Novel Approach To Opposing Class Certification Rejected

Competition Law360 - March 7, 2013

Current and former student-athletes are one step closer to forcing the National Collegiate Athletic Association and its member institutions to share their profits with them. On Jan. 29, 2013, the United States District Court for the Northern District of California ruled that a putative class of current and former student-athletes currently suing the NCAA, Electronic Arts Inc. (“EA Sports”), and Collegiate Licensing Company (“CLC”) can proceed to class certification.[1] In her ruling, Judge Claudia Wilken rejected the defendants’ novel approach to opposing class certification — a motion to strike the certification motion. She made it clear that a motion to strike is not the correct avenue to take in attempting to oppose a class certification motion when the basis for the motion is that the plaintiffs allegedly changed their liability and damages theories and/or class definition.[2]

Plaintiffs, who are student-athletes who currently compete, or formerly competed, in Division I football and basketball, filed their initial motion for class certification on Aug. 31, 2012.[3] However, on Oct. 17, 2012, the NCAA and other defendants[4] filed a motion to strike the plaintiffs’ motion for class certification, arguing, in part, that the plaintiffs had changed: (1) their liability and damages theories, (2) their class definition, (3) the products at issue, and (4) the alleged relevant market.[5] Defendants also alleged that the plaintiffs “boasted to the press that the [class certification motion’s] change in theory ‘this deep into the case’ is the NCAA’s ‘worst nightmare.’”[6] The defendants argued that the court had authority to strike the plaintiffs’ motion under “Federal Rules of Civil Procedure 15, 16, and 23, as well at [sic] the Court’s inherent power over its docket[.]”[7]
 
The plaintiffs argued that the defendants were “engag[ing] in a contorted reading” of the plaintiffs’ complaint and following a pattern that the “Court ha[d] already rejected” by mischaracterizing their “allegations and claims in a self-serving manner.”[8] The plaintiffs contended that while there might have been “slight modifications to the class definitions,” there were “no inconsistencies or significant changes in theory,” and the defendants were on notice with regard to all allegations asserted by the plaintiffs in their class certification brief.[9]

The plaintiffs contended that regardless of the alleged lack of merit to the defendants’ motion, a motion to strike was not the proper vehicle to address the defendants’ concerns. The plaintiffs stated:

Tellingly, Defendants cite no case in which a court has ever done what Defendants are asking this Court to do — strike a class certification motion and supporting papers — and this Court should not be the first. Their motion is unprecedented, unwarranted, and evidences a fundamental misunderstanding of how class actions work.[10]

The court could have rejected the plaintiffs’ motion for class certification or could have stricken the portions of the motion challenged by the defendants. However, Judge Wilken rejected the defendants’ motion and said the defendants’ contentions supporting their motion were not arguments that should be made in a motion to strike:

Defendants argue that the motion for class certification should be stricken because Antitrust Plaintiffs are precluded from prosecuting the claims for which they seek certification. However, this is not reason to preclude Antitrust Plaintiffs from moving for class certification; instead, these contentions are more properly considered as arguments supporting denial of the motion for class certification on its merits.[11]

The court said it would construe the defendants’ motion to strike as their opposition to the plaintiffs’ motion for class certification, and it set a class certification hearing for June 20, 2013.[12]

The plaintiffs are suing the NCAA, alleging the defendants participated in a multifaceted conspiracy and violated antitrust law by conspiring to fix at zero the amount of compensation athletes can receive for the use of their names, images and likenesses in products or media while they are in school or long after they cease attending intercollegiate athletic competition.[13]
 
More specifically, the plaintiffs allege that the NCAA, its member schools and conferences, CLC, and EA Sports violated Section 1 of the Sherman Act by organizing a horizontal cartel and engaging in a price-fixing conspiracy and a group boycott to limit the student-athletes’ compensation.[14]
 
Additionally, the plaintiffs allege that the NCAA improperly requires all student-athletes to sign forms each year which purport to require them to relinquish all rights in perpetuity to the commercial use of their images even after they graduate and are no longer subject to NCAA regulations.[15] The plaintiffs also have claims for unjust enrichment and accounting.[16]

Trial is set for Monday, June 9, 2014.[17]

Implications for Practitioners

Lawyers occasionally file motions to strike for reasons, whether proper or improper, that are not directly related to the reasons articulated as the basis upon which those motions are made, e.g., to educate the court on the merits of the parties’ claims and defenses, to circumvent court rules limiting the number and length of memoranda, for dilatory purposes, etc.[18] However, practitioners should take note: Judge Wilken’s decision is not an uncommon decision in the federal courts and, in fact, courts are extremely reluctant to grant motions to strike.[19]

At the very least, practitioners should consider the unnecessary — and perhaps unbillable — costs to their clients as a result of bringing such a motion. And at the upper end, lawyers should consider that they may be at risk for sanctions for filing such motions.[20] As Judge Patrick Schiltz of the U.S. District Court for the District of Minnesota has stated:

The Court will take a similar approach to “motions to strike” that are aimed at memoranda, affidavits, or anything else that is not a pleading for purposes of Civil Rule 12(f). Such motions will be denied-and, in appropriate cases, the attorneys who file them may be sanctioned. Civil Rule 11(b) provides that, in signing a “motion to strike,” an attorney is certifying that, to the best of his or her knowledge, that motion is “not being presented for any improper purpose” (such as to evade the word limits of Local Rule 7 .1(c)) and “warranted by existing law.” In light of what this Court and others have said about “motions to strike,” an attorney has little reason to believe that such a motion is “warranted by existing law.”[21]

Consequently, lawyers should exercise a great deal of caution when considering whether to file a motion to strike an opposing party’s motion for class certification.

--By Richard M. Hagstrom and Shawn D. Stuckey, Zelle Hofmann Voelbel & Mason LLP.
 
Richard Hagstrom is a partner and Shawn Stuckey is an associate in the Minneapolis office of Zelle Hofmann, which serves as counsel for the student-athlete plaintiffs in the In re NCAA Student-Athlete Name & Likeness Licensing Litig., C 09-1967 CW (N.D. Cal.). Stuckey is also a former NCAA student-athlete and NFL player, and currently represents retired NFL players in various sports-related litigations.

[1] See In re NCAA Student-Athlete Name & Likeness Licensing Litig., C 09-1967 CW, (N.D. Cal. Jan. 29, 2013).

[2] See id. at *1.

[3] See In re NCAA Student-Athlete Name & Likeness Licensing Litig., C 09-1967 CW, (N.D. Cal. Aug. 31, 2012) (Dkt. 530) (Doc. deleted pursuant to order, Dkt. 552).

[4] Defendants collectively include the NCAA, its member schools and institutions, CLC, and EA Sports.

[5] See In re NCAA Student-Athlete Name & Likeness Licensing Litig., C 09-1967 CW, *3 (N.D. Cal.) (Dkt. 639) (Joint Motion to Strike).

[6] See id. at *2.

[7] See id. at *12.

[8] See In re NCAA Student-Athlete, C 09-1967 CW, *1 (Dkt. 643).

[9] See id. at *2.

[10] See id. at *2 .

[11] See In re NCAA Student-Athlete, at *1.

[12] See id. at *4.

[13] See In re NCAA Student-Athlete Name & Likeness Licensing Litig., (N.D. Cal.).

[14] See id.

[15] See id.

[16] See id.

[17] See In re NCAA Student-Athlete, at *5.

[18] See e.g., Zellner-Dion v. Wilmington Fin. Inc., 10-CV-2587, *1, n.1 (D. Minn. July 19, 2012) (stating “[m]oreover, given that a party can always, in its brief on the merits, simply ask the Court to disregard a document filed by the party’s opponent, formal ‘motions to strike’ serve no purpose other than to crowd the docket and circumvent court rules limiting the number and length of memoranda.”); PHL Variable Ins. Co. v. Clifton Wright Family Ins. Trust, 09CV2344 BTM (POR), 2010 WL 1445186, *1 (S.D. Cal. Apr. 12, 2010) (stating “[b]ecause striking a portion of a pleading is a drastic remedy and because it is often used as a dilatory tactic, motions to strike are disfavored.”).

[19] See, e.g., Carlson Mktg. Group Inc. v. Royal Indem. Co., 04-CV-3368, *2 (D. Minn. Oct. 11, 2006) (stating “there is no such thing as a ‘motion to strike’-at least when the paper being targeted is a memorandum…. No such motion is authorized by the Federal Rules of Civil Procedure, and no such motion is authorized by the local rules of [the District of Minnesota]…. This point has been made repeatedly, both by judges of this District and judges of other districts…. And yet litigants continue to file ‘motions to strike.’”); Stanbury Law Firm PA v. I.R.S., 221 F.3d 1059, 1063 (8th Cir. 2000) (A district court enjoys broad discretion in enforcing its rules, but “striking a party’s pleadings is an extreme measure, and ... [m]otions to strike ... are viewed with disfavor and are infrequently granted.”); Big Stone Broadcasting Inc. v. Lindbloom, 161 F.Supp.2d 1009, 1013 (D.S.D. 2001) (citing multiple cases).

[20] See Carlson Mktg. Group Inc., at *3 (stating that sanctions and other remedies were available to the Court for parties filing motions to strike).

[21] Id. at *3.