Akeem Daniels, Cameron Stingily, and Nicholas Stoner v. FanDuel, Inc. and DraftKings, Inc. ( 2018 )

FILED
Oct 24 2018, 3:10 pm
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
IN THE
Indiana Supreme Court
Supreme Court Case No. 18S-CQ-00134
Akeem Daniels, Cameron Stingily, and
Nicholas Stoner
Plaintiffs-Appellants
–v–
FanDuel, Inc. and DraftKings, Inc.
Defendants-Appellees
Argued: June 28, 2018 | Decided: October 24, 2018
Certified Question from the U.S. Court of Appeals for the Seventh Circuit
Case No. 17-3051
The Honorable Frank H. Easterbrook, Judge
Opinion by Justice David
Chief Justice Rush and Justices Massa, Slaughter, and Goff concur.
David, Justice
Indiana’s right of publicity statute provides, “a person may not use an
aspect of a personality’s right of publicity for a commercial purpose…
without having obtained previous written consent.” Ind. Code § 32-36-1-
8(a). Pursuant to Indiana Appellate Rule 64, our Court accepted a
certified question from the United States Court of Appeals for the Seventh
Circuit, which asked:
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.
In short, we answer this question narrowly and find online fantasy sports
operators that condition entry to contests on payment and distribute cash
prizes do not violate the Indiana right of publicity statute when those
organizations use the names, pictures, and statistics of players without
their consent because the use falls within the meaning of “material that
has newsworthy value,” an exception under the statute.
Facts and Procedural History
Plaintiff-Appellants Akeem Daniels, Cameron Stingily, and Nicholas
Stoner were collegiate student–athletes at various times between 2014-
2016. The players’ on-field performances were collected as numerical
statistics and published by various fantasy sports website operators
including Defendants-Appellees DraftKings, Inc. and FanDuel, Inc.
Consumers wishing to use Defendants’ products could pay a fee to access
detailed information such as Plaintiffs’ names, images, and statistics,
assess the athletes’ weekly performances, and assemble a virtual team of
real-life athletes to compete against other users’ teams on the Defendants’
websites.
To participate in Defendants’ fantasy sports competitions, consumers
were required to follow certain rules imposed by the Defendants. For
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example, Defendants assigned a fictional dollar value to each Plaintiff
based on the player’s statistics and overall performance. To prevent a
consumer from assembling a team composed only of the league’s best
players, each consumer’s fantasy team was subjected to an overall salary
cap. Each athlete’s performance on the field translated to a point value
determined by Defendants. At the end of a designated period, consumers
were eligible to win cash prizes based on the points accumulated by their
fantasy sports team.
Plaintiffs filed a class action complaint against Defendants in Marion
County 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.” Daniels v. FanDuel, Inc., 2017 WL 4340329, at *1 (S.D. Ind.
Sept. 29, 2017). Defendants removed the case to the U.S. District Court for
the Southern District of Indiana and moved to dismiss, arguing that
Plaintiffs failed to state a claim upon which relief could be granted
because the use of Plaintiffs’ names and statistics fell under certain
statutory exceptions to the right of publicity. Id. The District Court
dismissed the suit, finding no violation of Plaintiffs’ right of publicity
because the use of their likenesses was in material that had newsworthy
value and was a matter of public interest under the exceptions in Indiana
Code section 32-36-1-1(c). Id., at *7, *9. Plaintiffs appealed to the Seventh
Circuit Court of Appeals, which certified a question of Indiana law to this
Court. Daniels v. FanDuel, Inc., 884 F.3d 672, 674 (7th Cir. 2018).
Discussion
The parties in this case ask us to consider a wide range of issues
touching on the right of publicity and its implications in our State. We
recognize at the onset that our decision will carry considerable weight not
only with respect to these parties, but for other potential right of publicity
litigants in our state courts. We also understand that certain factual
determinations and allegations remain unresolved and are squarely
within the jurisdiction of our federal colleagues. We therefore proceed
cautiously, maintaining a narrow focus on the question before us.
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To maintain this narrow focus, we begin with a brief overview of the
statutory scheme for the right of publicity. We then examine in detail the
“newsworthy value” exception to the statute, finding that certain
principles of statutory construction inform our reading of that exception.
Through this lens, we next analyze the spectrum of “material that has
newsworthy value” to evaluate the parties’ arguments. The conclusions
we draw from this analysis lead to the ultimate result that the use of
players’ names, pictures, and statistics in fantasy sports contests do not
violate the right of publicity in Indiana.
The Statute
We turn first to the right of publicity statute, including its pertinent
definitions and exceptions. Since its enactment in 1994 and recodification
in 2002, the statutory right of publicity in Indiana has remained largely
untouched.1 See, e.g., H.E.A. 1258, 117th Gen. Assemb., 2d Reg. Sess. (Ind.
2012) (adding an exception for a personality that has commercial value
solely because that personality has been charged with or convicted of a
crime and clarifying the chapter’s application to rights of a deceased
personality). Be that as it may, our Court has never had the opportunity
to review Indiana’s right of publicity statute.
In relevant part, the statute provides, “a person may not use an aspect
of a personality's right of publicity for a commercial purpose during the
personality's lifetime or for one hundred (100) years after the date of the
personality's death without having obtained previous written consent.”
Ind. Code § 32-36-1-8(a). The right of publicity is defined as “a
personality’s property interest in the personality’s (1) name; (2) voice; (3)
signature; (4) photograph; (5) image; (6) likeness; (7) distinctive
1Indiana is not unique in identifying a right of publicity. Other states have also recognized
this right either in statute, through the common law, or both. See, e.g., N.Y. Civ. Rights Law §
51, Brown v. Ames, 201 F.3d 654, 657-58 (5th Cir. 2000) (discussing a common law right of
publicity in Texas), and Gionfriddo v. Major League Baseball, 114 Cal.Rptr.2d 307, 312 (Cal. Ct.
App. 2001) (recognizing that California’s right of publicity is both a common law and a
statutory right).
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appearance; (8) gestures; or (9) mannerisms.” Ind. Code § 32-36-1-7. A
person who violates this right of publicity may be liable for damages. Ind.
Code § 32-36-1-10.
The legislature has codified several key exceptions to this statute, two
of which were argued before our Court. The “newsworthy value”
exception provides that the right of publicity does not apply to “[t]he use
of a personality’s name, voice, signature, photograph, image, likeness,
distinctive appearance, gestures, or mannerisms in … [m]aterial that has
political or newsworthy value.” Ind. Code. § 32-36-1-1(c)(1)(B). Another
provision, the “public interest” exception, concerns the use of a
personality’s right of publicity “in connection with the broadcast or
reporting of an event or a topic of general or public interest.” Ind. Code §
32-36-1-1(c)(3). If the use of a personality’s right of publicity falls into
either of these categories, the statute does not apply and no consent is
needed for its use.
Keeping in mind our narrow approach to answering the certified
question, and because we find that the use of players’ names, pictures,
and statistics by fantasy sports operators falls into the “newsworthy
value” exception, we decline to examine the “public interest” exception.
We will, however, examine the contours of the “newsworthy value”
exception to determine its scope.
The “Newsworthy Value” Exception
We turn our focus now to whether the use of the players’ names,
pictures, and statistics fall within the newsworthy value exception.
Because “newsworthy value” is not expressly defined in the statute, our
primary goal is to determine and give effect to the intent of the legislature.
Moryl v. Ransone, 4 N.E.3d 1133, 1137 (Ind. 2014). In doing so, we examine
the statutory language itself to “give effect to the plain and ordinary
meaning of statutory terms.” State v. Hancock, 65 N.E.3d 585, 587 (Ind.
2016). We also presume that the legislature “intended the statutory
language to be applied logically and consistently with the statute’s
underlying policy and goals.” Walczak v. Labor Works-Ft. Wayne LLC, 983
N.E.2d 1146, 1154 (Ind. 2013).
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We begin by addressing two arguments advanced by plaintiffs in this
case. First, we are not persuaded that the statutory exception for
newsworthiness does not apply in the context of commercial use. The
statute itself does prohibit the use of a person’s right of publicity “for a
commercial purpose.” See Ind. Code § 32-36-1-8. The newsworthy value
exception, however, removes the material from the right of publicity’s
application. Ind. Code § 32-36-1-1(c). We therefore decline to read such a
requirement into the otherwise facially clear language of the statute.
Second, whether Defendants are media companies or news
broadcasters is immaterial in the context of the newsworthiness exception.
The plain language of the statute only speaks to the use of a personality’s
right of publicity in “[m]aterial that has political or newsworthy value.”
Ind. Code § 32-36-1-1(c)(1)(B). The statute is silent on whether there are
any restrictions on who publishes or uses the material. Conversely, there
is a different exception that applies specifically to a “news reporting or an
entertainment medium.” See Ind. Code § 32-36-1-1(c)(1)(D). Given that
the legislature defined2 and carved out an exception that applies only to
news reporting entities, we decline to place a similar restriction on the
“newsworthy value” exception at issue here. If this was not the intent of
the legislature at the statute’s inception, it is free to revisit and redraw the
exceptions.
The scope of the “newsworthy value” exception becomes considerably
less clear as we consider the parties’ competing interests in this case. The
statute references “material that has political or newsworthy value,” but
provides no corresponding definitions or apparent clues as to the breadth
of these ambiguously familiar terms. Ultimately, however, we think there
are several compelling reasons why our Court should understand the
2See Ind. Code § 32-36-1-4, which defines “news reporting or an entertainment medium” as “a
medium that publishes, broadcasts, or disseminates advertising in the normal course of its
business, including the following: (1) Newspapers. (2) Magazines. (3) Radio and television
networks and stations. (4) Cable television systems.”
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term “newsworthy value” to incorporate fantasy sports operators’ use of
players’ names, pictures, and statistics.
First, there is a presumption that when the legislature enacts a statute, it
is aware of the common law and does not intend to make a change unless
it expressly or unmistakably implies that the common law no longer
controls. Gunderson v. State, Indiana Dep’t of Natural Res., 90 N.E.3d 1171,
1182 (Ind. 2018). Although no Indiana court has directly created a
common law right of publicity in our state, we find the historical
progression of this right to be particularly illuminating.
Prior to any discussion of a right of publicity, courts struggled with the
inherent tension of applying the right of privacy in the context of
commercial appropriation of a personality. See O’Brien v. Pabst Sales Co.,
124 F.2d 167, 170 (5th Cir. 1941), reh’g denied (declining to extend the right
of privacy to an action by a TCU football player whose picture appeared
in a calendar for Pabst Blue Ribbon beer because there were “no
statements or representations made…which were or could be either false,
erroneous or damaging to plaintiff”). A decade later, the idea of the right
of publicity began to gain traction independent of the right of privacy
when the Second Circuit announced this new right as it applied to
“prominent persons.” See Haelan Laboratories, Inc. v. Topps Chewing Gum,
Inc., 202 F.2d 866, 868 (2nd Cir. 1953). The court in Haelan Laboratories
wrote:
[I]n addition to and independent of that right of privacy (which
in New York derives from statute), a man has a right in the
publicity value of his photograph… For it is common
knowledge that many prominent persons (especially actors and
ball-players) …would feel sorely deprived if they no longer
received money for authorizing advertisements, popularizing
their countenances, displayed in newspapers, magazines,
busses, trains, and subways.
Id. at 868. The right of publicity, however, would not gain the attention of
the Supreme Court of the United States until 1977, when that Court
recognized Ohio’s statutory right of publicity as a distinctly separate right
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from the right of privacy. Zacchini v. Scripps-Howard Broadcasting Co., 433
U.S. 562, 573, 97 S.Ct. 2849, 2856, 53 L.Ed.2d 965 (1977).
The Zacchini decision involved a “human cannonball” act performed by
Hugo Zacchini at an Ohio county fair. Id. at 563. Members of the public
were charged a fee to enter the fair and watch the performance, but a
reporter at the event videotaped the act and showed the routine in its
entirety on the eleven o’clock news. Id. at 563-64. Zacchini sued, alleging
“unlawful appropriation of [his] professional property.” Id. at 564. The
Court held that publishing the entire performance without Zacchini’s
consent violated his right of publicity, finding that the economic value of
the performance gave Zacchini a right to control its publicity. Id. at 575-
76. Important to our analysis today, however, the Court also noted, “It is
evident…that petitioner’s state-law right of publicity would not serve to
prevent respondent from reporting the newsworthy facts about
petitioner’s act…[but] the First and Fourteenth Amendments do not
immunize the media when they broadcast a performer’s entire act without
his consent.” Id. at 574-75. Thus, it seems to us that the Supreme Court
recognized that at least some “newsworthy facts” could be published
outside the scope of a personality’s right of publicity.
Closer to home in Indiana and prior to the statute’s enactment in 1994,
the term “newsworthy” was understood to encompass a broad privilege
that was “defined in most liberal and far reaching terms.” Time, Inc. v.
Sand Creek Partners, L.P., 825 F.Supp. 210, 212 (S.D. Ind. 1993) (quoting
Rogers v. Grimaldi, 695 F.Supp. 112, 117 (S.D.N.Y. 1988)). More specifically:
The privilege of enlightening the public is by no means limited
to dissemination of news in the sense of current events but
extends far beyond to include all types of factual, educational
and historical data, or even entertainment and amusement,
concerning interesting phases of human activity in general.
Id. Considering the genesis and evolution of the right of publicity, and
presuming the General Assembly was aware of the right of publicity, its
origins, and the definitions available from caselaw in this area, we find
that the term “newsworthy” was meant to be construed broadly.
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Another compelling reason for a broad construction of the term
“newsworthy” is that we follow the “familiar canon of statutory
interpretation that statutes should be interpreted so as to avoid
constitutional issues.” City of Vincennes v. Emmons, 841 N.E.2d 155, 162
(Ind. 2006) (citing Gomez v. United States, 490 U.S. 858, 864 (1989)). When
considering a statute through the lens of the First Amendment, one
component of our typical inquiry involves whether the statute is content
neutral. State v. Economic Freedom Fund, 959 N.E.2d 794, 801 (Ind. 2011).
As such, a broad interpretation of the term “newsworthy value” would
likely avoid a First Amendment issue in parsing acceptable forms of
speech. See, e.g., Dillinger, LLC v. Electronic Arts Inc., 795 F.Supp.2d 829,
836 (S.D. Ind. 2011) (finding it likely that the Indiana Supreme Court
would adopt a broad definition of “literary works” to include videogames
to avoid constitutional issues with a narrow definition).
To bolster this point, the General Assembly has also built in exceptions
for other types of material that had been given First Amendment
consideration prior to the statute’s enactment in 1994. Compare
Southeastern Promotions, Ltd. v. Conrad, 420 U.S. 546, 557, 95 S.Ct. 1239,
1246, 43 L.Ed.2d 448 (1975) (finding “theatrical works” protected by the
First Amendment), Jenkins v. Georgia, 418 U.S. 153, 161, 94 S.Ct. 2750, 2755,
41 L.Ed.2d 642 (1974) (film), and Ward v. Rock against Racism, 491 U.S. 781,
790, 109 S.Ct. 2746, 2753, 105 L.Ed.2d 661 (1989) (music) with Ind. Code §
32-36-1-1(c)(1) (the right of publicity does not apply to theatrical works,
musical compositions, or film). These enumerated exceptions, including
“material with newsworthy value,” represent an obvious attempt to avoid
constitutional issues with the statute. Against this backdrop, we find no
indication within the text of the statute that the legislature intended to
abrogate the expansive common law view of the term “newsworthy.”
Considering the arguments presented in this case, 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. We agree that, “it would
be strange law that a person would not have a first amendment right to
use information that is available to everyone.” C.B.C. Distribution and
Marketing, Inc. v. Major League Baseball, 505 F.3d 818, 823 (8th Cir. 2007).
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This information is not stripped of its newsworthy value simply because it
is placed behind a paywall or used in the context of a fantasy sports game.
On the contrary, fantasy sports operators use factual data combined with
a significant, creative component that allows consumers to interact with
the data in a unique way. Although fictional salary values are assigned to
players, this does not change the function of the underlying data. It is
difficult to find that the use of this otherwise publicly available
information is somehow drastically different such that it should be placed
outside the definition of “newsworthy.”
Use in Advertisements
We now confront whether Defendants’ use of players’ names, pictures,
and statistics could constitute unauthorized advertising. At minimum,
both parties would seem to agree that the statistics of college athletes are
newsworthy. The public fascination with these facts and figures provides
context and standards by which past, present, and future players are
judged. See generally C.B.C. Distrib., 505 F.3d at 823 (discussing how sports
like baseball occupy a large portion of public discourse) and CBS
Interactive Inc. v. National Football League Players Ass’n, 259 F.R.D. 398, 419
(D.Minn. 2009) (noting that, “[c]onsumers of fantasy football… like
consumers of fantasy baseball, closely track player statistics”). This
fascination extends to our own state where many fans of the Notre Dame
Fighting Irish, Purdue Boilermakers, Indiana Hoosiers, and all other
collegiate sports teams argue, debate, and commiserate over the statistical
value of each player and where his or her achievements fall in the history
of football or basketball. Few activities invoke such fervor among so
many over so little.
At the other end of the newsworthy spectrum, we recognize that the
unauthorized use of a personality to advertise or promote a product likely
lies outside the scope of what is considered newsworthy. See generally
Abdul-Jabbar v. General Motors Corp., 85 F.3d 407, 416 (9th Cir. 1996)
(holding that Kareem Abdul-Jabbar could state a claim under California’s
right of publicity when GMC gained a commercial advantage in using
Abdul-Jabbar’s former name in a television advertisement). The right to
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control one’s identity from direct appropriation would seem central to the
right of publicity recognized in Indiana.3 Cf. Cardtoons, L.C. v. Major
League Baseball Players Ass’n, 95 F.3d 959, 967-68 (10th Cir. 1996)
(discussing how the right of publicity in Oklahoma involves property
rights for the full commercial value of an identity).
In the context of fantasy sports, however, courts have recently
concluded the risk of unauthorized advertising is minimal. See C.B.C.
Distrib., 505 F.3d at 824 (holding that the use of statistics and likenesses of
baseball players in a fantasy sports context does not implicate a right of
publicity in terms of advertising “because the fantasy baseball games
depend on the inclusion of all players and thus cannot create a false
impression that some particular player with ‘star power’ is endorsing
CBC’s products.”); CBS Interactive, 259 F.R.D. at 419 (reasoning that “[n]o
one seriously believes that the subjects of news reports are endorsing the
company that provides the report”). We embrace this understanding and
find that under similar circumstances—when informational and statistical
data of college athletes is presented on a fantasy sports website—it would
be difficult to draw the conclusion that the athletes are endorsing any
particular product such that there has been a violation of the right of
publicity. Importantly, however, this finding does not foreclose a court
from closely scrutinizing the actions of a particular defendant to ensure no
unauthorized endorsements are being made. At the risk of overstepping
the bounds of the certified question, we defer making any factual
determination on this issue to our federal colleagues.
Conclusion
We conclude that Indiana’s right of publicity statute contains an
exception for material with newsworthy value that includes online fantasy
3The statute reportedly came about after concerns that profiteers were selling baseball-style
cards of an AIDS victim without the consent of his surviving family. Dan Wetzel, Law ends
pirating of celebrities, INDIANAPOLIS STAR, June 25, 1994, at B1.
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sports operators’ use of college players’ names, pictures, and statistics for
online fantasy contests.
Rush, C.J., and Massa, Slaughter, and Goff, JJ., concur.
ATTORNEYS FOR APPELLANT
Stephen B. Caplin
Stephen B. Caplin Professional Corporation
Indianapolis, Indiana
W. Clifton Holmes
The Holmes Law Group, Ltd.
Chicago, Illinois
Todd L. McLawhorn
Siprut PC
Chicago, Illinois
ATTORNEYS FOR APPELLEE
Ian H. Gershengorn
Kenneth L. Doroshow
Ishan K. Bhabha
Jenner & Block LLP
Washington, District of Columbia
John R. Maley
Peter J. Rusthoven
Barnes & Thornburg
Indianapolis, Indiana
Damien J. Marshall
Boies Schiller Flexner
New York, New York
ATTORNEY FOR AMICUS CURIAE
CMG WORLDWIDE
Theodore J. Minch
Sovich Minch, LLP
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Indianapolis, Indiana
ATTORNEY FOR AMICI CURIAE
INTELLECTUAL PROPERT Y LAW PROFESSORS
John A. Conway
LaDue Curran & Kuehn LLC
South Bend, Indiana
ATTORNEYS FOR AMICUS CURIAE
FANTASY SPORTS TRADE ASSOCIATION
Rudolph A. Telscher, Jr.
Kara R. Fussner
Husch Blackwell LLP
St. Louis, Missouri
John W. Borkowski
Husch Blackwell LLP
South Bend, Indiana
ATTORNEYS FOR AMICI CURIAE
MAJOR LEAGUE BASEBALL PLAYERS ASS’N, ET AL.
Michael Rubin
P. Casey Pitts
Altshuler Berzon LLP
San Francisco, California
Gabriel A. Hawkins
Lynn Toops
Cohen & Malad, LLP
Indianapolis, Indiana
ATTORNEY FOR AMICUS CURIAE
NEW SPORTS ECONOMY INSTITUTE
Libby Yin Goodknight
Krieg DeVault LLP
Indianapolis, Indiana
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