SBJ/April 8-14, 2013/Law and Politics

NFL asks court to dismiss antitrust lawsuit filed by American Needle

Editor's note: This story is revised from the print edition.

The NFL asked a federal court last week to dismiss an antitrust lawsuit filed by cap maker American Needle, more than 12 years after the league signed a licensing contract with Reebok that sparked the claim and three years after a U.S. Supreme Court ruling on the matter.

The NFL argued, when the case was originally filed in 2004, that it was a consolidated entity of 32 clubs and not liable to antitrust claims. After winning at the district and appeals court levels, the NFL lost that argument at the Supreme Court in 2010.

The Supreme Court loss, however, did not end the dispute. The high court remanded the case back to the lower court for further review, noting with its ruling that the NFL, in not being immune from antitrust suits, would therefore have to battle each case, like American Needle’s case, on its merits.

The NFL’s filing last week spoke to that contention from American Needle that the Reebok deal violated antitrust laws.

“There is no evidence — none — supporting a conclusion that American Needle would have received a headwear license if, in 2000, the NFL had decided not to award an exclusive license in the headwear category and had instead decided to enter into contracts with two or even three headwear licensees,” the league contended in the motion to dismiss before an Illinois federal court.

After years of having up to 50 licensees, the NFL in 2000 consolidated most of those deals into one deal with Reebok, including for caps. The league did, according to the motion, consider other options, including a deal with two or three companies.

But even under that plan, the NFL wrote, American Needle was never considered because of “its non-competitive prior performance as an NFL licensee,” the league said.

The league at the time even considered bringing licensing in-house, creating a joint venture, or issuing licenses to specific categories, like women’s wear, caps, and on-field apparel, according to the motion.

That last option is the one the league deployed after the expiration of the Reebok deal. New Era now has the cap category.

The NFL also argued that in agreeing to bid as part of the process in 2000, American Needle waived its right to sue.

The American Needle response to the NFL’s motion to dismiss is due June 17.

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