Seventh Circuit Dismisses Athletes' Case in Fantasy Sports Suit

Friday, November 30, 2018 - 11:30 am PT
seventh circuit court of appeals right of publicity fantasy sports fanduel daniels

Yesterday, the Seventh Circuit ended the Daniels v. Fanduel case. Several former college athletes had sued over the use of their names, images, and statistics in online fantasy sports games―in particular uses by FanDuel and DraftKing. The plaintiffs alleged that the uses violated their right of publicity under Indiana law.

The district court had rejected the players’ claims, concluding that the uses were exempted under Indiana law because they were newsworthy. When the Seventh Circuit first considered the appeal, it certified the question of Indiana law to the Indiana Supreme Court. This unusual, but appropriate action led to the Indiana Supreme Court holding that Indiana’s right of publicity statute exempts “material with newsworthy value.” More specifcially, the state court concluded that the use of the “college players’ names, pictures and statistics for online fantasy contests” was newsworthy,and could not form the basis of a right of publicity claim in that state.

The case then returned to the Seventh Circuit, which held that the state supreme court's conclusion terminates the litigation. The appellate panel rejected the plaintiffs’ argument that the fantasy sports games were illegal gambling, and therefore could not benefit from the newsworthiness exemption. The panel correctly noted that this question was before the Indiana Supreme Court, which nevertheless held that the uses in the fantasy sports games could not form the basis of a right of publicity claim under Indiana law because they were newsworthy uses.

The appellate court left open the possibility that a state prosecutor could bring criminal charges if the games were illegal, but concluded that was not an issue for the federal judiciary to opine about. The court also noted, as I did when the state court's decision came out, that the Indiana Supreme Court noted that the players might still have a claim if there was likely confusion as to sponsorship by the athletes of the fantasy sports sites. Because there was no evidence or argument presented to the Seventh Circuit on this issue, the court held that the “civil suit is over.”

This decision puts the fantasy sports industry on very solid ground.  Although, as I have noted, the U.S. Supreme Court in Zacchini v. Scripps-Howard Broadcasting held that a state newsworthiness defense was really a First Amendment defense (in the context of Ohio common law), I think this would be an unlikely cert. grant since the newsworthiness analysis was rooted in a statute (rather than state common law).

Daniels v. FanDuel (7th Cir., Nov. 29, 2018)

 

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