Thursday, December 9, 2004

6th Circuit Recommends Not So Quick a Look

On November 15, the Sixth Circuit overruled a lower court's invalidation of the NCAA's two-in four rule under the antitrust laws.  The "two-in-four" rule limits the number of "exempt" tournaments in which Division I men's basketball teams can participate. Exempt tournaments are those designated by the NCAA as not counting toward the maximum number of games a team can play in a season. The two-in-four rule limits teams to playing in a maximum of two exempt tournaments every four years. 

The Sixth Circuit ruled that the lower court should have analyzed the economics of the rule more closely to determine its anti-competitive and pro-competitive effects and balance them.  The lower court was wrong in applying what is known as the "quick look" rule of reason, under which anti-competitive effects are presumed shifting the burden to the defendant to explain the pro-competitive effects of its business practice.  As the Sixth Circuit panel stated:

"Far from being a case in which 'an observer with even a rudimentary understanding of economics could conclude that the arrangements in question would have an anti-competitive effect on customers and markets,' here the relevant market is not readily apparent and the plaintiffs have failed to adequately define a relevant market, thereby making it impossible to assess the effect of [the rule] on customers rather than merely on competitors."

The decision, Worldwide Basketball and Sports Tour Inc. v. NCAA, can be found at  388 F. 3d 955 (6th Cir. 2004).

| Permalink

TrackBack URL for this entry:

Listed below are links to weblogs that reference 6th Circuit Recommends Not So Quick a Look:


Hello, Professor. Thanks for finding this case. I've been interested in the topic since helping to write the first DOJ/FTC enunciation of a "quick look" rule, in the Government's 1983 NCAA amicus brief

By the way, is there any chance that you could post links to cases other than the Westlaw link, which is not accessible to everyone? For instance, here are links for Worldwide Basketball v NCAA, from the 6th Circuit website:
pdf version

and the HMTL version.

Thanks for providing this excellent source of antitrust news and developments.

Posted by: David Giacalone | Dec 9, 2004 9:57:35 AM

thanks for your comment. I will try to have better links in the future. Also please pass on anything you would like me to post or link.

Posted by: shubha ghosh | Dec 9, 2004 5:37:40 PM

Post a comment