|October 24, 2013|
Previously published on October 23, 2013
As you may have heard, the NFL recently agreed to pay $765 million to settle concussion-related lawsuits brought by more than 4,500 retired players and their families, alleging the NFL deliberately concealed the risks of head trauma, leading to long-term damage for those who play the sport. While the settlement has been widely reported as an unmitigated victory for the league, the reality is somewhat different and provides insight into some of the reasons settlement is frequently an advantageous course.
While we talk about this case as "a" lawsuit, the settlement actually governs claims asserted in more than 200 separate lawsuits filed by former players and their families against the NFL. On January 31, 2012, these lawsuits were consolidated for pretrial purposes in one multi-district litigation in the Eastern District of Pennsylvania under the auspices of Judge Anita Brody. In August of that year, the NFL moved to dismiss the plaintiffs' claims as pre-empted under the collective bargaining agreements (CBAs) between the NFL and the players. Under Section 301 of the Labor Management Relations Act, 29 U.S.C. 185(a), any claims that require resolution of provisions of a CBA must be resolved pursuant to the grievance and arbitration procedure established in the CBA rather than in court. The NFL argued that because the relevant CBAs govern player safety, the state-law tort claims asserted by plaintiffs must be arbitrated under those agreements rather than be litigated in federal court.
Judge Brody was expected to resolve the motion to dismiss in July 2013. Instead, she called the parties into her chambers and, according to those present, indicated she was likely to grant at least part of the NFL's motion and cut hundreds of potential plaintiffs out of the case. She also told the NFL at least part of the case was likely to go forward, exposing the league to litigation and PR risks. Judge Brody ordered the parties to engage in mediation and appointed a retired judge to serve as the mediator, giving the parties until September 3 to attempt a resolution. On August 29, the sides announced they had reached a resolution.
Although the complete details of the settlement agreement will not be available until they are submitted to the district court for approval, the broad contours of the settlement have been made public:
The NFL will receive:
- Settlement of all claims on a classwide basis -- every player who does not specifically opt out of the settlement will have his claims released; and
- No admission of liability or validity of claims -- the NFL will continue to state that the players' injuries were not caused by football and that it settled the case in order to devote resources to the players rather than the litigation.
The plaintiffs will receive:
- A settlement fund of $765 million to provide medical benefits and injury compensation for retired NFL players, fund medical and safety research, and cover litigation expenses, disbursed as follows:
- $75 million for baseline medical exams for the players;
- $10 million for research and education;
- $6 million for notice and fund administration costs; and
- Attorneys' fees to be provided separately from this fund.
Much has been made in the popular and sports press about what a victory this settlement is for the NFL. In particular, reports have compared the $765 million settlement to the league's $10 billion annual revenue, declaring the NFL got off cheap. However, this superficial analysis fails to grapple with several factors on the plaintiffs' side compelling settlement. These factors are by no means unique to the NFL settlement but are indicative of the sort of issues that any party must consider when contemplating settlement:
- Risk of Dismissal Prior to Trial -- As noted above, Judge Brody's threat to dismiss many of the claims as pre-empted by various CBAs was not idle. While plaintiffs had some nontrivial arguments that certain claims at certain times should not be pre-empted, it seems clear the bulk of the claims would have been dismissed.
- Procedural Risk Issues -- Relatively little has been written about the difficulties of certifying this class, but recent Supreme Court precedent has cast doubt on the ability of courts to certify overly diverse classes of plaintiffs. In this case, the putative class includes players from several decades who played under very different sets of rules, collective bargaining agreements and scientific understandings of the dangers of concussions.
- The Difficulty of Winning at Trial -- It is one thing for everyone to agree that the suspicious number of former players experiencing neurological and psychological disorders almost certainly suggests football is causing or exacerbating these conditions, but it is a far different proposition to prove such a case to a jury relying solely on admissible evidence. In this case, virtually every plaintiff has been playing football at least since he was a teenager and would have the burden of proof to show it was professional football, not Pop Warner, high school or college ball, that was the cause of and not just a contributing factor to his injury.
- Money Now Is Worth More Than Money Later -- Every plaintiff has to consider the time value of money and whether the certainty of receiving $10 now is better than the chance of receiving $100 in five to 10 years, but the facts of this case make that decision much starker. Former players such as Steve Gleason of the New Orleans Saints and Kevin Turner of the New England Patriots are currently in advanced stages of ALS and might not survive to see the end of even a successful litigation. In considering the settlement, plaintiffs must ask whether the possibility of providing greater compensation to all players justifies denying such players immediate relief.
By no means is the announced settlement the end of the story. The settlement must be approved by Judge Brody before it can be presented to the plaintiffs. Even then, each plaintiff will have the right to opt out of the settlement class and pursue his claims on his own. Reportedly, if enough players choose to opt out, the settlement will fail and the parties will be back to litigation. Many believe the settlement is so one-sided that it is likely to be either rejected by the court or subject to so many opt-outs that it fails on its own terms. However, given the strong incentives noted above for plaintiffs to settle, this agreement will, most likely, be approved in substantially its current form. While these precise issues are not present in every case, they are representative of the sorts of considerations that commonly affect settlement. Recognizing these factors helps appreciate the forces compelling settlement even when it may seem otherwise unlikely.
 The MDL litigation included a consumer class action against Riddell, the official helmet manufacturer of the NFL, which was not part of the settlement and will continue to be litigated.