The NFL put its best legal foot forward Wednesday in front of the United States Supreme Court in the American Needle v. NFL case. After its hour in front of the tribunal, the league goes back to preparing for the divisional round of the playoffs and the Supreme Court goes back to hearing cases about what most would consider more important issues than whether a football league that grosses close to $8 billion in revenues is a single entity entitled to antitrust protection.
As we and so many others have written, the case stems from the NFL granting Reebok an exclusive license to outfit their players and coaches in 2002. American Needle, one of the apparel companies excluded as a result of the Reebok deal, argued that the NFL could not collectively do this and took its case all the way up the ladder to the Supreme Court. This is where the appeal got interesting, as the NFL joined American Needle in asking the court to take the case.
The NFL’s day in court is equivalent to a free play. To use a football analogy, with American Needle having already been called offside by the lower courts, the NFL had a chance to go for broke without losing ground on the play. At worst, it believed the outcome could be a five-yard penalty. At best, the NFL could have a game-changing play, a declaratory judgment from the Supreme Court that it’s entitled to an antitrust exemption.
From reports on the hearing, the justices did not seem overly knowledgeable or fawning over the most successful sports league in the country. This, in itself, is noteworthy, as history has shown judges to be fans as well. In the seminal case of Flood v. Kuhn, in which Curt Flood challenged the baseball antitrust exemption, Justice Harry Blackmun, in ruling for the majority, waxed poetic about the romance of baseball, invoking the names of dozens of famous players and reciting phrases from “Casey at the Bat” and “Tinker to Evers to Chance.” In reading the opinion in that case, once those musings appear in the first couple pages, it became clear that Blackmon was going to decide for Major League Baseball.
Although there were certainly football fans on the panel yesterday, it was not evident from the questioning. I remember hosting Chief Justice John Roberts at Lambeau Field for the frigid NFC Championship game against the Giants two years ago this week. Roberts was clearly a football fan (Bears) and enjoyed the game (he even sat outside), but it doesn’t appear that he’ll be swayed by his fandom.
The justice who appeared most engaged was the newest member of the court, Associate Justice Sonia Sotomayor. Interestingly, she has a bit of a history with the NFL, one that the league savors. Sotomayor wrote the Clarett v. NFL opinion in 2004 that rejected a lower court finding in favor Maurice Clarett and essentially approved the NFL’s age restriction rule in connection with the NFL draft, holding that the NFL’s eligibility rules were protected from antitrust attack by the non-statutory labor exemption. Imagine the chaos and extra expense had the court ruled for Clarett in terms of scouting players at all levels, even high school.
Although she protected the NFL through the non-statutory labor exemption, Sotomayor’s questioning Wednesday appeared not to support a broad antitrust exemption, even cutting off NFL lawyer Gregg Levy to say “So to the answer to my question is, there is — you are seeking through this ruling what you haven't gotten from Congress: An absolute bar to the antitrust claim.” Levy denied that, but he and the NFL had to feel that it was a shot worth taking.
The NFL does act collectively in negotiating deals like the Reebok deal, which has been sanctioned through the lower court rulings, and its substantial broadcast deals (sanctioned by the Sports Broadcasting Act of 1961). It can also negotiate collectively with the NFL Players Association, which represents the 1,800 players in the league.
The goal yesterday, it appears, was to take that collective action as far as it can. Will it result in an antitrust exemption for the league? Unlikely. Will it result in some limited forms of antitrust protection, essentially what the league has now? Likely. It’s the large gray area in between where this case will turn.
The NFL took its free play, with American Needle having been called offside after the snap. Whether it completes the pass or just takes the penalty will play out when the decision comes in May or June. For the sake of American Needle and all unions that submitted supporting briefs, the hope is that the opinion doesn’t include Hall of Fame players or quote Vince Lombardi.
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