McNeil v. National Football League

• Decision Date: 15 April 1992
• Docket Number: Civ. No. 4-90-476.
• Citation: 790 F. Supp. 871
• Parties: Freeman McNEIL, Mark Collins, Lee Rouson, Niko Noga, Don Majkowski, Dave Richards, Tim McDonald, and Frank Minnifield, Plaintiffs, v. NATIONAL FOOTBALL LEAGUE, The Five Smiths, Inc., d/b/a Atlanta Falcons; Buffalo Bills, Inc., d/b/a Buffalo Bills; Chicago Bears Football Club, Inc., d/b/a Chicago Bears; Cincinnati Bengals, Inc., d/b/a Cincinnati Bengals; Cleveland Browns, Inc., d/b/a Cleveland Browns; The Dallas Cowboys Football Club, Ltd., d/b/a Dallas Cowboys; PDB Sports, Ltd., d/b/a Denver Broncos; The Detroit Lions, Inc., d/b/a Detroit Lions; The Green Bay Packers, Inc., d/b/a Green Bay Packers; Houston Oilers, Inc., d/b/a Houston Oilers; Indianapolis Colts, Inc., d/b/a Indianapolis Colts; Kansas City Chiefs Football Club, Inc., d/b/a Kansas City Chiefs; The Los Angeles Raiders, Ltd., d/b/a Los Angeles Raiders; Los Angeles Rams Football Company, Inc., d/b/a Los Angeles Rams; Miami Dolphins, Ltd., d/b/a Miami Dolphins; Minnesota Vikings Football Club, Inc., d/b/a Minnesota Vikings; KMS Patriots Limited Partnership, d/b/a New England Patriots; The New Orleans Saints Limited Partnership, d/b/a New Orleans Saints; New York Football Giants, Inc., d/b/a New York Giants; New York Jets Football Club, Inc., d/b/a New York Jets; The Philadelphia Eagles Football Club, Inc., d/b/a Philadelphia Eagles; B & B Holdings, Inc., d/b/a Phoenix Cardinals; Pittsburgh Steelers Sports, Inc., d/b/a Pittsburgh Steelers; The Chargers Football Company, d/b/a San Diego Chargers; The San Francisco Forty-Niners, Ltd., d/b/a San Francisco 49ers; The Seattle Professional Football Club, Ltd., d/b/a Seattle Seahawks; Tampa Bay Area NFL Football Club, Inc., d/b/a Tampa Bay Buccaneers; Pro-Football, Inc., d/b/a Washington Redskins; Defendants.
• Court: U.S. District Court — District of Minnesota

790 F. Supp. 871

Freeman McNEIL, Mark Collins, Lee Rouson, Niko Noga, Don Majkowski, Dave Richards, Tim McDonald, and Frank Minnifield, Plaintiffs, v. NATIONAL FOOTBALL LEAGUE, The Five Smiths, Inc., d/b/a Atlanta Falcons; Buffalo Bills, Inc., d/b/a Buffalo Bills; Chicago Bears Football Club, Inc., d/b/a Chicago Bears; Cincinnati Bengals, Inc., d/b/a Cincinnati Bengals; Cleveland Browns, Inc., d/b/a Cleveland Browns; The Dallas Cowboys Football Club, Ltd., d/b/a Dallas Cowboys; PDB Sports, Ltd., d/b/a Denver Broncos; The Detroit Lions, Inc., d/b/a Detroit Lions; The Green Bay Packers, Inc., d/b/a Green Bay

Packers; Houston Oilers, Inc., d/b/a Houston Oilers; Indianapolis Colts, Inc., d/b/a Indianapolis Colts; Kansas City Chiefs Football Club, Inc., d/b/a Kansas City Chiefs; The Los Angeles Raiders, Ltd., d/b/a Los Angeles Raiders; Los Angeles Rams Football Company, Inc., d/b/a Los Angeles Rams; Miami Dolphins, Ltd., d/b/a Miami Dolphins; Minnesota Vikings Football Club, Inc., d/b/a Minnesota Vikings; KMS Patriots Limited Partnership, d/b/a New England Patriots; The New Orleans Saints Limited Partnership, d/b/a New Orleans Saints; New York Football Giants, Inc., d/b/a New York Giants; New York Jets Football Club, Inc., d/b/a New York Jets; The Philadelphia Eagles Football Club, Inc., d/b/a Philadelphia Eagles; B & B Holdings, Inc., d/b/a Phoenix Cardinals; Pittsburgh Steelers Sports, Inc., d/b/a Pittsburgh Steelers; The Chargers Football Company, d/b/a San Diego Chargers; The San Francisco Forty-Niners, Ltd., d/b/a San Francisco 49ers; The Seattle Professional Football Club, Ltd., d/b/a Seattle Seahawks; Tampa Bay Area NFL Football Club, Inc., d/b/a Tampa Bay Buccaneers; Pro-Football, Inc., d/b/a Washington Redskins; Defendants.

Civ. No. 4-90-476.

United States District Court, D. Minnesota, Fourth Division.

April 15, 1992.

COPYRIGHT MATERIAL OMITTED

Edward M. Glennon, Carol T. Rieger, Luke H. Terhaar; Charles J. Lloyd, Lindquist & Vennum, Minneapolis, Minn., James W. Quinn, Jeffrey L. Kessler, Craig Allely, Daniel Rubin, Evie C. Goldstein, Jay L. Levine, Holly J. Gregory, Jonathan T. Weiss, Weil, Gotshal & Manges, New York City, for plaintiffs.

James Fitzmaurice, Patrick J. Schiltz, Faegre & Benson, Minneapolis, Minn., Herbert Dym, Jeffrey Pash, Neil K. Roman, Covington & Burling, Washington, D.C., Frank Rothman, Shepard Goldfein, Douglas B. Adler, Skadden, Arps, Slate, Meagher & Flom, Los Angeles, Cal., for defendants.

ORDER

DOTY, District Judge.

This matter is before the court on the following motions:

1. Defendants' motion for summary judgment on Count II of the amended complaint;

2. Defendants' motion for summary judgment on Count I and II of the amended complaint;

3. Defendants' motion for partial summary judgment on plaintiffs' damage claims;

4. Plaintiffs' motion for partial summary judgment on Count I of the amended complaint;

5. Plaintiffs' motion for partial summary judgment on Count II of the amended complaint; and

6. Plaintiffs' motion for partial summary judgment concerning defendants' monopoly power in relevant markets.

Based on a review of the file, record and proceedings herein, the court:

1. Denies defendants' motion for summary judgment on Count II of the amended complaint;

2. Denies defendants' motion for summary judgment on Count I and Count II of the amended complaint;

3. Denies defendants' motion for partial summary judgment on plaintiffs' damage claims;

4. Denies plaintiffs' motion for partial summary judgment on Count I of the amended complaint;

5. Denies plaintiffs' motion for partial summary judgment on Count II of their amended complaint; and

6. Grants in part and denies in part plaintiffs' motion for partial summary judgment concerning defendants' monopoly power in relevant markets.

BACKGROUND

Plaintiffs, eight individual football players whose contracts with their NFL employers expired on February 1, 1990, assert various claims arising from defendants' alleged violation of § 1 of the Sherman Act. Plaintiffs and defendants bring motions on various issues. This order will set forth the facts and law relevant to each motion in turn.¹

DISCUSSION

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." This standard mirrors the standard for a directed verdict under Federal Rule of Civil Procedure 50(a), which requires that the trial judge must direct a verdict if, under the governing law, there can be but one reasonable conclusion as to the verdict. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). Stated in the negative, summary judgment will not lie if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id. at 248, 106 S.Ct. at 2510. In order for the moving party to prevail, it must demonstrate to the court that "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2553-54, 91 L.Ed.2d 265 (1986); Fed. R.Civ.P. 56(c). A fact is material only when its resolution affects the outcome of the case. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. On a motion for summary judgment, all evidence and inferences are to be viewed in a light most favorable to the nonmoving party. Id. at 250, 106 S.Ct. at 2511. The nonmoving party, however, may not rest upon mere denials or allegations in the pleadings, but must set forth specific facts sufficient to raise a genuine issue for trial. Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. Moreover, if a plaintiff cannot support each essential element of its claim, summary judgment must be granted because a complete failure of proof regarding an essential element necessarily renders all other facts immaterial. Id. at 322-23, 106 S.Ct. at 2552-53. With this standard at hand, the court will consider the various motions.

1. The Parties' Motions on Count II of Plaintiffs' Complaint

Both plaintiffs and defendants move for summary judgment on plaintiffs' claim concerning a proposed wage scale. On November 16, 1988, defendants presented to the National Football League Players Association ("NFLPA")² a proposal to enter a new system of player restraints entitled "Plan B." Under one provision of that plan, defendants proposed to eliminate all individual contract negotiations with players as of February 1, 1993 and to establish a wage scale setting the price for all NFL players' services.³ In Count II of their amended complaint, plaintiffs allege that the proposed Plan B wage scale is an agreement among competitors, the NFL member clubs, to fix the prices to be paid for plaintiffs' services as professional football players and as such constitutes a per se violation of § 1 of the Sherman Act, 15 U.S.C. § 1 (1988). Plaintiffs thus seek an injunction under § 16 of the Clayton Act, 15 U.S.C. § 26 (1988), to permanently bar the NFL defendants from implementing any such wage scale.

Plaintiffs move for partial summary judgment on that claim, contending that such a wage scale would clearly constitute a per se antitrust violation as a horizontal price-fixing agreement. They further contend that even if the proposed wage scale were not illegal per se, that the absence of any plausible procompetitive justification for its implementation renders it an unreasonable restraint of trade as a matter of law. They finally assert that the Plan B wage scale poses a significant threat of antitrust injury to plaintiffs and ask the court to grant partial summary judgment and permanently enjoin the NFL defendants from entering into or implementing any agreement to fix the prices to be paid for the services of plaintiffs at any time in the future.

Defendants argue, however, that the court should not enjoin a system that is neither planned nor in place. They further contend that any proposed wage scale should be evaluated under the rule of reason and proffer what they characterize as a judicially recognized procompetitive justification for such a wage scale, that is the promotion of competitive balance among NFL member clubs. They argue that their proffered justification creates a material fact dispute that defeats plaintiffs' motion for partial summary judgment on the unreasonableness of such a wage scale.

Defendants also move for summary judgment on Count II of the amended complaint, arguing that any proposed implementation of a wage scale is too speculative to support a permanent injunction. They further contend that plaintiffs are unable to establish any cognizable antitrust injury and thus have no standing to challenge the future implementation of a wage scale.

Count II of plaintiffs' amended complaint seeks an "injunction against a League-wide wage scale to be imposed by Plan B." Section 16 of the Clayton Act expressly authorizes injunctive relief in private litigation:

"against threatened loss or damage by a violation of the antitrust laws, ... when and under the same conditions and principles as injunctive relief against threatened conduct that will cause loss or damage is granted by courts of equity."

15 U.S.C. § 26 (1988). The Supreme Court has held that such injunctive relief:

Is characteristically available even though the plaintiff has not yet suffered actual injury; he need only demonstrate a significant threat of injury from an impending violation of the antitrust laws....

Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 130, 89 S.Ct. 1562, 1580, 23 L.Ed.2d 129 (1969) (citations omitted). Plaintiffs argue that the proposed wage scale constitutes such a threat. In 1989, the NFL defendants unilaterally imposed Plan B⁴ and...