Other Threshold Matters in Sherman Act Cases
Pages | 17-30 |
17
CHAPTER II
OTHER THRESHOLD MATTERS IN
SHERMAN ACT CASES
A. Introduction
Courts often are asked to consider two additional threshold issues in
determining whether federal antitrust law applies to sports-related
restraints. First, is the restraint “commercial,” and therefore subject to the
Sherman Act? Several sports cases, particularly those involving
amateurism rules in college sports, have held that a challenged restraint
is “noncommercial” in nature, and thus outside the substantive reach of
the Sherman Act. Second, does the challenged conduct govern the “rules
of the game”? Based on long established case law, rules governing on-
field sports competition generally fall outside the scope of the federal
antitrust laws.
B. Noncommercial Restraints
The Sherman Act only applies to “commercial” restraints.
1
As the
Supreme Court noted in Klor’s, Inc. v. Broadway-Hale Stores, Inc.,
2
“[t]he Act is aimed primarily at combinations having commercial
objectives and is applied only to a very limited extent to organizations . .
. that normally have other objectives.”
3
Subsequent decisions have
clarified, however, that the Sherman Act’s reach extends to nonprofit
organizations insofar as they conduct “commercial” activities.
4
Cases
1
. See Apex Hosiery Co. v. Leader , 310 U.S. 469, 492-93 (1940). This
inquiry is distinct from the Sherman Act’s jurisdictional requirement that
the conduct in question involv e interstate commerce. See Tanaka v. Univ.
of S. Cal., 252 F.3d 1059, 1062 (9th Cir. 2001).
2
. 359 U.S. 207 (1959).
3
. Id. at 213 n.7.
4
Collegiate Athletic Ass’n v. Bd. of Regents of Univ. of Okla., 468 U.S.
85, 100 n.22 (1984) (Board of Regents) (“There is no doubt that the
sweeping language of § 1 applies to nonprofit entities . . . .”); Minn. Made
Hockey, Inc. v. Minn. Hockey, Inc., 789 F. Supp. 2d 1133, 1141, at *3
(D. Minn. 2011) (rejecting the argument that a hockey league’s nonprofit
status immunized it from antitrust liability).
To continue reading
Request your trial