January 29, 2010

Supreme Court Eyes Threading American Needle At Oral Argument

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 »

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Categories: Antitrust Litigation

    January 28, 2010

    Obama DOJ Makes Ticketmaster Work For Its Ticket To Ride With Live Nation

    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 »

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    Categories: Antitrust Enforcement

      January 27, 2010

      Is The Plural Of Email “Economic Evidence”?

      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.

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      Categories: Antitrust Litigation

        January 20, 2010

        Hearing Date Set for Comcast-NBC Universal Deal

        The Senate Judiciary’s Antitrust Subcommittee has announced that it will hold a hearing on the Comcast-NBC Universal deal on February 4.   The notice of hearing is available here.
        For additional information on this pending hearing, please see our earlier post here

         

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        Categories: Legislative Updates

          January 16, 2010

          House Judiciary Committee to Consider Antitrust Status of National Football League

          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.

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          Categories: Legislative Updates

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