Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

NFL Antitrust Immunity Bid Tackled By Supreme Court

By Tony Mauro
May 27, 2010

The U.S. Supreme Court late last month dashed the hopes of the National Football League for baseball-style immunity from antitrust laws, with justices ruling unanimously against the league in a dispute over NFL-licensed apparel.

The NFL defended its exclusive contract with Reebok for souvenir headwear for all the league's teams by arguing that it should be viewed as a single entity for certain purposes.

But Justice John Paul Stevens, writing for the Court, said the NFL's contract amounted to “concerted action” by separate entities that warranted scrutiny under Section 1 of the Sherman antitrust law. The ruling came in the case American Needle Inc. v. National Football League, 560 U.S. __ (2010) (available online at www.supremecourt.gov/opinions/09pdf/08-661.pdf).

“To a firm making hats, the Saints and the Colts are two potentially competing suppliers of valuable trademarks,” Stevens wrote for the majority. Rather than acting as a single entity, he added: “The teams compete with one another, not only on the playing field, but to attract fans, for gate receipts and for contracts with managerial and playing personnel.”

The ruling may have been the final antitrust decision written by retiring justice Stevens, who began his career nearly 60 years ago as an antitrust lawyer in Chicago.

Did NFL Fumble?

The outcome may also represent something of a strategic blunder by the NFL, which had won the case below. When its adversary American Needle appealed to the Supreme Court, the NFL took the unusual step of also urging the High Court to grant review in the case to resolve conflicting lower court decisions.

“The NFL may be kicking itself for joining in asking for review,” says Bryan Cave antitrust expert James Smith. “They snatched defeat from the jaws of victory.”

Covington & Burling partner Gregg Levy, who argued the case for the NFL, could not be reached for comment. But Jones Day partner Meir Feder, part of the American Needle legal team, won't gloat about the NFL's strategic move.

“In fairness to them, they are a national network of teams,” Feder says. “And it's not helpful to have one circuit saying one thing and other circuits saying something else” on the antitrust issue. So the NFL may have decided to “give it their best shot” in the interest of uniformity, Feder says.

Cooperation May Still Be Allowed

American Needle, which used to make hats for NFL teams, was shut out of the business in 2000 when NFL Properties, a corporate entity created by the NFL, negotiated an exclusive contract with Reebok to make sports paraphernalia for all 32 teams in the league. American Needle sued, but the district court and the U.S. Circuit Court of Appeals for the Seventh Circuit ruled that, for the purposes of promoting football, the teams can act as a “single entity” without running afoul of the Sherman Act.

Stevens' ruling left open the possibility that, at trial, under a rule-of-reason standard, the NFL could justify some kinds of cooperation. “Football teams that need to cooperate are not trapped by antitrust law,” Stevens wrote.

Salil Mehra, a Temple University James E. Beasley School of Law professor and former Justice Department antitrust lawyer, says the ruling was the “first private plaintiff victory since 1992 in an antitrust case in front of the Supreme Court.”

Mehra agrees that under the decision, the dispute “may still be winnable for the NFL. While they don't get an immunity, they get a chance to argue that anti-competitive benefits of joint licensing outweigh anti-competitive harms.”

Matthew Cantor, an antitrust litigator at Constantine Cannon in New York, says the decision “goes beyond the NFL” and will affect other kinds of joint ventures by groups seeking to be viewed as single entities. “This is a broad affirmation of the applicability of Section 1″ of the Sherman Act, he says, a part of the law that is easier for plaintiffs to prevail in than Section 2.


Tony Mauro covers the U.S. Supreme Court for ALM Media. He can be contacted at [email protected].

The U.S. Supreme Court late last month dashed the hopes of the National Football League for baseball-style immunity from antitrust laws, with justices ruling unanimously against the league in a dispute over NFL-licensed apparel.

The NFL defended its exclusive contract with Reebok for souvenir headwear for all the league's teams by arguing that it should be viewed as a single entity for certain purposes.

But Justice John Paul Stevens, writing for the Court, said the NFL's contract amounted to “concerted action” by separate entities that warranted scrutiny under Section 1 of the Sherman antitrust law. The ruling came in the case American Needle Inc. v. National Football League , 560 U.S. __ (2010) (available online at www.supremecourt.gov/opinions/09pdf/08-661.pdf ).

“To a firm making hats, the Saints and the Colts are two potentially competing suppliers of valuable trademarks,” Stevens wrote for the majority. Rather than acting as a single entity, he added: “The teams compete with one another, not only on the playing field, but to attract fans, for gate receipts and for contracts with managerial and playing personnel.”

The ruling may have been the final antitrust decision written by retiring justice Stevens, who began his career nearly 60 years ago as an antitrust lawyer in Chicago.

Did NFL Fumble?

The outcome may also represent something of a strategic blunder by the NFL, which had won the case below. When its adversary American Needle appealed to the Supreme Court, the NFL took the unusual step of also urging the High Court to grant review in the case to resolve conflicting lower court decisions.

“The NFL may be kicking itself for joining in asking for review,” says Bryan Cave antitrust expert James Smith. “They snatched defeat from the jaws of victory.”

Covington & Burling partner Gregg Levy, who argued the case for the NFL, could not be reached for comment. But Jones Day partner Meir Feder, part of the American Needle legal team, won't gloat about the NFL's strategic move.

“In fairness to them, they are a national network of teams,” Feder says. “And it's not helpful to have one circuit saying one thing and other circuits saying something else” on the antitrust issue. So the NFL may have decided to “give it their best shot” in the interest of uniformity, Feder says.

Cooperation May Still Be Allowed

American Needle, which used to make hats for NFL teams, was shut out of the business in 2000 when NFL Properties, a corporate entity created by the NFL, negotiated an exclusive contract with Reebok to make sports paraphernalia for all 32 teams in the league. American Needle sued, but the district court and the U.S. Circuit Court of Appeals for the Seventh Circuit ruled that, for the purposes of promoting football, the teams can act as a “single entity” without running afoul of the Sherman Act.

Stevens' ruling left open the possibility that, at trial, under a rule-of-reason standard, the NFL could justify some kinds of cooperation. “Football teams that need to cooperate are not trapped by antitrust law,” Stevens wrote.

Salil Mehra, a Temple University James E. Beasley School of Law professor and former Justice Department antitrust lawyer, says the ruling was the “first private plaintiff victory since 1992 in an antitrust case in front of the Supreme Court.”

Mehra agrees that under the decision, the dispute “may still be winnable for the NFL. While they don't get an immunity, they get a chance to argue that anti-competitive benefits of joint licensing outweigh anti-competitive harms.”

Matthew Cantor, an antitrust litigator at Constantine Cannon in New York, says the decision “goes beyond the NFL” and will affect other kinds of joint ventures by groups seeking to be viewed as single entities. “This is a broad affirmation of the applicability of Section 1″ of the Sherman Act, he says, a part of the law that is easier for plaintiffs to prevail in than Section 2.


Tony Mauro covers the U.S. Supreme Court for ALM Media. He can be contacted at [email protected].

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Major Differences In UK, U.S. Copyright Laws Image

This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

The Article 8 Opt In Image

The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.

Removing Restrictive Covenants In New York Image

In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?

Fresh Filings Image

Notable recent court filings in entertainment law.