The FCAA's existence surfaced in a 2013 wrongful termination suit filed by Jon King, who for three years served as Hausfeld's lead investigator on the O'Bannon case. King claimed that, when asked about the FCAA by other lawyers at the firm, Hausfeld replied: "It's a revenue stream for us." According to the lawsuit, some lawyers expressed concerns that the FCAA created a potential conflict of interest by "creating a business that [Hausfeld] ultimately intended to be a for-profit licensing entity" and that he was using the O'Bannon case "to obtain that source of ongoing profits for the firm."
King had been fired on Oct. 3, 2012, for what he claimed were concerns he raised about potential ethical violations at Hausfeld LLP, including the FCAA issue. Hausfeld denied any improprieties and said King's dismissal was performance-based. The lawsuit was dismissed and sent to an arbitrator. Before a scheduled hearing, King surrendered. The agreement he signed -- and which was accompanied by an order issued by the arbitrator -- states that he "now understands that the claims previously asserted ... were incorrect" and "acknowledges that he has apologized" to Hausfeld and each of his partners. In an interview, King, who now works for a rival firm, said he dropped the suit because he feared he would be on the hook for more than $400,000 in legal fees if he lost. But he repeated his assertion that he and others felt Hausfeld's involvement with the FCAA was a potential conflict of interest.
Hausfeld says he has "no relationship economically" with the FCAA. Nor, he says, is it a "lock" that he will become the organization's outside counsel. "I'm floating just like anyone else," he says. But Feinberg concedes that Hausfeld is a favorite, given the sweat equity invested.
Hausfeld is also well-positioned to represent players in future sports litigation, including, potentially, hundreds or even thousands of individual cases that might grow out of the O'Bannon decision. In April, he announced that he and famed lawyer David Boies were forming a joint sports law group. Among other things, Boies and Hausfeld are seeking to become outside counsel to the NBA players' association.
Hausfeld says he is preparing his firm for transition to younger leadership. But he shows no signs of slowing down. Hausfeld might know little about sports, but his value to the case was put on vivid display during the O'Bannon trial, when he faced off against one of the NCAA's expert witnesses, James Heckman, a University of Chicago professor who has won nearly every major award in economics, including the Nobel Prize.
Heckman tried to assert that playing college sports does not hurt academic performance and earning power. Hausfeld produced a Knight Commission report showing that, in fact, star athletes are often admitted to universities with little chance of graduating and "are brought into the collegiate mix more as performers than aspiring undergraduates."
Aiming his bowtie as if it might squirt water on the witness, Hausfeld bore in. "Do you disagree with that representation of the Knight Commission?" he asked Heckman. "Yes or No."
Heckman refused to answer and, flustered, asked Hausfeld a question of his own. The judge, Claudia Wilken, interrupted. "The witnesses can't ask the lawyers questions," she admonished Heckman.
"OK, sorry about that, your honor. I'm not a professional witness," Heckman responded.
A member of Hausfeld's legal team slipped him a note: "He's toast. Get him off the stage."
But Hausfeld ultimately couldn't resist a parting shot. "Dr. Heckman, was there a typo in your report?" he asked. "Is your hourly rate $2,300?"
"Yes," Heckman acknowledged.
"I have no further questions, your honor," Hausfeld said.
Investigative reporter Paula Lavigne of ESPN's Enterprise and Investigative Unit contributed to this report.