The NFL Just Took A Major Legal Loss, Here’s Why It Matters

A judge's ruling against the NFL has opened the door to a nightmare scenario for the league

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Apr 29, 2016 at 6:21 PM ET

The National Football League finally found an opponent powerful enough to hand them a significant legal loss: the insurance industry.

As first reported by Sports Business Daily, the NFL will be forced go through the discovery phase in a suit related to concussions for the first time in its history. That’s a pretty big deal, given that it could force the NFL to finally reveal to the world exactly what it knew about brain trauma and football.

In 2012, a group of subsidiaries from the Travelers Companies, an insurance provider, took the league to the New York State Supreme Court, claiming that they should not be forced to defend and indemnify the NFL from any concussion-related lawsuits, including the one billion dollar settlement with a group of retired players, and the 150 individual cases that have been brought to date by those that chose to opt out of the settlement.

In the suit, the insurance companies allege that the NFL has known for decades of the inherent risks posed by playing football and conspired to conceal that information. If so, the insurers are under no obligation to cover what isn’t an “accident,” but rather the inherent cost of doing business.

And make no mistake, the NFL fought this tooth and nail. The case has been more or less stalled for the past four years, and yet they still argued that their insurers had to wait patiently until yet another appeal of the billion-dollar settlement is heard and any potential discovery phase for the 150 non-settlement cases had begun.

“I can’t stop this anymore,” Judge Jeffrey Oing said in issuing Friday’s ruling. When NFL outside counsel John Hall tried to minimize the potential damage, asking Oing to limit the scope of discovery to “documents and not depositions,” Judge Oing quickly shut him down.

“We haven’t heard the start gun go off and you are asking all these conditions to be put in,” he said. “The answer is no.”

Both parties now have two weeks to set up a calendar. Should they fail to come to an agreement, they’ll be back in court again on May 20.

But in the end, barring some form of legal Hail Mary or a settlement agreement between the NFL and its insurers, the NFL will have to come clean. Further, considering the insurance companies in question have been the NFL’s carriers since the 1960s, there’s no limit to the vast treasure trove of information that will be made available to the public.

The danger to the NFL isn’t just a question of information that might shock and disgust the general public. Rather, it’s that the plaintiffs in the insurance lawsuit and the ongoing concussion lawsuits have a great deal of overlapping interests.

Vocativ spoke with Lou Michels, a sports and employment litigation attorney with Lewis Brisbois Bisgaaard & Smith in Chicago. He explained that should it be proven that the NFL was well aware that CTE, dementia, and other associated medical problems were endemic to the profession, “that’s a very powerful argument to take the case out of the ‘accident’ realm.

“In other words, you guys put these players in harm’s way and you let it go forward,” Michels said. “And, oh, by the way, at the same time, you’ve been taking out insurance policies on something you know is going to happen. And that takes it out of the realm of an occurrence or an accident, and renders the coverage void … this intentionality issue is big. It cuts both to the concussion liability lawsuits by the players and also cuts directly to the insurance coverage issue.”

Of course, the players who have opted out of the concussion lawsuit would very much like to know if their employers have been intentionally misleading and defrauding their insurers and would love to get their hands on the discovery findings, specifically because of the question of intentionality.

“One of the things the NFL has argued and would continue to argue in the concussion cases, is that even if you establish that pro football does these things to people’s brains … these are worker’s compensation covered injuries,” Michels said. “And our worker’s compensation will take care of it.

“But if the conduct’s found to be intentional, if the employer knows, for example, that it’s putting its employees in a risky, dangerous situation and it does it intentionally, and it doesn’t advise the employees of that,” he continued, “then a lot of worker’s comp coverage has an exclusion that allows an injured employee—in this case, the players—to step outside the workers compensation realm and sue the employer directly.”

The only thing that might keep a lid on all this is if the judge agrees to a strong protective order. However, Michels considers that an unlikely possibility.

“We saw that not work very well in the tobacco litigation, for example, or the asbestos litigation,” he said. “If there’s evidence of intentional misconduct by an entity, hiding a dangerous aspect of its employment, I think a lot of judges would say, ‘We’re not protecting that. We’re not going to seal that off. That’s free game for whoever can find it and make use of it.’”