In a unanimous decision, the Indiana Supreme Court held that online fantasy sports operators do not need the consent of athletes whose names, pictures and statistics are used in connection with contests and/or related advertising, even though those operators collect payment for entry into such contests and distribute cash prizes. This is despite Indiana’s far-reaching right-of-publicity statute, which prohibits the use of “an aspect of a personality’s right of publicity for commercial purpose…without having obtained previous written consent.” Ind. Code § 32-36-1-8(a).
The question came before the Supreme Court by way of the United States Court of Appeals for the Seventh Circuit in the course of deciding the appeal of a federal right-to-publicity lawsuit, Akeem Daniels, et al. v. FanDuel, Inc., and DraftKings, Inc., 17-3051. The underlying action involved three collegiate student-athletes whose on-field performances were collected as numerical statistics and published by various fantasy sports operators. Consumers could pay a fee to access detailed information about the athletes, including their names, images and statistics. The athletes filed a class action complaint against various fantasy sports operators in Marion County, which was removed to the U.S. District Court for the Southern District of Indiana. The District Court, ultimately, dismissed the suit on the basis that the athletes’ right of publicity was not violated because the use of their likeness was (1) in material that had newsworthy value and (2) a matter of public interest, two codified exceptions to the Indiana right-to-publicity statute (Ind. Code § 32-36-1-1(c)).
At issue on appeal was: (1) whether the exceptions actually applied; and (2) whether fantasy sports operations are illegal gambling enterprises and therefore unable to take advantage of any statutory exception whatsoever. The Seventh Circuit justices found that “[i]t would be inappropriate for us to decide [the] question…without knowing exactly what it is that state law provides [on the issues]” after finding “nothing” in Indiana judicial precedent to guide their decision. Thus, the Seventh Circuit certified these questions of Indiana law to the Indiana Supreme Court.
The Indiana Supreme Court recognized at the outset that its decision would carry considerable weight, and therefore emphasized the narrow focus of its analysis and holding, finding only that the newsworthy value exception applied to the fantasy sports operators’ use of the athletes’ names, images and statistics.
The Court summarily disposed of the athletes’ argument that the exception does not apply to commercial activity and held that an entity need not be a media company or news broadcaster in order to employ the exception. In concluding the term “newsworthy” is to be construed broadly under the statute, the Court called upon the “genesis and evolution of the right of publicity” in history, citing the Zacchini v. Scripps-Howard Broadcasting Co., 433 U.S. 562, 97 S.Ct. 2849, 53 L.Ed.2d 965 (1977) decision involving a “human cannonball” act as well as various First Amendment decisions. The Court found that the “use of players’ names, images, and statistics in conducting fantasy sports competitions bears resemblance to the publication of the same information in newspapers and websites across the nation…This information is not stripped of its newsworthy value simply because it is placed behind a paywall or used in the context of a fantasy sports game.”
On the issue of whether the fantasy sports operators’ advertisements fell under the scope of the newsworthy exception, the Court deferred making any factual determination to the Seventh Circuit, at the risk of overstepping the bounds of the certified question. However, the Court recognized that “the unauthorized use of a personality to advertise or promote a product likely lies outside the scope of what is considered newsworthy.” Nonetheless, the Court noted, in the context of fantasy sports, “it would be difficult to draw the conclusion that the athletes are endorsing any particular product such that there has been a violation of the right of publicity.”
The Court further declined to examine the public interest exception to the Indiana right-to-publicity statute, given its finding that the fantasy sports operators’ use fell under at least one statutory exception.
While the Supreme Court’s decision merely guides the Seventh Circuit’s appellate review of the issues before it, it would be confounding for the Seventh Circuit to explicitly seek State guidance under Indiana Appellate Rule 64 (permitting certification of a question “when it appears to the federal court that a proceeding presents an issue of state law that is determinative of the case and on which there is no clear controlling Indiana precedent”) only to ignore the results. The Seventh Circuit has found the issues decided by the Supreme Court determinative on appeal and is duty-bound to follow State court precedent. Thus, the Supreme Court has likely solidified the right of fantasy sports operators in Indiana to use athletes’ names, pictures and statistics in connection with their services and promotions, without the consent of, or payment to, those athletes. Further, this result may not be limited to Indiana, because in every other state where the statutory scheme protecting the right of publicity contains a “newsworthiness” exception similar to Indiana’s, this opinion is likely to be instructive, guiding and potentially dispositive.
While of seemingly limited scope, the Court’s decision is a chink in Indiana’s formidable right-to-publicity statute, historically affording personalities broad protection of their likeness during life and death. The Court’s decision appears to limit personality’s protection based on the very reason they so badly need it—their celebrity status and presence in the news—permitting third-parties to profit off the use of a personality’s likeness so long as that likeness has been seen elsewhere in the public eye. This decision is particularly concerning in the collegiate-sport context, where athletes are notoriously prohibited from capitalizing—at least monetarily—on their skill and celebrity on the field. While fantasy sports may provide the most prevalent example of such non-consensual use at present, it remains to be seen where the justices may fall given similar contexts.