Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Preliminary approval sought for $4.75M settlement of NFL exclusive licensing agreements case, (Feb 29, 2016)

By Linda O’Brien, J.D., LL.M.

In a class action by a consumer against the National Football League (NFL) and Reebok International, Ltd. for allegedly entering into unlawful agreements concerning the NFL’s and its teams’ intellectual property, the defendants have agreed to pay $4.75 million to settle the action, according to a motion for preliminary approval of the settlement filed in the federal district court of San Jose, California (Villa v. San Francisco Forty Niners, Ltd., February 25, 2016).

Consumer Michael Villa filed suit against the NFL, National Football League Properties (NFLP), 30 individual NFL member teams, and Reebok International, Ltd., alleging: (1) a horizontal agreement between the NFL teams, NFLP, and the NFL, in violation of the Cartwright Act; (2) a vertical agreement between the individual NFL team defendants, NFLP, the NFL, and Reebok, in violation of the Cartwright Act; and (3) violations of California’s Unfair Competition Law. The allegedly illegal and anticompetitive agreements related to the licensing of the NFL’s and its teams’ intellectual property for use in apparel intended for the consumer retail market. In May 2015, Villa’s motion for summary judgment was denied as premature prior to class certification.

The plaintiff is seeking preliminary approval of a proposed settlement under which the defendants have agreed to create a $4.75 million settlement fund to pay the eligible claims of the settlement class, to fund the cost of disseminating notice to the proposed class, and to reimburse class counsel for attorneys’ fees and expenses incurred.

The plaintiffs propose preliminarily certifying the following class for settlement purposes: all persons nationwide who made a purchase in California, at retail, for personal use and not for resale during the class period, a licensed jersey, hat, or pair of shoes bearing the intellectual property of the NFL. A purchase will be deemed “made in California” if the purchaser was a resident of California, the purchaser was physically present in California, or the item was purchased online for delivery in California.

According to the plaintiffs’ motion, the proposed settlement satisfies the requirements under Federal Rule of Civil Procedure 23 for preliminary approval. The proposed class is sufficiently numerous that joinder of all members is impracticable as at least $2 million sales of apparel made by Reebok under license with the NFL took place during the class period and there are questions of law or fact common to the class. The claims or defenses of the class representatives are typical of the claims or defenses of the class and the class representatives will fairly and adequately protect the interests of the class and have retained highly experienced counsel.

Additionally, there are questions of law or fact common to class members that predominate over any questions affecting only individual class members and a class action is superior to other available methods for the fair and efficient adjudication of the controversy.

Attorneys: Roy A. Katriel (The Katriel Law Firm) and Ralph B. Kalfayan (Krause Kalfayan Benink & Slavens) for Michael Villa.

Companies: National Football League Properties, Inc.; National Football League; Reebok International, Ltd.

News: Antitrust CaliforniaNews