Sherman Act Claims: Elements and Analytical Framework

A. Introduction
This chapter presents the basic Sherman Act elements (both for
Section 1 and Section 2 claims) as well as some of the recurring issues in
sports antitrust cases, many of which can be outcome-determinative.
One of those issues is whether, under Section 1 of the Sherman Act,
the defendants have the capacity to conspirei.e., they are separate
economic actors in the marketplace for Section 1 purposes. Another
threshold issue for the court in a Section 1 casealthough not always at
the motion to dismiss stageis to determine what analytical framework
to apply. If, for example, the plaintiff is proceeding on a per se or quick
look theory, then the case will be dismissed if the court determines the
full rule of reason applies. Further, in the wake of Dagher
and American
there is significant uncertainty about what can be viewed as
procompetitive as a matter of law, even at the motion to dismiss stage.
And, of course, in Section 2 cases, courts must assess the defendants
alleged monopoly power and alleged misconduct. These analytical
frameworks are discussed below.
B. Section 1: Elements, Threshold Issues, and Modes of Analysis
1. Section 1 Elements
Section 1 of the Sherman Act provides that [e]very contract,
combination in the form of a trust or otherwise, or conspiracy, in restraint
of trade or commerce . . . is declared to be illegal.
It is well settled that
only unreasonable restraints of trade are prohibited by the statute.
Thus, at its simplest level, a Section 1 violation requires plaintiff to
establish (1) a contract, combination or conspiracy among two or more
. Texaco Inc. v. Dagher, 547 U.S. 1 (2006).
. Am. Needle, Inc. v. Nat’l Football League, 560 U.S. 183 (2010).
. The application of these princip les to specific recurring fact patterns is
addressed in Chapter III.
. 15 U.S.C. § 1.
32 Sports and Antitrust Law
distinct business entities, (2) that unreasonably restrains trade, and (3)
causes plaintiff an antitrust injury.
In order to understand how these elements are applied in the sports
industry, it is useful first to summarize certain threshold and analytical
issues, namely: the scope and application of the single-entity doctrine;
the analytical framework that courts may apply to any particular alleged
restraint; and, where appropriate, the current analytical steps and burden
shifting that has become part of the full rule of reason.
2. Single Entity Doctrine
a. Origins
Section 1 of the Sherman Act applies to contracts, combinations,
and conspiracies”—generally described as agreements”—in restraint of
The so-called single entity doctrine assesses whether two
entities are sufficiently economically independent to be viewed as
independent entities capable of conspiring with one another for purposes
of Section 1. By contrast, a single entity is incapable of conspiring
with itself and therefore not subject to Section 1 scrutiny.
Historically, the leading case on this doctrine is Copperweld Corp. v.
Independence Tube Corp.,
which holds that a parent corporation and its
wholly owned subsidiary are a single entity for antitrust purposes.
the sports context, a district court applied single entity treatment to a
Professional Golfers Association of America (PGA) rule imposed on the
Middle Atlantic Section of the PGA (MAPGA).
The plaintiff entered
into a contract to promote a golf trade show under the MAPGAs
sponsorship. When the promoters proposed the trade show be moved to a
location just outside the MAPGAs district, the PGA blocked the show
because the proposed location was in another PGA sections territory.
The trade show organizers challenged the restriction, but the district
court rejected the Section 1 claims after concluding the PGA and the
MAPGA were operating as a single entity. The Fourth Circuit affirmed,
. See, e.g., Dagher, 547 U.S. at 5; Major League Baseball Props., Inc. v.
Salvino, Inc., 542 F.3d 290, 315 (2d Cir. 2008).
. 15 U.S.C § 1.
. 467 U.S. 752 (1984).
. Id. at 771.
. Seabury Mgmt. v. Profl Golfers Assn of Am., No. 94-1688, 1995 U.S.
App. LEXIS 9538 (4th Cir. Apr. 26, 1995) (d ecision referenced in table at

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