Sports Law Deck Flashcards
What is Judicial Non-Interference?
Courts will defer to Private Associations Unless:
1) The action is illegal
AND/OR
2) The Association failed to follow the basic rudiments of due process in its own bylaws (acted in bad faith)
Crouch example of not fitting into the exception; M’Baye example of fitting into the exception
What is the policy behind Judicial Non-Interference?
We do not want courts to get stuck in the dismal swamp.
1) To decide these cases would be an inefficient use of judicial resources
2) Courts lack the institutional competency to deal with these cases.
Crouch v. NASCAR
The issue is about who the on-track winner of a race was. The on-track call was overturned by the league after an appeal by one of the racers. The racer who had the title stripped sues in federal court. The issue for the court was whether they could even hear this case (i.e., does it fit within the slim sliver of cases that are an exception to the doctrine of Judicial Non-Interference?)
The court decided that this cases did not meet either of the exceptions and thus could not be appealed to the judicial system.
M’Baye
M’Baye passed up constantly for a chance at the title fight. There was evidence of potential bad faith.
Denny Chin wrote for the 2nd Cir. He stated that Association decisions are given great deference but here the was evidence of bad faith (which Chin, J., equates with basic rudiments of due process) and thus allows the case to be heard.
Internal Self-Regulation of Sports
League Constitution regulates issues between Team and Team. These League constitutions also specify the role of the commissioner. When the commissioner is given deference (especially as the sole arbitrator) Courts treat decisions of the commissioner as that of binding arbitration. Thus they will only overturn the ruling of an arbitrator (here the commissioner) if the act of the commissioner (as the arb) was arbitrary, capricious, illegal, or lacks fundamental fairness.
Finley v. Kuhn
Internal Rules of Baseball stated that the commissioner could overrule the decisions which are detrimental to the league and to baseball. Commissioner used this language to overturn a trade stating that it isn’t in the best interest of the league. Clubs sue the commissioner.
The court found that bc the MLB const says that the commissioner is the neutral arb. his ruling will stand unless the actions of the commissioner (as arb) were arbitrary, capricious, illegal, fraudulent, patently bias, or otherwise lack fundamental fairness.
Turner v. Kuhn
Court comes out opposite of Finley. MLB had a rule in the CBA that the Turner breaks. The commissioner punishes Turner with a one-year suspension. Court intervened bc there was a list of punishments and this was not in that list of punishments. The court found that list to be exclusive (after engaging in some statutory interp.) Thus the court found the decision of the commissioner (as neutral arb) to have been an abuse of his power and thus could be overturned by the court (as it is equivalent to lacking fundamental fairness).
Steve Howe Arbitration
Steve Howe was a six-time violator of the MLB drug policy. On the 7th offence, the commissioner imposed a lifetime ban.
The arbitrator overturned the ban for two reasons, but this case stands for a few points:
1) When imposing discipline, the burden is on the party seeking to discipline to establish just cause
- - Here the party seeking to discipline is the commissioner thus he has the burden of proving just cause
2) The just cause standard:
- - Just cause requires a heavy focus on individual circumstances (is the punishment reasonably commensurate with the offence?)
The penalty the Commissioner impose in a particular case must be:
• Reasonably proportionate to the offense
• Appropriate given all the (individual) circumstances (all factors)
• Carefully fashioned with an eye toward responsive, consistent and fair discipline
– The Just Cause principle suggests that there should be listed punishments for violations
3) The facts of this case were important in deciding that Howe should not get a LIFETIME BAN.
– Lifetime bans (especially in the case of sports) are veryyyyy rare. There is a strong presumption against them bc you aren’t banning someone from a job but an entire industry.
- The court focused here on two important facts:
1) In the past, bc of Howe’s condition, the MLB had been advised that for him to stay clean, he needs to get tested every other day. The MLB did not heed this warning.
2) The MLB stated they would put a plan in place but never did.
3) This was a lifetime ban.
4) The court stated that the reason of the league (deterrence) was a laudable objective, but the court stated, “Deterrence, however laudable an objective, should not be achieved at the expense of fairness.”
- The court focused here on two important facts:
The court thus decided that the commissioner’s decision did not meet the standard of just cause.
NFL v. Brady (Deflategate)
There was an underinflation of footballs in the AFC game. There was an independent report. That report determined that it was npt scietifically possible for the balls to have been underinflated on their own. That report also stated that it was more probable than not that Brady had at least been generally aware bc it was unlikely that a locker room attenant would have defaletd the balls without Brady’s knowledge/approval/awareness. NFL commissioner imposes a four game suspension. Brady appealed and destroyed his phone. Commissioner drew the adverse conclusion that the phone contained exculptory evidence.
Takeaways:
Review of an arb decision is very limited. Court cannot review on the merits. Court can only review as to whether the arb acted within the scope of his authority as defined by the CBA.
– You look to teh arbs view of the facts and the arbs meaning of the contract, the court will not substitute its own.
(NEED TO SUPP)
Antitrust and Professional Sports
Sherman Act / 4 Categories / Joint Venture
§1 Sherman Act:
Any contract, combination or conspiracy in the restraint of trade shall be illegal
4 Categories:
1. Price Fixing: Maintaining price at a given level (Directly harmful to the consumer)
o Ex: Pepsi v. Coke setting one price
- Wage Fixing: People can’t sell their work for what it’s worth, doesn’t encourage all in society to reach for their most potential and higher grade
o Ex: Salary Cap - Group Boycott: Concerted refusal to deal
o Ex: Age Requirements (ban athletes under a certain age) - Market Allocation: Competitors divide markets among themselves
o Ex: Draft
Joint Venture: Structure made up of more than one company in an industry and at the same time there is an incentive for them to be both cooperators and competitors
– sports leagues considered JT.
Cooperweld v. Independent Tube
A company and a wholly owned subsidiary are one entity under the §1 and thus incapable of violation of §1
Facts: Cooperweld buys another tube company and raises prices of both tubes, the court found that they are one entity and thus incapable of violating §1.
Threshold Issue 1:
Agreement between two or more parties.
Dagher v. Texaco
If you are a joint venture, then not per se test but the proper competitive effects analysis is the Rule of Reason.
(At the point of competitive effects)
National Society of Professional Engineers v. United States
Antitrust is about ECONOMIC competition, not competition generally or even public policy but economic competition alone.
(add NFL case where they try and swindle this argument in)
At the point of Rule of Reason part two, net anti-competitive effect.
Wickard v. Filburn
Intrastate commerce can have interstate effects which equal interstate commerce.
Threshold issue 2
Antitrust Decision Tree in a Nutshell
Part 1:
§1 Sherman Act:
Any contract, combination, or consipracy in the restraint of trade is illegal.
– Before doing anything, ask if there is a union involved, if so consider the Labor Law issues, namely, Non-Statutory Labor Exemption (ADD CASE)
– Also ask, is the MLB involved, see the historic exemption for the MLB. (ADD CASE)
Part 2:
Which category of Antitrust are we in?
- Price Fixing: Maintaining price at a given level
- Wage Fixing: Salary Caps
- Group Boycott: Concerted refusla to deal
- Market Allocation: Competitors divide market (bell phone companies)
Part 3:
Threshold issues:
A) Agreement between two or more parties (Cooperweld) (Fraser)
B) Effects interstate commerce (Wickard) (You can argue not commerce, but loser arg (ADD CASE FROM END OF CLASS)
Part 4 (if yes to both thresholds): Competitive Effects Analysis: THRESHOLD HERE: -- Although any exam we will go to Rule of reason, this is a part to grab a quick point -- Is this a joint venture? (Daghar v. Texaco) if so, rule of reason, if not per se. If you want violation you want Per Se bc that says that the mere fact that one of the four categories happened is enough to find a violation. If you dont want, you argue for Rule of Reason.
Part 5: Rule of Reason
A) Market Power –> Two tests (really 4, test 1 and test 2 which has three versions) to decide: (pick what is most useful to you)
i) Test 1: US Dept of Justice and FTC version
ii) Test 2: Defines relevant market (Three versions)
1) Tanaka
2) Fraser
3) Worker's Rights View
B) Net-Anti Competitive Effect (Smith and Mackey; National Society of Prof Engineers) (Counter is focusing on things that are non-comp but in a non-econ way) (See Smith v. NFL)
i) Double Shifting Burden (Three Steps)
C) Consumer Harm (Smith and Mackey)
YOU MUST HAVE ALL THREE
Part 6: Affirmative Defenses
A) Non-Statutory Labor Exemption (if union agrees to certain restraint then it is okay bc Labor trumps Anti in this area, e.g., draft, age restrictions)
B) Statutory Labor Exemption (Norris LaGuardia Act)
C) Baseball’s Historic Exemption
