- NFL Concussion Litigation Faces Fight Over Selling Settlement Proceeds
- November 16, 2017 | Author: Joseph M. Hanna
- Law Firm: Goldberg Segalla LLP - Chicago Office
On October 13, 2017, class counsel in the National Football League concussion litigation asked a Pennsylvania federal judge to rule that an uncapped settlement agreement prohibits players from assigning their payouts to a third party. The motions stem from a hearing in July that addressed concerns that players who would benefit from an uncapped settlement were being improperly solicited by claim assistance providers who may be giving misleading offers.
Then, in a September hearing, class counsel warned the judge that many players made deals with third-party claims processors or lenders that offered advances against their awards. Many of those deals include high fees and interest rates.
At the September hearing, class counsel specifically warned against RD Legal Funding LLC. The Consumer Financial Protection Bureau (CFPB) earlier in the year sued RD Legal Funding, accusing the firm of scamming 9/11 first responders and NFL retirees with high-cost loans. In the class counsel’s motion, they argued that RD Legal was ignoring important “related to” language that extended the prohibition against assigning claims to assigning related settlement proceeds as well. Further, under New York law and the settlement agreement, class members have no legal claim to assign in the first place. In addition, CFPB and the New York attorney general added in their own brief that RD Legal is improperly relying on a provision within the UCC to claim the statute allows assignment of settlement proceeds. RD Legal cited UCC Article 9, but the CFPB and attorney general argued that it actually applies to the sale of payment intangibles, which does not apply in this case. Class counsel, CFPB, and the attorney general argued that RD Legal’s reading of the settlement agreement, after buying part of seven former NFL players’ anticipated settlement proceeds, makes the anti-assignment provision worthless.
RD Legal argued that the revised Article 9 renders the anti-assignment clause ineffective. Additionally, RD Legal claimed that reading the clause to bar assigning settlement proceeds and as well as the underlying claims conflicts with the overall agreement. Class counsel, CFPB, and the attorney general argued against RD Legal to protect players from being taken advantage of by the financial firm