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IP/Entertainment Case Law Updates

Daniels v. FanDuel

On question certified by Seventh Circuit, Indiana Supreme Court holds that online fantasy sports operators’ use of names, pictures and statistics of college athletes without their consent does not violate Indiana’s right of publicity statute because such information constitutes material of “newsworthy value.”

Defendants DraftKings Inc. and FanDuel Inc. operate popular fantasy sports websites that collect and publish statistics regarding the on-field performances of college athletes. Users accessing defendants’ websites pay a fee to access those athletes’ names, images and statistics, and use that information to assemble virtual teams of real-life athletes to compete against other users for cash prizes.

Plaintiffs Akeem Daniels, Cameron Stingily and Nicholas Stoner, college athletes from 2014 to 2016, filed a class action lawsuit in Indiana state court alleging that defendants “used their names and likenesses in operating and promoting online fantasy sports contests without Plaintiffs’ consent, and that doing so was a violation of their right of publicity under Indiana law.” Defendants removed the case to federal court and moved to dismiss for failure to state a claim, arguing that their use of plaintiffs’ information fell within statutory exceptions to the Indiana right of publicity statute. The district court agreed and dismissed the lawsuit, finding that the information at issue constituted “material that has newsworthy value” and that its use was “in connection with the broadcast or reporting of an event or a topic of general or public interest.” Plaintiffs appealed, and 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 court held that defendants’ use of such information constituted “material that has newsworthy value,” and was thus excepted from the state’s right of publicity statute.

Indiana’s right of publicity statute, the court noted, prohibits use of a person’s name, image and likeness, among other things, for a commercial purpose without that person’s prior written consent. The court further noted that the statute contains various exceptions for uses that do not require consent, including “the use of a personality’s name, voice, signature, photograph, image, likeness, distinctive appearance, gestures, or mannerisms in material that has political or newsworthy value.” Plaintiffs argued that this exception does not apply to commercial uses, but the court rejected that argument as contrary to the statute’s plain language. According to the court, because the statute already prohibits the use of one’s right of publicity “for a commercial purpose,” the newsworthiness exception removes the material from the right of publicity’s application altogether, and plaintiffs’ proposed limitation should not be read into that exception. The court also rejected plaintiffs’ argument that the exception applies only to news broadcasters, not to media companies, noting that the exception was silent as to whether it imposed restrictions on who may publish or use the material at issue. In any event, the court noted, a separate exception carves out news reporting entities, suggesting that such a restriction does not apply to the newsworthiness exception.

The court found several other “compelling” reasons why the term “newsworthy value” should be read to incorporate the fantasy sports operators’ use of players’ names, images and statistics. Surveying case law regarding the right of publicity preceding enactment of the state’s statute, the court determined that the Indiana General Assembly intended the term “newsworthy” to be construed broadly. Further, determining that statutes should be construed so as to avoid constitutional issues, the court opined that a broad interpretation of the phrase “newsworthy value” is more likely to render the statute content neutral because it avoids “parsing acceptable forms of speech.” Ultimately, the court concluded that 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.”

As to whether defendants’ use of plaintiffs’ information constituted unauthorized advertising, the court cited approvingly to other fantasy sports cases, concluding that the risk of unauthorized advertising is minimal because, among other things, such products depend on the inclusion of all players and thus cannot create a false impression that any particular player is endorsing the products’ use. The court added that it would be difficult to draw the conclusion that athletes are endorsing defendants’ products based merely on the publication of their informational and statistical data. Taking care not to overstep the bounds of the certified question, however, the court noted that its finding does not foreclose other courts from closely scrutinizing the actions of a particular defendant to ensure no unauthorized endorsements are being made.

Summary prepared by Frank D’Angelo and Ava Badiee