During the NFL’s 2011 lockout, we learned a few important facts. First, when you have a $9 billion industry, there actually is enough money to go around that can make the players and the owners happy. Second, if you are smart you will just play the game, make tons of money and don’t ever contemplate killing the golden goose.

However, as the storm clouds of a potential protracted labor dispute and work interruption passed, the mighty NFL seems to face another growing challenge to its financial dominance. As opposed to a labor struggle, this time a myriad of growing lawsuits may have the NFL and its insurers playing some complicated defense.

Across the country the NFL has been facing a series of lawsuits mostly related to former players’ claims arising from head trauma and concussion-related injuries. For example, in the State of California, the NFL’s workers compensation carrier, St. Paul Fire and Marine Insurance Company (a Travelers’ subsidiary), is fighting claims by former players for brain injuries. In general, many former players, filing under California’s liberal workers’ compensation laws, are claiming that they are entitled to receive benefits for brain injuries and related dementia from their work in the NFL. In those types of case, there is a pitched battle on the application of the statute of limitations to the claimants. In turn, the former players are making allegations that the NFL covered-up the long-term medical effects of concussions.
Besides the workers’ compensation battles, the NFL and its helmet vendor, Riddell, have been sued by 75 former players, including Mark Duper of the Miami Dolphins and Rodney Hampton of the New York Giants. The plaintiffs allege that Riddell and the NFL failed to protect the former players from head injuries while concealing the chronic risks of concussions and brain trauma.

So what does all of this have to do with the New Orleans Saints’ bounty scandal anyway? Well, from an insurance prospective, there is now enough litigation and the threat of additional significant personal injury claims to raise concerns. Specifically, there is no question that under the right legal and factual circumstances, the NFL and its vendors (and all their respective insurers) would be an enticing and welcomed “deep-pocket” target for the plaintiff’s bar. As for the $9 billion golden goose, she may need to learn a three-step drop to avoid a legal sack.

As an initial matter, most of the prior concussion related lawsuits (while potentially significant), were first brought by non-star players who were suffering serious financial hardships from oppressive medical costs. Based on recent events, the Saints’ “bounty” mess could involve star players and a more definitive path to potential liability. According to the NFL’s investigation, the Saints’ defensive coordinator, Gregg Williams, paid his players upwards of $50,000 to target opposing players to be injured (especially knocked out) during games.

We all know that football is an inherently violent and punishing game. From my couch-potato perspective, there is nothing more exciting than watching a defense impose its will on a game with big hits and intimidation. So what’s the problem with a little extra pain and suffering? As NFL Commissioner, Roger Goodell outlined the NFL’s “on field” responsibility is to protect player safety and the integrity of the rule of the game. A team sponsored bounty program not only violates those principles but could open the door for personal injury lawsuits against the team which could trigger insurance.

For its part, while the NFL concedes that a team sponsored bounty program, designed on intentionally injuring a player, could lead to civil liability for torts sounding in negligence and intentional conduct, the league is somewhat dismissive of these potential suits. The NFL points out that U.S. Courts “tend to defer to self-regulation, choosing not to interfere with on-field … discipline issues unless the conduct in question is far outside the range of what a player can expect to happen in game … Courts generally don’t want to get involved and potentially chill or impact how the game is played …”

Yet, therein lies the trap play. There is no question that players in professional sports assume the risks of injury, even catastrophic injury, when they take the field. The question, from a legal and insurance prospective, is where does that player’s assumption of the risk end? Do the white lines, on a professional football field, insulate the NFL from all personal injury suits of any nature (we know that wasn’t the case with the NHL)? Lastly, will an injured player who was targeted by a bounty on his head, feel a sense of urgency to commence a lawsuit given that the average NFL career is only about 3 years and medical costs could be incurred for a lifetime?

According to many legal commentators , as well as Sports Illustrated, no player assumes the risk of being targeted for purposeful injury, unconsciousness and even death in the most extreme circumstance. Moreover, no player assumes to bear the risk that a team, like the Saints, will ignore the NFL’s policy against player bounties. In essence, a planned targeting of a player for injury, in violation of the NFL rules, could shatter the cloak of fair play and assumption of the risk thereby creating the potential for civil liability.

Without question, a legal quagmire could be created if an injured player brought “an intent to injure” and negligence suit against a team and the NFL. Given the on-going battle between the former players and the NFL’s workers’ comp insurer, it seems that a prospective bounty plaintiff would avoid this forum and seek to institute a personal injury action. Yet, we will have to wait to determine how this type of case could play out until there actually is a pending action.

You have to wonder, for example, if Brett Favre elected to sue the Saints for his injuries sustained in the 2010 NFC Championship game. As a threshold factual matter, Favre didn’t work for the Saints and there is no question that the Saints purposely violated the league’s prohibition against the use of bounties. Now, Saints head coach, Sean Payton, and general manager, Mickey Loomis, have issued a statement admitting that “… violations disclosed by the NFL … happened under our watch” and they take “full responsibility.”

We do not know what “full responsibility” means at this point? Is it the loss of draft picks, suspensions or fines? Maybe “full responsibility” could mean significant personal injury suits (with insurance issues) unleashed by angry players targeted for injury.