Herrick is proud to have represented an affiliate of our longtime clients Yankee Global Enterprises, LLC and the New York Yankees in their joint venture effort with the English Premier League's Manchester City to bring a new Major League Soccer team to New York City. The new team, called New York City Football Club, will begin play in 2015 and will be Major League Soccer's 20th franchise. The Herrick deal team was led by partners Irwin Kishner and Dan Etna.
Do You Know the Way to San Jose?
The Oakland A's surely know the way to San Jose; whether they will in fact be able to relocate to "San Jo" is quite a different matter. In order to relocate, the Oakland A's must first obtain either the consent of the San Francisco Giants or the approval of at least 75% of the MLB Clubs.
The San Francisco Giants have objected to the proposed relocation on the ground that the City of San Jose is included within their exclusive operating territory. Meanwhile the Oakland A's have been waiting for over four years for a committee appointed by MLB Commissioner Selig to make a determination whether the relocation request should be submitted for a vote by the MLB Clubs.
In an effort to expedite the relocation process, the City of San Jose has filed an antitrust lawsuit against MLB. As a result of a 1922 U.S. Supreme Court decision, MLB operates under an antitrust exemption. The U.S. Supreme Court ruled that MLB does not engage in interstate commerce for purposes of the federal antitrust laws. Although this ruling has been soundly criticized, the U.S. Supreme Court has steadfastly declined to overturn the 1922 decision. The U.S. Supreme Court's view is that any change in MLB's antitrust exemption should be effected by means of legislative action.
The City of San Jose has claimed that MLB's antitrust exemption has been used as a "guise" to control MLB club locations and thereby unlawfully limit competition. In seeking to overturn the antitrust exemption, the City of San Jose has argued that the scope of MLB's activities involves interstate commerce. In this regard, the City of San Jose has called particular attention to MLB's national and international licensing and media rights deals. MLB has countered that the lawsuit is "an unfounded attack on the fundamental structures of a professional sports league." The suit is expected to be heard in October of this year.
Federal Appeals Court Reshuffles Poker Decision
The Second Circuit Court of Appeals has overturned a lower court judge's ruling that found the operator of "Texas Hold'em" poker games not guilty of violating the Illegal Gambling Business Act (the "IGBA"), a federal law that makes it a criminal offense to operate a gambling business. The lower court ruled in favor of the poker game operator on the basis that poker is a game of skill, rather than a game of chance. The lower court ruling was reported on in a prior edition of The Herrick Win Column.
In reversing the lower court ruling, the Second Circuit found that the plain language of the IGBA covered the "Texas Hold'em" poker operator. Specifically, the poker operation at issue satisfied the following three criteria for an illegal gaming business under the IGBA: (i) the poker operations were conducted in violation of New York state gambling laws; (ii) the poker operations required the attention of five or more persons; and (iii) the poker operations were conducted for more than 30 days or earned more than $2,000 in one day. The court held that the question of whether skill or chance predominates in poker is inconsequential for purposes of IGBA liability.
U.S. v. DiCristina, No. 12-3720 (U.S. Ct. of App. 2nd Cir. Aug. 6, 2013)
Federal Appellate Court Decisions Leave Video Game Maker with Double Vision
Two federal appellate courts have ruled in favor of claims brought by former college football players for violation of their publicity rights. In one case, Sam Keller, a former quarterback for Arizona State University and the University of Nebraska, filed a claim against video game maker, Electronic Arts ("EA"), alleging that EA's unauthorized depiction of a football player in its NCAA football game (the "Video Game") used his likeness without compensation in violation of California's right of publicity law. The other case involved a nearly identical lawsuit filed by Ryan Hart, a former quarterback for Rutgers University, alleging that the unauthorized use of his image in the Video Game violated his right of publicity under New Jersey law.
In each case, the former player alleged that the Video Game precisely replicated all of the NCAA football teams, including their uniforms, logos and stadium. Each player further alleged that the Video Game, with the exception of the players' names, depicted every distinctive aspect of the players, including preferred wristbands, headbands, face masks, visors, arm sleeves and arm bands. On the basis of the foregoing, each former player argued that he had sufficiently established liability for a violation of his publicity right. As a general matter, the right of publicity precludes a third party from using the name, voice, image, likeness or persona of any individual for commercial purposes without permission.
In both cases, EA countered by arguing that its First Amendment rights were superior to the former players' publicity rights. In particular, EA claimed that the First Amendment protected the use of player likenesses in the Video Game as a work of free expression. Each court applied a "transformative test" for purposes of ascertaining whether EA's First Amendment rights should be afforded priority. Under this test, the First Amendment protects works that contain significant transformative elements or whose value is not derived primarily from the fame of the aggrieved party. Each court found that the Video Game was not transformative since the player at issue was not depicted in a different form.
Keller v. Electronic Arts, No. 10-15387 (9th Cir. July 31, 2013); Hart v. Electronic Arts, 717 F.3d 141 (3rd Cir. 2013)