FROM PEE WEE FOOTBALL TO THE NFL: THE POTENTIAL IMPACT OF FOOTBALL-RELATED CONCUSSIONS ON SPORTS AND INSURANCE

IADC Committee Newsletter

The Center for Disease Control estimates that anywhere from 1.6 million to 3.8 million concussions occur each year.  Compared to all contact sports, football has the highest risk of concussions.  The CDC estimates that there is a 75% chance of concussions for males playing football.   In the last 5 years, football-related concussions have become a hot topic, mostly due to the initiation of multiple lawsuits filed by former professional football players against the National Football League (“NFL”).  The lawsuits filed against the NFL raise many legal implications, including the correct standard to apply; the potential liability of the NFL; the requirement of insurers to defend and indemnify the teams and/or the NFL; and whether there is a causal link between the concussions sustained by the players and the lingering effects on those retired players.  This article will address these issues, as well as the various effects that are being felt across the football world as a result of these lawsuits, and more specifically, concussions.

In June 2012, more than 80 lawsuits including over 2,000 former NFL players  were consolidated into one master complaint which was filed in the federal District Court for the Eastern District of Pennsylvania, where the Honorable Judge Anita Brody will preside over the case.  The Complaint contains twelve causes of action against various entities, including the NFL, alleging that the NFL fraudulently concealed the long-term effects of concussions (“Fraud”) and that the NFL failed to implement proper guidelines to decrease the risk of concussions (“Negligence”).  The Plaintiffs consist of numerous retired NFL players, all of whom claim that they are suffering from various lingering effects of concussions sustained while they played in the NFL.  They allege that the NFL had research and information many years ago which indicated that concussions could cause these lingering effects, but that the NFL withheld this information from the players.  In response, the NFL claims that it never hid any information and that it has always made player safety a priority.  It has also asserted arguments that these issues are covered by the collective bargaining agreement and thus, Judge Brody has no jurisdiction to decide the case.

In a 40 page motion to dismiss filed by the NFL on August 30, 2012, the NFL makes two essential arguments: (1) the Labor Management Relations Act (“LMRA”) preempts the players’ claims; and (2) Plaintiffs’ claims are governed by the collective bargaining agreement and therefore, the mandatory arbitration provisions should govern.  In essence, the NFL argues that this case involves nothing more than a labor dispute, while the players contend that the lawsuits have nothing to do with “labor,” but rather are an attack on the wrongs committed by the league.  The players filed their opposition brief on October 31, 2012, insisting that the gravity of the harm caused by the league requires the lawsuits to remain in the Pennsylvania federal court and not in the arbitration system.  While the NFL is expected to file a Reply brief and the players will likely file a Surreply, it is clear that Judge Brody is facing her first decision point since the cases have been filed.  If Judge Brody decides that the issues are preempted, then the lawsuits will be dismissed and the players may either appeal or proceed through the arbitration process.  If Judge Brody decides that preemption does not apply, then the cases will proceed in the federal courts, and the battle over many other legal issues will begin.

If the lawsuits proceed through the federal courts, Judge Brody and the litigants face very complex legal issues.  First, to maintain their cause of action for negligence, the players will have to prove that the NFL breached a duty to the players.  The players allege in their Complaint that the breach consisted of “failing to implement standardized post-concussion guidelines by failing to enact rules to decrease the risk of concussions during games or practices, and by failing to implement mandatory rules that would prevent a player who suffered a mild traumatic brain injury from re-entering a football game and being placed at further risk of injury.”   In support of these allegations, the players will contend that the NFL delayed, before introducing more stringent guidelines on concussions in 2009.  Before the 2009 guidelines, a player was only required to stay out of a game until all the concussion symptoms subsided.  However, the revised guidelines prevent a player from returning to a game in which the concussion injury occurred, and subsequently prevents any physical activity until all symptoms subside.  In support of their allegations, the players will argue that the NFL, despite its awareness that it was dangerous for players to return to games after exhibiting certain symptoms, waited too long to issue the revised guidelines.

Even if the players can overcome that hurdle, the next obstacle they will face is proximate causation.  They must prove that their lingering injuries were proximately caused by their game-day injuries (in most cases, concussions) and the NFL’s failure to implement proper guidelines.  While this will certainly be the subject of expert reports from both sides, the NFL is expected to argue that the players’ current injuries were caused not by concussions, but rather by outside factors such as previous injuries in high school or college, or alcohol, drug abuse, financial problems, and other physical or mental issues that could have caused the players’ medical issues.  These defenses raise the obvious implication that the players involved in the lawsuits will be investigated thoroughly by the NFL, and it is unknown what issues in the players’ pasts may become public knowledge.

Causation is not the only legal argument that the NFL is expected to raise to defend the lawsuits filed by the players.  The NFL will argue that there was no breach, essentially arguing that the league always made player safety a priority and that it was not aware of the long-term dangers of concussions.  Assumption of the risk and comparative negligence, may also be viable defenses.  Under the assumption of the risk theory, the league will assert that the former players knew of the risks of playing football, a violent sport, and still decided to get on the field and take that risk of injury.  The league will therefore assert that it has no liability for these injuries because the players assumed the risk.  Along the same lines, the NFL will also argue that the players contributed to their own injuries.  One example of this is the argument that certain players intentionally did not report their symptoms accurately to the medical staff so that they could get back on the field.  Of course, it is well known that player contracts have incentives for games played and certain achievements.  Thus, the NFL will argue that players affirmatively hid their symptoms from medical personnel to achieve greater financial remuneration.

While the battle between the former NFL players and the league may be getting the most attention, it is not the only battle that the NFL is fighting related to concussions.  One of the most significant issues facing the NFL is whether its legal costs, as well as any potential damages, should be covered by the various companies insuring the NFL.   The NFL is believed to be insured by over thirty (30) different companies, but many of those insurers are denying coverage for these lawsuits.  The questions that courts will inevitably struggle with are what constitutes an “occurrence” under the relevant policies and whether insurers are responsible for incidents that occur on the field.  In fact, many of the NFL’s insurers, including various subsidiaries of Travelers, filed a lawsuit in the New York Supreme Court seeking a declaratory judgment that they were not obligated to defend or indemnify the NFL for the lawsuits filed by the players.  The NFL responded almost immediately by filing a lawsuit of its own in California state court seeking the exact opposite determination.  In late November 2012, the California court issued an opinion holding that California was not the proper venue and that the state of New York, where the NFL has its headquarters, was the correct venue for the case.

The decision by the New York Supreme Court, which could take years, could have a monumental impact on the outcome of the players’ lawsuits.  Without insurance coverage, the NFL will be facing millions in legal costs alone, and the potential for damages in the millions or even billions of dollars.  Facing this possibility could result in the NFL settling these lawsuits much earlier than it otherwise would do, if it were insured for these potential losses.

Another concern, regardless of the outcome of the litigation, is the potential for insurers to raise premiums to compensate for the future risk that their insureds could be liable for concussion-related injuries or limit the coverage available for these risks.  The concern about increased premiums will not only being felt in the NFL, but also other levels including high schools, colleges, and even pee wee leagues.  The NFL is a billion dollar per year industry which could probably withstand the increasing costs and potential for liability.  However, colleges and high schools may face more difficult decisions.  Given their limited budgets, they might not be able to afford the increased insurance and risk of paying out large amounts of damages to injured players.  Schools may even be forced to decide whether continuing their contact sports are worth the risk.  Notably, this decision is not restricted to football, but extends to all sorts of contact sports where concussions are possible.

In sum, the impact of the lawsuits filed by former players will not be limited to the NFL.  It potentially could have an impact on most major sports, at all levels of competition. Although many of the reported effects seem negative, there are positive effects as well, one of them being that all levels of sports leagues are becoming more aware of the impact that a concussion may have on the players’ health, present and future.  As a result, sports leagues are being forced to take the proper precautions to protect the safety of its players, which is most important, and could also help the leagues in defending inevitable lawsuits filed by players.

Since the NFL, its players and its insurers are the focal point for this litigation, the resolution of these issues will closely watched.  Depending upon the result, sports, as we know them, may never be quite be the same.