Eighth Circuit Revives NFL Players' Pay Cap Lawsuit

The U.S. Court of Appeals for the Eighth Circuit has given the National Football League Players Association (NFLPA) an opening to revive its $3 billion lawsuit accusing league owners of colluding to place a secret salary cap on the 2010 season. White v. National Football League, 13-1251. But the NFLPA and its lawyers still face a long road to recovering any damages.

Back in 2012, U.S. District Judge David Doty in Minneapolis ruled that the NFLPA was bound by a prior stipulation that it wouldn't press collusion claims against league owners over the alleged pay cap. The Eighth Circuit partially reversed that decision, ruling that the NFLPA should be given a chance to argue that the stipulation was procured through fraud and is therefore invalid.

In 1993, the NFL settled an antitrust class action lawsuit brought by former players. According to the judge who signed off on that settlement, it included “strict anti-collusion provisions with an expedited and comprehensive enforcement mechanism to deter and punish any collusion” between team owners. Flash forward to the 2010 season, which was the first in almost 20 years not to be governed by a collective bargaining agreement. That meant the traditional cap on how much teams can spend on players wasn't in place.

In a January 2011 court filing, the NFLPA alleged that the owners had colluded to set an unofficial salary cap on the 2010 season, in violation of the provisions included in the 1993 class action settlement. Just a few months later, however, the players stipulated to dismissal of their collusion claims as part of a new collective bargaining agreement.

But in the months that followed, NFL owners made public statements that the NFLPA interpreted as admissions that there was indeed a secret salary cap on the 2010 season. In a May 2012 complaint, the NFLPA sought to revive its collusion claims, which the union estimated could be worth more than $3 billion in damages. The union acknowledged that it stipulated to the dismissal of those claims, but it argued the stipulation was invalid because the league owners had duped them.

District Judge Doty disagreed and tossed the collusion claims in December 2012, ruling that the prior stipulation was valid. The Eighth Circuit reversed that holding but made a point of saying that the NFL's lawyers at Covington & Burling and Faegre Baker Daniels could get the suit tossed yet again. “The association bears a heavy burden in attempting to convince the district court that the dismissal was fraudulently procured,” the appeals court wrote. “We hold only that the association should be given the opportunity to meet this burden.”

Jan Wolfe is a Staff Reporter for The American Lawyer, an ALM sibling publication of Entertainment Law & Finance.

The U.S. Court of Appeals for the Eighth Circuit has given the National Football League Players Association (NFLPA) an opening to revive its $3 billion lawsuit accusing league owners of colluding to place a secret salary cap on the 2010 season. White v. National Football League, 13-1251. But the NFLPA and its lawyers still face a long road to recovering any damages.

Back in 2012, U.S. District Judge David Doty in Minneapolis ruled that the NFLPA was bound by a prior stipulation that it wouldn't press collusion claims against league owners over the alleged pay cap. The Eighth Circuit partially reversed that decision, ruling that the NFLPA should be given a chance to argue that the stipulation was procured through fraud and is therefore invalid.

In 1993, the NFL settled an antitrust class action lawsuit brought by former players. According to the judge who signed off on that settlement, it included “strict anti-collusion provisions with an expedited and comprehensive enforcement mechanism to deter and punish any collusion” between team owners. Flash forward to the 2010 season, which was the first in almost 20 years not to be governed by a collective bargaining agreement. That meant the traditional cap on how much teams can spend on players wasn't in place.

In a January 2011 court filing, the NFLPA alleged that the owners had colluded to set an unofficial salary cap on the 2010 season, in violation of the provisions included in the 1993 class action settlement. Just a few months later, however, the players stipulated to dismissal of their collusion claims as part of a new collective bargaining agreement.

But in the months that followed, NFL owners made public statements that the NFLPA interpreted as admissions that there was indeed a secret salary cap on the 2010 season. In a May 2012 complaint, the NFLPA sought to revive its collusion claims, which the union estimated could be worth more than $3 billion in damages. The union acknowledged that it stipulated to the dismissal of those claims, but it argued the stipulation was invalid because the league owners had duped them.

District Judge Doty disagreed and tossed the collusion claims in December 2012, ruling that the prior stipulation was valid. The Eighth Circuit reversed that holding but made a point of saying that the NFL's lawyers at Covington & Burling and Faegre Baker Daniels could get the suit tossed yet again. “The association bears a heavy burden in attempting to convince the district court that the dismissal was fraudulently procured,” the appeals court wrote. “We hold only that the association should be given the opportunity to meet this burden.”

Jan Wolfe is a Staff Reporter for The American Lawyer, an ALM sibling publication of Entertainment Law & Finance.