As many of you may know, on Wednesday May 23, the NFL Players Association filed suit against the 32 NFL teams in the case White v. National Football League, arguing that the NFL teams “engaged in a secret, recently-revealed collusive … agreement” to suppress player salaries and impose a $123 million salary cap for the uncapped 2010 season. Last week, Elie Mystal shared his thoughts on the lawsuit. Elie has since invited me to add some thoughts from a sports law perspective….
Posts by Marc Edelman
Cleveland? Chicago? Miami? New York? New Jersey?
What about Europe? (Lebron once told ESPN he might play overseas for $50 Million per year).
NBA players should hope that Lebron chooses Europe. And this is for reasons more important than just their chances of winning an MVP Award…
Today the Supreme Court agreed, ruling 9-0 to overturn the Seventh Circuit’s ruling in American Needle v. Nat’l Football League , in which the Seventh Circuit had held the NFL clubs sometimes exempt from Section 1 review.
In a concise, 23-page opinion (PDF), the Supreme Court explained that the NFL is not a single entity because “the NFL teams do not possess either the unitary decisionmaking quality or the single aggregation of economic power characteristic of independent action.”
This case will now be remanded to the Northern District of Illinois for further discovery and then review of its antitrust merits under the Rule of Reason. (More detailed discussions of the issues on remand are available here and here).
Additional analysis and background, after the jump.
On Wednesday, Pittsburgh Steelers quarterback Ben Roethlisberger became the first NFL player never charged or convicted of any crime to be suspended under the NFL Personal Conduct Policy. According to Commissioner Roger Goodell, the decision to suspend Roethlisberger was the result of “some bad decisions” that Roethlisberger made in recent weeks, which emerged during the Georgia police’s investigation of him for sexual assault.
Allegations of sexual assault are not to be taken lightly. However, not all such allegations are true. See, e.g., the Duke Lacrosse scandal. And whether Roger Goodell even has the power to suspend a player where no criminal wrongdoing is found is questionable. The issue depends entirely upon how one interprets a few important clauses in the NFL Collective Bargaining Agreement…
Tomorrow, the Supreme Court will begin hearing oral arguments in the case American Needle v. National Football League for the purposes of determining whether the NFL clubs’ collective licensing of individual club trademarks is exempt from Section 1 of the Sherman Act under antitrust law’s single entity defense.
American Needle, which is represented by the law firm Jones Day, will argue that the Supreme Court should uphold the ruling of at least seven lower courts, each of which has found that the business practices of the NFL clubs are subject to Section 1 of the Sherman Act (American Needle’s briefs are available here and here). By contrast, the NFL, which is represented by the law firm Covington & Burling, will argue that, despite these lower court rulings, the NFL is really more akin to a single company and should be treated as such for antitrust purposes (The NFL’s brief is available here).
More details after the jump.
This Sunday marks Michael Vick’s official return to the National Football League–an event that has been widely criticized by People for the Ethical Treatment of Animals (“PETA”), as well as some sports writers and doggie bloggers.
What those who criticize NFL Commissioner Roger Goodell for reinstating Vick fail to understand, however, is that the NFL may have ultimately lacked any real choice. Had the NFL not reinstated Vick, Vick could have potentially filed an antitrust lawsuit against the 32 NFL clubs for concertedly refusing to deal with him. Even though such a lawsuit would have likely failed in the Second and Seventh Circuits (due to the holdings respectively in the Clarett and American Needle cases), a lawsuit against the NFL clubs would have likely gotten to a jury in the Third, Sixth, Eighth and D.C. Circuits–all places where professional athletes have previously won large antitrust settlements.
As a quick background in antitrust law, Section 1 of the Sherman Act, in pertinent part, states that “[e]very contract, combination … or conspiracy in the restraint of trade or commerce … is declared to be illegal.” Although most Section 1 claims involve restraints of trade related to product markets, the Sherman Act likewise prohibits restraints in labor markets, as long as these restraints occur outside of the proper workings of a collective bargaining agreement (“non-statutory labor exemption”).
Courts in general determine whether a particular restraint violates Section 1 of the Sherman Act in three steps. First, courts will determine whether a particular restraint emerges from a “contract, combination or … conspiracy” among two or more parties. Next, they will determine whether the restraint yields a net anticompetitive effect to consumers. Finally, they will assess whether any antitrust exemption would negate the finding of liability.
After the jump, how might a court weigh these factors?
For those who have been following the Supreme Court case American Needle v. NFL (previously blogged about in more detail here, here, and here), this Friday clothing manufacturer American Needle Inc. will file its opening brief, arguing that the Seventh Circuit Court of Appeals was wrong to define the NFL as a single-entity under Section 1 of the Sherman Act.
As many of you know, I have long agreed with American Needle’s view that the NFL should be treated as a collection of 32 separate clubs, and not as a single entity. To me, this issue was best resolved by the Second Circuit back in the 1982 case North American Soccer League v. Nat’l Football League, in which that court held “the sound and more just procedure is to judge the legality of [sports league] restraints according to well-recognized standards of our antitrust laws rather than permit their exemption.”
Currently, the Second Circuit’s view remains in the overwhelming majority, as seven previous courts have upheld this view and rejected the NFL clubs’ single-entity argument. The Seventh Circuit meanwhile remains alone in its iconoclastic position that single-entity status should be determined one league at a time, one function at a time.
American Needle’s counsel on this matter in the law firm Jones Day. The National Football League meanwhile is represented by Covington & Burling LLC–a firm where former NFL commissioner Paul Tagliabue serves as Senior Of Counsel.
Marc Edelman is a Professor at Barry Law School in Orlando, FL. He previously was a Visiting Professor at Rutgers School of Law-Camden. His bio is available here, and his publications, here.
Yesterday morning, the Supreme Court granted certiorari in the case American Needle v. National Football League (pdf, p.3) for purposes of determining whether the NFL clubs’ collective licensing of individual club trademarks is exempt from antitrust scrutiny under the single entity defense. The Supreme Court’s decision to hear this case was likely influenced by the fact that it marks one of just a few times that both a plaintiff and defendant have requested the Court’s review.
Earlier this month, the United States Department of Justice and the Federal Trade Commission had filed an amicus brief recommending that the Supreme Court deny certiorari. The United States had argued the Seventh Circuit’s holding in American Needle did not conflict with existing case law–a view with which most sports-antitrust scholars disagree.
For those who have not been following the American Needle case, the original plaintiff, American Needle Inc., had for more than twenty years maintained a non-exclusive license to design and manufacture headgear bearing the NFL clubs’ names and logos. Then, nine years ago, the NFL clubs decided to offer an exclusive license to American Needle’s main rival, Reebok.
Upon being foreclosed from the ability to sell NFL headgear, American Needle sued the NFL clubs in the Northern District of Illinois, contending that the new NFL licensing arrangement violated Section 1 of the Sherman Act by illegally restraining trade in the market for purchasing rights to NFL logos. The NFL clubs, in turn, responded by not only alleging that their licensing arrangement was pro-competitive under antitrust law’s Rule of Reason, but also by contending that the NFL clubs combined to form a single-entity that was entirely exempt from antitrust scrutiny. Both the district court and the Seventh Circuit Court of Appeals granted summary judgment to the NFL clubs based on the single-entity theory.
But can all 32 NFL teams act as one? Analysis after the jump.
Back in February, the U.S. Supreme Court asked the acting solicitor general to file an amicus brief in the case American Needle Inc. v. National Football League — a move that seemed to indicate that the Supreme Court would soon hear oral arguments. Yesterday, however, U.S. Solicitor General Elena Kagan did her best Jeff Feagles impersonation by filing a 22-page amicus brief (pdf) that ultimately attempted to punt this case off the Supreme Court’s docket. The brief, which was co-authored by the Federal Trade Commission, concluded that “[t]he petition for a writ of certiorari should be denied.”
For those who have not been following the American Needle case, the original plaintiff, American Needle Inc., had for more than twenty years maintained a non-exclusive license to design and manufacture headgear bearing the NFL clubs’ names and logos. Then, nine years ago, the NFL clubs decided to offer an exclusive license to American Needle’s main rival, Reebok. American Needle thereafter sued the NFL clubs in the Northern District of Illinois, contending that the new NFL licensing arrangement violated Section 1 of the Sherman Act by illegally restraining trade in the market for purchasing rights to NFL logos. The NFL clubs, in turn, responded by not only alleging that their licensing arrangement was pro-competitive under antitrust laws, but also by contending that the NFL clubs combined to form a single-entity that was entirely exempt from antitrust scrutiny.
Let’s take a look at the NFL’s “defensive line” after the jump.
While President Obama and a bipartisan Congress spent most of last weekend trying to recoup $165 million in taxpayer money that insurance giant AIG paid to its upper-level employees, the Miami-Dade County Commissioners were finalizing a plan to spend $359 million in taxpayer money to build a new baseball stadium for the Florida Marlins “bailout”-demanding owner Jeffrey Loria.
The Marlins new stadium, anticipated to open in 2012, will be neither the first baseball-oriented stadium built with public dollars (that distinction belongs to Milwaukee County Municipal Stadium), nor the most expensive subsidized baseball stadium (that distinction belongs to the Washington Nationals’ new $611 million facility). Yet, this new stadium may ultimately come to symbolize all that is wrong with the relationship between Major League Baseball and the American city.
From a taxpayer perspective, the Marlins new stadium deal epitomizes fiscal irresponsibility. First, the specific terms of the Marlins stadium agreement skew hugely in the Marlins’ favor (more so than many other recent stadium deals). Under the agreement, the local government will be responsible for covering approximately three quarters of stadium building costs, while the Marlins will get to keep all stadium revenues — even those revenues from events completely unrelated to baseball, and even those revenues derived from selling stadium naming rights.
And we haven’t even gotten to the worst part. More on that after the jump.