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The world of professional athletes has long been extremely financially rewarding. In recent years, college athletics have approached professional levels where revenue is concerned. The biggest difference is whether or not the players get a cut of the action. Beginning in 2008, the National Collegiate Athletic Association (NCAA) has faced increasing criticism from people who claim that college athletes are being exploited while colleges and the NCAA are making millions off the performance of these players.

The exploitations might not be permitted to last much longer. Ed O’Bannon, a former basketball star for UCLA, watched a friend’s son start up a video game in 2008 and was surprised to see himself appear on the screen. While his name never appeared, the player in the game undoubtedly resembled O’Bannon, down to his physique, his player number, and his right-handedness. O’Bannon was initially flattered until he realized that the gaming company was making money off of his likeness while he, O’Bannon, received nothing. The video game was published by E.A. Sports, a brand of Electronic Arts.

Beginning in 2009, O’Bannon filed a lawsuit seeking licensing of broadcast and video game rights for student athletes. Shortly after O’Bannon filed his lawsuit, the NCAA released a statement that its agreement with E.A. Sports prohibits the use of the names and pictures of athletes. However, in July 2003, six years before the lawsuit was ever filed, Peter Davis, an NCAA official, noted that Electronic Arts did include a feature in their latest football game, which allowed users to download rosters of players’ real names. Electronic Arts responded that the game did not use real names, although it did use “all the attributes and jersey numbers of the players.”

In an email, Davis asked if that was “too close to reality”. He was then warned by another NCAA executive, Melissa Caito, to be “cautious as you move through this – any more ‘watering down’ of the video games will likely move the manufacturers to cease operations with us”. Such a statement reflects the NCAA’s awareness that the video game avatars were pushing the limits of the law. It also demonstrates their determination to make as much money as possible off of the student athletes, while simultaneously making sure that they do not receive any of that money.

Other emails provide further evidence of high-level executives who see absolutely nothing wrong with the way they treat their athletes. David Berst, a senior NCAA executive, wrote to the head of the organization in August 2008 that, regarding “the student athlete, I think the focus of the exploitation may be misplaced, and maybe it is not our duty to protect the student athlete.”
Christine Plonsky from Texas, part of the presidential task force on commercialism, was equally dismissive. She wrote, “We have things we have to do a certain way to raise funds and pay for the scholarships and other things that [student athletes] and their parents expect. I view these cases as being the result of the entitlement attitude we’ve created in our revenue sports.”
Now O’Bannon’s lawsuit is moving to a critical stage.

A federal judge in Oakland, California will hear arguments concerning whether the case can proceed as a class action. If class-action status is granted, it would give the plaintiffs the opportunity to represent thousands of current and former student athletes.

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Our Chicago class action attorneys note that a class action claim against an insurance company, which the defendant had removed to federal court, fell within an exception to the federal jurisdiction statute, according to a federal district judge in LaPlant v. The Northwestern Mutual Life Insurance Company, No. 11-CV-00910, slip op. (E.D. Wis., Aug. 20, 2012). The court remanded the case to Wisconsin state court under the corporate governance exception to the Class Action Fairness Act (CAFA), 28 U.S.C. § 1332(d). It held that the plaintiffs’ claims related exclusively to the defendant’s “internal affairs,” based on Wisconsin law.

The defendant issued an annuity insurance policy to the lead plaintiff. As a mutual insurance company, the defendant was “owned cooperatively by its policyholders,” LaPlant, slip op. at 1, and paid dividends to policyholders out of its profits. In 1985, it moved policyholders’ money into a separate fund and began paying dividends based on interest generated by the fund. Id. The amount of the payments received by the policyholders allegedly decreased as a result of this change. Wisconsin law gives policyholders the right to participate in annual profit distributions. Wis. Stat. § 632.62(2).

The lead plaintiff brought a class action lawsuit for breach of contract and breach of fiduciary duty on behalf of a class of policyholders in Wisconsin. The class prevailed at trial, and the lead plaintiff moved to expand the scope of the class to include policyholders in other states. The defendant removed the case to federal court under CAFA, which confers jurisdiction to federal courts over class actions with more than one hundred class members, more than $5 million in controversy, and diversity of citizenship between the defendant and at least one class member. The plaintiff moved to remand the case to Wisconsin state court based on the “corporate governance exception,” which applies when a class action’s claims solely relate (1) “to the internal affairs or governance of a corporation” (2) based on the laws of the state of incorporation. LaPlant, slip op. at 2, citing 28 U.S.C. §§ 1332(d)(9)(B), 1453(d)(2).

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A federal court allowed most causes to proceed in a putative class action against a bank for allegedly fraudulent overdraft fees. White, et al v. Wachovia Bank, N.A., No. 1:08-cv-1007, order (N.D. Ga., Jul. 2, 2008). The plaintiffs, who alleged that the bank had recorded transactions out of chronological order to maximize overdraft fee liability, claimed violations of state deceptive trade practice laws and several claims related to breach of contract. The court denied the defendant bank’s motion to dismiss as to all but two of the plaintiffs’ claims.

The two lead plaintiffs opened a joint checking account with Wachovia Bank in 2007. They signed a Deposit Agreement that stated that the bank could pay checks and other items in any order it chose, even if it resulted in an overdraft. It also stated that the bank could impose overdraft charges if payment of any single item exceeded the balance in the account. The plaintiffs alleged in their lawsuit that Wachovia ordered its posting of transactions in a way that would cause their account to incur overdraft fees, even when they had sufficient funds to pay the items. They also alleged that the bank imposed overdraft fees when no overdraft had occurred.

The lawsuit, originally filed in a Georgia state court in February 2008, asserted violations of the Georgia Fair Business Practices Act (FBPA), O.C.G.A. §§ 10-1-390 et seq., and breach of the duty of good faith. The plaintiffs also claimed that the clause of the Agreement related to the ordering of transaction was unconscionable, that the bank had engaged in trover and conversion, and that it had been unjustly enriched. The defendant removed the case to federal court under the Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d)(2), which allows defendants to remove certain class actions to federal court. It then moved to dismiss all claims under Federal Rule of Civil Procedure 12(b)(6), which allows a court to dismiss a lawsuit that “fail[s] to state a claim upon which relief can be granted.” To defeat such a motion, a plaintiff must show a plausible factual basis for their claims.

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The Chicago class action attorneys and consumer fraud lawyers at DiTommaso Lubin filed a lawsuit alleging consumer fraud on behalf of our clients against famed Chicago Chef Charlie Trotter claiming that he sold what the specially retained expert concludes is a counterfeit bottle of rare wine. Trotter denies our client’s claims and asserts that they simply have “buyer’s remorse” according to a report in the Chicago Tribune. Our clients, a small family of wine enthusiasts, very much wanted to add the rare wine to their collection. They believed it was a magnum-size bottle of 1945 Domaine de la Romanée-Conti. They sought to have it insured but their carrier required them to get it authenticated. The expert concluded in the report attached to the lawsuit that the bottle was not authentic. After trying to get their money back, the client believed that they had no choice but to file suit so that they could get their over $46,000 investment back. They retained our Chicago fraud attorneys and we filed suit alleging consumer fraud and magnuson moss warranty claims on their behalf. We based the suit on the expert report that the wine was unmerchantable and that Charlie Trotter should have known based on his claimed expertise that it was not authentic. Charlie Trotter denies the claims according to the Chicago Tribune report and has not yet responded to the suit formally so it will now be a matter of proving the case in court before a jury which will decide the merit of the claims. The Complaint only states our clients’ claims which they need to prove.

The Complaint filed by our Chicago class action lawyers and Chicago consumer fraud attorneys alleges the following:

13. … A Charlie Trotter’s employee negotiated the price – $46,227.40 – with Benn and Ilir. Based on Defendants’ representation of the rarity and value of the DRC magnum, Benn and Ilir agreed to purchase it. Ben and Ilir paid Charlie Trotter’s $40,000 in cash and $6,227.40 by credit card for the DRC magnum.

14. On June 17, 2012, Defendants shipped the DRC magnum to Benn’ New York residence.

15. Upon receiving the DRC magnum, Benn contacted his insurance carrier. He notified the carrier that he wanted to list the DRC magnum on his homeowners insurance. Benn’s carrier informed Benn that 1945 bottles of Domaine de la Romanee-Conti are often counterfeited and that Benn would need to authenticate the DRC magnum through an expert before it would provide coverage.

16. On or about September, 2012, Benn retained Maureen Downey, DWS, CWE, FWS of Chai Consulting to authenticate the DRC magnum. Ms. Downey determined that the DRC magnum was counterfeit and valueless based on the physical attributes of the DRC magnum, the provenance provided by Charlie Trotter’s, and her discussions with experts on Domaine de la Romanee-Conti wines. See Exhibit 1. Ms. Downey visited the estate of Domaine de la Romanee-Conti after preparing her report. She spoke with Jean-Charles Cuvelier, the estate director of Domaine de la Romanee-Conti, regarding the production of large format bottles. The information Ms. Downey received from Jean-Charles Cuvelier confirmed the accuracy of her report.

The Complaint’s claims have been denied by Charlie Trotter according to the Chicago Tribune report and Defendants have denied the allegations.

Below is a video about famed Chef Charlie Trotter:

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A California federal court awarded $203 million in damages to a class of plaintiffs in Gutierrez v. Wells Fargo Bank, NA, 730 F.Supp.2d 1080 (N.D. Cal. 2010). The lawsuit alleged that the defendant bank overcharged the plaintiffs, who held deposit accounts at the bank, for overdraft fees, using a series of deceptive bookkeeping techniques. A similar bookkeeping trick was the subject of an Illinois lawsuit resulting in a settlement, Schulte v. Fifth Third Bank, 805 F.Supp.2d 560 (N.D. Ill. 2011).

According to the court’s ruling in the Gutierrez case, Wells Fargo charged individual depositors more than $1.4 billion in overdraft fees between 2005 and 2007, just in the state of California. Gutierrez, 730 F.Supp.2d at 1082. The lawsuit, filed on behalf of individual depositors, alleged that Wells Fargo used a bookkeeping trick known as “resequencing” to turn a single $35 overdraft charge into as many as ten overdraft charges. The bank would then hide this technique behind a “facade of phony disclosure.” Id. The court outlined how the bank would sequence transactions from the highest amount to the lowest amount, out of chronological order, often resulting in a negative balance in an account earlier than if it had sequenced the transactions in any other order. This maximized the amount of overdraft fees the bank could charge to the account. Id. at 1088.

The allegations in the Schulte case were similar to those in Gutierrez. Fifth Third Bank allegedly processed ATM and debit card transactions out of chronological order. During a posting period, the bank would process the largest transactions first, proceeding in high-to-low order. Schulte, 805 F.Supp.2d at 565. This allegedly almost guaranteed that, if a depositor overdrew their account during that posting period, the bank could collect more overdraft fees.

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A Florida appellate court reversed an order certifying a class of doctors claiming breach of fiduciary duty and other causes of action against their employer. InPhyNet Contracting Services v Soria, 33 So.3d 766 (Fl. Ct. App. 2010). The case began as a suit alleging breach of a covenant not to compete against one physician, leading the physician to counterclaim on behalf of a putative class with regards to a bonus compensation plan. After separating the physician’s individual claims from the class claims, the trial court certified a class. The appellate court reversed, finding that the class claims did not meet the requirements of commonality or predominance over class members’ individual claims.

InPhyNet Contracting Services (ICS) places physicians in hospitals around the state of Florida on a contractual basis. It offers incentives to physicians to work in hospital emergency rooms through a Physician Incentive Plan (PIP), which pays doctors out of a “bonus pool” associated with a hospital based on performance and similar factors. Id. at 768. ICS placed Dr. David Soria in the emergency room of Wellington Regional Medical Center, where he worked as Medical Director. The dispute between Soria and ICS began when Wellington terminated its contract with ICS and contracted with a competitor, and Soria began working for the competitor.

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A putative class action alleging violations of the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. (FCRA), must be submitted to binding arbitration, according to the court in Collier v. Real Time Staffing Services, Inc., No. 11 C 6209, memorandum opinion and order (N.D. Ill., Apr. 11, 2012). The court found that a clause in the contract between the plaintiff and defendant required both parties to submit any disputes between them to arbitration. On the question of whether the class claims asserted by the plaintiff were subject to mandatory arbitration, the court left it for the arbitrators to decide.

The plaintiff, Darion Collier, submitted an electronic job application to the defendant, Real Time Staffing Services, which did business as SelectRemedy. According to the court’s order, the plaintiff signed an acknowledgment that said his employment with SelectRemedy would begin once he started an assignment for one of its clients, and that it would be on an “at-will” basis. The acknowledgment further said that SelectRemedy could at any time modify the terms and conditions of his employment. Order at 2. SelectRemedy did not hire the plaintiff after reviewing his application, allegedly based on information in his consumer credit report.

The plaintiff filed suit on September 7, 2011, alleging violations of the FCRA on behalf of himself and a proposed class. SelectRemedy filed a motion to dismiss under Rule 12(b)(1) of the Federal Rules of Civil Procedure, asserting that an arbitration agreement signed by the plaintiff with his application precluded the lawsuit. The agreement stated that the plaintiff agreed to submit any disputes to binding arbitration in accordance with the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (FAA). In opposing the motion to dismiss, the plaintiff argued that the arbitration agreement was unenforceable for lack of consideration, that SelectRemedy’s ability to change the terms of employment rendered the contract illusory, and that the arbitration agreement should not cover class claims.

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