The Sports & Entertainment Law Playbook

Because of the fact being that I'm in the process of opening a second office—in another state, no less—my office won't be sending out "holiday" cards this year. It's not that I don't have the time. I could easily plug something into my word processor, send it through mail merge, and they'd all pop out with envelopes printed, and correct postage. But that's not how I do things. If I don't have the time to touch each card, and write something personal to its recipient, then I won't send out anything. To me, it's a respect thing.

I am reminded about this respect factor each time a holiday card arrives in my email inbox. Needless to say, I don't even open them. In lieu of sending out holiday cards, however, I was pretty entertained by the musical greeting above, which was produced by the law firm of Manatt, Phelps & Phillips, LLP. Enjoy, and season's greetings.

Although not directly related to sports or entertainment law, gun possession seems to be a recurring theme with professional athletes (my inaugural post to this blog) so there is a remote nexus. Also, I personally am entertained by NJ Governor Chris Christie, and after all, he is a lawyer (former U.S. Att'y for the District of New Jersey).

Yesterday, controversial GOP governor Chris Christie commuted the seven-year prison sentence of Brian Aitken, a 27-year-old Internet entrepreneur who was arrested, prosecuted, and convicted of state weapons charges after police found 2 handguns in the trunk of his vehicle. (Download pdf of the order.) Police stopped Aitken because his mother, who lives in Burlington County, called them after she became worried that he might harm himself (details & full story from ABC news).

Aitken purchased the guns lawfully, at a sporting goods expo in Denver, CO in 2007, after undergoing an FBI background check. In  before he moved back to NJ, he contacted the state police to find out what his responsibilities were in bringing his firearms with him. They advised him to transport the guns unloaded, and locked, in the trunk of his vehicle.

Prosecutors charged Aitken under NJ's current gun laws, which essentially place as much culpability on him as if he were using those guns to "stick up a 7-Eleven," says attorney Mike Carroll, a NJ state assemblyman. Indeed, N.J.S.A. 2C:39-5(b) makes it a felony to possess any handgun—even a pellet gun. Although there are some very limited exceptions relating to handgun transportation, Carroll said that Aitken was "almost certainly guilty of what he is accused of doing. Technically speaking…you can’t even stop for coffee if you’re transporting guns."

The fact that Brian Aitken will be home for X'mas doesn't change the reality that NJ's gun laws are Draconian to say the least—in fact, not much less restrictive than the law struck down by the U.S. Supreme Court in 2008, in District of Columbia v. Heller (Lyle Denniston's SCOTUSblog analysis; pdf file of the Court's opinion.) Many states have either amended their gun laws since Heller, or currently have legislation pending, so given the exposure of Aitken's case and the obvious miscarriage of justice, one would hope that New Jersey gets its act together in this regard. Eugene Volokh also reported here on a related civil suit in Illinois, which if successful, could lay the foundation for future Brian Aitkens to challenge onerous state gun laws.

Until they do, however, it's best to leave your guns at home (you too, professional athletes). I know I will.

‡ Note: I borrowed the title for this post from Doug Berman, one of my former law professors, who writes an acclaimed blog on the federal sentencing guidelines.

For everyone who says that juries aren't giving out mega-verdicts anymore, here's your exception: Last week, a federal jury in Philadelphia gave a $5,000,000 early X'mas present to a couple law professors in a defamation suit.† (Jury's Verdict pdf file).

Outside of legal contexts, the term defamation gets thrown around a lot, and although many people know what it is, most non-lawyers do not know what it takes to win a defamation lawsuit. In reality, defamation suits aren't very common, because they are in fact difficult to win. Why? Because the plaintiff must prove all of these elements:

(1) the defendant made a false & defamatory statement (if the statement was printed it is libel, an oral statement would be slander);

(2) to a third party;

(3) knowledge that the statement was false (or in some cases, merely negligence about the statement's truthfulness); and

(4) damages, or special harm that was caused by the statement.‡

Since 1987, the two professors, David Rudovsky (Penn. Law) and Leonard Sosnov (Widener) were the authors of the treatise Pennsylvania Criminal Procedure: Law, Commentary & Forms, published by West, but after they got into a dispute with West over royalties and compensation, they withdrew from the project. See Complaint (pdf file). But after the authors withdrew, West went ahead and published an update (aka "pocket part") which is supposed to contain important changes and updates to the laws that are the book's subject matter. Also, West continued to list Rudovsky and Sosnov as the authors. The problem was (in addition to using the authors' names without their consent) that the update West published omitted material changes in the law, and basically made the purported authors look like imbeciles.

The authors sued the legal publishing giant for (1) false advertising, under the Lanham Act; (2) unauthorized use of name, under Pa. state law; and common law claims for (3) defamation; (4) invasion of privacy/appropriation of name; and (5) false light. The trial court ultimately dismissed the first 2 claims, but the jury rendered a verdict in the authors' favor on the defamation and invasion of privacy claims. It seems likely, however, given the enormous resources of West Publishing and its parent company is Thomson Reuters this case is probably headed to the Third Circuit Court of Appeals, where West will argue that the punitive damages award is grossly disproportionate to the compensatory damages.

†Credit: Erika Wayne, of The Legal Intelligencer first reported this story in her blog, which has additional case history and details.

‡ See Sheldon W. Halpern, The Law of Defamation, Privacy, Publicity, & Moral Right: Cases and Materials on Protection of Personality Interests 4th ed., 6 (JPM Books 2000).

This is not cybersquatting. In fact, it's being called the first legal case of its kind—theft of an Internet domain name. A New Jersey man pleaded guilty to felony theft by deception in connection with his admission that he stole a company's Internet domain name, and then sold it on eBay for $111,211.

The domain name, p2p.com, was estimatedly valued at as much as $200,000 at the time that 23-year-old Daniel Goncalves hacked into the popular domain registrar goaddy.com, and then transferred its registration to his own GoDaddy account. Go Daddy records show that the same IP address was used to transfer the stolen domain as was used to log into Goncalves's Go Daddy account. After waiting 60 days from the date of the transfer, per ICANN (Internet Corporation for Assigned Names and Number) rules, Goncalves transferred the domain to another registrar, and ultimately sold it to Mark Madsen, a forward for the Los Angeles Clippers. Madsen had no idea that the domain was stolen. (Full story from newerseynewsroom.com.)

Although 5 years sounds like a long time to go to prison for stealing a "name," Goncalves's conduct in this case was particularly egregious (not to mention stupid). Before striking the plea deal with prosecutors, Goncalves was potentially facing 10 years in prison. What's even more incredible is the fact that Goncalves not only used (presumably) his own computer to complete the transaction, but that it took investigators 3 years to catch him!

Even though the domain was reportedly returned to its rightful owners (a "who is" search only revealed the current registrar, Moniker Online Services, Inc.), it appears that the domain/site remains dormant as of this date.

Given the way in which sports—even collegiate sports—have become so heavily branded, merchandised, and televised, another area of law that routinely intersects sports is intellectual property—namely copyright, trademark, licensing, and the all-but-forgotten right-of-publicity. For example, the University of Alabama sued the artist who painted this picture commemorating the Tide's 2010 BCS National Championship. The artist, Daniel Moore, won summary judgment in the district court (pdf decision here), but the case is currently on appeal to the Eleventh Circuit.

And in 2005, fantasy sports league operator CBC Distribution filed suit against Major League Baseball Advanced Media (MLBAM, MLB's Internet division) after CBC was denied a new licensing agreement with the players' association giving it the rights to player profiles and statistics.

MLB argued that the league owned intellectual property rights in the players' right-of-publicity, which made it unlawful for fantasy leagues to profit from the identities or statistics of MLB players. In 49-page order granting summary judgment to the fantasy league, U.S. District Court Judge Mary Ann Medler said that even if the league did have intellectual property rights in the players' stats and likenesses, the First Amendment trumped the league's property interest, because the information that the fantasy leagues disseminate are facts. Facts, Medler, wrote, appear in newspapers everyday. Nobody can own them. (CBC v. MLBAM pdf file)

Paul Weiler's textbook Sports and the Law (see previous post) is nearly 1200 pages long, yet it devotes fewer than 100 pages to sports and IP law. In fact, in that single chapter of the book that addresses IP, Weiler tackles broadcast rights, copyright ownership, player publicity rights, trademarks, and group marketing of IP rights. By contrast, the book has three chapters on antitrust, two on labor relations, and even has a full chapter devoted to Title IX and intercollegiate sports. But because of how every sports franchise, conference, and league is continuously exploring how to increase the revenue earned from their branding and intellectual property, IP law, will nonetheless continue to impact the sports world for many years to come.

So what about entertainment law? I realize that I just devoted three entire posts to explain sports law, and even though this is the Sports & Entertainment Law Playbook, I haven't so much as mentioned entertainment law. Again, there is no such body of law per se, though there are so-called entertainment lawyers. I happen to be one of them. Like sports and the law, there are many different areas of law that intersect with the entertainment industry, although IP is probably the most prevalent. Artwork, sheet music, and sound recordings all need copyright and in some circumstances, trademark protection. Also, composers routinely license their scores and compositions to filmmakers and advertisers. This process inevitably involves attorneys. And just like professional athletes, artists, actors, and musicians work under contracts as well, and they also need competent legal counsel to represent their interests during negotiation. The record companies, opera houses, and concert promoters are certainly going to come to the table with the best attorneys that money can buy, so it behooves the artist to also come prepared.