SBD/Issue 211/Law & Politics

American Needle V. NFL Could Be Turning Point For Pro Sports

Decision In American  Needle vs. NFL Case
Expected In Spring, Early Summer Of '10
Legal experts believe that American Needle v. NFL, which is under consideration by the U.S. Supreme Court, could "easily be the most significant legal turning point in the history of American sports," according to Lester Munson of ESPN.com. A decision in the case is expected "in the spring or early summer of 2010," but leaders and lawyers for all four major sports unions are "now in weekly conferences trying to formulate a coordinated strategy for intervening in the Supreme Court's deliberation." One NFLPA official said of the case, "There is nothing of more concern to me. Our leverage is in the antitrust courts, and a bad decision in this case could tilt the playing field beyond recognition." Munson noted the case began in December '04 when American Needle Inc. "filed an antitrust case against the NFL, claiming that the league was using its monopoly powers illegally to deprive the company of its share of the market for caps and hats bearing logos of NFL teams." The NFL "won as quickly and as conclusively as anyone can win an antitrust lawsuit in the trial court and in an appeals court," but American Needle then "filed a request for review to the U.S. Supreme Court." The NFL "told the Supreme Court it endorsed American Needle's request for a hearing and a decision," an action that was a "legal bombshell." The league said that it "wants the justices to consider an issue far beyond the caps-and-hats contract," as it "wants the court to grant the NFL total immunity from all forms of antitrust scrutiny, an immunity that would then apply to the NBA, the NHL and MLB." Univ. of Chicago Law School professor Randal Picker: "It's a strategy of high risk and high reward."

A LANDMARK CASE: The legal doctrine at the center of the case is known as "single entity," and law professors and experts said that if the NFL "manages to persuade the Supreme Court that the league is a single entity competing with other providers of entertainment rather than a group of 32 separate businesses competing with each other, the landscape of the sports industry will be transformed." If the NFL is a "single unit and not 32 separate, competing teams, any violation of American antitrust law would be impossible to establish," and the league would be "immune to the antitrust cases that have allowed player unions to establish and to protect free agency and other benefits." If the NFL is successful, "players, maverick owners, networks, paraphernalia manufacturers, fans and others will find themselves conducting business with what would be one of the most powerful cartels ever." Supreme Court scholars indicated that Chief Justice John Roberts and Justices Samuel Alito, Clarence Thomas and Antonin Scalia are "likely supporters of the NFL's position," and Justice Stephen Breyer "could easily join the pro-business justices based on his opinion in an NFL case in 1996 in which he hammered the union" (ESPN.com, 7/17).

BLOWN OUT OF PROPORTION? The SPORTING BLOG's Brian Cook wrote ESPN's Munson in his analysis "alternates between sober assessments of the situation at hand and WE'RE ALL GOING TO DIE hand-waving," making the upcoming Supreme Court decision "sound like the end of time." Munson depicts a "doomsday scenario" (SPORTINGNEWS.com, 7/21). Florida Int'l Univ. Law School associate professor Howard Wasserman wrote Munson's report "suffers from a number of weaknesses that plague much popular reporting and conversation on the judicial system." Antitrust laws are "statutory, so Congress always can undo whatever the Court does," and while "such statutory or 'legislative overrides' are relatively rare, the very characteristics that bring the case so much attention in the Court make it a likely candidate for override, depending on what the Court does." Munson "spends a lot of time spinning out the parade of horribles if the Court adopts the single-entity rule," but those horribles "would not happen because Congress could (and I believe would) step-in" (SPORTS-LAW.BLOGSPOT.com, 7/19).

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