Kirk Wright and the Suit Against the NFL
NFL Seeks Dismissal of Hedge Fund Suit, according to Forbes. According the the Forbes article, "The NFL and its union say a lawsuit filed by six current and former players seeking to recoup $20 million they lost in an alleged fraud scheme should be dismissed, arguing in part that league players are solely responsible for their own finances."
Actually, the main argument is more sophisticated and does not depend at all upon the interpretation of the clause in the collective bargaining agreement, quoted above.
The NFL's Player's Association's brief makes its clear that its main point is that a) whether the NFL and NFL Player's association owed the plaintiffs a duty can only be determined by interpreting the collective agreement, b) to determine the duties owed under the collective agreement requires the applicability of a Federal Law on Labour and not State Law on Negligence. Federal Law does not recognize a cause of action of mere negligence asserted against the Union for failing to ensure that screening program worked.
In essence, the NFL and NFL Player's association are saying that although the collective bargaining agreement established the existence of a screening program for financial advisors, nobody should have relied upon their screening duty as a matter of law because they could not have sued the NFL Player's association for negligence, only a failure of a duty of fair representation.
At the Daily Caveat Blog, they suggest a different issue "the NFL, for its part, is also in the crosshairs, but claims that the players bear sole responsibility for their finances. The League is asking for the suit to be dismissed and the NFL players' association is taking a similar tact. Both entities contend that they player contracts state that, in any case, arbitration - not litigation - is the remedy specified in player contracts. How the league will explain away the apparent total negligence of giving its endorsement to known fraudsters is a separate issue." The pleadings do not, however, claim that the NFL and NFL Player's association knew that Kirk Wright was a fraud. So I don't see that the Daily Caveat has accurately reported the legal issues.
None of this should obscure the fact that the NFL's screening program failed totally, and should be reviewed so that it can add to the SEC's compliance program and stand as a mere fig leaf.
Technorati Tags: nfl player, kirk wright, negligence, federal law, union, collective bargaining, hedge fund, fraud scheme, collective agreement
Comments
I appreciate the nuances that you draw from what is stated in the Forbes article and what the pleadings actually indicate. I must confess, I had not read the full pleadings from the case, but the issue to my mind would not be that the NFL knew that Kirk Wright and his cohorts were fraudsters, but rather that, in the opinion of the players who have filed suit, the league did not take adequate precautions to prevent fraudsters from being able to take up residence in the league's recommended advisor program. In the statement that I made and you highlighted above, I was not implying that the issue in question was a core component of the player's legal case, but rather a question that does indeed need an answer. Negligence in the (perhaps carefree) senes hat I used the term wasn't meant to represent the actual legal standard or a component of a specific federal law. The fact remains, however, that they players are suing because they feel that they were victimized in the course of their participation in a program that was created to prevent such things. Thanks for reading The Daily Caveat and for linking through. Otherwise, I might not have found your own fine blog.
All the best,
-- MDT
Posted by: Michael Thomas | September 5, 2006 2:43 PM
Michael, I agree with the general sentiment that the NFL program has simply not lived up to its stated purpose. But it appears that this may not give rise to a cause of action for negilgence.
Posted by: Michael Webster | September 5, 2006 3:38 PM