Clarett v. National Football League
| Decision Date | 05 February 2004 |
| Docket Number | No. 03 Civ. 7441(SAS).,03 Civ. 7441(SAS). |
| Citation | 306 F.Supp.2d 379 |
| Parties | Maurice CLARETT, Plaintiff, v. NATIONAL FOOTBALL LEAGUE, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Alan C. Milstein, Jeffrey P. Resnick, Sherman, Silverstein, Kohl, Rose & Podolsky, Pennsauken, New Jersey, John B. Langel, Burt M. Rublin, Amy L. Weiss, Ballard, Spahr, Andrews & Ingersoll, LLP, Philadelphia, Pennsylvania, Robert A. Skirnick, Daniel B. Allanoff, Meredith, Cohen, Greenfogel & Skirnick, New York City, Prof. Robert A. McCormick, Michigan State University, Detroit College of Law, East Lansing, Michigan, for Plaintiff.
Gregg H. Levy, Joshua D. Wolson, James M. Garland, Benjamin C. Block, Covington & Burling, Washington, D.C., Jessica L. Malman, Covington & Burling, New York City, for Defendant.
Maurice Clarett's goal is to play in the National Football League next year. The only thing preventing him from achieving that goal is the League's rule limiting eligibility to players three seasons removed from their high school graduation. The question before the Court is whether this Rule violates the antitrust laws.
Clarett, a star freshman football player attending The Ohio State University, now in his sophomore year, challenges the Rule, claiming that he is ready, willing and able to play in the NFL and that his exclusion violates the antitrust laws. Clarett's challenge to the Rule raises serious questions arising at the intersection of labor law and antitrust law, not to mention the intersection of college football and professional football. Should Clarett's right to compete for a job in the NFL — the only serious pro football game in town — trump the NFL's right to categorically exclude a class of players that the League has decided is not yet ready to play?
The answer requires the Court to tackle a number of technical legal issues. The NFL defends itself by asserting three arguments: (1) the Rule is the result of a collective bargaining agreement between the NFL and the players union and is therefore immune from antitrust scrutiny; (2) Clarett has no standing under the antitrust laws to bring this suit; and (3) the Rule is reasonable.
While, ordinarily, the best offense is a good defense, none of these defenses hold the line. Because the Rule does not concern a mandatory subject of collective bargaining (wages, hours and conditions of employment), governs only non-employees, and did not clearly result from arm's length negotiations, it is not immune from antitrust scrutiny. Clarett has standing to sue because his injury flows from a policy that excludes all players in his position from selling their services to the only viable buyer — the NFL. Finally, the NFL has not justified Clarett's exclusion by demonstrating that the Rule enhances competition. Indeed, Clarett has alleged the very type of injury — a complete bar to entry into the market for his services — that the antitrust laws are designed to prevent. It is axiomatic, in the words of Learned Hand, that the antitrust laws will not tolerate a contract "which unreasonably forbids any one to practice his calling."1
Because the NFL cannot prevail on any of these defenses, the Rule must be sacked.
The facts of this dispute are easily recounted and essentially undisputed, unless otherwise noted. Clarett, a college football player, is suing the NFL under the Sherman Antitrust Act,2 asserting that the League's Rule limiting eligibility for the draft to players three seasons removed from their high school graduation constitutes an unreasonable restraint of trade.
The NFL began operating in 1920 as the American Professional Football Association, comprised of twenty-three member clubs.3 The current NFL is an unincorporated association of thirty-two member clubs.4 Although there are other professional football leagues in North America — including the Arena Football League, the Arena Football League 2, the National Indoor Football League, and the Canadian Football League5 — the NFL dominates. It consistently outperforms all other professional sports leagues, not to mention the other professional football leagues, in both revenues and television ratings.6 The Super Bowl — the League's championship game — is routinely the top-rated television program of the year,7 and indeed, four of the top ten highest-rated programs in television history are NFL football games.8
Not surprisingly, the League's fiscal success also inures to the benefit of its players. The average NFL player earned $1,258,800 in 2003;9 the average starting NFL running back (which Clarett aspires to be) earned $1,578,275;10 the average first-round draft choice (which Clarett also aspires to be) earned $1,367,120;11 the minimum salary that a rookie may be paid is $225,000.12 In contrast, the 2000 salary cap in the Canadian Football League — the total amount of money that a team was permitted to pay to all 50-odd of its players combined — was approximately $1,700,000.13 Similarly, the 2003 team salary cap in the Arena Football League was $1,643,000.14 In other words, the average starting running back in the NFL makes only slightly less than the average teams do in the CFL and AFL. In short, the NFL represents an unparalleled opportunity for an aspiring football player in terms of salary, publicity, endorsement opportunities, and level of competition.
Day-to-day operation of the League is handled by an appointed Commissioner, currently Paul Tagliabue.15 Representatives of each of the thirty-two teams, however, comprise the National Football League Management Council ("NFLMC"), the exclusive collective bargaining representative of the League.16 The 1,400-odd NFL players are exclusively represented by the National Football League Players Association ("NFLPA"),17 which was created in 1956.18 In 1968, the NFLPA and the NFLMC entered into the League's first Collective Bargaining Agreement ("CBA").19
The current CBA took effect on May 6, 1993, and expires in 2007.20 The CBA, along with the League's Constitution and Bylaws, comprehensively outlines the relationship between the players and the League, covering the operation of the League, player salary and the player draft, including detailed rules by which the teams select new players. Two provisions of the CBA are at issue here. Article III, section 1, provides:
This Agreement represents the complete understanding of the parties on all subjects covered herein, and there will be no change in the terms and conditions of this Agreement without mutual consent.... [T]he NFLPA and the Management Council waive all rights to bargain with one another concerning any subject covered or not covered in this Agreement for the duration of this Agreement, including the provisions of the NFL Constitution and Bylaws....21
Article IV, section 2, entitled "No Suit," provides:
[N]either the NFLPA nor any of its members, agents acting on its behalf, nor any members of its bargaining unit will sue, or support financially or administratively any suit against, the NFL or any Club relating to the presently existing provisions of the Constitution and Bylaws of the NFL as they are currently operative and administered....22
Clarett and the NFL disagree on whether these two provisions establish that the NFL and the players union actually bargained over the terms of the Constitution and Bylaws (which contained the eligibility Rule at issue), or merely bargained away the NFLPA's ability to bargain over or challenge the Bylaws' provisions.23
The NFL's eligibility Rule precluding college underclassmen from participating in the draft has been in force — in one form or another — for decades.24 "It was adopted after Illinois's star running back, Harold `Red' Grange, stunned the sports world by leaving school at the end of the 1925 college season and joining the Chicago Bears of the five-year-old NFL for a reported $50,000."25 The original Rule precluded a player from joining the NFL unless four seasons had elapsed since his high school graduation; in 1990, the requirement was changed to three seasons.26
Notwithstanding the fact that the Rule predates the CBA, the NFL maintains that "[d]uring the course of collective bargaining that led to the 1993 CBA, the eligibility rule itself was the subject of collective bargaining."27 On May 6, 1993 — the same day that the current CBA became effective — the NFLPA and the NFLMC also executed a side letter acknowledging that the Constitution and Bylaws attached to the letter were referenced in the CBA.28 Among the various provisions of the 1993 Bylaws are comprehensive rules describing who is eligible to play in the NFL. The Bylaws provided that a player became eligible if he exhausted his eligibility to play college football or graduated from college.29 A player was also eligible if he was five years removed from his first enrollment in college (or four years removed, if he never played college football), regardless of whether he had any remaining college eligibility.30 Finally, a player not otherwise eligible could be granted "Special Eligibility."31
Such a player has been granted eligibility through special permission of the Commissioner. In order to receive consideration for the League's principal college draft in any year, any application for special eligibility must be in the Commissioner's office no later than January 6 of that year. For college football players seeking special eligibility, at least three NFL seasons must have elapsed since the player was graduated from high school.32
Although by its plain language the Rule requires the "special permission" of the Commissioner, that permission appears to be routinely granted where a player falls within the ambit of the Rule (i.e., is clearly three years removed from his high school graduation).33
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