Key Sports Law Cases of 2014

Monday, 05 January 2015

With the New Year upon us we thought it would be a good time to reflect on some of the key sports law cases and developments of 2014. Therefore we asked our Editorial Board and Advisory Board members to pick some of their key sports law cases and/or developments of 2014.

Mark Hovell, Head of Sport, Mills & Revee & CAS Arbitrator

For me, it was the case that never was – UEFA vs Manchester City. As we know, it was settled on various terms that saw City pay a fine of EUR 20m, with a further EUR 40m suspended; limits put on the club’s spending in the transfer market last summer; limits on the Champions League squad size; and a reduction in acceptable deviations on FFP losses going forwards. What we can only speculate upon is exactly what City were charged with – possibly the inter-group IP transactions, possibly the Etihad sponsorship deal and/or possibly a difference in accounting treatment of pre-2010 salary costs – we just don’t know. What we do know, however, is both parties avoided the risk of the matter being heard firstly at UEFA and then at the Court of Arbitration for Sport (CAS). For City, they could budget for the future and for UEFA, their FFP Regulations remained intact and it has some useful precedents going forward for any other non-compliant clubs. For the lawyers, it was all a bit of a disappointment! Having seen the positive effect the Regulations have had on the health of the Game, as demonstrated in UEFA’s Benchmarking Reports, it’s proving revolutionary for European football.

Prof. Jack Anderson, Professor of Law, Queen’s University

2014 will, I believe, be remembered as the year of the whistle-blower in sport. In July, New Zealand cricketer Lou Vincent admitted match-fixing and received a life ban from all participation in the sport but co-operated with anti-corruption officials from both the International Cricket Council and the England and Wales Cricket Board relating to allegations of his involvement in the spot-fixing of matches.

Around the same time, Emma O’Reilly, the masseuse to Lance Armstrong and his US Postal Service team launched her memoir, The Race to Truth, based on her experiences during the team’s Tour de France domination. At interview given by O’Reilly to the journalist David Walsh in 2003 was the catalyst for a series of events that ultimately lead to the USADA’s damning report of Armstrong and US Postal.

Two other more recent whistleblowing incidents include the evidence given by Phaedra Almajid and Bonita Mersiades to Michael Garica, the head of FIFA’s investigatory arm, in the course of an investigation into the FIFA World Cup bids of 2018-2022. Both subsequently complained that the infamous Echkert summary of the Garcia report breached the condition of anonymity under which they agreed to cooperate.

Finally, in his first interview since the broadcasting of the German TV documentary Top Secret Doping: How Russia Makes Its Winners, the whistle-blower Vitaliy Stepanov gave further insight this week to David Walsh in the Sunday Times as to into the extent and nature of widespread doping in his home country.

All of the above matters will continue to play out in 2015.

Ariel Reck, Sports Lawyer, Argentina

For me, the key case in 2014 was the “Suarez biting incident” decided by CAS 2014/A/3665 & 3666 & 3667 Luis Suarez, FC Barcelona & Uruguayan Football Association v. FIFA. The operative part of the decision was notified on 14 August 2014 and the grounds were communicated at the beginning of December 2014.

The award confirmed the fine and the official matches suspension: 9 games with the Uruguayan National team and 4 months with Barcelona. The football related activities and stadium ban were both revoked. The key aspects to study from the award are: Barcelona’s standing to appeal despite not being a party at FIFA level, the interaction between art.48 and 57 of the FIFA Disciplinary Code, the proportionality of the ban and the consideration of recidivism and finally, the most controversial issue (in my opinion), the way FIFA and CAS disregarded without further explanation the principle established in art.36 Of the FIFA Disciplinary Code:

“Cautions received during one competition are not carried over to another Competition”

Paul Greene, Partner, Global Sports Advocates

The decision by the Chicago office of the National Labor Relations Board that deemed Northwestern University men’s football players to be employees of the school. While the decision remains on appeal, the symbolic effect of a legal determination that college student-athletes are "employees” of a university is far reaching in the US. If upheld, the notion that student-athletes are legally eligible to be paid salaries as employees would threaten to blow up the college sports model as we know it and force the NCAA to regroup in a still to be determined way.

Daniel Geey, Senior Associate, Fieldfisher

The UEFA Financial Fair Play (FFP) settlement decisions published in May, incorporated the first break-even sanctions imposed by UEFA on a number of high profile clubs including Manchester City, PSG, Zenit and Galatasaray. Some have criticised UEFA by pointing to the settlement agreements having limited value because no club that UEFA believed was in breach was actually banned from UEFA competition. Nonetheless, nine clubs had relatively severe sporting sanctions imposed including squad size reductions and transfer budget restrictions. The wider impact of FFP can also be seen with club losses in the most recent UEFA benchmarking report decreasing by over €600m. Although some may question the severity of the settlement sanctions imposed, there are plenty of reasons to suggest that UEFA has hit clubs hard with budget and squad size constraints. It appears a raft of sanctions are having a deterrent effect for clubs though expulsion for break-even breaches is yet to be imposed by UEFA.

Sean Corbett, Brand Protection Manager, Formula One Management Limited

Cosmetic Warriors (Lush) v Amazon (trade marks)- The High Court of England & Wales found that Amazon’s use of the registered trade mark LUSH as a Google Adword was an infringement where the trigger for the Adword did not enable consumers to determine without difficulty that the goods being offered were not actual LUSH products. Essentially Amazon was using the LUSH mark as a “generic indicator of a specific class of goods” and this adversely affected the ability of LUSH to fulfil its primary function, i.e. to act as an indication of trade origin. What makes this any different from other Keyword or Adword case? In this case the Court also found an infringement where the use of the registered mark within the search facilities on Amazon’s own website automatically suggested “lush” products in drop down menus directing consumers to alternative products in circumstances where it was difficult for consumers to determine that the aforementioned products were not actual LUSH products and such use therefore interfered with the origin, advertisement and investment functions of the mark. The decision may impact sport events owners (e.g. ticket sales) and sports retailers (e.g. merchandising), who should pay close attention to the manner in which they offer alternative products linked to a specifically searched term on their own website. Search results will almost certainly need to be clear as to what products are being offered to the consumer.

I couldn’t overlook another trade mark case fresh off the press that is close to my heart after an epic 10-year battle concluded with the General Court upholding an opposition (Formula One Licensing v OHIM, Case T-10/09 RENV, 11 December 2014 ) against the figurative mark F1-LIVE which has seen the Formula One Group take the fight all the way to the CJEU to overturn the unlawful removal of the protection afforded to an earlier trademark and back down to the General Court again for a decision on the facts. In what was good news for all trade mark owners and great news for the world’s most famous brand of racing F1® is back in pole position to protect its rights in the trade mark F1 even when compared against marks that incorporate other “allegedly” distinctive elements.

Alfonso Valero, Principal Lecturer

Gibraltar Betting vs CMS [2014] EWHC 3236 (Admin). The claimant is the representative body of those gambling operators licensed in Gibraltar (substantial number of them). The case was brought against the Secretary of State for Culture, Media and Sport and the Gambling Commission challenging the legality of the amendment of the Gambling Act 2005 by way of the Gambling (Licensing and Advertising) Act 2014. The new statute required that any gambling operator offering its services in the UK would have to obtain a licence. According to the claimants, the Act was disproportionate and contravened article 56 TFEU (regulating the freedom to provide services within the territory of the EU).

The previous system was probably the most liberal system of the whole of the European Union, allowing advertising and betting to users based in the UK even if the operator was located in Gibraltar, EEA and other states. Contrast this approach with, for example, Portugal (Liga Portuguesa de Futebol Profissional v Departamento de Jogos da Santa Casa da Misericordia de Lisboa (C-42/07) [2009] E.C.R. I-7633, [2010] 1 C.M.L.R. 1) or Sweden regime, now under challenge.

Green J. understood that even if there was restriction (which was not subject to dispute), it was proportionate and allowed in the context of EU law since the measures adopted are not beyond what is necessary and also protect the consumers. The judgement makes a good case for the validity of the law even if the EU changes its position with regards to harmonisation of the gambling market.

Prof. Mark James, Professor of Laws, Northumbria University

2014 Agenda 2020 and the New Host City Contract. Not a case, but potentially more important than any issue litigated in 2014. In passing each of the proposals for change identified by the Agenda 2020 consultation, the IOC has thrown down the gauntlet to all governing bodies, but most particularly to itself, that there needs to be a new way that sporting mega events are organized. These changes affect the Olympic Charter, the Fundamental Principles of Olympism, the bidding process, content and location of the Games and the Host City Contract. In moving to a more open bidding procedure, requiring greater transparency, highlighting the need for increased sustainability and bringing human, social, economic and environmental rights to the foreground, a new template for organising the Olympic Games is on the horizon. The impact of Agenda 2020 will only become apparent in its implementation and will be a test of the IOC’s commitment to change. However, nations like Germany and the USA that refused to bid for the 2022 Winter Games are already actively considering bidding under the new rules for the 2024 Summer Games. If successful, Agenda 2020 could see a change in the way that all sporting mega-events are governed.

Chris Duffy, Solicitor, IMG

My key case of 2014 has come late in the year and wasn’t exactly a reasoned judgement from a public court but has the potential to be absolutely earthshattering in the sports world. The decision of the FIFA Appeal Committee to rule that Michael Garcia’s appeal against the summary of his report which was released by Hans-Joachim Eckert was inadmissible, is not ground-breaking in the slightest on its own merits. However, this was clearly the straw that broke the camel’s back from Mr Garcia’s perspective and the domino effect that this decision has created could shake the football world to its very core.

Mr Garcia’s decision to resign immediately following the announcement of the Committee’s findings has caused FIFA to re-evaluate the situation and FIFA executives have now unanimously agreed that the full findings (redacted where required and after certain other investigations are completed) should be released next year. Although, such U-turns are not unheard of, the speed of the turnaround and the public statements from several influential figures are very interesting. Given the current feelings of the footballing world in general towards FIFA, Qatar 2022 and Mr Blatter in particular, the fall-out next year could see some major changes.

Nick De Marco, Barrister, Blackstone Chambers

2014 saw a number of interesting cases in sport. The impact of social media led to a few noteworthy disciplinary cases in football. But for my ‘top’ case I’m choosing a recent decision of the CAS, soon to be published in full, dismissing the appeal (in part) of Oracle Team USA sailor Dirk de Ridder who had been found guilty of breaking the rules in the Americas’ Cup: CAS 2014/A/3630 Dirk de Ridder v International Sailing Federation (ISAF). The circumstances of the case, and the findings of the CAS tribunal, will be interesting to many, not least as part of the emerging canon of CAS cases on the correct approach to cheating or corruption in sport. But it is the enunciation of some ‘essential requirements of fairness’ in sports disciplinary procedures that will be of wider importance to those involved in Sport. The requirements include the need for there to be a clear demarcation between the roles of investigator, prosecutor and adjudicator – a separation of powers, as well as important protection for the accused to have disclosure of all the information used against them, independence of appellate bodies and the principle of non-retroactivity.

Many of these principles of procedural fairness should be obvious to lawyers, but not every sports body adheres to them as rigorously as one might hope all of the time. Those bodies which incorporate a right of a de novo appeal to CAS (such as ISAF and most Olympic sports), or to some other independent appeal body, are likely to be able to have any earlier defects in procedure (that they shall no doubt still wish to avoid) cured by appeal. Those who don’t should take even more care to ensure their procedures comply with these essential requirements – a failure to do so may well open up other challenges to disciplinary action (whether by way of Bradley type review – in which one would expect the same approach, or under the Arbitration Act, or otherwise).

John Wolohan, Attorney and Professor of Sports Law, David B. Falk College of Sport and Human Dynamics at Syracuse University

Identifying the most important sports law case of 2014 really depends on your point of interest: professional or college sports. For example, if involved in professional sports the NFL’s concussion settlement would probably be on the top of your list of important cases. For those of us however more interested in college sports, the most important case would have to be the O’Bannon v. NCAA case. In the O’Bannon case, the court, for the first time, ruled that colleges and universities by refusing to compensate their athletes for the use of their images and likenesses were violating federal antitrust law. In addition, when you combine the O’Bannon case with another ruling in 2014, the Northwestern case, the two cases can be seen as the beginning of the end of the current collegiate sports model in the United States. In the Northwestern case, the Federal Labor Board ruled that athletes, in particular football players, were employees of the university with the right to unionizes.

The reader should note that even though both O’Bannon and the Northwestern cases are being appealed. However, no matter the outcome on appeal, the NCAA, and the colleges and universities from the five major sports conferences in the United States are already reforming and granting athletes greater rights in the hope of preventing future lawsuits.

Kevin Carpenter, Solicitor, Hill Dickinson

One of my key cases of 2014 was Kevin Sammut v. UEFA (CAS 2013/A/3062) as some long overdue common sense on proportionality returned to the sanctioning of individuals for match-fixing offences. Mr Sammut was appealing a lifetime ban imposed by the UEFA Appeals Body for allegations of match-fixing during the European Championship qualifying match between Norway and Malta on 2 June 2007. This was a case of betting-related match-fixing orchestrated by two notorious organised criminals in the world of match-fixing, Mr. Ante Sapina and Mr. Marijo Cvrtak. The CAS Panel was comfortably satisfied that a meeting took place on the afternoon of the fixture in Mr. Cvrtak’s hotel room in the same city with a Maltese player who, in concurrent criminal proceedings, he identified as Mr Sammut. Originally the UEFA Control and Disciplinary Body banned Mr Sammut from any football-related activity for ten years. However UEFA appealed its own body’s ruling and the UEFA Appeals Body allowed their request for a lifetime ban. The CAS Panel, despite acknowledging that in most previous CAS awards regarding match-fixing life bans have been upheld to protect the integrity of sport, reverted back to the original sanction and reduced his ban to ten years. This was because they could not establish the extent of Mr Sammut’s involvement in the implementation of the fix. Now in reality, as the CAS noted, his career as a player is over in any event, but they did say that the length of ban was now “commensurate” (i.e. proportionate) to his breach of the regulations.

Benoit Keane, European Lawyer & Principal, Keane Legal

From a European perspective, a key development in 2014 was the adoption of the Council of Europe Convention on the Manipulation of Sports Competitions. The purpose of the Convention is to provide a common framework on how to prevent, detect, and punish the manipulation of sports competitions. In particular, Article 15 of the Convention states that the manipulation of sports competitions may be criminally sanctioned when it involves coercion, corruption or fraud. The Convention also recognises that disciplinary sanctions imposed by sports organisations are particularly effective in tackling the manipulation of sports competitions. In addition, the Convention enhances international cooperation between public authorities, sports organisations and sports betting operators. Fifteen countries signed the Convention on 18 September 2014 and it is open to both members of the Council of Europe and non-members for signature. It is a landmark moment in international action to protect the integrity of sport.

John Mehrzad, Head of Sport, Littleton Chambers

In terms of substantive issue, the Suarez CAS decision is my highlight of 2014 since it rebuffed FIFA for its approach to the proportionality of a disciplinary sanction. Proportionality – and the weighing up of applicable factors (including the vexed question of the “right to play” and a club’s rights regarding a player) – has been a hot-topic for a while but has only really been grappled with to date in relation to drug-offences by CAS.

Procedurally, the FA’s decision to allow West Ham to use the Rules K arbitration procedure to “appeal” a disciplinary appeal committee’s decision opens up that avenue for a whole series of other “appeals” in the future. Even though there is a very high threshold for such “appeals”, it has changed the dynamic of appealing disciplinary and other regulatory bodies’ decisions within the domestic game.

Nina Goolmali, Head of Sport, 2 Temple Gardens

Hamilton Management Group (HMG) Limited v Paul Di Resta* litigation was a highlight for me in 2014.

On 7^th February 2014, a multi million pound claim brought by Anthony Hamilton (father of Lewis Hamilton, the 2008 and 2014 Formula 1^® World Champion) against Paul Di Resta for alleged wrongful termination of their Formula 1^® management agreement was dismissed by consent on confidential terms. The conclusion of the case took place before judgment could be handed down, but was only arrived at after a widely publicised 12 day High Court trial before Mrs Justice Asplin.

The case placed the usually discreet world of Formula 1^® contractual negotiation and management firmly into the spotlight, raised a large number of complex evidential disputes and required both parties to undergo a comprehensive review of the leading authorities on the doctrine of restraint of trade to resolve one of the key legal disputes during the trial, namely whether the management agreement between the parties was unenforceable on the basis that it represented an undue restriction of Paul Di Resta’s trade as a Formula 1 driver.

*Nina was Junior Counsel for Paul Di Resta

Jeffrey G. Benz, 4 New Square, London, and Agency for Dispute Resolution, Los Angeles

In 2014, we saw major developments in anti-doping, and these look to continue into 2015.

In September 2014, the NFL and the NFL Players Association reached agreement on a new performance enhancing substances policy, adding HGH to the testing menu, permitting for the first time appeals of positive results under the program to third-party arbitrators jointly selected and retained by the NFL and NFLPA, and modifying discipline so that a first violation will result in suspension without pay for up to six games depending on the nature of the violation, a second violation of the steroid policy will result in a suspension without pay of 10 games, and a third violation will result in banishment for a minimum of 2 years.

The anti-doping program in Jamaica faced several challenges in the course of 2014, with cases heard by the Court of Arbitration for Sport on appeal from the Jamaican anti-doping scheme involving Asafa Powell, Veronica Campbell-Brown, Sherone Simpson, and Travis Smikle. The CAS eliminated the penalty against Veronica Campbell-Brown (previously found to be 2 years), based on faulty sample collection procedures and possible environmental contamination, and reduced the penalties for Asafa Powell and Sherone Simpson from 18 months to 6 months. The CAS determined that it did yet not have jurisdiction over the then-filed appeal of Travis Smikle.

In addition, in the first half of 2015, the Cycling Independent Reform Commission, formed in 2014, is due to issue its report. Among many other things, before them is the issue of whether Lance Armstrong may receive a reduction in his USADA-issued lifetime ban.

In 2015, the recent revelations about alleged systematic doping in Russia will reach a crescendo when the WADA-appointed commission, led by Dick Pound, finishes its investigation.

Finally, in 2015, the long-awaited revision to the World Anti-Doping Code will take effect and it will be interesting to see how the cases address its new features, including, among other things, stronger penalties for intentional doping and more leeway for athletes unintentionally taking contaminated substances. Watch for the first cases to be heard in the middle to the end of the year.

Jake Cohen, US Attorney & Executive Contributor, LawInSport

The lawsuit filed against FIFA by young football players and their parents in United States federal district court has helped keep the spotlight on head injuries in football.

The plaintiffs allege that FIFA and the relevant domestic and regional governing bodies have failed to fulfill their duties with regards to ensuring player safety. They have filed for injunctive relief, asking the Court to compel FIFA to enact and enforce proper concussion-management practises and return-to-play guidelines; mandate temporary substitutions; and impose limits on how many times youth players can head the ball in training.

Football lags far behind many other sports with regards concussion education, awareness, and management. Hopefully this lawsuit, and the unfortunate mismanagement of Christoph Kramer's high-profile concussion during the 2014 World Cup, will lead to the adoption of better concussion policies during 2015.