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MAY
17
2 YEARS

Electronic Arts Fails to Dismiss Athletes' Antitrust Class Action

Judge rules there's enough in allegations that EA has conspired to not pay former student-athletes to continue forward in the lawsuit.

EA Logo - H 2012

Electronic Arts isn't escaping a lawsuit brought by former collegiate athletes who allege a conspiracy to forbid them from profiting from their images and likenesses in sports video games. On Wednesday, a California federal judge denied EA's attempt to score a quick win.

The athletes, including Jim Brown, Sam Keller and Ed O'Bannan, claim that when athletes agree to participate in Division I collegiate sports, they're told to sign a waiver agreement that gives the NCAA and its licensees the right to use their images, likenesses, and names without compensation. The athletes say that these agreements have been interpreted to exist in perpetuity, even after the student-athletes have ended their collegiate playing career. Further, the athletes allege that the NCAA and its partners have come to their own agreements to not pay collegiate athletes and to refuse to bargain with them whatsoever.

Last year, a federal judge denied an attempt to dismiss the amended lawsuit, but EA recently asked the court to review its licensing agreements with the Collegiate Licensing Company, the entity that works with the NCAA to license its intellectual property. EA believed that a reading of the licensing deal would would conclusively refute the plaintiffs' allegations.

Judge Claudia Wilken does review, but comes to the opposite conclusion.

In an opinion released on Wednesday, the judge says that a reading of the allegations about the agreements in the context of the overall complaint "do not refute" the allegations.

Specifically, as part of EA's licensing agreement, the video game publisher agrees that it will "not encourage or participate in any activity that would cause an athlete or an institution to violate" the NCAA's rules.

The judge says this doesn't distinguish between former and current student-athletes and "can fairly be read" as evidence of a "meeting of the minds" between the defendants to not compensate ex-collegiate athletes. The judge also points to other terms in the contract where CLC and the NCAA have written approval over all licensed products containing student-athletes' likenesses and the broad authority to inspect EA's financial records related to the products, "allowing them to see that payments were almost never made to former student-athletes," says the judge.

EA has recently put to bed some of its other big lawsuits, including an antitrust lawsuit over the price of "Madden Football" and a dispute with rival Activision over alleged interference with the executives who developed "Call of Duty." But this lawsuit continues to move forward.

E-mail: eriq.gardner@thr.com

Twitter: @eriqgardner