City of Oakland v. Raiders
| Decision Date | 02 December 2021 |
| Docket Number | 20-16075 |
| Parties | City of Oakland, Plaintiff-Appellant, v. Oakland Raiders, a California Limited Partnership; Arizona Cardinals Football Club, LLC; Atlanta Falcons Football Club LLC; Baltimore Ravens, LP; Buffalo Bills, LLC; Panthers Football, LLC; Chicago Bears Football Club, Inc.; Cincinnati Bengals, Inc.; Cleveland Browns Football Company, LLC; Dallas Cowboys Football Club, Ltd.; PDB Sports Ltd.; Detroit Lions, Inc.; Green Bay Packers, Inc.; Houston NFL Holdings, LP; Indianapolis Colts, Inc.; Jacksonville Jaguars LLC; Kansas City Chiefs Football Club, Inc.; Chargers Football Company LLC; The Rams Football Company, LLC; Miami Dolphins, Ltd.; Minnesota Vikings Football LLC; New York Football Giants, Inc.; New York Jets, LLC; Philadelphia EAGLES LLC; PITTSBURGH STEELERS LLC; FORTY NINERS FOOTBALL COMPANY LLC; FOOTBALL NORTHWEST LLC; BUCCANEERS TEAM LLC; TENNESSEE FOOTBALL, INC.; PROFOOTBALL, INC.; NATIONAL FOOTBALL LEAGUE; NEW ENGLAND PATRIOTS LLC; NEW ORLEANS LOUISIANA SAINTS, LLC, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
City of Oakland, Plaintiff-Appellant,
v.
Oakland Raiders, a California Limited Partnership; Arizona Cardinals Football Club, LLC; Atlanta Falcons Football Club LLC; Baltimore Ravens, LP; Buffalo Bills, LLC; Panthers Football, LLC; Chicago Bears Football Club, Inc.; Cincinnati Bengals, Inc.; Cleveland Browns Football Company, LLC; Dallas Cowboys Football Club, Ltd.; PDB Sports Ltd.; Detroit Lions, Inc.; Green Bay Packers, Inc.; Houston NFL Holdings, LP; Indianapolis Colts, Inc.; Jacksonville Jaguars LLC; Kansas City Chiefs Football Club, Inc.; Chargers Football Company LLC; The Rams Football Company, LLC; Miami Dolphins, Ltd.; Minnesota Vikings Football LLC; New York Football Giants, Inc.; New York Jets, LLC; Philadelphia EAGLES LLC; PITTSBURGH STEELERS LLC; FORTY NINERS FOOTBALL COMPANY LLC; FOOTBALL NORTHWEST LLC; BUCCANEERS TEAM LLC; TENNESSEE FOOTBALL, INC.; PROFOOTBALL, INC.; NATIONAL FOOTBALL LEAGUE; NEW ENGLAND PATRIOTS LLC; NEW ORLEANS LOUISIANA SAINTS, LLC, Defendants-Appellees.
No. 20-16075
United States Court of Appeals, Ninth Circuit
December 2, 2021
Argued and Submitted June 14, 2021 San Francisco, California
Appeal from the United States District Court No. 3:18-cv-07444-JCS for the Northern District of California Joseph C. Spero, Magistrate Judge, Presiding
Michael M. Fay (argued), James W. Quinn, Jenny H. Kim, and Emily Burgess, Berg & Androphy, New York, New York; Bruce L. Simon, Pearson Simon & Warshaw, LLP, San Francisco, California; Clifford H. Pearson, Michael H. Pearson and Thomas J. Nolan, Pearson Simon & Warshaw, LLP, Sherman Oaks, California; Barbara Jean Parker, Maria Bee, and Malia McPherson, Office of the City Attorney, Oakland, California, for Plaintiff-Appellant City of Oakland.
Daniel B. Asimow (argued) and Kenneth G. Hausman, Arnold & Porter Kaye Scholer LLP, San Francisco, California; Jonathan I. Gleklen, Arnold & Porter Kaye Scholer LLP, Washington, D.C.; for Defendant-Appellee The Oakland Raiders.
John E. Hall, Gregg H. Levy, Derek Ludwin, and Benjamin J. Razi, Covington & Burling LLP, Washington, D.C., for Defendants-Appellees The National Football League and all NFL Clubs other than The Oakland Raiders.
Makan Delrahim Assistant Attorney General; Michael F. Murray, Deputy Assistant Attorney General; Daniel E. Haar and Jeffrey D. Negrette, Attorneys; Antitrust Division, United States Department of Justice, Washington, D.C.; for Amicus Curiae United States of America.
Before: A. Wallace Tashima and Patrick J. Bumatay, Circuit Judges, and Douglas L. Rayes, [*] District Judge.
SUMMARY[**]
Antitrust
The panel affirmed the district court's dismissal, for failure to state a claim, of an antitrust action brought by the City of Oakland against the National Football League and its member teams.
The City alleged that defendants created artificial scarcity in their product of NFL teams, and then used that scarcity to demand supra-competitive prices from host cities. The City alleged that when it could not pay those prices, defendants punished it by allowing the Raiders to move to Las Vegas.
The panel held that the City had Article III standing because it plausibly alleged that, but for defendants' conduct, it would have retained the Raiders, and thus made the required showing that its injury was likely caused by defendants.
Affirming the district court's dismissal, the panel held that defendants' conduct did not amount to an unreasonable restraint of trade in violation of § 1 of the Sherman Act. The panel held that the City failed sufficiently to allege a group boycott, which occurs when multiple producers refuse to sell goods or services to a particular customer. Here, the City alleged only that a single producer, the Raiders, refused to deal with it. The panel held that the City also failed sufficiently to allege statutory standing on a theory that
defendants' conduct constituted an unlawful horizontal price-fixing scheme. The panel held that a finding of antitrust standing requires a balancing of the nature of the plaintiff's alleged injury, the directness of the injury, the speculative measure of the harm, the risk of duplicative recovery, and the complexity in apportioning damages. The panel reasoned that here, the City was priced out of the market and therefore was a nonpurchaser. In addition, the City's damages were highly speculative and would be exceedingly difficult to calculate.
Concurring, Judge Bumatay wrote that he would hold that the price-fixing claim was too speculative to satisfy the threshold of constitutional standing. He wrote that the City did not show that its injury was fairly traceable to defendants' challenged conduct, but rather relied on speculation upon speculation to connect its injury of the Raiders leaving for Las Vegas to the NFL's entry rule. Judge Bumatay thus concurred in the court's judgment and joined Parts I, II, and III.B of the majority opinion.
OPINION
A. WALLACE TASHIMA JUDGE.
Plaintiff City of Oakland (the "City") alleges that the National Football League ("NFL") and its thirty-two member teams (collectively, "Defendants") have "created artificial scarcity in their product (NFL teams), and then used that scarcity . . . to demand supra-competitive prices from host cities." First Am. Compl. ("FAC" or "complaint") FAC ¶ 1.[1]It further alleges that, "[w]hen Oakland could not pay those prices, Defendants punished the city: they voted to allow the Raiders to move to Las Vegas, which left Oakland without an NFL team and caused significant losses to Oakland." FAC ¶ 2. The City contends that Defendants' conduct amounts to an unreasonable restraint of trade in violation of § 1 of the Sherman Act, 15 U.S.C. § 1, on two independent bases: First, because it constitutes an unlawful group boycott, and second, because it constitutes an unlawful horizontal price-fixing scheme. The district court dismissed the City's Sherman Act claim for failure to state a claim upon which relief may be granted. See City of Oakland v. Oakland Raiders, 445 F.Supp.3d 587, 606 (N.D. Cal. 2020); Fed.R.Civ.P. 12(b)(6). We affirm.
We agree with the district court that the City has failed to allege a group boycott. A group boycott occurs when multiple producers refuse to sell goods or services to a particular consumer. Although the City alleges collective
action (i.e., that the other NFL teams supported the Raiders' boycott), it has not alleged a group boycott. The City has alleged only that a single producer-the Raiders-refused to deal with the City.
The City's horizontal price fixing theory fails as well. To plead a Sherman Act claim, a private plaintiff must show that it is a proper party to pursue the claim-a requirement known as antitrust standing. Although buyers who pay collusive overcharges (direct purchasers) ordinarily have antitrust standing to challenge a horizontal price-fixing scheme, buyers, like the City, who are priced out the market-and hence do not purchase the product or pay the overcharge-ordinarily do not. A nonpurchaser's injury is less direct than the injuries of actual purchasers and highly speculative: we cannot know whether, in the absence of Defendants' restrictions on output, the nonpurchaser would have made a purchase and, if so, under what terms. In addition, the City's damages are highly speculative and would be exceedingly difficult to calculate. We therefore agree with the district court that the City has failed to allege antitrust standing on its horizontal price fixing theory of liability.
I.[2]
In 1995, the Oakland Raiders professional football team signed an agreement to play in the Oakland-Alameda County Coliseum ("Coliseum"). FAC ¶ 102. Under the terms of the agreement, the Raiders leased the Coliseum for a period of sixteen years, with an annual rent of $50, 000; the City offered the Raiders a $31.9 million relocation and operating loan; the City committed up to $10 million toward the construction of a new training facility; the City offered up to $85 million toward stadium modernization efforts; and the Raiders agreed to a $1 surcharge on ticket sales, with the proceeds to benefit Oakland public schools and other public services. FAC ¶ 102. The Raiders extended the lease in 2009 and again in 2014. FAC ¶¶ 107, 112.
In the years that followed, the City negotiated with the Raiders in an unsuccessful attempt to keep the team in Oakland. In 2014, the City proposed donating land to the Raiders for a new stadium. FAC ¶ 113. In 2015, the City proposed a $500 million renovation of the Coliseum, to which the City would have contributed significantly. FAC ¶ 113. In 2016, the City supported a proposal to build a new $1.3 billion stadium in Oakland, financed by $350 million in public funds, $400 million from an investment group led by former NFL players Ronnie Lott and Rodney Peete, and $500
million from the Raiders. FAC ¶ 121. The City alleges that the Raiders and the NFL engaged in these negotiations in bad faith. According to the complaint, "[t]he Raiders, the NFL, and ultimately, the vast majority of NFL Clubs, were just stringing Oakland along as part of their collusive scheme to relocate the Raiders." FAC ¶ 23.
In 2017, the Raiders filed an application with the NFL to relocate the team to Las Vegas. FAC ¶ 124. The NFL teams voted thirty-one to one to approve the relocation. FAC ¶ 132. The complaint alleges that the move benefitted the Raiders and the other NFL teams alike. The Raiders moved to a new, $1.9 billion stadium in Las Vegas, financed by $750 million in public funds, FAC ¶¶ 5, 149, and the team's enterprise value more than doubled to $3 billion, FAC ¶¶ 5, 63. The other teams, meanwhile, divided a $378 million relocation fee paid by the Raiders, FAC ¶ 66, and, due to revenue sharing among NFL teams, stand to share in "new television rights in a new geographic territory, new merchandising, new intellectual property and game...
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