Issues in Antitrust Private Litigation: Sports Cases

• Pages: 87-129

87

CHAPTER V

ISSUES IN ANTITRUST PRIVATE LITIGATION:

SPORTS CASES

A. Introduction

The Clayton Act authorizes private damages actions and private

actions for injunctive relief under the antitrust laws.

1

This section

addresses issues that arise regularly in private antitrust actions. Part B

addresses a variety of issues concerning standing in the antitrust and

sports context, including the subjects of antitrust injury and the

application of Associated General Contractor s.

2

Part C discusses the

requirements for a case to proceed as a class action. Part D discusses the

use of experts. Part E considers when an antitrust sports litigant has

suffered an injury that is sufficient to support a damages award or

injunctive relief.

B. The Antitrust Standing Requirement

1. Standing to Pursue a Damages Claim

All private antitrust plaintiffs must have antitrust standing. Antitrust

standing is “generally determined by reference to five factors: (1)

whether plaintiff’s injury is an antitrust injury; (2) the directness of the

injury; (3) the speculative measure of the harm; (4) the risk of duplicative

recovery; and (5) the complexity in apportioning damages.”

3

Some courts

add other factors, including the specific intent of the alleged wrongdoer

4

1

. 15 U.S.C. §§ 15, 26.

2

. Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of

Carpenters, 459 U.S. 519, 537-44 (1983).

3

. Id.; see a lso Toscano v. PGA Tour, Inc., 201 F. Supp. 2d 1106, 1116

(E.D. Cal. 2002) ( holding that a golfer did not have standing to challenge

the media rules and conflicting eve nts rules of the senior PGA tour

because his injuries were remote and his damages were speculative);

Kingray, Inc. v. Nat’l Basketball Ass’n, 188 F. Supp. 2d 1177 (S.D. Cal.

2002).

4

. Hairston v. Pac-10 Conference, 8 93 F. Supp. 1485, 1491 (W.D. Wash.

1994), aff’d, 101 F.3d 1315 (9th Cir. 1996); Sullivan v. Tagliabue, 25

F.3d 43, 46 (1st Cir. 1994).

88 Sports and Antitrust Law

and whether there is another group of available plaintiffs better suited to

seek redress.

5

Courts generally balance these factors, although the

absence of antitrust injury is dispositive as a matter of law.

6

a. Antitrust Injury and Causation

Antitrust injury is an injury to a plaintiff’s business or property that

is of the type the antitrust laws were meant to prevent and that flows

from that which makes the challenged conduct unlawful.

7

Antitrust

injury is a necessary but not sufficient element of antitrust standing: “[I]f

there is no showing of injury, or if the injury alleged or proven is not

‘antitrust injury,’ the plaintiff does not have a claim cognizable under the

antitrust laws.”

8

Some courts have found that the enforcement of league or

association rules to exclude participants in the sport or industry can cause

antitrust injury. Thus, in Radovich v. National Football League, the

Supreme Court held that a professional athlete should have the

opportunity to show that the National Football League (NFL)’s

blacklisting caused him antitrust injury.

9

In Cla rett v. National Football

League, the district court held that a college football star who sought to

enter the NFL draft after his freshman year of college suffered antitrust

injury when the NFL eligibility rules prevented his entry into the draft.

10

In Piazza v. Major League Baseball,

11

the court rejected Major League

Baseball (MLB)’s argument that plaintiffs who alleged that they were

stopped from buying a team, in part due to their Italian descent, could not

5

. Volvo N. Am. Corp. v. Men’s Int’l Prof’l Tennis Council, 857 F.2d 55,

66 (2d Cir. 1988).

6

. Race Tires Am., Inc. v. Hoosier Racing Tire Corp., 614 F.3d 57, 83-84

(3d Cir. 2010); Sullivan, 25 F.3d at 47 (“The existence of antitrust injury

is a central factor i n the standing calc ulus.”); Toscano, 201 F. Supp. 2d at

1116 (“[A]bsence of antitrust injury is fatal.”).

7

. Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 349, 351 (1990)

(citing Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489

(1977)); Los Angeles Mem’l Coliseum Comm’n v. Nat’l Football

League, 791 F.2d 1356, 1363 (9th Cir. 1986) (Raider s II).

8

. Midwest Commc’ns v. Minnesota Twins, Inc., 779 F.2d 444, 450 (8th

Cir. 1985).

9

. 352 U.S. 445 (1957).

10

. Clarett v. Nat’l Football League, 306 F. Supp. 2d 379 (S.D.N.Y), rev’d on

other gro unds, 369 F.3d 124 (2d Cir. 2004).

11

. 831 F. Supp. 420 (E.D. Pa. 1993).

Issues in Antitrust Pr ivate Litigation: Sports Cases 89

show antitrust injury.

12

The court found that plaintiffs were alleging

exclusion from a relevant market, an injury “Congress sought to redress

in the antitrust laws.”

13

In Volvo North America Corp. v. Men’s Internationa l Pr ofessional

Tennis Council,

14

Volvo sued the Men’s International Professional

Tennis Council (MIPTC). After years of sponsoring MIPTC events and

broadcasts, Volvo claimed that MIPTC had conspired to monopolize and

restrain trade in the market for men’s tennis by eliminating Volvo’s

ability to produce men’s tennis events in the manner it saw fit, by

reducing the number of such events through a noncompete agreement

with a rival tennis promoter, and by requiring players who wanted to

compete in major tournaments to sign contracts that included restrictive

provisions.

15

MIPTC argued that Volvo had not sustained an injury that

the antitrust laws were meant to prevent because it had benefitted from

the alleged cartel.

16

The court reasoned that alleged participation was not

determinative: “[T]o the extent that a cartel member credibly asserts that

it would be better off if it were free to compete—such that the member’s

interest coincides with the public interest in vigorous competition—we

believe that the individual cartel member satisfies the antitrust injury

requirement.”

17

The National Collegiate Athletic Association (NCAA) has also faced

lawsuits related to NCAA bylaws which require college athletes to

remain “amateurs” and therefore prevent college athletes from use of

their likeness in the media. In O’Bannon v. National Collegiate Athletic

Ass’n,

18

former UCLA basketball star Ed O’Bannon claimed that he was

excluded from “participating in the collegiate licensing market” by the

NCAA’s alleged rule requiring college athletes to assign their publicity

rights to the association.

19

He specifically complained that the NCAA

sold videos on its website of UCLA’s championship win from when he

was a student, but he claimed that his image was being offered without

his consent and without compensation. He alleged that the restraints at

12

. Id. at 432.

13

. Id.; but see infra note 41 and accompanying text (disc ussing Mid-South

Grizzlies v. Nat’l Football League).

14

. 857 F.2d 55 (2d Cir. 1988).

15

. Id. at 60-61.

16

. Id. at 66-67.

17

. Id.

18

. Nos. C 09-1967 CW, C 09-3329, C 09-4882 CW, 2010 WL 445190

(N.D. Cal. Feb. 8, 2010).

19

. Id.