November 10, 2008

San Francisco Jury Awards $21 Million in Punitive Damages Against NFL Players Association

The Associated Press is reporting that a jury in federal district court in San Francisco has awarded $7.1 million in compensatory damages and $21 million in punitive damages against the NFL Players Association in a lawsuit brought by retired players. The plaintiffs alleged that the union failed to properly market their images, and cut them out of licensing deals so that active players could receive bigger royalty payments.

The AP story says the $21 million is slightly less than 10 percent of the union's net worth at the start of the year. If the case was tried under California law, it's the union's net worth at the time of trial that's relevant, not the net worth at the start of the year. (See, e.g., Washington v. Farlice (1991) 1 Cal.App.4th 766, 777 [the only relevant financial condition is that existing as of the time of trial].) Given the recent events in the stock market, the union's current net worth could be quite a bit lower. If the award exceeds the union's net worth at the time of trial, that could lead to a reduction of the award on appeal. (See Michelson v. Hamada (1994) 29 Cal.App.4th 1566, 1596 [punitive damages are generally are not allowed to exceed 10 percent of the net worth of the defendant].)