American Football League v. National Football League

• Decision Date: 21 May 1962
• Docket Number: Civ. No. 12559.
• Parties: AMERICAN FOOTBALL LEAGUE et al. v. NATIONAL FOOTBALL LEAGUE et al.
• Court: U.S. District Court — District of Maryland

205 F. Supp. 60

AMERICAN FOOTBALL LEAGUE et al. v. NATIONAL FOOTBALL LEAGUE et al.

Civ. No. 12559.

United States District Court D. Maryland.

May 21, 1962.

Warren E. Baker, Washington, D. C., Richard S. Harrell, Thomas F. O'Toole, New York City, and Chadbourne, Park, Whiteside & Wolff, New York City, for plaintiffs.

Gerhard A. Gesell, Hamilton Carothers, Charles W. Havens, III, and Covington & Burling, Washington, D. C., and William D. Macmillan, William A. Fisher, Jr., and Semmes, Bowen & Semmes, Baltimore, Md., for defendants.

THOMSEN, Chief Judge.

In this action for treble damages and injunctive relief under the antitrust laws, plaintiffs, the American Football League (AFL) and its members, charge defendants, the National Football League (NFL) and most of its members, with monopolization, attempted monopolization and conspiracy to monopolize major league professional football.

It is not disputed that all of the parties to the case are engaged in interstate commerce and subject to the provisions of the antitrust laws. Radovich v. National Football League, 352 U.S. 445, 77 S.Ct. 390, 1 L.Ed.2d 456. See also United States v. National Football League, E.D.Pa., 116 F.Supp. 319. At a pretrial conference the parties agreed that the trial should be conducted in two stages: that the court first hear evidence on and determine the issue of liability (including the requirement that plaintiffs prove some injury from each of the alleged violations); and, if liability is found, that the court thereafter hear evidence on and consider the issue of relief (the amount of damages or the equitable relief to which the several plaintiffs may be entitled).

The Parties

The AFL was organized in the latter half of 1959, and began play in 1960. Joe Foss has been its only Commissioner. At the time this suit was filed, October 14, 1960, its member teams or franchisees and the principal owners thereof were:

Eastern Division:

Boston Patriots (Sullivan)

Buffalo Bills (Wilson)

Houston Oilers (K. S. Adams, Jr.)

New York Titans (Wismer)

Western Division:

Dallas Texans (Lamar Hunt)

Denver Broncos (Howsam)

Los Angeles Chargers (Hilton.

Transferred to San Diego after 1960 season.)

Oakland Raiders (a triumvirate)

The NFL was organized in 1920 and since 1933 has had from 10 to 14 teams. Bert Bell served as Commissioner until his death on October 11, 1959; thereafter Austin Gunsel was Acting Commissioner until January 1960, when Pete Rozelle was elected Commissioner. As of the date of suit, its teams, their principal owners, and others who figured prominently in the evidence were:

Eastern Division:

Chicago Cardinals (Mr. and Mrs. Wolfner. Transferred to St. Louis before 1960 season.)

Cleveland Browns (Jones; Paul Brown, general manager and coach.)

Dallas Cowboys (Clint Murchison, Jr. Began play as a "swing team" in 1960.)

New York Giants (Mara and sons)

Philadelphia Eagles (McNamee, Donohue)

Pittsburgh Steelers (Rooney)

Washington Redskins (Marshall)

Western Division:

Baltimore Colts (Rosenbloom)

Chicago Bears (Halas)

Detroit Lions (Anderson)

Green Bay Packers (Olejniczak; Lombardi, general manager and coach.)

Los Angeles Rams (E. W. Pauley, Sr.; Rozelle, general manager until January 1960.)

San Francisco 49'ers (Morabito)

Minnesota Vikings (Winter, Boyer, Skoglund, Ridder and Haugsrud. Began play in 1961.)

Plaintiffs did not sue the Minnesota Vikings. Before trial, but after the opinion of this court on jurisdiction and venue, 27 F.R.D. 264, plaintiffs dismissed the Los Angeles Rams and the San Francisco 49'ers.

Each of the leagues is an unincorporated association, with permanent franchises which remain the property of the members to whom issued unless forfeited or transferred with the approval of the league.

The Issues

The successful operation of a major league professional football team requires (1) membership in a league in which the several clubs are reasonably well matched in playing strength and are located in areas which can and will support the teams by attendance throughout the season sufficient to provide adequate revenues for both the home and visiting clubs, (2) the acquisition of a group of capable players, and (3) the sale of television rights.¹ Plaintiffs allege that defendants monopolized, attempted to monopolize and conspired to monopolize each of these three areas of competition.

With respect to (1), plaintiffs contend that they have shown that all defendants monopolized and that all defendants, except the Washington Redskins, attempted to monopolize and conspired to monopolize the metropolitan areas in which franchises can successfully be located. Plaintiffs argue that the granting of NFL franchises to Dallas and to Minneapolis-St. Paul, at the times and under the circumstances shown by the evidence, and statements made with respect to a proposed franchise for Houston, constituted an exercise of monopoly power, and that those acts were done as part of an attempt or a conspiracy to monopolize. On the other hand, defendants deny that they had monopoly power, and contend that those franchises were granted and those statements were made pursuant to a policy of expansion adopted by the NFL before the AFL was organized, and that the timing was at most an effort by the NFL and its members to compete more effectively with proposed AFL teams in the particular cities.

With respect to (2) above — acquisition of players — plaintiffs conceded at the close of their case that they had not proved any violation of the antitrust laws entitling them to recover herein.

With respect to (3), they conceded that they had not shown the requisite intent to support their charge that defendants had attempted to monopolize or conspired to monopolize with respect to the sale of TV or radio rights; but they contend that they have shown that defendants possessed monopoly power, and that the approval by the NFL Commissioner of the TV contract made by the Baltimore Colts and the Pittsburgh Steelers with the National Broadcasting Company was an exercise of that power which renders defendants liable on the charge of monopolization. Defendants contend that the Commissioner was obliged to approve the contract under the principles laid down by Judge Grim in United States v. National Football League, supra, and it was agreed that further evidence and argument on this point should await the decision of the court on the question whether the NFL had monopoly power.

Elements of Offenses Charged

The several charges of (a) monopolization, (b) attempt to monopolize and (c) combination or conspiracy to monopolize require proof of different elements.

(a) Monopolization. To prove monopolization in this private antitrust suit plaintiffs must show (1) that defendants possessed monopoly power and (2) that they undertook some course of action the consequence of which was to exclude competition or prevent competition in the business of major league professional football or which was undertaken with the purpose or intent to accomplish that end. United States v. Griffith, 334 U.S. 100, 107, 68 S.Ct. 941, 92 L.Ed. 1236; United States v. United Shoe Machinery Corp., D.Mass., 110 F. Supp. 295, 342, aff'd per curiam 347 U.S. 521, 74 S.Ct. 699, 98 L.Ed. 910.

(1) "Monopoly power is the power to control prices or exclude competition." United States v. E. I. DuPont De Nemours & Co., 351 U.S. 377, 391, 76 S.Ct. 994, 100 L.Ed. 1264. In the same case, citing Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 58, 31 S.Ct. 502, 55 L.Ed. 619, the Court said that a party has monopoly power if it has "over `any part of the trade or commerce among the several States,' a power of controlling prices or unreasonably restricting competition." 351 U.S. at 389, 76 S.Ct. at 1004.²

"Monopoly is a relative word." United States v. Associated Press, S.D. N.Y., 52 F.Supp. 362, 371, aff'd 326 U.S. 1, 65 S.Ct. 1416, 89 L.Ed. 2013. Whether the sole business in a particular field has monopoly power depends upon the nature of the business.³ Those wishing to operate professional football teams must belong to a league. The test of monopoly power in this case, therefore, is whether the NFL had sufficient power to prevent the formation or successful operation of a new league. It is not sufficient that they might have had the power to exclude a new league from a particular city or group of cities, unless the power to exclude from that city or group of cities would have effectively prevented the formation or operation of a new league.

(2) A business organization which has acquired monopoly power is guilty of monopolization if it undertakes a course of action the consequence of which would be to exclude competitors or prevent competition. Proof of a specific intent is not necessary. United States v. United Shoe Machinery Corp., supra; United States v. Griffith, supra; Kansas City Star Company v. United States, 8 Cir., 240 F.2d 643, 658, cert. den. 354 U.S. 923, 77 S.Ct. 1381, 1 L.Ed. 2d 1438; United States v. Aluminum Co. of America, 2 Cir., 148 F.2d 416, 428-29.⁴

However, it cannot be required to forego normal competitive business methods to further legitimate business ends, as distinguished from acts which are done with the intent to create or preserve a monopoly, or which would have the consequence of excluding competitors from a relevant market. See Board of Trade of the City of Chicago v. United States, 246 U.S. 231, 238, 38 S.Ct. 242, 62 L.Ed. 683; United States v. Griffith, supra; Gamco, Inc. v. Providence Fruit & Produce Bldg., Inc., 1 Cir., 194 F.2d 484, 488, cert. den. 344 U.S. 817, 73 S.Ct. 11, 97 L.Ed. 636; United States v. United Shoe Machinery Corp., supra.⁵

(b)-(c). Attempt and Conspiracy. There may be an attempt to monopolize, or a combination or conspiracy to monopolize, without the offender or offenders actually having monopoly power. But an essential element of an attempt to monopolize, or of a combination or conspiracy to monopolize, is a specific intent to destroy...