ATLANTA (March 30, 2007) -- A lawsuit filed by six current and former players against the NFL and its union seeking to recoup $20 million they lost in an alleged fraud scheme is moving forward.
A judge denied a motion to dismiss, meaning the case in federal court in Atlanta can proceed. No trial date has been set.
The NFL and the NFL Players Association contended the lawsuit filed last June should be thrown out partly because under the league's collective bargaining agreement, players are solely responsible for their own finances.
They also argued that the agreement requires arbitration, not litigation, of disputes such as the ones raised in the lawsuit.
But U.S. District Judge Julie E. Carnes said in an order dated March 29 that the league and union also have duties to the players under state law and there is nothing in the record at this point to suggest the labor agreement pre-empts that.
"Because the court cannot determine at this time whether the union agreed to expand the rights and duties it owed to plaintiffs under the collective bargaining agreement, the court will not dismiss plaintiffs' allegations at this stage," Carnes wrote.
The lawsuit against the league and union initially included seven plaintiffs, but Marco Coleman's name was dropped from the lawsuit in an amended complaint filed last July.
The players still listed as plaintiffs are Steve Atwater, Ray Crockett, Al Smith, Blaine Bishop, Carlos Emmons and Clyde Simmons. Other plaintiffs include the spouse of one of the players and entities set up by the players or for the players' benefit.
Aside from the NFL and NFLPA, other defendants include companies whose names are unknown to the plaintiffs, but were supposed to perform certain background checks for the NFL and NFLPA.
The lawsuit claims the union endorsed the services of an investment firm even though its manager had liens against him.
In the lawsuit, the players said the league and the NFLPA are liable for the losses because of investments with hedge fund manager Kirk Wright.
Wright was arrested in Miami Beach, Fla., last May on federal fraud charges. He also faces a lawsuit filed by the Securities and Exchange Commission against him and his company, International Management Associates.
According to authorities, Wright and his company collected as much as $185 million from at least 500 investors since 1997 and used false statements and documents to mislead some of them to believe the value of those investments was increasing. Much of that money is now missing.
Wright is awaiting trial. No date has been set.
The Associated Press News Service
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