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While many people claim that “imitation is the sincerest form of flattery,” bribery is the more effective method for college athletic recruitment. For decades, colleges have found ways to slip money under the table, allowing them to lure top prospects. In order to secure the most talented athletes, many colleges utilized “boosters” (mostly proud alumni) to pay recruits to play for their alma mater. It's hardly surprising that a young athlete who’s eager to start making money would be influenced by such an offer. Although it’s technically illegal for schools to pay prospective and current athletes directly, recently passed NIL laws allow the athletes to be paid if it is done indirectly by alumni or through opportunities the school provides. This may make the recruitment of athletes through “bribery” more common, or it could actually reduce the number of athletes who choose schools purely based on the deals they are offered. Due to their ability to sign endorsements earlier in their career, high school NIL contracts may be able to prevent the influence of money on recruitment. How Do NIL Contracts Increase Recruitment with Money? The NCAA now gives student-athletes the opportunity to profit from their NIL (name, image, and likeness), allowing them to receive money during their college careers. While schools cannot pay their athletes directly, there are many ways that they can help them profit. Because schools can now promise their recruits NIL-related opportunities, athletes are less inclined to choose schools with the best programs for their sport or best environment for them. Instead, they may simply choose the schools that offer them the best deals. One of the most effective methods of recruitment will be through boosters, or “representatives of athletic interest”, as described by the NCAA. Even though NCAA policies now allow boosters to recruit players, they have clarified that these boosters and colleges can not engage in “pay-to-play” methods. However, there are loopholes in the rules that do not prevent boosters from forming organizations that provide profitable opportunities for athletes. For example, boosters for the University of Texas football team arranged the “Horns With Heart” organization. Although they struggled to fill this position in the past, their pledge to give $50,000 to offensive linemen who participated in local community service was very effective. This helped them acquire seven talented OLs, including five-star rated Devon Campbell. While some attributed it to coaching changes and others argued that he felt some loyalty to the team that had given him his first offer, Texas’ paying opportunity may have also contributed. How Do NIL Contracts Prevent Athletes From Choosing Schools Purely Based on Money? Recent NIL laws may cause athletes to choose schools based on the incentives they offer, but an argument can be made that in some cases it will have the opposite effect. Many highly recruited athletes will already have NIL contracts. If students have the ability to begin earning money in high school through these contracts, they may be less susceptible to financial incentives. In addition to this, many of their contracts will be longer-term (hence more lucrative) than the opportunities provided by boosters. Some of the very best recruits will be able to earn millions of dollars while in high school, which is already the case for Mikey Williams. Last year, Williams signed a multi-million dollar endorsement deal with Puma. Williams has mentioned that he would be interested in attending an HBCU (historically black college/university). Due to a lack of funding, HBCUs are unlikely to be able to compete financially with the strongest sports programs because they often have less funding and wealthy boosters that can help with recruitment. Despite this, Williams is still likely to go to an HBCU. Since Williams will already have made plenty of money by the time he graduates high school, he can attend a school that has the best environment for him, rather than a school where he will get paid the most. Will Bag Money Bag Top Recruits? Whether colleges will be able to “bag” top recruits with money will depend on the athlete. If the athlete has a NIL contract as a high school student or doesn’t care about earning money as quickly as possible, they are unlikely to be influenced. However, many may be tempted to attend the schools that show their interest with a little cash. This may create a variety of potential issues. Many coaches have already criticized the situation as being immoral or unfair because it rewards the teams that have the most money and boosters. Therefore, wealthier schools can take advantage of being able to pay their recruits, creating an uneven playing field. High school NIL contracts may be the solution. While the number of athletes who will be able to secure NIL contracts is slim, top athletes will often achieve some degree of financial security before finishing high school. If colleges are unable to sign the very best athletes by offering them money, they may stop attempting to use this method because it is ineffective. Danica Zelvin is a high school student with an interest in high school NIL contracts. She can be found on LinkedIn.

Name, image, and likeness (NIL) could soon be coming to Pennsylvania for high school athletes. The Pennsylvania Interscholastic Athletic Association (PIAA) Board of Directors on Wednesday approved on first reading a new policy to allow high school athletes to profit off their NIL. The PIAA, like many other high school state athletic associations, is considering the adoption of a NIL policy to ensure that local talent stays home and competes for in-state schools rather than attending out-of-state schools in states where NIL is permitted for high school athletes. Under the proposed policy, Pennsylvania high school athletes would be eligible to profit off their NIL from, among other options, commercial endorsements, promotional activities, and social media presence. The proposed policy, however, has some restrictions. Students cannot wear school uniforms or “school-identifying apparel” or make reference to the PIAA or their school or team name when engaging in NIL activities. Students also cannot endorse or promote any third-party entities, goods, or services during team or school activities. The proposed policy also outlined prohibitions on activities in certain vice industries, including: Adult entertainment; Alcohol; Controlled substances; Opioids; Casinos and gambling; and Weapons, firearms and ammunition. According to WGAL News 8 Local Pennsylvania, the PIAA plans to hire a company to provide educational services and resources to help athletes and their families, coaches, and school officials navigate NIL. The policy needs at least two more readings before it is adopted. If the PIAA’s proposal passes through two more readings, Pennsylvania will join a growing list of states that permit high school athletes to profit off their NIL. That list currently includes the following states: Alaska, California, Colorado, Connecticut, Kansas, Louisiana, Minnesota, Nebraska, North Dakota, New Jersey, New York, and Utah. The PIAA Board of Directors meets again in September and October, which means the policy could be enacted before winter, but likely won’t happen until July 2023, according to WGAL News 8 Local Pennsylvania. The full text of the proposed NIL policy is available here. Ryan Whelpley is an Associate at Morse in Waltham, Massachusetts, where he is a member of the firm’s Corporate Practice Group and focuses on venture capital financings, M&A transactions, and general corporate work for start-up and emerging growth companies. He is a graduate of Albany Law School (2019) and Union College (2016). At Union, Ryan was a member and three-year captain of the Men’s Basketball Team. You can connect with him via Twitter (@Whelpley_Law) and LinkedIn.

The legal battle continues over the failed Panthers’ headquarters project in Rock Hill, South Carolina. In response to York County, South Carolina’s lawsuit filed in June, GT Real Estate Holdings, LLC (“GTRE”) has filed a complaint seeking a declaratory judgment in the United States Bankruptcy Court for the District of Delaware, the court with jurisdiction over GTRE’s bankruptcy action. York County’s Complaint Within days of GTRE filing for bankruptcy, which imposes an automatic stay against creditors taking action against GTRE/GTRE’s property, York County filed a lawsuit in South Carolina state court. To avoid the automatic stay, the complaint did not name GTRE as a defendant. Instead, the defendants are entities owned or controlled by David Tepper, including Appaloosa Management, LP, DT Sports Holding, LLC, and Tepper Sports Holding, Inc. As a part of the lawsuit, the County is seeking to recoup $21 million in Penny Tax Funds provided by the County for the Panthers’ headquarters project in Rock Hill, South Carolina. Specifically, the County’s complaint included causes of action for civil conspiracy, negligence and negligence per se, interference with contractual relations, and negligent misrepresentation. In the County’s complaint, the County alleges that the defendants’ conduct was performed by or on behalf of GTRE. Therefore, via its complaint in the U.S. Bankruptcy Court for the District of Delaware, GTRE is pushing back on the County, and GTRE is asking the Court to declare that the County’s complaint violates the automatic stay. GTRE’s Complaint There is no doubt that this is GTRE’s first attempt at avoiding litigating this issue in South Carolina, York County’s home turf, and into the federal bankruptcy court under an impartial judge familiar with the matter. GTRE’s complaint utilizes the County’s complaint to its advantage. None of the County’s allegations include particular injuries due to actions on behalf of the other entities. Instead, the County’s allegations that any creditor’s damages on the Panthers’ headquarters project are due to the City of Rock Hill’s failure to issue infrastructure bonds. Due to the City’s failure to issue infrastructure bonds, the project failed, which makes the County’s claims an action against GTRE/GTRE’s property in violation of the automatic stay granted under 11 U.S.C. § 362. Similarly, GTRE points to being “a necessary party to the State Court Action because its liability must be determined in order to give effective relief to the County.” Basically, if the South Carolina state court were to make determinations on issues in the case, could lead to another court preventing GTRE (via collateral estoppel) from taking alternate positions in other litigation, including bankruptcy litigation. Whether GTRE’s complaint will succeed remains to be seen. Either way, GTRE would rather move the litigation over tax funds out of South Carolina and into a more favorable venue. Landis Barber is an attorney at Safran Law Offices in Raleigh, North Carolina. You can connect with him via LinkedIn or via his blog offthecourtdocket.com. He can be reached on Twitter @Landisbarber.

With Major League Baseball’s All-Star Game set to take place on July 19 and many festivities occurring throughout the week, Dodger Stadium concession workers—employed by Levy Restaurants—are set to strike if the stadium workers cannot reach a deal on a new contract. Representing union UNITE HERE Local 11 announced on Monday, July 11, that workers voted 99% to strike at any moment before the All-Star Game. The nearly 1,500 stadium workers employed by Chicago-based Levy Restaurants at Dodger Stadium include bartenders, cooks, servers, dishwashers, and suite attendants. The union’s last contract expired in 2019. Since then, disparities in housing and healthcare for concessions workers have continued to grow. Thus, beyond wages, the focus on the negotiations between the union and Compass Group, owner of Levy Restaurants, will be housing and healthcare. Stadium workers are becoming an afterthought despite heavily contributing to the game-day experience and Major League Baseball team values averaging $2.07 billion. In 2020, the average Dodger Stadium concession worker earned nearly $17.39 per hour, for a total of around $11,268.72 for an 81-game season. Considering average rental prices for one-bedroom apartments in Los Angeles are over $2,000 per month, it is clear why stadium workers are focused on housing. It is not the first time UNITE HERE has aided stadium workers in pursuing better wages, benefits, and working conditions. In 2021, UNITE HERE Local 2 represented concessions workers at Oracle Park, home of the San Francisco Giants, in their negotiations with Bon Appétit, the Giants’ food service contractor, over COVID safety, health care, and hazard pay. Concessions workers voted 96.7% to strike, but ultimately the parties reached an agreement before the union called a strike. In 2022, prior to the Super Bowl, UNITE HERE Local 11 represented concessions workers at SoFi Stadium, home of the Los Angeles Rams and Los Angeles Chargers, securing a union contract that boosted wages, benefits, and other protections. As a part of its Dodger Stadium announcement, UNITE HERE Local 11 noted the SoFi contract and stated, “Levy workers at Dodger Stadium are seeking to win the same rights.” On the same day of UNITE HERE Local 11’s announcement, July 11, the Major League Baseball Players Association (MLBPA) released a statement announcing its support for Dodger Stadium workers. In March, recognizing the impact of the Major League Baseball lockout on stadium workers and the vital role stadium workers play during the season, the MLBPA launched a $1 million fund to help stadium workers affected by the lockout. With the All-Star Game on deck, UNITE HERE Local 11 is capitalizing on the increased attention on Dodger Stadium. Today, July 13, the union and Compass Group have resumed discussions. Hopefully, the union can reach a new deal that is a victory for stadium workers. Landis Barber is an attorney at Safran Law Offices in Raleigh, North Carolina. You can connect with him via LinkedIn or via his blog offthecourtdocket.com. He can be reached on Twitter @Landisbarber.

Anyone that follows F1, or has seen Drive to Survive will remember Red Bull's engine supplier struggles and drama over the past several seasons. With the official departure of Honda from F1 (again) at the end of last season, Red Bull decided to create their engine program so they wouldn't have to put up with any supplier issues like they did with Renault, or a supplier pulling out like Honda did ever again. Originally this decision meant that starting in 2022, all Red Bull engines would be branded a Red Bull Powertrain component despite the engine specification freeze in effect until 2026, with Red Bull designing their first powertrain for the new set of regulations. However, a wrinkle has been thrown into this plan by the Volkswagen Group, which is rumored to enter Formula One at the same time as the new engine regulations in 2026. Let's dissect red bull's original plan, these complications, and how likely Red Bull is going to be able to pull this one off. As I stated above, Red Bull's original intention was to take over the manufacturer and maintenance of the Honda design powertrains starting this year. This included a transfer of the intellectual property that Honda owns regarding the motor to Red Bull, so they would be able to build and maintain the engines without any direct involvement from Japan. This original plan would have allowed Red Bull to continue to use the Honda powertrain that helped it win the world title last season at a time when regulations are frozen, meaning that they would be at no disadvantage to any other engine supplier, particularly Mercedes or Ferrari. Since this original plan was hatched last year when Honda announced it would no longer be participating in Formula One past the conclusion of the season, it made perfect sense and was the logical step for Red Bull to take. However, since then developments in the world of Formula One have caused them to back off of that original plan in hopes of getting added benefits when the new regulations begin. This wrinkle in the original Red Bull plan was caused by speculation which now seems to have solidified into real news, which is that the Volkswagen Group plans to enter Formula One with both Audi and Porsche brands. Speculation suggests that the Volkswagen Group ideally would want to have an Audi works team, meaning that a team's primary sponsor (if not the outright owner) would be Audi, who would be responsible for the design of the car as well as the production of an engine. While it's unclear which team exactly might take on the Audi project, a strong case could be made for either Alpha Tauri, Williams, or Alfa Romeo. Porsche though has been linked closely linked with Red Bull and their new engine department for collaborating on a Porsche-branded power unit. This is a logical pairing, as Red Bull has already built the infrastructure and testing equipment necessary to design and maintain a Formula One engine in the UK, and would be a very easy “plug and play” for a new engine manufacturer to jump into the sport and hit the ground running. However, this speculation has caused Red Bull's original plan of maintaining, building, and receiving the intellectual property from Honda a little bit more complex. Within the regulation of Formula One by the FIA, there are special provisions in place for the new engine regulations four new engine manufacturers that will potentially enter the sport, regulations which the Volkswagen Group has been instrumental in arguing for due to their planned entries. These added benefits include a higher operating budget, more development time, and more time on the dyno to test the engines as well. This is all designed so that a new manufacturer that enters Formula One does not have to operate from a disadvantageous position at first until they “catch up” with the development of the established engine suppliers. Recently, the rumors of the Porsche Red Bull partnership have become more solidified as Red Bull has changed their approach for the remaining time of the engine freeze in hopes that they will be afforded the “new” engine supplier benefits when Porsche announces their official entry into Formula One. Because Porsche is likely planning to partner with Red Bull, they have put a halt on their original plans to acquire the intellectual property from Honda and build and maintain the engines for the duration of the engine freeze under the Red Bull powertrains moniker. Instead, Red Bull and Honda have come to an agreement where Honda will maintain the intellectual property, continue to build in service the engines, and provide all development and technical support to the team through the engine freeze. This essentially makes Honda the “unofficial” official engine supplier for Red Bull, with the hope being that the FIA will then as a result allow Red Bull and Porsche the extra dyno time and budget associated with being a new engine supplier, despite the existence of Red Bull powertrains for several years by that point. There are a couple of things about this decision that make it interesting from a legal and political standpoint. One is going to be the marketing of Honda on the Red Bull cars going forward. Currently, on the engine cover of the Red Bull car there is a small decal recognizing Honda's part in the production of the engine, but no widespread advertisement for them as there was last year because Red Bull powertrains are the “official” manufacturer. For Red Bull’s new plan to work, their cars going forward will have to have more Honda branding to highlight this increased involvement by Honda to convincingly show the FIA that Honda is the “actual” engine supplier, not Red Bull. this decision also raises eyebrows because of the surprising decision for Honda to leave Formula One after just handful of seasons of being back with Red Bull. It wasn't that the engineers at Honda didn't want to continue, it was that their profit-motivated board decided that they couldn't afford to spend the immense amount of resources required to maintain a Formula One engine program anymore. But here they are less than a year after making that decision, committing to essentially doing just what they said they “couldn't afford to do” again. Beyond these attempts by Red Bull to show they aren’t the engine supplier yet, there's still the issue of whether or not this plan will work and convince the FIA and the other Formula One teams to afford Red Bull Powertrains these benefits. Ultimately, it's not up to Red Bull whether they get these benefits—it's going to be up to the FIA, with the other engine suppliers having a say as well. That's going to be a hard sell to the likes of Ferrari and Mercedes, the other two major engine suppliers, and Formula One because they are witnessing exactly what we are, and just like us, they will see right through it and understand what Red Bull is trying to accomplish here. All this is to say that Red Bull Powertrains will certainly have an uphill battle in front of them to attain these benefits of being an engine supplier, and their trickery and optics surrounding Red Bull Powertrains will likely continue to evolve and play a major role in whether or not they can receive these benefits come the new engine regulations. Zachary Bryson is a graduate from Wake Forest University with B.A. in Economics and a Minor in Entrepreneurship. He is currently JD candidate at Elon University School of Law, Class of 2023. You can connect with him via LinkedIn or follow him on twitter at @ZacharySBryson.

By Daniel Wallach After settling 21 civil lawsuits alleging sexual misconduct, the natural inclination is to expect Deshaun Watson to be suspended following his NFL disciplinary hearing because of the low standard of proof used in such proceedings. Unlike criminal cases — which require proof beyond a reasonable doubt to convict an accused — or civil cases (which require a preponderance of the evidence in order for a plaintiff to win the lawsuit) — NFL disciplinary hearings for personal conduct policy violations (which are governed by Article 46 of the CBA) may require only a showing of “credible evidence” that the player violated the policy. “Credible evidence” is one of the lowest evidentiary standards in the law. It generally means evidence that is “worthy” of belief, not necessarily evidence that makes it “more likely than not” that the accused person committed the alleged offense. Crucially, it imposes no duty on the fact finder to weigh conflicting evidence, no matter how substantial, and allows a charged offense to be substantiated even if only one out of several strands of evidence supports it. Think about that for a second – even in a case where the overwhelming weight of the evidence may support the player’s version of the facts, he will still lose so long as the league can point to any credible evidence that he committed the offense, even though it may be in conflict with, or perhaps even be outweighed by, other evidence. The "credible evidence" standard raises constitutional due process concerns The attempted use of such a low evidentiary threshold in trial-type proceedings has been rejected by courts as a violation of due process. In Valmonte v. Bain, the Second Circuit held that the use of the "credible evidence" standard in a adversarial proceeding was unconstitutional because of "the unacceptably high risk of error." As the court observed, the credible evidence standard "does not require the factfinder to weigh conflicting evidence" and allows the prosecutor "to present the bare minimum of material credible evidence to support the allegations." Unlike the preponderance of the evidence standard, "where both sides share the risk of error,” the credible evidence standard leaves just one side -- the accused -- "bearing the brunt of the risk," the court concluded. Similarly, the Illinois Court of Appeals, in Cavarretta v. Dep't of Children & Family Servs., found the credible evidence standard to be "deficient" because "it does not require the fact finder to weigh conflicting evidence," which is "especially unfair and unreliable in light of the nature of the testimony and the need to compare and contrast different versions of the same event." Rather than allocate the risk of error equally, the credible evidence standard "facilitates the deprivation of a significant individual interest by a standard of proof which presents a high risk of error" and "deprives a subject of due process," the court concluded. The "credible evidence" standard is not mentioned anywhere in the CBA But even apart from the serious due process concerns which are implicated by the use of such a low standard of proof to deprive a professional athlete of his right to work (in an industry where careers are of relatively short duration), a compelling argument can be made by Deshaun Watson's legal team that the jointly selected Disciplinary Officer -- retired Delaware federal judge Sue L. Robinson -- is not even required to use the "credible evidence" standard in determining whether the NFL has met its burden of proof in the disciplinary case against Watson. Pointing to the league’s own documents and using basic rules of contract interpretation, Watson’s lawyers could attempt to persuade Judge Robinson to apply the higher "preponderance of the evidence" standard of proof, which would require the league to show that it was "more probable than not" that Watson violated the NFL Personal Conduct Policy. In Watson's case, the difference between these two evidentiary standards is essentially the difference between winning and losing — or the difference between playing and not playing. Indeed, a closer look at the league's own internal documents -- i.e., the 2020 Collective Bargaining Agreement, the NFL Personal Conduct Policy, and even Roger Goodell's arbitration ruling in Deflategate -- strongly suggest that the Disciplinary Officer has the flexibility and discretion to decline to apply the "credible evidence" standard of proof in any Article 46 disciplinary proceeding arising out of an alleged violation of the NFL's Personal Conduct Policy. To begin with, the "credible evidence" standard is not mentioned anywhere in the Collective Bargaining Agreement. Article 46 of the new CBA specifies the procedures that are to be followed in disciplinary proceedings regarding alleged violations of the Personal Conduct Policy. Article 46 of the CBA states, for example, that “[t]he NFL will have the burden of establishing that the player violated the Personal Conduct Policy," but does not specify what that burden actually is. This silence is to be contrasted with other CBA provisions which specify a “clear preponderance of the evidence” standard of proof that is to be used in other types of arbitration proceedings between the league and its players, such as those conducted pursuant to Article 12 (section 6), Article 14 (section 3), and Article 17 (section 5) of the CBA. You would think if it’s important enough for the NFL to specify the burden of proof in other types of arbitration proceedings where the disagreement between the league and players is over money, then it should be equally if not more important to specify the burden of proof in those sections of the CBA (such as Article 46) that can be deployed by the NFL to suspend or terminate a player's employment relationship with his team, which is a far more serious matter. Further, the "credible evidence" standard appears only in the non-collectively-bargained Personal Conduct Policy, which was unilaterally imposed by the league on the players without the NFLPA's consent or input. That document was never expressly “incorporated by reference" into the CBA. By contrast, nearly every other external document mentioned in the CBA, such as the NFL Player Second Career Savings Plan (Article 54), the NFL Player Annuity Program (Article 55), the NFL Player Tuition Assistance Plan (Article 56), and the NFL Player Insurance Plan (Article 58), is expressly "incorporated by reference and made a part of [CBA]." The failure to expressly incorporate the Personal Conduct Policy into the CBA is a legally significant omission. The CBA is, above all else, a contract. Under the contract-law doctrine of "incorporation by reference," which is recognized by courts in every state, when a contract (such as the CBA) expressly incorporates an external writing by reference, that writing becomes part of the contract. Conversely, the failure to expressly incorporate an external document by reference into a contract means that it should not to be treated as a part of that contract. By failing to expressly incorporate the Personal Conduct Policy into the CBA (as it did with scores of other external documents that don't adversely impact a player’s employment status nearly as much as the Personal Conduct Policy), the NFL may have provided Watson's legal team with a colorable legal argument that the "credible evidence" standard (which appears only in the Personal Conduct Policy) is not to be used in an Article 46 proceeding governed by the CBA. Such an argument is amply supported by the numerous examples of the NFL and NFLPA expressly incorporating many other external documents into the CBA and specifying the applicable burdens of proof in several other CBA-authorized arbitration proceedings. The failure to do the same here speaks volumes. Roger Goodell's prior acknowledgement in his Deflategate arbitration decision Contrary to the position that the league is currently believed to be asserting in the Watson case, NFL Commissioner Roger Goodell has previously recognized that the higher "preponderance of the evidence" standard applies in Article 46 disciplinary proceedings. In his July 28, 2015 arbitration decision upholding Tom Brady's 4-game suspension in Deflategate, Commissioner Goodell (acting in his familiar capacity as appellate judge ) stated that "[t]he underlying standard of proof for factual findings in Article 46 proceedings is 'preponderance of the evidence,' or stated differently, 'more probable than not.'" (Presumably, this sentence was reviewed by the league's in-house attorneys and outside counsel Paul Weiss before being publicly released, as Goodell is not an attorney). Notably, Goodell stated that this higher evidentiary standard applies "in Article 46 proceedings," without limiting it to disciplinary proceedings for "conduct detrimental to the integrity of, or public confidence in, the game of professional football" (which is the specific clause that Tom Brady was accused of violating). At the time that Goodell made that statement, the NFL had already issued its Personal Conduct Policy (with its “credible evidence” standard of proof) in the aftermath of the Ray Rice saga. It is therefore notable (and, more importantly, legally significant) that Goodell stated that the higher preponderance of the evidence standard applies "in Article 46 proceedings," which at the time encompassed both "'conduct detrimental' to the game of professional football" (Subsection 1(a)) and violations of the Personal Conduct Policy (Subsection 1(e)). Goodell could have just as easily have said "in Article 46 proceedings arising out of Section 1(a)" instead of the much broader "in Article 46 proceedings" without any limiting or confining language. I would not be surprised if Deshaun Watson's legal team seizes upon this sweeping statement in urging Judge Robinson to apply the higher preponderance of the evidence standard of proof in Watson's case. The use of the permissive "may" means that the credible evidence standard is optional, not mandatory More importantly, the "credible evidence" language from the Personal Conduct Policy is expressed in permissive, rather than mandatory, language. In the section titled "Discipline" (on page 5), the Personal Conduct Policy states that “[i]n cases where a player is not charged with a crime, or is charged but not convicted, he may still be found to have violated the Policy if the credible evidence establishes that he engaged in conduct prohibited by this Personal Conduct Policy." (This is the only mention of “credible evidence" in the Personal Conduct Policy.) The use of the permissive "may" in that sentence (as opposed to the mandatory "shall") means that it is within Judge Robinson's discretion whether to use the “credible evidence” standard in deciding Watson’s disciplinary case. The NFL very easily could have worded that sentence to read that the player "shall" be found to have violated the Personal Conduct Policy if the credible evidence establishes it." Instead, they used the permissive word "may," which connotes discretion rather than a mandatory obligation. This is supported by basic principles of contract interpretation. The mandatory/permissive canon of construction provides that mandatory words, such as “shall,” impose a duty while permissible words, such as “may,” grant discretion. See Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 112 (2012) ("Per the ‘Mandatory/Permissive Canon,’ the word ‘may’ is commonly treated as a permissive word granting discretion.”); Janssen v. Denver Career Serv. Bd., 998 P.2d 9, 16 (Colo. App. 1999) (“[W]here the term ‘may’ is used as opposed to ‘must,’ the term refers to authority which is permissive and not mandatory.”). Further, any ambiguities in a contract are to be construed against the party which drafted the contract. Here, NFL drafted the Personal Conduct Policy without any input from the NFLPA. As such, any uncertainty as to whether the use of the credible evidence standard is optional or mandatory must be resolved in Watson's favor and deemed to be optional. The “credible evidence” language from the Personal Conduct Policy is outdated The inclusion of the "credible evidence" standard in the Personal Conduct Policy appears to be a remnant of an outdated disciplinary process. The 2018 Personal Conduct Policy (the most recent one that is accessible online) employs the "credible evidence" standard in a non-analogous context: as part of an initial “disciplinary recommendation" to the Commissioner. The relevant passage on page 5 provides that "[a] disciplinary officer . . . will present a disciplinary recommendation for the Commissioner's consideration. The Commissioner will review the report (and recommendation if presented) and determine the appropriate discipline, if any, to be imposed on the player." That process has since been changed to an adversarial proceeding under the new CBA, enacted two years after the 2018 Personal Conduct Policy. In Article 46 of the new CBA, the role of the disciplinary officer is fundamentally different. Instead of merely "recommending" discipline following an investigation, the disciplinary officer now functions as the equivalent of a trial court judge, making factual findings and imposing the actual discipline. When the disciplinary officer's role was merely an investigative and advisory one, as opposed to adjudicative, the "credible evidence" standard made much more sense -- and would likely pass legal muster. See, e.g., Doyle v. Camelot Care Centers, Inc., 305 F.3d 603, 620 (7th Cir. 2002) (observing that the Illinois appeals court in Cavarretta "did not address in any definitive manner whether the use of the credible evidence standard during the initial phases of the investigation violated principles of due process."). But the credible evidence standard makes less sense — and would violate due process rights — when it is used as the governing standard of proof in a contested adversarial proceeding where a trial judge must make factual findings and determine punishment that could result in the deprivation of a significant individual interest such as the loss of one’s employment. “Credible evidence” is traditionally used as an appellate standard of judicial review "Credible evidence" is not an evidentiary standard that is normally associated with a adversarial trial-type proceeding where findings of fact are made by a judge. It is used more typically as an appellate standard of review, such as when an appeals court must determine whether a trial judge erred in setting aside a jury's verdict. It is not a proper evidentiary threshold for an initial finding of fault in a contested adversarial proceeding where a deprivation of one's professional livelihood is at stake, particularly when such a standard was neither the subject of collective bargaining nor incorporated by reference into the CBA. As a longtime federal district court judge who has presided over hundreds of trials in her judicial career, Judge Robinson might view this non-collectively-bargained low evidence bar as violative of procedural due process, just as the appellate courts in Valmonte and Cavarretta did. But she doesn't even need to engage in a weighty constitutional analysis in order to justify any decision to decline to apply the “credible evidence” standard of proof in the Watson case. The NFL's own documents reveal that Judge Robinson has the flexibility to ditch the “credible evidence” burden of proof in favor of the higher preponderance of the evidence standard. Daniel Wallach is the co-founder of Conduct Detrimental. He is a nationally-recognized gaming and sports betting attorney. You can follow him on Twitter at @WALLACHLEGAL.

Just last week, Penn National Gaming – who has gained a whole lot of attention since purchasing a 36% stake in Barstool Sports in January 2020 – reached a $2 billion dollar agreement to acquire Score Media and Gaming. And now, Major League Baseball and Barstool Sports are in “significant negotiations” over broadcasting national midweek games with a focus on in-game betting, according to New York Post. Major League Baseball’s current national TV deal roster leaves an open spot for Barstool to work its magic on regular, non-exclusive Monday and Wednesday games, as ESPN’s new contract, set to begin next year, notably dropped those games. Per the Post, discussions started recently and while not a certainty yet, discussions are picking up steam. In considering the potential of such an unconventional and controversial partner, the biggest question we have to ask is: will the broadcasts be exclusive? If so, MLB may face significant backlash from its older fanbase as well as baseball fans who are simply not fans of the Barstool platform and their personalities. Perhaps Barstool founder Dave Portnoy, gave us all a hint last week when he alluded to talks with one of four major sports networks to air games but did not specify which. “Do you know we’re talking with major leagues? When I say major leagues, like the four major sports," Portnoy said. "Ever since we announced the Arizona Bowl, major leagues are like, ‘We can give you the rights. We can give you the rights to call one of the major four leagues games.’ Not gonna say which one. We’re looking at it.” As Portnoy explained, this new announcement comes just a few weeks after Barstool landed exclusive rights to a college football game: the Arizona Bowl. Set to be played on December 31, the 2021 Barstool Sports Arizona Bowl game will feature teams from the Mid-American and Mountain West conferences with Barstool as the title sponsor and broadcaster. (Photo Credit: Rebecca Sasnett, Arizona Daily Star) The Arizona Bowl was originally scheduled to be on CBS, but will now stream exclusively on Barstool’s website and app. It’s expected that the “love-it or hate-it” brand may sign other deals for live television rights in the near future. As broadcast television slows down and streaming services heat up by pushing out exciting content, this groundbreaking development is just another sign that we have entered a new dimension of digital media, seemingly tailored to a younger, more quirky audience. Whether you like it or not, here Barstool comes. Stephanie is a recent graduate of New York Law School and a law clerk at Geragos & Geragos. You can find her on Twitter @SWeissenburger_ and Instagram @Steph_ExplainsItAll

(Photo by Getty Images) By Daniel Wallach In the realm of adjudicating player discipline cases under Article 46, Roger Goodell has been famously described--not inaccurately---as 'the judge, jury and executioner.' And even the appellate judge too. This is because the collective bargaining agreement between the players and the league gave the NFL Commissioner broad disciplinary authority to impose discipline in the first instance and then to review the correctness of his own decision in the event an appeal was filed by the accused player through the NFLPA. But where the league itself is a defendant and its own conduct is directly at issue--such as in the case of the recent lawsuits filed by Brian Flores and Jon Gruden--can the NFL similarly bank on language in the two coaches' employment agreements with their former teams to force these recently filed lawsuits into private arbitration before Commissioner Goodell, who for all intents and purposes is the league's CEO? In a word, no. Are we really that brainwashed from 'Deflategate' to believe such a scenario is plausible, much less likely? Unlike the player discipline cases, such as those involving Tom Brady, Adrian Peterson and Ezekiel Elliott, there is no CBA in effect here. (Nor has there even been any completed arbitration--a highly significant fact given the longstanding reluctance of federal courts to interfere with already-completed arbitration proceedings). Rather, the hook on which the NFL will be seeking to have its own chief executive performing the role of 'neutral' arbitrator to decide the fate of serious accusations against the league--and potentially subjecting the league to millions of dollars in damages and industry-shifting injunctive relief--is standardized language in most NFL coaches' contracts acknowledging that the agreement "shall be governed by and construed in accordance with the Constitution, Bylaws, rules, and regulations of the National Football League." To that end, section 8.3(E) of the NFL Constitution and Bylaws provides that "[t]he Commissioner shall have the full, complete and final jurisdiction and authority to arbitrate . . . [a]ny dispute involving a member or members in the League or any players or employees of the members of the League or any combination thereof that in the opinion of the Commissioner constitutes conduct detrimental to the best interests of the League or professional football." By the way, this seemingly broad arbitration language isn't even expressly included in the agreement between the coach and the team. Rather, it appears only in the NFL Constitution and Bylaws, which is referred to in the coach's employment agreement with the team and which the coach "acknowledges that he has read"--a rather oblique way of shoehorning seemingly important arbitration language into an agreement without actually including it. (While there is a more specific arbitration provision in most coaches' contracts, that provision only empowers the Commissioner to arbitrate "all matters in dispute" between the coach and the Club, including any disputes "arising under" the contract, which would seemingly have no applicability to the Gruden case since he is not suing the Raiders--or to large chunks of the Flores case, which raises broader claims against the NFL). Putting aside the question of whether there is even a valid agreement to arbitrate, the more salient point is whether an arbitration clause installing the NFL Commissioner as the final arbiter of any and all claims asserted against the league--you know, the one that employs him to the tune of $63.9 million per year--is even enforceable. The issue here is one of bias. To that point, the United States Supreme Court has stated that "[w]e cannot believe that it was the purpose of Congress to authorize litigants to submit their cases and controversies to arbitration boards that might reasonably be thought to be biased against one litigant and favorable to another." In the case of completed arbitrations, federal courts may vacate an award where there is 'evident partiality'--a fancy term for arbitrator bias, such as when the arbitrator has a relationship with one of the parties to the arbitration. But, where, as here, the arbitration has not yet taken place and the dispute centers on whether a contractual arbitration provision should be enforced, the standard of review is slightly less onerous. The law is well settled that “in an appropriate case, the courts have inherent power to disqualify an arbitrator before an award has been rendered.” Under New York law, the proper standard of review for the disqualification of an arbitrator 'is whether the arbitration process is free of the appearance of bias." As New York courts have stated, any such bias "must be clearly apparent based upon established facts, not merely supported by unproved and disputed assertions." (Notably, neither the NFL Constitution and Bylaws or the employment agreements at issue make any reference to the Federal Arbitration Act (a federal law), only that the Commissioner (and not a designee) would conduct the arbitration. For this reason, the law of New York--where the NFL is headquartered--may be relevant). This isn't even a close call. It is inconceivable--to me at least--that a judge would countenance allowing an NFL executive to serve as the arbitrator of a dispute where the NFL itself is being accused of tortious conduct and that same employee is directly implicated in the alleged misconduct at issue and will undoubtedly be a material fact witness in both cases. This indisputably rises to the level of a "clearly apparent" conflict of interest sufficient to justify the court's denial of the NFL's motion to compel arbitration in both the Flores and Gruden lawsuits. A recent decision involving minor league baseball reinforces this obvious conclusion. In Nostalgic Partners, LLC (d/b/a The Staten Island Yankees) v. New York Yankees Partnership, a one-time minor-league affiliate of the New York Yankees sued the Yankees and Major League Baseball for tortious interference with contractual relations over the latter's decision to terminate the team's longstanding affiliation with the Yankees, and, in doing so, to interfere with the terminated minor-league affiliate's contracts with third parties. The Yankees promptly filed a demand for arbitration before the Commissioner of Major League Baseball, per a contractual arbitration provision. The plaintiff minor-league team moved to stay the arbitration, arguing that it would be "absurd" for the MLB Commissioner--as a highly paid employee of one of the main defendants--to consider and issue a declaratory judgment deciding whether the minor-league team's claims against the New York Yankees and MLB had any merit. Citing the "appearance of bias" standard recognized under New York law (and emanating from a 1968 U.S. Supreme Court decision), the minor-league team stated that "[t]he Commissioner, as the head of MLB, plainly has an interest in ensuring that the NY Yankees – and by extension, MLB – avoid any negative consequences stemming from the NY Yankees’ support for and participation in MLB’s restructuring of its relationship with minor league baseball clubs and leagues. . . . As such, the Commissioner may well be 'deaf to the testimony or blind to the evidence presented' and there is certainly 'a real possibility that injustice will result.'” In a December 17, 2021 decision, Justice Barry Ostrager of the New York County Supreme Court granted the minor-league team's motion to stay arbitration. In his decision, he reasoned that "[b]ased on the appearance of impropriety, the Commissioner of Major League Baseball should not arbitrate a dispute of claims that are asserted against Major League Baseball." This decision--which was appealed last week to New York's Appellate Division--will likely be cited as precedent by plaintiff's counsel in both the Flores and Gruden cases, especially given the paucity of case-law involving attempts by professional sports leagues to enforce contractual arbitration provisions that would install league executives as the arbiters of tort claims filed against the leagues. Finally, the class-action status of the Flores lawsuit provides yet another compelling reason why the contractual arbitration provision should not be enforced (well, at least not in the Flores case). For all of Commissioner Goodell's supposed arbitral talents, resolving 'class-wide' claims does not appear to be among them. In fact, no NFL Commissioner has ever arbitrated a class action lawsuit in his capacity as the NFL Commissioner. Putting aside the question of whether other minority coaches and GM candidates are even subject to the mandatory arbitration language in their contracts with NFL teams--or whether they have NFL contracts at all (see college coaches)--it is highly dubious that 'class-wide' claims-spanning potentially 100 or more individuals could be effectively vindicated before an NFL Commissioner with no class action experience, much less a law degree. Daniel Wallach is the co-founder of Conduct Detrimental. He is a nationally-recognized gaming and sports betting attorney. You can follow him on Twitter at @WALLACHLEGAL.

Image via https://www.commanders.com/news/redskins-hire-ray-horton-as-defensive-backs-coach By Daniel Wallach After a period of relative inactivity, the Brian Flores racial discrimination lawsuit against the NFL is beginning to heat up. Last month, Flores filed an amended complaint which included two additional plaintiffs (Steve Wilks and Ray Horton) and added 3 more NFL teams (the Titans, Texans and Cardinals) as defendants. While we await the formal response from the NFL defendants--which is expected towards the end of June--both sides recently filed a proposed "civil case management plan and scheduling order" with the court. The proposed case management plan provides a succinct overview of the claims and anticipated defenses. This is especially appreciated when the amended complaint is 100 pages long and involves multiple parties, claims, and non-intersecting storylines. More revealingly, the case management plan includes a preview of what to expect in the lawsuit over the next couple of months. Both sides identify for the first time what "motions" (i.e., requests for judicial intervention) they will be filing with the court. Besides stating the obvious--such as the NFL signaling that it will be filing both a motion to dismiss the amended complaint and a motion to compel arbitration--these initial disclosures also include some unexpected revelations from each side that could tee up some spirited legal battles over the next few months. Horton's importance to the lawsuit for class certification purposes One of these crucial battles will focus on Horton, who may turn out to be the key plaintiff for class certification purposes. Horton was a defensive coordinator for three NFL teams (including the Titans) and coached in the league for more than 20 years without ever having been offered a head coaching position. The addition of Horton as a named plaintiff serves two important strategic purposes. First, it bolsters Flores' allegation that NFL teams conduct 'sham' interviews of Black head coaching candidates simply to satisfy the 'Rooney Rule.' Whereas Flores relies primarily on a Bill Belichick text message that the NFL now conveniently asserts is "ambiguous," Horton's claim of a 'sham interview' process is backed by much stronger evidence--a recorded admission from former Titans head coach Mike Mularkey, who stated in a podcast interview that he was offered the Titans head coaching position in 2016 in circumvention of the Rooney Rule while other minority candidates--including Horton--were still going through the interview process. That allegation--when coupled with the Belichick text message--could help the plaintiffs overcome an expected NFL motion to dismiss on that claim. Second, Horton's inclusion as a named plaintiff is seemingly designed with class certification in mind. Unlike Flores and Wilks--the other new plaintiff added in the amended complaint--Horton has never been a head coach in the NFL. As such, his claims of racial discrimination are more "typical" of the claims of other potential members of the class, many of whom have yet to be hired as an NFL head coach. The "typicality" requirement of class certification ensures that the named plaintiffs' claims have the same essential characteristics as the class at large. Since both Flores and Wilks have previously been head coaches in the NFL, their situations and circumstances may differ markedly from those class members who have never been an NFL head coach. Nowhere is this more evident than in Flores' own particularized allegations, which detail: (1) an alleged bribe offer made by Miami Dolphins owner Stephen Ross to intentionally lose games during the 2019 season as part of a scheme to secure the top overall pick in the 2020 NFL Draft; and (2) an "improper directive" to secretly meet with a prominent NFL quarterback (reportedly Tom Brady) still under contract with another NFL team. Flores alleges that his refusal to participate in the alleged tanking and tampering schemes played a role in the Dolphins' decision to fire him as head coach despite leading the team to winning records in his last two seasons. Calling these reasons "plainly unrelated to his race," the NFL defendants have indicated that they will be seeking the dismissal of Flores' racial discrimination claims for failure to state a viable cause of action because his own allegations reveal that "race played no role in the employment decisions challenged here." NFL will be seeking the dismissal of Horton's claims as time-barred This potential ground for dismissal as to Flores' claims accentuates the importance of Horton's inclusion in the lawsuit since he is not subject to this unique defense, and moreover, possesses characteristics more aligned with other members of the potential class. Which is why the looming battle over the validity of Horton's claims warrants special attention. In their portion of the proposed case management plan submitted to the court last month, the NFL defendants signaled that they will be moving to dismiss Horton's racial discrimination claims as time-barred because the events giving rise to his claims occurred, if at all, in January 2016 when he interviewed for the Titans head coaching position. The statute of limitations on a claim of employment discrimination is generally either three or four years (depending on the particular statutory cause of action), meaning that Horton may have filed his claims several years too late. The NFL defendants hint at this argument with their statement in the joint letter that "Mr. Horton alleges that the Titans interviewed him for their head coaching position over six years ago, in 2016, without a genuine interest to hire him," followed several paragraphs later by their assertion that they plan to assert multiple other defenses to Plaintiffs' claims, including . . . statute of limitations defenses." The consequences of this defense are obvious. If Horton's claims are dismissed as time-barred, there might not be a certifiable class since he is the only plaintiff who has never been a head coach--and thus his claims are more "typical" of the other class members--and both Flores and Wilks could be subject to unique defenses and other individualized arguments that may otherwise preclude class certification (or, worse, lead to the dismissal of their claims on a Rule 12(b)(6) motion to dismiss). Without a suitable class representative, this lawsuit becomes much narrower in scope. Therefore, the viability of Horton's claims could be the key to the entire case. Plaintiffs may need "equitable tolling" to save Horton's claims To preserve Horton's seemingly untimely claims, his attorneys may need to resort to the doctrine of "equitable tolling." Indeed, in their recent court filing, Horton's attorneys assert that the doctrine of "equitable tolling" would serve to "revive" any claims where the statute of limitations has otherwise passed. "Equitable tolling" is a common law doctrine providing that a statute of limitations shall not bar a claim in cases where the plaintiff, despite the exercise of due diligence, could not or did not discover the alleged injury until after the expiration of the limitations period. In the employment discrimination context, however, equitable tolling is considered an "extraordinary" remedy that is to be applied sparingly. The Second Circuit's case law on equitable tolling makes clear that for equitable tolling to apply, "the employer must prevent the employee in some extraordinary way from exercising her rights, or the employee must be actively misled by his employer and that conduct must be responsible for making the employee unaware of her [statutory] rights.” In short, equitable tolling will apply only where the employer's own acts or omissions have lulled the plaintiff into foregoing prompt attempts to vindicate his or her rights. Horton's attorneys will likely argue that the Titans actively prevented Horton from discovering the existence of the alleged sham interview by concealing the fact that Mularkey had already been offered by the Titans' head coaching position when Horton interviewed for that same position in January 2016. Horton's attorneys would presumably argue that, as a result of this active concealment by the team, Horton could not have discovered--with the exercise of reasonable diligence--that he was the victim of a sham interview by the Titans until October 21, 2020 at the earliest when Mularkey publicly admitted in a podcast interview with "Steelers Realm" that one of his greatest professional regrets was secretly accepting the Titans coaching position in circumvention of the Rooney Rule while other minority candidates--including Horton--were still going through the interview process. The expected discovery battle over equitable tolling Believing that "equitable tolling" may be the only way to avoid dismissal of Horton's claims on statute of limitations grounds, Horton's attorneys have advised the court in their proposed case management plan that "certain discovery" is necessary prior to the resolution of the NFL's anticipated motion to dismiss and motion to compel arbitration. In particular, plaintiffs' attorneys have indicated they will be seeking pre-ruling discovery on the arbitrator bias issue (bearing on the appropriateness of NFL Commissioner Roger Goodell serving as the arbitrator of tort claims asserted against his employer and those that pay his $63.9 million annual salary), personal jurisdiction and venue issues (to the extent that the NFL defendants raise those grounds for dismissal in their forthcoming motion to dismiss), and "issues relating to the equitable tolling issue in connection with the claims brought by . . . Horton." On the equitable tolling issue, Horton's attorneys would presumably seek to take Mularkey's deposition under oath to get him to repeat and/or verify the statements that he made during the podcast in order to overcome any potential hearsay objection by the Titans and/or the NFL since those podcast admissions were made by him out of court and are being offered by Horton for the truth of the matter asserted. A deposition of Mularkey could also elicit more detailed information about the conversations that he had with Titans ownership and management regarding his hiring and the need to interview other candidates. Along the same lines, Horton's attorneys would likely also seek to take the depositions of Titans team owner Amy Adams Strunk, Kenneth Adams (another team owner), Titans General Manager Jon Robinson, Titans President Steve Underwood, and Titans' Vice President Vin Marino, all of whom allegedly participated in the January 2016 interview with Horton. Through these depositions, Horton's legal team would seek to learn more about the timing of the Titans' decision to hire Mularkey as head coach and could request internal documents (including emails) bearing on that decision. In addition, the plaintiffs' attorneys may seek to depose the other candidates who interviewed for the Titans' open head coaching position in January 2016, namely, Doug Marrone (the then Jacksonville Jaguars assistant head coach), and Teryl Austin (a black candidate who was the Detroit Lions defensive coordinator). If the court were to grant such pre-ruling discovery, the depositions would likely take place on an expedited basis, likely during the summer months. Not surprisingly, the NFL defendants have a different view of the issue, advising the court that such pre-ruling discovery is "unwarranted" and that they will instead be seeking a blanket stay of all discovery during the pendency of their motion to dismiss and motion to compel arbitration. While there are many battles and legal skirmishes that will play out in the Flores case over the coming months, this will definitely be one worth keeping your eye on given its potential signal importance to the entire case and the viability of a class action. Daniel Wallach is the co-founder of Conduct Detrimental. He is a nationally recognized gaming and sports betting attorney. You can follow him on Twitter at @WALLACHLEGAL.

By Daniel Wallach The debate over whether participants in daily fantasy sports contests are the "actual contestants" in their own distinct game of skill or, as some have contended, are merely passive players whose performance is entirely derivative of the skill deployed by the real-life athletes in the underlying sporting events has finally been resolved in the DFS industry's favor. If you recall, during the early days of DFS, several state attorney general opinions expressed skepticism that DFS participants were the actual contestants in a bona fide contest of skill because their success was tied to the performance of the real-life athletes who were beyond their control or influence. But the pendulum has now swung the other way. Two recent state court appellate court opinions lend support to treating DFS contests as bona fide contests of skill between actual contestants. Those rulings could open the door to other skill-based games tethered to real-life sporting events being similarly treated as bona fide contests of skill between actual contestants, even if some degree of chance determines which contestant prevails. Under the so-called "bona fide contest of skill" exception recognized in many states, the definition of “gambling,” “bet,” or “wager” specifically excludes: “offers of purses, prizes or premiums to the actual contestants in any bona fide contest for the determination of skill, speed, strength, endurance, or quality.” The typical fact-pattern usually involves a contestant who pays an entry fee to enter a contest of skill to win a prize in which they are the actual participant. Oft-cited examples include fishing tournaments, hole-in-one golf contests, spelling bees, hot dog eating contests and baking competitions. In a resounding one-two punch, the highest court of two states would add DFS contests to this expanding list of bona fide games of skill between actual contestants falling outside the purview of state gambling prohibitions. Dew-Becker v. Wu In Dew-Becker v. Wu, 178 N.E.3d 1034 (Ill. 2020), the Illinois Supreme Court concluded that daily fantasy sports contests are predominantly skill-based, and, as such, do not constitute gambling where the applicable definitional test is the "predominance" or "dominating element" standard. The Court began its analysis by recognizing that daily fantasy sports contestants are the "actual contestants" in a DFS contest, implicitly rejecting the notion that they were only passive players whose participation was entirely derivative of the real-world athletes in the underlying sporting events. Id. at 1039. The more relevant inquiry from the Court's perspective was whether the DFS contestants were engaging in a "bona fide contest for the determination of skill " when they competed head-to-head. Id. *(emphasis added). Of the three gambling definitional tests used to determine whether a contest was one of skill or chance, the Court determined that the "dominate factor" test was "the most appropriate" standard since it "provides a workable rule that allows for greater consistency and reliability in determining what constitutes a contest of skill." id. at 140. Citing several recent peer-reviewed studies, the Court concluded that participants in head-to-head daily fantasy sports contests were not engaging in "gambling" because such contests were "predominately determined" by the skill of the participants "in using their knowledge of statistics and the relevant sport to select a fantasy team that will outperform the opponent." Id. at 140-41 (adding that the historically dominant performance of highly skilled DFS players has created a potential revenue problem for the DFS websites since "new or unskilled players are often hesitant to participate.”) (citing Ed Miller & Daniel Singer, For Daily Fantasy Sports Operators, the Curse of Too Much Skill, Sports Bus. J., (July 27, 2015)). White v. Cuomo More recently, in White v. Cuomo, --- N.E.3d ---, 2022 WL 837573 (N.Y. Mar. 22, 2022), the New York Court of Appeals held that interactive fantasy sports contests do not constitute "gambling" within the ambit of New York's constitutional prohibition against gambling. Crucially, New York’s highest court used the “dominating element” standard (instead of the stricter “material degree” test under section 225.00 of the Penal Law) as the “constitutional” standard for determining whether IFS contests are permissible contests of skill or impermissible games of chance. Id. at *7. Applying the dominating element standard, the Court of Appeals concluded that the New York Legislature’s factual determination that IFS contests are a game of “skill,” not of “chance,” has “resounding support” from statistical studies showing that “skilled players achieve significantly more success in IFS contests and that rosters of skilled human players were more successful in IFS contests than randomly generated lineups over 80% of the time." Id. The Court also pointed to a "statistical analytic report" quoted at the legislative public hearing in 2016, wherein an unnamed statistical expert opined that IFS contests 'haver an inherent and vast character of skill where chance is overwhelmingly immaterial in the probability of winning” and winning a prize in such contests “strongly depends more on skill than on chance.” Id. Going beyond the statistical studies, the Court also emphasized that the facts "bear out" that IFS contests "involve a significant exercise of the participants' skills," reasoning that: [p]articipants draw from their knowledge of the relevant sport, player performance and histories, offensive and defensive strengths of players and teams, team schedules, coaching strategies, how certain players on opposing teams perform against each other, statistics, strategy, and the fantasy scoring system in order to exercise considerable judgment in selecting virtual players for their rosters. Id. at *8. While acknowledging that chance plays some role in IFS contests, the Court reiterated that participant skill “plays a substantial role in the outcome of the IFS contest—that is, the competition between IFS participants as to whose roster will yield more fantasy points, a contest which is scored through a metric different from that of the actual sport.” Id. Ultimately, the Court deferred to the findings of the legislature, concluding that, based on the record, the legislature’s determination that IFS contests are predominantly games of skill because they pit the strategic rosters of participants against one another—that is participants have control over their own skill-based roster selection, which substantially determines the outcome of the IFS contest—is firmly grounded in evidence and logic.” Id. The Court cited the Illinois Supreme Court's decision in Dew-Becker approvingly, stating that "it is now 'widely recognized’ that IFS contests are predominantly skill-based competitions” as distinguishable from games of chance. Id. at *7 (emphasis added) (quoting Dew-Becker, 178 N.E.3d at 1041). This is a promising development for those who operate (or seek to launch) DFS products in states where daily fantasy sports contests have not yet been authorized by statute or regulation. Despite the clear win for proponents of daily fantasy sports contests, the White decision is of limited precedential value in assessing the legality of other types of skill-based contests under the New York Penal Law’s definition of “gambling” in Section 225.00(2). That statutory provision incorporates a lower definitional threshold for what constitutes “gambling,” finding it to exist either: (i) when the outcome of the contest “depends in a material degree upon an element of chance,” or (ii) when a contestant stakes or risks something of value upon the outcome of "a future contingent event not under his control or influence." The New York Court of Appeals did not apply this statutory standard in assessing whether the Legislature exceeded its constitutional authority in authorizing IFS contests through a purely statutory enactment. Instead, the Court declared that "the proper benchmark in assessing whether an activity is a 'game of chance' for purposes of the constitutional gambling prohibition is whether chance is the dominating or controlling element." Id. at *7. But this constitutional standard is of no import when assessing the legality of other skill-based contests that have not been legislatively authorized. In all other instances, the Penal Law's "material degree" standard still governs. “Actual Contestants” in “Bona Fide Contests of Skill” Despite the apparent limited impact of the main holding in White, there is another section in the Court's majority opinion that could be helpful outside of the constitutional context, and, in particular, for the operators of other types of skill-based contests that award prizes to contestants who pay an entrance fee in order to participate. While not labeled as such, the Court acknowledged that IFS contests were "bona fide contests of skill" between "actual contestants" irrespective of the definitional standard used. The "bona fide contest of skill" principle is generally recognized as an exception to the definition of "gambling" in a growing number of states (including New York) and is codified by statute in at least nine states. (States which recognize this exception by statute include Colorado, Georgia, Illinois, Idaho, Indiana, New Mexico, Texas, Wisconsin, and Wyoming). But even in the absence of a statutory exception, courts have repeatedly held that contests for which the contestants pay entry fees to participate and for which prizes are awarded are not illegal gambling activities, even if some degree of chance determines which contestant prevails. See, e.g., Las Vegas Hacienda, Inc. v. Gibson, 359 P.2d 85 (Nev. 1961) (hole-in-one golf contest for which contestants paid entrance fee and stood to receive a $5000 prize was not illegal gambling). Rather than constituting gambling, “[p]aying an entrance fee in order to participate in a game of skill, or mixed skill and chance, in the hope of winning prize money guaranteed by some sponsor to successful participants, is a traditional part of American social life." State v. Am. Holiday Assn, 727 P.2d 807, 812 (Ariz. 1986) (“We are reluctant to adopt a statutory interpretation that would turn sponsors of golf, tennis or bridge tournaments, spelling bees and beauty contests into class 6 felons.”). The White court reaffirmed this longstanding principle. (The last time the Court of Appeals had addressed this issue was in 1897; so maybe it was in need of a bit of refreshing). In Section "B" of the opinion, the Court drew a sharp distinction between "permissible contests for prizes," such as spelling contests and golf tournaments, and illegal "bets and wagers," declaring that it has “long distinguished the ‘bets and wagers’ of gambling activities from lawful contests that award prizes to competitors—contests integral to the fabric of American social life, spanning the range from spelling bees to golf tournaments to televised game shows.” Id. at *8. “Permissible contests,” the Court explained, “share the ‘essential particulars’ that ‘one of the parties strives with others for a prize; the competing parties pay an entrance fee for the privilege of joining in the contest, and . . . the entrance fee forms a part of the general fund from which the premiums or prizes are paid.” Id. (citation omitted). “By comparison,” the Court continued, “bets and wagers are ‘agreement[s] between two or more, that a sum of money or some valuable thing, in contributing which all agreeing take part, shall become the property of one or some of them, on the happening in the future of an event at the present uncertain.’” Id. at *9 (citation omitted). “In other words,” as the Court explained, “‘[i]llegal gaming implies gain and loss between the parties by betting, such as would excite a spirit of cupidity’—an element that is notably lacking when entrance fees are fixed, and predetermined prizes are awarded by a neutral party whose monetary stake is limited to the payment of the prize.” Id. (internal citations omitted) (emphasis in original). “Contests charging entry fees and awarding fixed prizes do not constitute gambling prohibited by article I, § 9 of the Constitution,” the Court declared, noting that the IFS contests which were authorized by statute “are structured in the manner of fixed prizes for skill-based competitions—consistent with [New York case-law].” Id. The IFS statute permits only those contests that have prizes which are “[i] predetermined, [ii] announced prior to the start of the contest, [iii] awarded by a neutral operator, and [iv] which do not change based upon the number of participants or the amount of entry fees collected.” Id. With these guardrails in place, the Court determined that “IFS participants are not ‘wagering’ in the hopes of scoring a pool of funds ‘wagered’ by other players.” Id. “Rather, at the outset, an IFS contestant knows the set fee to enter the competition and the sum total of prizes that may be awarded—and that sum must be awarded even if entry fees are insufficient to cover the cost of the prize,” the Court added. Id. The Court also rejected the assertion that IFS contests were “indistinguishable” from traditional sports betting due to the lack of a contestant’s control or influence over the performance of the real-life athletes. The Court found that comparison inapt, stating that “[u]nlike bets or wagers on games of skill in which a bettor takes no part, participants in IFS contests engage in a distinct game of their own, separate from the real-life sporting events, in which they strive against other IFS participants.” Id. (emphasis added). As distinguished from sports betting, “[t]he outcome of an IFS contest turns—not on the performance of real-life athletes, as it would with respect to a bet or wager—but on whether the participant has skillfully composed and managed a virtual roster so as to garner more fantasy points than rosters composed by other participants.” Id. “An IFS contestant’s success is therefore not dependent upon the outcome of any particular real-life athlete’s performance or on the score sheet of any sporting event. Rather, success in IFS contests is relative, measured only by the quantity and quality of skill exercised by other IFS participants,” the Court reasoned. Id. In the majority opinion’s concluding paragraph, the Court summarized its holding in the case as follows: “[T]he prohibition on “gambling” in article I, § 9 encompasses either the staking of value on a game in which the element of chance predominates over the element of skill or the risking of value through bets or wagers on contests of skill where the pool of wagered value is awarded upon some future event outside the wagerer’s influence or control. However, games in which skill predominates over chance and skill- based competitions for predetermined prizes in which the participants have influence over the outcome do not constitute ‘gambling.’” Id. at *10. Takeaways from Dew-Becker and White The Dew-Becker and White decisions clearly reflect a judicial trend towards recognizing DFS contests as legal skill-based contests between "actual contestants," especially in those states which employ the "dominating element" standard for analyzing whether the contests at issue constitute illegal gambling activity. But a strong case could also be made that regardless of the standard employed, Dew-Becker and White amply support the proposition that DFS contests are true contests of skill between the actual contestants, and, therefore, fall outside the scope of the definition of gambling regardless of the standard utilized. And other skill-based competitions not tethered to sporting events could likewise potentially avail themselves of this legal reasoning. Daniel Wallach is the co-founder of Conduct Detrimental. He is a nationally-recognized gaming and sports betting attorney. You can follow him on Twitter at @WALLACHLEGAL.

(Photo by Getty Images) By Daniel Wallach It was easy for Miami Dolphins owner Stephen Ross to be dismissive of former head coach Brian Flores' bribery and tanking allegation when it wasn't backed up by any documentary evidence or eyewitness testimony. Indeed, Ross called the allegation that he made a $100,000 per loss bribe offer to Flores "false, malicious and defamatory" in his first public statement after Flores included that bombshell allegation in his original complaint alleging racial discrimination against the NFL, the New York Giants, Miami Dolphins, and Denver Broncos. Following that public denial, Flores' attorney, Douglas Wigdor, told CNN that he had "corroborating evidence" to support Flores' accusation. True to his word (sort of), Wigdor referred to that "corroborating evidence" when he filed an amended complaint on Feb. 8. In addition to naming two more plaintiffs--Steve Wilks and Ray Horton--and providing further evidence of a "sham" interview process for Black head coaching candidates in order to nominally satisfy the so-called "Rooney Rule," the amended complaint alleges that Flores detailed the alleged bribe offer in a written memorandum that was sent to the Dolphins' hierarchy in December 2019. As alleged at paragraph 166 of the amended complaint, "Mr. Flores memorialized Mr. Ross’ desire to have Miami lose games in a December 4, 2019 memorandum that was provided to General Manager, Chris Grier; Chief Executive Officer, Tom Garfinkel; and Senior Vice President of Football and Business Administration, Brandon Shore." This new allegation is a double-edged sword, for both sides. First, the decision by Flores' counsel not to attach that Dec. 4, 2019 memorandum as an exhibit to the amended complaint--a "smoking gun" if there ever was one--or to even quote from it strikes me as puzzling, especially when the complaint liberally quotes other individuals such as Patriots head coach Bill Belichick and NFL Executive Vice President for Football Operations Troy Vincent when it was beneficial to do so. Why hold this one back then? Perhaps, as one lawyer on Twitter admonished, the memo is the sole property of the Miami Dolphins and Flores has no right to it, calling this "employment law 101." But Flores wrote the memo! Nonetheless, it seems like a curious choice to tease the so-called corroborating evidence and then not even quote from it after using Bill Belichick's private text messages. From the perspective of the Dolphins and Ross, the existence of such a memorandum (even if the underlying bribery accusation is untrue) could have far more severe consequences. For example, if the alleged bribe offer referenced in the Dec. 4, 2019 memo was a false accusation, then why didn’t the Dolphins fire him right on the spot instead of letting him continue in his current position for two more years and work for an owner whom he just accused of committing a third-degree felony under Florida law. Assuming the memo exists (and aligns with the allegation at paragraph 166 of the amended complaint), it's odd that Ross would continue to employ a coach who accused him of committing a felony and then published that accusation in a memo sent to others. Conversely, if the accusation was true, then you may have both a felony crime and an attempted cover up. Regardless of whether it’s true or false, the Dolphins would seemingly have an obligation to immediately alert the NFL of a head coach's accusation that the team owner had offered him a bribe to lose games on purpose. Besides being a crime, the alleged offense strikes at the very integrity of the league's games, which are marketed as being true sporting competitions and not scripted entertainment a la professional wrestling. The failure to report such an accusation (as evidenced by the NFL only now getting around to investigating Flores’ claim that he was offered a bribe by Ross to lose games) could itself be considered conduct detrimental to the welfare of the league and grounds for severe discipline under the NFL Constitution and Bylaws, including a possible forfeiture of Ross’s entire interest in the team (through a forced sale). And that would likewise doom understudy Bruce Beal’s contractual right of first refusal to buy out Ross’s interest, a right which would not be cognizable in a forced sale situation (as I have previously written for Conduct Detrimental). A lot to unpack here. Daniel Wallach is the co-founder of Conduct Detrimental. He is a nationally-recognized gaming and sports betting attorney. You can follow him on Twitter at @WALLACHLEGAL.

(Photo by Rick Diamond/Getty Images) By Daniel Wallach Bill Belichick's texting misadventures may have gotten the headlines during the initial news cycle surrounding Brian Flores' filing of a class action lawsuit for racial discrimination against the NFL in early February, but it is not even close to being the most legally significant factual nugget in the complaint. To be sure, Belichick's text message sent to Brian Flores in which the legendary New England Patriots head coach congratulated someone he mistakenly believed was Brian Daboll (a white coach) about getting the New York Giants head coaching job that Flores (a black coach) was still interviewing for--may be evidence that the later interview with Flores was nothing more than a "sham" designed to satisfy the NFL's so-called "Rooney Rule," which requires NFL teams to interview at least one Black person in connection with a head coaching vacancy. But that anecdote--which may very well reflect an erroneous and premature assumption by Belichick--is highly specific to Flores and, while potentially helpful to his individual claim of racial discrimination against the Giants, does not implicate other NFL teams and may not even be particularly relevant to the claims of other Black coaching candidates who were not part of the Giants' interview process during the January 2022 hiring cycle. After all, this is a class action lawsuit and not just an individual claim by Flores. Indeed, Flores is purporting to represent the interests of an entire class of Black head coaching candidates who were passed over for the top job by other NFL teams, and not just with the Giants. For that, he'll need 'class-wide' proof of discriminatory intent. The Belichick text--while it may be one small link in the chain of evidence--is not enough by itself to get a class certified in federal court and may not even be enough to get Flores past the expected NFL motion to dismiss the complaint. (Per a recent court order, the NFL's response to the complaint is due on April 11th). Luckily, Flores already has a 'smoking gun' in his arsenal. And it is far more meaningful--and legally significant--than the Belichick blunder. At paragraph 7 of the complaint, Flores' legal team includes NFL Executive Vice President Troy Vincent's recent admission--first reported by Mark Maske of the Washington Post on January 11, 2022--that there is a "double standard" when it comes to the tenures of Black head coaches, citing several examples of Black NFL head coaches (such as Tony Dungy and Jim Caldwell) being fired after a winning season and another Black NFL head coach (Steve Wilks) being fired after only one season. [An even more recent example of that is David Culley, a black head coach who was recently fired by the Houston Texans after just one season at the helm]. "How do you explain that?", Vincent rhetorically asks. Answering his own question, Vincent states that "[t]here is a double standard." He then wonders why some NFL head coaches--namely, white ones--"get the benefit of the doubt to be able to . . . take [their] bumps and bruises in this process of getting a franchise turned around when others [undoubtedly referring to black head coaches] are not afforded that [same] latitude?" Vincent concludes by saying that "we've seen that [throughout] history at the [p]rofessional level." This is tantamount to an admission of guilt. And it comes from one of the highest-ranking executives in the league office. As such, it carries tremendous evidentiary weight. From this lens, it may be enough to allow Flores to overcome the NFL's expected motion to dismiss. To survive a motion to dismiss, a plaintiff alleging 'race-based' employment discrimination must "specifically allege the events claimed to constitute intentional discrimination as well as circumstances giving rise to a plausible inference of racially discriminatory intent." Yusuf v. Vassar College, 35 F.3d 709, 713-14 (2d Cir. 1994) (emphasis added). Two recent decisions in the Southern District of New York shed light on the "plausible inference" standard. In O'Quinn v. City of New York, 2021 WL 4429787, at *8 (Sept. 27, 2021), the Court described this standard as requiring a plaintiff to allege facts "supporting at least 'a minimal inference of discriminatory motivation.'" In Walker v. Triborough Bridge & Tunnel Auth., 2021 WL 5401481, at *3 (S.D.N.Y. Nov. 18, 2021), Judge Valerie Caproni--who is presiding over the Flores case--similarly wrote that a plaintiff alleging 'race-based' employment discrimination "need only give plausible support to a minimal inference of discriminatory motivation." She added that "[a] plaintiff may defeat a motion to dismiss in a discrimination case 'by indirectly showing circumstances giving rise to an inference of discrimination.'" Id. (citing cases). Vincent's admission that there is a racial 'double standard' in the NFL is about as close to an admission of guilt as one can get. To say that it supports a "minimal inference" of discriminatory intent would be the understatement of the year. See Sweeney v. West, 149 F.3d 550, 554 (7th Cir. 1998) ("No admission of guilt is necessary, . . . but the plaintiff must at least raise an 'inference of discrimination,'" inferring that an admission of guilt would easily clear the 'minimal inference' threshold). When combined with the compelling statistical evidence presented in the complaint--detailing the gross disparity between the number of Black head coaches in the NFL (only 1 out of 32 teams when the complaint was filed) and the number of Black players in the league (roughly 70% of the workforce)--Vincent's admission should enable Flores to overcome the NFL's expected Rule 12(b)(6) motion to dismiss for failure to state a cause of action. There is more than enough in the complaint. And if he can survive both that motion and the NFL's motion to compel arbitration, Flores will be able to proceed with the all-important discovery phase of the lawsuit and begin taking the depositions of key witnesses. Daniel Wallach is the co-founder of Conduct Detrimental. He is a nationally-recognized gaming and sports betting attorney. You can follow him on Twitter at @WALLACHLEGAL.