Sports Law Outline – Martin Edel

I. Role of the Commissioner ( 61-69, 86-96, 109n.5, NBA v. NBPA)1. Parameters of the Commissioner's Authority

1. Charles O. Finley & Co. v. Kuhn (1978)1. The Commissioner stopped the A’s from selling the contracts of three of its MVP’s

court allowed him to do this with the “best interests of baseball clause”. 1. The commissioner is hired by the owners and has broad sweeping powers 2. The Commissioner can act on any matter that involves the integrity of or public

confidence in baseball. Integrity and public perception of baseball are to be determined by the Commissioner. 1. Here the Commissioner has expressed concern for

1. debilitation of the Oakland Club 2. lessening of the league's collective balance 3. the unsettled circumstances of the reserve system.

3. MLB Agreement 1. “the functions of the Commissioner shall be...to investigate...any act,

transaction or practice... not in the best interests of the national game of baseball” and “to determine...what preventative, remedial or punitive action is appropriate in the premises, and to take such action...” Art I sec 2 (a) & (b)

2. Major League Rule 12(a): “no...[assignment of players] shall be recognized as valid unless...approved by the Commissioner.”1. The clubs agreed to be bound by the CBA and Rules.

4. Must not act arbitrarily or capriciously. Decisions must be made in good faith, after investigation, consultation and deliberations in a manner which he determined to be in the best interests of baseball. Whether he was right or wrong is beyond the competence and jurisdiction of the court to decide.1. Much like Chevron deference in Admin law, the commissioner is given wide

deference to make such decisions because he is an expert and is held accountable to the owners.

2. Chicago NL Ball Club, Inc. v. Vincent (1992)1. Commissioner Vincent wanted to realign the Cubs into the NL West division, the

Cubs challenged his authority to do so.1. 1982: Expansion and Realignment require:

1. 75% vote of all clubs 2. Consent of transferred club

2. March 1992: As one might imagine, the Cubs did not give their consent. 3. July 6 1992 : Commissioner does it anyway and realigns the Cubs4. Question: Whether the broad best interests of baseball authority in the

MLAgreement empowers the Commissioner to abrogate the Cubs right to veto their transfer (pursuant to the NL Constitution). 1. HELD: The power to investigate acts, transactions and practices does NOT

encompass restructuring divisions of the NL. 1. There has been no affirmative conduct for the commissioner to investigate

punish or remedy under Art I. Even if article I could be read this way Art. VII, expressly limits the commissioner's jurisdiction to resolution of disputes other than those whose resolution is expressly provided for.1. Such in the NL constitution. (ArtI must be read in light of Art VII)

2. This is beyond the commissioner's power.

3. Commissioner Review of Game Officials (109 n.5)1. Sometimes the decisions of game officials come into question.

1. Generally the commissioner will defer to the JUDGMENT call of the officiator because he is considered to be an expert, and he was there to witness the actual event, in real time. (wow sounds tons like admin law)

2. Umpires and referees are often considered to be final speakers of the game decisions. (Dont argue balls and strikes!)

3. Umpires are unionized, have conducted strikes and have some bargaining power4. Though Commissioners have reversed game officials and ordered replays.

1. Depends on 1. Timing and severity of the mistake

1. Think a clock error early in the game may not necessitate replay, whereas a mistake late in the game may prevent that error from being corrected without a replay.

2. This is absurdly rare but, for an example see the George Brett walk off homerun against the Yankees. The homerun was later disallowed because of a pine tar violation.

4. NBA v. NBPA (2005) 1. This is the Ron Artest fight case. NBA Commissioner David Stern issued

suspensions to each of the players involved with the fight. The players filed for grievance arbitration, because they contended this was an off the court issue. The NBA commissioner has final say on matters which occur on the court, off the court penalties are entitled to grievance arbitration hearings. The NBA ignored the union's notice. 1. HELD: The suspensions are entitled to an arbiter's review because the incident

occurred off the court and in the stands. The arbiter was able to alter the suspensions.

II. Discrimination in Sports 1. Discrimination is rampant in sports, but has generally shifted from on the field to off the

field. 1. Not really discrimination so much as racial and gender inequity.

2. Several law's exist to curb discrimination in both the workplace and the educational settings 1. Title VII of the Civil Rights Act of 1964, Title IX as well 2. the 14th Amendment to the Constitution

1. Civil Rights Act of 1871 (ie section 1983) 2. Remember the State Action requirement

3. Equal Pay Act of 1963 3. Merit, Ol' Boy Networks, and the Black Bottomed Pyramid

1. Essentially, Black participants are concentrated at the bottom 1. Players

2. Whereas most of the top and mid-level non-athletic positions are filled by white people 1. There should be qualified black people for these spots, but they get passed over.

1. Theory: Ole Boys Club, the white guy at the top knows more white guys and hires them. Those guys in turn do the same all the way down.

2. Or Nepotism. 1. Don Shula's son, Don Shula is a coach. However, because his Dad was hired

in an era where racism was normal, a black person does not get this same advantage.

3. While 8/10 NBA players and 68% of NBA and NFL players are Black respectively, only 5% of key sport management positions (front office, doctors, lawyers etc) are minorities.1. Note, only 2.8% of top level managers in Corporations are black.

4. Players who move up to the “corporate side”1. George Brett was made VP of Baseball Operations just one year after his retirement

from baseball. 2. Black people do not see these types of promotions.

5. Affirmative Action? 1. The NFL requires that at least one black person be interviewed for a vacant Head

Coaching position. This at least expands the the exposure that some up and coming african american coaches get. Coach Tomlin is the shiznit.

2. Justice Blackmun DISSENTING in Regents of UC v. Bakke: We must first take account of race in order to get past it. 1. Meh, IMHO.

3. Anti-Discrimination laws however make it so that taking race into account at any time could be a violation of the law. 1. Wygant v. Jackson BoE: J. White: ANY preference based on on race must

receive a vigorous examination to ensure constitutional equality1. JPS: “racial classifications are too pernicious to permit any but the most

exact connection between justification and classification.”4. Affirmative action can insinuate poor views on minorities that are generally

unwarranted. For example, if Mike Tomlin got interviewed because the league forced them to, it may look like he got the job simply because of AA, or that he got the job at the expense of a qualified white. Even though, he deserved the job to begin with.

5. The article concludes that AA is necessary. 1. I think its ridiculous. Honestly, while it is a VERY hard case to make if the hiring

practices at any employer are actually discriminatory there is a legal recourse. Otherwise, as race relations improve (as they have, though we are not perfect) we will see a rise in minorities who join the upper echelon of management.

6. Gay People 1. To many, this is the worst thing someone can be in sports. For all of the progress that

we have made in the real world, sports still lag behind in tolerance (or dare I say acceptance?) of homosexuals.

2. Locker room atmosphere enhances these homophobic feelings. 3. The hegemonic masculinity involved in the social development of males in sport

means that sports have to confirm the masculinity of those in sports, and being (openly) gay flies in the face of that image that many portray as being an athlete. 1. Hegemonic Masculinity

1. he belief in the existence of a culturally normative ideal of male behavior 4. Dave Kopay, came out after 10 years of NFL play, Billy Beane and Glenn Burke

were gay baseball players. 1. Roy Simmons was gay. His teammate Butch Woolfolk said he played with 4 gay

players, he did not know Simmons was a fifth. 5. The text contends that gay men represent a more serious challenge to the political

dominance of male elites than lesbians1. However, there is a LONG history of abuse of lesbians in collegiate and

professional basketball, and all female softball players are presumed lesbians except Jenny Finch.

7. Gender Discrimination1. Postema v. NL of Professional Baseball Clubs (1992)

1. Postema was a female umpire, who graduated 17 in her class of 130. He umped professionally in the GCL, FSL, AA Texas League, and then in the AAA PCL.

2. Other managers called her a “Cunt” and one MLB pitcher (Knepper) said if she was an MLB ump she would be an affront to Gd and contrary to the teachings of the bible (because the bible discusses baseball and umpires...) 1. Even when higher ups knew about this, they did nothing about such conduct.

3. 1987: AL Asst President and former head of Umpires: She needs to be better than everyone else to get to the bigs, because she is a girl.

4. 1989: Larry Napp AL Asst Ump Supervisor echoed that sentiment. The defendants never contradicted or corrected Napp, nor did they punish him. 1. She then received a performance evaluation which was poor, even though her

peers considered her to be a better than average game caller. This was the first evaluation she ever got. Just months after she was fired.

5. ISSUES: TITLE VII1. Hiring/ Promotion Claim

1. Postema cannot make this claim because no one was hired, you cannot claim that you were illegally not promoted or hired if no one was hired or promoted. Lack of vacancies are not a defense.

2. McDonnell Douglas Test:1. A plaintiff meets her burden if you could prove you were qualified, a

member of a protected group, unsuccessfully sought a vacant position, but the employer sought others with equal qualifications

3. Thurston Test:1. Case made by establishing direct evidence of discriminatory practice. 2. There still needs to be a vacancy

2. Termination Claim1. Claim that AAA fired her because the NL nor the AL were interested in

considering her for employment 1. AL contends it lacked interest because they had no vacancies to fill

1. However, Postema correctly argues the list AAA gave was not meant merely for hiring right now, but if there would ever be interest.

2. AL was not her employer at the time of termination 1. If the P can show that a 3rd party was involved in her termination, she

can bring a Title VII claim because the act's intent stretches beyond the typical employer-employee relationship.

4. Ludtke v. Kuhn (1978)1. FACTS: On April 2, 1975 defendant Bowie Kuhn, Commissioner of Baseball, wrote the

general managers of all major league baseball teams indicating that baseball should maintain a “unified stand” against the admission of women sportswriters to major league

clubhouses. (The Yankees wanted to allow women, but then didnt because of the commissioner)2. At the 1977 Baseball World Series games between the New York Yankees and the Los

Angeles Dodgers, Melissa Ludtke, an accredited reporter assigned by Sports Illustrated to cover the Series, was informed that she was not permitted, solely on the basis of her sex, to enter either team’s clubhouse after the Series games.

3. Defendants claimed that women reporters were excluded in order to (1) protect the privacy of those players who are undressing or who are in various stages of undressing

and getting ready to shower;(2) protect the image of baseball as a family sport; and (3) preserve traditional notions of decency and propriety.1. Plaitiff claiming an Equal Protection Clause violation because she was intentionally

denied equal opportunity to pursue her profession as a sports reporter. 4. ISSUE: Did the New York Yankees’ refusal to allow Ludtke access to the clubhouse

violate the Equal Protection Clause and due process? 1. HELD: Yes. The New York Yankees’ refusal to allow Ludtke access to the

clubhouse violated the Equal Protection Clause and due process. 2. State Actor?

1. The determination of whether state action as applicable was made under the Burton Standard of “sifting facts and weighing circumstances.” Burton (1961). New York City is substantially involved in Yankee Stadium and leases those premises to the Yankees. The facility is devoted to public use and is maintained and improved with the use of public funds. The lease provision requires the Yankees to comply with all local, state, and federal laws. State action may be found where the direct perpetrator of allegedly discriminating acts is, through a private entity, “so entwined” with an agency of the state that that agency must be deemed responsible for the private entity’s acts. Burton (1961).

3. 14th Amendment Claim:1. “To withstand constitutional challenge…classifications by gender must serve

important governmental objectives and must be substantially related to achievement of those objectives.” Craig v. Boren (1976). 1. As justification for the complete exclusion of female reporters from the

clubhouse at Yankees Stadium, defendants asserted their interest in protecting the privacy of the ballplayers while undressing in the locker room. However, during the World Series games, male members of the news media with television cameras were allowed in the Yankee locker room immediately after the game and broadcast live from that location. These locker room encounters were viewed by mass audiences which included many women and children. This practice, along with the practice of refusing to allow accredited women sports reporters to enter the locker room, shows that the latter was “substantially related” only to maintaining the locker room as an all-male preserve. The court held that the defendant’s policy of total exclusion of women sports reporters from the locker room at Yankee Stadium was not substantially related to the privacy protection objective and thus deprived Ludtke of that equal protection of the laws which is guaranteed by the Fourteenth Amendment.

2. Accommodations, such as curtains and doors and wearing towels, could have easily been implemented.

3. The right to pursue one’s profession is a fundamental “liberty” within the meaning of the Fourteenth Amendment’s due process guarantee. The Kuhn policy substantially interfered with the right of the plaintiff to pursue her profession as a sports reporter. Women reporters who had been given access to locker rooms in other sports had found that a substantial portion of their material came from the locker room and thus access to the locker room is an important part of their job. If any sports reporter is to have immediate access to athletes in a locker room or clubhouse setting, whether it be women’s access to men’s locker rooms or men’s access to women’s locker rooms, then it should be given regardless of gender.

5. Disabled Athletes 1. PGA Tour, Inc. v. Casey Martin (2001)

1. Casey Martin is a golfer with a degenerative leg condition, which made it difficult for him to walk a golf course during tournaments. He requested use of a golf cart, the PGA denied him that use claiming it would fundamentally alter the game of golf.

2. Issues1. Whether the Americans with Disabilities Act (ADA) protects access to

professional golf tournaments by a qualified entrant with a disability.1. HELD: It does, section III of the ADA states no individual shall be

discriminated against on the basis of disability in the full and equal enjoyment...of any place of public accommodation. 1. Public accommodation is usually broadly construed, but the act

specifically mentions golf courses as a place of public accommodation so construction does not matter. 1. PGA says, Title III only applied to consumers and that the claim that

is job related can only be brought under Title I, but Title I only extends to employees, Martin is an independent contractor.1. Court: Even so, Martin paid $3,000 to enter and is therefore a

consumer. However the court also says that Title III is not limited to consumers, because participation is a privilege included in the spirit of Art III.

2. Whether a disabled contestant be denied the use of a golf cart because it would fundamentally alter the nature of the tournament because everyone else walks.1. HELD: In this situation the golf cart does NOT fundamentally alter the game

of golf. Art III allows limits the extent to which discrimination is not allowed. If the alteration that is required would fundamentally alter the nature of such good...privileges...or accommodations. The essence of golf is shot making, and the rules of the game of golf do not prevent golf carts. The PGA's rule is “based on an optional condition buried in the appendix to the rules...[and] is not an essential attribute of the game itself. 1. PGA says, this is the highest level of golf and they want to incorporate

the element of fatigue into the skill of stroking. 1. Court :

1. Expert: Fatigue from walking a golf course for 4 days is insignificant. They walk 5 miles which is 500 calories, which is “nutritionally less than a Big Mac”

2. Golf tournaments include lots of rest and refreshments. 3. The PGA rule conflicts directly with the policy of the ADA as the

rules need be altered for “individuals” and in Martin's case the modification of the rule is not “game changing.”

3. Scalia DISSENTING:1. If one assumes, however, that the PGA TOUR has some legal obligation to play

classic, Platonic golf–and if one assumes the correctness of all the other wrong turns the Court has made to get to this point–then we Justices must confront what is indeed an awesome responsibility. It has been rendered the solemn duty of the Supreme Court of the United States, laid upon it by Congress in pursuance of the Federal Government’s power “[t]o regulate Commerce with foreign Nations, and among the several States,” to decide What Is Golf. I am sure that the Framers of the Constitution, aware of the 1457 edict of King James II of Scotland

prohibiting golf because it interfered with the practice of archery, fully expected that sooner or later the paths of golf and government, the law and the links, would once again cross, and that the judges of this august Court would some day have to wrestle with that age-old jurisprudential question, for which their years of study in the law have so well prepared them: Is someone riding around a golf course from shot to shot really a golfer? The answer, we learn, is yes. The Court ultimately concludes, and it will henceforth be the Law of the Land, that walking is not a “fundamental” aspect of golf.

2. Harjo v. Pro-Football, Inc. (1999)1. TTAB ordered cancellation of Redskins mark on grounds that it was disparaging to

Native Americans. 1. Immoral or Scandalous marks

1. Is the mark shocking to the sense of truth, decency or propriety (substantial composite of the general public standard)

2. Disparaging Marks 1. Does the mark dishonor by comparison with what is inferior, slight,

depreciate, degrade, affect or injure by unjust comparison (referenced group standard)

2. In 2005, the CoA overturned the TTAB because of laches. 1. Laches, when the plaintiff sits on the case/ his rights long enough that the

defendant reasonably believes they will not exercise those rights and acts to their detriment in that belief. 1. I think Plaintiff waited 3 months.

III. Sports Agents 1. Agents Duties and Responsibilities

1. There are few rules regarding the minimum standards of competence, expertise or experience required to be an Agent.

2. Agents are:1. the player's representative

1. lawyers, negotiators, tax consultants, stock broker, estate planner, traveling secretary, public relations guy etc.

2. Agents are widely considered to be the one who represents the athlete in contract negotiations.1. Needs familiarity with CBA, other players, his player's needs, wants, desires,

financial conditions and good business judgment. 3. Also considers athletes outside business opportunities

1. endorsements, various marketing campaigns1. Decides which opportunities are prudent and help his player's pocket and

image, while also negotiating the terms of the agreement. 4. Money management may also be another function of the players primary agent

1. IMHO, having you agent manage your money is ill-advised. This is an example of giving one person too much power.

2. Though, if given this power he could pay the athlete's bills, or file his tax returns without bothering his client.

3. Develop financial plans5. Personal Services

1. the agent who conforms and fulfills the needs of his client has a happy client2. Pertinent Regulations

1. In order to understand the regulations, or why there should be more or improved

regulations of sports agents we need to know, why the need regulations 1. Income mismanagement2. excessive fees 3. conflicts of interests

1. representation of multiple players seeking the same employment 4. incompetence5. overly aggressive client reimbursement practices 6. disruption of current contractual obligations 7. misappropriation of funds entrusted to the athlete.

2. The NCAA1. Tries to monitor the activities of sports agents

1. note that the major concern of the NCAA is to maintain the student/amateur status of its athletes.

2. Also note that the power of the NCAA to punish is generally to punish the member institution. 1. Though the athlete may lose eligibility2. It cannot do jack shit to an agent

1. As an agent has said (Trope): They are rules, not laws and are meaningless

2. The agents future income is far greater than any penalty the NCAA can impose

3. The NCAA has an agent registration system, where only registered agents can contact school officials to request contact with the student athletes 1. this also lacks teeth

4. Student athletes may contact lawyer to confer on contracts, but that lawyer can have no part in the negotiation of that contract.

3. State and Federal Legislation1. There are many statutes that, while not aimed at agent activity, certainly capture

some of their acts. 1. Racketeer Influenced and Corrupt Organizations Act (RICO- remember from

batman?!) 1. Walters v. Fullwood: Agents convicted on RICO violations for making

violent threats to student-athletes and threats to infringe on the potential careers of students who refused to sign with them. 1. Included mail fraud claims due to letters attempting to induce the athletes

to fraudulently misrepresent themselves to their schools on forms. 2. US v. Piggie: agents involved in a fraudulent scheme to have players play

and be paid to play in a summer amateur league between HS and College.2. Tortious interference + other common law claims 3. Some states have attempted to created administrative schemes to regulate the

agents, or require registration. 1. Honestly, it seems here that if the agent does something illegal there is

already a law that covers it and punishes for it. Therefore if there were to be an agent regulation law, I'd rather a federal administrative agency exist, where there would be more uniform standards, rather than have each state create a huge mess. 1. Uniform Athlete Agency Act (UAAA), approximately 34 states have

adopted the UAAA. (NY included) 1. Requires agents to register

2. Any contract made in violation of the act renders the contract void and terminates all financial liability or consideration owed the other party.

3. Contracts signed with Student-athletes, agents must warn that the contract jeopardizes their eligibility. 1. Notice must be sent to the school AD within 72 hours

4. Sports Agent Responsibility and Trust Act (SPARTA)1. Congress passed in 2004, prohibits deceptive acts or practices by agents 2. empowers the FTC to enforce the prohibition.

1. Wow. I sorta called this earlier. Bitchin. 3. Essentially regulates much of the UAAA

5. If the Agent is a lawyer then he must comply with the ABA Model Rules of Professional Conduct.1. Deals with solicitation, advertising, fees, minimum competency and CoIs.

4. Player's Unions 1. In labor law, there is no analogous situation to the sports agent- outside of the sports

agent or entertainment agent. Typically unions are the employee's exclusive bargaining representative.

2. There is tension between the union and the agent, because the union has a duty represent all members of the bargaining unit equally, whereas his agent only wants what is best for his clients. 1. Furthermore, the union negotiates the CBA, which must cover wages, hours and

terms of employment. So the union greatly effects what the agent does. 3. All of the major sports unions require agent registration (wow there is a lot of

registration the NCAA, State law, Federal law and Unions so far require it- this shit is a mess)1. NFLPA requires an application, which also includes a background check of

education, past jobs, bar membership, licenses, criminal and civil records and involvement in sports.1. There is also a fee ($1650)+ an annual fee2. a minimum of a 4 year degree plus an MS or JD

1. Bitchin, I have all three (pending)3. Agent must also pass a test on the Cap, benefits and NFLPA regulations and

other issues.2. NFLPA also permits a maximum 3% of the player's salary to be paid to the agent3. NFLPA sec 6 includes a grievance procedure too and empowers the imposition

of sanctions. 4. MLBPA, states that agents cannot take a negotiation fee unless the player earns

more than the MLB minimum. 5. An agent cannot register with the MLBPA unless a player designated that person

as his agent. 3. Agent Abuses and Litigation

1. Zinn v. Parrish (1981)1. Plaintiff, an agent, brought an action to recover commissions that were allegedly due

under an SRK. The agent secured three professional football team contracts for his client and pursuant to the SRK was entitled to a 10% agency fee. The agent was to negotiate contracts, furnish advice on business and tax matters, seek endorsements and assist with off-season employment. The plaintiff performed some of these obligations; he solicited some investment advice and assisted defendant in investing

a small amount of his money in buying a house. No jobs, though; no endorsements; no off-season employment and, for tax advice, plaintiff sent his client to H & R Block. Defendant alleged that his agent acted as an investment advisor under 15 U.S.C.A. Sec. 80(b)-2(a)(11) and since he was not registered, the contract was void.1. HELD: The investment advice was merely an incident to the primary purpose of

the management contract which was to negotiate a professional contract. In short, defendant alleged that plaintiff failed to perform his duties competently. However, plaintiff satisfied his obligations by performing these duties in good faith. The contract establishes the rights and responsibilities between the parties. It only calls for a good faith effort. The actions of the agent do not necessarily have to prove successful.

2. Brown v. Woolf (1983)1. This case is about an agent who secured a deal with a hockey club, that had financial

troubles. Initially the player was going to take a lesser deal with another club but the agent promised a better deal else where, and got it. However, the player had to renegotiate his contract.

2. Player only received $185k of the $800k he was promised, the agent received all $40,000 he was owed. Plaintiff alleges a breach of fiduciary duty. 1. HELD: Nothing, the case says that there might be a cause of action for

constructive fraud, and that there is no per se rule regarding punitive damages in such a case.

2. Constructive Fraud (multiple formulations from which the court doesnt pick)1. acts or course of action where one gains an unconscionable advantage, or

breach of confidence coupled with unjust enrichment which shocks the conscience

2. The making of a false statement by a dominant party in a confidential or fiduciary relationship or by one who holds himself out to be an expert upon which the plaintiff relied to his detriment. The defendant need not know that statement is false, nor have fraudulent intent.

3. Punitive damages can possibly awarded, maybe, if there is recklessness or oppressive conduct are demonstrated.

3. Detroit Lions, Inc. v. Argovitz (1984, aff'd 1985)1. Argovitz was an agent for Sims. He was also partial owner of the USFL's Gamblers,

a team to which he directed his client. There are also significant financial differences between the USFL and the NFL, including the NFL's stability. He did not inform his client of any of this. 1. The agent does have the obligation to make a full and complete disclosure of all

areas of potential conflicts of interest and must receive prior consent from the athlete if representation is continued after this disclosure. The agent must not have any conflicts of interest that might influence or affect his ability to do the best job for his client. The agent must inform the principal of all facts that come to his knowledge which may be material or might affect his principal's rights or interests or influence the actions that the athlete may or may not take.

4. Walters v. Fullwood 1. Fullwood was a runningback at Auburn during the late 80's. Agents Walters ans

Bloom signed him to a contract while still in college, before his eligibility had ran out. During this time, Walters gave Fullwood appox 8,000 and secured a security interest in Fullwood's future career. All of this is not allowed by the NCAA. After college, Fullwood ditches Walters and signs with Agent Kickliter.

1. Walters claims Tortious interference with existing contractual relations1. ELEMENTS

1. existence of a valid contract between P and the other party2. D's knowledge of that contract 3. D's intentional procurement of a breach of contract by the other party4. damages

2. Here, knowledge of the contract is not alleged nor is the procurement of breach 1. Side note: Athletic Scholarships are contracts, so an agent looking to sign

student-athletes could be found to have committed a tortious interference.2. Tortious interference with Prospective Economic Advantage

1. ELEMENTS1. Requires that the defendant's sole motive was to inflict injury 2. Requires that the defendant employed unlawful means to make the injury

2. No evidence of either requirement 3. As for the loan: Accepting a loan from unaccredited institutions or accepting

money for play violates the NCAA rules.1. Court says: The observance of these rules is in the public interest of the

citizens of NY, and the loan represents a “betray[al] [of] an important, if perhaps naïve, public trust.”1. The court refused to make Fullwood pay as they declined to be the

“paymaster of the wages of crime, or referee between thieves.” 4. Arbitration rights: Just like the above, because of the acts repugnant to public

policy the right to arbitration is overridden. There is a public policy exception to enforce otherwise valid agreements 1. Though an agreement may be unenforceable in NY as contrary to public

policy even if no statute is violated if the sovereign has expressed a concern for the values of said policy. 1. NY has tax laws designed to foster national amateur sports 2. Enforcing contracts that require fraudulent conduct

2. Given the above, NYS has given the NCAA constitution some teeth. IV. Contracts and Sports: Negotiation, Formation, and Enforcement

1. There are tons of sports contracts, they range from food suppliers to television to player contracts to corporate sponsorship deals. They all require special knowledge of the circumstances that apply in each situation.1. Bargaining history2. Desires of clients3. Collective Bargaining 4. Other laws (like sports broadcasting act etc) 5. Statistics 6. form contracts 7. precedent

2. Negotiating tips1. Negotiating from your own demands

1. It may be advisable to wait for an offer so as to not underestimate your adversary, but if you negotiate from your demands you are working on your terms, on your field rather than theirs (whoever they are).1. Allows you to write the noncritical language you prefer but wouldnt insist upon.

2. Be available to clients who are in the midst of contract offers and negotiations, its a

stressful time. 3. Be sure to resolve all issues with ambiguous or vague terms

1. though how they are resolved can be based on your bargaining power. 4. It is smart to cost out the contract

1. put a monetary value on all of the items so that each side knows what they are liable for.

5. Know when to pick your battles. 3. Contract Duration

1. Sample v. Gotham Football Club, Inc (1973)1. Gotham Football = JETS 2. Sample signed three separate documents with the Jets which would require he play

for them for 1968, 1969 and 1970. Sample got injured in 1969, and he demanded his 1970 injury benefits, contending that the three agreements constitute one contract. 1. HELD: These are three separate contracts, therefore the claim is dismissed.

1. Sample's lack of representation, unequal bargaining power and sophisitcated negotiation skills are not valid arguments.

2. Where the terms of a contract is clear you cannot consider extrinsic evidence. The intent of the contract must come from the contract itself. Each contract refers to an individual season and were all executed separately.

3. Separate K's are read as one when the refer to the exact same subject matter or were intended to effectuate the same purpose or specifically integrated. 1. Not the same subject matter because it required performance at different

times. 4. Terms of the contract make it clear that injury in a given season entitles him

only to the benefits of that year's contract. 2. Rooney v. Tyson

1. Whether an oral contract to train a boxer for as long as he fights professionally constitutes an enforceable agreement. 1. Where the duration of a contract is indefinite, the relationship will be found to be

at- will; terminable at any time. 1. If the term is indefinite or absent the court will find a presumption of at-will

that is rebuttable.2. Here the majority found that the terms were sufficiently definite and therefore

enforceable1. Dissent: The term is indefinite, the majority makes the duration of the

fighter's career to be more definite than death. At-will employment is a the bedrock of employment law, and there need be a specifically timed duration to get around it.

4. Salary, Bonuses and Incentives- Failure to Pay as a Material Breach 1. Alabama Football, Inc. v. Stabler (1974)

1. Stabler signed contract with Alabama, which included a $100k signing bonus. He received $70k of it when the team became unable to pay. Stabler files suit claiming he is owed the remaining $30k, largely because his contract forbade him from pursuing other alternatives leading to irreparable damage. 1. HELD: He can keep the $70k, but that is all.2. This is a result driven decision, because generally a rescission of contract

requires that the part give back the money conferred. However the court held:1. Alabama Football had used the P's name to its advantage and had received

benefits from it.

2. Rescission is allowed because the inability of a party to perform a K after the K is made is proper grounds for rescission.

5. Enforcement 1. Negative Injunction

1. Central NY Basketball, Inc. v. Barnett (1961)1. As a matter of contract law, specific performance of a contract will be ordered

when the damages are unable to be estimated because of the unique nature of the contracted for good or service. This is the negative injunction- an injunction which causes one not to breach a contract.

2. Barnett played in Syracuse, and when his contract ran out he signed to play in the ABA Cleveland. However, Cuse notified Barnett that his K had been renewed, pursuant to a clause which allowed them to do so (reserve clause?) 1. HELD: Injunctive relief ordered because Barnett was unique, with

exceptional skill and ability and is of peculiar and particular value to the plaintiff. 1. The contract that they agreed to says that they agree that he is in-fact

exceptional and unique2. The fact that the Cleveland organization was willing to pay him more

than the Syracuse clubs was in addition to the Syracuse pay raise indicates, regardless of testimony stating otherwise that Barnett is exceptional. (he was in the top 20% of scorers) 1. When a player is moving to enhance his financial benefit, he is more

likely to be seen as exceptional and irreplaceable. 3. Side note: This case is an NBA equivalent acceptance of the reserve

system, we can see later that in cases like Messersmith, that this sort of practice is not okay today.

4. TEST for Negative Injunction1. Unique or irreplaceable

1. irreparable harm2. Likelihood of success on the merits 3. Balancing of the harm

1. Policy discretion which allows judges a wider range of options2. Boston Celtics LP v. Shaw (1990)

1. Shaw was contracted to play in Italy, however the Celtics came along and offered him a deal to play for them. He signed with BOS, but then realized that the deal was for below market value, so he attempted to finish his term in italy (the second year of his k can be rescinded to play in the NBA).

2. Arbitrator found for the Celtics and the D.C. issued a preliminary injunction.3. HELD: C.J. Breyer writing for the CoA. The DC properly issued the

preliminary injunction. 1. Elements for Preliminary Injunction

1. Likelihood of success on the merits?2. Lack of injunction would cause irreparable harm?

1. Player's skill is important 2. Timing is important here too, the timing would have prevented the

team from being able to intelligently planning for next season. 3. Does the balance of harm favor Shaw or the Celtics?

1. Here note that Shaw plays and gets paid any way, while the Celtics lose out on a player they covet.

4. Would the injunction harm the public interest? 2. Case also supports the deference to the arbitration process, and general

support of labor policy. 3. Washington Capitols Basketball Club, Inc. v. Barry (1969)

1. Rick Barry signed a contract to play basketball for the Oakland Oaks. The Oaks were acquired by the Washington Capitols. Barry then signed to play with the San Francisco Warriors. The Capitols sought a preliminary injunction to prevent Barry from playing basketball for any other team. 1. The court ruled the Capitols were entitled to the injunction (provided they

could prove irreparable injury) in order to maintain the status quo pending final determination of the case1. . The court defined "status quo" to mean the last, peaceable, uncontested

status between the parties which preceded the present controversy1. the status quo would have been playing for the Oaks, but all of their

assets were assigned to the Capitols, which makes it the closest to status quo that is attainable. 1. Personally, I think this is analogous to a trade, where a contract is

assigned from one team to another in exchange for good consideration.

2. and "irreparable injury" as injury which is certain and great and which cannot be compensated by the award of money damages.1. Barry was an elite college player, NBA rookie of the year and NBA

All star. V. Intellectual Property and Sports

1. Palmer v. Schonhorn Enterprises, Inc. (1967)1. Schonhorn made a golf game which included the names and profiles of 23 golfers

including Arnold Palmer. Plaintiffs never gave permission for the use of their names and were not compensated. Plaintiffs contend Schonhorn violated their right to privacy. 1. HELD: Schonhorn violated the golfers' right to privacy

1. Defendant: plaintiffs waived their right to privacy because of their status as famous athletes1. Court: Sure, famous people are entitled to less rights in this regard but there

are still protections. 2. There is a news worthiness exception, but this is obviously commerical.

1. The privilege does not extend to commercialization of his personality..distinct from the dissemination of news or information.1. Gautier v. Pro-Football (1952)

3. NY Statute: Makes it a misdemeanor and a tort to make use of a name, portrait or picture for advertising purposes or purposes of trade without written consent.

4. Prosser's 4 privacy torts:1. Intrusion upon physical solitude or seclusion2. giving publicity of a highly objectionable kind with respect to private

information about the Plaintiff, even if it is true.3. False Light 4. Appropriation of the plaintiff's likeness or name.

1. This is the 4th one. 5. The use of biographical information for the purposes of commercial project is a

violation. The use of biographical information in general is NOT a per se violation.

2. Hirsch v. S.C. Johnson & Son, Inc. (1979)1. Defendant makes shaving cream for women, they called it Crazylegs (one could see how

this would happen as women shave their legs...). Elroy Hirsch is a football player who has a unique running style which led to his nickname Crazylegs (again, one could see just how this would happen). Hirsch played in the NFL and in professional basketball. During his career his used his nickname on many endorsements, though he was careful with it's use refusing to associate it with cigarettes and things of that sort. 1. Appropriation

1. “Protects not merely the right to be let alone but, rather, protects primarily the property rights in the publicity value of aspects of a person's identity.”

2. HELD: 1. “Because the right of publicity – the right to control the commercial

exploitation of aspects of a person's identity – differs from other privacy rights, it is appropriate for this court to recognize a cause of action to protect this right, although other privacy rights were rejected in prior decisions of this court.”1. Supported by public policy:

1. interest in controlling one's reputation, 2. prevention of unjust enrichment 3. or like here, the name is associated with being of high character because

of all of the TIME and EFFORT devoted to THAT PURPOSE. 1. Prosser: It would be ridiculous if Samuel Clemens had a cause of

action for the use of his name but not for the use of Mark Twain 2. Johnson's first ad included a cheer similar to the one used at U Wis, and took

place at a sporting event (running as opposed to football).2. Trade name claim

1. This cause of action exists as well. The misuse of a trade name is unfair competition, and can be akin to passing off. Here is the standard:1. Property rights of commercial value are to be and will be protected from

any form of unfair invasion or infringement or from any form of commercial immorality.

2. Trademarks need to be connected with a good or service. However, a trade name is more appropriate here. 1. Trade name

1. A designation use by a person to identify his business, vocation or occupation provided such use is not illegal or contrary to policy.

2. Infringement1. Likely to

1. cause confusion, mistake or deception, or2. cause prospective purchasers believe that3. the actor's goods or services are those of another 4. the actor's g or s's emanate from the same source as the other5. the actor's g's or s's are APPROVED OR SPONSORED by the

other 6. the actor is the business of or associated with the other

3. Here, my guess is the last two apply. 1. Hirsch testified as to the ACTUAL CONFUSION required by

trademark law. 2. (NOTE: this case determined a cause existed not the merits of those

causes.)

3. ETW Corporation v. Jireh Publishing, Inc. (2003)1. This is the Tiger Woods case. 2. ETW owns numerous TMs for the mark "Tiger Woods" including categories 3. of art prints, calendars, photographs, notebooks, pencils, pens, posters, trading cards--

Class 16. Rush created an art print called "The Masters of Augusta" featuring Tiger Woods in the center, and a text that comes with the print (not on the print) said the print features Woods "displaying his awesome swing, flanked by his caddie." This work was sold as a limited edition print.1. HOLDING:

1. A celebrity’s name may be used in the title of an artistic work so long as there is some artistic relevance . The use of Woods' name on the envelope and description is purely descriptive and used in good faith.

2. Not every word or symbol constitutes a protectable mark. It must be proven that it does the job of identifying the source and distinguish from others. 1. It is not reasonable to believe that any image of Woods originated from him.

To have the court hold that it does, would be to give Woods himself protection as a living trademark.

2. Court holds as a general rule that a person's image or likeness cannot function as a trademark. 1. Unless one image is consistently being used to sell a product. Like Elvis

goods. 3. First Amendment Defense:

1. Movies, prints and other pieces of art are afforded first amendment protections. Speech is protected even when it is carried out in a form sold for profit. The fact that expressive works are sold does not diminish it's degree of protection. The print is expressive, and entitled to full protection of the 1st amendment. (now the court must balance Woods' IP right to Jireh's 1st amendment right)

4. In false endorsement claims, the idea is that of likelihood of confusion. However, with celebrities in artistic works we use a test that balances the first amendment with the public interest in avoid confusion. When the PI outweighs the 1st amendment then the Lanham Act will apply. Here, there is artistic relevance and there is no explicit misleading here.

5. Right of Publicity is an IP right that is inherent to every human being to control the commercial use of his or her identity. Zacchini v. Scripps Howard: The first amendment does not trump the RoP when the Plaintiff's entire act is published. However, the RoP is fundamentally constrained by the 1st amendment. The first amendment protection extends to entertainment and other creative works making such claims largely inactionable. If the name or likeness is used merely to attract attention to the work then it loses it's first amendment protection. Based on the court's analysis, the first amendment will almost always trump the RoP claim unless there is a purely commercial purpose, that is where there is going to be the belief of origin or endorsement. 1. Transformative Elements Test: Where the work contains significant

transformative elements it is less likely to interfere with the economic interest held by the plaintiff and also has full 1st amendment protection. 1. Literal depiction for commercial gains will not.

2. A piece of art which potrays a historic sporting event communicates and celebrates the value that our culture attaches to such events.

3. This print, which will earn money will not deprive Woods of his ability to reap benefits for endorsements and appearances.

4. NBA v. Motorola, Inc. (1997)1. STATS, Inc., a provider of sporting event scores via pager and online, and Motorola,

Inc., the pager manufacturer,transmitted “real-time” NBA game scores and statistics taken from broadcasts of games in progress to pager owners on STATS' site on America Online, and elsewhere. The NBA sued for misappropriation under NewYork state law. 1. The Second Circuit Court of Appeals ruled that while the state's misappropriation

law, based on the case of International News Service v. Associated Press,[2]. Survives copyright preemption as applied to “hot news,” much of that decision, which went beyond “hot news” and precluded the use of other information, was preempted by the Copyright Act.1. In its ruling, the appellate court established a new test for misappropriation

claims under the INS doctrine. Under the test, to be actionable, the plaintiff's misappropriation claim must meet five criteria: 1. plaintiff generates or gathers information at cost; 2. the information is time-sensitive; 3. defendant's use of the information constitutes free-riding on the plaintiff's

efforts;4. defendant is in direct competition with a product or service offered by the

plaintiffs; and5. the ability of other parties to free-ride on the efforts of the plaintiff or others

would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened.

2. The appeals court held that under the facts of this case, the NBA had not established a claim for misappropriationunder this test.

3. The court made a clear distinction between the event itself (which is not protected) and a broadcast or report about the event (which is protectable by copyright). The trial court held, and the appellate court reiterated, that Motorola and STATS did not infringe NBA's copyright because they reproduced only facts from the broadcasts, not the expression or description of the game that constitutes the broadcast.

5. CBC Distribution & Marketing, Inc. v. MLB Advanced Media LP (2007)1. CBC is a company that ran a fantasy baseball platform, they had a contract with

MLBAM which ran out. CBC continued to use the names and statistics of the MLB players. 1. In order to make a claim to right of publicity under Missouri State Law (The

Restatement Standard) you must: 1. show that the D used the Plaintiff's name as a symbol of his identity 2. without consent 3. with the intent to obtain a commercial advantage

2. HELD: MLBAM and the MLBPA failed to make a claim for being unable to show both elements 1 and 3 1. Name as a Symbol of Identity

1. CBC only used the names and historical facts about the players, without using their identities. Compare to Doe v. TCI Cablevision, where Spawn character Tony Twist was designed to invoke the personality and name of NHL player Tony Twist. In TCI, the name was used in conjunction with the players enforcer personality, and therefore his name was a symbol of his

identity. Names with historical facts however do not rise to meet that standard.

2. Intent to Obtain Commercial Advantage 1. Evidence that the defendant used the celebrity's name to attract attention to

it's own product or service will serve as proof of such an intent.2. However, it is hard to conceive that using the names would give CBC a

commercial advantage over any other fantasy provider because all fantasy providers use player names and stats.

3. There is also no reason to assume that the players endorse this item, any more than they endorse box scores, (which is essentially what fantasy sports are).

4. Distinguished from Palmer1. Palmer involved photos and a right of privacy, that court refused to use a

theory of publicity.2. Palmer came before Zacchini and therefore is merely persuasive and non-

binding. 3. Public Policy

1. The use of names and statistics do not undermine the policy behind the right of publicity. It does not prevent the athletes from making a living from their sport or from endorsing a product.

4. First Amendment 1. This speech is protected by the first amendment because

1. it is expression, albeit in a less traditional form. 2. Names and stats are historical facts, which are protected by the first

amendment3. the fact that this was for profit does not rob it of protection (see ETW)4. entertainment speech is protected by the first amendment5. as is interactive speech 6. this is not a use of player information to sell an unrelated production

2. Gionfriddo balancing test 1. The right of the players to be protected from unauthorized publicity

against the public interest in dissemination of news and information consistent with the freedom of speech and the press. 1. Players have little interest here because the protection provides little

in the way of economic success nor would the use of their names effect their reputation such as to diminish it's endorsement value.

2. The consumer's interest in access, recitation and discussion of factual data concerning athletic performance commands a substantial public interest.

5. Copyright Preemption 1. Facts are inherently unoriginal, and are therefore not copyrightable.2. The Copyright act would not preempt a Right of Publicity claim.

VI. Reserve System and the Antitrust Laws: Primer, the baseball exemption1. Anti-trust Overview

1. Sports, like in most bodies of law, cannot be considered separately from the general body of anti-trust law with only 2(ish) exceptions 1. Baseball Exemption2. Sports Broadcasting Acts of 1961 and 1966

2. Most anti-trust cases arise in the traditional manufacturer-wholesaler-retailer economic

structure 1. For this reason sports leagues, boards and franchises often attempt to argue that the

typical body of anti-trust law should not apply to them 2. Outside of baseball, these attempts have failed miserably- see American Needle

1. Though, there has been some success in gaining greater scrutiny of the facts in such cases because it is undeniable that sports are to some extent very different from traditional businesses.

3. Sports cases are often considered “landmark” and find wide applications in non-sports situations1. See Brown v. Pro-Football, Inc 518 US 231 (1996) and the Labor exemption

3. Which laws will apply to sports?1. Sherman Anti-Trust Act (1890)

1. Section 11. See Below

2. Section 21. See Below

2. Clayton Anti-trust Act (1914)1. Section 3

1. Deals with the prohibition of the “tying” of goods or services, or exclusivity. Again, usually covered by Sherman sec 1, and rarely adds anything in terms of analysis.

2. Section 7 1. Prohibits M&A's which would substantially lessen competition or to create a

monopoly. Again, this sounds a lot like section 1 of Sherman.1. AFL- NFL mergers etc

3. Section 21. makes price discrimination illegal

3. Section 5 of the Federal Trade Commission Act 1. prohibits unfair methods of competition in or effecting commerce. 2. There is no implied right of action though. So this is purely a government cause

of action. (Actually, it is an FTC cause) 4. Sherman Section 1

1. “ Every contract in the form of trust or otherwise, or conspiracy, in restraint of trade...is declared to be illegal” 1. Standard Oil v. US: unreasonable restraint of trade

2. Basic Anti-trust Framework for section 1 1. Did the challenged conduct involve an agreement ie, was the contract,

combination or conspiracy requirement met? 1. The question means that we need an action of two or more persons or

entities. Contract, combination or conspiracies (or the 3 C's) are just another way of saying that there need to be multiple economic actors.

2. Copperweld Corp v. Independence Tube Corp..: They need to be separate entities, subsidiaries are not wholly separate. Nor can a company contract with itself. This is the case that leagues have tried to build the Single entity argument off of.

2. Was it a vertical or horizontal agreement?1. Horizontal Agreements

1. are agreements made between or among firms or persons on the same level of the market. Therefore they are agreements between current or

potential competitors. 1. Example: Sports teams agreeing to respect each other's exclusive

territories. 2. Example: two tech companies opening a research center together for

joint research3. Example: Player's union demands represent horizontal agreement

amongst the players2. Vertical Agreement

1. an agreement on multiple levels of production or sources. Such as a seller of raw materials, a manufacturer and a distributor working together. Nearly all sales of products include a vertical agreement of some sort. 1. Example: League agreements with television companies 2. Team affiliations with minor league franchises (note that the

franchises themselves are typically owned by someone other than the team, which is why 10 years ago Norfolk was the Mets AAA affiliate and now Buffalo is).

3. Difference in analysis 1. Analysis

1. Vertical agreements are essential, while horizontal ones rarely are.1. Maybe companies researching cancer can go horizontal

considering the amount of money, man power involved plus the public interest in such a product. But I am making this shit up.

2. Vertical agreements facilitate the functioning of markets and facilitate development. Horizontal ones reduce the competition in the market.

3. Horizontal agreements replace competition with cooperation, and lead to the exercise of monopoly power.

4. If the source material is rare, exclusive vertical agreements can limit others ability to produce a product or enter a market.

5. Perhaps a vertical agreement can cause other companies to expend greater amounts of money in order to get a material

6. All of the above, distinguish the two and we can see it is more likely that a horizontal agreement will be found in restraint of trade.

2. Distinguishing pro and anti-competitive agreements 1. An anti-competitive horizontal agreement is if all oil distributors got

together to limit production or raise prices, rather than doing this independently.

2. A pro-competitive horizontal agreement would be if two firms purchased supplies together allowing them to reduce prices. Or pooling funds for a research facility.

3. Was it one of the per se violations?1. Horizontal Price Fixing

1. Vertical price fixing really has not yet been an issue in sports. (For this reason look out for it on the exam)

2. “...restrictions on free and open price competition pose an actual or potential threat to the central nervous system of the economy.” US v. Socony-Vacuum Oil Co. 1. Agreements that raise, lower or stabilize prices are per se violations

1. Though, when the effect was incidental to an agreement which was designed to improve the competitive working of the market

place, price fixing will not be a per se violation. BMI v. CBS (1979)

3. Though price doesnt have to the be the object of agreements 1. major oil companies agreed to purchase all excess gas supplied by

independent oil companies to prevent prices from dropping wound up stabilizing prices. Even though there was no agreement to stabilizing prices it was held to to be a per se price fxing violation. Socony-Vacuum.

2. Horizontal Market Division1. Horizontal conspiracies to allocate territories, dividing up customers or

otherwise imposing non-price restraints, Simple agreements to to avoid each other's territory or customers are such a division. US v. Topco Associates (1972) [PS this is a BIG fucking deal in sports.]

2. Where an east coast dominant firm agrees not to go west so that a dominant west coast wouldnt move east is a per se violation.

3. Group Boycotts1. concerted refusal, typically from horizontal competitors, to deal with

others or a third party. 2. This type of action prevents one of the conspirators from independently

deciding who to deal with and prevents the third party from operating in an open market. 1. Northwest Wholesale Stationers v. Pacific Stationary and Printing

(1985): describes which types of group boycotts are per se illegal, because not all of them are.1. Joint efforts by firms to disadvantage competitors by either

directly denying or coercing suppliers to deny relationships the competitors need in the competitive struggle.

2. Often includes cutting off a supply, facility or market required for the third party to compete.

3. Boycotting firms typically have dominant power in the relevant market.

4. Tying1. an agreement by a party to sell one product but only on the condition that

the buyer also purchases a different or tied product.1. Honestly, this is more Clayton 3 claim rather than Sherman 1 claim. I

do not see the multiple actors. 2. This can be used to leverage market power in one market into power in

another. Nothern Pacific Ry. v. US (1958) 1. Sports Example: In order to buy season tickets you must buy

preseason tickets.2. Sports Example: PSL's and season tickets 3. Ex: Bundling team rights, in order to by Twins rights you must buy

Minnesota North Stars rights.1. Though no claim has really been made in sports.

4. If it was a per se violation, does it merit per se treatment?1. Though, when the effect was incidental to an agreement which was designed

to improve the competitive working of the market place, price fixing will not be a per se violation. BMI v. CBS (1979)

2. As far as horizontal market division goes, some courts, such as the 4th

circuit have allowed a narrow affirmative defense, which would allow the case rule of reason examination if the defendants acted with the purpose AND effect of achieving a legitimate public policy objective. Hospital Building Co v. Trustees of Rex Hospital / NCAA v. Board of Regents of Univ. of Okla. (SCOTUS 1984). 1. Courts are moving more toward a rule of reason for many HMD's.

Chicago Professional Sports. Ltd. Partnership v. NBA (1991) et al. 3. After reading it I cannot understand the exceptions to the group boycotting

per se rule. 5. If not, then under the rule of reason:

1. was there an agreement between two or more persons?1. See above

2. The agreement or conduct adversely affected competition in the relevant market.1. For analysis of the relevant market see Section 2 analysis.

3. What are it's anti-competitive effects?4. What are its pro-competitive effects?

1. NSPE v. US (1978): the inquiry is confined to consideration of the impact on competitive conditions, not as the NSPE asserted that a general benefit to the safety of the public was sufficient. 1. Though through NCAA v. Board of Regents Uni. Okla, may have

broadened the inquiry, though this is debateable. 5. If the pro-competitive outweigh the anti-competitive, is there a less

restrictive way to achieve the same effect? 5. Section 2

1. “ Every person who shall monopolize, or attempt to monopolize, or combine or conspire... to monopolize any part of the trade or commerce among the several states... shall be guilty of a felony.”

2. Section 2 Analysis1. Monopolization Elements

1. Establish a relevant market1. The relevant market is the area of effective competition within the

defendant operates, which could be either a product or geographic market. Brown Shoe Co v. US/ Std Oil Co. v. US

2. Which one, is decided by the trier of fact and will be set aside only if clearly erroneous (International Boxing Club v. US)

3. Relevant Product Market1. US v. du Pont : “The market is composed of products that have

reasonable interchangeability for the purposes for which they are produced, price, use and qualities considered. “

2. Twin City Sportservice, Inc v. Charles O. Finley & Co. (1975)1. “Substitutability in production refers to the ability of firms in a

given line of commerce to turn their productive facilities toward the production of commodities in another line because of similarities in technology between them. Where the degree of substitutability in production is high, cross elasticity of supply will also be high, and again the two commodities should be treated as part of the same market”

4. Relevant Geographic Market

1. the area of effective competition in which the product or it's reasonably interchangeable substitutes are traded. Hecht v. Pro-Football, Inc (1977) 1. economic and physical barriers to expansion as transportation

costs, delivery limitation, and customer convenience must be considered.

2. Location and facilities of other sellers are important.2. Prove that the defendant has monopoly power

1. considered in terms of the ability to raise market prices or exclude competition (US v. EI Du Pont de Nemours 1956) , however in reality, market share is the most commonly used method.1. Typically 70% market share is considered monopoly power.

1. US v. Alcoa says 63% definitely is not, 64% might2. Wow, that sounds like a lot of bullshit. 3. Learned Hand: 66% is, 33% isnt, in between is iffy.

2. Other determining factors 1. maintenance of market share despite an inferior product. 2. Stability of market over time, degree of barriers to entry, size of the

firms competitors.3. Defenses

1. Defendant will show it doesnt have this power by enlarging the relevant market or by showing that it cannot raise the market price.

2. Finally the defendant will try to show that it gained its position lawfully, through superior skill, foresight or industry rather than wrongful conduct.

3. and show that:1. the monopoly power was acquired through some sort of wrongful,

exclusionary or predatory conduct 1. encouraging competition, only to turn on that victorious competitor

and intend to put them out of business/ involuntary elimination of competitors (Alcoa)

2. currently all of this is similar to the section balancing test. 2. the wrongful conduct helped the monopolist maintain its power, when

new or existing competitors would have eroded that power, OR3. the conduct of the monopolist constituted an improper use or abuse of its

monopoly power. 2. Attempt to Monopolize

1. The plaintiff must establish that the defendant has the specific intent to achieve a monopoly and that the wrongful conduct has a dangerous probability of success. 1. Defendant's market share must typically be around 30%2. the conduct is moving the defendant at a steady rate toward higher

market shares. (do this also during the pendency of the trial)3. Conspiracy

1. is irrelevant, because more times than not, it will be covered by section 1 2. Elements

1. The existence of an agreement 2. an overt act by one of the parties in furtherance of the conspiracy

1. (sounds like the criminal law standard)

3. A substantial amount of commerce was affected or would be affected by the planned conduct

4. specific intent on the agreeing parties to monopolize 6. The Baseball Exemption

1. Federal Baseball Club of Baltimore, Inc. v. ML of Professional Baseball Clubs(1922)1. The business of baseball, is exhibitions. Personal effort, not related to production

baseball is not a subject of commerce. Interstate transport is merely incidental, not the essential thing and things which are not commerce do not become so, by crossing state lines. 1. Well all know that this is bull shit. But hey, we'll take it.

2. Toolson v. New York Yankees, Inc (1953)1. In one of the worst fucking written opinions of all time, Toolson affirms Federal

Baseball Clubs on the grounds of Federal Baseball Clubs. Plus the fact that Congress had not addressed the issue by law.

2. The one, brief albeit legitimate argument the court asserts is that because of Federal Baseball Clubs, baseball had operated under the reasonable assumption that had this exemption, and it would be unfair to say that they violated the law when the court said they didnt. 1. DISSENTING: J. Burton: UH...baseball does interstate commerce, stop

kidding yourselves. Theres farm systems, players taken from other states and countries, food, television, radio, travel, equipment etc.

3. Flood v. Kuhn (1972)1. Curt Flood is an OF for the Cardinals. At this time in the MLB each contract

maintains a clause which allows the team to renew a contract each year continually. This is called the reserve clause, and it created a system where players could not enter a free player market. They were essentially team property.

2. HELD: Baseball is a business engaged in interstate commerce, however it has an exemption from the Anti-trust law- which is an exception and anomaly. Congress has considered the issue several times, and have declined to remove the exemption, which means that it is not congress' intent to have these law apply to baseball.

3. Though, in Haywood, Rodovich and International Boxing, the exemption was limited only to baseball and no other sports.1. Dissent: Douglas: Gardella v. Chandler: The equities are with the victims of

the reserve clause.7. Post Flood Exemption, yet Pre-Curt Flood Act

1. Henderson Broadcasting Corp. v. Houston Sports Ass'n, Inc. (!982) [biz, but not broadcasters]1. Henderson Broadcasting alleges that has (the Astros) and KENR entered into a

conspiracy to divide and allocate advertising and audience territories and to eliminate competition for advertising revenue and listening audiences thus imposing horizontal restraints. 1. HELD: The baseball exception applies only to those aspects of baseball, such

as leagues, clubs and players which are integral to the sport and not to related activities which merely enhance its commercial success. 1. No Exception in:

1. Broadcasting

2. Baseball Cards (Fleer Corp. v. Topps)3. Concessions

2. Piazza v. MLB (1993) [reserve/some business]1. Vincent Piazza and his group had a deal to purchase the SF Giants for 115 mil,

after which he wanted to move them to Tampa Bay. MLB stepped in, ended the deal and prevented the move. Piazza sues for violation of Sherman. 1. HELD: Federal Baseball and it's progeny, which require result stare decisis

(because of the holding in Flood), extends only to the reserve system and matters of league structure.1. Therefore, the exception does not apply as it pertains to the purchase of

teams and must be subjected to Rule of Reason analysis.2. The denial of the relocation of the team, however, might be covered by

the exception, because this has profound effects on the structure of the league. 1. Personal question: How come the league still gets to approve

ownership? 3. Butterworth v. NL of Professional Baseball Clubs (1994)[reserve]

1. This case comes from Piazza, as the AG of Florida issued civil anti-trust investigative demands on the NL, looking into the combination in restraint of trade in connection with the sale and purchase of the SF franchise. The NL moved to quash the investigative demands based on its exemption. 1. HELD: Based on, Piazza and the effect Flood had on Federal Ballclubs, only

the Reserve system is subject to exemption from the anti-trust law. 8. Curt Flood Act of 1998

1. Partially overturns Federal Baseball, Toolson, and Flood w/r/t players.1. Done after collusion (see later); strike; jointly agree to lobby Congress to

overturn baseball’s antitrust exception.2. Gave MLB players the same rights as other athletes to sue in antitrust when the suit

is related to labor relations.1. Basically applies antitrust to baseball with regard to labor.

3. Flood still may have broader antitrust exemption authority that does not make it totally obsolete – this doesn’t address franchise relocation, etc (Piazza issue) – just gives players the right to file antitrust suit.

9. MLB v. Crist (11th Cir 2003) [biz of baseball] 1. This is the appeal of the Butterworth case, Crist succeeded Butterworth as AG.

1. Noting that the scope of the baseball exemption had been “the subject of extensive litigation over the years,”the Crist court ultimately adopted the district court’s interpretation of the relevant authority, finding that the exemption broadly protected the “business of baseball. Although the court held that the exemption was not unlimited – in particular stating that the “exemption has not been held to immunize the dealings between professional baseball clubs and third parties”– the court nevertheless believed it clear that the proposed contraction fell within the scope of the exemption, concluding that “the number of clubs, and their organization into leagues for the purpose of playing scheduled games, are basic elements of the production of major league baseball games.”

VII. Anti-Trust and Sports: Eligibility, Rookies, Veterans and Free Agency 1. Player Restraints and application of the Per Se Rule

1. Kapp v. NFL (1974)1. In this oddly decided case, the court looked at the per se rules and the charges that

QB Kapp made against the NFL. 2. HELD: The per se rule, due to the differences between businesses and sport should

not be applied so readily. However, that did not stop the court from deciding to immediately strike down certain portions of the NFL rules and contract so patently unreasonable that there is no genuine issue for trial (which sounds sort of like a per se rule to me, however, the actions themselves are not per se illegal, the degree of these rules were.) 1. Rozelle Rule, which provided that when a player at the end of his contract term

signs with another team his previous team gets a ransom, agreed to by the teams or the commissioner. 1. This is restrictive because even while not under contract a player's ability to

operate in a free market is almost non existent. There are other less restrictive ways to maintain the the competitve nature of the league. This rule operates as a perpetual restraint on player movement.1. Note: that baseball has a compensation system, involving type A and B

free agents, though only draft picks are awarded or created.2. Draft Rule, this rule, requiring that even when a team makes no offer or no

sufficient offer, that player remains reserved and unable to seek a contract with another team is equivalent to a perpetual boycott (which in normal situations is a per se violation)

3. One man rule, the rule by which the commissioner has final decision which is unappealable is just as unreasonable because it goes against the Federal Arbitration Act.

4. The Option rule is not so unreasonable so as to be decided by summary judgment.

5. Kapp's refusal to sign the contract was okay, because it would have bound him to such illegal terms in the constitution and by laws.

2. Mackey v. NFL (8th Cir. 1976)1. Again tested the use of per se violations and the Rozelle Rule. This court actually

distinguishes sports from real life, finding that per se violations are inappropriate given the special differences in the business of sports. One of these differences is, in sports economics parlance Louis-Schmelling Complex, where your business would fail without equally competent competition. Therefore there is no interest in putting other teams in your league out of business, in fact you want them to be close to equally as competitive as your team is (studies indicate that 60-40 is nice). Application of the per se rule really only makes sense in an environment where the dynamic is not like this.

2. Court asked for a legitimate business purpose and whether there is a less restrictive means to accomplish that purpose. 1. The Rozelle rule was highly anti-competitive because it effectively eradicating

free agent offers. The NFL defended on the grounds that it was necessary for competitive balance. 1. Court did not buy that shiz. The restriction applied to everyone not just the

top free agents, it was unlimited in duration and provided no procedural safe guards.

2. We can see here how the court says this rule is not okay, but given the way that team sports work, a restriction on the talent could be allowable.

2. Player Restraints: Limitations on Participation 1. Molinas v. NBA (1961)

1. Jack Molinas was a player for the Detroit Pistons. He admitted to gambling on his team. He was indefinitely suspended. During his suspension he went to Brooklyn Law School where he learned to sue people, and surely enough, he sued the NBA because the NBA reserve clause was in violation of section 1 and the NBA's refusal to reinstate him (and his suspension without notice) constituted a similar violation. 1. The reserve clause issue: In order for a private plaintiff in a civil anti-trust suit to

recover, must establish a clear causal connection between the violation alleged and the injuries suffered. Here there is no evidence, nor is it alleged that Molinas' injury results or stems from the reserve clause

2. As to the the refusal to reinstate, the court held that a rule and corresponding contract clause providing for the suspension of those who place wagers on games in which they are participating seems not only reasonable, but necessary for the survival of the league.

2. Clarrett v. NFL (2nd Cir 2004)1. NFL Age requirements state you must be 3 years out of high school in order to be

eligible for the draft. Maurice Clarrett was a talented albeit bat shit crazy RB at THE Ohio State University. 1. The issue is whether the NFL’s eligibility rule is exempt from antitrust law2. Holding

1. The 2nd Circuit reasoned that the primary objective of anti-trust legislation is to preserve business competition. The court of appeals held the eligibility rules are immune from antitrust scrutiny under non-statutory labor exceptions and can only be scrutinized under labor law. The NFL began limiting amateur entrance into the draft in 1925 to prevent injury to young and immature athletes. The issue arises in this case because the NFL players union and the NFL Players Association (NFLPA) collective bargaining agreement at the time did not include the eligibility rules. The eligibility rules were located in the NFL Constitution and Bylaws. The court of appeals reasoned that if the NFLPA wanted to change the eligibility rules they could have brought the issue to the table during bargaining, but did not. The relationship between the NFLPA and the NFL created by the collective bargaining agreement prohibits teams from negotiating directly with players. Clarett claimed this reduced the competitive market of professional football and therefore violated antitrust law. The court held that Clarett’s disagreement with the criteria to enter the draft established by the employer and labor union could only be remedied through labor law, not antitrust. The Court held no antitrust exemption would be made. The 2ndCircuit reversed and remanded the case with instruction to enter judgment in favor of the NFL.

VIII. Anti-Trust and Sports: Restraints on Owners and Leagues 1. Inter-Sport Competition and Cross-Ownership Bans

1. North American Soccer League v. NFL (1981)1. NFL passes amendment to by-laws mandating that owners who cross own or receive

income from ownership in another competing league, such as the NASL, must divest ownership of said team.

2. HELD1. Single Entity argument rejected (get used to it boys, it wont be the last time): A

combination of actors, behaving a joint venture is still a combination. Such a loophole would allow league members to escape antitrust responsibility for any

restraint they entered into to enhance league competition to outweigh the anti-competitive effects.

2. Per Se rule is also rejected. Court says that this type of behavior does not rise to the level of badness that would warrant per se ruling without further analysis. 1. Price Fixing2. limiting market or customer areas

3. NFL claims the market is quite large, any financier can try. Court says NAH BRAH, the ability to purchase a franchise is limited to a narrow group of eligible purchasers, largely in part to the restrictive approval policies established by the leagues.

4. Pro-competitive effects 1. The ban prevents CoI's

1. Court calls bull shit again, there has been cross ownership for a while and the NFL is still dominant, and no team has been ran less efficiently because of it.1. Alternative: remove cross-owners from broadcasting rights

committee. 2. Confidential information is protected by the ban

1. The NFL hasnt been able to show evidence of the type of information they are referring (duh! Its confidential!)

2. Franchise Relocation 1. Los Angeles Memorial Coliseum Comm'n v. NFL (1984)

1. 1978, rule 4.3 required a 100% vote to approve relocations within another team's territory. In response to legal threats the league changed the rule to a 3/4th super majority.

2. The LA Rams, moved to Anaheim, which is still in the LA territory, with the LA Coliseum empty, it and the league looked for a new resident. Al Davis and his Oakland Raiders step in and decide they wanted to move from Oakland to LA, however in the 1980 vote failed. LAMCC and the Raiders brought this action. 1. Single Entity Issue

1. Granting the NFL Single Entity status would be to immunize them from all antitrust liability, yet in the past they have violated section 1

2. Other organizations just as unitary have been found to be in violation3. the clubs are not separate businesses and each has its own separate value 4. Citing NASL v. NFL, where cross ownership prohibitions where violative of

section 1 even with the admission that cooperation between the teams was necessary.

5. Threshold requirement1. Multiple corporations operate as a single entity when corporate policies

are set by one individual or by a parent corporation. 1. Each team jointly creates policy

6. Even though revenues are shared and divided there is still a huge difference in profits and losses from team to team, which set their own prices, hire their own coaches, management and players.

7. NFL clubs compete with each other for talent on and off the field, and some teams like the Jets and Giants will compete for fans and fan dollars.

2. Rule of Reason1. Basic Elements

1. 1) an agreement 2) intended to cause harm or unreasonably restrain trade

3)actual injury to competition. 1. Agreement via NFL constitution and by-laws 2. rule 4.3 is on its surface an agreement to control and/or prevent

competition among NFL teams via territorial divisions.2. Relevant market

1. While it does not seem extremely clear from the opinion I think that the court decided that 4.3 effected competition among NFL teams and among stadia.

2. Though the court states the difficulty that sport presents in this area. 3. Reasonableness of Rule 4.3

1. NFL argued that the ancillary restraint doctrine applies here, which effectively removes the per se label from certain acts where a restraint on trade may be valid if they are subordinate and collateral to another legitimate transaction necessary to make that transaction effective. 1. Court agrees that territorial divisions are ancillary to football, which

means the rule of reason must be applied. 2. Rule 4.3 encourages stability which prevents one team from gaining an

unfair advantage on the field. Territories foster fan loyalty which promotes traditional rivalries, which contribute to attendance and television viewing. There is the additional joint marketing issue, that in order to properly exercise the rights which come with their ability to collectively negotiate the TV rights, the league must be able to have some control over team placements to ensure football is popular in many markets. The last NFL argument is that the ability to block moves like this allows local governments to recover their expenditures (they invest tons in stadia etc).1. The court HELD, that while these are pretty worthwhile reasons,

there are far less restrictive ones which could carry out the same goals. 1. As to the local government reason, it could be left up to the local

governments to address this issue themselves via lease agreements which should in practice last long enough to allow them to recover.

2. In regard to the joint marketing reason, the current rule really just means that a team needs only 7 friendly votes to block a move regardless of whether a market can support another team or not.

3. There was evidence that the commissioner and other owners hated Al Davis for being a Maverick (lol) and the vote could have been motivated by animosity.

4. In 1978 Davis suggested that rule 4.3 be replaced by objective guidelines rather than a subjective voting measure.

5. Regulation of private profit is best left to the market. 6. There was no showing that the move would harm the competition

of the league. No schedule problems, no facility problems, no foreseeable loss of league revenues.

2. NBA v. SDC Basketball Club, Inc. (1987)1. Essentially states that the holding in Raiders I (above), is not a rule. Rather, the issue

of whether or not a league rule prohibiting the relocation of a team is a fact specific issue.

1. Economic arguments should be made.2. The rule must be closely tailored to the business objectives 3. There should be an objective set of criteria such as population, economic

projections, playing facilities, regional balance, and television revenues. 4. Summary judgment will be hard to obtain.

3. Transfer of Ownership1. Sullivan v. NFL (1994)

1. Sullivan owned the Patriots and it was partially publicly traded. Then the AFL merged with the NFL, which had an unwritten policy forbidding public ownership of teams. He bought all of the stock back. Then he was in financial trouble and he wanted to sell a minority interest in the team in stock. He asked other owners to alter the rule to allow him to do it. Rozelle, being a dick, said he was not in favor of the proposal and that league support was very dubious. Never asking for a vote, Sullivan sold the team for $87 million, which was a low price. He sued claiming that the policy was in violation of Sherman. 1. Court rejects the NFL's argument that there was no injury to competition

1. Market: nationwide market for the sale and purchase of ownership interests in the NFL member clubs, NE, in particular. The NFL's policy had actual harmful effect on the competition in this market. A policy which restricts the buying and selling of teams injures competition in that market. 1. NFL denies that NFL teams compete for the sale of their ownership

interests.2. Court declines to find that as a matter of law the NFL teams do not compete

against each other.1. While there is case law to backup the idea that the league can refuse approval

to individual transfers of team ownership, but not the general proposition that no policy regarding ownership can injure competition. 1. This argument rests on the relevant market

1. “[This policy] restricts competition between clubs for the sale of their ownership interests...[whereas the other] cases a league's refusal to approve a given sale transaction or new team merely prevented outsiders from joining the league, but did not limit competition between the teams themselves.”

2. Those same cases left open the possibility that competition for ownership was a legitimate market.

2. This leads also to the rejection of the single entity argument again. 1. Copperweld v. Indendence Tube Corp

1. Corporations and their wholly owned subsidiary are a single enterprise for the purposes of section 1. 1. Unity of Interests 2. whether any of the defendants has pursued interests diverse from

those of the cooperative itself. 3. Do I really need to mention that sports teams do this....

3. The court rejected the NFL's claim that there was insufficient evidence of harm to competition.1. Though the court felt that the evidence was “rather thin” it was not too thin

to support a finding for Sullivan. 1. Sullivan's expert: NFL exercises monopoly power in preventing certain

people from owning a franchise, and enables a group of owners, merely

8, to exclude from the league owners who may be more effective competitors than they themselves are.1. Other owners say that this is okay because if big corporations were

allowed to buy teams then they would funnel massive amounts of money into the team and make it unfair.1. UH, then make a salary cap. Oh, wait, they did. 2. PS, these statements imply that if allowed there would be

competition for ownership of teams. 2. Even people would just buy stock for investment purposes, not just for the

purpose of owning a sports team3. This policy restricts the market for investment capital

1. Proving that the policy reduces the available output of ownership interests.

4. Ancillary Benefits 1. The restraint is ancillary to the functioning of such a joint activity. The court

accepts this notion, and that such rules controlling who joins a joint venture and the policy in question constitutes an ancillary rule.1. It contributes to the NFL's ability to function as an effective league.

1. Investors short term interests are different from the long term interests of the league and team ownership.

2. This is not enough to get around the Rule of Reason, such an ancillary rule can still violate section1.

3. There are less restrictive means to achieve this goal, such as preventing majority shares being sold, so that a singular majority owner controls the dividends and so forth.

5. Injury in Fact1. Need to prove that the antitrust violation was a material cause not the sole

cause. 2. Again, the evidence was weak but strong enough to support the verdict. 3. Even though, Sullivan never asked for a vote, there was evidence it was

rejected any way. 6. TRIAL ERRORS

1. Equal involvement defense, an instruction on this defense should have been issued to the jury because there was sufficient evidence that Sullivan was “substantially responsible for maintaining or effectuating the policy” because he was on the joint committee during the merger which decided the rules.

2. The failure to request a vote can be a potentially dispositive issue in the case.1. If he didnt request it for reasons other than the policy then there is no

case3. the balancing test instruction, the jury needs to be instructed to consider the

pro-competitive justifications. 2. Chicago Professional Sports LP v. NBA (1996)

1. The Bulls wanted to broadcast more of their games over WGN, a television superstation carried nationally on cable. Since 1991 the Bulls and WGN have been allowed by injunction to broadcast 25 to 30 games per year. The district court made a 30 game allowance permanent and held the NBA’s fee excessive. Chicago wants to broadcast 41 games per year over WGN; the NBA contends that antitrust laws allow it to fix a lower number (15 to 20) and collect the tax proposed. The NBA signed a contract that transferred all broadcast rights to NBC. NBC only shows 26 games

during the regular season and the network contract allows the league and its teams to permit telecasts at other times. Each team has the right to broadcast all 82 of its regular season games unless NBC casts that game.1. The Ninth Circuit held that district court properly condemned the

NBA’ssuperstation rule under the rule of reason analysis because (a) the league did not argue that it should be treated as a single entity and (b) the anti-free-riding justification for the superstation rule failed because a fee collected on nationally telecast games would compensate other teams for the value of their contributions to the game being broadcasted.

2. Although, according to Copperweld, the teams of the league have competing interests, the NBA may be treated as a single firm in that it produces a single product. The Ninth Circuit decided that when acting in the broadcast market the NBA is closer to a single firm than to a group of independent firms; therefore, the Bulls and WGN must respect the league’s limitations on the maximum number of superstation telecasts.

4. THE SINGLE ENTITY DEFENSE 1. Because of the multiple actors requirement of section 1 in Sherman, one real great way

to get around liability would be to convince a court that you are not multiple actors because you are really a single economic actor. This is called the Single Entity Defense.

2. After the decision in NASL and Raiders I (LA Coliseum), the defense was considered dead, especially for the NFL. However Copperweld Corp v. Independence Tube Corp (1984) reignited the dying flame.

3. Copperweld1. Officers, directors and employees of a single firm engage in unitary, not joint,

conduct 2. Corporations and it's unincorporated divisions also engage in unitary conduct.3. Most importantly however was the finding that corporations and their wholly owned

subsidiaries are single entities. 1. They have a complete unity of interest2. does not involve a sudden joining of economic resources that had previously

served different interests.1. Such as the central licensing units of professional sports leagues?

3. Wholly owned subs. of the same corp, may be treated the same.4. Why Copperweld really doesnt help the sports leagues

1. Copperweld generally requires complete ownership, complete unity of interest or absolute right to control. 1. The league does not have the absolute right to control, the teams each control

their teams as they see fit. The league has no power to run the teams absent any extreme circumstances (see MLB purchasing the Montreal Expos and moving to WAS). Teams are separate businesses, linked by their constitution and by laws but not owned commonly. In fact the constitution and by laws allow for teams to withdraw from the NFL so that they can join other leagues or form one. Mid-South Grizzlies v. NFL (1984)

2. League-wide sharing of revenue does not support a notion of unity of interest. There is no sharing of costs and there are wide gaps in profitability from team to team. Just because they share money does not mean they are incapable of consipiracy. Chicago Professional Sports LP v. NBA (1992).

3. Even if the revenue sharing portion were enough, it fails on the fact that Copperweld makes direct reference to the “joining of economic reasources

which have previously served different interests.” 4. Sullivan v. NFL: whether any defendants had pursued interests diverse from

those of the cooperative itself.5. By 1991 the defense was so dead that the NBA didnt even mention it in Chi pro sports

LP (1992) (Bulls I) 6. Though, in Bulls II, Judge Easterbrook wrote a shitty fucking decision, misapplying

legal standards, ignoring the treatises he himself cited to, providing no real standard and waffling on whether a per se rule or rule of reason should be used, and held that there needs to be a further investigation as to whether the NBA was a single entity- he certainly seemed to favor it. 1. PS I have never seen a text shit all over a judge like this in my life. And its a VERY

well known one at that. 5. American Needle v. NFL (2010)

1. Decision by JPS1. Product Market and Joint Action

1. “defining the product as ‘NFL football’ puts the cart before the horse.  Of course, the NFL produces NFL football, but that does not mean that cooperation amongst NFL teams is immune from [Sherman Act] scrutiny.  Members of any cartel could insist that their cooperation is necessary to produce the ‘cartel product’ and compete with other products.”

2. “Competitors,” he added, quoting colleague Justice Sonia Sotomayor when she was a judge on the Second Circuit Court, ” ‘cannot simply get around’ antitrust liability by acting ‘through a third-party intermediary or ‘joint venture.’ ”

3. “substance over form” 4. “The key is...whether it joins together separate decision makers.” 5. “NFL teams do not possess either the unitary decision making quality or the

single aggregation of economic power characteristic of independent action. 1. NASL v. NFL: the financial performance of each team is related to the others

but does not necessarily rise and fall with that of the others. 2. Brown v. Pro-Football (1996): teams compete for fans, for gate and player/on

field personnel.3. In the market for IP

1. to a firm making hats the colts and the saints are two potentially competing suppliers of valuable trademarks. When each team licenses its IP it is acting in their own interest not in the interests of the league.1. Honestly, I agree with just half of this. I see how each team owns a

valuable commodity in its own IP rights, and they choose to pool them in NFLP, and it chooses which one company gets the rights. But, the revenue is split evenly, so that the league teams with less valuable IP, get more money to remain competitive, which is what the league needs to survive. Teams with more valuable IP take less money at the expense of maintaining this competition.

2. “To license their separately owned trademarks collectively and to only one vendor are decisions that deprive the marketplace of independent centers of decision making.”

4. Just because the teams need each other to exist, does not mean that they are in unity of interests. A K, combo or conspiracy that is necessary or useful to a joint venture is still just that: a combo etc.

6. NFLP is liable to section 1 attacks as well. NFLP's licensing decsions are made

by the 32 separate entities which own the corporation and the rights that they market. 1. Though these are decisions made inside one corporation, when the parties of

the agreement are acting on interests separate from those of the firm itself , the intrafirm agreements are merely a formalistic shell for concerted action.

2. Each team takes its individual economic benefits apart from the NFLP profits as a result of the decisions they make for NFLP

3. NFLP is merely an instrumentality of the teams because the business interests will often coincide with that of the business, such commonality exists in every cartel.

IX. Anti-Trust: League Wide Media Contracts and Web Content 1. MSG v. NHL (2007)

1. The purported anticompetitive conduct cited by Madison Square Garden includes allegations that the NHL teams imposed a series of rules limiting individual team control over their websites, marks, licensing rights, merchandising rights, dashboard sales, and broadcast rights. The complaint further alleges that, "by seeking to control the competitive activities of independent business in ways that are not necessary to the functioning of the [NHL] joint venture, the NHL has become an illegal cartel," and that such "broad collective control over the competitive activities of the independent [hockey] business is inconsistent with federal and New York state antitrust laws." 1. the district court denied MSG's request for a preliminary injunction against the

NHL’s effort to ban the Rangers from operating an independent website, holding that MSG had failed to demonstrate a likelihood of success or a sufficiently serious question going to the merits.

2.  MSG’s injunction challenged only the NHL’s New Media Strategy, which required, among other things, the migration of the MSG-owned Rangers’ website to an NHL-operated server. The Complaint filed by MSG, however, was much broader and challenged NHL restraints relating to four different categories: 1) merchandising and licensing, 2) broadcasting and streaming, 3) advertising and sponsorship, 4) and New Media. 1. In its motion to dismiss, the NHL raised two primary arguments. First, the NHL

argued that all claims relating to the first three categories (ie, all non-New Media claims) were barred by a release in a Consent Agreement signed by MSG in 2005 (or, in the alternative, were barred by the doctrine of laches). Second, the NHL claimed that it constitutes a “single entity when deciding how to make and sell what only the venture can create” and thus is incapable of violating Section 1 of the Sherman Act (or, in the alternative, that MSG had failed to allege antitrust injury).

2. Judge Preska dismissed all of the non-New Media claims, finding that they were released pursuant to the Consent Agreement (and, in the alternative, were barred by the doctrine of laches). The Consent Agreement reads, in relevant part: “MSG forever releases and discharges [the NHL] from any and all claims…upon any legal or equitable theory [which] exist as of the date of the execution…relating to, or arising from, any hockey operations or any NHL activity, including, without limitation, the performance, presentation or exploitation of any hockey game….” Judge Preska held that the language of the release encompassed MSG’s non-New Media claims and that enforcement of the release would not violate public policy. In holding that the release does not violate public policy, Judge Preska essentially rejected the antitrust challenge to NHL’s various

restrictions regarding merchandising, broadcasting, and advertising, concluding that the NHL’s “undisputed legitimacy diminishes the public policy concerns compared to those in the case of a Section 1 conspiracy whose very existence is unlawful, as in the case of a monopoly or price-fixing conspiracy.”

3. The New Media Strategy, however, did not exist at the time the Consent Agreement was signed, and thus was not barred by the general release. Judge Preska therefore had to determine if the single entity defense barred MSG’s New Media Strategy Section 1 antitrust claims. Although Judge Preska recognized that “[w]hat is essentially the same [single entity] argument has been rejected in a similar case by the Court of Appeals,” and that “[m]ost other Courts that have taken up the issue have reached the same conclusion,” Judge Preska concluded that the “Court need not—and will not—resolve the question at this juncture [because] the arguments advanced by the NHL in favor of single entity status require examining facts outside the pleadings.” In particular, Judge Preska noted that “there is no evidence in the record on the crucial question of market definition, let alone the inquiry into how the NHL actually operates as an economic actor in that market,” and “therefore the NHL’s arguments in favor of dismissal cannot be resolved at the pleading stage.”

X. Anti-trust and Sports: The Labor Exemption 1. Clayton sec. 6

1. “Nothing contained in the antitrust laws shall be construed to forbid the existence and operation of labor...organizations, instituted for the purposes of mutual help...”

2. Clayton sec 201. No injunctions shall be granted in case between employer and employee involving or

growing out of a dispute concerning terms or conditions of employment.1. Unless that strike is illegal, will damage property, is violent or constitutes a

secondary strike.3. Non-Statutory Exemption

1. Basically, any union-management agreement that was a product of good faith negotiation will receive protection from the antitrust laws. That means that the provisions of the agreement cannot be attacked as collusive or anti-competitive. Say that a salary cap is agreed to by a union and management. In pure antitrust terms, a cap can be a violation of the antitrust law. But since the cap was part of the collective bargaining agreement negotiated in good faith and agreed-to by the union and management, the cap cannot attacked in court as a violation of antitrust.

2. Clarett v. NFL (2004) 1. United Mine Workers of America v. Pennington (1965)

1. The exemption of labor organizations from antitrust laws does not extend to those situations where a union conspires with non-labor organizations with the intent to diminish competition in a particular industry by embodying industry wide standard requirements in a CBA with only one set of employers.1. J. Goldberg Dissenting: We should not carve away the power to collectively

bargain be creating ways to open them up to the antitrust laws. Clayton 6 and 20 were specifically designed to avoid such a situation.

2. Amalgated Meat Cutters v. Jewel Tea Co. (1965)1. Where a contract provision is so intimately related to wages, hours and working

conditions that the union's successful attempt to obtain the provision is through bona fide arms-length bargaining in pursuit of it's own labor union policies, and not at the behest of or in combination with non-labor groups it is exempt from

the Sherman Act.3. Connell Construction v. Local 100

1. An agreement outside of a CB relationship and not restricted to a particular job site which obliges a contractor to subcontract work only to union firms may be the basis for antitrust suits.

3. Mackey v. NFL (1976)1. The commissioner tries to use the labor exemption to enforce the Rozelle rule..

1. 3-prong Test:1. 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 CBA

2. Federal labor policy is implicated sufficiently to prevail only where the agreement sought to be exempted concerns a mandatory subject of bargaining

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

2. Court assumed that Rozelle Rule wasn’t part of arm’s length bargaining, which opened it to antitrust attacks and was found to be anti-competitive as seen earlier.

4. Labor Exemption when CBA expires 1. My assumption is, because of the way that Labor law works is that once the CBA

terminates the status quo is maintained. Though, this is really a condition for bargaining, if the union however were to disband, then there would be issues. I think.

2. Powell v. NFL (1989)1. 1987 NFL strike ended; union played without a new contract; sued over free agency.

1. Judge says as long as the parties have a collective bargaining relationship, labor law governs, so no antitrust liability. This extends the Mackey prong from requiring an agreement to exist, to requiring a relationship to exist.1. Meaning I was correct earlier insofar as so long as there is a section 9a

relationship, the labor exemption applies. 2. If impasse were to end the relationship then it would be too easy to

artificially create impasse, and open the league up to antitrust litigation (or the union)1. The problem with this could be that when impasse happens, the employer

can impose his last good faith offer. Which creates a hairy situation where an employer institutes what would be a rule in violation of sherman in the collective bargaining arena without the consent of the union. Which flies in the face of the policy we are going for. (Of course when this happens there will be a strike or lock out).

3. Brown v. Pro-Football, Inc (1996)1. This case deals with the addition of developmental practice squads in the NFL. The

League offered the union to pay them $1,000 per week, Union rejects this offer and they bargain to impasse. Due to impasse, the league unilaterally imposed that offer. Does the labor exemption apply? 1. even if implemented unilaterally it is not subject to antitrust laws2. If challenged restraint regulated by governing labor law then antitrust laws do

not apply Unilaterally imposing terms in “impasse” common feature in labor law

3. J Breyer: Labor laws cannot work properly if at any pt in process can use antitrust law…

4. If Union in existence (collective bargaining relationship in existence) will be governed exclusively by labor law & antitrust law will not apply

5. When might the players ever again resort to antitrust laws?1. Sup Ct said: still possible only if restraint at issue is sufficiently distant in

time & in circumstances from the collective bargaining process that a rule permitting antitrust intervention would not significantly interfere w/ that process

4. Clarett v. NFL (2004) Again1. Clarett's argument completely neglects that labor policy exists2. For the NFL to negotiate with Clarett would be an ULP, and therefore his

employment with the NFL would be subject to a union agreement which states that he is unqualified to play in the NFL until he is 3 years removed from HS.

XI. Labor Law and Sports: Collective Bargaining and Arbitration 1. North American Soccer League v. NLRB

1. This is an appropriate bargaining unit issue, which is just mildly ridiculous to say. 2. NASLPA in its petition for recognition included all NASL players in the bargaining unit.

The NLRB found that the NSAL teams were joint employers and therefore this type of bargaining is okay (multiemployer bargaining), and ordered an election including only the American players (ie not the Canadian teams) because of the extent of NLRB jurisdiction.1. The existence of joint employment relationship depends on the control than another

employer exercises over another employer.1. NASL has significant control to effectuate labor policy

1. selection, retention, termination of players 2. individual players contracts 3. dispute resolution4. player discipline

2. The standard for determining if a bargaining unit is appropriate is that the unit must be reasonable, and in terms of judicial review there is an arbitrary and capricious standard. A unit is typically reasonable if they share a community of interests. 1. 9(a) establishes that the NLRB determines the unit 2. 9(b) provides some of the basic outlines, but it is WIDE open.

2. NFL Management Council and NFLPA (1992)1. NFLMC, instituted a reporting deadline for strikers for a wednesday to eligible for

games and payment. On a thursday the union made its unconditional request for reinstatement, only the players who returned by the wednesday deadline were fully reinstated, eligible to play and paid for games that week. 1. Even though this is similar to the inherently destructive acts taken in NLRB v. Great

Dane Trailers (where GDT made a 7/1 deadline to return to get benefits when the union made its request for reinstatement on 7/15)(inherent as opposed to comparatively slight), the court determined that it was still the burden of the defendant to prove it's legitimate business motives (in the comparatively slight cases such a motive can be defeated only by discriminatory intent, in the inherent ones, the motive can be defeated because of the nature of the act itself).

2. The NFL argued it made the rule in order to protect players from injury and keep them in game shape as well as to prevent mismatches. 1. However the court called BS because players who hold out for better contracts

and miss time are not held to similar requirement. 2. The Weds. Deadline was only applicable to striking players and not nonstrikers

who signed on Saturday before the game.3. Saftey did not preclude reinstatement in the 1982 strike. 4. Administrative burdens was a bad excuse too. 5. This was a violation of 8(a)(3) and 8(a)(1)

3. Silverman v. MLB Player Relations Comm. Inc., (1981)1. This is a refusal to furnish information case 2. The MLBPA was bargaining with the MLBPRC. The negotiations were tough, and then

other owners and the commissioner said that the salaries of players was making the situation tough and several teams could be put into bankruptcy. The MLBPA requested financial data to prove the claim , the MLBRC refused claiming financial hardship was not the reason for difficulty.1. Where a representative of the employer outside of the realm of collective bargaining

makes claims about not being able to financially accede to the demands of the union the NLRB may not require that the employer reveal it's financial statements to the union. 1. 8(a)(5) requires to bargain in good faith. Because the owners outside of the

negotiation have no power in said negotiation there statements as to the condition of the financials does not mean as much as when those who are bargaining say that financials are not the reason for their position. If the PRC said that, yeah thats the reason, they would have to present their financial documents.

4. Morio v. NASL (1980)1. This is about by-passing the bargaining representative, which is also an 8a5.2. In 1978 the NASLPA was recognized as the exclusive bargaining agent of the players in

the NASL. However, the NASL continued to negotiate individual contracts. 97% of the contracts were negotiated after the NLRB certification of the union. The NASL was making unilateral changes in the conditions of employment. 1. After a union has been certified the NLRB can prevent the enforcement of unilateral

changes made by the league, including individual contracts. 2. NLRB v. Katz: it is an 8a5 to undercut the union by entering into individual

contracts with employees. 1. The fact that NASL was appealing certification does not relieve them of their

duty to bargain in good faith. 5. Silverman v. MLB PRC (1995)

1. unilateral implementation of mandatory subjects/ 8a5 8a1 2. Free agency and salary arbitration are mandatory subjects.

1. MLB changes (elimination of salary arbitration and anti-collusion terms declaring impasse) violate the duty of good faith in bargaining.

6. In the Matter of Arbitration Between MLBPA and the 26 MLB Clubs (1986)1. In the 1984 offseason there was plenty of free agent signing. But in the 1985 offseason,

no free agent signed with a team other than their current team unless that team declared that they were not interested in retaining that player. The MLBPA filed for arbitration to greive the issue, claiming collusion in violation of Article XVIII(H) of the basic agreement (the CBA). 1. MLB argued that this was just an example of each member of the market

individually changing their feelings as to the best and most efficient way to run their teams. They claimed that they had bad experiences with FA's and would rather

develop from within.2. Sorry MLB but at the GM meetings, the commissioner told all GMs that it is dumb

to sign long term contracts, they distributed a list of all declared free agents. The general tone of the meeting was that signing free agents is bad. Which resulted in the colluding of teams not to sign players other than their own.1. HELD: The owners and MLB colluded.

7. MLBPA v. Garvey (2001)1. Judicial Response to Arbitration Process 2. As a result of the collusion of the owners in 1985, 1986 and 1987, the MLB was ordered

to create a $280 mil fund from which injured players could make a claim for. Steve Garvey, a retired baseball player, claimed that before the end of the 1985 season SD Padres owner offered him an extension through the 1989 season, but once the colluding began that contract was withdrawn.1. Of course, in order for a player to claim the injury and get money from the fund he

would have to prove that he had a contract offer that was repealed because of collusion.

2. The arbiter denied Garvey's claim, he appealed. The District court refused to vacate the arbiter's decision, but on appeal, the CoA reversed and remanded with instructions that the arbitration panel to enter an award for the amount Garvey claimed.

3. SCOTUS: Judicial review of arbitration is very limited. Courts are not authorized to review the arbiter’s decisions on the merits despite allegations that the decision rests on factual errors or misinterprets the parties' agreement. Only when the arbiter strays from interpretation and application of the agreement does he effectively dispense his own brand of justice, and renders his decision unenforceable. 1. Here the CoA, reversed on the fact that the some of the testimony may have been

false and the evidence which the arbiter found to be probably unauthentic was more than likely real. This does not fall under the narrow realm of where a court can change the decision of the arbiter.

2. The courts have no business weighing the merits of the grievance. The appropriate thing to do is to remand the issue, not settle it.

3. Of course he must be acting within the scope of his authority.8. Union as the Respondent in arbitration

1. Miami Dolphins Ltd. v. Williams (2005)1. Ricky Williams gets bonuses in his contracts. He retired midcontract. The Dolphins,

pursuant to his contract wanted the bonuses back. The arbiter found that his contract had the clause and there was no reason not to order the payment. The Dolphins filed to confirm the order, while Williams countered with a motion to vacate. 1. Federal Arbitration Act

1. Vacate when:1. award was procurred by corruption or fraud or undue means 2. evident partiality or corruption3. arbiter misconduct in refusing to postpone the hearing where there was

good cause to postpone or in refusing to hear pertinent and material evidence , or prejudicial misbehavior.

4. Arbiter exceeded his power so far that no mutual final and definite award was made.

2. Standard from Garvey used too3. CoA 11th Circ

1. Arbitrary and capricious 2. enforcement is contrary to public policy 3. evinces a manifest diregard for the law

1. like if you had to enforce a union security agreement in a Right to work state.

4. In the present case, the arbiter may have misinterpreted the law a little, which is not grounds for vacation.

5. Though the state of FL does not enforce liquidated damages clauses so much this was not against the policy of the state because the clause can be construed as lawful and was within the arbiter's scope to interpret as such.