Category: Blog Posts

Can rapper Travis Scott be held liable for Astroworld tragedy?

By Noah Zedeck, 2L member

Rapper Travis Scott is making headlines for all the wrong reasons. In November 2021, a massive “crowd surge” left 10 people dead at Scott’s Astroworld Music Festival. Additional injuries were reported, including 11 cases of cardiac arrest, and 23 people were hospitalized. Questions are now mounting regarding who is responsible for this event and how it occurred. Potential plaintiffs are looking for who is liable.

Numerous lawsuits have been filed in relation to the event, but it is still largely unclear who is truly liable as a number of individuals and entities could be to blame. The event itself was held at NRG Park in Houston but it was organized by a number of entities, including Live Nation. The most notable organizer of the event who could face liability is Scott himself.

Scott’s unique position as not only a performer, but also an organizer and supervisor of the Astroworld event, places him in relatively uncharted territory compared to other artists who have faced potential liability for concert deaths. For example, neither Pearl Jam nor The Who were sued when people were trampled to death at their concerts. This was due in part to those bands merely performing at the venues where those deaths occurred rather than organizing and supervising the entire events themselves.

The case against Scott is further substantiated by his history of provoking large crowds, at times by explicitly encouraging attendees to storm the stage. Some lawsuits have even named fellow rapper Drake as a defendant after he appeared onstage with Scott and allegedly contributed to inciting the crowd.

While it is not so uncommon for large events hosting thousands of people to get out of hand and sometimes lead to injuries or deaths of attendees, it has been extremely uncommon for performers at those events to be held liable for such tragic occurrences. Astroworld is perhaps a different kind of event, and Scott a different kind of performer, than has ever been the subject of this type of litigation.

Other performers will no doubt be keeping a close eye on these cases to see if courts will opt to hold Scott even partially liable for the Astroworld tragedy, thus potentially exposing them to future liability as well.

Works cited:

Reckless disregard or honest mistake? Sarah Palin v. N.Y. Times argues actual malice standard

By Kristen Johnson, Content Editor

A jury on Feb. 15 found the New York Times Company not liable for defaming Sarah Palin. This verdict was returned years after Palin first filed a complaint against The New York Times in 2017.

Reporter James Bennett had published an editorial connecting Palin’s political platform on gun rights to the 2011 mass shooting in Tucson, Arizona that seriously injured then US-Congresswoman Gabby Giffords. Palin argued the paper knew there was no connection between her political action committee and the mass shooting.

However, after an evidentiary hearing, U.S. District Court Judge Jed Rakoff dismissed Palin’s Complaint in 2017, finding Palin had failed to prove actual malice. Judge Rakoff stated, “[I]f political journalism is to achieve its constitutionally endorsed role of challenging the powerful, legal redress by a public figure must be limited to those cases where the public figure has a plausible factual basis for complaining that the mistake was made maliciously.”

In 2019, the U.S. Court of Appeals for the Second Circuit overturned the dismissal on procedural grounds, finding that Judge Rakoff was required to accept pled facts as true because he had not converted the NYT’s motion to dismiss into a motion for summary judgment. On remand, Judge Rakoff dismissed the case again on Rule 50 grounds, finding Palin failed to establish the requisite malice at trial.

This actual malice standard was created in another case involving The New York Times. In 1964, the Supreme Court created the actual malice standard for public officials in New York Times Co. v. Sullivan. In this case, an elected commissioner of the city of Montgomery, Alabama, sued the New York Times for libel, arguing the publication inaccurately depicted his actions to control protestors and the arrest record of Dr. Martin Luther King, Jr., among other things.

The court held that public officials may not recover damages for defamatory falsehoods relating to their official conduct unless they prove with convincing clarity that the statements were made with actual malice. The actual malice standard is considered publication with knowledge of the falsity or reckless disregard for whether it was false or not. The reasoning for this standard is that “[i]t is a prized American privilege to speak one’s mind, although not with perfect good taste, on all public institutions.” (Citing Bridges v. California (1940)).

Thus, since 1964, actual malice has been a requirement for public officials seeking to prove a defamation claim. As such, Palin’s case was dismissed because the reporter’s conduct was shown to be an “honest mistake.”

In July, U.S. Supreme Court justices Clarence Thomas and Neil Gorsuch wrote in separate dissenting opinions in Berisha v. Lawson that the actual malice standard needs to be reviewed; now, it appears Palin v. NYT will not be the case the Supreme Court uses to revisit current libel law.

Works Cited:

New York Times Co. v. Sullivan, 376 U.S. 254 (1964).

Bridges v. California, 314 U.S. 252, 270 (1940).

Your patent is no good here: Russia’s war on intellectual property following war in Ukraine

By Elizabeth Tirrill, 2L member

The Russian invasion of Ukraine began Feb. 24 for purposes of “de-Nazifying” Ukraine, according to Russian President Vladimir Putin. Putin claimed the war is not actually a war at all, but simply a “special military operation.”

Regardless of terminology, Russia’s actions are leading to detrimental consequences to the people of Ukraine and to Russia’s economy. One such consequence is the amount of sanctions issued against Russia by western nations and international authorities.

It is reported Russia’s assets have been frozen in its central bank to prevent the state from reaching its approximately $63 billion of foreign currency reserves. Additionally, the sanctions on Russia cover multiple industries, including military goods, luxury fashion goods, international departing flights, and oil and gas. Some international businesses have also seized operations in Russia since the invasion.

The Russian government in early March took an unexpected course of action in response to the international sanctions and condemnation of Russia’s actions. Putin issued a decree that “effectively legalize(s) patent theft from anyone affiliated with countries ‘unfriendly’ to it, declaring that unauthorized use will not be compensated,” the Washington Post reported.

“This means that Russian businesses can use intellectual property, such as patented inventions or fashion designs, without having to pay or seek the consent of the rights holders,” The Fashion Law reported.

Under this decree, patent holders outside of Russia will have no recourse if a Russian entity or individual infringes on the patent. “Russia’s decree removes protections for patent holders who are registered in hostile countries, do business in them or hold their nationality,” according to the Washington Post.

While the decree only specifically mentions patents, it is apparent that it applies to trademarks as well. Professionals in the field agree that right now, intellectual property rights holders have no immediate relief available for stolen intellectual property in Russia. “Just how much IP is in jeopardy is unclear,” Yahoo Finance reported.

Normally, international intellectual property disputes could be resolved by the World Trade Organization (WTO). However, that route for relief requires the federal government of the affected rights holder to bring a claim in front of the WTO.

Commenters believe that this is unlikely to happen as nations such as the United States are probably not very concerned for intellectual property rights at the moment with the current state of the world. Additionally, if Russia is expelled from the WTO because of the war on Ukraine or otherwise, the organization would no longer have jurisdiction over Russia’s actions.

While a war on intellectual property is unexpected, the strategy is not completely unprecedented.

An action like this has not been taken since World War I and the Trading With the Enemy Act when the now-famous Aspirin patent was seized by the United States and then later shared with France, Russia, and the United Kingdom after the Treaty of Versailles. However, unlike the Trading With the Enemy Act, Russia’s decree threatens intellectual property on a much larger scale.

The effects of Russia’s decree are already apparent, especially on trademarks. Trademark applications have already been filed in the past week for close resemblances to IKEA, Instagram, Starbucks, and McDonald’s in Russia. Additionally, trademark applications have also been filed for marks resembling if not totally copying Nike, Puma, Chanel, and Christian Dior.

A Russian court has already ruled in favor of an alleged Russian infringer because of the decree. The judge dismissed a copyright and trademark infringement claim brought by the creators of British children’s television show Peppa Pig. The judge cited on the record that the unfriendly actions of the United States and other foreign nations toward Russia gave influence to his decision.

Intellectual property rights holders are at risk for theft in Russia, and under this decree, those rights holders have no possibility for redress in the near future. It is unclear how this issue will unfold in the coming weeks and months.

Works Cited:

To stream or not to stream: Are artists really not receiving their royalties?

By Katherine Hinkle, 2L Member

“Does anyone even buy CDs anymore?” is a comment I’m sure is overheard by many in bookstores, department stores or any retailer that carries the works of many artists we all love. The answer to that can be complicated, or you could just say “Streaming is where it’s at.”

Streaming giants such as Spotify and Apple Music have taken over the music scene within the last few years, so much so that it is hard to find individuals who do not have a streaming subscription from either platform.

This presents a different outlet for artists to share their works than what was available to them before the rise of streaming services. Streaming allows for a much more streamlined process for emerging artists to promote their music.

However, how much are artists actually making from their streams? Business Insider reported in February 2021 that Spotify streams are only worth about $.003 to $.005 per stream.

To calculate payout rates for artists, Spotify takes the money it makes overall from ads and subscriptions each month and pays that out in proportions to each artist on the platform. The proportional shares are based each artist’s share of total streams across the entire service for that particular month.

For example, an artist that has 10,000 streams out of a total of 1 million streams across the entire platform would receive one percent of Spotify’s overall revenue share. To put that into perspective, even the big-name artists of today would not make as much as many in the general public believe they do from their music alone.

This misconception of the entertainment industry leaves many artists asking “Where are my royalties?” or, “Why am I not getting paid?”

Unfortunately, aspiring artists and even emerging stars who have at least stuck their toes in the water are taken advantage of. Many sign extremely vague contracts or they have absolutely no understanding of the terms and conditions within their contracts.

An example of this situation is shown by the lawsuit rapper when Megan Thee Stallion filed against her label, 1501, for fraud, breach of contract, and negligent misrepresentation.

Artists are led to believe that they are guaranteed a running start to fame and stardom, but they may not even receive any of the money from their discography. Their streaming revenues could go straight back to their labels, manager or agent. Without legal representation, many artists do not understand this.

In Section 114 of Federal Copyright law, 45 percent of performance royalties are paid to the artists on the track being streamed, while five percent are paid to artists not featured on the track. Finally, the remaining 50 percent of the performance royalties are paid to the owner of the rights of the track.

Many artists have signed an agreement that subjects them to royalty deductions. Labels use the money gained from the mechanical royalties of each artist to pay for that artist’s upfront costs, such as production expenses.

Those artists sign deals without knowing they could never see the money gained from their streams. It’s a never-ending, hurtful cycle for artists. Some artists never see the fruit of their labor, simply because they have no idea how much their streams are really worth as that money is taken from them.

Overall, the glamor of the music industry casts a dangerous façade for emerging and aspiring talent. Streaming payouts are the harsh reality that go completely under the radar.

Works Cited:

Jon M. Garon, Entertainment Law and Practice 547 (3rd ed. 2020).

Tattoos in sports video games present copyright ownership questions

By Melissa Bergmann, 2L member

Tattoos, once thought of as taboo, are now a generally accepted and popular form of expression and adorn the bodies of musicians, models, athletes, and movie stars. Likewise, video games, such as the NBA 2K series, that feature depictions of real athletes have also gained increasing popularity. These two trends lead to the question of who owns the copyright to a tattoo inked onto the skin of an athlete featured in a video game.

Tattoos are capable of copyright protection as copyrights protect original works of authorship (e.g., pictorial or graphic, such as an image in a tattoo) that are fixed in a tangible means of expression (e.g., inked on skin). This concept is supported by Whitmill v. Warner Bros. Entertainment Inc. (E.D. Mo., 2011). In this case, a tattoo artist attempted to stop the release of The Hangover: Part II because of alleged copyright infringement based on a tattoo he inked on Mike Tyson’s skin.

The presiding U.S. federal court stated, “Of course tattoos can be copyrighted… I don’t think there is any reasonable dispute about that.” The application of such copyrights to tattoos depicted on an athlete’s skin in video games complicate this concept.

The United States District Court for the Southern District of New York dealt with this issue in the novel case, Solid Oak Sketches, LL v. 2K Games, Inc. and Take-Two Interactive Software, Inc., (2020). The plaintiff alleged copyright infringement in relation to the reproduction of five tattoos that were depicted on NBA players Lebron James, Kenyon Martin, and Eric Bledsoe in the Defendant’s basketball video game in versions 2K14, 2K15, and 2K16.

The court granted summary judgment for the defendants on three different grounds.

First, the court found that the use of the tattoos in the video games was de minimis because the tattoos are rarely in the game, and when they are featured, they are so small and distorted that they are unrecognizable.

Second, the court found that the tattoo artists gave the players an implied license for unrestricted use of the tattoos as elements of the players’ likeness. Accordingly, the court held that Solid Oak could not license the tattoos because they are affixed to the player’s bodies and Solid Oak does not have the publicity rights to the players’ likenesses, which include the tattoos.

Finally, the court found that the tattoos featured in the game constituted fair use because the tattoos had previously been published and the designs are more factual than expressive.

Other courts have taken a more forgiving stance as to a tattoo artist’s copyright protections, such as the United States District Court of Southern Illinois in Alexander v. Take-Two Interactive Software, Inc., (2020). In this case, a tattoo artist alleged that Take-Two infringed her copyrights in a tattoo that she applied to WWE wrestler Randy Orton by depicting the tattoo on Orton’s character in Take-Two’s video game WWE 2K.

The court denied Take-Two’s motion for summary judgment, disagreeing with Take-Two’s defenses that the tattoo use was de minimis, authorized by an implied license, and constituted fair use. The court found triable issues of fact existed as to the existence and scope of the implied license and whether the artist and Orton discussed permissible forms of copying, distributing, and sublicensing the tattoo.

The legal implications of tattoo depiction in video games are still novel to most courts and riddled with underlying factors, such as the fame of the individual being tattooed and what court is governing the dispute. James himself in a Declaration of Support for Take-Two stated that his tattoos are part of his persona and identity, and the use of his image without his tattoos undermines his publicity rights and deprives him of his right to license his own body.

As a preemptive measure in the wake of such disputes, video game creators who depict celebrities should protect themselves by obtaining necessary rights from the tattoo artist through waiver, instead of relying on de minimis and fair use defenses.

Works Cited:,physical%20object%20and%20display%20originality.

Leach continues courtroom fight vs. Texas Tech more than decade after firing

By Brad Stephens, Managing Editor

More than 12 years after Texas Tech University fired Mike Leach as its head football coach, he is still fighting the school in court.

Leach sued Texas Tech in December, claiming the school violated the state’s open records laws, ESPN reported. The lawsuit came more than a decade after Leach’s firing in December 2009 for his alleged mistreatment of a concussed player. This suit is only the most recent in a string of legal battles between the coach and the university.

“I think all he really wants is for the truth to come out about what happened 12 years ago when he was terminated,” Julie Pettit, one of Leach’s lawyers, told ESPN of the latest suit.

Leach accepted the position as head coach at Texas Tech in 2000. His Red Raider program produced 10 consecutive winning records, and he was named the Big 12 Conference Coach of the Year in 2008.

However, the coach’s tenure at the school abruptly ended in 2009 when player Adam James accused Leach of locking him in an equipment shed after he suffered a concussion. James’ father Craig, an ESPN analyst at the time, approached Texas Tech about the incident, leading to a school investigation that resulted in Leach’s termination.

Texas Tech asserted that Leach was terminated for just cause, and the school maintained Leach was not owed any money for the remainder of his contract. In response, Leach sued for wrongful termination, maintaining that he was owed compensation.

In 2011, the Texas Court of Appeals ruled for Texas Tech and affirmed the dismissal of Leach’s suit. Leach v. Tex. Tech Univ. (Tex. App. 2011). The court held the university did not waive its sovereign immunity and could not be sued for monetary damages on Leach’s claims. The Texas Supreme Court denied Leach’s petition for review.

Around the same time, Leach separately sued Craig James, ESPN, and a public relations firm on claims of defamation, tortious interference with a contract, and civil conspiracy to tortiously interfere with a contract.

Once again in 2014, the Texas Court of Appeals decided against Leach, affirming summary judgment rulings for the defendants. Leach v. James (Tex. App. 2014).  The court concluded the coach’s termination resulted from Texas Tech’s own investigation into the Adam James incident and was not the result of outside pressure from Craig James or ESPN.

Despite multiple courtroom defeats, Leach has continued his fight against Texas Tech. Paxton v. Dolcefino Communs., LLC (Tex. App. Sep. 30, 2021). He hired an investigative firm to obtain documents pertaining to his termination, and the most recent lawsuit relates to those efforts.

After years of battling Texas Tech in court, Leach finally faced his old employer on the football field in December. The coach’s current program, Mississippi State University, played the Red Raiders on Dec. 28 in the Liberty Bowl.

Heading into the game, Leach’s long-running legal battle was a primary story because this was his first matchup against Texas Tech since his termination.

Leach reiterated his willingness to settle the feud for $2.4 million and “an acknowledgement that I didn’t do anything wrong,” ESPN reported.

“Some of the (Texas Tech) leadership, at least when I was there, was very sleazy and slimy and dirty,” Leach told the Mississippi Clarion Ledger. “I enjoy naming names on it too, which I might as well. They all know who they are. We should get this thing settled. They should pay me.”

Once the Liberty Bowl kicked off, Leach’s Mississippi State squad took a resounding 34-7 loss – yet another defeat for the coach at the hands of Texas Tech.

Works cited

The Mickey Mouse struggle: Will Disney reshape copyright law again?

By Dani Bhadare-Valente, 2L member

The U.S. Constitution codified the principle that an author, innovator, or artist should enjoy the benefits of her intellectual property. Since the adoption of our Constitution, however, U.S. copyright law has been subject to many revisions, and the Walt Disney Company has been a major player in those transformations.

Congress passed its first Copyright Act in 1790. Under this act, an artist’s work could be protected for fourteen years with a renewal period of another fourteen years before the work moved to the public domain. In 1909, Congress passed its next Copyright Act (“1909 Act”). Artists could now protect their work for twenty-eight years with a renewal term of twenty-eight years, totaling fifty-six years of protection.

Disney introduced Mickey Mouse in 1928 with the release of Steamboat Willie. Pursuant to the 1909 Act, Steamboat Willie’s copyright protection was set to expire in 1984 and fall into the public domain. Once there, anyone could use the character without obtaining permission from, or paying, Disney.

With the 1984 expiration of Disney’s mascot soon approaching, it began intensely lobbying for Congress to reconsider and amend the 1909 Act. The company’s lobbying proved successful, because Congress passed the Copyright Act of 1976 (“1976 Act”) which transformed copyright law.

A piece of work was no longer protected by a term of years with a renewal period. Instead, the copyright extended to the life of the author plus fifty years. For corporations, the copyright protections lasted for seventy-five years from the year of creation. Mickey Mouse’s date of copyright expiration was now extended to 2003.

Again, Disney worked hard to lobby Congress for another copyright extension in the 1990s, and again, its efforts were rewarded. In 1998, Congress passed the Sonny Bono Copyright Term Extension Act, more commonly known as the Mickey Mouse Protection Act.

The Mickey Mouse Protection Act extended works created on or after January 1, 1978, to the life of the author plus seventy years.  For corporations, copyright protections extend for ninety-five years from first publication or 120 years from creation, whichever was shorter.

With the Mickey Mouse Protection Act, today Disney’s mascot is dangerously close to being released into the public domain. Unless the company successfully lobbies another extension, Steamboat Willie is set to expire next year.

Based on its history, we should expect that Disney has been lobbying to keep ownership and protection over its beloved character, but it is unclear whether these efforts have been – or will be – successful. Unfortunately for Disney, the COVID-19 pandemic has affected the country, and Congress, beyond what anyone may have imagined.

Whether Disney will be able to pull the legislature’s focus away from the pandemic to protect its characters is still up in the air, but this time next year, the public may have a new friend added to the mix.

Works Cited:

U.S. Const. art. 1, § 8, cl. 8

Who’s legally responsible for Rust set shooting that caused death of cinematographer?

By Shelby Harding, 2L Member

The Oct. 21 shooting on the set of the low-budget Western film Rust left the public questioning how something so reckless could ever happen. While shooting the film in New Mexico, a prop gun held by actor Alec Baldwin was improperly loaded with live ammunition and discharged, killing 42-year-old Halyna Hutchins and injuring director Joel Souza.

Yet, many would be surprised to know that between 1990 and 2016, there were at least 43 deaths from the improper handling of prop firearms on set, and 150 other people sustained life-altering injuries, a number that has continued to increase in the last six years.

Since the incident, there have been several civil lawsuits filed by different parties involved. Most recently, the family of Hutchins filed suit against Baldwin and “others responsible for the safety on set and whose reckless behavior” led to her “senseless and tragic death.”

The Hutchins family is suing for negligence, intentional, willful, or reckless misconduct resulting in wrongful death and loss of consortium. They are seeking both punitive and compensatory damages.

Hundreds of people are involved in the process of filming a motion picture. Therefore, it can be difficult to narrow down who is legally at fault when a tragedy like this takes place.

Many people were quick to point the finger at Baldwin as he was the one who fired the fatal shot. However, the actors performing scenes with firearms typically know very little about the deadly weapon before it reaches them to film a scene. This is why production companies hire prop masters, armorers, and other professionals to assist actors and actresses in executing the scenes and by making sure the prop weapons are safely handled on set.

It is unlikely Baldwin will face criminal charges resulting from the shooting. However, he may face civil liability for his role as a producer on the film if a court finds that industry safety protocols were not followed properly on the set.

According to reports from a camera operator on the set of Rust, there had been three other accidental discharges prior to the fatal shooting. Additionally, there were several reports of bullets lying all around the set, including dummy rounds, blanks, and live rounds.

According to other experienced producers and armorers, “there never should be live rounds on set at all, let alone loaded into an unattended weapon left on a props cart, and all ammunition should be kept track of and stored separate from weapons and not left in the weapons.”

If these reports are found to be true dozens of individuals may be held liable for the death of Hutchins. Individuals such as producers, armorers, and prop masters involved in the film could all face civil liability and may be required to pay damages to the Hutchins family.

The attorney representing the family expects the matter to go to trial in the next year-and-a-half depending on how quickly the New Mexico court system moves.

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QB Quinn Ewers’ transfer shows need for uniform NIL rules

By Gavin Dwyer, 2L member

Following the Supreme Court’s Alston decision in June, 28 states have adopted legislation allowing athletes to finally profit from their name, image, and likeness (“NIL”) rights. (NCAA v. Alston (U.S. 2021)).

The Court in Alston unanimously held that the NCAA violated the Sherman Act regarding caps placed on educational benefits conferred to athletes. The decision in Alston did not directly touch on the issue of athlete NIL and the legality of that NCAA restriction.

However, Justice Kavanaugh’s concurring opinion attacked the litany of NCAA rules and regulations, which, at the time, included restrictions on athletes profiting from NIL. He questioned whether the NCAA would be able to successfully survive the “rule of reason” scrutiny.

“Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate,” Kavanaugh wrote.

The NCAA heeded the shot sent across its bow by Justice Kavanaugh, and within a week the organization announced its relaxation on athlete NIL rights.

Prior to Alston, the NCAA would suspend athletes for monetizing their NIL rights through actions such as signing autographs for money. On July 1, the NCAA opened the NIL floodgates and left it to the state legislatures to determine the rules athletes must abide by when monetizing their NIL rights.

The NCAA punted on the idea of creating a uniform NIL policy, perhaps in fear of litigation over violations and overturning broader NCAA principles or muddying the waters enough for Congress to step in.

Either way, the NCAA’s actions created 28 different NIL statutes among states and countless others in states that do not have NIL legislation where individual universities created their own NIL policies to follow. The National College Players Association (“NCPA”) identified 21 different provisions either contained in or lacking from the 28 states that have created NIL legislation.

From these provisions, the NCPA identified New Mexico as the most NIL-friendly state, with a 90-percent grade. Alabama, Illinois, and Mississippi classify as the most NIL-restrictive, coming in with a 43-percent grade from NCPA.

This variance among states will inevitably lead to drastic differences in the ability for athletes to profit from their NIL and may affect recruiting classes in years to come.

One football player who took advantage of relaxed NIL laws is star quarterback recruit Quinn Ewers.

The Texas High School Association denied Ewers the ability to profit from his NIL as he entered what would have been his senior season in the fall of 2021. Accordingly, Ewers reclassified into early graduation and enrolled for the 2021-22 school year as a freshman at Ohio State University, where he entered a contract with GT Sports Marketing for $1.4 million.

Ewers failed to play a snap in 2021 for the Buckeyes. He announced in December he would transfer to the University of Texas, where he is expected to compete for the Longhorns’ starting QB job in 2022.

This simple example shows the difference between just two states’ NIL legislations.

First, Texas is one of three schools that prohibit high school athletes from participating in NIL deals (Illinois and Mississippi are the other two). Secondly, if the transfer happened in reverse (signing an NIL deal in Texas, then transferring to a school in Ohio), Ewers would be prevented by law from continuing the NIL contracts entered in Texas.

While minor in this case, differences of this type are littered throughout state NIL laws.

The NCAA and athletes have both pleaded to Congress to adopt a federal NIL policy that will guide and advise athletes. Multiple bills have been introduced, but none have passed at this time.

Now, some states that currently have NIL legislation are looking to either repeal or modify their existing laws as they are more restrictive than necessary to conform to the old NCAA rules. While the goal of revising the laws is to make them less restrictive, there is the possibility that it further muddies the water for universities and athletes to determine what they are allowed to contract for regarding their NIL rights.

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Big tech and antitrust: What we can learn from FTC’s suit against the monopoly formerly known as Facebook

By Madeleine Hickman, Symposium Director

The FTC is gaining ground with the Facebook monopoly lawsuit after the D.C. Circuit Court denied tech giant’s motion to dismiss earlier this year.

On Dec. 9, 2020, the Federal Trade Commission (“FTC”), along with 48 U.S. states and territories, filed antitrust lawsuits against social media giant Facebook, Inc. (“Facebook”) (a/k/a “Meta”). The FTC’s complaint alleges that Facebook’s anticompetitive acts violate Section 2 of the Sherman Act, 15 U.S.C. § 2, and thus constitute unfair methods of competition in violation of Section 5(a) of the Federal Trade Commission Act (“FTCA”), 15 U.S.C. § 45(a). Specifically, the complaints allege that:

  • the acquisition and continued control of Instagram has neutralized a significant independent personal social networking provider
  • the acquisition and continued control of WhatsApp has neutralized a significant competitive threat to Facebook’s personal social networking monopoly; and
  • the imposition and enforcement of anticompetitive conditions on access to APIs suppress and deter competitive threats to its personal social networking monopoly.

The government charged that Facebook “has for many years been unlawfully stifling competition and strengthening its monopoly.” Accordingly, the FTC sought relief from the court including divestiture of Instagram and WhatsApp, as well as injunctive relief preventing Facebook from pursuing anticompetitive practices.

In its subsequent motion to dismiss the complaint (FTC v. Facebook, Inc.), Facebook contended the FTC failed to adequately allege that Facebook has maintained monopoly power and harms consumers. Judge James E. Boasberg in June 2021 found the FTC failed to prove that Facebook holds monopoly power in the U.S. personal social networking market. He dismissed the FTC’s complaint without prejudice. Following Judge Boasberg’s rulings, shares of Facebook rose more than 4 percent, “sending the social media company’s market capitalization above $1 trillion for the first time.”

In July 2021, while the FTC was busy gathering additional information for its amended complaint, Facebook petitioned FTC Chair Lina M. Khan and the Commission “to recuse Chair Khan from participating in any decisions concerning whether and how to continue the FTC’s antitrust case against the company.” The petition argued that “Chair Khan, well before becoming a commissioner, had already decided the material facts relevant to Facebook’s liability in the Commission’s pending antitrust lawsuit and already reached legal conclusions that Facebook was liable under the antitrust laws.” After review by the FTC’s Office of General Counsel, the Office of the Secretary dismissed Facebook’s petition for recusal, finding that, “as the case will be prosecuted before a federal judge, the appropriate constitutional due process protections will be provided to the company.”

The FTC in August 2021 filed an amended complaint against the social media giant. The amended complaint included “additional data and evidence to support the FTC’s contention that Facebook is a monopolist that abused its excessive market power to eliminate threats to its dominance.”  According to the amended complaint, “Facebook continues to monitor the industry for competitive threats to its personal social networking monopoly.” The amended complaint further alleges that “Facebook is likely to impose anticompetitive conditions on access to its platform and seek to acquire companies it perceives as potential threats, especially when it next faces ‘acute competitive pressures from a period of technological transition.’” Facebook again moved to dismiss the amended complaint, “contending that the FTC’s latest effort is akin to rearranging the deck chairs on the Titanic.”

In October 2021, Frances Haugen, a former Facebook product manager, leaked Facebook’s internal company research and documents to media outlets throughout the United States. The documents contained information indicating that the company has knowledge “of the harms its apps and services cause but either doesn’t rectify the issues or struggles to address them.” The reports resulted in increased scrutiny against Facebook. Haugen later testified before a Senate panel about the reports. On Oct. 28, in the wake of the Haugen whistleblower scandal, Facebook announced that it had changed its company name to Meta. For the purposes of this article, “Facebook” shall refer to the company now known as “Meta.”

In January 2022, the FTC cleared its first major hurdle of the case when Judge Boasberg issued a ruling denying Facebook’s motion to dismiss. The court held that “[t]he FTC has now alleged enough facts to plausibly establish that Facebook exercises monopoly power” and “that the company’s dominant market share is protected by barriers to entry into that market.” Furthermore, “the agency has also explained that Facebook not only possesses monopoly power, but that it has willfully maintained that power through anticompetitive conduct.” Finally, the court found that Facebook’s attempts to force the recusal of Chair Kahn were in vain, noting that “such contention misses its target, as Khan was acting in a prosecutorial capacity, as opposed to in a judicial role, in connection with the vote” to proceed with the suit. The court’s ruling gives the government’s case a new life and will allow the Commission to move forward to the discovery phase of the case.

Want to know more? Check out the Belmont Entertainment Law Journal’s 2022 publication later this spring!

Works cited: