City of Oakland v. Raiders, Case No. 18-cv-07444-JCS
| Citation | 445 F.Supp.3d 587 |
| Decision Date | 30 April 2020 |
| Docket Number | Case No. 18-cv-07444-JCS |
| Parties | CITY OF OAKLAND, Plaintiff, v. OAKLAND RAIDERS, et al., Defendants. |
| Court | U.S. District Court — Northern District of California |
Barbara J. Parker, Oakland City Attorney's Office, Oakland, CA, Clifford H. Pearson, Daniel L. Warshaw, Matthew A. Pearson, Michael Harrison Pearson, Thomas Jerome Nolan, Pearson, Simon & Warshaw LLP, Sherman Oaks, CA, Benjamin Ernest Shiftan, Bruce Lee Simon, Pearson Simon & Warshaw, LLP, San Francisco, CA, Bronwyn M. James, Chris L. Sprengle, David Berg, James W. Quinn, Jenny H. Kim, Michael M. Fay, Berg and Androphy, Emily Maria Burgess, Pro Hac Vice David H. Berg and Associates, P.C., New York, NY, for Plaintiff.
Daniel B. Asimow, Arnold & Porter Kaye Scholer LLP, Sean F. Howell, Covington & Burling LLP, San Francisco, CA, Jonathan I. Gleklen, William J. Baer, Arnold and Porter Kaye Scholer LLP, Washington, DC, for Defendant Oakland Raiders.
John Edward Hall, Benjamin John Razi, Gregg H. Levy, Covington & Burling LLP, Derek Ludwin, One City Center, Washington, DC, Daniel B. Asimow, Arnold & Porter Kaye Scholer LLP, Sean F. Howell, Covington & Burling LLP, San Francisco, CA, for Defendants Arizona Cardinals Football Club LLC, Atlanta Falcons Football Club, LLC, Baltimore Ravens Limited Partnership, 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, 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., Pro-Football, Inc., National Football League, New England Patriots LLC, New Orleans Louisiana Saints, LLC.
Re: Dkt. No. 73
Plaintiff the City of Oakland ("Oakland") brings this action against the Defendants the Oakland Raiders (the "Raiders"), the National Football League (the "NFL"), and all thirty-one other teams in the NFL,1 asserting that the Raiders' decision to leave Oakland, and the NFL's approval of that decision, violate the antitrust laws and the NFL's own governing documents, among other claims. On a motion by Defendants, the Court previously dismissed Oakland's complaint with leave to amend. Oakland has now filed a first amended complaint, and Defendants move to dismiss once again under Rule 12(b)(6) of the Federal Rule of Civil Procedure. The Court held a public hearing by videoconference on April 17, 2020. For the reasons discussed below, Defendants' motion is GRANTED, Oakland's claim under the Sherman Act is DISMISSED with prejudice, and its remaining claims under state law are DISMISSED for lack of subject matter jurisdiction, without prejudice to pursuing those claims in a court of competent jurisdiction.2
This case concerns the Raiders' decision, formalized in a January 2017 request to the NFL, to relocate from Oakland, California—where the Raiders had played in a stadium known as the Coliseum for many years—to Las Vegas, Nevada, despite efforts by Oakland to entice the Raiders to stay. Under the NFL's bylaws, any team's relocation must be approved by a three-quarters majority of all thirty-two NFL teams, and such decisions often require the relocating team to pay a fee to the other teams. In March of 2017, the team owners voted to approve the Raiders' relocation with a $378 million fee. Oakland brings claims for violation of § 1 of the Sherman Act, breach of contract (i.e., the NFL relocation policy), and unjust enrichment. The factual allegations of the case are summarized in more detail in the Court's previous order dismissing Oakland's original complaint with leave to amend. Order Granting Mot. to Dismiss ("July 2019 Order," dkt. 64)3 at 2–8. New allegations of the first amended complaint are addressed where relevant in the analysis section of this order.
The Court previously dismissed Oakland's Sherman Act claims for failure to allege antitrust injury. Id. at 15–18. To the extent that Oakland's claims were based on the NFL's imposition of a $378 million fee as part of its approval of the Raiders' request to relocate, the Court held that requiring such a fee would discourage teams like the Raiders from seeking to relocate, and thus would tend to help rather than harm existing host cities like Oakland. Id. at 15– 16. Once a team has applied to relocate, a mechanism that encourages the NFL to approve that request moves the process closer to an unrestricted market (where teams would be free to relocate without seeking approval), and the Court therefore held that any harm caused by that incentive for approval is not " ‘of the type the antitrust laws were intended to prevent.’ " Id. at 16–17 (quoting Somers v. Apple, Inc. , 729 F.3d 953, 963 (9th Cir. 2013) ). To the extent that Oakland instead based its claim on the NFL's restriction to thirty-two teams, the Court held that Oakland had not sufficiently alleged antitrust injury because it neither alleged that the Raiders would have remained (or some other team would have played in Oakland) if more teams were allowed in the NFL, nor addressed what structure it believed would be permissible if the current thirty-two teams structure were not. Id. at 17–18.
While those issues of antitrust injury were sufficient for dismissal, the Court also briefly addressed some of Defendants' arguments concerning damages. Id. at 19–24. The Court held that Oakland's status as a "landlord" did not inherently bar it from recovering antitrust claims, id. at 19–20 (distinguishing R.C. Dick Geothermal Corp. v. Thermogenics, Inc. , 890 F.2d 139 (9th Cir. 1989) (en banc)), but that the Ninth Circuit's decision in City of Rohnert Park v. Harris , 601 F.2d 1040, 1044 (9th Cir. 1979), foreclosed a theory of damages based on "lost municipal investment" that Oakland might have made based on its expectation that the Raiders would remain, July 2019 Order at 20–21. The Court also held that "lost tax revenue based broadly on ‘the presence of the Raiders and the economic activity their presence generates,’ " id. at 22 , was not the type of injury redressable under the antitrust laws, but the Court did not rule out the possibility that a more narrowly tailored category of tax revenue, negotiated as part of an agreement between a local government and a private entity, might "take on a ‘commercial’ instead of—or as well as—‘sovereign’ character" such that it could support antitrust damages. Id. at 21– 22. The Court did not address in detail Oakland's claim for damages based on diminution in value of the Coliseum, but noted that it "would require Oakland to plausibly allege not only that the Raiders would have remained in Oakland but for Defendants' purported antitrust violation, but also that the Raiders would have remained at the Coliseum, rather than a new stadium" in Oakland as some of the negotiations between the parties had contemplated. Id. at 22–23.
Without reaching a firm conclusion on the subject of Oakland's alleged relevant market, the Court addressed that issue as follows:
Oakland's theory of the relevant market—cities offering or willing to offer "home stadia and other support to major league professional football teams in the geographic United States," Compl. ¶ 88—is somewhat unorthodox. Although L.A. Memorial Coliseum considered a somewhat similar market for "[f]ootball stadia," [Los Angeles Memorial Coliseum Com'n v. National Football League ,] 791 F.2d [1356] at 1365 [ (9th Cir. 1986) ], Oakland cites no case recognizing a market comprised of cities seeking to attract professional sports franchises. Failure to plead a relevant market for a rule of reason antitrust claim warrants dismissal, Hicks v. PGA Tour, Inc. , 897 F.3d 1109, 1120 (9th Cir. 2018), and as Defendants note, markets defined by their consumers rather than the products at issue are not generally cognizable, Newcal Indus., Inc. v. Ikon Office Sol. , 513 F.3d 1038, 1045 (9th Cir. 2008). Oakland's reference to "support to major league professional football teams" raises issues with respect to that rule, although Oakland may be able to amend to allege specific forms of "support" that happen to be unique to NFL teams. As Defendants also note, Oakland's complaint includes only conclusory assertions that other professional sports franchises do not complete with NFL teams for stadiums. See Compl. ¶ 89 (). Oakland's complaint does not address the test of "whether a hypothetical monopolist could impose a ‘small but significant nontransitory increase in price’ (‘SSNIP’) in the proposed market," or whether potential host cities would respond to such an increase by substituting other "products." See Saint Alphonsus Med. Ctr.-Nampa Inc. v. St. Luke's Health Sys., Ltd. , 778 F.3d 775, 784 (9th Cir. 2015). On the other hand, the massive public subsidies of NFL stadiums and the competition among cities alleged in the complaint tend to suggest a market at least similar to Oakland's proposed definition. While the Court declines to resolve whether Oakland's current allegations support a cognizable relevant market, if Oakland chooses to amend its complaint, it should consider Defendants' arguments regarding this issue.
The Court assumed for the sake of argument that the NFL's relocation policy was enforceable as a contract, but held...
To continue reading
Request your trial
-
City of Oakland v. Oakland Raiders
...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......
-
City of Oakland v. Raiders
...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.......