November 11, 2008 3:33 PM

Manatt, McKool Sack NFL Player's Union

Posted by Zach Lowe

It's not hard for the Am Law Daily to picture Hall of Fame cornerback Herb Adderley, clad in a yellow "NFL Alumni" blazer, weeping in a federal courtroom in San Francisco after a jury awarded him and some 2,000 other retired NFL players more than $28 million in damages after finding that their union had wrongly excluded retirees from its marketing deals.

"I won three Super Bowls and this feels better than all of them combined," Adderley said after the verdict came in, according to the Associated Press.

Adderley and his fellow plaintiffs have Manatt, Phelps & Phillips and McKool Smith to thank for the $7.1 million jury award and $21 million in punitive damages the same jury tacked in rendering its verdict on Monday.

(Note for sports nuts: Adderley played for the Green Bay Packers in the Ice Bowl, and is one of just a handful of players to suit up for both Vince Lombardi's Packers and Tom Landry's Dallas Cowboys).

The player union's attorney, Dewey & Leboeuf's Jeffrey Kessler, says the jury was motivated by sympathy and ignored the evidence in the case. He says the union did not violate the terms of its licensing agreement with the players, and expects the verdict to be overturned.

Manatt got the case when Bernie Parrish, 72, a former Cleveland Browns defensive back, called partner Ron Katz. Parrish had read about Katz winning a similar case in the late 1990s on behalf of Major League Baseball players and called out of the blue, Katz says.

Parrish was concerned about a host of issues, including pension plans and disability protections. But Katz read the five-page licensing agreement the NFL Players Association (NFLPA) signs each year and decided that was where the biggest potential payoff lay.

"I saw that licensing was where the big dollars were," Katz says.

How big? Take the union's annual deal with Electronic Arts, makers of the hugely popular John Madden football video game (which, by the way, the Am Law Daily was quite good at back in the late '90s). Electronic Arts pays the NFLPA about $35 million each year to use the names and likenesses of players.

Until now, none of that money has gone to retired players--even though the game includes 143 vintage teams, including at least one of Adderley's Packer squads. EA scrambled the images of the "vintage" players and did not use their real names. The union claimed they encouraged EA to do so in order to protect the retirees' rights, but Manatt and McKool argued it was another way for the NFLPA to avoid sharing licensing revenue. That, Katz says, is a violation of the NFLPA's licensing agreement, which requires the union to share licensing revenue equally with ex-players.

"Instead, they got zero dollars for more than 16 years," he says.

Katz called McKool Smith and asked for their help on the case; the two firms have worked together on IP cases in McKool's home base in Texas, says Lewis Leclair, a McKool principal who worked on the case.

"It's a great partnership," Leclair says. "A true 50-50 partnership."

Kessler, who serves as the union's regular outside counsel, says companies like EA paid only for the licensing rights to the names of active players. He says jurors reacted emotionally to a statement -- which he says were taken out of context -- in which former union chief Gene Upshaw referred to retired players as "dog food."

"That was their entire case," Kessler says.

As for Manatt, it's been quite a nice two weeks. Late last month, they won nearly $707 million in damages for a satellite communications company who claimed Boeing violated the terms of a contract the companies signed in the late 1990s.

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