By Ryan M. Rodenberg
“Oyez! Oyez! Oyez!”
With the traditional Latin introduction, the legal case described by ESPN’s Lester Munson as a possible “Armageddon” began at 10:08AM EST on January 13, 2010, in the Supreme Court of the United States (“SCOTUS”). In an abundance of caution, I arrived more than four hours early to wait in the SCOTUS bar member line. I crossed my fingers that I would be able to get a seat in the case of American Needle v. NFL, et al. With sports law cases rarely seeing the rarified air of Supreme Court review (Casey Martin’s Americans with Disabilities Act lawsuit against the PGA Tour in 2001 was the most recent such case), I expected the line to be long. Others shared my opinion. By 9:00AM, there were several hundred attorneys waiting in line for 75 tickets guaranteeing admittance.
With a ticket in hand, I stuffed my jacket and cell phone in a locker (no electronic devices are allowed in the courtroom) and perused several briefs as I took a seat seven rows behind the elevated seats of the justices. At issue in the case was whether the NFL should be considered a “single entity” for antitrust purposes under Section 1 of the Sherman Act when it collectively and exclusively licenses league and team-specific intellectual property (e.g. names and logos). Plaintiff American Needle pointedly complained that the NFL’s 2001 exclusive licensing contract with Reebok violated antitrust laws on the basis that such agreement represents an impermissible contract, combination, or conspiracy in restraint of trade. The NFL prevailed at the district court level and the grant of summary judgment was affirmed by the U.S. Court of Appeals for the Seventh Circuit. American Needle appealed to the U.S. Supreme Court via a writ of certiorari. Interestingly, the NFL joined in the plaintiff’s appeal and requested review even thought the league had already won the case twice.
From the outset of oral argument, it was evident that each of the nine justices was engaged and knowledgeable about the case. With the exception of Justice Thomas, every justice posed at least one question to the lawyers arguing the case. Questions by the justices at oral argument often take the form of hypothetical fact patterns. For example, Justice Kennedy asked counsel for American Needle whether an NFL rule that protected quarterbacks should be subject to “rule of reason” analysis if it detrimentally impacted certain teams. Justice Alito similarly inquired about the antitrust permissibility of two NFL teams opting to play an additional game against each other over and above the league-mandated 16 game regular season as a way to make more money. Justice Breyer drew an analogy to baseball and asked about the Red Sox competing against the Yankees when selling t-shirts – humorously concluding that “I don’t know a Red Sox fan who would take a Yankees sweatshirt if you gave it away.”
The two sides attempted to further their case by promulgating fairly predictable arguments. American Needle contended that the concerted action of the NFL, its 32 teams, and Reebok should be subject to antitrust review, rendering the district court’s grant of summary judgment improper. The NFL countered that its internal decision-making is analogous to a single entity, thereby distancing itself from antitrust scrutiny. The case had an added wrinkle in the form of the Solicitor General, President Obama’s de facto legal department that represents the interests of the United States in matters before SCOTUS. After initially recommending that the Supreme Court should decline to hear American Needle v. NFL, et al, the Solicitor General later filed an amicus brief on the side of American Needle. The brief, like American Needle’s, argued that the case should be remanded. However, contrary to American Needle’s position, the Solicitor General offered a two-pronged test for evaluating the antitrust permissibility of conduct by joint ventures such as the NFL. Such test represented a middle ground between the relatively extreme positions favored by American Needle and the NFL. As such, neither American Needle nor the NFL endorsed the Solicitor General’s compromise position. In the short amount of time allocated to the Solicitor General attorney during oral arguments, the justices seemed dubious of the government’s proposed hybrid solution to thorny antitrust questions.
The justices also seemed generally skeptical of the NFL’s position during oral argument. Anecdotal examples of such skepticism from the ideologically unlikely triumvirate of Justice Scalia, Justice Breyer, and Justice Sotomayor included the following directed towards the NFL:
“The purpose is to make money. I don’t think the [NFL] care[s] whether the sale of the helmet or the T-shirt promotes the game. They sell it to make money from the sale.” – Justice Scalia
“So let’s call it an NFL supermarket…Patriots automobile shop, Patriots tractor store, everything becomes Patriots. Everything…no competition anywhere.” – Justice Breyer
“[Y]ou are seeking through this ruling what you haven’t gotten from Congress: An absolute bar to an antitrust claim.” – Justice Sotomayor
After being present for the oral arguments and spending a dozen hours reading the various briefs filed in the case, Lester Munson’s aforementioned “Armegeddon” speculation seems more hyperbole than realistic possibility. Similarly, the draconian result of an NFL win in the court case alluded to by New Orleans Saints quarterback Drew Brees in a recent Washington Post op-ed wasn’t hinted at by either the justices or the litigants during oral argument. While a decision at either edge of the argumentative spectrum is a remote possibility, SCOTUS’s decision will likely be a narrow one solely focused on whether the NFL can commercially exploit team-owned intellectual property on an exclusive basis, as it did with Reebok close to a decade ago. Regardless of whether the case is remanded or affirmed on the intellectual property issue, the tone and substance of oral argument indicated that the NFL is unlikely to score a sweeping victory and secure blanket “single entity” status.
Ryan M. Rodenberg, JD/PhD teaches sports law at Indiana University – Bloomington. He can be contacted at rmrodenb@indiana.edu. © Ryan M. Rodenberg 2010.
