Hairston v. Pacific-10 Conference

• Decision Date: 20 May 1994
• Docket Number: No. C93-1763R.,C93-1763R.
• Citation: 893 F. Supp. 1485
• Parties: Russell HAIRSTON, et al., Plaintiffs, v. PACIFIC-10 CONFERENCE, an unincorporated association, Defendant.
• Court: U.S. District Court — Western District of Washington

893 F. Supp. 1485

Russell HAIRSTON, et al., Plaintiffs, v. PACIFIC-10 CONFERENCE, an unincorporated association, Defendant.

No. C93-1763R.

United States District Court, W.D. Washington, at Seattle.

May 20, 1994.

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Michael D. Hunsinger, Neubauer & Hunsinger, Seattle, WA, James L. Magee, Graham & Dunn, Seattle, WA, Henry C. Jameson, Jameson Babbitt Stites & Lombard, Seattle, WA, for Russell Hairston, Frank Garcia, Jaime Weindl, Jovan McCoy, Kyle Roberts, Scoreboard Inc., Team Spirit Inc., Graham S. Anderson.

Al VanKampen, Richard J. Wallis, Angela M. Luera, Bogle & Gates, Seattle, WA, for Pacific 10 Conference.

Peter D. Byrnes, Byrnes & Keller, Seattle, WA, for National Collegiate Athletic Ass'n.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS

ROTHSTEIN, Chief Judge.

THIS MATTER comes before the court on a motion under Fed.R.Civ.P. 12(b)(6) by defendant Pacific 10 Conference to dismiss plaintiffs' complaint. Having reviewed the motion together with all documents filed in support and in opposition, and being fully advised, the court finds and rules as follows:

I. BACKGROUND

Plaintiffs in this case are five student athletes ("the players") on the football team at the University of Washington ("UW"), two football souvenir sellers who have licensing agreements with the UW, and a holder of a season ticket ("ticket holder") to UW football games.

Defendant Pacific 10 Conference ("Pac-10") is a private voluntary association of ten universities from the western United States, including the UW. The purpose of the association is to establish an athletic program, administer intercollegiate athletic events, and stage conference tournaments. The Pac-10 is in turn a member of the National Collegiate Athletic Association ("NCAA"), a national association of universities and colleges which supervises, promotes, and sanctions athletic competition among its members. Both the Pac-10 and the NCAA promulgate and enforce rules governing the conduct of their members' athletic programs.

In August of 1993, the Pac-10 assessed penalties against the UW for infractions of NCAA rules governing the conduct of the football program. The penalties consisted of a ban for one year on receiving revenue from television coverage of football games and other sanctions lasting two years, including a probationary period, a ban on participation in bowl games, and a reduction in the number of available scholarships and permitted recruiting visits.

Plaintiffs brought this lawsuit alleging that the true purpose of the penalties was not to punish rules infractions, but to cripple the UW's ability to compete against the rest of the universities belonging to the Pac-10. Plaintiffs accordingly seek damages and injunctive relief on a variety of claims including violation of federal antitrust laws pursuant to the Sherman Act, 15 U.S.C. §§ 1, 4 and 16; the Washington Consumer Protection Act, RCW 19.86.020 and -.030; breach of contract; tortious interference with a business expectancy; and deprivation of state constitutional due process guarantees.

The Pac-10 now moves to dismiss all of plaintiffs' claims on numerous grounds.

II. LEGAL ANALYSIS

A. STANDARD FOR MOTIONS TO DISMISS

The Pac-10 moves to dismiss under Fed.R.Civ.P. 12(b)(6). In considering such motions, the court construes the complaint in the light most favorable to the plaintiff and takes its allegations as true. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974); Brian Clewer, Inc. v. Pan American World Airways, Inc., 674 F.Supp. 782, 785 (C.D.Cal.1986). The court, however, still examines whether the allegations in the complaint follow from the description of the facts alleged by the plaintiff. See Clewer, 674 F.Supp. at 785.

B. CONSTITUTIONAL STANDING

The Pac-10 first argues that plaintiffs lack standing to bring suit under Article III of the United States Constitution. The Supreme Court recently summarized the three-part test for determining whether constitutional standing exists: (1) plaintiff must have suffered an injury in fact, i.e., an invasion of a legally protected, particularized, nonhypothetical interest; (2) there must be a causal connection between the injury and the conduct complained of; and (3) it must be likely, not speculative, that the injury will be remedied by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 559, 112 S.Ct. 2130, 2136, 119 L.Ed.2d 351 (1992).

The Pac-10 stresses two considerations which it feels plaintiffs fail to meet. First, it contends that plaintiffs are actually asserting the rights and interests of the UW, which was the entity penalized, in order to get relief from a perceived injury to themselves. See Warth v. Seldin, 422 U.S. 490, 509, 95 S.Ct. 2197, 2210-11, 45 L.Ed.2d 343 (1975). Plaintiffs do not dispute that they have no standing to assert the UW's claims. See McCormack v. National Collegiate Athletic Ass'n, 845 F.2d 1338, 1341 (5th Cir. 1988). But they insist that they are asserting their own rights based on injuries to their own separately protected interests: the players with their right to compete in a bowl game; the ticket holder with his right to enjoy the unhampered competitiveness of the UW football team; and the souvenir sellers with their right to unfettered sales of football paraphernalia, including bowl game souvenirs. The court concludes that plaintiffs have alleged their own rights separate and distinct from those of the UW.

Second, the Pac-10 argues that plaintiffs cannot show that their injuries are likely to be redressed by a favorable decision. The relief plaintiffs seek is injunctive relief stopping the Pac-10 from imposing the sanctions and treble damages (except for the ticket holder, who seeks no money damages). The court finds that plaintiffs have shown a sufficient relationship between the alleged injuries and the relief sought to survive this threshold requirement for establishing constitutional standing.

C. CLAYTON ACT ANTITRUST STANDING — DAMAGES ACTION

Section 4 of the Clayton Act allows the recovery of treble damages by "any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws." 15 U.S.C. § 15. To bring a private action under § 4, a plaintiff must establish that it has "antitrust standing." It may do so by showing that "it is a proper party to bring a private antitrust action." Associated Gen. Contractors v. California State Council of Carpenters, 459 U.S. 519, 535 n. 31, 103 S.Ct. 897, 907 n. 31, 74 L.Ed.2d 723 (1983) ("AGC"); see also Blue Shield of Va. v. McCready, 457 U.S. 465, 477, 102 S.Ct. 2540, 2547, 73 L.Ed.2d 149 (1982). The Supreme Court has listed five factors to be considered in determining if a plaintiff is a proper party to bring suit:

(1) The nature of the plaintiff's claimed injury;

(2) The directness of the injury;

(3) The specific intent of the alleged conspirators;

(4) The character of the damages, including the risk of duplicative recovery, the complexity of apportionment, and their speculative character; and

(5) The existence of other, more appropriate plaintiffs.

See AGC, 459 U.S. at 537-45, 103 S.Ct. at 908-12; R.C. Dick Geothermal Corp. v. Thermogenics Inc., 890 F.2d 139, 146 (9th Cir. 1989) (en banc).

The first factor, which focuses on whether an "antitrust injury" has been alleged, is a threshold requirement for antitrust standing. See Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 110 S.Ct. 1884, 109 L.Ed.2d 333 (1990); Yellow Pages Cost Consultants, Inc. v. GTE Directories Corp., 951 F.2d 1158 (9th Cir.1991). If the plaintiff satisfies the requirement of antitrust injury, the court then must examine the other four AGC factors. None of those remaining factors controls the decision and "a court may find standing if the balance of factors so instructs." Los Angeles Memorial Coliseum Comm'n v. National Football League, 791 F.2d 1356, 1363 (9th Cir.1986), cert. denied, 484 U.S. 826, 108 S.Ct. 92, 98 L.Ed.2d 53 (1987). It is according to the AGC factors that the court analyzes the claims of the players and souvenir sellers in this case.¹

1. Antitrust Injury

In determining if a plaintiff has alleged an antitrust injury, the courts generally look at whether it is a participant in the same market as the alleged wrongdoer, either as a consumer or as a competitor. See AGC, 459 U.S. at 538-39, 103 S.Ct. at 908-09; Eagle v. Star-Kist Foods, Inc., 812 F.2d 538, 540 (9th Cir.1987). The players and souvenir sellers concede that they are not consumers or competitors. They note, however, that the Clayton Act "`does not confine its protection to consumers, or to purchasers, or to competitors....'" McCready, 457 U.S. at 472, 102 S.Ct. at 2545 (quoting Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U.S. 219, 236, 68 S.Ct. 996, 1006, 92 L.Ed. 1328 (1948)). The Supreme Court stated in McCready that "where the injury alleged is so integral an aspect of the conspiracy alleged, there can be no question but that the loss was precisely `the type of loss that the claimed violations ... would be likely to cause.'" Id. at 479, 102 S.Ct. at 2548 (quoting Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 697-98, 50 L.Ed.2d 701 (1977)). In keeping with McCready, the courts have allowed suits by plaintiffs who are not consumers or competitors, so long as they allege a direct injury. See, e.g., Radovich v. National Football League, 352 U.S. 445, 77 S.Ct. 390, 1 L.Ed.2d 456 (1957); Ostrofe v. H.S. Crocker, Inc., 740 F.2d 739 (9th Cir.1984).

In this case, the players have alleged a direct injury. The complaint alleges that the Pac-10 intended to harm both the UW as an institution and the UW football team. See Compl. at ¶¶ 46-51.² The Pac-10, however, insists that any harm was suffered only by the UW. This contention misses the mark. The Pac-10 did not limit the...