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UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

John Frederick Dryer, James Lawrence Marshall, Joseph Michael Senser, Elvin Lamont Bethea, Dante Anthony Pastorini, Edward Alvin White, Fred Barnett, Tracy Simien, Darrell Alexander Thompson, Lemuel Joseph Barney, James Nathaniel Brown, Mark Gregory Clayton, Irvin Acie Cross, Brian Duncan, Billy Joe Dupree, Michael James Haynes, Paul James Krause, Bruce Allan Laird, Reginald McKenzie, Preston Pearson, Reginald Joseph Rucker, Jackie Larue Smith, and Jim Ray Smith, on behalf of themselves and all others similarly situated, Plaintiffs, v. National Football League, Defendant.

Civil No. 09-2182 (PAM/AJB)

SPECIFIC REASONS FOR OBJECTION TO THE FAIRNESS, REASONABLENESS, AND ADEQUACY OF THE PROPOSED SETTLEMENT BY PLAINTIFFS JAMES LAWRENCE MARSHALL, JOSEPH MICHAEL SENSER, AND DANTE ANTHONY PASTORINI

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TABLE OF CONTENTS Page INTRODUCTION ............................................................................................................. 1 FACTUAL BACKGROUND ........................................................................................... 2 ARGUMENT ..................................................................................................................... 7 I. The Settlement Is Unfair Because It Does Not Provide Certainty that Any Class Member Will Receive an Economic Benefit. ..................................... 8 A. B. The Proposed Settlement Distributes All Funds to Third Parties. .......... 9 The Facts Do Not Justify a Distribution of Settlement Funds Only to Third Parties. ............................................................................................. 10 The Settlement Will Impose Unfair Disparate Treatment On Class Members. ........................................................................................................ 16 The Licensing Agency Does Not Guarantee Compensation to Class Members. ............................................................................................. 17

C.

D.

II.

Complicating Factors Emphasize that the Settlement Is Unfair. .................... 20 A. The Court Should Deny Approval Because Damages Discovery Has Not Occurred. ........................................................................................ 21 Lead Settlement Counsel Has Not Satisfied His Duty to Evaluate the Value of the Released Claims. .............................................................. 25

B.

III. The Class Members’ Claims Have Value. .......................................................... 27 A. B. The NFL Has Violated Class Members’ Rights. ....................................... 27 The Alleged Litigation “Challenges” Identified by the Settling Parties and the Court Do Not Alleviate Their Burden to Demonstrate that the Settlement Is Fair. ................................................... 29

i

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i.

The Law of a Single State Applies to All Class Members’ State-Law Claims. ................................................................................ 32 Common Liability Questions Predominate Over Individual Liability Questions. .............................................................................. 35 Common Damages Questions Predominate Over Individual Damages Questions. ............................................................................ 35

ii.

iii.

CONCLUSION................................................................................................................ 37

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TABLE OF AUTHORITIES Page Cases Alexander v. National Football League, No. 4-76-Civil-123, 1977 U.S. Dist. LEXIS 14685 (D. Minn. 1977) ........................ 24 Allstate Ins. Co. v. Hague, 449 U.S. 302 (1981) ...................................................................................................... 32 Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) ...................................................................................................... 30 Beattie v. CenturyTel, Inc., 511 F.3d 554 (6th Cir. 2007)........................................................................................ 36 Buchet v. ITT Consumer Fin. Corp., 845 F. Supp. 684 (D. Minn. 1994) ................................................................................ 7 City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974) ......................................................................................... 24 Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1437 (2013) (dissent) ........................................................................ 36 Contreras v. PM Beef Holdings, LLC, No. 07-CV-3087, 2008 U.S. Dist. LEXIS 73800 (D. Minn. Sept. 18, 2008) ............ 24 Cox v. Zurn Pex, Inc. (In re Zurn Pex Plumbing Prods. Liab. Litig.), 644 F.3d 604 (8th Cir. 2011).................................................................................. 31, 32 Ferrington v. McAfee, Inc., No.: 10-CV-01455-LHK, 2012 U.S. Dist. LEXIS 49160 (N.D. Cal. Apr. 6, 2012) ........................................................................................................................ 16, 17 Free v. Abbott Labs., 953 F. Supp. 751 (M.D. La. 1997)............................................................. 24, 25, 26, 29 Grunin v. Int’l House of Pancakes, 513 F.2d 114 (8th Cir. 1975).......................................................................................... 7

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Hosch v. Levings, 2009 Minn. App. Unpub. LEXIS 1155 (Minn. Ct. App. Oct. 27, 2009) ................ 34 In re Airline Ticket Comm’n Antitrust Litig., 268 F.3d 619 (8th Cir. 2001).................................................................................. 11, 13 In re Airline Ticket Comm’n Antitrust Litig., 307 F.3d 679 (8th Cir. 2002).................................................................................. 11, 13 In re Baby Prods. Antitrust Litig., 708 F.3d 163 (3d Cir. 2013) ............................................................................. 13, 14, 15 In re Classmates.com Consolidated Litig., No. C09-45RAJ, 2011 U.S. Dist. LEXIS 17761 (W.D. Wash. Feb. 22, 2011).... 13, 15 In re General Motors Corp. Pick-Up Truck Fuel Tank, 55 F.3d 768 (3d Cir. 1995) ................................................................................. 7, 16, 21 In re Groupon, Inc., No. 11md2238 DMS (RBB), 2012 U.S. Dist. LEXIS 185750 (S.D. Cal. Sept. 28, 2012) ........................................................................................................................ 12 In re Pet Food Prods. Liab. Litig., 629 F.3d 333 (3d Cir. 2010) ......................................................................................... 25 In re Pharm. Indus. Average Wholesale Price Litig., 588 F.3d 24 (1st Cir. 2009) .......................................................................................... 13 In re Thornburg Mortg., Inc. Secs. Litig., 885 F. Supp. 2d 1097 (D.N.M. 2012) ................................................................... 13, 15 In re Wireless Tel. Fed. Cost Recovery Fees Litig., 396 F.3d 922 (8th Cir. 2005).......................................................................................... 7 Jepson v. Gen. Casualty of Wis., 513 N.W.2d 467 (Minn. 2000) .................................................................................... 34 Klier v. Elf Atochem N. Am., Inc., 658 F.3d 468 (5th Cir. 2011)...................................................................... 11, 13, 14, 15 Mars Steel Corp. v. Continental Ill. Nat’l Bank and Trust Co. of Chicago, 834 F.2d 677 (7th Cir. 1987).......................................................................................... 7 iv

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Masters v. UHS of Del., Inc. 631 F.3d 464 (8th Cir. 2011)........................................................................................ 22 McFarland v. Miller, 14 F.3d 912 (3d Cir. 1994) ........................................................................................... 27 Mirfasihi v. Fleet Mortg. Corp., 356 F.3d 781 (7th Cir. 2004)........................................................................................ 17 Nielson v. The Sports Authority, No: C 11-4724 SBA, 2012 U.S. Dist. LEXIS 168226 (Nov. 27, 2012) ...................... 24 Palmer v. Schonhorn Eters., 232 A.2d 458 (N.J. Super. Ct. Ch. Div. 1967) ........................................................... 27 Phillips Petroleum Co. v. Shutts, 472 U.S. 797,(1985) ...................................................................................................... 11 Powell v. Georgia-Pacific Corp., 119 F.3d 703 (8th Cir. 1997).................................................................................. 11, 12 Richie v. Paramount Pictures Corp., 532 N.W.2d 235 (Minn. Ct. App. 1995) (reversed on other grounds)........................................................................................... 33 Schumacher v. Schumacher, 676 N.W.2d 685 (Minn. Ct. App. 2004) .................................................................... 33 Six Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301 (9th Cir. 1990)................................................................................ 13, 15 Sobel v. The Hertz Corp., 3:06-CV-00545-LRH-RAM, 2011 U.S. Dist. LEXIS 68984 (D. Nev. June 27, 2011) ........................................................................................................................ 22, 23 Van Horn v. Trickey, 840 F.2d 604 (8th Cir. 1988).................................................................................... 7, 30 Welsch v. Gardebring, 667 F. Supp. 1284 (D. Minn. 1987) ............................................................................ 21

v

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Whitney v. Guys, Inc., 700 F.3d 1118 (8th Cir. 2012)...................................................................................... 32 Statutes 28 U.S.C. § 2072 ............................................................................................................... 14 28 U.S.C. § 2072(b) .......................................................................................................... 14 Rules Fed. R. Civ. P. 23 ....................................................................................................... 14, 31 Fed. R. Civ. P. 23(a)......................................................................................................... 30 Fed. R. Civ. P. 23(b) ........................................................................................................ 30 Fed. R. Civ. P. 23(b)(3) .............................................................................................. 30, 31 Fed. R. Civ. P. 23(c)(4)-(5) .............................................................................................. 36 Fed. R. Civ. P. 23(e) ........................................................................................................... 7 Treatises Am. Law Inst., Principles of the Law of Aggregate Litigation § 3.07 (2010) ... 11, 12 Annotated Manual for Complex Litigation (Fourth) § 21.61 (2008).......................... 7 J. Thomas Mccarthy, THE RIGHTS OF PUBLICITY AND PRIVACY (2013) .......... 22, 27, 37 M. Redish et al., Cy Pres Relief & The Pathologies of the Modern Class Action, 62 FLA. L. REV. (2010) .................................................................................................. 14 Moore’s Federal Practice § 23.161 (2013) ..................................................................... 30 Restatement (Second) of Torts § 652C (1977).............................................................. 27 Restatement Third, Unfair Competition § 49 (1995) .................................................. 22 Wright, Miller & Kane, Federal Practice & Procedure: Civil 3d § 1797.1 (2005)............................................................................................................................... 8

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INTRODUCTION The proposed settlement does not guarantee that any class member will receive any economic benefit in any form. For that reason, it is unfair. The risk that class members will receive nothing has not even been communicated to the class. The Court should exercise its duty to protect the silent class members and deny final approval. Neither the Common Good Fund nor the Licensing Agency guarantees any economic benefit to any retired player. Those organizations cannot promise anything more than a speculative hope that some class members might benefit from this settlement. The NFL, on the other hand, receives a solid guarantee: class members release all their past and future claims to payment for the NFL’s use of their likenesses to promote NFL football—a complete release for the use of its game footage library. The Court should not approve giving settlement funds to a third party—the Common Good Entity—for further distribution to other third-party charities with only a hope that an economic benefit will trickle down to class members. This daisy-chain of third-party payments does not protect the silent class members or ensure they receive compensation for their claims. Nor does it ensure that any class member will receive anything. But it does effectively guarantee that at least part of the class will get nothing. All class members should receive compensation for giving up their claims. They should have the opportunity to find out what those claims might be worth. Instead, they have been told they should accept an unfair deal because their case has risks. All lawsuits have risks, but the risks must be balanced against the 1

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potential value of the released claims. Lead Settlement Counsel, however, has refused to answer class members’ requests for information about the value of their claims. Risks alone do not justify releasing the class members’ claims for potentially nothing in return. Plaintiffs Jim Marshall, Joe Senser, and Dan Pastorini (the “Objecting Plaintiffs”) respectfully request that the Court deny final approval to this unfair settlement, and hereby set forth the specific reasons for their objection pursuant to the Court’s Preliminary Approval Order. Dkt. #270. FACTUAL BACKGROUND On March 18, 2013, several named plaintiffs (“Settling Plaintiffs”) submitted a proposed settlement to the Court for approval. Dkt. #262. The six named plaintiffs that initiated this lawsuit opposed preliminary approval of the settlement. Dkt. #264; Dkt. #269. The Court granted preliminary approval, certified a class at the Settling Plaintiffs’ request, and directed that notice be provided to the class, defined as all retired players and their heirs. Dkt. #270. The Court appointed Dan Gustafson as Lead Settlement Counsel. Id. at 7. The settlement allocates up to $50 million among (1) a 501(c)(3) organization called the Common Good Entity; (2) costs for establishing a Licensing Agency; (3) attorneys’ fees; (4) settlement administration expenses; and (5) the NFL’s fees and costs for litigation with class members who exclude themselves from the settlement class. Dkt. #262-1 at ¶¶ II.A.1; II.A.3; II.B.1; IV.F.1; IX. The NFL will pay $42 million over eight years to the Common Good Entity, but if the NFL incurs opt-out litigation expenses, it can withhold up to $13.5 million of the $42 million, leaving $28.5 million for the Common Good Entity. Id. at ¶¶ II.A.1-4.

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The Common Good Entity has authority to distribute settlement funds only to other third-party organizations. Dkt. #262-1 at ¶¶ IV.F.5. If it does not distribute all funds within ten years, remaining funds revert to the NFL. Id. at ¶ IV.F.9. The Common Good Entity will be managed by a seven-member Board of Directors that has discretion to disburse the funds to third-party charities for a group of approved uses such as medical research, housing, insurance, medical evaluations, mental health, wellness, and employment training. Id. at ¶ IV.F.5.(c). The approved uses do not include compensation for the NFL’s use of retired players’ images and other publicity rights. The initial Board of Directors approved by the Court consists of seven former NFL players. Dkt. #270 at 19-20. The settlement does not guarantee that the funds received by the Common Good Entity will reach any class member in the form of an economic benefit. The settlement creates a Licensing Agency for licensing class members’ publicity rights to third parties. Dkt. #262-1 at ¶ IV.A. The Licensing Agency does not involve the NFL’s use of class members’ publicity rights and will not generate compensation for such use. The Board of Directors appointed to manage the Common Good Entity also will manage the Licensing Agency. Dkt. #270 at 19-20. The Licensing Agency does not have the authority under the settlement to license NFL game footage to third parties. Dkt. #262-1 at ¶ III.C.4. It also does not have the authority to license any NFL IP Rights, such as logos, to third parties without the NFL’s consent. Id. at ¶ IV.C.3. Notwithstanding the above, in the event the Licensing Agency licenses any of the class members’ publicity rights, the “proceeds” from those licenses will be

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divided between the Common Good Entity and the class members whose rights are licensed. Dkt. #262-1 at ¶ IV.E.1. The settlement does not provide any revenue projections or likelihood of success for the Licensing Agency. The settlement does not ensure that the Licensing Agency will generate revenue or have sufficient funding to remain in operation. In sum, neither the Common Good Entity nor the Licensing Agency guarantee that any class member will receive an economic benefit from the settlement. The settlement provides that class members release their claims against and covenant not to sue the NFL or any third party authorized to use NFL game footage (“Released Parties”). Dkt. #262-1 at ¶¶ I.E.43; III.A.1-3; III.C.4. The release includes all past and future claims relating to the use of retired players’ publicity rights to promote the NFL. Id. at ¶¶ III.A.1-3. The released publicity rights include each player’s name, nickname, initials, likeness, image, picture, photograph, animation, persona, autograph/signature, appearance, voice, personal or biographical information, or any other identifying or personal characteristic. Id. at ¶¶ I.E.38; I.E.40; III.A.1-3. The release covers all such claims in perpetuity. Id. at ¶ III.A.2. The settlement also includes a covenant that class members will not contest the NFL’s “exclusive right” to broadcast, license, or otherwise disseminate NFL game footage. Id. at ¶ III.C.4. Thus, the release will secure the NFL’s ability to exploit its game footage library without challenge from retired players. The settlement does not provide any information describing the value of the released claims or the covenant not to sue.

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The release and covenant do not allow the NFL to use retired players’ publicity rights in a way that constitutes an “endorsement” by those players of a non-NFL brand, product, or service (such as a consumer product). Dkt. #262-1 at ¶¶ III.A.2; III.C.4. “Endorsement” is not defined. Id. The settlement provides that a third-party use of NFL game footage is not an “endorsement” if the use does not “unduly focus on, feature, or highlight” a player in the footage and would not lead a “reasonable consumer” to believe that a player is a “spokesperson” for or “promoter” of the third-party brand, product or service. Id. at ¶ III.A.2. “Unduly,” “focus on,” “feature,” “highlight,” “reasonable consumer,” “spokesperson,” and “promoter” are not defined. The settlement includes a fee-shifting provision for future disputes. Dkt. #262-1 at ¶ III.D. The provision applies only in favor of the NFL; it does not apply in favor of class members. Id. If a class member brings a claim against any Released Party, and the Released Party prevails “based on the Release or Covenant,” the class member must pay the Released Party’s costs and expenses, including attorneys’ fees. Id. If the class member prevails, the fee-shifting provision does not apply. Id. The provision has the effect of ensuring that retired players will not contest the NFL’s use of their images in the future. If a retired player believes the NFL has violated the agreement, he is left with a Hobson’s choice: sue the NFL and lose and pay the NFL’s fees; or sue the NFL and win but pay his lawyers all their fees. Damages discovery has not yet occurred. The Court deferred damages discovery until completion of discovery on the named plaintiffs’ claims and class certification. Dkt. #65 at 2. The NFL therefore refused to produce damages

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discovery. Dkt. #65 at 3. It also meticulously redacted its production to omit reference to any financial information. Dkt. #167 at 26. The Court upheld the NFL’s redactions. Dkt. #168 at 2. Class members have not received—and Plaintiffs have not had the opportunity to discover—information evaluating the potential value of the past and future claims released by the settlement. After notice was provided to the class, counsel for the Objecting Plaintiffs reached out to Lead Settlement Counsel to address concerns about risks of the settlement and request information about the economics of the settlement. Letter from M. Ciresi to D. Gustafson, June 6, 2013 (Ex. A).1 The letter requested information demonstrating (1) certainty that class members would receive an economic benefit; (2) potential revenue of the Licensing Agency; and (3) value of the claims released by class members. Id. The letter also raised concerns that the class had not received information about the risks of the settlement. Id. at 5. In the next seven weeks, Lead Settlement Counsel did not respond. On July 29, Objecting Plaintiffs’ counsel sent a follow-up letter to Lead Settlement Counsel confirming that he did not have the information requested in the June 6 letter. Letter from M. Ciresi to D. Gustafson, July 29, 2013 (Ex. B). Lead Settlement Counsel responded on August 1, and again did not provide any of the requested information. Letter from D. Gustafson to M. Ciresi, Aug. 1, 2013 (Ex. C). He instead wrote “I saw little purpose in offering a point-by-point rebuttal to your first letter and see no reason to debate either of them now.” Id. at 1. The

Citations to “Ex. _” refer to Exhibits to the Declaration of Aaron R. Fahrenkrog, submitted with this objection.
1

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Objecting Plaintiffs’ attempts to engage in a substantive discussion about the proposed settlement have fallen on deaf ears. ARGUMENT Before granting final approval, the Court must conclude that the proposed settlement is reasonable, adequate, and fair. Fed. R. Civ. P. 23(e);Van Horn v. Trickey, 840 F.2d 604, 606 (8th Cir. 1988). The most important factor in this inquiry is the strength of the plaintiffs’ case balanced against the terms of the settlement. Van Horn, 840 F.2d at 607. The Court has an independent duty to act “as a fiduciary, serving as a guardian of the rights of absent class members.” In re Wireless Tel. Fed. Cost Recovery Fees Litig., 396 F.3d 922, 932 (8th Cir. 2005). This duty is especially important, given “the settling parties frequently make a joint presentation of the benefits of the settlement without significant information about any drawbacks.” Manual for Complex Litigation (Fourth) § 21.61 at 309 (2008). The Settling Plaintiffs bear the burden of proving the proposed settlement is fair, reasonable, and adequate. Grunin v. Int’l House of Pancakes, 513 F.2d 114, 123 (8th Cir. 1975). In evaluating a settlement reached before a class has been certified, “a heightened level of scrutiny is required, and the Court’s inquiry should be ‘especially careful and penetrating.’” Buchet v. ITT Consumer Fin. Corp., 845 F. Supp. 684, 691 (D. Minn. 1994) (quoting Mars Steel Corp. v. Continental Ill. Nat’l Bank and Trust Co. of Chi., 834 F.2d 677, 681-82 (7th Cir. 1987)); see also In re Gen. Motors Corp. Pick-Up Truck Fuel Tank, 55 F.3d 768, 786-92, 805 (3d Cir. 1995) (stating that a district court must be “even more scrupulous than usual” in reviewing settlements presented pre-certification). The Settling Plaintiffs must

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demonstrate that the settlement meets this heightened level of scrutiny. See Wright, Miller & Kane, Federal Practice & Procedure: Civil 3d § 1797.1 (2005). The Settling Plaintiffs cannot meet their burden. The proposed settlement is unfair and inadequate:
1.

There is no certainty that any class member will receive any economic benefit from the settlement. All settlement funds are distributed to third-party organizations. There is no claims process for class members to request their share of the settlement proceeds. The Settling Plaintiffs have provided no information about the value of the claims released by the class.

2. 3.

4.

These inadequacies have not been communicated to the class. There is a substantial risk that class members will remain in the settlement class, release all past and future publicity rights claims against the NFL and its licensees, and get nothing in return. The Objecting Plaintiffs respectfully request that the Court protect the class by denying final approval.
I.

The Settlement Is Unfair Because It Does Not Provide Certainty that Any Class Member Will Receive an Economic Benefit. The Court should not approve the settlement because it does not guarantee

that each identified class member—or indeed any class member—will benefit. This risk arises because the settlement distributes all proceeds—after fees and costs are deducted—to a third party, the Common Good Entity. The Common Good Entity has discretion to distribute the proceeds for a variety of charitable uses, but only to other third parties and not class members. If the Common Good Entity fails to distribute the funds, the money goes back to the NFL. This

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distribution structure does not guarantee that any class member will receive a benefit, and as a practical matter guarantees that some class members will not. This is unfair to the class.
A.

The Proposed Settlement Distributes All Funds to Third Parties.

No class member will receive a payment directly from the settlement proceeds. Instead, all payments from the fund will go to unknown third-party organizations:

All settlement proceeds initially will go to a third party: the Common Good Entity. The settlement allows the possibility that class members will never see any of the proceeds. Instead, the proceeds may revert to the NFL or may be distributed to charities that benefit only “similarly situated” individuals but not class members. That is, non-class members likely will benefit while certain class members will not. The defined list of charitable uses allowed by the settlement

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make it highly likely that many class members—those who do not qualify for the various charities—will not receive a benefit. The Common Good Entity is not a mere “administrative vehicle” for distributing settlement funds to class members. It has no claims process. It has no authority to distribute funds to class members. But it has discretion to choose which charities will receive settlement funds. The Common Good Entity is a charitable organization, not a settlement administrator. It does not provide any assurance that class members with valid claims will receive compensation from the settlement, in any form. The Settling Plaintiffs’ own descriptions of the settlement highlight the uncertainty and risks: “The NFL’s contributions to the Common Good Fund, overseen by a Board with representatives from among the Class Members, potentially will benefit all Retired Players who are eligible for the support from the organizations supported by the Fund.” Dkt. #261 at 8 (emphasis added). That is, the contributions “potentially” will not benefit even those class members who are eligible. Indeed, the eligible class members are not even afforded priority from the organizations that will receive the funds. Class members who are not eligible are guaranteed to receive nothing. This settlement—distributed entirely through third parties although nothing would prevent distribution of proceeds to the class—is unprecedented. It is unfair and should not be approved.
B.

The Facts Do Not Justify a Distribution of Settlement Funds Only to Third Parties.

The Eighth Circuit has approved class settlement distributions to third parties only for “unclaimed” funds to which no party has a legal right. In re 10

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Airline Ticket Comm’n Antitrust Litig., 307 F.3d 679, 680-83 (8th Cir. 2002) (“Airline II”). Such “unclaimed” funds arise only from two circumstances: (1) where class members are difficult to identify or change constantly; or (2) where funds remain after distributions to the class members. In re Airline Ticket Comm’n Antitrust Litig., 268 F.3d 619, 625 (8th Cir. 2001) (“Airline I”) (citing Powell v. Georgia-Pacific Corp., 119 F.3d 703, 706-07 (8th Cir. 1997)). Where, as here, class members have been identified, funds do not become “unclaimed” and subject to third-party distribution until after compensating class members. Airline II, 307 F.3d at 680-81 (describing “unclaimed” funds as those remaining after compensating class members). The proposed settlement does not address “unclaimed” funds. The Settling Parties seek to ignore that prerequisite for third-party distribution and instead distribute all settlement funds to third parties without compensating class members in exchange for releasing their claims. The Eighth Circuit has not sanctioned this form of a class settlement, and its application of cy pres principles indicate that it will not approve the settlement here. Only “unclaimed” funds may be distributed to third parties because class members have property rights in the settlement proceeds, as they represent consideration for the release of the class members’ claims. Klier v. Elf Atochem N. Am., Inc., 658 F.3d 468, 474 (5th Cir. 2011) (citing Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 807-08, 812-13 (1985)).2 It is unfair to divest these rights without compensation. Only when no party has a remaining legal right to settlement See also Am. Law Inst., Principles of the Law of Aggregate Litigation § 3.07 cmt. b (2010) (“[F]unds generated through the aggregate prosecution of divisible claims are presumptively the property of the class members . . . .”).
2

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proceeds may they be distributed to a third party. See Powell v. Georgia-Pacific Corp., 119 F.3d 703, 706-07 (8th Cir. 1997); In re Groupon, Inc., No. 11md2238 DMS (RBB), 2012 U.S. Dist. LEXIS 185750, at *36-37 (S.D. Cal. Sept. 28, 2012) (denying final approval of award that would distribute unclaimed settlement funds to third parties rather than to class members). Here, over 24,000 class members have been identified. Dkt. #262-2 at 4. The Settling Plaintiffs cannot claim that distribution costs would exceed individual awards. Class members have not been compensated for releasing their existing and future claims. The Court should not approve this unfair arrangement. The Court previously ruled that the settlement does not include a cy pres distribution. Dkt. #270 at 4. The Objecting Plaintiffs respectfully disagree and present their analysis of this issue again here to preserve their objection and request that the Court reconsider its prior ruling. Whether or not the term “cy pres” applies to the settlement, however, is not the critical issue. Regardless of label, courts should not approve class settlements distributing all funds through independent third parties instead of compensating class members directly, except where class members cannot be identified or administration costs exceed individual awards. AM. LAW INST., PRINCIPLES OF THE LAW OF AGGREGATE LITIG., § 3.07 (2010). Here, the funds are distributed to a third party for further distribution only to other third parties. The policy underlying the consistent rejection of cy pres settlement distributions demonstrates that the settlement proposed here is unfair to the class. “Cy pres” is a term used to describe a variety of class settlement distributions. It describes situations in which settlement proceeds are distributed

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to a third party instead of class members, typically when identifiable class members have been compensated and the Court must dispose of unclaimed settlement funds. See, e.g., Airline II, 307 F.3d at 682; In re Thornburg Mortg., Inc. Secs. Litig., 885 F. Supp. 2d 1097, 1106-07, 1111 (D.N.M. 2012) (with cy pres, courts “‘distribute unclaimed portions of a class-action judgment or settlement funds to a charity that will advance the interests of the class’”). Sometimes the Court chooses the recipient; other times the recipient is directed by the settling parties’ agreement—both situations have been labeled cy pres. Klier, 658 F.3d at 471; In re Baby Prods. Antitrust Litig., 708 F.3d 163, 169 (3d Cir. 2013). The term cy pres also applies when settling parties agree to distribute all settlement proceeds to one or more third parties without compensating class members. Such situations arise when (1) class members cannot be identified; or (2) administration costs would exceed individual recoveries under the settlement. In re Pharm. Indus. Average Wholesale Price Litig., 588 F.3d 24, 34 (1st Cir. 2009); see also In re Classmates.com Consol. Litig., No. C09-45RAJ, 2011 U.S. Dist. LEXIS 17761, at *15 (W.D. Wash. Feb. 22, 2011); Six Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1305 (9th Cir. 1990). Neither condition is present here. In all of these varieties, cy pres distributions have been criticized as compared to direct distributions to class members. Airline I, 268 F.3d at 625. Although cy pres has not been defined precisely, the policy underlying the label has been consistent: class settlements that distribute funds to third parties instead of class members should not be approved except in unusual circumstances. Id. This treatment of third-party distributions protects class

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members from releasing their claims for a “benefit that is at best attenuated and at worse illusory.” In re Baby Prods., 708 F.3d at 173. Therefore, approving a distribution of class settlement funds to third parties under Rule 23 would violate the Rules Enabling Act, 28 U.S.C. § 2072, where the funds could be distributed instead to the class members. Class members have a right to the settlement funds as compensation for their underlying substantive claims. See Klier, 658 F.3d at 474. The Rules Enabling Act does not allow settling parties and the Court to create a remedy through Rule 23 that does not exist in the underlying substantive law. See 28 U.S.C. § 2072(b); M. Redish et al., Cy Pres Relief & The Pathologies of the Modern Class Action, 62 FLA. L. REV. 617, 644-48 (2010). The settlement here creates a new remedy by directing compensation solely to the Common Good Entity and Licensing Agency, third parties that have suffered no injury under the class members’ publicity rights claims and have no standing in this lawsuit. This remedy would not be available through the class members’ substantive claims, and the Rules Enabling Act prohibits its creation through the procedural vehicle of Rule 23, where class members could be compensated directly. The Settling Plaintiffs may be correct in their statement “[n]o court ever has applied the cy pres label to a settlement like this.” Dkt. #268 at 2. But it may also be correct that no court has confronted a settlement like this in which all settlement funds must pass through multiple third party organizations before any class member might enjoy their benefit, even though nothing prevents direct distribution to the class. The proposed distribution through multiple third parties does not change the cy pres nature of the settlement; instead, adding the

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Common Good Entity as an intermediary between the funds and charity merely adds another level of administrative expense. See, e.g., Dkt. #262-1 at Ex. 6 §§ 3.16 (describing expense reimbursement); 4.04 (describing compensation of officers). The Settling Plaintiffs have not identified a single case where a court has approved a settlement like this in which all proceeds go first to third parties although class members are identifiable and direct distributions would far exceed administration costs—whether or not the distribution is labeled “cy pres.” For example, in In re Baby Prods. Antitrust Litig., 708 F.3d at 171-76, the court vacated approval of a settlement because of questions about the fairness of distributing $18 million to third parties while only distributing $3 million directly to class members. In Six Mexican Workers, 904 F.2d at 1308-09, the court set aside a distribution to a third party because “there is no reasonable certainty that any [class] member will be benefited.” In Klier, 658 F.3d at 477-80, the court set aside a third-party distribution, explaining that unused funds should have been distributed directly to class members rather than to third parties. In In re Classmates.com Consolidated Litig., 2011 U.S. Dist. LEXIS 17761 at *13-15, the court found that a third-party payment was not a meaningful settlement benefit where class members could have been compensated directly. And in In re Thornburg Mortg., Inc. Secs. Litig., 885 F. Supp. 2d at 1106-07, the court stated “cy pres awards are a bad idea and inappropriate” and “class actions are disputes between parties and the money damages should remain among the parties, rather than be distributed to some third party.” Here, the proposed settlement’s failure to directly compensate class members is more egregious than the settlements rejected in the cases above. In

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those cases, class members received some settlement funds directly as individual awards. Here, third parties—the Common Good Entity, its recipient charities, and the Licensing Agency—will receive all settlement funds remaining after attorneys’ fees are paid. Class members will receive no direct payments from the settlement fund. This settlement is not a uniquely creative vehicle for distributing funds to the class; it is an unfair distribution to third parties that may result in the class receiving nothing.
C.

The Settlement Will Impose Unfair Disparate Treatment On Class Members.

If the settlement provides benefits to class members at all, it almost certainly will provide disparate benefits to class members having identical claims. Some class members might receive a benefit; other class members will receive nothing, despite releasing identical past and future claims. This problem arises because the charitable uses allowed by the settlement do not relate to the underlying released publicity rights claims. The Settling Plaintiffs have acknowledged this disparate treatment. Dkt. #261 at 8 (admitting that the Common Good Fund will “potentially” benefit only “eligible” retired players). Disparate treatment among identically situated class members demonstrates the unfairness of a class settlement. See, e.g., In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d at 808-09 (“[T]he relative inability of class members to use the [settlement] militates against settlement approval.”); Ferrington v. McAfee, Inc., No.: 10-CV-01455-LHK, 2012 U.S. Dist. LEXIS 49160, at *26 (N.D. Cal. Apr. 6, 2012) (“[D]isparate treatment between class members increases the likelihood that the settlement agreement does not meet the Rule 23(e) standard.”). 16

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Courts have refused to approve settlements under which some class members receive a benefit while others receive nothing. For example, in Ferrington, 2012 U.S. Dist. LEXIS 49160 at *30, the court refused to approve a settlement under which a subclass of class members would effectively be “releasing all of their claims without any compensation.” The court explained that compensating some class members while “extinguishing the [other class members’] claims for no consideration would be unfair and unreasonable.” Id. at *31-32. In Mirfasihi v. Fleet Mortg. Corp., 356 F.3d 781 (7th Cir. 2004), a negotiated settlement contained a provision that would provide benefits to one subclass, while the other subclass received nothing and still released all their claims. The Seventh Circuit reversed the district court’s grant of final approval, in part because some class members’ claims were released for essentially no consideration, despite having value. Id. at 783-85. Here, the release is identical for all class members. But the third-party distributions are not tethered to the released claims and will undoubtedly result in disparate treatment of similarly situated class members. The result is unfair.
D.

The Licensing Agency Does Not Guarantee Compensation to Class Members.

The Licensing Agency also does not compensate class members for releasing their claims. It is a third party, and therefore the money spent establishing the Agency does not constitute a distribution to the class members. The Agency’s revenue is entirely speculative—it guarantees nothing. Lead Settlement Counsel has refused to answer requests for information about the economic potential of the Agency, including revenue projections. Fahrenkrog Decl. Exs. A-C (correspondence exchanged between M. Ciresi and D. Gustafson). 17

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Speculative and uncertain benefits cannot suffice to compensate class members for giving up their rights. The Licensing Agency will not serve as a proxy for the value of the publicity rights claims released in the settlement. It can license publicity rights only to non-NFL parties to promote non-NFL brands, products, and services. The released claims, in contrast, arise from the NFL’s use of class members’ publicity rights to promote NFL football—a use to which retired players’ publicity rights are uniquely suited. For example, in six years that NFL will celebrate its 100th anniversary and undoubtedly will want to use retired players’ likenesses to further promote NFL football—but class members will not be compensated for this use by the Licensing Agency. The revenue generated by the Licensing Agency for each class member will not match the value of the class member’s publicity rights to the NFL, and therefore the revenue will not correspond to the value of each class member’s released claims. Revenue generated by the Licensing Agency has nothing to do with the claims being settled. The Licensing Agency lacks the authority to complement its licensing of retired player publicity rights with either (1) NFL IP, such as logos; or (2) NFL game footage. Dkt. #262-1 at ¶¶ I.E.28 (defining “NFL IP Rights”); III.C.4 (articulating the NFL’s “exclusive rights” to license game footage); IV.C.3.b (specifying process for Licensing Agency customers to request NFL IP rights from the NFL). If a Licensing Agency customer wants to use NFL IP, the settlement provides only that the NFL “will not unreasonably hold its consent” and “will apply in good faith the same standards that it ordinary employs in deciding whether to grant licenses for that type of NFL IP Rights” (Id. at

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¶ IV.C.3.b)—that is, the customer must pay the NFL for an IP license at market rates. The settlement agreement does not provide Licensing Agency customers with any access to NFL game footage—a right retained by the NFL for itself alone. Id. at ¶ III.C.4. The Licensing Agency, like the Common Good Entity, allows the possibility that class members will receive nothing from the settlement. Therefore, it cannot cure the deficiencies of the settlement and does not justify approval. Further, the Licensing Agency’s model is not new. In 2011, the NFL Alumni Association also created a group licensing program for retired players. G. Martin Letter to Alumni, July 18, 2011 (Ex. D). Like the Licensing Agency, the Alumni licensing program divides licensing revenue between players and charity. The Alumni program allocates 80 percent to players and 20 percent to “promote the health and welfare of retired National Football League players.” NFL Alumni Group Licensing Agreement at ¶ 3 (Ex. E). The Licensing Agency pays 75 percent of licensing proceeds to players, minus operating expenses and the remaining 25 percent to the Common Good Fund for charitable benefits. Dkt. #262-1 at ¶ IV.E.1.a. Retired players, therefore, would receive a greater share of licensing revenue through the existing Alumni program than through the Licensing Agency. Like the Settling Plaintiffs, the Alumni Association pitched its group licensing program as a “unique opportunity.” Martin Letter to Alumni, July 18, 2011 (Ex. D). The program intended to “provide revenue opportunities for retired NFL players through licensing agreements, appearances and engagements.” Id. The Alumni Association was “working with some of the

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biggest brands in the nation to create revenue generating opportunities” for retired players. Id. All of these are similar or identical to the claims made now by the Settling Plaintiffs. Although the Licensing Agency appears to be modeled on the Alumni Association group licensing program, the Settling Plaintiffs contend “Retired Players would not have been able to create a Licensing Agency” without the settlement; they add “certainly none have been able to do so previously.” Dkt. #268 at 12. If the NFL Alumni Association program did not succeed, there is no reason to expect the Licensing Agency to do better. And if class members did not voluntarily participate in the Alumni program, their choice should not be denied through a class settlement. Forcing a failed model upon all class members does not represent a fair trade for giving up their claims against the NFL. The Licensing Agency only duplicates efforts that already exist. It does not provide any new benefit to class members. Therefore, it does not compensate class members for releasing their claims and cannot justify approval.
II.

Complicating Factors Emphasize that the Settlement Is Unfair. Complicating factors emphasize and highlight the unfairness of the

settlement as described above. First, no damages discovery has occurred and therefore the true value of the class members’ released claims cannot be ascertained and was likely unknown during negotiations. Second, and consistent with the lack of damages discovery, it appears that Lead Settlement Counsel failed to consider the value of the released claims before recommending the settlement for approval. These issues—which may have led to the unfair settlement structure—further demonstrate that the settlement is unfair.

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A.

The Court Should Deny Approval Because Damages Discovery Has Not Occurred.

A reviewing court’s ability to evaluate a settlement is tied to the amount and type of discovery that has been completed. Welsch v. Gardebring, 667 F. Supp. 1284, 1297 (D. Minn. 1987). “The extent of discovery completed and the stage of the proceedings are important factors to consider in determining the fairness, adequacy, and reasonableness of the Settlement because they are indicative of the Court’s and counsels’ ability to evaluate the merits of plaintiffs’ claims.” Id.; see also In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d at 788-89 (noting information problems often afflict pre-certification settlements, including relating to damages, and stating “[w]ithout the benefit of more extensive discovery, both sides may underestimate the strength of the plaintiffs’ claims”). Here, the lack of damages discovery emphasizes the unfairness of the settlement described above. The Court has not allowed damages discovery, and the NFL has relied upon that ruling and meticulously redacted financial information from its production. A proper measure of damages for the NFL’s violation of class members’ publicity rights, however, includes the NFL’s profits directly and indirectly attributable to the use of class members’ rights. Damages discovery and analysis therefore must occur before the Court—or class counsel—can evaluate whether the settlement is fair compared to the potential value of the released existing and future claims. Discovery from the NFL is necessary to evaluate the value of the claims released by the settlement. In right of publicity cases, recovery of the infringer’s profits attributable to the infringement is an ordinarily available remedy.

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Restatement (Third), Unfair Competition § 49, cmt. d (1995).3 “[M]onetary relief may be awarded for the pecuniary loss to the plaintiff or the pecuniary gain to the defendant resulting from the unauthorized use of the plaintiff’s identity.” Id. Further, “[a]n accounting of the defendant’s profits from an unauthorized use of the plaintiff’s identity is most often justified as a means of deterring infringement and recapturing gains attributable to wrongful conduct.” Id. at cmt. c. Class members’ identities, “as a property right, contributed to defendant’s profits and that share of the profits is the property of plaintiff[s].” 2 J. Thomas McCarthy, THE RIGHTS OF PUBLICITY AND PRIVACY § 11:34 at 780. This is true even if the defendant’s conduct has “caused no identifiable loss to plaintiff,” because the defendant has been unjustly enriched. Id. Defendant’s profits also are available as damages for the class members’ Lanham Act claims. Masters v. UHS of Del., Inc. 631 F.3d 464, 474 (8th Cir. 2011). Failing to obtain critical damages discovery prevents settling plaintiffs and reviewing courts from evaluating whether a settlement is adequate and fair. Sobel v. The Hertz Corp., 3:06-CV-00545-LRH-RAM, 2011 U.S. Dist. LEXIS 68984 (D. Nev. June 27, 2011). In Sobel, plaintiffs moved for final approval at a time when discovery had been completed on liability but had only just begun on damages. The court denied the plaintiffs’ motion in part because the lack of damages The Restatement adopts the rule from other fields of intellectual property that the plaintiff need only prove gross sales such that it is the defendant’s burden to establish revenues not due to the infringement and any expenses properly deducted to determine net profits. Restatement (Third) Unfair Competition § 40, cmt. d; see also 2 J. THOMAS MCCARTHY, THE RIGHTS OF PUBLICITY AND PRIVACY § 11:34, at 781 (2013) (“Recovery of the infringer’s profits is usually regarded as an option open to plaintiff, in addition to recovery of plaintiff’s own losses and damages, so long as there is no double recovery.”).
3

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discovery meant that neither plaintiffs nor the court had sufficient information to know what the claims were worth and, therefore, whether the amount proposed in settlement was fair. The court outlined the barrier to final approval succinctly, stating: Because discovery on damages was in its infancy at the time of settlement, it is highly questionable whether Plaintiffs have sufficient information to make a fullyinformed assessment of the strengths, weaknesses and value of their case going forward. Indeed, as discussed above, given the parties’ failure to present evidence regarding the value of the claims Plaintiffs would be giving up if the settlement were to be approved, the court itself is unable to determine whether the value of the settlement is reasonable in relation to the value of the claims surrendered. Id. at *42-43 (emphasis added). Thus, in Sobel, the lack of damages discovery, coupled with the settling plaintiffs’ unwillingness to provide the court with information about the value of the plaintiffs’ claims, justified denial of final approval. The same deficiencies present themselves here. In this case, there has not been damages discovery for Plaintiffs or the Court to know what Plaintiffs’ claims are worth. Furthermore, the Settling Plaintiffs have not provided the Court (or the class) with any information as to the actual value of the released claims. Lead Settlement Counsel has claimed that the settlement is fair without any apparent knowledge of what class members’ claims are actually worth. Dkt. #261 at 25 (listing factors considered in evaluating settlement; omitting value of claims); Dkt. #268 at 10 n.3. When class members have repeatedly asked him to provide this information, he has refused to respond. Fahrenkrog Decl. Ex. C. He 23

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has argued to the Court that such information is “essentially irrelevant” to whether the settlement is fair. Dkt. #268 at 10 n.3. Damages discovery, however, is necessary for the Court to compare the economic value of the settlement to the value of the class members’ released claims. The practice of considering the “best possible recovery” metric is wellestablished. The most common test for evaluating settlements is the set of factors laid out in City of Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir. 1974). The Grinnell factors include: “(8) the range of reasonableness of the settlement fund in light of the best possible recovery; [and] (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation.” Id. The factors have been applied by many courts across the country, including this Court. See, e.g., Alexander v. Nat’l Football League, No. 4-76-Civil123, 1977 U.S. Dist. LEXIS 14685 at *36, n.9 (D. Minn. 1977); see also Contreras v. PM Beef Holdings, LLC, No. 07-CV-3087, 2008 U.S. Dist. LEXIS 73800, at *3 (D. Minn. Sept. 18, 2008) (approving a settlement “in light of . . . the range of reasonableness of the settlement in light of the best possible recovery” and other factors). Courts therefore refuse to approve settlements without information on the value of the released claims. Nielson v. The Sports Auth., No: C 11-4724 SBA, 2012 U.S. Dist. LEXIS 168226, *16 (N.D. Cal. Nov. 27, 2012) (denying approval where class counsel “[did] not specify the maximum recovery that [he] could have obtained if the action were concluded on the merits”); Free v. Abbott Labs., 953 F. Supp. 751, 753 (M.D. La. 1997), (denying approval because proponents of a class settlement “failed to furnish significant information about the estimate of the

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possible range of recovery which class members will surrender in exchange for the settlement”). Appellate courts also require information about released claims’ value. In re Pet Food Prods. Liab. Litig., 629 F.3d 333, 350, 355-56 (3d Cir. 2010) (vacating approval because “the settling parties failed to provide the District Court with estimations of recoverable damages”). Without damages discovery, the value of the class members’ claims cannot be determined. Additional discovery may be necessary to determine the additional value of the future released claims. The lack of information and status of the litigation emphasize that the settlement is unfair to the class. The Objecting Plaintiffs request that final approval be denied.
B.

Lead Settlement Counsel Has Not Satisfied His Duty to Evaluate the Value of the Released Claims.

Lead Settlement Counsel has not provided the Court with any information about plaintiffs’ possible recovery at trial. He has indicated that he did not even consider Plaintiffs’ best possible recovery in evaluating the proposed settlement. Dkt. #261 at 25 (listing factors considered). This conduct highlights the concerns expressed above about the fairness of the settlement, and indeed a failure to consider the potential recovery may have led to the settlement structure in which at least some class members will receive no benefit. Lead Settlement Counsel has claimed that the aggregate damages class members might recover at trial are “essentially irrelevant.” Dkt. 268 at n.3. He asserted that “[n]o matter how large the perceived potential damages to the Class may be, the risks of a dismissal on summary judgment or the denial of class certification make this Settlement fall easily within the range of fair, reasonable and adequate.” Dkt. 268 at n.3; cf. Free, 953 F. Supp. at 753 (rejecting this excuse

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for failing to provide necessary information about the value of class members’ claims). He has not specified what this “range” might be. Lead Settlement Counsel has refused to answer class members’ questions about the value of their claims. Courts have noted that “counsel for the parties are the main source of information concerning the settlement” and that “to enable the court to reasonably assess the fairness of the settlement, the proponents are obligated to furnish adequate information,” including information about the possible range of recovery. Free, 953 F. Supp. at 753. As noted above in the Factual Background, counsel for the Objecting Plaintiffs sent multiple requests to Lead Settlement Counsel asking that he provide information to class members about the value of their claims, consistent with his duties as Lead Settlement Counsel. Fahrenkrog Decl. Exs. A, B. Objecting Plaintiffs’ counsel explained that his clients wanted to know what their claims might be worth in order to assess whether the settlement offered a fair compromise. Id. Objecting Plaintiffs’ counsel requested all information in Lead Settlement Counsel’s possession relating to the value of NFL films and revenue projections for the licensing agency. Id. Lead Settlement Counsel refused to provide this information. Instead, he responded “I saw little purpose in offering a point-by-point rebuttal to your first letter and see no reason to debate either of [your letters] now,” and “[y]our letters seek to impose obligations upon me that in my view are inconsistent with the Court’s approved class notice process.” Fahrenkrog Decl. Ex. C. In sum, Lead Settlement Counsel refused to answer any questions about the value of the released claims.

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Lead Settlement Counsel’s inability and refusal to demonstrate that the settlement is fair in light of the potential value of the released claims shows that the Objecting Plaintiffs’ concerns are justified. The settlement is unfair to the class and should not be approved.
III. The Class Members’ Claims Have Value. A.

The NFL Has Violated Class Members’ Rights.

Plaintiffs have a strong liability case that the NFL has violated their publicity rights. The right of publicity has been recognized in thirty-one states including New Jersey, the likely proper choice of law for this case. 1 J. Thomas McCarthy, THE RIGHTS OF PUBLICITY AND PRIVACY § 6.3; Palmer v. Schonhorn Eters., 232 A.2d 458, 462 (N.J. Super. Ct. Ch. Div. 1967). New Jersey follows the Second Restatement of Torts, which imposes liability on “[o]ne who appropriates to his own use or benefit the name or likeness of another is subject to liability to the other for invasion of his privacy.” Restatement (Second) of Torts § 652C (1977). The right of publicity is considered a property right. Id. at cmt. a. Accordingly, the “[t]he right to exploit the value of [an individual’s] notoriety or fame belongs to the individual with whom it is associated.” McFarland v. Miller, 14 F.3d 912, 923 (3d Cir. 1994) (applying New Jersey law). Unauthorized use of another’s likeness “harms the person both by diluting the value of the name and depriving that individual of compensation.” Id. The NFL misappropriates retired players’ publicity rights by using their names, images, and likenesses contained in game footage without consent to promote its product, NFL football. NFL Films operates and maintains a library of this game footage and uses it to promote the NFL and generate commercial benefits for the NFL. 27

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The NFL leverages the value of this asset in multiple ways. The NFL restricts access to the footage and licenses it to third parties. The NFL also uses the footage to create its own promotional materials. This use of players’ rights generates significant value for the NFL. It is undeniable that Defendant exploits the names and likenesses of the retired players through its licensing of game footage and creation of promotional materials from that footage. The films that the NFL creates with the game footage amount to promotional advertisements that the NFL uses in its efforts to develop and maintain its brand. In particular, the NFL promotional films are designed to develop brand name awareness, brand loyalty, the perceived quality of the brand, and particular brand associations. For example, the productions promote brand awareness by prominently displaying the NFL logo through any particular film. The productions promote brand loyalty by highlighting what is perceived to be the best and most satisfying experiences that the NFL has to offer. And they provide a platform by which the NFL builds strategic continuity and associations with its brand. As the Court has noted before, the films are completely void of any criticism of NFL football. As a result of these branding efforts, the NFL is the most popular spectator sport in the United States. NFL Films itself boasts on its website that Sports Illustrated magazine has described NFL Films as “the most effective propaganda organ in the history of corporate America.”4 The NFL does not have the right to use class members’ rights. As the Court has previously noted, to the extent the retired players’ written contracts even addressed publicity rights, none of the contracts extended the NFL’s right to use the retired players’ publicity rights past the expiration of the player contracts.
4

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Dkt. #247 at 6. The NFL has therefore never had the legal right to use the retired players’ names, likenesses, and images past their retirement. Id. Because the NFL has misappropriated Plaintiffs rights for its own benefit without their consent, Plaintiffs’ liability case is strong.
B.

The Alleged Litigation “Challenges” Identified by the Settling Parties and the Court Do Not Alleviate Their Burden to Demonstrate that the Settlement Is Fair.

Courts have rejected class settlements where the proponents’ balancing of the merits of the case against the settlement terms amounts to the assertion that settling under any terms is better than the possibility of losing the case. Free, 953 F. Supp. at 753. The possibility of no recovery “is always present in litigation,” id., and it adds nothing to the analysis to argue that the possibility exists without quantifying the risk and discounting the potential recovery accordingly. The settlement agreement identifies several “challenges” allegedly considered by the Settling Plaintiffs and their counsel. Dkt. #262-1 at ¶ I.D.1. The Settling Plaintiffs have relied on these “challenges” to justify their failure to provide a valuation of the case. Dkt. #261 at 24; Dkt. #268 at 10 n.3. The Court also relied on two of these—the limitations period and class certification—in granting preliminary approval. Dkt. #270 at 3-4. None of these “challenges,” however alleviates the Settling Parties’ burden to submit evidence comparing the potential value of the released claims to the value given in the settlement. The fundamental problem with the Settling Plaintiffs’ balance of the case merits and settlement terms is the lack of quantification—of potential damages, value of released future claims, litigation costs, or risks. Comparing a settlement number—$28.5M to $42M—to qualitative substantive issues is comparing apples

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to oranges. The Court should not approve the settlement because, without quantitative information about the class members’ claims, it cannot perform the “single most important factor” in the fairness analysis: “a balancing of the strength of the plaintiff’s case against the terms of the settlement.” Van Horn , 840 F.2d at 607. For example, the Court’s ruling that damages cannot go back more than six years from the filing of the complaint is meaningless without knowing the magnitude of damages incurred during that time period. The complaint was filed in 2009, meaning that ten years (2003-2013) of damages have accrued within the limitations period. Further, the settlement releases not only existing claims but also future claims—indefinitely. The value of the future released claims may dwarf the ten years of damages already accrued. The Settling Plaintiffs have not provided any way to know, and Lead Settlement Counsel apparently has not considered this information. The Settling Plaintiffs’ and Court’s qualitative concerns about class certification also do not demonstrate whether the funds allocated in the settlement are fair. Further, a class can and should be certified. The Court already has certified a class under Rule 23(b)(3), urged by the Settling Plaintiffs. Dkt. #270 at 5-7; Dkt. #261 at 12-18. Class certification for settlement demands full satisfaction of the Rule 23(a) and (b) requirements in the same way as class certification for trial. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 621 (1997); MOORE’S FEDERAL PRACTICE § 23.161 (2013). Indeed, the required scrutiny under Rules 23(a) and (b) is greater when certifying a class for settlement before trial. MOORE’S FEDERAL PRACTICE § 23.161 .

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The Court’s certification order, therefore, demonstrates that class certification is appropriate if this case proceeds to trial. The Settling Plaintiffs, however, previously argued that the Objecting Plaintiffs’ opposition to the settlement did not address the risk of a denial of class certification if the case does not settle. Dkt. #268 at 10 n.3. Therefore, the Objecting Plaintiffs here briefly explain the justification for class certification. This class can be certified because Defendant’s liability and the damages it owes to Plaintiffs may be resolved “in one stroke” on a class-wide basis. Here, Defendant’s liability depends on the nature of its use of the game footage in its promotional films, and the damages owed to the retired players is controlled by the value of the footage and the profits derived from its use, with individual damages being apportioned with either an accounting or a class-wide model developed by Objecting Plaintiffs’ expert. Civil Procedure Rule 23 authorizes classes that meet the requirements of numerosity, commonality, typicality, and fair and adequate representation. Fed. R. Civ. P. 23. In addition, the class in this case must satisfy Rule 23(b)(3)’s predominance requirement. All requirements are satisfied, as the Court has explained. Dkt. #270 at 5-7. The settlement agreement, however, points to the predominance requirement as a potential “challenge.” Questions common to all class members predominate over individual questions and justify certification under Rule 23(b)(3). Individual issues are those which require “evidence that varies from member to member” for a prima facie showing. Cox v. Zurn Pex, Inc. (In re Zurn Pex Plumbing Prods. Liab. Litig.), 644 F.3d 604, 618 (8th Cir. 2011) (quotation marks omitted). “Common questions are

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those for which a prima facie case can be established through common evidence.” Id. Here, common questions predominate over individual questions in all aspects of the class members’ claims.
i.

The Law of a Single State Applies to All Class Members’ State-Law Claims.

The law of a single state—New Jersey—can and likely should be applied to all class members’ state-law claims. This Court must apply Minnesota’s choiceof-law rules to determine the applicable law. Whitney v. Guys, Inc., 700 F.3d 1118, 1123 (8th Cir. 2012). Under Minnesota’s three step conflict-of-law analysis, New Jersey’s law likely should apply. New Jersey’s law can be constitutionally applied because that state has a “significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair.” Id. at 1124 (citing Allstate Ins. Co. v. Hague, 449 U.S. 302, 312-13 (1981)). Defendant’s activities in New Jersey through NFL Films provide an aggregation of contacts, creating sufficient state interests in New Jersey such that application of New Jersey law is neither arbitrary nor unfair. NFL Films holds rights to the game footage and is headquartered in New Jersey. New Jersey law likely should be applied here because it best satisfies Minnesota’s multi-factor evaluation of the: “(1) predictability of result; (2) maintenance of interstate and international order; (3) simplification of the judicial task; (4) advancement of the forum’s governmental interest; and (5) application of the better rule of law.” Whitney, 700 F.3d at 1123-24 (quoting Jepson v. Gen Casualty of Wis., 513 N.W.2d 467, 470 (Minn. 2000)). Each factor is addressed below. 32

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First, predictability of results requires that the same facts, regardless of forum, should have the same result. The injury to the retired players comes from Defendant’s planned business operations. Under these circumstances, the predictability factor is important. See Schumacher v. Schumacher, 676 N.W.2d 685, 690 (Minn. Ct. App. 2004). Predictability goes to whether the choice of law was “predictable before the time of the transaction or event giving rise to the cause of action.” Kolberg-Pioneer, Inc. v. Belgrade Steel Tank, Co.¸823 N.W.2d 669, 673 (Minn. Ct. App. 2012). Choosing law based on locus of Defendant’s activity that caused the harm (i.e., New Jersey) would lead to high predictability and supports applying New Jersey law. See id. (applying Minnesota law in products liability case where the product was manufactured in Minnesota but the injury occurred in Montana). Further, New Jersey law can be applied “because the activities involved in producing nationally broadcast publications are planned. [B]roadcasters might be chilled by the possibility of being subject to the varying laws of 50 states. . . . [T]he need for predictability by media defendants, who otherwise would be required to comply with differing laws governing defamation in fifty states, is analogous to the need of those entering into a contract to know which state’s laws govern the contract.” Richie v. Paramount Pictures Corp., 532 N.W.2d 235, 241 (Minn. Ct. App. 1995) (reversed on other grounds). The first factor strongly favors New Jersey law. Second, courts consider interstate and international order, which is “primarily concerned with whether the application of [New Jersey] law would manifest disrespect for [another state’s] sovereignty or impede the interstate

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movement of people or goods.” Jepson v. Gen. Casualty of Wis., 513 N.W.2d 467, 470 (Minn. 2000), 513 N.W.2d at 471. This factor favors New Jersey law because of New Jersey’s legitimate interest to police the activities of NFL Films in its state. See Hosch v. Levings, 2009 Minn. App. Unpub. LEXIS 1155, at *12 (Minn. Ct. App. Oct. 27, 2009). Third, Minnesota courts consider simplification of the judicial task. This factor is neutral because most state law regarding publicity rights is clear and straightforward to apply. Id. Fourth, Minnesota courts consider the advancement of the forum’s governmental interest. This factor turns on Minnesota’s governmental interest in this case. New Jersey publicity rights law is consistent with that of Minnesota because the Court has held that Minnesota courts would recognize publicity claims and the two states would apply similar statutes of limitation. Accordingly, applying New Jersey law advances Minnesota’s governmental interests by ensuring that law consistent with that of Minnesota is applied. This factor therefore favors applying New Jersey law. Fifth is a consideration of which of the competing laws is the better rule of law. Minnesota courts have not given this factor any weight and it is therefore neutral. Accordingly, the five factors in Minnesota’s choice of law analysis likely justify the application of New Jersey law to all class members’ state-law claims. The proper choice of law analysis, therefore, raises common questions, not individual questions.

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ii.

Common Liability Questions Predominate Over Individual Liability Questions.

The only issue to be resolved in determining the NFL’s liability for misappropriating the retired players’ publicity rights is whether the NFL used the game footage for its benefit as commercial promotions. There is no dispute that the retired players’ contracts did not confer on the NFL a right to use the players’ likenesses past the expiration of the contracts—once the player was done playing and the contract terminated, the NFL’s right to use the player’s likeness was extinguished. Further, the NFL has pointed to no other contract, written or oral, that allows the use of the retired players’ publicity rights as contained in the game footage. Therefore, the only issue left to seal the NFL’s liability for misappropriating the retired players’ publicity is whether the NFL misappropriated the likenesses for its own use or benefit. This issue is resolved “in one stroke” on consideration of the promotional nature of the films that the NFL creates with the game footage as well as the fact that it licenses the game footage to third parties. Further, any appeal to the First Amendment by Defendant would also be resolved by this contention. The NFL’s liability can therefore be resolved “in one stroke” with the determination of the truth or falsity of one contention: that the NFL’s use of the game footage is commercial in nature and inures to its pecuniary benefit.
iii.

Common Damages Questions Predominate Over Individual Damages Questions.

The class also will provide a damages model that allows calculation of aggregate and individual damages on a classwide basis. First, the value of the right to use the game footage can be determined, and the vast majority of this value should be attributed to the retired players, who are the central focus of the 35

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footage. Second, various accounting methods or models can be employed to allocate the total damages among individual players. Economist Carl Degen has explained that damages can be calculated on an aggregate basis and allocated among class members according to a formulaic approach. Degen Decl. ¶¶ 9-20.5 The profit generated by the NFL through its unauthorized use of class members’ publicity rights can be determined in the aggregate. Id. ¶¶ 9-11. The aggregate profit then can be allocated among the class members according to a common formulaic methodology. Id. ¶¶ 12-17. Common questions predominate over individual questions in the damages analysis. Class certification would be appropriate even if a classwide damages model could not be maintained. “[W]hen adjudication of questions of liability common to the class will achieve economies of time and expense, the predominance standard is generally satisfied even if damages are not provable in the aggregate.” Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1437 (2013) (dissent). Classes may be divided into subclasses. Fed. R. Civ. P. 23(c)(4)-(5). “Recognition that individual damages calculations do not preclude class certification under Rule 23(b)(3) is well nigh universal,” Comcast, 133 S. Ct. at 1437 (citing, among other cases, Beattie v. CenturyTel, Inc., 511 F.3d 554, 564-66 (6th Cir. 2007)), and in “the mine run of cases, it remains the ‘black letter rule’ that a class may obtain certification under Rule 23(b)(3) when liability questions common to the class predominate over damages questions unique to class members.” Id. Accordingly, for the reasons detailed above, the retired players class should be certified for liability purposes. Certification for liability purposes followed by a finding of Citations to “Degen Decl.” refer to the Declaration of Carl G. Degen, submitted with this document.
5

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liability would allow class members to obtain an injunction, a standard form of relief for violations of the right of publicity. 2 J. Thomas McCarthy, THE RIGHTS
OF PUBLICITY AND PRIVACY

§ 11.22.

The Settling Parties therefore are wrong that class members are unlikely to prevail on their claims or unlikely to certify a class. The value of the class members’ claims—which has not been determined—should not be unfairly discounted based on ambiguous statements about risks. All litigation has risks. Those presented here do not differentiate this case from any other and do not justify the extreme discount imposed on the class members’ rights advocated by Lead Settlement Counsel and the Settling Plaintiffs. CONCLUSION For the reasons outlined in this objection, the proposed settlement is inadequate, unreasonable, and unfair. The Objecting Plaintiffs respectfully request that the Court deny final approval.

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Dated: August 21, 2013

ROBINS, KAPLAN, MILLER & CIRESI L.L.P. By: s/ Michael V. Ciresi Michael V. Ciresi (MN Bar No. 16949) Jan M. Conlin (MN Bar No. 192697) Thomas C. Mahlum (MN Bar No. 259391) Aaron R. Fahrenkrog (MN Bar No. 386673) 2800 LaSalle Plaza 800 LaSalle Avenue Minneapolis, MN 55402-2015 Phone: (612) 349-8500 Fax: (612) 339-8141 MVCiresi@rkmc.com JMConlin@rkmc.com TCMahlum@rkmc.com ARFahrenkrog@rkmc.com Robert A. Stein (MN Bar No. 104930) BOB STEIN LLC 10125 Crosstown Circle, #200 Eden Prairie, MN 55344 Phone: (952) 829-1043 Fax: (952) 829-1040 rastein66@aol.com Thomas J. Ward WARD & WARD, P.L.L.C. 2020 N Street, N.W. Washington, D.C. 20036 Phone: (202) 331-8160 Fax: (202) 503-1455 tom@wardlawdc.com Attorneys for Plaintiffs James Lawrence Marshall, Joseph Michael Senser, and Dante Anthony Pastorini 38

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WORD COUNT COMPLIANCE The undersigned hereby certifies that the Specific Reasons for Objection to the Fairness, Reasonableness, and Adequacy of the Proposed Settlement by Plaintiffs James Lawrence Marshall, Joseph Michael Senser, and Dante Anthony Pastorini contains 10,116 words, as determined by Microsoft Office Word 2010 word processing software used to prepare the document. The word processing program has been applied to include all text, including headings, footnotes, and quotations. The document was also prepared in 13-point font in accordance with the type size limitation of Local Rule 7.1(h).

Dated: August 21, 2013

s/ Aaron R. Fahrenkrog Aaron R. Fahrenkrog

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