In what is becoming a common trend in Courtroom Football thus far, Judge Susan Nelson of the District Court of Minnesota (the Court) has supplied more momentum for the Players. Late Wednesday evening on the eve of the 2011 NFL Draft, Judge Susan Nelson entered an order denying the NFL's motion to stay the injunction pending appeal to the Eighth Circuit Court of Appeals, meaning as per her Court order, the lockout is lifted without delay, or so the Players think (the Owners may think differently).
Here are some things you need to know about her opinion.
The NFL lacks a “strong showing” to succeed on the merits
According to Judge Nelson, the NFL did not meet the high burden that is required for the issuance of a stay (delay). Stays are typically the exception, not the norm, since they disrupt the normal judicial process. For the following reasons, Judge Nelson was not persuaded by the NFL's arguments.
The NFL cannot demonstrate “irreversible injury”
The NFL first asserted that without a stay, its labor law rights would be adversely affected, denying them the ability to lock out. Needless to say, Judge Nelson did not buy this argument.
The NFL also contended that without a stay, any rules imposed will subsequently be challenged as antitrust restraints of trade. However, Judge Nelson made clear that the NFL is free to choose its own course of conduct. She emphasizes that, “nothing in this Court's Order obligates the NFL to even enter into any contract with the Players.”
Further, the Court points out that the NFL itself has acknowledged that the lockout imposes financial harm upon themselves – with their own estimate that it would lose $1 billion before one game is cancelled.
Finally, Judge Nelson was critical of certain League conduct: (1) announcing the NFL 2011 regular season schedule, (2) applying Franchise tags and tenders, and (3) conducting the 2011 NFL Draft. To Judge Nelson, these actions indicate the NFL is fully capable of resuming operations.
ICONAnother courtroom loss for the NFL.
Ongoing harm to Players
Judge Nelson was quite adamant — both in Monday's court opinion and Wednesday night's denial — that the Players are suffering “ongoing” irreparable harm, which is not monetarily compensable. On this factor alone, the Court ruled that the balance strongly tips in favor of the Players.
A case of misunderstanding
From Judge Nelson's perspective, the NFL mischaracterized what the Court decided, or more importantly, what the Court did not decide. Judge Nelson explained that Monday's order only concerned the lockout, and nothing more. Contrary to the NFL's view, the Court did not evaluate the merits of the underlying antitrust claims, nor did it conclude whether the nonstatutory labor exemption applies to player restraints.
On to the Eighth Circuit
After suffering another legal defeat, the NFL will appeal Judge Nelson's stay denial to the Eighth Circuit Court of Appeals in St. Louis. Although the time frame is unknown, the matter is expected to be heard within the next few days. In the event the Eighth Circuit disagrees with Judge Nelson, the lockout will be restored. However, if the appellate court agrees with Judge Nelson, the lockout will officially be over.
And the Eighth Circuit will host plenty of Courtroom Football in the near future as the NFL has also appealed Judge Nelson's order granting a preliminary injunction, blocking the lockout on Monday. That matter is anticipated to be heard by the end of May.
Open for business?
Amidst this chaos is the question of when the new League Year will begin. While the NFL is likely to open its doors — or face contempt of court — it is unclear when the League will institute work rules. My sense is that the NFL will not open the 2011 League Year — meaning no signings, trades, payment of roster bonuses, etc. — while the Eighth Circuit deliberates as to whether or not to keep the lockout intact during the appeals process. Either way, I think it is highly unlikely we will see anything in the Draft tonight than what we have expected to see — drafting and trades of picks — not players — only.
Curiously, Judge Nelson emphasized that her order does not mandate the NFL to pursue any specific course of conduct (other than end the Lockout). She specifically states that, “nothing in this Court's Order obligates the NFL to even enter into any contract with the Players.” However, it is not totally clear how the NFL can proceed.
All 32 owners cannot agree amongst themselves to refrain from signing players — this would be a clear violation of the antitrust laws. However, each individual owner, acting on his own initiative, could decide to not sign any players. These individual actions are not scrutinized under the antitrust laws.
Now, how one determines the difference, is the real question. The underlying conduct is the same (i.e., no players are signed to contracts). And all it takes is for one rogue owner to buck the trend.
This is truly a unique and unprecedented time in NFL history
The NFL has now in recent weeks taken emphatic losses in the television “lockout insurance” cases and two cases regarding the legality of their lockout. They are putting their fortunes in the hands of the Eighth Circuit now to try to recoup some losses.
Keep in mind, if and when the NFL does open for business, whether this week, next or in a while, it will be under temporary rules that will not last. It will likely be under the 2010 rules that require six, rather than four years for free agency. And then, when we finally do reach a new CBA — whenever that may be — the free agency requirement will likely go back to four years. This, of course, is not ideal.
As to potential damages for lack of transactions now and even under a temporary system, that sounds good but practically speaking, it will all come out in the new settlement/CBA. That is what all of this legal wrangling and courtroom football is about.
Well at least there's a Draft…
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