Bit Parts

Arbitration/NFL Agent Contracts

The Court of Appeal of California, Fourth District, decided that an allegation by an NFL football player ' that his agent breached a fiduciary duty to him by failing to repay investment loans the player made to the agent ' didn't place the claim within the arbitration provision of the NFL representation agreement. Morton v. Steinberg, G037793. Athlete Chad Morton had sued his agent Leigh Steinberg and several other parties over their alleged failure to repay loans Morton made to them, including for a music-concert venture in China. The trial court denied Steinberg's petition to compel arbitration. Affirming, the court of appeal explained in an unpublished opinion: 'Both the representation agreement and the NFLPA regulations address the provision of services by an athlete agent to an athlete within the limited context of negotiating and enforcing the player's employment agreement with a professional football team, namely 'individual contract negotiations,' in the words of the regulations. Steinberg attempts to broaden the scope of these documents by arguing his alleged breaches of contract and allegedly fraudulent conduct are within the scope of the NFLPA regulations and therefore the arbitration provision in the representation agreement, because the regulations require the contract advisor to '[a]ct at all times in a fiduciary capacity on behalf of players,' and prohibit certain conduct on the part of the contract advisor '. When we consider the full text of the regulations, we conclude they address the conduct of agents in the context of their actions or omissions as agents under the representation agreement. The acts and omissions placed at issue by Morton's complaint are outside the scope of the representation agreement.'

Copyright Exemption/Subject-Matter Jurisdiction

The U.S. District Court for the Eastern District of Virginia decided it lacked subject-matter jurisdiction over a suit for a declaration that use of a device for substituting unauthorized new advertisements into TV broadcasts complied with the Copyright Act. SegOne Inc. v. Fox Broadcasting Co., 3:07-CV-342. A Manhattan federal district court had ruled earlier this year that the ad-replacement device wasn't permitted by the 'homestyle exemption' of 17 U.S.C. Sec. 110(5)(A). American Broadcasting Cos. Inc. v. Flying J. Inc., 06 Civ. 2967(DAB) (S.D.N.Y. 2007). The exemption allows 'for the incidental entertainment of patrons in small businesses or other professional establishments,' the public performance 'of copyrighted works using the kind of apparatus commonly used in private homes.' SegOne, which filed the action in Virginia, hadn't intervened in the New York case. The Virginia federal district court noted: 'Coupled with the timing of this suit, which was filed one day after [truck-stop operator] Flying J settled the claims against it [in the New York litigation] (in a way that did not favor segOne), segOne's decision not to intervene strikes the Court as a way to get two chances to litigate its claim, a strategy that the Court wishes to discourage.'

The U.S. Court of Appeals for the Sixth Circuit affirmed denial of a mistrial over a jury award in favor of the plaintiffs in a suit over an unlicensed sample. Bridgeport Music Inc. v. Justin Combs Publishing, 06-6294. The publisher and sound-recording owner of 'Singing in the Morning' by the Ohio Players sued over a sample on 'Ready to Die,' the title track of a 1994 album by Notorious B.I.G. The defendants claimed that the verdict was the result of 'passion and prejudice' based on remarks made by plaintiff's counsel during closing. For example, the plaintiffs' attorney referred to a co-defendant as a 'multi-million dollar company,' and suggested the expert for the defendants was 'a fancy guy from New York.' '[But] other than the improper references to Nashville and New York,' the appeals court noted, '[d]efendants only point to the fact that the jury deliberated for less than three-and-one-half hours and awarded plaintiffs the same amount of damages that plaintiffs demanded. Together, these considerations do not rise to the level of prejudice that would require a new trial.' However, the court found unconstitutionally excessive a $3.5 million punitive damages award that had been assessed with compensatory damages of $366,939, in favor of Westbound Records, the owner of the Ohio Players sound recording, on a claim for common-law copyright infringement. (The Ohio Players sound recording was pre-1972 and thus not protected by federal copyright law.) 'Given the large compensatory damages award of $366,939, a substantial portion of which contained a punitive element, and the low level of reprehensibility of defendants' conduct, a ratio of closer to 1:1 or 2:1 [of punitive to compensatory damages] is all that due process can tolerate in this case.'

The U.S. District Court for the Middle District of Florida granted summary judgment for defendant producers and distributors of a reality-TV dating series sued over use of the term 'Ironman.' World Triathlon Corp. v. Dawn Syndicated Productions, 8:05-CV-983-T-27EAJ. The plaintiff holds several federally registered 'Ironman' trademarks and organizes the Ironman Triathlon World Championship. The district court noted in part that it appeared the defendants had decided to use 'Ironman' within their 'elimiDATE' TV series 'because of its common English meaning and because in a comedic fashion the term depicts the type of competitor, someone with physical endurance, who could succeed in dating multiple women over a five day period. ' In light of the totality of the circumstances related to the parties' products and their commercial activities, there simply is no likelihood of customer confusion as to origin or sponsorship of the elimiDATE Ironman Challenge.'