SBD/Issue 41/Leagues & Governing Bodies

Jury Awards Group Of NFL Retirees $28.1M For Lack Of Marketing

Richard Berthelsen Says NFLPA Will Look To
Have Judge Throw Out Jury's Decision
A federal jury stunned the NFLPA yesterday by awarding a class of retired players $28.1M for not marketing them and not representing their best interests. The jury found the union guilty on both contract and fiduciary duty breach, but awarded no damages for the contractual violation and $7.1M for the fiduciary duty breach. The jury also awarded $21M of punitive damages. In arguing to no avail to the jury, the NFLPA contended that awarding punitive damages would hurt the group's chances in its labor struggle with the league's owners. "We are obviously not pleased with any award of damages, but we believe that we have solid legal grounds to get this award overturned through post-trial motions and/or on appeal to the Ninth Circuit Court of Appeals," NFLPA interim Exec Dir Richard Berthelsen said in a statement on the union's Web site (Daniel Kaplan, SportsBusiness Journal). Ron Katz, the attorney who repped the 2,062 former players, said, “If you do the math, it comes out to $13,000 per class member. I think the former players are going to be very satisfied.” In L.A., Greg Johnson reports the attorneys and U.S. District Court Judge William Alsup “must still decide how to divvy up the award, some of which will go toward paying attorneys.” Berthelsen said that the union would appeal the decision if it fails to get Alsup “to toss out the verdict.” NFLPA outside counsel Jeffrey Kessler: “It’s an unjust verdict, and we are confident it will be overturned” (L.A. TIMES, 11/11). More Kessler: “The verdict is a complete miscarriage of justice. It is not supported by the facts in the case” (USA TODAY, 11/11).

HOW DAMAGES WERE AWARDED: Kessler said it was telling that on the core contractual breach charge, there was no damages. The plaintiffs alleged that a group licensing agreement signed by the class of retired players entitled them to share in licensing revenue only going to active players. The jury sided with them on that, but then did not give them a penny. The fiduciary duty charge alleges the union turned its backs on the players who the group had an obligation to. However, during the trial, the plaintiff’s damages witness testified he had not done an analysis of how much the players should receive for this charge, which would have involved deciphering their marketability and what they would have gotten had they not entrusted some of their rights to the union. Nonetheless, the jury awarded $7.1M (Kaplan). In S.F., Bob Egelko reports the jury ruled the NFLPA “had failed to protect the retirees’ rights,” which “opened up the union to the steep punitive-damages decision” (S.F. CHRONICLE, 11/11).

UNION SHOULD NOT MARKET RETIRED PLAYERS: Kessler in his closing arguments made clear one message that will remain from the jury’s verdict regardless of the appeal -- the NFLPA should not be trying to market retired players. The NFLPA is the only one of the big four sports unions to do so. Katz said, “I expect a leadership change at the NFLPA and I would hope that the new leadership would want to reconcile the active and retired players by, among other things, settling this lawsuit” (Kaplan).

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