<i>Counsel Concerns</i><br>Athletes' Lawyer Sues Co-Counsel Over Fees from Video Game Cases

Federal District Judge Claudia Wilken of the Northern District of California awarded $5.7 million in attorney fees to Hagens Berman in the combined settlement of three lawsuits against EA and the NCAA on Dec. 10, 2015. The judge awarded $696,000 to McIlwain after concluding that his fee application sought payment for several items that were unrelated to the case.

But McIlwain's legal fees lawsuit in New Jersey federal court cites an agreement between plaintiffs' firms in the video game litigation that called for the pooling of any fee award, and a division giving 60% to Hagens Berman and 40% to McIlwain and his co-counsel, the Lanier Law firm. Berman agreed to those terms in a Sept. 24, 2013, email that is included in an exhibit to McIlwain's complaint.

McIlwain brings counts for breach of contract, breach of the covenant of good faith and fair dealing, and interference with prospective economic advantage. He seeks compensatory and punitive damages as well as costs, interest and legal fees.

McIlwain filed suit in state court on behalf of former Rutgers University football player Ryan Hart in 2009. EA removed the case to U.S. District Court for the District of New Jersey. Around the same time, Hagens Berman's attorneys filed the suit in the Northern District of California on behalf of Sam Keller, who was a quarterback at Arizona State University and the University of Nebraska.

McIlwain's case, Hart v. Electronic Arts Inc., 09-cv-5990, was dismissed by a federal judge in New Jersey who found EA's use of the plaintiff's likeness was protected by the First Amendment. But that decision was overturned by the U.S. Court of Appeals for Third Circuit, which sent the case back to District Court in May 2013.

Meanwhile, in Keller v. National Collegiate Athletic Association, 4:09-cv-1967, EA appealed the District Court's ruling denying its motion to strike right-of-publicity claims asserted by Keller. EA claimed that its use of the player's likeness and jersey numbers was a transformative use and therefore protected by the First Amendment. But the Ninth Circuit affirmed the lower court in July 2013.

Lawyers for those cases and for a similar suit, O'Bannon v. National Collegiate Athletic Association, 09-1967, signed their fee-splitting agreement on Sept. 24, 2013. And two days later, on Sept. 26, 2013, EA agreed at a mediation session to settle the three suits for $40 million. In June 2014, the NCAA agreed to pay $20 million to settle the three suits.

Hagens Berman argued before District Judge Wilken that it should receive the largest portion of the fee award in the case because a ruling it obtained from the Ninth Circuit in Keller was the catalyst for the $60 million settlement. McIlwain, for his part, maintains that the ruling he received from the Third Circuit in Hart was the catalyst for the settlement and, therefore, he is entitled to over $4 million in fees.

But Judge Wilken said in a Dec. 10, 2015, order that the right-of-publicity claims raised under California law in Keller exposed EA to the greatest liability. That finding weighed in favor of a finding that the Keller case made the most significant contribution to the settlement, Judge Wilken said.

Leonard Aragon, who is in Hagen Berman's Phoenix office, recently said that the fee distribution was resolved by Judge Wilken. “Any attempt to bypass the court's order is frivolous. … [W]e will move to dismiss the case and will seek fees and costs against Mr. McIlwain.”

Aragon said the email cited by McIlwain was “part of a much larger agreement and that agreement never came to fruition. I would suggest to him that he re-read Judge Wiken's order and dismiss his case.”

The class action litigation was notable because it marked the first time the NCAA paid for the use of the name, image and likeness rights of student athletes. “Many students received thousands of dollars from the NCAA as a result of the Hagens Berman's work, and the settlement was universally well received by the athletes,” Aragon said.

McIlwain and his attorney, John Sanders II of Shebell & Shebell in Shrewsbury, NJ, did not return calls about the case.

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Charles Toutant is a Reporter for the New Jersey Law Journal, an ALM sibling publication of Entertainment Law & Finance.

A New Jersey lawyer claims in a legal complaint that the law firm Hagens Berman Sobol Shapiro shortchanged him on fees from a $60 million settlement of class action suits that had been brought behalf of college athletes over the use of their names and likenesses in video games. McIlwain v. Berman, 1:2017cv01257.

Timothy McIlwain of Linwood, NJ, claims Hagens Berman breached a contract between plaintiffs' lawyers concerning sharing of fees, in his lawsuit against the firm and three principals that he has filed in federal court in the District of New Jersey. The suit names managing partner Steven Berman and partners Leonard Aragon and Robert Carey as defendants. Aragon said prior to seeing the lawsuit that any claim contradicting a Northern District of California judge who awarded fees in the class action litigation would be “frivolous.”

McIlwain's suit claims Hagens Berman breached a contract it entered into with McIlwain concerning division of fees from class action litigation against the National Collegiate Athletic Association (NCAA) and video game maker Electronic Arts (EA). Roughly 24,000 class members received payments averaging $1,600 each for appearing in a series of video games produced by EA between 2003 and 2014. In July 2015, a U.S. district judge in San Francisco approved the $60 million settlement, which was brought on behalf of college football and basketball players who said their rights of publicity were violated by unauthorized depictions of them in video games.

Federal District Judge Claudia Wilken of the Northern District of California awarded $5.7 million in attorney fees to Hagens Berman in the combined settlement of three lawsuits against EA and the NCAA on Dec. 10, 2015. The judge awarded $696,000 to McIlwain after concluding that his fee application sought payment for several items that were unrelated to the case.

But McIlwain's legal fees lawsuit in New Jersey federal court cites an agreement between plaintiffs' firms in the video game litigation that called for the pooling of any fee award, and a division giving 60% to Hagens Berman and 40% to McIlwain and his co-counsel, the Lanier Law firm. Berman agreed to those terms in a Sept. 24, 2013, email that is included in an exhibit to McIlwain's complaint.

McIlwain brings counts for breach of contract, breach of the covenant of good faith and fair dealing, and interference with prospective economic advantage. He seeks compensatory and punitive damages as well as costs, interest and legal fees.

McIlwain filed suit in state court on behalf of former Rutgers University football player Ryan Hart in 2009. EA removed the case to U.S. District Court for the District of New Jersey. Around the same time, Hagens Berman's attorneys filed the suit in the Northern District of California on behalf of Sam Keller, who was a quarterback at Arizona State University and the University of Nebraska.

McIlwain's case, Hart v. Electronic Arts Inc., 09-cv-5990, was dismissed by a federal judge in New Jersey who found EA's use of the plaintiff's likeness was protected by the First Amendment. But that decision was overturned by the U.S. Court of Appeals for Third Circuit, which sent the case back to District Court in May 2013.

Meanwhile, in Keller v. National Collegiate Athletic Association, 4:09-cv-1967, EA appealed the District Court's ruling denying its motion to strike right-of-publicity claims asserted by Keller. EA claimed that its use of the player's likeness and jersey numbers was a transformative use and therefore protected by the First Amendment. But the Ninth Circuit affirmed the lower court in July 2013.

Lawyers for those cases and for a similar suit, O'Bannon v. National Collegiate Athletic Association, 09-1967, signed their fee-splitting agreement on Sept. 24, 2013. And two days later, on Sept. 26, 2013, EA agreed at a mediation session to settle the three suits for $40 million. In June 2014, the NCAA agreed to pay $20 million to settle the three suits.

Hagens Berman argued before District Judge Wilken that it should receive the largest portion of the fee award in the case because a ruling it obtained from the Ninth Circuit in Keller was the catalyst for the $60 million settlement. McIlwain, for his part, maintains that the ruling he received from the Third Circuit in Hart was the catalyst for the settlement and, therefore, he is entitled to over $4 million in fees.

But Judge Wilken said in a Dec. 10, 2015, order that the right-of-publicity claims raised under California law in Keller exposed EA to the greatest liability. That finding weighed in favor of a finding that the Keller case made the most significant contribution to the settlement, Judge Wilken said.

Leonard Aragon, who is in Hagen Berman's Phoenix office, recently said that the fee distribution was resolved by Judge Wilken. “Any attempt to bypass the court's order is frivolous. … [W]e will move to dismiss the case and will seek fees and costs against Mr. McIlwain.”

Aragon said the email cited by McIlwain was “part of a much larger agreement and that agreement never came to fruition. I would suggest to him that he re-read Judge Wiken's order and dismiss his case.”

The class action litigation was notable because it marked the first time the NCAA paid for the use of the name, image and likeness rights of student athletes. “Many students received thousands of dollars from the NCAA as a result of the Hagens Berman's work, and the settlement was universally well received by the athletes,” Aragon said.

McIlwain and his attorney, John Sanders II of Shebell & Shebell in Shrewsbury, NJ, did not return calls about the case.

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Charles Toutant is a Reporter for the New Jersey Law Journal, an ALM sibling publication of Entertainment Law & Finance.