Judge Calls Issues With Appeal Of ATP Antitrust Win "Close"

By Daniel Kaplan, Staff Writer, SportsBusiness Journal

Judge Describes Issues In Hamburg's Appeal Of ATP Antitrust Suit As "Close"

The Chief Judge of the U.S. Third Circuit Court of Appeals yesterday described the issues involved in the appeal of the ATP Tour's victory last year in an antitrust lawsuit as very close. Robert MacGill, the lawyer for the Hamburg, Germany, tournament that is suing the ATP, disagreed with Judge Anthony Scirica, saying the ATP's conduct was a clear violation of antitrust law. However, the judge did not appear to agree. "There seem to be so many close competing questions," Scirica said. The judge at that point suggested the court might soon get guidance from the U.S. Supreme Court, which is set to hear oral arguments on January 13 in America Needle's antitrust lawsuit against the NFL. The Hamburg tourney sued the ATP for demoting the event. A district court judge last August threw out most of the charges, and a jury ruled for the ATP on the remaining count. Hamburg appealed in October '08. The one-hour hearing yesterday in Philadelphia revolved a lot around the issue of whether the judge at the lower court level should have instructed the jury not to consider whether there was a market that the ATP had monopolized. MacGill argued instead the judge should have utilized what in legal circles is known as "quick look," which essentially means that the antitrust violation is so apparent, the plaintiffs do not need to define a market that has been violated. Under traditional antitrust law, there must be a market definition. MacGill argued that the ATP had monopolized the market for players, but the jury rejected that position in the Delaware case last year and ruled that a relevant market had not been established. He is now saying that the jury should never have been asked whether a market had been defined.

PANEL SKEPTICAL OF QUICK LOOK APPROACH: The three-judge panel seemed skeptical of the quick look approach, wondering why MacGill only waited until the end of the trial to ask the judge to use it. MacGill said he did so because the judge needed to hear the whole trial before ruling. ATP attorney Brad Ruskin noted that if, as Scirica said, these are close issues, the obvious violation of antitrust law necessary for quick look did not exist in this case. "Quick look would be nonsense," Ruskin said. Two of the judges also asked MacGill how the ATP could function without being able to schedule tournaments and dictate where players compete. "You can't produce the product without coordination," said Judge Kent Jordan. And Judge Morton Greenberg asked, "Wouldn't you have total chaos in the tennis world if you had a really wide-open competitive marketplace?" MacGill disagreed, saying there would not be chaos if the ATP's rights to schedule events and dictate where players compete was taken away. And he said the ATP does not have a product, what is at issue is controlling the player-services market.

ASKING ABOUT TOSSED-OUT CHARGE: The judges asked about one of the charges that the district court threw out, that being that former ATP BOD member Charlie Pasarell should have recused himself when he voted for the new scheduling system that demoted Hamburg. Because he owned an interest in a tournament that would remain in the top tier of the new system, MacGill argued he violated his duty as a director. Scirica asked if did it made "any difference whether Indian Wells was doing well" with Pasarell voting for the system. Indian Wells, California, is the home of the BNP Paribas Open, the top tier event Pasarell owns a stake in. Ruskin replied that Pasarell only owned a minority stake in the event, and that the new system affected not only the BNP Paribas Open, but the whole ATP. MacGill kept coming back to the point that the ATP had conspired to control the market for players, and pointed to the agreements between the tour and the four Grand Slams to devise ranking points as evidence of a conspiracy.

FEW ATTENDEES: The hearing attracted far fewer attendees then the district court trial in Delaware during the summer of '08, when agents, USTA officials and others from the sport showed up. Since that trial, the ATP CEO has changed, as has much of the board, though those now departed individuals still remain as defendants in the Hamburg suit. Attending the hearing yesterday for the ATP was CEO of the Americas and general counsel Mark Young. New ATP Exec Chair & President Adam Helfant did not attend. In addition to Ruskin, Proskauer Rose also had two other lawyers there to observe, Joe Leccese and John Oram. Ruskin's wife also attended. On the Hamburg side, German Tennis Federation President Georg von Waldenfels attended and said afterwards he was pleased with how the day went. MacGill's partner at Barnes & Thornburg, Peter Rusthoven, was also in attendance.