SPORTS LAW OUTLINE

Chapter 1 - Best Interests of the Sport: The Role of the Commissioner and Other Governing Authorities

Pete Rose v. Giamattio 1989: Commissioner Giamatti hired lawyer to investigate allegations

about Rose’s betting while acting under the Major League Agreement Art. 1, §2

o April 1990: Giamatti sent letter to US District Judge Carl Rubin who then sent copy of letter to Rose’s attorney

o Rose filed suit to prohibit commissioner from disciplinary proceeding; Rose won a restraining order

o Giamatti sought to remove to federal court on diversity grounds Players’ contracts included a clause in which parties agreed to

submit themselves to discipline of Commissioner; Judge read this clause as establishing a Commissioner’s office with power independent of Reds organization

Rose and Giamatti were the real parties in interest and there was diversity

o Rose facing pressure from IRS settled the case and accepted Commissioner’s jurisdiction and faced permanent ineligibility to associate with baseball

o Who are the parties? Rose: player (selling his services to one buyer in the market place:

monopsony) Commissioner: oversees the league (the employer)

o How did case get to federal ct.? diversity b/w Rose and Giamattio Dealing with a private sector and parties who make agreements with each

other (ie. Constitution). Kind of like the 14th amendment. Parties agreed that Comm. have broad powers (ie. investigate

matters for the best interests of baseball). Rose argues that the commissioners’ powers are vague and ambiguous.

What recourse do players have with arbitration Labor law applies to employer/employee relationships

o Gambling has a detrimental affect on baseball b/c it looks bad on MLB and affects potential sponsorships/ affects the market value of the product. If Rose had succeeded, the commissioner’s office would have been irreparably damaged.

o Issue: To what extent should public law, speaking through judges, venture to overturn decisions made by private leagues, speaking through their commissioners?

Legal Scope of the Commissioner’s Authorityo Time Line

1919: American League Baseball Club of NY v. Johnson Commissioner Johnson suspended pitcher Carl Mays for walking off the field. Yankees sued Johnson for this suspension.

Holding: Judge interpreted §24 of league Const. as the each club having the right to regulate its own affairs when it comes to suspending players and thus issued a permanent injunction

Late 1919: Owners decide to dismantle the tripartite commission and replace with a single, powerful commissioner

Kenesaw Landis, a federal judge, took position but only if he had sweeping powers

1931: Milwaukee Am. Ass’n v Landis: Commissioner did not approve of transaction btwn Browns and Milwaukee b/c they were all secretly controlled by Brown’s owner. Milwaukee brought suit against Landis

Issue: Does Comm. have jurisdictional powers to make player a free agent?

Holding: Commissioner has wide powers and discretion pursuant to the MLA which was the intent of the parties when they selected Landis as Commissioner. Commissioner has jurisdiction to decide the free agent matter. Commissioner has discretion to determine if a situation is detrimental to the national game of baseball.

1933: Farm system develops and major league can use reserve system to stock pile players on a minor league team

1976: Baseball players were no longer tied to their baseball for life; Free agency began

1976: Ct. determined in action brought by Ted Turner of Braves against Kuhn that Comm. still has brought authority but now has to be read in tandem with the new Labor Agreement btwn owners and the Players Association.

Ct. ruled that Comm. went beyond authority by taking away the Braves first pick

1978: Charles Finley v. Bowie Kuhn: Owner of Oakland A’s sold off his assets with free agency pending and developed a farm system. He also sold off his star players, Rudi and Fingers to Red Sox and Blue to Yankees. Comm. Kuhn disapproved of assignments as inconsistent with interests of baseball. Finley brought suit against Comm. challenging his authority

Issue: Does Comm. have power to disapprove of player assignments?

Holding: The 1964 Amends to MLA restored the Comm’s power that was limited by the 1944 Amends. In the 25 years as Comm. he has found other actions detrimental that did not violate per se Rules. The history of the MLA evidences that Comm. has authority to determine whether

any act, transaction, or practice is not in the best interests of baseball and to take whatever remedial or preventative action that deems appropriate

“Best interest of the sport”-commissioner makes ultimate decision.

1992: 2 expansion teams with an effort to shift Cubs to the West Division and the Cubs strongly opposed. A number of teams asked Comm. Vincent to order realignment pursuant to his powers under Art. 1, §2 of MLA. Cubs argued his authority was limited by Art. VII. Comm. Vincent ordered realignment. (p.21)

Chicago Cubs v. Vincent : Ct. concluded that Comm. authority was preempted by Art. VII b/c specific language in NL Const. provided that no team may be transferred to a different division without consent. The Comm. long history of authority was not decisive and an injunction was granted.

Gamblingo Molinas v. NBA

Facts: Jack Molinas was drafted to the Pistons. In 1954 he admitted in writing to betting on his Pistons team to win. League Pres., Podoloff, acting pursuant to §15 of Molinas contract and §79 of League Const. indefinitely suspended the Molinas from league

Issue: Whether the NBA’s continued ban against Molinas was an “unreasonable” restraint on trade in his services.

Holding: Not every disciplinary rule which a league may invoke runs afoul of the anti-trust laws. A DR against gambling seems reasonable and to conclude that Molinas conduct cannot be tolerated seems reasonable. At the time the confidence in the league had been shattered due to a series of gambling incidents and in order to effectuate policies against gambling, it was necessary to enforce its rules strictly.

Drug Useo MLB Players and the Comm. of MLB

Facts: Comm. Ueberroth in 1986 wrote a policy memo placing drug testing under the control of Comm.’s Office. Steve Howe, a pitcher, was hospitalized for drug related treatment on 6 occasions and suspended 6 times. Medical recommendations said that Howe needed to be in a strict program if he was to return to baseball which required frequent drug testing for remainder of career, however, these requirements were not implemented when he returned. After returning Howe was arrested in off season for possession of cocaine. Comm. imposed a life time ban which was challenged by MLBPA.

Holding: Howe argues that his 4th Am right to privacy is being violated. Dr’s safeguards were not implemented had they maybe Howe would not have relapsed. Comm. should have looked at the underlying problems of Howe. Drug abuse was not as high as in past and Howe is not the person to use to deter drug use when other measures are available and have been successful. Therefore, Comm.’s actions were without just cause.

Drug Testing o Hill v. NCAA

Facts: NCAA implemented drug testing program which would test not only for performance enhancing drugs but also mind altering street drugs. The rules required that every student sign a consent to such testing if they want to compete. Stanford University athletes challenged the University’s efforts to institute the program. The students won a lower ct. injunction. The trial ct. found that college athletes do not use drugs more frequently than students in general; No compelling need for drug testing to protect the health of college athletes; program was overbroad b/c it also banned over the counter drugs.

Issue: Does the NCAA drug testing program invade privacy Holding: Drug testing does impact privacy interests but several

factors must be evaluated to determine if a const. violation Reasonable expectations of privacy: Athletes expectations are

diminished by the nature of sports; Full disclosure of the banned substances is made at the beginning of season along with a written consent form; no legal right to participate in athletics

Seriousness of Invasion: Direct observation of urination is intrusive but is not conclusive which justifies further inquiry

Competing Interests: NCAA’s motives are to safeguard the integrity of college sports and to protect the health and safety of student athletes. These motives are presumed valid as

Class: Legal Argument: Right of Privacy Treatment of Women By Sports

o Ludtke & Time v. Kuhn Facts: Comm. Kuhn instituted a general ban against women sports

writers to baseball clubhouses. Kuhn insisted that Ludtke, a Sports Illustrated sportswriter, covering the 1977 World Series not be allowed in the Yankee’s clubhouse. Kuhn defended to protect privacy of players; protect image of baseball as a family sport; preservation of traditional notions of decency and propriety. Yankee stadium was owned by the City of NY. Male reporters were getting fresh off the field interviews

Holding: Yankee’s interest in protecting ballplayer privacy may be fully served by a much less sweeping means. The state action unreasonably interferes with Ludtke’s fundamental right to pursue her profession in violation of due process of 14th Amend.

Ch. 2 - Constructing a Players Market: From Contract to Antitrust Lawo Issue: The ability of players to move from one club to another, Whether in the

same or different leagueo Toronto Blue Jays v. Boston Celtics and Danny Ainge

o Facts: Danny Ainge played 2 sports. He was brought into Blue Jays system in 1978. In 1981 he was drafted by Celtics for basketball. Ainge didn’t play well in the minors and wanted to play basketball. Blue Jays gave him a $300k signing bonus and Ainge tried paying it back knowing he would make more money in NBA. Jays didn’t accept that offer and wanted to uphold his contract. The contract with Blue Jays had a reserve clause in which he would play baseball for Jays and would refrain from playing with another team and in any other league. Jays sued Celtics and Ainge in federal ct.

o Class: Signed contract with Jays but retained eligibility to play NCAA

basketball

In his baseball contract there was a provision that Ainge could not participate in any other sport or activity that is detrimental to health

Ainge’s rights were retained by Jayso Boston Celtics v. Brian Shaw

o Facts: Shaw signed 1 year contract with Celtics in 1988. 1989, signed a 2 year contract with Italian basketball team which gave Shaw option to terminate the second year if he wanted to return to NBA. Celtics persuaded Shaw to sign a 5 yr contract and undertook to terminate his contract with Italian team. Shaw retained an agent who said his market value is worth more and that he should not leave the Italian team. Arbitrator ruled that Shaw had to terminate his contract with Italian team and district ordered the enforcement. Shaw appealed

o Issue: Was Arbitrator’s decision unlawful? Did Celtics meet the standards for a preliminary injunction? Did Celtics come into the contract with “unclean hands”?

o Rule: (1) Arbitration award is valid so long as it draws its essence from the labor contract; (2) Irreparable harm can be found in the loss of services of a star athlete to a team

o Holding: Shaw barred from playing anywhere but Boston Arbitrator’s award was lawful:

Shaw Argues: Promise not to cancel a contract to play with a different team is null and void b/c the Collective Bargaining Agreement does not apply to Amend. that do not deal with compensation

Ct’s Response: Promise is related to compensation b/c it defines the beginning of the compensation relationship. The NBA Comm. who reviews contracts, found the term to relate to compensation as did the arbitrator

Irreparable harm can be found in the loss of services of a star athlete to a team. It would be difficult for Celtics to plan intelligently for the next season. The balance of harms favors the Celtics. This is not a case dealing with the enforcement of personal service contracts, but rather a case in which a court can order an individual to rescind a contract and prevent them from performing a service for others. Celtics hands were not unclean b/c Shaw is an intelligent person who read and understood the contract when he signed it.

o Class: Court looked to the labor agreement He had an existing contract

o Flood v. Kuhn (US Supreme Ct.)o Facts: Flood played for St. Louis Cardinals for a number of years. At age 31

he was traded to Phillies with a pay raise, however, Flood rejected the trade and declared himself a free agent and filed suit. Flood claimed a violation of anti-trust law and 13th Amend. Flood appealed to Supreme Ct.

o Issue: Is professional baseball’s reserve system within the reach of the federal antitrust laws?

o Rule: Baseball’s reserve system is exempt from the federal antitrust laws.o Holding: Flood’s claim is not actionable under anti-trust laws

Pro. Baseball is a business and it is engaged in interstate commerce. The rulings of Fed. Baseball and Toolson have survived Stare Decisis. Other sports operating interstate are not exempt. Congress has been aware of these arguments but has been passive and

does not have any intention to subject reserve system to the reach of antitrust statutes.

If any change is going to be made it will be made by Congress and not the Courts.

o Class: There is no other market for this player to play Sherman Act §1 : makes illegal any contract b/w 2 or more individuals

in the form of trust, combination, or conspiracy in restraint of trade of commerce amongst the several states

Contract b/w Flood and team Flood is selling his services in commerce

Sherman Act §2 : prohibits the effort by any persons to monopolize or attempt or conspire to monopolize trade

Upon its face it looks like Flood his being constitutionally being prohibited to move freely

What is the rationale for MLB?: MLB is a business that it is trying to improve and the only way to keep fans is to restrict players movement

Rely on stare decisis Should be left to the legislature

Flood is based on aspect b/w employer and employee Not all restrictive behavior is anti-competitive What is baseball’s reserve/farm system? Every major league team has

a minor league team in which players are under a perpetual contract and cannot get out of

Remember if you don’t have anything to argue always look to the Constitution and try to analogize

Baseball is exempt from Anti-trust (specifically reserve system) probably based on policy reasons and how baseball is a National Pastime.

What § of Sherman Act would argue for Microsoft? Both §1: every computer has a Microsoft operating system;

nowhere else to get Microsoft software §2: Microsoft controls about 98% of market

RESERVE SYSTEM —Restraining players to particular team; baseball only; not applicable to other sports

ANTITRUST LAW: created to protect capitalism, preserve the marketplace; keep competition alive in business

Heavily litigated area of law

Antitrust litigation brought about the placing of factories in US by Nissan, Toyota, other foreign automakers b/c before ford and GM blocked their entry into the US workforce

Look at pro athletes as fungible commoditieso Product that has usable lifespan – interchangeable (can

be replaced easily) This is why 1 athlete can’t dictate the market Fungible commodity has market value (what are

they offering? Services) Can file from property perspective

(violates RAP)o Did this b/c baseball was important pastime for

Americans, especially at this time Decided not to disturb baseball b/c if they did,

baseball would be drastically changed Lots of lobbying to remove baseball’s

exemption from antitrust Saying that lobbying gov’t interests is big

business now in most major citieso Piazza and Tirendi v. Major League Baseball

o Facts: In 1990’s there was a pursuit of a franchise baseball team in San Francisco and Tampa Bay. The NL owners rejected the Tampa Bay’s group’s request to locate Giants to Tampa Bay. 2 major investors in the Tampa Bay group, Vincent Piazza and Vincent Tirendi, brought suit against MLB for defamation about their background of being of Italian descent, breach of contract, and violation of Sherman Act. MLB sought Summary judgment based on the long standing antitrust exemption of MLB.

o Issue: Does MLB’s scope of exemption only apply to the reserve system (a club’s right to keep/reserve a player forever) or the entire business of baseball?

o Rule: Antitrust exemption created by Federal Baseball is limited to baseball’s reserve system.

Anticompetitive activity in the market for the sale of ownership interests in baseball teams may be covered by an exemption under the Sherman Act if physical relocation of a team implicates matters of league structure

o Holding: MLB is not exempt from antitrust for contractual issues dealing with franchises.

If you were looking at the Sherman Act section 1, the league and the team are conspiring against you to restrain your trade of buying and selling baseball teams (Piazza’s argument).

MLB’s counter-argument would be that the crossing of baseball across state lines is interstate commerce.

Look at the historical effects of the rule that is in place, then you do a pro-competitive v. anti-competitive analysis.

o If it is pro-competitive, then it would satisfy interstate commerce.

Flood examined the analytical underpinnings of Federal Baseball (that the business of exhibiting baseball games is not interstate commerce). The court rejected this reasoning removing any doubt that professional baseball is a business engaged in interstate commerce.

Now we know how to identify the market as pro-competitive v. anti-competitive. Look at the statute and the rule.

Federal Baseball case (BAD LAW??) Business of providing public baseball games for profit between

clubs of professional baseball players was not within the scope of the federal antitrust laws.

Did not hold that all businesses based on professional baseball were outside the scope of antitrust laws.

This new anti-trust coverage (Curt Flood Act of 1998) (page 170-1) of baseball doesn’t apply to any conduct that does “not directly relate to or affect employment of major league players to play baseball at the major league level.”

The purpose of that Act was to state that MLB players are covered under the antitrust laws (and they will have the same rights under antitrust laws as do other pro athletes).

Also, applies to any decisions “relating to or affect franchise expansion, location or relocation,” and the sales of intellectual property, including broadcasting.

Chapter 3: From Antitrust to Labor Law

ANTITRUST—BILL OF RIGHTS IN ECONOMIC SYSTEM OF THIS COUNTRYI. Antitrust Background

A. Notes Sherman Act section 1 requires that at least 2 distinct legal

persons who are parties to a collusive arrangement Section 2 speaks of “every person who shall monopolize” Single entities are only subject to section 2 Immediate target of antitrust law is excessive market power (aka

to create an even playing field) Market power : when consumers have few if any alternatives to

the seller’s product, thus enabling the seller to dictate terms based on profit maximization rather than competitive pressure

Horizontal v. Vertical Restraints (retail example: manufacturer says don’t sell my product below a certain price)

Monopsony : sellers are forced to accept lower purchase prices. The reverse of monopoly (sellers have no other alternative but accept lower prices or invest more effort and resources in

production of a higher quality good for the same price; this effects a wealth transfer from sellers to buyers)

Players object to the draft and to restrictions on free agent movement because by thereby limiting players’ options to a single team the league creates a monopsony.

Rule of Reason : An agreement is unlawful if the anticompetitive injury it causes outweighs the pro-competitive benefits it generates

§6 Clayton Act : labor of a human being is not a commodity or article of commerce

LOOK FOR THE RED FLAGS! POOLING TOGETHER…CONSOLIDATION! LOTS OF POWER COMING TOGETHER IN ONE SET OF HANDS. Look for decisions that restrict products/trade and harm the consumer

FOCUS ON 175-178! Main issue is whether the league when it adopts intraleague

policies is a single entity subject only to section 2 of the Act, or a combo of separate clubs whose internal arrangements are exposed to section 1 scrutiny?

Another sub-issue is whether the “trade and commerce” that is protected against collusive restraint (or monopolization) doesn’t include the labor market.

Economists have identified 2 general consequences of excessive market power.

1. Transfer of wealth from customers to producers

2. The amount of the good or service produced for and purchased by consumers will drop.

In Kartell (page 177), the Ct. dismissed an antitrust claim filed by doctors against Blue Shield, the dominant provider of health insurance in Mass., which req’d all doctors who performed services for Blue Shield insureds to accept its fee schedule as full payment for the service, and not charge the patient any more.

1. Courts are more likely to respond when “prices are fixed” at a high level rather than a lower price!

B. Brown v. Pro Football (Washington Redskins) (page 179) (monopsony)Facts: Redskins player lodged suit w/ the player’s association against the NFL for its unilateral imposition of a standard $1k/week salary paid to players assigned to a team’s development squad, rather than the regular roster (could’ve been paid upwards of $7k/week); players association wanted salaries to be negotiated individually. NFL filed a motion for SJ.Issue: Is wage-fixing that affects labor market subject to Antitrust?

Holding: YES, Wage-fixing is an antitrust violation to which the Sherman Act applies When Congress enacted section 6 of Clayton Act it was concerned with the right

of labor organizations to continue engaging in activities that would otherwise would be antitrust violations but not the right of employers to band together in fixing wages

o Congress limited the exemption by saying the labor of a human being is not a commodity

o Wage-fixing has been seen by other courts as price-fixing Clayton Act has broad remedial objectives that protect all who are made victims

o Ct. analogized when a consumer is injured by artificially inflated prices to when a buyers of services artificially deflate the price of services through cooperative anticompetitive conduct

Class: What is quickest way to preserve player’s rights? Seeking an injunction How do you attack under Antitrust

o Define the marketo Determine what federal law to use (which section of the antitrust to use?)o Rule of reason analysis

History Purpose Anticompetitive affect Pro-competitive virtues

Wage or price fixing is a restraint on trade Rule of Reason Analysis

o In this case, the CT ruled for players and said the NFL was engaging in anti-competitive conduct

II. Antitrust and the Players MarketRookie Drafts and Anti-Trust1. Yazoo Smith v. Pro Football, Inc. (Redskins) (1978) [186] - First round

pick has a career-ending injury - sues team for Anti-trust violation, claiming that without the restrictive draft, he could have negotiated a bigger deal in a truly “free market”.a. DCT - the draft is a group boycott and is per se illegal - damages

were awarded of $92,200 (trebled).b. CTA-DC - the draft is similar to a group boycott, but the

participants here are not true competitors in the AT sense of the word. Under an ROR standard, the anti-competitive effects (total ban on competition to supply labor) outweigh the pro-competitive effects (which increase competition on the playing field, not in the labor supply market), and there are less restrictive alternatives, so the draft is illegal (now that it is collectively bargained, its legal). Damages were remanded for a better estimation.

c. Mackinnon’s dissent - the teams are not economic competitors in the AT sense of the word, so the court’s analysis isn’t really proper

- in addition, you must look at the draft globally, rather than just focusing on the impact on the players.

III. Interpretation: The court seems to be saying that if the union is acting in its own self interest and a CBA results, no rule in that CBA can violate AT. Under the NSLE, the substance of a CBA can’t be challenged under AT. Here, having a draft seems more in the owners’ best interests.

IV. If not bargained for a draft is illegal

Smith v. Pro Football (ESSSSSSAY!) Facts: The NFL draft was designed to promote a “competitive balance” by dispersing new talent equally among the teams which would maximize revenue and overall health of the sport. NFL had a “no-tampering” rule in which no team was permitted to negotiate prior to the draft with any player eligible to be drafted and no team could negotiate with any player selected by another team in the draft. If a college player could not reach a satisfactory agreement with the team holding the rights to his services, he could not play in NFL. Smith was selected by the Wash. Redskins as the 12th pick in the first round of the 1968 draft. He signed a one year contract and then suffered a career ending neck injury in the last game of the season. Smith filed suit 2 years later attacking the legality of the rookie draft under antitrust law contending that but for the draft he would have secured a more lucrative contract that would have protected him from the financial consequences of his injury. DC found in favor of Smith and awarded treble damages. NFL appealedIssue: Is NFL’s player draft a violation of antitrust?

Rule: A restraint under the Sherman Act must be evaluated to determine whether it is significantly anticompetitive in purpose or effect and is unreasonable if it has the net effect of substantially impeding competition (anticompetitive evils v. pro-competitive virtues)

Holding: The NFL’s rookie draft as existed in 1968 had severe anticompetitive effects and no pro-competitive virtues making it an unreasonable restraint of trade in violation of section 1 of Sherman Act (2 or more people conspiring) Draft is not like a “group boycott” because it is more like a joint venture

where no team is interested in driving out another team and IS not trying to exclude competitors which therefore does not meet the per se antitrust violation.

o The draft is anticompetitive in purpose and effect b/c it restricts competition among the NFL clubs. It forces each player to deal with only one buyer and to have the effect of lowering players’ salaries.

o The draft’s pro-competitive virtues are nil because it does not increase competition for others to enter the market.

Ct. discusses less restrictive alternativeso NFL says: can affect efficiency of business in the NFLo Ruled in favor of the players by saying that the draft was

anticompetitive Draft isn’t anticompetitive anymore b/c of collective bargaining

o As long as these K’s are bargained for, there is no violation of antitrust Labor law comes into play here

Standard of Review?o Identify the relevant marketo What is the history/purpose of the Sherman Act?

Per Se Approach (Quick Look analysis): represents the considered judgment of the courts, after considerable experience w/ a particular type of restraint, that the rule of reason, the normal mode of analysis, can be dispensed w/…courts won’t use this very often. Riskier!

Rule of Reason analysis: Anti-competitive or Pro-competitive? Pro-Competitive Argument: Team says it should have

the ability to get good playersClass:

The draft is an attempt to improve product; acquiring new services increases productivity

Market: draft eligible football players Player is going to argue by showing evidence that he would be worth more in an

open market Team will argue pro-competitive virtues

o Competition on the fieldo Affects the league economically

B. Salary Restraints Brown v. Pro Football (Washington Redskins)

Facts: The Development Squad system permitted each team to sign as many as 6 rookies or 1st year free agents who could practice but not play with the team and their wages were fixed at $1000 per week. Issue: Is NFL’s development squad system a violation of antitrust (unlawful wage-fixing)Holding: Based on the holding of Smith v. Pro Football, NFL’s alleged pro-competitive purposes (“competitive balance” & “better product”) are either insufficient as a matter of law b/c they fail to justify the necessity of the salary restraint or they are not relevant to the rule of reason test

Salary restraint robbed each seller of football services of any bargaining power and left no room for competition b/w the teams for the services of the players

Class: Market: development squad players

c. Veteran Free AgencyMackey v. NFL (part 1)Facts: Rozelle Rule was the NFL’s practice of requiring the team that signed a veteran free agent to provide a “fair and equitable” compensation to the team that had lost the player off its roster. Players objected to this rule b/c they felt they had no ability to sign with other teams than did baseball players. In 1968 the NLRB recognized the NFLPA as a labor organization and since then has engaged in collective bargaining. The Rozelle

Rule was embedded in the NFL Const. As for the purpose to maintain “competitive balance”Issue: Is Rozelle Rule a violation of antitrust? Holding: YES - Rozelle Rule is an unreasonable restraint of trade in violation of section 1 of the Sherman Act.

DC found that Rule was illegal per se b/c it operates to deter clubs from negotiating with and signing free agents and acts like a group boycott, however they did not do a rule of reason inquiry b/c the NFL is a unique business that cannot be applied to per se illegality rules

The Rules anticompetitive effects include a deterrent to players playing out their options and becoming free agents; decreases players bargaining power in contract negotiations; players denied right to sell services in a free open market; salaries paid by each club are lower than if competitive bidding prevailed; absent the rule there would be increased movement in interstate commerce of players

NFL argues that without Rule there would be no “competitive balance”; diminished spectator interest; necessary to protect scouting expenses and player development costs are not justified

The rule because of its unlimited duration is far more restrictive than necessary to fulfill the justifications.

Analysis:-What is the relevant product market here? Veteran free agency

What is the issue? Free negotiations; getting true market valueo Rozelle Rule was too anti-competitive b/c it restrained trade because of

the financial burdens (Teams will not want to pay more to acquire players)

Fraser v. MLS (2002) – Discussed this during Chapter 7Facts: §2 of the Antitrust Act – Monopolization. Must show that there is a market and that they own the majority of the market. Issue: Is the MLS engaging in anti-trust violations via it’s salary regime?Holding: No, the possibility that a less integrated and restrictive salary regime might make some individual salaries even higher is hardly conclusive.

w/out these restrictions, the MLS might not exist, which would hardly enhance competition.

The MLS faced significant competition for player services both from outside the US and from non-Division I teams.

CT says it can’t rule per se that the MLS is not engaging in an Anti-trust violation, so it uses a Rule of Reason analysis

o PL’s say that the MLS operated as a price-fixed or group boycott conspiracy for which no market power needed to be shown.

o Sherman Act Section 2 Analysis: Players alleged 3 possible violations of Sherman Act section 2: 1)

that the MLS monopolized the market for D1 professional soccer in the US, 2) that it attempted to monopolize that market, and 3)

that it conspired w/ the United States Soccer Federation to monopolize the same market.

Jury found that players had failed to establish the relevant market it alleged. SJ granted.

o Clayton Act Section 7 Analysis: Players say that the dist ct. erred in dismissing their claim that the

formation of MLS violated section 7 of the Clayton Act. They said, “if not for this combo of assets and purchase of

stock, MLS member teams would compete w/ each other for players, like teams in all other major US pro sports leagues.”

Section 7 prohibits, w/ certain commerce-related conditions, stock or asset acquisitions whose effect “may be substantially to lessen competition, or to tend to create a monopoly.”

o Court granted SJ to the DF’s on the ground that there can be no Section 7 liability b/c of the formation of MLS didn’t involve the acquisition or merger of existing business enterprises, but rather the formation of an entirely new entity which itself represented the creation of an entirely new market.

o It would’ve been necessary for players to prove that MLS operates w/in a relevant econ market that is presently concentrated.

Notes: the amount of market power that must be shown in order to establish a Sherman Act Section 2 violation is less than that req’d to establish a Sherman Act Section 1 or Clayton Act Section 7 violation

V. Labor Exemption from Antitrust Main issue: whether AT’s intrinsic focus on “consumer welfare” implies a lack

of antitrust concern about employer power in the labor market. 2nd issue: whether, even if the Sherman Act was meant to apply to collusive

restraints in the overall labor market, antitrust policy must still be subordinate to a separate federal labor policy that has evolved through a number of statutes designed to foster and protect labor org’s and collective bargaining.

There is a fundamental tension b/w antitrust law, which bars “any contract, combo, or conspiracy in restraint of trade,” and labor unions, whose purpose is to organize and to coordinate the efforts of employees in dealing collectively w/ their employer.

o Clayton act held that the labor of human beings isn’t a commodity or article of commerce.

Also, said that in disputes b/w employers and employees about terms and conditions of employment, collective axn undertaken by employees through strikes, picketing, and boycotts, should not “be considered or held to be violations of any law of the US.”

o Wagner Act: created an affirmative right of employees to organize themselves into unions, and then imposed on the employer a duty to bargain in good faith w/ the union to arrive at a collective agreement.

Mackey v. NFL (part 2)Facts: See aboveIssue: Is free agency restriction a labor exemption from antitrust scrutiny?Rule: To determine whether an agreement made b/w union and employers is exempt from Antitrust: the labor policy favoring collective bargaining may potentially be given pre-eminence over the antitrust laws where the restraint on trade primarily affects only the parties to the collective bargaining relationship;

federal labor policy prevails only where the agreement sought to be exempted concerns a mandatory subject of collective bargaining;

Policy favoring collective bargaining is necessary to override the antitrust laws only where the agreement sought to be exempted is the product of bona fide arm’s length bargaining.

Holding: The agreements b/w the clubs and players embodying the Rozelle Rule do not qualify for the labor exemption because there is unequal bargaining power, thus the NFL’s enforcement of the Rule is not exempt from the coverage of antitrust law

The agreement affects only the parties to the agreemento It concerns a mandatory subject of collective bargaining b/c the Rule

operates to restrict a player’s ability to move from one team to another and depresses players salaries which falls within the meaning of the National Labor Relations Act

NFLPA stood in weak bargaining power prior to 1974; the Rule was unilaterally imposed by the NFL and has continued to be imposed

Checklist: ID Relevant Product Market Look at what would appear to violate the Sherman Act How does Labor Exemption relate to Mackey #2?

o Look at rule of Case NFL’s enforcement of the Rozelle Rule is not exempt from the coverage of anti-

trust lawClass:

National Labor Relations Act:o Collective bargaining agreement: terms and conditions of working

environment Certain factors must be determined: wage, hours, player’s

movement, etc. Labor agreements are exempt from anti-trust under NLRA

o The old agreement continues during collective bargaining negotiations

A. Brown v. Pro Football (U.S. Supreme Ct.)Facts: (see above) The Development Squads was not the subject of collective bargaining prior to 1989. The DC rejected NFL’s labor exemption defense b/c the labor exemption expired upon expiration of the agreement. The Ct. of Appeals reversed and held that

labor exemption protected a league from all antitrust suits brought by or behalf of their players union with respect to conduct engaged in during collective bargaining relationship.Issue: Whether NFL club owners who had bargained to an impasse with the players union about a wage issue and had then agreed among themselves but not with the union to implement the terms of their own last bargaining offers should have agreement shielded by labor laws.Holding: The labor exemption applies to the conduct at issue here b/c the conduct took place during and immediately after a collective bargaining negotiation; it grew out and was directly related to the lawful operation of the bargaining process; involved a matter that the parties were required to negotiate collectively; concerned only the parties to the collective bargaining relationship.

Professional sports are multi-employers who can be involved in collective bargaining

Labor exemption is to avoid antitrust courts to answer questions regarding employee matters

o To allow antitrust liability after impasse would introduce instability and uncertainty in collective bargaining process

o The labor laws give the NLRB, not antitrust courts, primary responsibility for policing collective bargaining process

Employers are not completely free after impasse to act independently but limits them to 4 options:

o Maintain status quoo Implement their last offero Lock out their workerso Negotiate separate interim agreements with the union

Class: If impasse, then a grievance can be filed pursuant to NLRA in front of arbitrator How do you attack under Sherman Act after impasse? De-certify the union

Ch.4Labor Law and Collective Bargaining in Professional Sports

I. Free Agency Via Labor ArbitrationA. National & American League Professional Baseball Clubs v. MLBPA

(VERY IMPORTANT CASE! BEGINNING OF FREE AGENCY IN BASEBALL!)

Facts: Messersmith and Dave McNally, professional baseball players, refused to sign new contracts at the end of the 1974 season. Instead they played the 1975 under the terms of §10(c) of the Uniform Player Contract which gave clubs right to renew the old contract “on the same terms”.Issue: Whether the contract as renewed by the club contains the option clause for that would keep a player indefinitely on the club’s reserve lists through the perpetual renewal option?

Rule: The option clause does not get renewed with other terms and the players may become free agents at the end of the renewal yearHolding: “Same terms” does not include the option clause, therefore, Players were not under contract at the end of the renewal year

Ct. did not strike down the reserve system b/c that should be left to negotiations btwn the parties; The arbitrator’s role is to interpret the agreement of the parties

Ct. rejected league’s argument that the “option clause” is among the terms that get renewed b/c the parties did not clearly express their intentions to have successive renewals; the renewal clause determines whether a contract is going to exist while the other terms stand or fall with the contract

Ct. rejected league’s argument that ML rule 4(a) shows the exclusive reservation of player’s service b/c this reservation of services assumes the existence of a contractual relation which there was not at the end of the renewal year

Ct. rejected league’s argument that not having a lifetime reserve system would devastate baseball b/c it was purely speculation and any devastation can be prevented by good faith collective bargaining

Class: Why is this in arbitration? B/c collective bargaining agreement contains an

arbitration clause pursuant to NLRA This case is relative to the Flood case b/c can’t attack under Sherman Act have to

go through NLRA Case created the current day of free agency

D. Certification of the Players’ Bargaining Agent Aim of a union organizing drive is to win the right to represent employees in

collective bargaining w/ their employer. Unionizing Process:

1 – NLRB must define the scope of the relevant employee constituency (that is, the unit appropriate for purposes of collective bargaining)

2 – Employees must petition the NLRB to conduct a secret ballot election. 3 – Election held: if the union wins a majority of the votes cast, the Board

then certifies the union as the exclusive bargaining agent for all the employees.

The Courts and the NLRB have developed an elaborate jurisprudence for determining whether the union’s proposed employee grouping constitutes a sufficient “community of interest” to become the recognized “bargaining unit.”

North American Soccer League v. NLRB (1980) The court found the bargaining unit to be all professional soccer players on clubs

that are based in the United States. o The court held that the league and its member clubs are joint employers. o The key to the decision was the joint employer status of the individual

teams and the league. The court, however, was momentarily swayed by the apparent

individuality of each team: "Contrary to our first impression, which was fostered by the knowledge that teams in the League

compete against each other on the playing fields and for the hire of the best players, * * *."

However after further consideration, the court agreed with the NLRB that there was a joint employer relationship among the league and its member clubs; they then designated the league as the appropriate bargaining unit.

o The NLRB is not required to select the most appropriate bargaining unit, but only to choose an appropriate unit under the circumstances.

The NLRB's decision not to exercise jurisdiction over the three Canadian clubs did not undermine its evidentiary base for their finding that there was a joint employer relationship between the league and the clubs.

There is one caveat. o The duty to bargain requires that both sides must

bargain in good faith. All soccer teams must bargain as a single unit w/ the players assoc.

o Section 8(d) of the NLRA states that both parties must meet at reasonable times and confer on mandatory subjects of collective bargaining. The failure to do so is an unfair labor practice.

This duty to bargain in good faith can be defined as a willingness to enter in negotiations with an open and fair mind and with a sincere desire to find a basis of agreement.

The duty to bargain calls for sincerity, not results.

E. Union’s Exclusive Bargaining Authority Once the NLRB has certified the union as the majority choice of all the

employees, the union becomes the “exclusive rep of all the employees in the unit for purposes of the collective bargaining”

Morio v. North American Soccer League (1980) Action by player’s association against the NASL alleging to the NLRB that the

NASL’s conduct violated the union’s exclusive bargaining authority under the NLRA. The player’s association sought an injunction against post-certification negotiation of new individual contracts. The NASL had unilaterally instituted a number of changes in the general working conditions while the preceding case was going on.

Rule: the duty to bargain carries w/ it the obligation on the part of the employer not to undercut the Union by entering into individual contracts w/ the employees.

NASL says that there is too much power in the hands of the Union, a non-party to this action, and that it will result in chaos in the industry and subject the league to severe economic loss and hardship since these individual K’s are the only real property of the league.

o Court says: the Union is seeking to render voidable only those unilateral acts taken by the NASL. The Union claims that these unilateral changes appear to modify all existing individual K’s entered into before the Sept 1, 1978, in derogation of the Union’s right to act as the exclusive bargaining agent of all employees in the unit.

o Court finds that the Union is entitled to the temporary injunctive relief it seeks w/ respect to all of the individual contracts.

o The union is entitled to eliminate all individual bargaining, even bargaining to secure better terms than the collectively-negotiated minimum.

F. Duty to Bargain in Good Faith Once an employee bargaining agent has been selected, both employer and union

come under a statutory duty to bargain collectively w/ each other. Focus is procedural, rather than substantive.

o As long as a party doesn’t engage in surface bargaining (going through the motions w/ no real intent to arrive at a settlement), the party is free to engage in hard bargaining (to remain unyielding in its negotiating position, whatever the arguments made by the other side).

Silverman I (1981)Issue: Whether an employer, bound by the NLRA to bargain in good faith, could claim that it was financially unable to pay higher wages and then refuse a union’s request to produce financial data to substantiate the claim.Analysis:

o If this Court were to find that the several public statements by club officials and the Commissioner were sufficient to support a finding that the League and its negotiating team view of the Player’s Assoc. “compensation” proposal as related to the financial condition of the clubs, it would do violence to the intent and purpose of the Act which limits the jurisdiction of this Court.

o To accept League’s argument would permit disgruntled employers in a multi-employer unit who disagreed w/ the negotiation policies of their rep’s to force negotiation issues into the courts, thereby conducting labor management relations by way of an injunction.

o The court leaves resolution of the “compensation” issue to the parties through the negotiation process.

o Silverman I was decided favorably for the baseball owners’ only b/c the PRC (player relations committee) itself had carefully avoided making any claims of financial difficulty during negotiations.

Eventually led to a strike.

Silverman v. MLB Player Relations Committee (Silverman II)Facts: In 1994 MLB and the players were negotiating new collective bargaining agreement. After General Counsel of NLRB said owners violated the NLRA, the owners agreed to remove salary cap and restore status quo. 3 days later the owners informed that

salary arbitration would not be available to any player and the prior ban against concerted actions of owners was revoked. The General Counsel issued a formal complaint for the owners unilateral elimination of the salary arbitration and anti-collusion employment terms. The owners argued that such subjects were not mandatory but rather permissive and owners did not have duty to bargain in good faith about themIssue: Were the provisions mandatory subjects?Rule: The statutory right to join collective bargaining unit belongs to employees, not to employer; where the only statutory right of employers is to bargain in good faithHolding: The Reserve system and salary arbitration are mandatory subjects under the NLRA and an injunction was proper b/c monetary damages would be too difficult to ascertainClass:

League and owners made several pronouncements that the effect of escalating salaries had caused serious financial problems to the game and threatened bankruptcy; Player’s wanted to see the books to substantiate the league’s claims. Ct. held that if such argument is important enough to present in collective bargaining it is important enough to require some sort of proof of its accuracy; however, injunction was denied

Notes from another outline: only official bargaining entity PRC’s bargaining positions matter in

fulfillment of duty to bargain in good faith, outside of authorized bargaining o when statements made outside bargaining process – no power to negotiate for

leagueo not have bargaining authority, not basis of bargaining position o Owners were saying that they could not afford the escalating player

salaries and that they might go under but would not give the players union a copy of this financial data. They sued the owners for “bargaining in bad faith”.

o official bargaining unit for the owners, the Players Relations Committee, had not made the statements but rather it was just individual owners.

o This case is the exception and not the rule. Generally, in sports bargaining, it is not uncommon for the league to have to provide supporting data when they claim an inability to pay.

K. Salary Caps and TaxesB. The amount of money that individual teams could spend to induce player

movement1. Each year the league office and players add up gross revenue

received by all clubs from defined sources.2. An agree to percentage of that revenue is assigned for player

compensationa. Part of compensation is reserved for payment of player

retirementC. NBA’s “Soft-cap”: does not restrict the amount that clubs are permitted to

spend to sign their current players to new contracts→”Larry Bird Exception” – Can resign beyond the cap

D. NFL’s “Hard Cap”: forces teams to release some their higher paid players when their overall salary budget was exceeding the collective bargained limit

Class: Luxury taxes Larry Bird exception What counts against salary cap

o NFL: signing bonus prorated and base salary

Ch. 5: Agent RepresentationI. Union and Agent Representation of Athletes

A. Standardized and Individualized Contract TermsAlvin Moore & Atlanta BravesFacts: Moore signed a one-year contract with the Braves. The contract contained a special covenant which allowed Moore if he was not satisfied with his playing time by June 5, 1977 the Braves had to trade him to another team; if not traded by end of season then would become a free agent. The League Pres. disapproved of this provision as inconsistent with the Reserve System Article of the Agreement. Player’s association filed a grievance saying that players are permitted to negotiate individual salaries and special covenants.Issue: What the special covenant permissible under the MLB AgreementRule: League Pres. can disapprove of a special covenant if: (1) the covenant does not actually or potentially provide additional benefits to the player (2) violates an applicable law or is specifically prohibited by a ML rule which is inconsistent with Basic Agreement (3) binds a third party whom the Club and Player have no authority to bindHolding: The provision can be interpreted as not to impinge legitimate interests of other clubs b/c the 5-6 year service requirements of players to their teams is for the benefit of the teams which can be waived by that team. However, cannot waive the reentry procedure designed for the benefit of the teams.

B. Salary ArbitrationRaymond Bourque and Boston Bruins

Contract battle because Bourque’s value in question. one of greatest defensemen to ever

Arbitrator finds that his value should be higher than all defense-men and comparable to other great players at different positions.

This holding allowed Bruins to sign Bourque for considerably less than he was asking.C. Dealing with the Salary Cap

1. Finding loopholesa. Ex: Deion Sanders and Cowboys contractb. Ex: Chris Dudley contractc. Ex: Juwan Howard and Miami Heat contract

II. Breakdowns in the Agent-Player RelationshipA. Agent Recruiting of College Athletes

Norby Walters and Lloyd Bloom v. Brent FullwoodFacts: Walters and Bloom induced Fullwood a star running back for Auburn University to sign a postdated representation agreement in return for an immediate payment of $4000 and another $4000 during fall football season. Fullwood was the 4th pick in the draft but retained another agent and repudiated his deal with Walters and Bloom. Walters and Bloom sued Fullwood to recover the $8000 and the promised 5% commission.Issue: Was the secret arrangement by the parties which was violation of NCAA regulations an enforceable contract?Rule: A court will not force rights that arise under an illegal contract in which parties were in pari delictoHolding: The contract arrangement was contrary to public policy which prohibits either party from the benefit of arbitration bc there is a concern for the integrity of sporting event and the concern for the integrity of higher education of college athletes

III. Emergence of Agent RegulationCollins v. NBPA & GranthamFacts: Collins had become a successful agent with several NBA stars. Collins received his certification from the NBPA after the new regulations came into place. Collins let his certification lapse because of the suit against him by Kareem Abdul Jabbar for breach of fiduciary duty. Collins and Jabbar settled out but he still had another pending suit against him and he tried to get recertification by a personal request of one his other players, Cummings. He was granted recertification but Committee undertook an investigation and decided to deny his recertification. Collins filed suit under antitrust law alleging the Players association was monopolizing representation of basketball players with their Regulations. Regulations restrict the representation of players to only certified agents and implement a “code of conduct” and limits agents fees.Issue: Are Regulations statutorily exempt under antitrustRule: To meet statutory labor exemption the regulations must be designed to promote the union’s legitimate self-interest and there was no combination with either a non-labor group or non-party to a labor disputeHolding: The regulations are statutorily exempt b/c the NBPA acted in its own interest to protect player wage scales; has no effect on the market for teams’ services or on the market relating to any team; there is no combination with employers interests. The regulations are also nonstatutorily exempt.

IV. Agents, College Athletes, and NCAA RulesUS v. Norby WaltersPROCEDURAL POSTURE: Defendant appealed his conviction in the United States District Court for the Northern District of Illinois for mail fraud in violation of 18 U.S.C.S. § 1341.OVERVIEW: After it was discovered that defendant had entered into contracts with college athletes under which they agreed to use him as their agent in negotiating professional contracts and that he had given them money and cars during college, he was charged with mail fraud in violation of 18 U.S.C.S. § 1341 and several other offenses. He ultimately entered an Alford plea to mail fraud, and the other charges were dismissed. On appeal, defendant claimed that there was insufficient evidence to support the conviction. The crux of his argument was that he had not used the mails to obtain money or property

fraudulently and that he had derived no benefit at the expense of the colleges. In reversing the conviction, the court found that an essential element of mail fraud was that the use of the mails was foreseeable and that, although defendant knew that the athletes were required to submit eligibility forms to the colleges, there was no proof that these forms had been mailed to the colleges. It found that another essential element of mail fraud was that the perpetrators obtain property from the victim and that the evidence failed to show that defendant received any property from the colleges.OUTCOME: The court reversed defendant's conviction for mail fraud because the prosecution failed to show that use of the mails was foreseeable to defendant's scheme and also failed to show that defendant had derived any property from the victim of the crime. Because both elements were essential to the crime of mail fraud, the evidence was insufficient to support the conviction.

Ch. 6: Sports Broadcasting, Merchandising, and Intellectual Property Law For our class need to know: Trademark law, copyright act, player publicity rights.

I. Right to Broadcast GamesPittsburgh Athletic Co. v. KQV BroadcastingOVERVIEW: Pirate’s played their games at Forbes field which permitted the game to be seen from outside vantage points. Pittsburgh Athletic Co. owned the exclusive right to broadcast Pirates games and assigned their rights to NBC. A competing radio station broadcasted the game from the vantage points outside the stadium. Plaintiffs sought a preliminary injunction to restrain defendant broadcaster from broadcasting play-by-play reports and descriptions of baseball games played by a professional baseball team, both at its home park and at baseball parks in other cities. ISSUE: Do the Pirates have the exclusive property right to broadcast their games?RULE: Athletic team has the legitimate right to capitalize on the news value of their games and therefore has a property right in such news and the right to control the use. HOLDING: The court found that the actions of defendant constituted a direct and irreparable interference with, and an appropriation of, plaintiffs' normal and legitimate business. Further, defendant's action was calculated to, and did, result in the unjust enrichment of defendant at the expense of the plaintiffs although no revenue was obtained. The court concluded that defendant's unauthorized broadcasts of information concerning the games constituted unfair competition with plaintiffs and were in violation of the Communications Act of 1934, 47 U.S.C.S. § 151 et seq. Additionally, defendant's actions constituted a wrongful interference with the contractual rights and obligations of the parties. Accordingly, plaintiffs were entitled to and were granted a preliminary injunction.OUTCOME: The plaintiff athletic companies were entitled to and were granted a preliminary injunction because defendant broadcaster's actions constituted a violation of the Communications Act of 1934, 47 U.S.C.S. § 151 et seq.

Federal copyright law forbids anyone else rebroadcasting the particular versions of a game, but does not create exclusive property in the bare events of the game

Ct’s concern was that allowing one news service to take and sell the benefit of investigations by another would eventually eliminate the incentive of the second service to invest the work and effort.

What is Pirates asset? Production of baseball games which becomes a property that can be disseminated (broadcasted)

o Competitive station was simultaneously broadcasting What elements would you argue for an injunction?

o Copyright Act It would have been ok if they were just giving the scores at the end of each

inning b/c not copyrighting the expression of the game

NBA v. Sports Team Analysis and Tracking Systems & MotorolaOVERVIEW: STATS were enjoined from transmitting scores or other data about professional basketball games in progress via handheld pagers. NBA had brought various trademark and misappropriation claims against STATS for the transmissions. ISSUE: Whether Copyright law preempts any state law claims?HOLDING: On review, the court held that NBA's state law claims for misappropriation did not survive preemption. Since STATS expended their own resources to collect purely factual information, they did not free-ride on NBA's product. In fact both parties produce 2 different products.

1. Difference with first case? STATS was just producing the “facts”2. INS case is important for intellectual property3. Elements of an “Hot news” claim:

a. P generates and collects info. at some cost or expenseb. Value of info is highly time sensitivec. D’s use of info. constitutes free ridingd. D’s use of info. is in direct competition with service offered

by Pe. The ability of other parties to free ride on the efforts of the P

would so reduce the incentive to produce and threat to quality of service provided by P

4. Elements that allow a “Hot news” claim to survive preemptiona. time-sensitive value of factual informationb. free-riding by a Dc. threat to the very existence of the product or service provided

by P

Copyright in the Game BroadcastsNew Boston Television v. Entertainment Sports Programming Network (ESPN)OVERVIEW: New Boston owned a copyright on the broadcast of Red Sox and Bruin games. ESPN (D) copied and broadcast highlights of plaintiffs' teleplays on its sports cable channel. Plaintiffs sued for copyright infringement and ESPN defended with “fair use”. ISSUE: Did ESPN have a fair use privilege?HOLDING: Applying the factors for the “fair use” doctrine, the court determined defendant's use was not fair. The court agreed that public access to news items was a primary justification for the fair use defense; however, this did not mean defendant could appropriate the medium used by plaintiff and copy it for themselves; the excerpts used by D were the “highlights” of each broadcast; and it is the P’s right to determine when and in what manner they choose to exploit their copyright.OUTCOME: Motion for preliminary injunction granted on the grounds that defendant did not sufficiently prove the fair use defense because copying plaintiff's videotaped broadcasts was not a privileged use under that doctrine.

1. Copyright Act Finds roots in Const. Originally Protected authors of books and maps Now extends to other things, including TV Broadcasts

Extends to duplication of original but also preparation of derivative works

Copyright duration1.) Author: life of author + 75 years past2.) Business entity owner: 75 years straight

Limitations1.) §102(a): only kinds of works that can be copyrighted are

original works of authorship fixed in any tangible medium of expression

2.) §102(b): copyright does not extend to any idea, procedure, process, system, method of operation, concept, principle or discovery

3.) § 106: exclusive right encompasses not just duplication of the original, but also preparation of derivative works

4.) Does not extend to basic “ideas” or facts5.) The author must prove the other had access to the original

work2. “Fair Use” Doctrine (§107 of Copyright Act): a privilege in others than the

owner of the copyright to use the copyrighted material in a reasonable manner without his consent; notwithstanding the monopoly granted the owner

Criteria to Analyze:1.) Purpose and character of the use; whether it is for commercial

nature or nonprofit educational purposes2.) The nature of the copyrighted work3.) The amount and substantiality of the portion used in relation

to the copyrighted work as a whole4.) The effect on the use upon the potential market for or value of

the copyrighted work Which party is likely to use Doctrine? Defendant Is it a fact driven or matter of law issue? On its face it seems that the highlights are the facts but the purpose

was for commercial use: free-riding

NFL v. McBee & Bruno’s, Inc.OVERVIEW: Plaintiffs, the National Football League and one of its teams, alleged that defendants, restaurant owners, violated plaintiffs' copyright by broadcasting games via satellite in blacked out areas. ISSUE: Whether Ds use of satellite fell under the Copyright Act “Home Use” exceptionHOLDING: The court held that defendants' display of the games did not fall under an exception regarding common use since satellite dishes were not commonly found in private homes and that they infringed despite their use of the "clean feed" to the satellite. Ps copyright extended to the game, the game action, and the noncommercial elements of the game.OUTCOME: The injunction was upheld since irreparable harm was shown to plaintiffs, no copyright exception applied, and the defendants were on notice of the dates of future games and their blacked-out status.1. What is a clean feed? Just the performance of the game and does not include

the commercials (dirty feed)2. They were rebroadcasting a “live performance”3. Areas covered under this chapter

a. Copyright; b. Player’s Publicity Rights; c. Trademarks

4. Cable TV: pg 412-419

a. Exemption from Copyright5. §101 “Public performance”: performance or transmission of the work to a

place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.

a. §110(5) Exception: communication of a transmission embodying a performance…of a work by the public reception of the transmission on a single receiving apparatus of kind commonly used in private homes

b. Takes into account live broadcasts of games

II. Player Publicity RightsBaltimore Orioles v. MLBPAPROCEDURAL POSTURE: Baseball clubs sought declaration that they had exclusive right to televise performance of major league games involving their players. OVERVIEW: In 1982 Players sent letters to both the clubs and the broadcasters saying that their telecasts without their consent constituted misappropriation of the players’ property right in their performance on the field. ISSUE: Whether the clubs rather than the players owned copyright in the game broadcasts as “works made for hire”? Any copyright ownership by the clubs preempted state law publicity law claims by the players?RULE: Employer owns the copyright if the work was prepared within the scope of employee’s employment unless the parties have agreed otherwiseHOLDING: The court affirmed the judgment as to the clubs' ownership of copyrights in telecasts. Since baseball players were employees, their televised and taped performances were within the scope of their employment. Telecasts of major league baseball games, which consisted of players' performances, were works made for hire within meaning of 17 U.S.C.S. § 201(b). Finally, the collective bargaining agreement does not expressly represent that players own the copyright. Pursuant to 17 U.S.C.S. § 301, Clubs' copyright in telecasts of major league baseball games preempted the players' rights of publicity in their baseball game performances.OUTCOME: The court affirmed the lower court's decision as to the clubs' ownership of copyrights in telecasts, finding appellees to be copyright owners because telecasts of baseball games were works made for hire and appellees' copyright of telecasts preempted players' right of publicity in performances. The court vacated and remanded the master-servant issue.1. Player’s argument: invasion of privacy

a. Talking about player’s name and likeness2. Arguments against

a. Freedom of speechb. Not used for profitc. Commonly used names

3. Players want to bring state law claims b/c the employer has a leg up in federal law

a. League would argue preemption4. § 201 (b): copyright in a work vests initially in the author of the work; however

in the case of a work made for hire, the employer is considered the author unless the parties have expressly agreed otherwise in a written instrument signed by them

5. § 301 (a): Preemption: preempts all equivalent state law claims in any work within the subject matter of copyright whether or not the work embodies any creativity.

a. work must be fixed in a tangible form and come within the subject matter of copyright as specified in § 102

1.) § 101: work is fixed in tangible medium of expression when its embodiment is in a copy

a.) Unrecorded performances are not fixed in a tangible form

b.) the right must be equivalent to any of the rights specified in § 106

a. Since the works in which the Players claims rights are fixed in tangible form and come within the subject matter of copyright, the Player’s rights of publicity in their performances are preempted.

EXAM QUESTION: Copyright v. Trademark

III. Owner Trademark RightsIndianapolis Colts v. Metropolitan Baltimore Football ClubPROCEDURAL POSTURE: NFL sued the Canadian football team who was using the name Baltimore Colts seeking to block any use of the word “Colts” under the Lanham Act. DC granted an injunction and D appealed.OVERVIEW: Defendants wanted to name its new team, located in a Baltimore city in which plaintiffs' team used to play, similarly to plaintiffs' team. Plaintiffs wanted to enjoin defendants from using its trademark, because consumers would have been likely to think, mistakenly, that defendants' new team was related to plaintiffs. The Baltimore Colts were making merchandise which appeared “CFL” in small blurred lettering.ISSUE: Is the Baltimore Colts similar enough to confuse consumers with the Indianapolis Colts? HOLDING: D’s infringement would have likely caused substantial consumer confusion. Ct rejected D’s argument that P abandoned the mark b/c the former owner continued to market the same product or service under a similar name with an overlapping history. The 2 products are similar unlike the Brooklyn Dodger case where it involved a baseball team and a restaurant.OUTCOME: Judgment allowing plaintiffs to enjoin defendants' Lanham Act trademark infringement affirmed.1. Need to create a “legal entity” in order to own a trademark

a. NFL Properties owns NFL trademark2. NFL arguing that “Colts” is trademarked in the same market as the CFL team is

trying to use it3. Lanham Act (Trademark law)

a. Trademark: any word, name, symbol or device used by a person to identify and distinguish his or her goods from those manufactured and sold by others and to indicate the source of the good.

b. Even if a mark is not registered with Patent and Trademark Office it can still be filed under §43 (codifies common law doctrine against unfair competition)

c. Purpose: to bar any use of a name or symbol that is identified with a product where such use may confuse consumers in some fashion about the source and quality of the products they are seeking

d. Standard: Would the challenged mark if permitted to be used by D would cause the P to lose a substantial number of consumers

2.) Similarity of the products and marks3.) Knowledge of the average consumer of the product4.) Overlap in the parties’ geographical markets

5.) Other factorse. Producers, do not, however, receive a copyright-like monopoly in their name

and symbol that blocks others from using it for non-confusing purposes

Boston Professional Hockey Association v. Dallas Cap and Emblem MFG., Inc.PROCEDURAL POSTURE: NHL brought an action based on trademark infringement under the Lanham Act seeking to enjoin defendant manufacturer from producing and selling embroidered emblems depicting their trademarks. DC found that the Ds disclaimer on the produces was a sufficient remedy. NHL appealed.OVERVIEW: NHL had organized a service to serve as their exclusive licensing agent who licensed numerous manufacturers to use the team names and symbols. D sought to obtain the license but was unable to do so. Instead D manufactured the emblems for sale to sporting goods stores.ISSUE: whether the unauthorized, intentional duplication of a professional hockey team's symbol on an embroidered emblem, to be sold to the public as a patch for attachment to clothing, violated any legal right of the team to the exclusive use of that symbol?HOLDING: The D were making the trademark but not attaching it to any good or services which other case law has shown. Although trademark law has an interest in protecting the public there is also an intermeshed interest in protecting the business interests of the P. Court answered the question whether the symbols were used in connection with the sale of goods in the affirmative b/c without P’s marks D would not have a market for his particular product. Court answered the question whether the infringing would cause confusion in the affirmative b/c the D duplicated the protected trademark and sold them to the public knowing the public would identify them as being the team’s trademarks. The court reversed and remanded, holding that the team had an interest in its own individualized symbol entitled to legal protection against such unauthorized duplication.

Essentially, PL’s are arguing that their property rights are being violated Section 1114 is used when the trademark is registered.

WCVB-TV v. Boston Athletic Ass’nOVERVIEW: A local news station was telecasting the Boston Marathon even when another station had exclusive rights to telecast. The local station regularly used the phrase “Boston Marathon” during its telecast. The BAA claimed that "Boston Marathon" was a registered trade or service mark. BAA also argued that such phrase would confuse viewers in that the station had permission or authorization from BAA to use those words (ie. They were given the official “OK”). ISSUE: Does it cause confusion in the public’s eye?RULE: Purpose of trademark does not give any property right in the mark except the right to prevent confusion.HOLDING: Ct. said this is not an ordinary confusion case. TV station was not putting on its own marathon. Court found no persuasive evidence of any intent of plaintiff to use the words "Boston Marathon" to suggest official sponsorship of its broadcast. In fact, plaintiff offered to broadcast disclaimers. No evidence that station profited from its viewers. The use of the words for descriptive purposes is called a “fair use” and the law permits it even if the words themselves also constitute a trademark. Court concluded that defendants had shown no real likelihood of relevant confusion.1. Trademark is for the protection of consumer and owner2. D used the defense of “fair use” which is also used in Copyright

IV. Group Marketing of Intellectual Property RightsTopps Chewing Gum v. MLBPA

PROCEDURAL POSTURE: Topps, a baseball trading card manufacturer, moved for summary judgment on allegations that defendant's actions in instigating a group boycott and combining to monopolize major league baseball players' publicity constituted a per se antitrust violation.OVERVIEW: MLBPA’s Commercial Authorization Agreement gave only the Authorization the right to market the players publicity rights on a group basis and agreed not to renew any existing contracts that were inconsistent with this. The purpose of the new rule was to enhance the Association’s ability to negotiate a new agreement with Topps and others. The player’s realized they would be able to make more money if there wasn’t an exclusive agreement w/ a certain card company.HOLDING: Per se treatment (group boycott) under plaintiff's restraint on trade claim was inappropriate where parties are not direct competitors and agreement between defendant and players did not clearly restrict competition. Topps only purchases the rights from players and does not compete with MLB for the player’s publicity rights. Summary judgment also unavailable under rule of reason analysis where genuine issues of material fact existed as to relevant market, defendant's intent, and effect of defendant's acts.1. What do you think of when you hear of group marketing: Antitrust

a. Not anticompetitive b/c the parties are not competitors2. § 43 Lanham Act (amended): grants the owner of a famous work injunctive relief if

others used its mark in ways that cause dilution of the distinctive quality of the mark.a. Factors to determine famous

1.) mark’s degree of distinctiveness2.) duration and extent of its use in connection with particular

products3.) mark’s degree of recognition in trading channels and geographic

area4.) whether or not the mark has been officially registered

Dilution: lessening of the capacity of a famous work to identify and distinguish goods and services regardless of the likelihood of confusion, mistake, or deception

P. 506:Trademark Litigation Factors:

1. Strength of the P trademark2. Similarity between the parties marks3. Proximity of their products (geographic and intended use/purpose)4. Likelihood that the P will “bridge the gap” between the two marks5. Evidence of actual confusion6. Presence or absence of good faith on the part of the D7. Quality of the D’s services8. Sophistication of likely purchasers

Intellectual Property

Patents Patent law is governed by the Federal Patent Act. If an individual discovers or invents any new machine, process, manufacture of any matter they may apply to get a patent. An

individual can secure a patent by filing an application with the US Patent and trademark office. The patent act defines a potential patent as any “new and useful process, machine, manufacture or composition of matter”

In order for an invention to be patentable it must be1. in a subject matter category2. useful3. novel in relation to the prior art4. obvious from the prior art to a person of ordinary skill in the art at the time the

invention was made

Copyrights Copyright law protects original works of authorship embodied in a tangible medium of expression. Copyright Act 17 USCA §§ 101 Subject matter that may be copyrighted include music, drama, computer programs, sound recordings and visual arts. Copyright protects the original expression of ideas, not the idea themselves. A work may fall into more than one category. Copyright law gives exclusive rights to produce the work, to prepare derivative works based on the work, to distribute copies of the work and to publicly display or perform such work.

A copyright term extends for the life of the author plus 70 years after the authors death.

There are 3 basic conditions:1. A work must be within the constitutional and statutory definitions of a work

of authorship2. the work must be in a tangible medium of expression3. it must be original

Trademarks A trademark is a type of symbol used by one to identify a particular set of goods and to distinguish them from another’s goods. A trademark owner can prevent others from using the same or similar marks that create a likelihood of confusion or deception. Under trademark law, an individual Can est. one manufactured good and serves from another. (think of Nike swoosh)

Trademark law distinguishes between the following:1. the right to use a mark2. the right to exclude others from using a mark3. the right to register the mark

The Federal Trademark Act of 1946, which is commonly referred to as the Lanham Act, governs the registration and law of trademarks as well as the remedies and enforcement procedures for infringement of trademarks. Under the Lanham Act a trademark is defined as including “any word, name, symbol or device or any combination thereof adopted and used by manufacturer or merchant to identify his goods and also to distinguish from those manufactured and sold by others.”The Lanham Act provides for registration of service marks, certification marks as well as trademarks. Trademarks protect both the consumer and the owner.

In a trademark infringement action, P must meet 5 requirements:1. there must have been either a reproduction or counterfeit of the mark2. the reproduction must have occurred without the authority of the registrant3. the reproduction has been used in the stream of commerce4. the use must have been in the sale, distribution or offering of goods and services5. the use of the reproduction must be likely to cause confusion

Trade Dress Trade dress protection is available for non-functional features if they distinguish the goods’ origin. The Lanham Act provides protection against the creation of confusion by the simulation of a product or serve trade dress. Trade dress originally meant the packaging, now include configuration and ornamentation of a product.

Ch. 7Franchise, League, and Community

I. Franchise Ownership RulesNASL v. NFLOVERVIEW: Plaintiffs North American Soccer League and its members (NASL) sued defendants National Football League and its members (NFL), seeking a permanent injunction and damages for violating the §1 of Sherman Act, by adopting a policy prohibiting its members from owning interests in other professional sports leagues, including plaintiff NASL. ISSUE: Whether the cross-ownership ban rule is subject to antitrust?HOLDING: The restraint is that an owner may in practice sell his franchise only to a relatively narrow group of eligible purchasers, not to any financier. The court found that there was a sub-market for sports capital and the cross-ownership ban had an anticompetitive purpose and effect in that market. Court found there was not threat of disloyalty from cross-owners and no evidence that cross-owners would share alleged “confidential information”. Defendants failed to prove that the proposed ban was the least restrictive way to achieve their purpose.

1. What’s the market: ownership of sports franchises2. NFL could not show that they could not achieve their purpose through less

restrictive means3. NFL owners are now only precluded from owning teams in a competing

league if those other teams are in cities where somebody else’s NFL team is located

Fraser v. MLS Plaintiff soccer players sought review of a decision from the United States

District Court for the District of Massachusetts, which granted summary judgment to defendants, soccer association, operator/investors, and soccer federation, on plaintiffs' 15 U.S.C.S. §§ 1 and 18 claims, and entered judgment on a special verdict in favor of defendants on plaintiffs' 15 U.S.C.S. § 2 claim.

As an initial matter, the court affirmed the summary judgment on the 15 U.S.C.S. § 1 claim.

The court found that the effects of defendants' arrangement simply were too uncertain to warrant application of the per se rule.

Moreover, even if the § 1 claim had not been dismissed on summary judgment, the jury still would have found in favor of defendants on the grounds that the market alleged in the complaint had not been proved.

The court also affirmed the judgment for defendants on the 15 U.S.C.S. § 2 claim, as plaintiffs had failed to establish the relevant market as alleged.

i. Furthermore, plaintiffs failed to show the requisite prejudice resulting from alleged errors in certain jury instructions and certain evidentiary rulings.

ii. The court concluded by affirming the dismissal through summary judgment of plaintiffs' 15 U.S.C.S. § 18 claims.

iii. The court agreed with the district court that there was no liability under the statute where the formation of the soccer association did not involve the acquisition or merger of existing business enterprises, but rather the formation of an entirely new entity which itself represented the creation of an entirely new market.

The court affirmed the judgments in favor of defendants on plaintiffs' claims under the Sherman and Clayton Acts.

Whereas 15 U.S.C.S. § 2 requires monopoly power or a prospect of it, significant market power is enough to trigger 15 U.S.C.S. § 1's rule of reason approach; similarly, something less than monopoly power is required to condemn mergers under Clayton Act § 7's, 15 U.S.C.S. § 18, "substantially lessen competition" test. 

To show monopolization, the plaintiffs have to prove that the defendant had engaged in an act that helped create or maintain its alleged monopoly. In Sherman Act § 2, 15 U.S.C.S. § 2, cases, the wrongful act is usually one designed to exclude competitors from the market (e.g., predatory price, exclusive dealing). 

II. Admission and Relocation of Sports FranchisesLos Angeles Memorial Coliseum v. NFL (Raiders I)

PROCEDURAL POSTURE: NFL appealing decision which found that NFL’s action to bar relocation of Raiders was an unreasonable restraint of trade under §1 Sherman Act.

OVERVIEW: Al Davis sought to relocate the Raiders to LA Coliseum that became vacant. The NFL rule, which required unanimous approval by the members before any single member could move into another's home territory, prevented the owner's football franchise from moving to the commission's stadium.

ISSUE: Can NFL avoid antitrust scrutiny by claiming they are a single entity for purposes of §1 of Sherman Act? Was the NFL rule an unreasonable restraint of trade?

HOLDING: The court rejecting arguments that the league was a single entity incapable of conspiring to restrain trade, because the members were sufficiently independent (generate profits on their own; compete for players

and fans) and competitive with one another to warrant rule of reason scrutiny. Although the NFL rule is reasonable under the doctrine of ancillary restraints, because territorial restraints creates stability and secure each team in the league legitimate fruits of their participation, however, in determining the reasonableness of an ancillary restraint, the court must factor in less restrictive alternatives. Court concluded that a jury could have found that NFL could have used less restrictive means that did not foreclose competition.

Market?: relocation of a franchise Arguing the “single entity” defense Could have made a §2 Sherman Act b/c NFL controls this particular market;

players do not have any other place to play

City of Oakland v. Oakland Raiders (I)PROCEDURAL POSTURE: City of Oakland appealing the dismissal of their petition through eminent domain statute to keep the Raiders in Oakland by condemning the Raider’s franchise and immediately reselling it to a local owner approved by NFL.OVERVIEW: The franchise argued that the law of eminent domain did not permit the taking of intangible property not connected with realty, thereby rendering impossible the city's condemnation of the football franchise which the franchise described as a network of intangible contractual rights. ISSUE: Is an NFL franchise the type of property subject to eminent domain? Is a NFL franchise necessary for public use?RULE: Operation of a sports franchise may well be an appropriate municipal function for purpose of a city statute that allows for eminent domain of any property necessary to carry out its function.HOLDING: The court held that the right of eminent domain encompassed property of every kind and character, whether real or personal, or tangible or intangible, including an NFL franchise. If a city can erect and operate a sports stadium there is no valid legal reason why it cannot own a stadium that fields a team that plays within the stadium. Other Courts have held that cities providing access to its residents in the form of spectator sports is an appropriate function of city government because it is for “public use”. The City’s statute affords it the power to acquire through eminent domain any property necessary to carry out its function.

City of Oakland v. Oakland Raiders (II)PROCEDURAL POSTURE: Raiders challenged City of Oakland’s eminent domain petition by arguing it burdened interstate commerce.OVERVIEW: Raiders argued that professional football was so completely involved in interstate commerce that acquisition of a franchise by an individual state or city through eminent domain would impermissibly burden interstate commerce.HOLDING: The threat of a City’s power of eminent domain over a NFL franchise does more than incidentally burden interstate commerce. The League is nationwide and has an interest in the quality of the facility where games are being played. Such acquisition of a franchise would threaten the structure of the league b/c it would disrupt bargaining on stadium leases. Finally, there is a uniform need for national regulation.

1. The Commerce Clause preempts the state’s eminent power

III. League Wide TV Contracts

Chicago Professional Sports Limited Partnership & WGN v. NBAOVERVIEW: Chicago Bulls wanted to sell their broadcast rights to WGN while NBA sought to restrict broadcast rights and impose additional fees. Plaintiffs claimed this violated antitrust laws, while defendant argued it should be treated as a single entity under antitrust laws, possessing options to restrict licensing rights. (This would defeat the §1 Argument, because need 2 or more)HOLDING: Court determined that NBA’s single entity argument was not clear b/c case law has not laid a clear characterization of sports leagues. Court held this was erroneous reasoning because complete unity of interest was not a legal requirement of a single entity operation under antitrust law. Court did state that NBA is an entity sufficient enough for Rule of Reason analysis. Court held that when NBA is acting in the broadcast market, it is more like a single firm subject to §2 of Sherman Act than a group of independent firms, which means that WGN cannot prevail unless they establish that NBA has significant market power. WGN could not establish NBA’s market power b/c unlike collegiate football there is no time slot in which NBA predominates and it competes with other sports team professional and collegiate.OUTCOME: Judgment vacated and remanded due to trial court's erroneous reasoning in determining defendant's status under antitrust law.

1. Unless a contract reduces output in some market, to the detriment of consumers, there is no antitrust problem

2. Market: league wide television contract3. Restraint: restricting output of NBA games

Ch. 8Monopoly in Professional Sports

AFL v. NFL Trump brought antitrust lawsuit

I. Monopolizing ConductA. Television Contracts

USFL v. NFL EXAM! Look at SportsPrit3 Outline too!PROCEDURAL POSTURE: USFL appealed a judgment awarding it one dollar in damages, pursuant to a jury verdict, in plaintiffs' lawsuit alleging violations of the common law and the Sherman Anti-Trust Act, 15 U.S.C.S. §§ 1,2.OVERVIEW: USFL started a competitive football league that played in spring. It’s competitor, the NFL, had deals w/ all the major networks (CBS, NBC, and ABC), thus locking up the fall schedule. The NFL did this to eliminate competition. USFL filed suit against NFL, alleging violations of the common law and §§1, 2 of the Sherman Anti-Trust Act, 15 U.S.C.S. §§ 1, 2. The jury awarded plaintiffs one dollar in damages after finding that defendants had willfully acquired or maintained monopoly power in a market consisting of major-league professional football in the U.S. and that such monopolization had injured plaintiffs. HOLDING: The anti-competitive activities on which the jury based its verdict were not of sufficient impact to justify a large damages verdict or sweeping injunctive relief. Moreover, the lower court's instructions to the jury were proper, and plaintiffs' challenges to the lower court's evidentiary rulings were without merit.OUTCOME: The court affirmed the jury's verdict and the judgments entered thereon, holding that that the anti-competitive activities on which the jury based its verdict did not justify a large damages verdict or sweeping injunctive relief; defendants' conditional cross-appeal was therefore moot.

1. Monopolization : willful acquisition or maintenance of monopoly power

a. willfulness: requires intentb. acquisition or maintenance: requires proof of effect

2. section 2 deals with monopoly What is the Quick Look Approach? Should we use this?

Remember, Sherman Act is sports teams Achilles heal b/c of the treble damages

The USFL’s problem was they didn’t hammer home the “essential facilities” argument! Look at the other outline! They should’ve tried to get this into the jury instructions.

Class 11/9:Essential Facilities Doctrine – Heck Case? Antitrust violation. Section 2 Arguments.

Ch. 9Intercollegiate Sports

The Tarkanian SagaNCAA v. TarkanianLook at sportsprit3 outline

I. Eligibility RequirementsA. Admission Standards: Proposition 48

Parish v. NCAAPROCEDURAL POSTURE: Parish sought a preliminary injunction.OVERVIEW: Parish failed to meet the NCAA's academic qualifications, after taking the ACT twice, under a rule establishing minimum projected grade-point averages of 1.6. Centenary college signed Parish knowing his ACT scores were low by converting the ACT score into a SAT score. NCAA told school was against NCAA rules. ISSUE: Does 1.6 Rule deny equal protection?HOLDING: The 1.6 Rule did not create a classification which violates the equal protection requirements. The Rule had a rational relationship to the legitimate state interest of insuring that the athlete be an integral part of the education program; prevent exploitation of athletes. Almost every school requires a score from an admissions test and the black race has been the greatest beneficiaries of the participation of intercollegiate athletics. Ct. concluded that the determination of eligibility should made at the time of application.OUTCOME: The court denied the players' motion for a preliminary injunction prohibiting the NCAA and officials from enforcing a rule that declared athletes with low projected grade-point averages ineligible to compete in interscholastic competition.

II. Judicial Scrutiny of Institutional DecisionsA. To what extent should courts engage in independent scrutiny of the

judgments made about issues within the college athletic establishmentGulf South Conference v. Boyd: The non-interference doctrine concerning voluntary associations does not apply to cases involving disputes between college athletes

themselves and college athletic associations b/c the athlete has no bargaining power concerning the rules and regulations adopted by the athletic associations.Ross v. Creighton UniversityPROCEDURAL POSTURE: Plaintiff student-athlete brought an action against defendant university in contract and tort. He claimed the university injured him by recruiting him to attend the school on a basketball scholarship while knowing he was pitifully unprepared to attend college.OVERVIEW: Student attempting to create a new cause of action for education malpractice. He asserted the university was negligent for recruiting an athlete utterly incapable of performing the academic work, then enrolling him in a remedial elementary school program, which contributed to his emotional problems. ISSUE: Whether to create a cause of action for education malpractice?HOLDING: Ct. did not create a new cause of action. Education was an intensely collaborative process, requiring the interaction of student with teacher. The ultimate responsibility for success remained with the student.

Ch. 10Intercollegiate Sports: Commercialism & Amateurism

I. Antitrust Scrutiny of NCAA RulesA. What antitrust standards should be used to assess the NCAA’s denial or

removal of a school’s membership?1. Product Market

NCAA v. Board of Regents of the Univ. of Oklahoma & Univ. of GeorgiaPROCEDURAL POSTURE: Universities brought action against NCAA for violations of Sherman Act and sought injunction to prevent NCAA from interfering with universities efforts to deal with NBC.OVERVIEW: Universities, who members of the NCAA and the CFA, contracted with NBC to air football games. NCAA had already negotiated television rights with other stations which limited the number of times a particular school’s team could be aired. The NCAA’s rules barred any individual member from selling its own team’s broadcast rights. NCAA threatened universities with sanctions.ISSUE: Was the NCAA’s TV plan a violation of antitrust?HOLDING: The Court held that NCAA’s TV plan was a horizontal restraint of trade and unreasonable as a matter of law. NCAA limited the number of games that a university televised, the number of games available to the public, and barred negotiation between broadcasters and universities. The Court found that televising university football was a separate market over which NCAA had monopolistic control. NCAA restrained trade by raising prices and reducing output. Under the Rule of Reason, NCAA could not justify their anticompetitive conduct by arguing that the Plan was to protect live attendance at games.

1.) Elements of §2 Antitrust a.) Large concentration of the marketb.) Willful conduct

2. Coaching MarketLaw v. NCAA

3. Athletes MarketBanks v. NCAA