Key Sports Law cases of 2013
It has been a busy year for sports lawyers across the world. Therefore trying to select the key cases from 2013 was always going to be difficult, and with so many cases to choose from we asked our Editorial Board and Advisory Board members to pick their ‘key case’ of 2013.
Jon Walters – key case of 2013
The NFL concussion settlement. It's not for any new or interesting point of law that this settlement will be remembered; but it will come to be seen as a turning point for the protection of athlete welfare.
The settlement - in which the NFL agreed to settle a consolidated lawsuit brought by more than 4,500 retired NFL players for concussion related injuries and conditions for $765 million - was inevitable given the evidence, both anecdotal and hard, of the concealment of the risks caused by concussion all at the same time as football was growing fat from its promise of bone-jarring hits and spectacular highlights footage. I don't necessarily believe that it follows that other contact sports face litigation on a similar scale, as serious and considered efforts have been made elsewhere to address the issue (rugby being the leading example) and, while the procedures may invite debate, not all federations or leagues have been neglectful.
What the NFL settlement does show is that athletes, even highly paid professionals, require protection. Whether it is injury as in the NFL, burn-out (see Roger Federer's determined efforts on the ATP Player Council to reduce the player schedule), the psychological impact of sport (Jonathan Trott) or workplace bullying (see Miami Dolphins or the extraordinary Stoke City "Glove" allegations), athlete welfare will be increasingly in the spotlight and, if it is not tackled effectively and sympathetically by leagues and federations, in the courts.
Kendrah Potts – key case of 2013
2013 saw Rory McIlroy make a high profile move to join the Nike stable. At the same time, Oakley brought a claim against McIlroy seeking specific performance and/or damages on the basis that McIlroy had failed to comply with the provisions of his endorsement agreement regarding “rights of first refusal”. Like many endorsement agreements, the Oakley/McIlroy agreement provided that if McIlroy was to receive an offer in respect of the same or substantially similar products to those he endorsed under the Oakley endorsement agreement, Oakley had a right to be notified and had a period of 10 days to meet the conditions of the new offer.
In addition to arguments about what information must be provided to meet the technical requirements of a right of first refusal clause where the contract requires the party that received the offer to provide “written confirmation of terms”, the case presented interesting issues around what it means to meet the conditions of a new offer. The most basic aspect of an offer that must be matched is the price. However, a new offer will often include other features that the original contracting party cannot match (for example equipment that the original party does not produce). In the absence of clear wording in the contract setting out precisely what terms must be matched and whether the original party must match the whole of the new offer or is entitled to carve out and match only part of the offer, a new entity arguably has scope to include “poison pills” in their offers to defeat rights of first refusal. Most endorsement agreements contain rights of first refusal and this case serves as a reminder of how important the wording of such clauses might be. In this case, the dispute was settled to the satisfaction of both parties in November.
John Wolohan - key case of 2013
Since one of my cases was settled before trial, I would like to identify two cases.
The first case is NCAA et al. v. Christie, 730 F.3d 208 (3rd. Cir., 2013). In an attempt to increase tax revenue, the State of New Jersey passed theSports Wagering Law, N.J. Stat. Ann. § 5:12A-1 et seq. Citing the Professional and Amateur Sports Protection Act of 1992 (PASPA), 28 U.S.C.S. § 3701 et seq., the NCAA and the various professional sports league in the United States challenged the new law. The PASPA prohibites all but four states from licensing sports gambling. In ruling that New Jersey’s Sports Wagering Law violated PASPA, the Third Circuit Court in September held that the law conflicted with federal policy with respect to sports gambling and was preempted. In support of this conclusion, the Third Circuit Court held that because Congress had decided that sports gambling was an area in need of regulating, it had the right under the Commerce Clause to restrict state-licensed wagering on sports. New Jersey is currently decided whether to appeal the decision to the US Supreme Court.
The case was important because it prevents New Jersey, and other states, from expanding the scope sports gambling in the United States. The leagues argued that if New Jersey was allowed to enact such a law it was suffer "negative perceptions attributed to game fixing and gambling" and that such an association with gambling would negatively impact the sports.
My second case is the NFL Concussion Settlement.
In August 2013, the NFL and more than 4,500 former players reached a tentative $765 million settlement over concussion-related brain injuries among its 18,000 retired players. The former players, all suffering from some form of head injury, including: dementia, depression or Alzheimer's that they blamed was caused by repeated blows to the head, had all sued the NFL accusing it of concealing the dangers of concussions from the players.
The settlement is important because it most likely means the NFL will not have to disclose internal files about what it knew, and when, about concussion-linked brain problems. This is important because due to the fact that in the past few years a number of high profile former NFL players have been diagnosed after their deaths with chronic traumatic encephalopathy, or CTE. Those ex-players included Seau and lead plaintiff Ray Easterling, who filed the first lawsuit in Philadelphia in August 2011, both of whom would later committed suicide.
Jack Anderson – key case of 2013
Sports Law 2013: Woodland v Essex County Council [2013] UKSC 66
An editorial published online on 9 December 2013 by the British Journal of Sports Medicine asked whether the lack of physical activity strategy for children in the UK is “complicit mass child neglect”? The piece, which received significant coverage in the media, argued that successive governments in the UK had failed “to implement a comprehensive national policy to promote children's exercise” and the resulting sedentary lifestyle among children risked storing up health and other problems. Schools, the editorial suggested, had a key role to play in promoting physical activity.
Earlier in the year, the UK Supreme Court dealt with a case arising out of an accident that occurred to a school child during swimming instruction. In Woodland v Essex County Council [2013] UKSC 66 (23 October 2013), the appellant was a 10-year-old pupil at a school for which Essex County Council was the local educational authority (LEA). The then national curriculum included a requirement for LEAs to provide physical activity of various kinds, including swimming. The school had arranged for swimming lessons to be provided during school hours at a pool operated by Basildon Council and supervised by an independent contractor. During one of these swimming lessons, the appellant alleged that she came into trouble unnoticed and started to drown. She was resuscitated but it is alleged, that she suffered hypoxic brain injury.
The appellant sought a finding that the LEA was liable for any negligence committed on the part of the independent, supervising contractors. The delegation of the stated function to an external contractor meant that it could not be argued that the LEA was primarily liable nor could vicarious liability apply. Could the LEA be held responsible because of the existence and breach of a “non-delegable duty of care”?
The High Court and Court of Appeal said no. The Supreme Court unanimously answered in the affirmative. In terms of sports law, the key question is, given that Woodland v Essex County Council potentially enlarges the scope of public authorities’ legal responsibilities in this regard, whether the case will have a “chilling effect” on the provision of school sport activities more generally to the detriment of any future strategy in the UK seeking to promote children’s exercise through schools.
Alfonso Valero – key case of 2013
I would pick the ECB v Kaneira case. The case of 2013 is Kaneira (England and Wales Cricket Board Limited v Danish Kaneria [2013] EWHC 1074 (Comm)) because it is the first time that the ratio of a case considers that the decisions of sport governing bodies may be considered arbitration award and what are its requirements. Up until Kaneira, even in spite of Stretford(Stretford v The Football Association Ltd & Anr [2007] EWCA Civ. 238), the decisions of sport governing bodies, and for that matter any disciplinary body, could be challenged before the English Courts on the basis of its supervisory jurisdiction. The supervisory jurisdiction is the power that the courts of the majority of common law jurisdictions have to revise decisions of non-administrative tribunals. Accordingly, even if the recourse to the courts to challenge decisions of a governing body or disciplinary tribunal is forbidden, the supervisory jurisdiction would allow the courts to step in any consider the overall fairness of the decision. This kind of remedy is available to those who cannot recourse to judicial review and, importantly for the purposes of Kaneira, against non-arbitral awards. However, if the decisions of the governing bodies are to be considered arbitral awards, then the only way to challenge them would be following sections 67 to 69 of the Arbitration Act 1996 (in England and Wales or Northern Ireland) or the relevant arbitration law in other jurisdictions. If the English Arbitration Act was of application, there would be time limit of 28 days of the date of the award (section 70(3)) and limited grounds of challenge: for example, any challenges based in the jurisdiction of the arbitral tribunal should have been raised during the arbitration and dismissed and the appeal on a point of law may not always be accepted by the other side or leave granted by the court. Very much in the same way that the introduction of the Human Rights Act 1998 made the governing bodies review their internal disciplinary procedures, I would expect that the governing bodies will seek to rely on Kaneira to shield themselves against challenges, although by no means this is a secure route when the governing bodies themselves don’t clarify the nature of their procedures.
Paul Greene – key case of 2013
There are many to choose from, but as I look back on 2013, In my view, the concussions suit brought by former NFL players against the NFL which settled for $765 million (pending court approval) was the key case of 2013. The case has led to a total re-examination of the issue of concussions in sport. The courage displayed by the former players involved show that a plaintiff can change the world for the better and reshape policy through a lawsuit. Hopefully, the next generation of athletes will enjoy safeguards to prevent the concussions suffered by the previous generation as a result.
Ariel Reck - key case of 2013
For me, the key case in 2013 was TAS 2012/A/2862 FC GIRONDINS DE BORDEAUX c. FIFA decided by the Court of Arbitration for Sport on 11 January 2013.
The award established, in relation to FIFA´s prohibition on the transfer of U18 players, that alongside with the three written exceptions of art.19 of the FIFA Regulations on the Status and Transfer of Players (RSTP), there´s a non-written one that applies to transfers of European citizens even if they are transferred from a country outside UE and/or EEA, as long as the new club fulfils the same minimum obligations as those established in art.19.2.b) of the RSTP.
This case will have a mayor impact in relation to transfers of minors from South-America to Europe (In this region there are many families with dual nationality, due to its European origin) especially after the publication of the EU Commission´s report in favour of the legality of the home grown player rule and the importance of bringing foreign players as early as possible to fulfill the quota of home trained players.
Daniel Geey - key case of 2013
Although only in its initial phase, the football agent Daniel Striani complaining to UEFA concerning its Financial Fair Play licensing regulations as well as bringing a case before the national Belgium courts, demonstrates that EU law is being used as a weapon against what are considered unduly restrictive regulations. Along side this challenge (although I am technically cheating by including two more examples!) is the very recent FIFPro announcement that they will challenge the legality of the FIFA transfer system and the Commission investigation into a number of clubs in relation to state aid issues. What all three current investigations/cases highlight is how the fundamental EU Treaty freedoms, as well as competition law, are being engaged by stakeholders unhappy with the current status quo at regular intervals. All three began in 2013 and are likely to take several years to resolve.
Andrew Nixon - key case of 2013
My key case is England and Wales Cricket Board v. Kaneria as my case of 2013
This was an important case not just for the central issue of the disciplinary hearing (namely match fixing by the Pakistani cricketer Danish Kaneria) but also because of a decision by the Commercial Court that the ECB tribunal was an arbitration, even though there was no specific reference to the tribunal proceedings being arbitral within the rules. The case confirmed the well-known comments in Walkinshaw v Diniz, in which the Court set out what it called the ‘hallmarks’ of arbitral proceedings.
The ECB, as the governing body and regulator, wished to characterise the internal disciplinary proceedings as an arbitration because it wanted to summon a key witness to give evidence, and in order to do that the ECB wanted to apply section 43 of the Arbitration Act. Kaniera argued, on the other hand, that the proceedings were not arbitral and should be characterised as simply internal disciplinary proceedings because there was no specific reference to arbitration and indeed the wording used was wording typically akin to disciplinary proceedings.
The Court found that Kaneria had agreed to be bound the rules and the Court was also satisfied that Kaniera had as a result agreed to waive his right to a public hearing under Article 6 ECHR . It then considered the characteristics of the hearing, using the obiter comments in Walkinshaw as guidance as to whether the proceedings were sufficiently judicial in effect and it found that this criteria had been satisfied and it at the same endorsed the Walkinshaw principles. The decision is not necessarily a surprising one; however, it is important for this endorsement of Walkinshaw and its clarification that a set of rules does not necessarily need to refer specifically to arbitration for the proceedings to be arbitral in nature.
Chris Duffy – key case of 2013
Rihanna v Top Shop [Fenty v Arcadia Group Brands Ltd (t/a Topshop) [2013] EWHC 2310 (Ch)] was a memorable case for me in 2013. Heralded initially as a landmark decision for celebrities in the development of something akin to an image right via the conduit of passing off, after subsequent scrutiny it is not much more than a concise restatement of the existing law which provides for no such image right in the UK. Whilst it was undoubtedly the idiosyncratic facts of the case (Rihanna having had previous involvement with Topshop, the offending photo being the same as on a recent album cover and her pre-existing reputation in the fashion sector all being key) which allowed Justice Birss to establish the requisite misrepresentation and damage to goodwill, the decision does broadly reflect the current commercial understanding in the industry. Combined with the previous Irvine decision [Irvine v Talksport Ltd [2002] EWHC 367 (Ch)] which concerned false endorsement, celebrities and their advisers may in future find themselves with sufficient deterrents to prevent the unauthorised use of their image or at least derive some financial benefit for themselves!
Mark Hovell – key case of 2013
My key case for 2103 was the corruption cases involving FC Metalist and UEFA at the CAS. We've recently seen cases against individuals with serious sanctions, such as ECB v Kaniera, but this case involved a club being punished for the actions of its director in paying sums to the opposing team to lose a match. It confirmed the principles of strict liability on a club for actions of others (a principle we're seeing applied in racism cases now too) and confirmed the admissibility of under cover video evidence in sports disciplinary cases (something that will feature more and more after recent events in England!). The decision was then enforced by UEFA by throwing the club out of the Champions League (after the had qualified for their first time) and the subsequent appeal was dealt with by CAS within a few days. Again, this shows a trend for the future, that will be called into play with FFP cases; the matters have to be dealt with in a short space of time, else competitions, such as the Champions League are underway, with the risk that the winner might later sanctioned for matters that took place before the competition.
Kevin Carpenter – key case of 2013
The series of cases regarding Rangers Football Club in Scotland, which continued throughout 2013, were (unfortunately for them) a goldmine for sports lawyers. It has been a soap opera saga and continues to be a governance circus. Of all the failings in leadership and governance in football in recent years this has to be the most spectacular. All areas of sports law seem to have been touched including insolvency, commercial, corporate, employment, regulatory, criminal and tax. Once all cases have been concluded, both in the civil and sport arena, it will make a great case study textbook rather than a work of fiction, although you really couldn't make it up!
Benoit Keane – key case of 2013
For EU sports law in 2013, the sale of media rights was in the spotlight again. The European Court of Justice delivered significant rulings relating to the EU listed events regime, news access and the enforcement of copyright on the internet. In November, the Financial Times led with a front page story that the EU Commission may launch an investigation into the sale of sports and movie rights for consumers. So the story will continue into 2014.
Mark James – case of 2013
I think that the FIFA/UEFA listed events case could have a major impact on sport in the future. By allowing the UK & Belgium to declare the entire World Cup & European Nations Finals games to be listed events leaves open the opportunity that others will follow suit. On top of that, it provides the government with an opportunity to add more events to the list, as long as they can provide a justification for doing so. This decision has the potential to alter radically the TV rights market.
Oliver Rumsey – key case of 2013
I don’t have a key case (as such) from 2013. However, in terms of prominent issues that arose during the year, we’re surely only just scratching the surface of betting with what’s going on in football at the moment. To the extent we’re not already, I think we’re all soon going to be sick of the phrases “spot fixing” and “joined-up approach”! My fear is that the cover this issue is currently getting might make the situation worse before it gets better.
