Wednesday, March 7, 2018

Seventh Circuit Certifies Question to Indiana Supreme Court in Fantasy Sports Case

By Professor Jennifer Rothman

This article originally appeared on Rothman's Roadmap to the Right of Publicity 

Today, the Seventh Circuit with lightening speed issued an opinion in the Daniels v. Fanduel case seeking guidance from the Supreme Court of Indiana. The case, which I have previously written about, involves a lawsuit by former college football players against online fantasy-sports companies FanDuel and DraftKings. An Indiana district court dismissed the case last September, concluding that the use was exempt under Indiana’s right of publicity statute because the uses were newsworthy and reported on a topic of public interest.

The Seventh Circuit heard oral arguments in the case on February 22nd, and Judge Frank Easterbrook repeatedly asked the attorneys why the interpretation of the Indiana statute was not something better addressed by the state court. It therefore is no surprise that today the court issued an opinion that he authored calling for the state’s supreme court to answer those questions.

The opinion focuses on the meaning of the exemptions to Indiana’s right of publicity statute, and particularly the question of whether the for-profit fantasy games fit within the purview of the statute’s exemptions for uses in “material that has . . .newsworthy value” or “in connection with the . . . reporting of an event . . .of general or public interest.” 

To date, Indiana courts have not interpreted these provisions. The court seemed particularly interested in whether the state would consider the fantasy sports games to be illegal gambling, and whether this would affect the application of the statute.

The Seventh Circuit certified the following question to the Supreme Court of Indiana: “Whether online fantasy-sports operators that condition entry on payment, and distribute cash prizes, need the consent of players whose names, pictures, and statistics are used in the contests, in advertising the contests, or both.”

Notably, the phrasing of the certified question is quite broad and gives the Indiana Supreme Court the option to make more general rulings about the case beyond the specific statutory exemptions at issue. It also seems to have been drafted favorably for the plaintiffs by focusing the question on the for-profit status of the game, its similarities to gambling, and the related advertising, rather than on the informative nature of the use of statistics and names.

This all should make the fantasy sports leagues very nervous.

At the end of the day, however, if things don’t go their way in the Indiana court, there will still be the First Amendment defense. This would put things squarely back in the federal courts where there is reason to be optimistic--though not overconfident.

In another fantasy sports case involving statistics, CBC Distribution & Marketing v. Major League Baseball Advanced Media, the Eighth Circuit held that uses of players’ names and statistics were protected by the First Amendment. On the other hand, the sports-themed videogames have fared poorly in the circuit courts with both the Third and Ninth Circuits rejecting First Amendment defenses to uses of players' likenesses.

Although dodging, at least for now, the First Amendment issue at the heart of the case, I applaud Judge Easterbrook and the Seventh Circuit for noting that under Erie R.R. v. Tompkins, the federal courts must look to state courts for questions of state right of publicity laws. This is something rarely done by federal courts in the context of right of publicity laws, and these failures have led to great expansion of state law by federal courts, something I address in more detail in my book.

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