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August 19, 2009 1:21 PM

The Michael Vick Chronicles: A Football-Heavy Look at Sports and the Law

Posted by Zach Lowe

There's a new ground zero for the legal battle over sports gambling: Delaware, which has instituted a state-sanctioned lottery system that allows bettors to wager on single games.

To fight the lottery, the leagues have side-stepped their usual law firms (a combination of Proskauer Rose, Skadden, Arps, Slate, Meagher & Flom and Covington & Burling) and handed the case to Kenneth Nachbar at Morris, Nichols, Arsht & Tunnell in Delaware. 

It has been tough going for Nachbar after a federal district court ruled this month that Delaware's governor, Jack Markell, was within his rights to create the gambling lottery. Nachbar and the sports leagues disagree, arguing that the federal Professional and Amateur Sports Protection Act, passed in the early 1990s, bans sports gambling except in states that had a policy in place between 1976 and 1990.

Delaware had such a policy at that time, but it only allowed complicated bets involving two or three games--bets that casual fans without much gambling experience aren't likely to make.

After the district court rejected Nachbar's injunction request, the lotto system was scheduled to start on Sept. 1. Nachbar then appealed to the U.S. Court of Appeals for the Third Circuit, and on Friday, he got his first break. The court accepted his request for an expedited hearing. Arguments are scheduled for Monday.  

State lawyers have been working on the case for Delaware, along with attorneys from the litigation boutique Bouchard, Margules & Friedlander. Last week, the state put out a request for proposals to other firms with offices in the state. Richards, Layton & Finger submitted the winning bid, with partner Gregory Williams serving as lead counsel. 

Other recent sports law cases include:

• Remember the so-called StarCaps case from last season, when the NFL moved to suspend five players who tested positive for a banned diuretic, bumetanide, found in a dietary supplement you can buy over the counter at your local GNC? The players fought their suspensions and mounted a broad-based challenge to the league's drug policy. 

Well, those players still haven't served their suspensions, and lawyers were back in federal court in Minnesota Tuesday to argue their cases. 

As we reported previously, the players and their union challenged the suspensions on a number of grounds, including that the NFL failed to warn the players that StarCaps contained a banned substance; that the arbitration process for players to appeal a suspension is biased because the league appoints the arbitrator; and that the league's drug policy violates state laws in Minnesota that protects employees from being punished for using substances that can be legally purchased. 

A federal judge granted summary judgment in favor of the NFL on all but the claim that Minnesota state laws protect the two Minnesota Viking players involved in the case. As one might imagine, the NFL and its sports league brethren were not happy with that ruling.

The league appealed (repped in the courtroom Tuesday by Akin Gump Strauss Hauer & Feld and behind the scenes by its regular counsel at Covington), making the long-held argument that federal laws giving primacy to arbitration clauses in labor contracts preempt any state laws protecting employees or consumers.

The players and the union, meanwhile, appealed the broader summary judgment ruling in favor of the NFL.

(Crowell & Moring and Fulbright & Jaworski represent the players, while Clifford Greene of the Minneapolis-based firm Greene Espel argued for the players union on Tuesday. The union's regular counsel at Dewey & LeBoeuf has been advising the union since the players were suspended.)

The case has drawn amicus briefs from the other major sports leagues (repped by Proskauer Rose) and the World Anti-Doping Agency, or WADA, an independent organization (largely funded by the U.S. government and repped in court by the Denver-based firm Holme Roberts & Owen) that polices drug use in Olympic sports. Both argue that allowing various state employee protection laws to trump collectively bargained league policies ignores federal preemption rules and makes no sense for sports. 

The Proskauer brief includes a (probably implausible) worst-case scenario in which teams from one state have an advantage because their state laws allow them to use substances the league has banned. 

"No one would reasonably suggest, for example, that it is fair for a team from New York to play a team from Illinois, while the team from New York is aided by certain substances that the team in Illinois is prohibited from using, simply because of different rules of the home states," the brief says.

Actually, we think fans of the New York Yankees would find this perfectly reasonable. 

Lawyers say they expect the three-judge panel to issue a ruling soon, since NFL teams are well into training camp.

• Turning to college football, the Southeastern Conference ruffled a lot of feathers last week when it issued a new media policy limiting how much footage media outlets can use from SEC football games; banning substantive live-blogging; and prohibiting fans at games from Tweeting from games or posting images to their Facebook profiles. 

The idea, an SEC spokesman told us, was to make viewers as dependent as possible on the SEC's main broadcast partners (ESPN and CBS), which pay billions for the privilege of televising SEC games. 

But when local SEC media outlets, fans and bloggers got upset, the SEC quickly back-tracked. The conference revised its policy to allow the media to use footage from ESPN and CBS game broadcasts for up to a week after a game ends (the prior policy allowed only a 72-hour window).

The SEC also decided to permit live-blogging, although it reserves the right to rip the cord from your laptop if the live-blog gets so descriptive that a viewer might choose to follow the game online rather than watching it on television. (And the conference reserves the right to determine where that imaginary line is). 

At the center of all of this is Robert Fuller, a partner at Robinson, Bradshaw & Hinson in Charlotte, N.C., who helped the SEC craft the policy. Fuller, who has represented the SEC for ten years after previously advisiing Conference USA, says the new media rules were not intended to be overly restrictive.

"People are upset, but it's a bit of a misunderstanding," he says. "The goal is to be fair to the news media but also to maintain control over licensed content that is very valuable."

And what about fans who want to Tweet? The conference is also revising that policy.

• To wrap up, you may have heard that Michael Vick signed a multimillion dollar deal with the Philadelphia Eagles last week after serving an 18-month sentence for running a dog fighting ring in Virginia.

That's good news for his bankruptcy lawyers at Crowell & Moring, who have racked up $2.6 million in fees in Vick's bankruptcy case, an amount critics have called excessive, according to our own Brian Baxter. (The fees apparently equate to working 24 hours a day for 300 days, and the fee requests includes things like air conditioning bills).

The firm has agreed to reduce those fees to $1.7 million, but the judge hasn't approved them yet. That may happen during a mega-hearing on Aug. 27, when Judge Frank Santoro will decide whether to approve Vick's general reorganization plan. (Crowell bankruptcy partner Michael Blumenthal declined to comment.)

Either way, Crowell's lawyers will get paid something--especially now that Vick is making money again. The reorganization plan calls for lawyers who represented Vick's creditors to get paid first from funds that are already available, with Crowell lawyers next in line. For anything outstanding, Vick would make payments to his lawyers and creditors after paying his income taxes and keeping $300,000 for annual living expenses.


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