Major Victory for Fantasy Sports against College Athletes

Friday, October 6, 2017 - 4:00pm
daniels fanduel right of publicity lawsuit indiana

Last week while a California trial court let the right of publicity run roughshod over the First Amendment in a case involving a docudrama, an Indiana district court in Daniels v. Fanduel rejected the right of publicity claims brought by former NCAA football players, Akeem Daniels, Cameron Stingily, and Nicolas Stoner against fantasy sports leagues run by FanDuel and DraftKings.

The former student-athletes complained about both websites using their names, statistics and likenesses to operate and promote the fantasy sports games. The players claimed the uses violated Indiana’s right of publicity law.  The defendants asserted a number of defenses, including that the uses fell under Indiana’s statutory exemptions, were allowed by (and protected by) the First Amendment, and were barred by federal copyright law.

There was no challenge to the fact that the use of the players’ identities was for a commercial purpose as required by Indiana law.  The websites are pay sites and the court noted that in 2015 the fantasy sports industry generated $3 billion in “customer entry fees.”

The defendants claimed that many of Indiana’s statutory exceptions to liability applied to and exempted the uses of the players' identities on the websites. The defendants claimed that the uses were "newsworthy" or were reports on topics of "public interest", appeared in "literary works," and truthfully identified a “performer of a recorded performance”.

The district court agreed with FanDuel & DraftKings that their uses were newsworthy and reported on subjects of public interest. The court therefore concluded that the uses were exempted from liability under Indiana’s right of publicity statute. The court broadly interpreted these statutory exemptions, and suggested that doing otherwise would run afoul of the First Amendment.

Unsurprisingly, the court found this case similar to that of CBC Distribution & Marketing v. Major League Baseball Advanced Media, an Eighth Circuit Court of Appeals decision with concluded that the use of baseball players names and statistics in a fantasy sports game is allowed and protected by the First Amendment.  The court distinguished the more recent and troubling Ninth Circuit decision in In re NCAA Student-Athlete Name & Likeness Licensing Litigation (aka Keller v. Electronic Arts) that rejected a First Amendment defense to right of publicity claims arising out of the use of players’ likenesses and playing statistics in videogames.  The Indiana district court concluded that Electronic Arts’ videogame did not report on the players, in contrast to the fantasy sports leagues which provide actual information about specific players’ real-world performance.

Although it did not matter for the decision, the court noted that it was not clear that the websites fell within the literary works exception. This should trouble many who work in the online world and in videogames. The court also rejected the application of the truthfully-identifying-a-performer provision because the fantasy sports leagues were clearly making use of the players’ identities far beyond such a use.

Crucially, for those seeking to protect speech from an ever more expansive right of publicity­—the court rejected the First Amendment defense at the motion to dismiss stage, concluding that more fact-finding was required to determine whether the use in fantasy sports leagues was commercial speech. The court suggested that such a determination would affect the level of scrutiny provided by the First Amendment and therefore the likelihood of the defense’s success.  Accordingly, it could not be dismissed before discovery took place.

This conclusion gives fuel to the arguments from the Motion Picture Association of America and others that the best way to protect expressive and other uses of public figures’ identities is with specific statutory exemptions to right of publicity laws.

Finally, the court quickly rejected the argument that the right of publicity statute was preempted by copyright law, concluding that a person’s identity is not within the subject matter of copyright law.  Although short on analysis, the decision suggests that no copyright preemption defense would be valid against Indiana law which cannot be correct, even if it is likely appropriate to reject the defense in this particular case.

We will have to see if the players appeal.  If they do, there are good odds that the Seventh Circuit will affirm on the same statutory exemption grounds that the district court did, wanting to avoid wading into the First Amendment thicket.

Daniels v. FanDuel Opinion (S.D. Ind. 2018)

Daniels v. FanDuel Final Judgment (S.D. Ind. 2018)