Seventh Circuit Punts Publicity Rights Dispute

Advertising Law

The U.S. Court of Appeals for the Seventh Circuit recently turned to the Indiana Supreme Court for guidance on the issue of publicity rights in a case involving online fantasy sports games.

A group of former college athletes sued FanDuel and DraftKings, alleging that 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 professional athletes, subject to a budget cap. Results from actual games determine the winning rosters.

FanDuel and DraftKings moved to dismiss the complaint, pointing to two exemptions in the state law: the permissible use of the 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. The plaintiffs appealed, arguing that the sites operated as illegal gambling enterprises to which none of the statutory exemptions applied.

The Seventh Circuit found itself stumped. “No one doubts that television can show college football games and discuss plaintiffs’ performances without their consent,” the court said. “But the statute asks not whether a given name or performance is ‘newsworthy’ or of ‘public interest’ but whether the name and other details appear ‘in … [m]aterial that has … newsworthy value’ or ‘in connection with the … reporting of an event … of general or public interest. Plaintiffs’ names and details on FanDuel and DraftKings are not necessarily ‘in’ newsworthy ‘material’ or a form of ‘reporting.’”

Turning to Indiana case law didn’t help, the federal appellate panel said. “As far as we can see, none of the language in either [exemption] has ever been interpreted by any state judge,” the court said.

Case law from other states offered no guidance, the court added, as the bulk of the federal court decisions did not analyze state law. Cases cited by the parties addressed ancillary issues such as California’s statute on strategic litigation, or the First Amendment as a defense to right-of-publicity statutes, the court said. They did not interpret a statute similar to Indiana’s.

“The absence of precedent from Indiana and the dearth of precedent from other states make this difficult,” the panel wrote. “[W]e do not think that the exemptions in [Indiana law] can be understood without knowing what the state’s judiciary makes of phrases such as ‘in … [m]aterial that has … newsworthy value’ or ‘in connection with the … reporting of an event … of general or public interest,’ which leave their meaning ambiguous.”

As a result, the Seventh Circuit certified the following question to the Indiana Supreme 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 panel noted the question was intentionally phrased in “general terms” so that the state’s highest court could consider any matters it deemed relevant (such as the plaintiffs’ assertion that the defendants’ fantasy games are illegal and the possibility that there is an extra-textual illegal activity exception to the provisions of Indiana’s publicity rights statute).

To read the opinion in Daniels v. FanDuel, Inc., click here.

Why it matters: The Seventh Circuit drew a blank on the issues presented in the case, finding zero precedent in the state of Indiana and nothing helpful from courts considering other state right-of-publicity laws. The plaintiffs’ gambling argument adds a further complication, since the panel asked the Indiana Supreme Court to consider the potential for an exception to the statute for illegal activity.



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