College Athletes Fumble Publicity Rights Suit

Advertising Law

In answering a certified question from the U.S. Court of Appeals, Seventh Circuit, the Indiana Supreme Court ruled that fantasy sports websites do not violate Indiana’s publicity rights law by using the names and images of college athletes without their consent.

Northern Illinois University football players Akeem Daniels and Cameron Stingily, along with Indiana University football player Nicholas Stoner, sued a pair of fantasy sports websites, alleging the sites illegally used their names, pictures and on-field statistics without their permission in violation of Indiana state law.

Fantasy league participants compete for cash prizes by paying an entry fee and selecting a roster of athletes, subject to a budget cap. Results from actual games determine the winning rosters.

Indiana’s right of publicity statute provides that “a person may not use an aspect of a personality’s right of publicity for a commercial purpose … without having obtained previous written consent.”

The defendants moved to dismiss the complaint, pointing to two exemptions in the state law: the permissible use of material that has “political or newsworthy value” and the right to use information “in connection with the broadcast or reporting of an event or a topic of general or public interest.”

A district court judge granted the motion to dismiss, and on appeal, the Seventh Circuit punted the case to the Indiana Supreme Court. The federal appellate panel asked the state’s highest court “whether online fantasy sports operators that condition entry on payment, and distribute cash prizes, need the consent of players whose names, pictures, and statistics are used in the contests, in advertising the contests, or both.”

The unanimous court answered in the negative, finding that the use fell within the meaning of “material that has newsworthy value” as an exception under the statute. In full, that exception provides that the right of publicity does not apply to “[t]he use of a personality’s name, voice, signature, photograph, image, likeness, distinctive appearance, gestures, or mannerisms in … [m]aterial that has political or newsworthy value.”

The court rejected the athletes’ argument that the exception did not apply in the context of commercial use. “The statute itself does prohibit the use of a person’s right of publicity ‘for a commercial purpose,’” the Indiana Supreme Court wrote. “The newsworthy value exception, however, removes the material from the right of publicity’s application. We therefore decline to read such a requirement into the otherwise facially clear language of the statute.”

Nor was the court persuaded by the plaintiffs’ contention that the defendants could not take advantage of the exception because they are not media companies or news broadcasters. Such a characterization is “immaterial,” the court said, as the “statute is silent on whether there are any restrictions on who publishes or uses the material.” The legislature also carved out a separate exception that applies only to news reporting entities, the court pointed out, and “we decline to place a similar restriction on the ‘newsworthy value’ exception at issue here.”

A walk through the history of the right of publicity—including the Supreme Court opinion that first established that a “state-law right of publicity would not serve to prevent respondent from reporting the newsworthy facts about petitioner’s act”—led the court to the conclusion the exception applied to the fantasy sports websites.

“Given the genesis and evolution of the right of publicity, and presuming the General Assembly was aware of the right of publicity, its origins, and the definitions available from caselaw in this area, we find that the term ‘newsworthy’ was meant to be construed broadly,” the court wrote. “Defendants’ use of players’ names, images and statistics in conducting fantasy sports competitions bears resemblance to the publication of the same information in newspapers and websites across the nation. We agree that, ‘it would be strange law that a person would not have a First Amendment right to use information that is available to everyone.’”

The simple fact that the statistics about the players are placed behind a paywall or used in the context of a fantasy sports game does not strip the information of its newsworthy value, the court said.

“On the contrary, fantasy sports operators use factual data combined with a significant, creative component that allows consumers to interact with the data in a unique way. Although fictional salary values are assigned to players, this does not change the function of the underlying data. It is difficult to find that the use of this otherwise publicly available information is somehow drastically different such that it should be placed outside the definition of ‘newsworthy.’”

Turning to whether the use of the plaintiffs’ names, pictures and statistics constituted unauthorized advertising, the Indiana Supreme Court again answered in the negative, finding the risk of unauthorized advertising “minimal.”

When information and statistical data of college athletes are presented on a fantasy sports website, “it would be difficult to draw the conclusion that the athletes are endorsing any particular product such that there has been a violation of the right of publicity,” the court said.

The court did leave room for other courts to “closely scrutinize” the actions of particular defendants to ensure that no unauthorized endorsements are being made, deferring “any factual determination on this issue to our federal colleagues.”

To read the Indiana Supreme Court opinion, click here.

Why it matters: The decision is a major victory for fantasy sports websites, with the Indiana Supreme Court informing the Seventh Circuit that a right of publicity exception for “material that has newsworthy value” applies to the sites’ use of players’ names, images and statistics. However, the court kept open the possibility that a defendant could be liable under the statute for unauthorized endorsements based on its use of such information.