Brady v. Nat'l Football League, Civil No. 11-639 (SRN/JJG)

CourtUnited States District Courts. 8th Circuit. United States District Court of Minnesota
Writing for the CourtSUSAN RICHARD NELSON, United States SUSAN RICHARD NELSON
PartiesTom Brady, Drew Brees, Vincent Jackson, Ben Leber, Logan Mankins, Peyton Manning, Von Miller, Brian Robison, Osi Umenyiora, Mike Vrabel, C arl Eller, Priest H olmes, O bafemi Ayanbadejo, Ryan Collins, and Antawan Walker, individually and on behalf of all others similarly situated, Plaintiffs, v. National Football League, et al., Defendants.
Decision Date25 April 2011
Docket NumberCivil No. 11-639 (SRN/JJG)

Tom Brady, Drew Brees, Vincent
Jackson, Ben Leber, Logan Mankins,
Peyton Manning, Von Miller, Brian
Robison, Osi Umenyiora, Mike Vrabel,
C arl Eller, Priest H olmes, O bafemi
Ayanbadejo, Ryan Collins, and Antawan
Walker, individually and on behalf of all
others similarly situated, Plaintiffs,
v.
National Football League, et al., Defendants.

Civil No. 11-639 (SRN/JJG)

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

Filed: April 25, 2011


MEMORANDUM OPINION

AND ORDER

Barbara P. Berens and Justi R. Miller, Berens & Miller, PA, 80 South Eighth St., Suite 3720, Minneapolis, MN 55402; Timothy R. Thornton, Briggs & Morgan, PA, 80 South Eighth St., Suite 2200, Minneapolis, MN 55402; Bruce S. Meyer and James W. Quinn, Weil, Gotshal & Manges, LLP, 767 Fifth Ave., New York, NY 10019; Christopher R. Clark, David G. Feher, David L. Greenspan, Jeffrey L. Kessler, Jennifer Stewart and Molly Donovan, Dewey & LeBoeuf, LLP, 1301 Avenue of the Americas, New York, NY 10019, for Plaintiffs Brady, Brees, Jackson, Leber, Mankins, Manning, Miller, Robison, Umenyiora and Vrabel.

Arthur N. Bailey, Jr., Hilary K. Scherrer, Jon T. King, Michael D. Hausfeld and Michael P. Lehmann, Hausfeld LLP, 44 Montgomery St., Suite 3400, San Francisco, CA 94104; Daniel S. Mason, Mark J. Feinberg and Michael E. Jacobs, Zelle Hofmann Voelbel & Mason LLP, 500 Washington Ave. South, Suite 4000, Minneapolis, MN 55415; and Samuel D. Heins and Vincent J. Esades, Heins Mills & Olson PLC, 31 0 Clifton Ave., Minneapolis, MN 55403, for Plaintiffs Eller, Holmes, Ayanbadejo, Collins and Walker.

Daniel J. Connolly and Aaron D. Van Oort, Faegre & Benson, LLP, 90 South Seventh St., Suite 2200, Minneapolis, MN 55402; Benjamin C. Block, Gregg H. Levy and James M. Garland, Covington & Burling, LLP, 1201 Pennsylvania Ave. Northwest, Washington DC 20004; David Boies and William A. Isaacson, Boies, Schiller & Flexner, LLP, 333 Main St., Armonk, NY 10504, for Defendants.

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SUSAN RICHARD NELSON, United States District Judge

This matter is before this Court in these consolidated actions on the motions for a preliminary injunction sought by Plaintiff Tom Brady, et al. (the "Brady Plaintiffs") as well as by Plaintiff Carl Eller, et al. (the "Eller Plaintiffs") (Doc. Nos. 2 & 58).1 For the reasons stated below, this Court grants the Brady Plaintiffs' motion. This ruling renders moot the Eller Plaintiffs' motion, which seeks identical relief, that is, an injunction lifting the "lockout." See infra notes 52 & 57.

I. FACTUAL AND PROCEDURAL BACKGROUND

The Brady Plaintiffs are nine professional football players and one prospective professional football player who have been or seek to be employed by Defendants, the National Football League ("NFL") and the 32 separately-owned NFL teams (collectively,

"the NFL" or "the League"). The Brady Plaintiffs filed this lawsuit on behalf of themselves and similarly situated players, alleging antitrust violations and breach of contract based on Defendants' actions, inter alia, in imposing a "lockout" or "group boycott" of the Players. (Doc. No. 1 (Complaint) ¶¶ 116-60.) Plaintiffs seek a

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declaratory judgment, injunctive relief, and damages. (Id. at 48-50 ("Prayer for Relief").)

The dispute between the NFL and the Players has a long and complex history. Powell v. NFL, 930 F.2d 1293, 1303 (8th Cir. 1989). The present case dates in some respects back to the dispute resolved in Mackey v. National Football League, 543 F.2d 606 (8th Cir. 1976). In Mackey, several players challenged the so-called "Rozelle Rule" as a violation of Section 1 of the Sherman Act. 543 F.2d at 609. In 1963, the League unilaterally adopted the Rozelle Rule, which governed free agency, largely by restricting it. Id. at 610-11. The League defended the Rule as protected from antitrust scrutiny under the nonstatutory labor exemption, which insulates employers and management from antitrust claims where an employer is participating in collective bargaining with a union that represents its employees. Id. at 611-12.

After a lengthy bench trial, the district court ruled that the Rozelle Rule was both a per se violation of Section 1 as well as an invalid restraint of trade under the Rule of Reason. Mackey v. NFL, 407 F. Supp. 1000 (D. Minn. 1975).2 The Eighth Circuit affirmed based on the Rule of Reason. 543 F.2d at 620-21. In assessing the nonstatutory labor exemption, the Eighth Circuit found that the proper accommodation between the competing interests of the labor laws (which seek to facilitate collective action by employees) and the antitrust statutes (which seek to promote competition and limit

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collective action) required, in order for the exemption to apply, (1) that the restraint "primarily affects only the parties to the collective bargaining relationship," (2) that the agreement subject to the protection of the exemption "concerns a mandatory subject of collective bargaining," and (3) that the agreement "is the product of bona fide arm's-length bargaining." Id. at 614. Although the particular agreement at issue there-the Rozelle Rule-satisfied the first two prongs of the test, the court found it was not the product of bona fide arm's-length bargaining. Id. at 615-16. The League later settled the class action for $13 million in damages.

"The players' initial antitrust victory was short lived, for following the ruling in Mackey the owners used their leverage in collective bargaining to reestablish the status quo, exchanging the Rozelle Rule for similar collectively bargained provisions that were impervious to antitrust attack." White v. NFL, 585 F.3d 1129, 1134 (8th Cir. 2009). The next major battle occurred in the various Powell / McNeil cases. In 1977, the League and the Players entered into a collective bargaining agreement governing free agency. The terms were modified in a successor agreement entered into in 1982. That agreement expired in August 1987. In September 1987, after negotiations for another agreement proved unsuccessful, the Players initiated a strike over veteran free agency and other issues.

After the strike failed to produce a new agreement, the Players filed an action in October 1987, contending that the League's adherence to the expired 1982 agreement violated the antitrust laws. In January 1988, the district court held that after the

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expiration of a bargaining agreement, the labor exemption from the antitrust laws terminates with respect to a mandatory subject of bargaining when employers and a union reach a bargaining impasse as to the contested issue. Powell v. Nat'l Football League, 678 F. Supp. 777, 788 (D. Minn. 1988).

On November 1, 1989, the Eighth Circuit rejected the district court's 1988 ruling that impasse lifted the protection of the exemption from the antitrust laws, noting that in certain circumstances "the nonstatutory labor exemption may be invoked even after a collective bargaining agreement has expired." Powell, 930 F.2d at 1301. The court concluded that the parties had "not yet reached the point in negotiations where it would be appropriate to permit an action under the Sherman Act," explaining that "even after impasse" both a union and management retain certain rights and remain under certain legal obligations. Id. at 1302. The court held that, on the facts presented there, antitrust claims were not appropriate in light of the general labor policy that favors "negotiated settlements rather than intervention by the courts." Id. at 1303.

Moreover, the court declined to "pick a termination point for the labor exemption." Id. But, the court noted that "[i]mportantly, this does not entail that once a union and management enter into collective bargaining, management is forever exempt from the antitrust laws." Id. Thus the Eighth Circuit expressly declined to "hold that restraints on player services can never offend the Sherman Act." Id. The court then also noted that "[t]he League concedes that the Sherman Act could be found applicable, depending on the circumstances," in certain situations including (as most relevant here) "if the affected

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employees ceased to be represented by a certified union." Id. at 1303 n.12.3

In the interim, the district court, having concluded that the impasse triggered the application of the antitrust laws, proceeded to hold, in July 1988, that the "presence of a bargaining impasse" nevertheless does not signify "the end of a 'labor dispute'" so as to preclude the application of the Norris-LaGuardia Act's prohibition against injunctions in cases "'involving or growing out of labor disputes.'" 690 F. Supp. 812, 814-15 (D. Minn. 1988) ("Indeed, a bargaining impasse is by definition a 'labor dispute.'"). The court noted that "where the bargaining relationship and the collective bargaining process remains intact, a controversy regarding terms or conditions of employment constitutes a labor dispute." Id. at 815.4

In the face of the Eighth Circuit's November 1989 ruling that a negotiating impasse did not permit the Players to pursue antitrust claims-and recognizing that the court did not identify any particular point when they could seek such relief-the Players faced a difficult choice between (1) continuing to engage in a collective bargaining

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process that had failed to accord them any true negotiating power, see Brown v. NFL, 50 F.3d 1041, 1057 (D.C. Cir. 1995) ("We recognize...

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