May 25, 2010
Summer of George?
Seinfeld fans will recall neurotic George's declaration that he was going to end his second-guessing for one summer. "A George divided against George cannot stand," he reasoned.
In stark contrast, the Supreme Court yesterday found the 32-team National Football League to be 32 separate entities for purposes of section 1 of the Sherman Act. American Needle, Inc. v. National Football League et al. The unanimous decision reversed a 7th Circuit holding dismissing a suit by the former owner of a non-exclusive licensing contract with the unincorporated association. In his opinion, Justice Stevens emphasized that NFL teams "do not posses either the unitary decisionmaking quality or the single aggregation of economic power characteristic of independent action" in rejecting the NFL's self-characterization as one (large) business; likewise, the 7th Circuit's rationale that "NFL teams share a vital economic interest in collectively promoting NFL football" failed to carry the ball.
While American Needle's case now goes back to District Court for adjudication, the Supreme Court decision has potentially far-reaching, practical consequences for both NFL players (who must negotiate collective labor pacts) and consumers (who often pay high prices for replica apparel to vendors heretofore enjoying exclusive licenses). Further, the holding has ramifications for other leagues such as the NBA and NHL - will this be the end of the Summer of George for any of these groups?
The Supreme Court decision is available at http://www.supremecourt.gov/opinions/09pdf/08-661.pdf.
May 25, 2010 | Permalink