By Pamela C. Maloney, J.D.
Online fantasy sports operators who conditioned entry to contests on payment and distributed cash prizes did not violate Indiana’s right-of-publicity statute in using the names, pictures, and statistics of college players without their consent because the use fell within the "material that has newsworthy value" exception under the statute, the Indiana Supreme Court ruled in response to a question certified from the U.S. Court of Appeals for the Seventh Circuit. Having determined that the newsworthy material exception to Indiana’s right-of-publicity statute applied, the state high court declined to examine whether the statute’s public interest exception also applied (Daniels v. FanDuel, Inc., October 24, 2018, David, S.).
Former college football players Akeem Daniels, Cameron Stingily, and Nicholas Stoner filed a lawsuit against fantasy sports websites and mobile apps providers FanDuel, Inc. and DraftKings, Inc. alleging unauthorized use of their names, likenesses, and on-field statistics in operating and promoting online fantasy sports contests in violation of Indiana’s right-of-publicity statute, Ind. Code §32-36-1-8(a). In September 2017, the federal district court in Indianapolis dismissed the complaint, finding that that the defendants’ use of the former players’ names, likenesses, and data qualified for two statutory exemptions as (1) "[m]aterial that has political or newsworthy value" under Ind. Code §32-36-1-1(c)(1)(B); and (2) use "in connection with the broadcast or reporting of an event or a topic of general or public interest" under Ind. Code §32-36-1-1(c)(3).
The former players appealed, arguing that the district judge misunderstood the scope of the statutory exemptions. They further contended that FanDuel and DraftKings were illegal gambling enterprises to which none of the statutory exemptions applied. Expressing its reluctance to interpret the statutory exemptions in Indiana’s right-of-publicity statute without judicial precedent, 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."
Newsworthy value exception. Beforeaddressing the scope of the "newsworthy value" exception to Indiana’s right-of-publicity statute, the state high court rejected the former players’ arguments that the exception did not apply in the context of commercial use or that it applied only to media companies and or news broadcasters, not to fantasy sports operators.
According to the court, although the statute did not define material that had a political or newsworthy value, there were several compelling reasons for its finding that the term "newsworthy value" should be construed broadly enough to incorporate use of players’ names, pictures, and statistics by fantasy sports operators. First, the state high court precedent had recognized that at least some newsworthy facts could be published outside the scope of a personality’s right of publicity and that newsworthy facts extended beyond the dissemination of news in the sense of current events to include all types of factual, educational and historical data, and information that had entertainment and amusement value.
Second, a broad interpretation of the term "newsworthy value" would avoid First Amendment issues. Noting that there were several enumerated exceptions built into the statute for theatrical works, musical compositions and films, all of which included material with news worthy value, the court opined that these exceptions represented an obvious attempt by the legislature to avoid constitutional issues with the statute.
Furthermore, the use of players’ names, images, and statistics by fantasy sports operators in conducting fantasy sports competitions was similar to the publication of the same information in newspapers and websites across the nation. This information was not stripped of its newsworthy value simply because it was placed behind a paywall or was used in the context of a fantasy sports game. On the contrary, fantasy sports operators used factual data combined with a significant, creative component that allowed consumers to interact with the data in a unique way. According to the court, it would be difficult to find that the use of this otherwise publicly available information was somehow drastically different so as to require it to be placed outside the definition of "newsworthy" when used by fantasy sports operators.
Use in advertisements. Although the statistics of college athletes were newsworthy, the unauthorized use of a personality to advertise or promote a product likely fell outside the scope of what could be considered newsworthy, the court went on to explain. In the court’s opinion, the right to control one’s identity from direct appropriation appeared to be a central tenet of the right of publicity recognized by Indiana. However, in the context of fantasy sports, courts have concluded in recent years that the risk of unauthorized advertising was minimal. It would be difficult to draw the conclusion that when informational and statistical data for college athletes was presented on a fantasy sports website, it created an impression that a particular player was endorsing a particular product. This finding did not preclude a court from closely scrutinizing the actions of a particular defendant to ensure that no unauthorized endorsements were being made.
This case is No. 18S-CQ-00134.
Attorneys: Stephen B. Caplin (Stephen B. Caplin Professional Corp.), W. Clifton Holmes (The Holmes Law Group, Ltd.) and Todd L. McLawhorn (Siprut PC) for Akeem Daniels. Ian H. Gershengorn (Jenner & Block LLP) and John R. Maley (Barnes & Thornburg) for FanDuel, Inc. and DraftKings, Inc.
Companies: FanDuel, Inc.; DraftKings, Inc.
MainStory: TopStory PublicityRights TechnologyInternet IndianaNews
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