If the recent oral argument in American Needle, Inc. v. National Football League is any guide, the U.S. Supreme Court might just thread the needle and decide that case on a narrower, more middle-ground, basis than the Seventh Circuit decision, which raised the specter of freeing all professional sports leagues from antitrust scrutiny.

The Supreme Court heard oral argument on January 13, 2010, in the much anticipated case, which may well result in a watershed opinion in antitrust law as applied to sports leagues and joint ventures generally.

American Needle, the plaintiff-petitioner and a manufacturer of NFL-licensed headwear, claims that the NFL acted anticompetitively by granting Reebok the exclusive license for certain NFL paraphernalia.  The trial court granted summary judgment to the NFL, and the U.S. Court of Appeals for the Seventh Circuit affirmed.  Both lower courts held that, in licensing individual team and NFL trademarks, the NFL is a single entity under antitrust law – as opposed to multiple, collectively acting teams – and thus not subject to the anticonspiracy prohibition of § 1 of the Sherman Act.  For more detail about the case, click here for this blog’s prior discussion.

The Supreme Court’s treatment of the NFL’s claim to be a single entity will determine the extent to which the NFL’s actions are immunized from § 1 of the Sherman Act.  (While the NFL would remain subject to the antimonopoly provisions of § 2, § 1 claims are typically easier to prove.)

At one extreme, the Court could hold that, because everything the NFL does promotes NFL professional football, the NFL is really an integrated single entity immune from the anticonspiracy prohibition.  In this scenario, the NFL could fix prices for everything:  players’ and coaches’ salaries; tickets; hats; jerseys; T-shirts; etc.  At the other extreme, the Court could hold that, because the NFL is comprised of multiple ball clubs, everything it does is subject to the anticonspiracy prohibition.  For example—in a hypothetical posed by Justice Kennedy, the likely swing vote—the antitrust laws could be used to challenge game rules providing greater protection to quarterbacks because the rules would disfavor teams with better running games.

The justices’ questioning of the lawyers indicated that the Court will likely reject both extremes. click here for more »

Although Ticketmaster’s got a ticket to ride with its merger target, Live Nation, the ticket vendor is finding that the price of a ticket for a merger has gone up in the Obama Administration.

The Antitrust Division of the U.S. Department of Justice forced Ticketmaster this week to take actions to achieve antitrust clearance of its merger with Live Nation.  Among other things, Ticketmaster was compelled to license its intellectual property to a competitor for five years as a condition for deal approval.

Ticketmaster, the largest vendor in primary ticketing, sought to merge with Live Nation, a small competitor in primary ticket vending and the largest concert promoter in the U.S.  The Division determined that the merger would have substantially lessened competition in primary ticket sales by resulting in higher ticket prices for events.

To remedy this likely competitive harm, the Division caused Ticketmaster to divest one of its subsidiaries and to provide that subsidiary (as an independent competitor) with the ability to utilize Ticketmaster’s “host” primary ticketing electronic platform.  As a result, this new competitor will be able to offer consumers the same sophisticated e-ticket technology offered by the dominant, merged entity on a substantial scale. click here for more »

The aphorism that the “plural of anecdote is data” is being put to the test in federal courts as judges grapple with the question of whether emails and other anecdotal evidence can form the basis of reliable expert economic opinion.

Recent federal court decisions concerning the type of evidence that may be relied upon by economic experts in formulating opinions indicate that the plural of email might just be “economic evidence.”

For example, in denying a motion to exclude plaintiff’s economist expert in Discover Financial Services v. Visa USA, Inc., 582 F. Supp.2d 501, 507 (SDNY 2008), United States District Judge Barbara Jones held that “qualitative” evidence, i.e., evidence that is not numerical or mathematical in nature, can be considered by an expert in rendering his or her opinion on market definition and power.  Anecdotal statements made in corporate documents – including e-mail – or deposition testimony are quintessential forms of qualitative evidence.

According to recent cases that followed Discover Financial, such evidence can support expert opinions as long as those opinions will “assist the trier of fact” under Fed. R. Evid. 702.  The best way to test whether the inferences that an expert draws from qualitative evidence are appropriate, according to these decisions, is through cross-examination at trial. 

Accordingly, parties to antitrust litigation should expect that party and non-party statements will be deemed evidence that can form the basis of reliable economic opinion.  Parties should not expect that an economic expert’s opinion must rely solely on quantitative or mathematical analysis.

The chairman of the House Judiciary Committee, Rep. John Conyers (D.-Mich.), has announced that on January 20, the Committee’s Subcommittee on Courts and Competition Policy will hold a hearing on the Supreme Court’s pending decision in American Needle, Inc. v. National Football League. 

The notice of the hearing can be found here:

http://judiciary.house.gov/hearings/hear_100120.html

In the case below, the Seventh Circuit held that the NFL was a single entity for antitrust purposes – not a group of 32 separate companies that could conspire together. 

            That decision can be found here: 

http://www.ca7.uscourts.gov/tmp/T40LC5H9.pdf

            The Court granted certiorari last June and heard arguments on January 13.  The Subcommittee has not as yet released a witness list for the hearing.

Antitrust defendants got a reminder yesterday that while the United States Supreme Court may have stiffened pleading requirements in recent years, its Twombly decision is not always a silver bullet.

Applying Twombly (which often means the dismissal of an antitrust case), the Court of Appeals for the Second Circuit yesterday restored a complaint alleging price fixing of internet music by major record labels – including EMI, Sony BMG, Universal, Warner, and others – controlling over 80% of digital music in the U.S.

Judge Preska had dismissed the complaint under Twombly.  The appeals court reversed Judge Preska, holding that “[t]he present complaint succeeds where Twombly’s failed because the complaint alleges specific facts sufficient to plausibly suggest that the parallel conduct alleged was the result of an agreement among the defendants.” click here for more »

Italian consumer rights group Codacons has filed class action lawsuits against Italy’s two largest banks – Intesa Sanpaolo SpA (ISP.MI) and UniCredit SpA (UCG.MI) – for banking fees paid by more than 25 million customers.

The cases are the first to be brought under a new law permitting class action suits in Italian courts, and could force the two banks to pay up to 6.25 billion Euros (approximately nine billion dollars) to their customers.

In December 2009, an antitrust regulator ruled that the Italian banks charged higher fees on loans and credit lines to recover part of the overdraft fees canceled by the government in July.  In some cases the bank overdraft fees were 15 times higher than under the old system which was abolished with the aim of lowering charges.

The 25 million customers of Intesa and UniCredit who paid the banking fees can file a request for reimbursement of 250 Euros each, resulting in an overall total of 6.25 billion Euros.

The new law, effective as of January 1, 2010, allows collective lawsuits against any unfair commercial practice from August 16, 2009 onward.  However, unlike in the United States, the Italian law only allows for compensation to victims, not punitive damages against companies. click here for more »

It may be a Hail Mary pass, but New Orleans Saints quarterback Drew Brees has thrown a long bomb to the Supreme Court with a Washington Post op-ed that warns the Supremes that their decision in the upcoming case of American Needle, Inc. v. National Football League, could end up sacking both professional athletes and antitrust enforcement.

At issue in the American Needle case is the extent to which the NFL – and by implication all professional sports leagues – should be considered a single entity immune from antirust claims of conspiracy.  The Supreme Court is slated to hear oral arguments in the case on Wednesday.

In his op-ed, Brees expresses concern that the Seventh Circuit’s decision in American Needle – if affirmed or extended – could enable football teams to agree to abolish free agency and otherwise eliminate all competition from their multibillion dollar business without fear of antitrust scrutiny.

In a previous post, this blog examined the far-reaching implications the American Needle case could have for antitrust regulation of all professional sports leagues in the U.S.

News reports indicate that the Senate Judiciary’s Antitrust Subcommittee will vet the Comcast-NBC Universal joint venture in late January or early February.  The reports indicate that Comcast Chairman Brian Roberts and NBC Universal President Jeff Zucker will testify at the hearing.  

Comcast and NBC Universal announced the $30 billion deal on December 3, 2009.  Because it combines substantial assets in television programming and distribution in one company, the deal will face considerable congressional and regulatory scrutiny.

In addition to the expected Senate hearing, other congressional committees will likely hold similar hearings.  Under the Hart-Scott-Rodino Act, the Department of Justice will review the deal for competitive concerns.  The Federal Communications Commission will consider the communications policy aspects.

Update 01/06/10 – For more information, see today’s Wall Street Journal article on this topic here.