Attorneys Representing NFL Move To Dismiss Antitrust Suit

Jun 19, 2004

Attorneys representing the NFL, Pittsburgh Steelers and the Philadelphia Eagles filed a motion to dismiss an antitrust claim on May 28, arguing that the Allegheny County, Pa taxpayer that sued the defendants does not have standing to bring the suit.
Plaintiff Robert C. Warnock, who is represented by William Helzlsouer of Dravosburg, Pa., alleged in his complaint that the defendants “forced” the county to pay “far more to build Heinz Field and to agree to more onerous lease terms to keep the Steelers in Pittsburgh than a marketplace free of these trade restraints would have demanded.” The suit seeks $200 million in punitive damages from the defendants, and wants to triple that amount if antitrust allegations are upheld in court.
The league and its two Pennsylvania teams, who are represented by Michael J. Manzo of Klett, Rooney, Lieber & Schorling in Pittsburgh and Gregg H. Levy, Steven E. Fagell and James M. Garland of Covington & Burling in Washington, D.C., mounted their own legal charge late last month.
The defendants argued in their motion that not only did the plaintiff fail to satisfy the standing requirement in Article III, but also “the more rigorous” standing requirement for federal antitrust claims.
With regard to the former, they claimed the plaintiff did not meet “the threshold requirements of ‘injury in fact.’” The defendants also argued that the taxpayer is misplaced as a plaintiff in the case. The plaintiff, “if at all,” should be the county or the Sports & Exhibition Authority, which authorized the lease. Instead, the taxpayers represents a “’generalized grievance’ shared by all Allegheny County taxpayers.”
The defendants added that relevant case law requires that a “litigant must assert his or her own legal rights and interests, and cannot rest a claim to relief on the legal rights or interests of third parties.” Powers v. Ohio, 499 U.S. 400, 410 (1991).
Turning to “the more rigorous” standing requirements for antitrust cases, the defendants claimed that the plaintiff fell short of the initial requirement that a plaintiff has “suffered injury in fact to his business or property.” Associated Gen. Contractors v. Cal. State Council of Carpenters, 459 U.S. 519, 536-544 (1983). The defendants wrote that the plaintiff does not claim that the “alleged conspiracy has injured his business or property in any way.”
The defendants also sited case law and other legal sources, which highlights the belief that “claims of standing on the basis of taxpayer injury are ‘routinely denied.’ Areeda & Hovencamp, supra 339c.
It was at this point that the defendants alluded to the ongoing litigation in the Southern District of Ohio, where a taxpayer there initiated a suit against the NFL and the Cincinnati Bengals for antitrust violations. Virtually identical to the instant litigation, that plaintiff alleges that the NFL violated antitrust laws in securing a stadium lease that was unfavorable to the municipality.
There, the court sua sponte held that the taxpayer there had ‘municipal taxpayer standing’” to pursue the suit. The defendants in that case, Carrie Davis v. NFL, et al., have moved for reconsideration, a motion that is currently pending.
The defendants in the present case argued in their motion to dismiss that court’s holding “is completely and demonstrably at odds with established precedent.” To support that argument, the defendants cited case law from the federal circuit courts as well as the U.S. Supreme Court.
As an example of the latter, the defendants cited Frothingham v. Mellon, 262 U.S. 447, 486-87 (1923), where the high court “recognized in dicta that municipal taxpayers had been held to have standing to sue for injunctive relief to remedy constitutional violations by public entities.” Another line was drawn in Doremus v. Board of Education, 342 U.S. 429, 434-35 (1952), when the court invoked “Municipal Taxpayer Standing” when the taxpayer possesses a “financial interest that is, or is threatened to be, injured by … unconstitutional conduct.”
The defendants described the instant lawsuit as an action for “damages against only private parties for an alleged statutory violation,” falling outside the “narrow ambit of cases permitting municipal taxpayer standing in federal court.” Turning to the academic community, it pointed to Nancy C. Staudt’s Taxpayers in Court: A Systematic Study of a (misunderstood) Standing Doctrine, 52 Emory L.J. 771, 833 & n.306 (2003). She noted according to the defendants that “not a single taxpayer has succeeded in getting standing” when the alleged violation is one of federal statutory law.
Using a public interest rationale as the proverbial cherry on top, the defendants finally argued that “taxpayers should not be permitted to preempt or circumvent, through the device of a taxpayer action, the government’s exercise of its sovereign discretion over whether to initiate a lawsuit on its own behalf.”


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