Beginning in June 2011, former NFL players began filing lawsuits against the NFL alleging that the NFL failed to take reasonable actions to prevent them from the chronic risks of head injuries in football. More and more lawsuits were filed and eventually they were all consolidated before a single federal judge. In total, approximately 5,000 players filed over 300 lawsuits against the NFL.
After the District Court denied approval of an initial settlement agreement for $765 million, citing doubts that a capped fund would be sufficient, the parties reached a second agreement, which was approved by the lower court. Despite approval, some members of the class objected to deal and appealed.
On Monday, the appeals court upheld the agreement, calling it “not perfect, but fair.”
Here are four takeaways from the appellate court’s decision:
The NFL was the heavy favorite, but still sweated it out.
The players objecting to the settlement were heavy underdogs going into the appeal, mainly because the appeals court reviewed the lower court’s decision for “abuse of discretion.” This means that the appellate judges did not have to agree with the lower court’s findings, but only reviewed the opinion for a clearly erroneous finding of fact or law. At times, the judges even acknowledged that, although it is not their role, they might have structured the settlement differently:
[pullquote align=”full” cite=”” link=”” color=”” class=”” size=””]“In the end, this settlement was the bargain struck by the parties, negotiating amid the fog of litigation. If we were drawing up a settlement ourselves, we may want different terms or more compensation for a certain condition. But our role as judges is to review the settlement reached by the parties for fairness, adequacy, and reasonableness.”[/pullquote]
Even if there was only a remote chance of defeat, don’t think that this appeal didn’t terrify the NFL. As much as we see Deflategate in the headlines, the concussion litigation is by far its most important lawsuit and issue for the League moving forward. The health and safety of players threatens the future of the game, and this settlement gives the NFL relative financial certainty on the issue.
If the NFL lost, the settlement would have been scrapped, forcing the parties to go back to the negotiating table and to continue litigating the case. With more and more negative information seemingly coming out by the day (see Jeff Miller’s admission and the New York Times article regarding the NFL using incomplete data in its concussion studies), there is a good chance that the NFL’s liability may have been much greater and it would have been even more difficult for a settlement to be reached (it took a 12 day mediation for the parties to reach the initial settlement).
Some players with CTE will not be compensated.
Under the approved, and now confirmed, settlement, players with a diagnosis of CTE will not be directly compensated. However, the court took particular care to note that some players with CTE will be compensated:
[pullquote align=”full” cite=”” link=”” color=”” class=”” size=””] “Most importantly, objectors are not correct when they assert that CTE claims are released by the settlement in return for ‘nothing.’” [/pullquote]
How can this be? The court reasons that since many persons that are diagnosed with CTE after death suffered from conditions in life that are compensated, such as ALS, Alzheimer’s, and Parkinson’s, they will be compensated through other means. But the settlement does not cover every symptom of CTE. Notably, those who suffer mood and behavior symptoms associated with CTE, such as aggression, depression and suicidal thoughts, will not be compensated.
Unfortunately, this leaves some players with CTE and their families (as of this writing, CTE can only be diagnosed after death) high and dry. This exclusion could leave the NFL liable for future litigation. In fact, former NFL players Tracy Scroggins (who is a member of the settlement class) and Joe Horn (who is not), recently filed a class action lawsuit against the league for players who have been “pre-diagnosed” with CTE.
The Attorneys will be compensated handsomely.
To the tune of about $112.5 million split among the plaintiffs attorneys, all for not taking a single deposition. Lawyers for the NFL and Plaintiffs actually have not formally agreed upon the total amount of fees, however, the NFL has agreed not to contest any award up to $112.5 million. As such, the court noted, “a betting person would say it will be close to $112.5 million.”
The appeals court examined several aspects of this “agreement”. First, they determined that, although unusual, there is no rule prohibiting the attorneys from not agreeing to the amount of fees at the same time as the rest of the settlement. Once the formal agreement is reached, objectors will be able to present arguments as to why the requested amount is improper, and the district court may modify the fees based on those arguments.
Agreements between the parties of a class action lawsuit not to contest attorneys fees (called “clear sailing provisions”) raise concerns of potential collusion amongst the attorneys. It is not difficult to imagine a scenario where plaintiffs’ lawyers agree to concede an item of value in the settlement in order to make sure they will be compensated without a fight. However, in this case, the court found no evidence “that class counsel bargained away the claims of the retired players in return for their own fees” because (1) fees were not discussed until after the settlement was agreed to; (2) the fee award is separate from the class recovery; and, (3) the amount is just over 10% of the class recovery.
The appellants may seek an en banc review (seeking review by all of the appellate judges in this Circuit) of the case and then, if not successful, petition the U.S. Supreme Court, but both requests are highly unlikely to be granted. Assuming that both appeal avenues are a dead end, it is just a matter of time before this version of the settlement is finalized. As, noted earlier, members of the settlement class may also object to the amount of attorneys fees once that number is finalized, which is unlikely to derail the settlement but may drag on the proceeds.
The 220 former players who opted out of the settlement agreement will be able to continue pursuing their cases against the NFL. Current and future NFL players may also bring lawsuits against the League; however, the NFL’s current initiatives addressing concussions will make future cases relatively more difficult to pursue.