SBD/Issue 84/Law & Politics

Supreme Court Skeptical Of NFL's Claim In American Needle Case

Levy Argues Teams Must Form "Single,
Cooperative Unit" To Produce Football League
Supreme Court justices yesterday signaled that they are "not inclined to shield the NFL and other pro sports leagues from federal antitrust laws," according to David Savage of the L.A. TIMES. The league, in American Needle v. the NFL, is "seeking a high court ruling that the league is a 'single entity' and, therefore, shielded from antitrust claims." But that argument "ran into skepticism from most of the justices" during yesterday's hearing (L.A. TIMES, 1/14). In DC, Robert Barnes notes the justices "showed little support for exempting" the NFL from federal antitrust laws. NFL outside counsel Gregg Levy argued that "decisions by the NFL relating to football and its promotion should not be subject to antitrust lawsuits." He said that teams "compete on the field," but must form a "single, cooperative unit in order to produce a football league." Levy: "They are not independent sources of economic power, because none of them can produce the product of the venture on their own. No NFL club can produce a single unit of production, a single game." But American Needle attorney Glen Nager said, "These teams are separately owned. They are separate decision-makers joining together, and they are making a decision about how they are going to jointly produce something or not produce something." Supreme Court Justice Ruth Bader Ginsburg "seemed sympathetic to the argument that even frivolous lawsuits can cost the NFL millions of dollars in court costs and legal fees." Chief Justice John Roberts added "there are some things that it just seems odd to subject" to antitrust scrutiny. But there were "more skeptical questions for Levy," and some justices "wondered about other ventures the NFL might undertake that would be far afield from football, throwing out hypotheticals such as tractor sales or building houses." Several justices suggested the possibility of "returning the case to the lower courts, as the Obama administration recommends, with new instructions about how to determine if the league's action was anti-competitive" (WASHINGTON POST, 1/14).

FIRST DOWN & LONG: In N.Y., Adam Liptak writes under the header, "Justices Skeptical Of NFL's Court Claim." Several justices yesterday suggested that they "might rule against the league on the narrow question in the case -- whether it was entirely immune from antitrust scrutiny because it is a single entity" (N.Y. TIMES, 1/14). BLOOMBERG NEWS' Stohr & McQuillen noted several justices suggested that they "would give American Needle a chance to prove that the NFL's apparel marketing was anticompetitive." Justice Stephen Breyer said to the NFL, "Why shouldn't they have their shot? You might well win, but they want to make that claim." Much of the debate during yesterday's hearing "centered on how closely connected apparel sales are to the league's core functions." Levy told the justices that apparel sales are a "means of promoting the on-field product, an argument that Justice Antonin Scalia disparaged." Scalia said, "The purpose is to make money. I don't think that they care whether the sale of the helmet or the T-shirt promotes the game" (BLOOMBERG NEWS, 1/13). ESPN.com's Lester Munson noted there were "important indications that the NFL may not succeed." Comments and questions from an "unlikely combination of three justices -- Antonin Scalia, Breyer and Sonia Sotomayor -- seemed to lay the foundation for the court to make a more limited ruling." The word that the NFL "really didn't want to hear -- 'remand' -- was mentioned eight times" yesterday, a decision that would "send the American Needle lawsuit back to Chicago for a trial." Munson noted instead of "focusing on the broad immunity question initiated by the NFL, the Scalia-Breyer-Sotomayor line of questioning pushed" Levy "into a corner he wanted to avoid" (ESPN.com, 1/13).

NFL States Teams License Trademarks
Jointly To Better Promote The League
TURNOVER ON DOWNS? USA TODAY's Joan Biskupic notes the Supreme Court appears "unlikely to completely shield" the NFL. The justices focused on "how they might distinguish which NFL activities would be central to league business and likely free from antitrust liability" (USA TODAY, 1/14). The WALL STREET JOURNAL's Jess Bravin writes under the header, "Justices Look Tough In NFL Antitrust Case" (WALL STREET JOURNAL, 1/14). In N.Y., Paul Tharp writes the NFL "didn't seem to score a lot of winning points" during yesterday's hearing. Judging from the "questions and comments by the high court justices, the NFL didn't win the clear victory it sought" (N.Y. POST, 1/14). SI.com's Stefan Fatsis wrote the NFL seems "not only further from the end zone" in this case, but "at risk of losing the game entirely." None of the justices "seemed sympathetic to a central position articulated by Levy: that the NFL teams license their trademarks and logos jointly in order to better promote the league as a whole." After yesterday's hearing, there seems to be a "problematic possibility for the NFL: that the court not only could say that it and leagues aren't single entities, but specify areas in which they aren't" (SI.com, 1/13).

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