This Sunday marks Michael Vick’s official return to the National Football League—an event that has been widely criticized by People for the Ethical Treatment of Animals (“PETA”), as well as some sports writers and doggie bloggers.

What those who criticize NFL Commissioner Roger Goodell for reinstating Vick fail to understand, however, is that the NFL may have ultimately lacked any real choice. Had the NFL not reinstated Vick, Vick could have potentially filed an antitrust lawsuit against the 32 NFL clubs for concertedly refusing to deal with him. Even though such a lawsuit would have likely failed in the Second and Seventh Circuits (due to the holdings respectively in the Clarett and American Needle cases), a lawsuit against the NFL clubs would have likely gotten to a jury in the Third, Sixth, Eighth and D.C. Circuits—all places where professional athletes have previously won large antitrust settlements.

As a quick background in antitrust law, Section 1 of the Sherman Act, in pertinent part, states that “[e]very contract, combination … or conspiracy in the restraint of trade or commerce … is declared to be illegal.” Although most Section 1 claims involve restraints of trade related to product markets, the Sherman Act likewise prohibits restraints in labor markets, as long as these restraints occur outside of the proper workings of a collective bargaining agreement (“non-statutory labor exemption”).

Courts in general determine whether a particular restraint violates Section 1 of the Sherman Act in three steps. First, courts will determine whether a particular restraint emerges from a “contract, combination or … conspiracy” among two or more parties. Next, they will determine whether the restraint yields a net anticompetitive effect to consumers. Finally, they will assess whether any antitrust exemption would negate the finding of liability.

After the jump, how might a court weigh these factors?

For those who have been following the Supreme Court case American Needle v. NFL (previously blogged about in more detail here, here, and here), this Friday clothing manufacturer American Needle Inc. will file its opening brief, arguing that the Seventh Circuit Court of Appeals was wrong to define the NFL as a single-entity under Section 1 of the Sherman Act.

As many of you know, I have long agreed with American Needle’s view that the NFL should be treated as a collection of 32 separate clubs, and not as a single entity. To me, this issue was best resolved by the Second Circuit back in the 1982 case North American Soccer League v. Nat’l Football League, in which that court held “the sound and more just procedure is to judge the legality of [sports league] restraints according to well-recognized standards of our antitrust laws rather than permit their exemption.”

Currently, the Second Circuit’s view remains in the overwhelming majority, as seven previous courts have upheld this view and rejected the NFL clubs’ single-entity argument. The Seventh Circuit meanwhile remains alone in its iconoclastic position that single-entity status should be determined one league at a time, one function at a time.

American Needle’s counsel on this matter in the law firm Jones Day. The National Football League meanwhile is represented by Covington & Burling LLC—a firm where former NFL commissioner Paul Tagliabue serves as Senior Of Counsel.
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Marc Edelman is a Professor at Barry Law School in Orlando, FL. He previously was a Visiting Professor at Rutgers School of Law-Camden. His bio is available here, and his publications, here.

Yesterday morning, the Supreme Court granted certiorari in the case American Needle v. National Football League (pdf, p.3) for purposes of determining whether the NFL clubs’ collective licensing of individual club trademarks is exempt from antitrust scrutiny under the single entity defense. The Supreme Court’s decision to hear this case was likely influenced by the fact that it marks one of just a few times that both a plaintiff and defendant have requested the Court’s review.

Earlier this month, the United States Department of Justice and the Federal Trade Commission had filed an amicus brief recommending that the Supreme Court deny certiorari. The United States had argued the Seventh Circuit’s holding in American Needle did not conflict with existing case law—a view with which most sports-antitrust scholars disagree.

For those who have not been following the American Needle case, the original plaintiff, American Needle Inc., had for more than twenty years maintained a non-exclusive license to design and manufacture headgear bearing the NFL clubs’ names and logos. Then, nine years ago, the NFL clubs decided to offer an exclusive license to American Needle’s main rival, Reebok.

Upon being foreclosed from the ability to sell NFL headgear, American Needle sued the NFL clubs in the Northern District of Illinois, contending that the new NFL licensing arrangement violated Section 1 of the Sherman Act by illegally restraining trade in the market for purchasing rights to NFL logos. The NFL clubs, in turn, responded by not only alleging that their licensing arrangement was pro-competitive under antitrust law’s Rule of Reason, but also by contending that the NFL clubs combined to form a single-entity that was entirely exempt from antitrust scrutiny. Both the district court and the Seventh Circuit Court of Appeals granted summary judgment to the NFL clubs based on the single-entity theory.

But can all 32 NFL teams act as one? Analysis after the jump.

Back in February, the U.S. Supreme Court asked the acting solicitor general to file an amicus brief in the case American Needle Inc. v. National Football League — a move that seemed to indicate that the Supreme Court would soon hear oral arguments. Yesterday, however, U.S. Solicitor General Elena Kagan did her best Jeff Feagles impersonation by filing a 22-page amicus brief (pdf) that ultimately attempted to punt this case off the Supreme Court’s docket. The brief, which was co-authored by the Federal Trade Commission, concluded that “[t]he petition for a writ of certiorari should be denied.”

For those who have not been following the American Needle case, the original plaintiff, American Needle Inc., had for more than twenty years maintained a non-exclusive license to design and manufacture headgear bearing the NFL clubs’ names and logos. Then, nine years ago, the NFL clubs decided to offer an exclusive license to American Needle’s main rival, Reebok. American Needle thereafter sued the NFL clubs in the Northern District of Illinois, contending that the new NFL licensing arrangement violated Section 1 of the Sherman Act by illegally restraining trade in the market for purchasing rights to NFL logos. The NFL clubs, in turn, responded by not only alleging that their licensing arrangement was pro-competitive under antitrust laws, but also by contending that the NFL clubs combined to form a single-entity that was entirely exempt from antitrust scrutiny.

Let’s take a look at the NFL’s “defensive line” after the jump.

While President Obama and a bipartisan Congress spent most of last weekend trying to recoup $165 million in taxpayer money that insurance giant AIG paid to its upper-level employees, the Miami-Dade County Commissioners were finalizing a plan to spend $359 million in taxpayer money to build a new baseball stadium for the Florida Marlins “bailout”-demanding owner Jeffrey Loria.

The Marlins new stadium, anticipated to open in 2012, will be neither the first baseball-oriented stadium built with public dollars (that distinction belongs to Milwaukee County Municipal Stadium), nor the most expensive subsidized baseball stadium (that distinction belongs to the Washington Nationals’ new $611 million facility). Yet, this new stadium may ultimately come to symbolize all that is wrong with the relationship between Major League Baseball and the American city.

From a taxpayer perspective, the Marlins new stadium deal epitomizes fiscal irresponsibility. First, the specific terms of the Marlins stadium agreement skew hugely in the Marlins’ favor (more so than many other recent stadium deals). Under the agreement, the local government will be responsible for covering approximately three quarters of stadium building costs, while the Marlins will get to keep all stadium revenues — even those revenues from events completely unrelated to baseball, and even those revenues derived from selling stadium naming rights.

And we haven’t even gotten to the worst part. More on that after the jump.

Last week, the U.S. Supreme Court asked the acting solicitor general to file an amicus brief in the case American Needle Inc. v. National Football League. This move seems to indicate the Court will soon grant certiorari for purposes of clarifying the NFL’s antitrust status.

The underlying facts in the American Needle case are straightforward. The plaintiff, American Needle, had for more than twenty years held a non-exclusive license to design and manufacture headgear bearing the NFL clubs’ names and logos. Then, nine years ago, the NFL clubs decided to offer an exclusive license to American Needle’s main rival, Reebok.

American Needle thereafter sued the NFL clubs in the Northern District of Illinois, contending that the new NFL licensing arrangement violated Section 1 of the Sherman Act by illegally restraining trade in the market for purchasing rights to NFL logos. The NFL clubs, in turn, responded by not only alleging that their licensing arrangement was pro-competitive, but also by raising as a defense the single entity exemption from antitrust law. (For those less familiar with antitrust law, Section 1 of the Sherman Act states that any “contract, combination…or conspiracy in the restraint of trade or commerce…is declared to be illegal.” The single entity exemption, meanwhile, states that where the only defendant to a Section 1 suit is a single entity, a conspiracy in restraint of trade cannot exist.)

Could the NFL lose? More discussion after the jump.

Last Tuesday, the Wisconsin Supreme Court held that a cheerleader who allegedly failed to spot his teammate was immune from liability under a Wisconsin assumption-of-risk statute, which forbids bringing a claim against any amateur athlete who acts negligently while performing a sport. In reaching this conclusion, the court explained that competitive cheerleading was indeed a “sport” based on the American Heritage Dictionary’s definition of that word: “an activity involving physical exertion and skill that is governed by a set of rules or customs.”

Upon learning of this decision, one astute Above the Law reader asked if courts would similarly find cheerleading to be a sport under Title IX of the Patsy T. Mink Equal Opportunity in Education Act. This is an especially interesting question because some schools including the University of Maryland and Seton Hall University have granted varsity status to their disproportionately female cheerleading squads. Thus far, the Department of Education has not taken a stance on these particular schools’ Title IX compliance, nor has there been a test case in our court system.

After the jump, should cheerleaders count for Title IX purposes?

[Ed Note: ATL is happy to welcome back Marc Edelman, sports-law professor/sports-law blogger. Marc will be giving ATL readers his take on the sports-law issues of the day on an ad-hoc basis.]

Sports executives are supposed to be shrewd. They are supposed to be savvy. They are supposed to follow sound legal advice, and they are not expected to write smoking gun emails.

Some big-name sports executives, however, keep fouling this up.

Last Thursday, Portland Trailblazers president Larry Miller sent an email to the other 29 NBA teams, asking them not to sign free agent forward Darius Miles. Miller sent this email because he did not want to incur the salary cap hit that would have been triggered if Miles plays in two more games this season. (For more details, see here).

According to various sources, Miller’s email was filled with legal banter such as claims that if any NBA team signed Miles, it would breach a “fiduciary duty as an NBA joint venturer,” and “tortiously interfer[e] with the Portland Trail Blazers’ contract.”

As a matter of law, however, Miller’s claims are bizarre, if not outright bogus. There is no fiduciary duty amongst NBA teams that forbids them from competing vigorously in the free agent market. In addition, there is no active player contract between a free agent player such as Miles and his former team.

Even more disturbing than these outlandish legal claims, however, is that Miller’s email seems to invite NBA teams to boycott Miles’s services. This reading of Miller’s email places the Blazers at risk of facing an antitrust lawsuit under Section 1 of the Sherman Act or a labor grievance under the anti-collusion provisions in the NBA collective bargaining agreement (Major League Baseball owners got into trouble for similar misconduct in the late 1980s) (pdf).

After the jump, more sports executives behaving badly.

To: Attorneys All
From: Marc Edelman
Re: A Hearty Farewell

Dear Friends:

Today marks the end of my six-month externship as sports editor at Above the Law. On Monday, August 18, I will begin the next stage of my career as a visiting assistant professor at Rutgers School of Law in Camden, NJ. I will also continue my current affiliation with the Institute for Information Law and Policy at New York Law School.

During my brief stint as your sports law blogger, I enjoyed the opportunity to interact with many readers. To those of you that have reached out, thanks. It has been a pleasure to exchange ideas and share advice on breaking into the sports industry.

To David Lat, thanks as well for taking a leap of faith and inviting me, as an academic, to guest blog on your self-described “tabloid.” I know not all of our experiments worked perfectly (see, e.g., Monday Morning Quarterback); however, more often than not, the readership survived their traditional and sensationalist worlds colliding.

For those wishing to stay in touch, the best way to reach me is via email at either MarcEdel at camden dot rutgers dot edu or Marc at MarcEdelman dot com.

All the best,
M.E.

P.S. For one final time … take it away, Statler and Waldorf.

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Marc Edelman is an attorney, business consultant, published author and professor, whose focus is on the fields of sports business and law. You can read his full bio by clicking here.

If you’re a Biglaw associate, you probably know that feeling when all of your matters heat up at once. In academia, that feeling comes far less often. This week, however, there has been an unusual amount of movement in the world of sports law. Here is some of what is going on (and without even delving into Rudy Giuliani’s son’s lawsuit against the Duke Golf Team — we may have more on that later — or today’s prison sentences for NBA referee Tim Donaghy’s alleged co-conspirators).

Judge Places Marlins New Stadium on Hold

Although Miami-Dade Circuit Judge Jeri Beth Cohen was originally expected to rule this week in Norman Braman’s fight to keep Miami-Dade County from building a new ballpark for the Florida Marlins (previous blogged about here), Judge Cohen announced that she would delay her ruling on one particular issue — whether Article VII, Section 12 of the Florida Constitution requires a public vote before the county could pledge stadium bonds — until the Florida Supreme Court announces its decision in a rehearing of an important case on the matter, Strand v. Escambia (PDF). With the Florida Supreme Court on recess until the third week in August, Marlins president David Samson is angered — even if Judge Cohen eventually rules in the Marlins favor, the team may not have enough time to get their new stadium ready for Opening Day 2011. (Then again, a recent survey indicates more than half of Miami-Dade County residents would be upset if their tax dollars went to build this new stadium).

Bonds’s Agent Renews Collusion Concerns

On the eve of baseball’s all-star game last Tuesday, the agent for Barry Bonds renewed his concerns of collusion by MLB club owners (previously blogged about here). Bonds’s agent Jeff Borris claims he recently offered Bonds’ services to “numerous” clubs for the major league-minimum salary of $390,000, but there were no takers. It remains very surprising that not a single one of Baseball’s thirty teams is interested in Bonds’ services, especially now that Bonds’s perjury case has been delayed until next year. Although a successful collusion grievance would require showing that club owners had a common understanding to boycott Bonds, MLB clubs should be mindful of language from Arbitrator George Nicolau’s famous Collusion II ruling (decided Aug. 31, 1988) that explains “it is not one piece of evidence, but the evidence taken as a whole that tells us where a common understanding exists,” and lack of offers where, in a free market, offers would be expected helps to prove collusion.

Read more — about Oscar Pistorius, Brandon Jennings, and the Seattle Sonics settlement — after the jump.