Category: Money & Debt

$1 Billion NFL Class Action Settlement Affirmed, But Still Contested

The Third Circuit in April 2016 held that the estimated $1 billion settlement reached by National Football League (“NFL”) and more than 20,000 retired NFL players while “not perfect,” was fair. In In re: Nat’l Football League Players’ Concussion Injury Litigation players claimed that they sustained concussive and sub-concussive hits while playing for the NFL, which put them at risk for repetitive head trauma. The players argued that the NFL had a duty to warn them of the short and long-term risks associated with such trauma, including Alzheimer’s disease, dementia, depression, and a newly recognized disease called chronic traumatic encephalopathy (“CTE”), but instead, ignored, minimized, or “outright suppressed” information regarding causal relationship.

The parties reached a settlement in principle on August 29, 2013. The settlement, later revised, provides an uncapped monetary fund to compensate retired players, a $75 million baseline assessment program that gives eligible retired players free examinations, and a $10 million education fund dedicated to instructing football players on injury prevention. Included in the settlement is a provision that releases all claims and actions by participating claimants against the NFL “arising out of, or relating to, head, brain and/or cognitive injury as well as any injuries arising out of, or relating to, concussions and/or subconcussive events,” such as CTE.

The settlement received final approval by the District Court on April 22, 2015, but then was appealed by certain objectors.

In affirming settlement approval, the Third Circuit relied upon the lower court’s thorough 123-page analysis to determine that the agreement was fair, reasonable and adequate.

Notably, the Court of Appeals determined that the class was adequately represented despite challenges objectors raised. In cases like this, involving a divided class of people holding present and future interests, a conflict of interest may arise. To overcome the conflict of interest within the class, “there must be structural protections to assure that differently situated plaintiffs negotiate for their own unique interests.” Here, the plaintiffs’ counsel used a subclass structure to protect the divergent interests of the retired players, which the Third Court stated, “alone [was] a significant structural protection for the class that weigh[ed] in favor of finding adequacy.” The Court also cited the uncapped and inflation-adjusted awards, the guarantee of a baseline assessment examination, and the presence of a mediator and special master as structural protections.

Despite the Third Circuit’s holding, two groups of objectors filed petitions for writ of certiorari with the U.S. Supreme Court. Unfortunately, the settlement will not become effective unless and until all appeals are exhausted and resolved in favor of the settlement.