba, Edward Skiba and Steiner Sports, in accordance with a confidential settlement agreement reached today. The compromise agreement, entered into by all parties, should not be viewed as supporting any allegations, claims or defenses…All parties are grateful to have the matter, which began in 2014, concluded and are now focused on football, the fans and the future.”
On, May 16, 2018, news broke of a monumental settlement that will require Michigan State University to pay $500 million to victims of Larry Nassar’s sexual assault. $425 million will be distributed to the 332 claimants seeking damages from the University for its failure to act on persistent complaints about the doctor. The remaining $75 million will be set aside for two years in the event that more victims of Nassar’s abuse come forward. The settlement is believed to be the largest ever in a sexual misconduct case involving a university, surpassing the $109 million paid by Penn State University to victims of abuse by Jerry Sandusky.
In February 2018, Nassar was sentenced for up to 125 years in prison after pleading guilty to three counts of criminal sexual conduct. In his plea, he admitted to sexually abusing young girls and women through the guise of his position as a trusted team doctor. At the sentencing hearings, more than 200 people presented victim impact statements. Nassar is already serving a 60 year sentence after pleading guilty to child pornography chares.
The lawsuit against Michigan State began in January 2017 when 18 women filed suit against the University, USA Gymnastics, the United States Olympic Committee (USCO), and Twistars gymnastics group. The suit alleged that Michigan State and the co-defendants ignored complaints from those treated by Nassar, effectively perpetuating the doctor’s abuse of his patients for decades.
In response to the settlement, Rachael Denhollander, the first public accuser of Nassar, said “I’m very happy that we’re done with litigation… I’m very grateful for the historic number that acknowledges some of the hardships that these women have suffered.” Robert Young, special counsel to Michigan State said, “Michigan State is pleased that we have been able to agree in principle on a settlement that is fair to the survivors of Nassar’s crimes… We appreciate the hard work both sides put into the mediation, and the efforts of the mediator, which achieved a result that is responsible and equitable.” In addition, Michigan State has begun renovating their policies regarding the administration of claims of sexual assault, including changes to its Title IX policy.
The settlement is exclusive to Michigan State’s role in the lawsuit. The plaintiffs have expressed that they will proceed with the action against USA Gymnastics, the USOC, and Twistars. The victims, led by Denhollander, are also focusing on their push to inspire new legislation that would extend the statute of limitations for accusers of sexual abuse and eliminate sovereign immunity protections from government institutions like universities.
After making his NHL debut in 1989, Mike Peluso played nine professional seasons as a bruising left winger for five different NHL franchises. He won the Stanley Cup in 1995 as an enforcer on the New Jersey Devils’ “Crash Line”. After his retirement in 1998, the long-term effects of his role as an enforcer and the resulting brain injuries formed the basis of a workers’ compensation suit against his former teams. The most recent allegations, however, have implications outside of workers’ compensation context as Peluso moves forward with a lawsuit against his former teams claiming battery, battery with aggravation of injury, intentional infliction of emotional distress, fraudulent concealment, and civil conspiracy, among other claims.
In April of 2017, Peluso filed suit in U.S. District Court in Minnesota against the New Jersey Devils, the St. Louis Blues, and their insurance carriers. The complaint alleges that Peluso’s former teams knew of a link between Peluso’s risk of head injuries and potential permanent brain damage but continued to clear him to play. In a 2015 article, Peluso explains his earliest memories of suffering concussions and seizures throughout the season, yet remaining in the lineup pursuant to clearance by team doctors and trainers. Peluso kept skating and dropping the gloves despite the symptoms he experienced. His quality of life has suffered as a result. To date, Peluso has suffered numerous seizures and is permanently disabled with “zero post-injury earnings capacity.”
The newest development in the case came on Thursday, May 10, 2018, when Peluso filed a Motion for Leave to amend his complaint against the organizations and their insurance carriers. Peluso says he has new evidence that the organizations were not only concealing the risk of brain injury, but also concealing facts indicating that Peluso had already suffered injuries. The judge granted the motion, allowing Peluso to amend his complaint. The amended complaint will seek to rebut the defendants’ challenge that Peluso’s lawsuit is identical to a case already being in heard in the workers’ compensation context. Peluso will amend the complaint with new facts in an attempt to prove that his former teams ignored evidence of his injuries, leading to the current state of his life after hockey.
On Monday, May 14, 2018, the Supreme Court of the United States struck down a federal statute controlling the states’ ability to regulate sports gambling, destroying Nevada’s monopoly and opening the door for other states to get in on the multi-billion dollar industry. In its majority opinion, the court voted to strike down the Professional and Amateur Sports Protection Act of 1992 (PASPA). Although PAPSA did not make sports gambling itself a federal crime, the Act made it unlawful for states to promote, license, or otherwise authorize wagering on competitive sporting events. Despite the Act’s “grandfather” provisions that provided for the existing forms of sports betting in four states, including Nevada, states were otherwise prohibited from regulating sports betting individually.
The court held, “when a State completely or partially repeals old laws banning sports gambling, it ‘authorizes’ that activity” and therefore violates PAPSA. This prohibition on state authorization was found to violate the anti-commandeering principle by issuing a direct order to states, preventing them from regulating the conduct within their borders. “Just as Congress lacks the power to order a state legislature not to enact a law authorizing sports gambling, it may not order a state legislature to refrain from enacting a law licensing sports gambling.” Finally, the court held that no provision of PAPSA was severable from the provision directly at issue, striking the Act down in its entirety.
The result is twofold: Either Congress can take action to regulate sports gambling directly or it can abstain, leaving each state free to act on its own. Accordingly, many states are prepared to move forward quickly. New Jersey has led the way, with its then-Governor Chris Christie initially challenging the federal ban. Current New Jersey Governor, Phil Murphy, said he will start working to pass a law authorizing sports betting “in the very near future.” It is expected that Delaware, Mississippi, New York, Pennsylvania, and West Virginia will also act quickly to grab a piece of the legal bookmaking action.
Professional sports leagues also reacted to the court’s decision, emphasizing the need for regulation that ensures the integrity of competition. Major League Baseball issued a statement highlighting the decision’s “profound impact”, adding that the “most important priority is protecting the integrity of our games.” The National Football League addressed the decision with a statement, announcing its intention to “call on Congress again, this time to enact a core regulatory framework for legalized sports betting.”
Undoubtedly, the legal sports betting industry is set to take off. However, the future of regulation within the industry is less clear. As suggested by the NFL, Congress could meet this ruling with broad and sweeping regulation. Alternatively, Congress may defer to the states to regulate the multi-billion dollar industry as they see fit. In either case, fans and bettors alike will root for legislatures in their pursuit of a scheme that promotes the safety and integrity of athletic contests.
In 2013 NFL running back Mike James was playing for the Tampa Bay Buccaneers on Monday Night Football. During the opening drive of the game, James broke his ankle after an opposing player fell on his foot, causing his ankle to be twisted awkwardly. James was rolling on the ground in excoriating pain and was later carted off the field with a left ankle injury. Surgery, a metal rod, and medal wires were needed to repair his ankle, and after the surgery, James was given several prescriptions for opioid painkillers. According to James, he was not worried about the potential additive effects of the painkiller because he was receiving the pills “from a doctor.” However, James quickly developed a dangerous dependency on the drugs, at one point James took two-dozen opioid painkillers a day. Aubrey James, James’ wife, became concerned about her husband’s opioid painkiller dependency. As an alternative, Aubrey suggested that James try medical marijuana to relive his pain. Suddenly, “my pain subsided,” James said in an interview. He continued, “I never had something where I could be coherent and still have pain relief.” While James still experiences pain, he is not yet ready to walk away from his NFL career.
Currently, James is a NFL free agent, but the NFL and NFL Players Association prohibit active players from using marijuana as part of the NFL’s policy on substance abuse. The only way that James could play, while still managing his pain with medical marijuana, is if James has a therapeutic use exemption (TUE). A TUE is an exam that determines if a player requires a specific substance, in this case marijuana, to treat a diagnosed medical condition. In March 2018, James became the first NFL player to file for a TUE specifically for marijuana; however, the league denied his request. According to James, “By them denying me a TUE, they’re really giving me no other options to continue playing football . . . to be able to play this violent game and deal with my chronic pain, I need an option for that.”
As it stands, eight states have legalized recreational use of marijuana and 21 have legalized medical marijuana; however, the NFL has shown few signs of relaxing its rules on marijuana and has yet to officially comment on its denial of James’ TUE request. NFL Commissioner, Roger Goodell, said NFL experts have been studying the issue of medical marijuana, but “to date, they haven’t said, ‘This is a change we think you should make that is in the best interest of the health and safety of our players.’” James made his TUE request hoping to change the NFL’s position on medical marijuana. In the process, he hopes to give fellow NFL players a safer alternative to opioids. In 2011, a study showed that 52 percent of former NFL players used opioids during their NFL career and 71 percent reported misusing the opioids.
It is likely that the conversation surrounding medical marijuana and the NFL will continue especially considering both medical marijuana and the opioid endemic have become nationwide political discussions.
On April 25, 2018, former University of Louisville employee, Kimberly Maffet, filed a lawsuit against the school, claiming that a number of wrongs against her ultimately led to undue termination. In particular, she asserts that she was discriminated against for her disability, retaliated against for speaking out on alleged supervisory misconduct, and wrongfully discharged on the basis of both her disability and retaliation. Prior to her termination, Maffet served as the Associate Athletic Director for Human Resources, and had been there for about 10 years.
The discrimination concerns began when Maffet had to be hospitalized for potentially life-threatening health problems. Although the university was reportedly accommodating, albeit begrudgingly, such accommodations wore thin, and her supervisor expressed disdain for her absences, making snide comments and letting out sighs of frustration any time she had to bring a health concern to the university’s attention. The same management was apparently also displeased with accommodations needed for another disabled employee, which only validated Maffet’s worries.
Maffet’s retaliation issues, on the other hand, resulted from a different matter entirely. Her complaint provides that a number of personnel concerns came to her attention, which had generated “a culture of misogynism, sexism, lying, cover-up, and bullying in the Athletic Department.” Additionally, according to the complaint, common practice at the University involved weekly meetings where employees were required to choose a University employee who they believe should be fired, and place that person’s name in a “firing jar.” Maffet expressed her discomfort with the practice, asking to be excused, though she was allegedly advised that her name would be next in the jar if she would not oblige.
After reporting the specifics of the poor conduct within the University, purportedly relating to nepotism and employee policy violations, Maffet claims that her “reports of misconduct along with her disability caused her to become a target of reprisal and termination.” Maffet is seeking both compensatory and punitive damages, as well as costs and fees.
On April 25, 2018, an NCAA commission circulated a report it believes will address internal corruption, which, in recent times, has seemingly saturated the realm of collegiate sports. The commission is led by former secretary of state, Condoleeza Rice, who was chosen by NCAA president, Mark Emmert to lead the charge and pen the report. In doing so, Rice was tasked with recommending some well-needed changes which could remedy issues within the NCAA’s internal affairs and improve its relationships and interactions with collegiate athletes going forward.
As we have previously reported, the NCAA has been eyeing reforms for quite some time. In the wake of an unfortunate bribery scandal, Emmert looked to Rice once he determined that the public had lost confidence in the NCAA’s ability to appropriately handle concerns. Rice and the commission were instructed to study practices and happenings within the college basketball realm and make appropriate recommendations for reform. Rice’s ultimate report touched on a myriad of issues, ranging from NBA drafting rules, to eliminating the “one-and-done rule,” to player-agent relationships and apparel company relationships, as well as enforcement of NCAA rules.
The so-called “one-and-done rule” is notable, as it would significantly affect the dynamic of incoming recruits. Currently, the NCAA may not recruit players until they are 19, which leads most to attend college for one year, until turning 19, before getting plucked away by a professional team. The status of the NCAA’s relationship with apparel companies, such as Adidas and Nike, is also a particularly important concern, as it will bear weight on potential sponsorships that incoming athletes are able to secure. Although the question of payment to college athletes has been lingering for resolve, the report did not seek to address it.
The report provided that “[m]illions of dollars are now generated by television contracts and apparel sponsorship for the N.C.A.A., universities and coaches.” Because of this, “[t]he financial stake in success has grown exponentially; and thus, there is an arms race to recruit the best talent — and if you are a coach — to keep your job.” Nevertheless, Rice stated that she and the NCAA “believe this is an opportunity to put the college back in college basketball.”
On April 24, 2018, two former NFL cheerleaders voiced their willingness to settle their discrimination dispute with the NFL on two conditions. The cheerleaders determined that they would both stop pursuing their claims in court if league commissioner, Roger Goodell, would sit down with them for a four-hour, good-faith meeting and pay just $1 to each. The meeting would involve plaintiffs Kristan Ware and Bailey Davis, as well as several other cheerleaders who were not involved in the suit, but who are connected to the discrimination issues nonetheless.
The issues were sparked when Ware and Davis began feeling that they, as cheerleaders, were receiving significantly disparate treatment from the league than were the football players. Ware, a former Dolphins cheerleader, claims that she was let go for her well-known religious beliefs, and specifically, for discussing her interest in saving herself for marriage. Davis, a former Saints cheerleader, on the other hand, claims to have been fired after she posted a photo of herself in a bathing suit, apparently in violation of a nudity rule upheld by the NFL, aimed only at cheerleaders. That the women’s claims differed in kind supports their assertions that discrimination is a pervasive issue within the NFL, and highly personal, leaving themselves and other cheerleaders feeling deeply wronged.
Sara Blackwell, counsel for the cheerleaders recently weighed in on the modest request, providing, “[w]e’re not asking them to admit fault, or to admit guilt, or even admit that there is anything wrong. But if they do want and expect that cheerleaders should have a fair working environment, as they have stated, then it doesn’t make any common sense why the answer would be no.”
In possible response to this, a representative for the NFL stated, “[t]he NFL and all NFL member clubs support fair employment practices. Everyone who works in the NFL, including cheerleaders, has the right to work in a positive and respectful environment that is free from any and all forms of harassment and discrimination and fully complies with state and federal laws. Our office will work with our clubs in sharing best practices and employment-related processes that will support club cheerleading squads within an appropriate and supportive workplace.”
On April 23, 2018, counsel for former NFL football players involved in the $1 billion concussion settlement filed a motion opposing a Pennsylvania court’s ruling which allowed the NFL to conduct ex parte interviews with the doctors who treated the players. As we have previously covered, the release of settlements had been slowed due to potentially fraudulent claims, allegedly “clogging the system,” and delaying relief to former players who had legitimate injuries.
The motion filed by the Neurocognitive Football Lawyers (NCFL) sought to address the delay issues, providing that the “Audit Procedure, including overreaching ex parte physician interviews, are preventing the Court from hearing the voices of the players because their appeals are being held in abeyance by a procedural quagmire.” The motion proceeds to emphasize that in its relentless quest for fraudulent claims, the claims administrator has circumvented the specific legal issue of whether a denied claim is governed under a particular claims procedure. If a denied claim is, in fact, governed by the claims procedure contemplated by the NCFL, “there is no longer any Claim to Audit,” hence its urgency in attempting to assess how denied claims should be treated.
The underlying issue contended by the NCFL is that the claims administrator has failed to meet the standard of certainty required for fraud — a “knowing false representation of a material fact,” a threshold that the NCFL maintains has not been reached. The NCFL claims that “[a]t best, the Claims Administrator has only raised the specter of a debatable diagnosis in some of the Claim Packages.” The players’ asks include the removal of denied claims from the audit queue, strict reading of audit requirements, expanded information surrounding the amount of claims in audit, and the ability to assist in physician audits, should they ultimately be permitted.
On April 20, 2018, MLB players Ryan Zimmerman and Ryan Howard, plaintiffs in the Al Jazeera libel case, filed another motion to compel discovery in the ongoing battle. As we have previously reported, this is not the players’ first attempt at extracting additional information from defendant Al Jazeera amid discovery. The defamation suit stems from their production and airing of a 2015 documentary, called “The Dark Side,” which accused the MLB players of using performance-enhancing drugs (PEDs) while playing for the MLB.
The entire documentary is purportedly based off of statements made by pharmacist Charles Sly, who avowed that the athletes ordered several shipments of the PEDs he had been selling. According to Zimmerman and Howard, the particularly egregious aspect is that Sly recanted his statements prior to the publication of the documentary, claiming that he had been lying about the serious accusations. In support of that, in 2016, the MLB confirmed that the players did not have such drugs in either of their systems. Their suit asserts that not only were the highly publicized allegations patently untrue, but that their reputations were significantly harmed as a result.
Zimmerman and Howard are now seeking information from Al Jazeera regarding its motive, ratings, financial investment in the documentary, marketing techniques used to promote the documentary, text messages, and miscellaneous documents relating to Sly, among much other information. The players also allege that Al Jazeera has placed an “unduly restrictive date range for its document production,” which has impeded their ability to retrieve “relevant, discoverable information,” despite their own unhindered cooperation with discovery throughout the process.
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