Beruflich Dokumente
Kultur Dokumente
____________________
ERRATA SHEET
1994, is
The caption
Sullivan II,
on
the coversheet
should read:
"William
H.
Members of the
"Paul Tagliabue,
et
and twenty-one
collectively as
them
by
the "NFL")
(referred to
entered against
after a jury found that the NFL violated the antitrust laws
restricting
owners of
member
football
owner of the
(the "Patriots"),
clubs from
selling
Plaintiff-appellee, William
was awarded
a total
of $51
football
million in
sell the
Patriots
him from
to a
offering 49%
private buyer
of the team to
traded stock.
Because
after the
NFL prevented
form of publicly
we vacate
remand for a
new
trial.
I.
I.
Under
laws,
Article 3.5
three-quarters of
transfers
of ownership
transfers within a
club to
stock.
The
the
of the
the NFL
interests
family.
BACKGROUND
BACKGROUND
NFL's constitution
club
owners must
in an
NFL
approve all
team, other
public through
than
rule is an
interests in an
of publicly
full authority to
and by-
traded
approve
according to Article
3.5.
Sullivan
in
1959 until
October
of
1988.
-2-
Sullivan
formed
the
the team
from the NFL, and which had no policy against public ownership of
teams.
In
league.
Under
merged into a
single
public ownership.
The
Patriots,
public ownership
Sullivan-owned company.
the
transaction
shareholders
was
Stockholders approved
subsequently
subsequently
obtained a
price.
consummated,
brought
suit,
into a new
although
some
challenging
the
to pay
and his
son, Chuck
Sullivan, who
owned the
the mid-1980s.
The
of their
-3-
debts.
On October
Inc.,
They discussed a
the
Sullivans
Patriots
$80
and the
million
other half
be repaid out
dollars,
with
half going
to Chuck Sullivan's
of the sale of
to
the
company which
of the proceeds
the loan
49% of the
Stephens agreed
they would
first have to
get NFL
approval.
Sullivan ultimately never obtained NFL approval and the deal with
Stephens never progressed beyond some preliminary discussions.
At a meeting
of the
NFL owners on
October 27,
1987,
for
stock sale
a modification
ownership
to
allow for
interests
in NFL
from the
public
public
offering
of
eventually tabled
the
owners
the NFL's
certain
Alternatively,
ownership policy
the
Patriots.
and, at
one point,
was
not in
favor of
sales of
for his
minority
contemplated
Sullivan's
request
was
Sullivan counted
offering (seven
and
against public
Sullivan requested
his public
other owners
policy
controlled
at this meeting.
of
clubs.
waiver
owners were
the 21
of allowing him to
still undecided).
Sullivan's
17 of
Sullivans that
proposals and
that league
-4-
a vote.
Sullivan
futile.
In
approximately
October of
$83.7
1988,
million to
Sullivan sold
KMS
Patriots
the Patriots
L.P. ("KMS"),
for
limited
partnership owned
by
Victor Kiam
Instead,
asset with
Murray.
appreciating
and Francis
high potential
for future
profits.
Act, 15 U.S.C.
private
debts.
in an equity offering.
to sell the
After
Sherman
Act, the
amount of
a trial
$38 million,
remittitur
provides for
on Sullivan's
jury rendered
which the
to $17 million.
entire team to
a verdict
judge
Pursuant to
Sullivan alleged
claims.
49% of the
claim under
that,
Sherman Antitrust
of the
for Sullivan
in the
later reduced
15 U.S.C.
through
15, which
-6-
II.
II.
The
NFL
has
raised
ANALYSIS
ANALYSIS
a number
of
issues
on
appeal
of law.
not.
error and we
We next
allegations of trial
that we overturn
Civ. P.
50.
We review the
court's decision
de novo,
_______
Daewoo
______
strongly and
Gallagher,
_________
962 F.2d
To establish
an antitrust violation
restraint of
trade."
under
of the
v.
-7-
reason,"
antitrust
law's
the
restraint
NFL's
policy
Corp., 485
_____
is
in
Under
Id. at
__
v. Sharp Electronics
__________________
commonly referred to as
competitive
process," are
output
______
an
and
usually
measured by
increase in prices
____________________
in
the
to the
a reduction in
_____________
relevant
market.
are the
(hereinafter
paradigmatic examples
"NCAA");
____
of restraints
of trade")
Chicago
Professional
Sports
Ltd.
_______________________________________
cert. denied,
____ ______
113 S.
Ct.
Town of Concord v.
_______________
21-22
Cir.
(1st
409 (1992).
1990),
cert.
____
Injury
to
generally in terms
of
499
U.S.
931 (1991);
competitive process
prices, better
methods."
efficient production
-8-
NFL
established the
argues
that
Sullivan
asserting (1)
appeal
has
not
on
be attributed
to be injured in
a reasonable
restrains
trade.
conceptualizing the
jury could
Although
conclude that
we
agree
harm to competition
with
the
NFL's policy
the
in this case
NFL
that
is rather
NFL does
not challenge on
___
appeal the
jury's
initial
finding
of
the
relevant
at trial.1
market
As a
and
no
result, the
____________________
1
The NFL argues in passing that certain expert testimony
related to the relevant market issue was inherently unreasonable
and thus could not support the jury's relevant market finding.
We do not consider this passing argument to be sufficient to
raise the relevant market issue on appeal as matters averted to
in a perfunctory manner,
unaccompanied by some effort at
developed argumentation, are deemed waived on appeal.
United
______
States v. Innamorati, 996 F.2d 456, 468 (1st Cir. 1993). More
______
__________
importantly, the NFL did not challenge the relevant market issue
-9-
NFL faces
injury
an uphill battle in
to competition.
presence of an
policy
restricting
the
buying
and
selling
of
such
The NFL
for
the sale
of their
ownership
interests, even
if we
points out
that member
clubs must
cooperate in
to
make
the
Football League v.
_______________
success.
Football League, 726 F.2d 1381, 1391-92 (9th Cir.), cert. denied,
_______________
____ ______
Cir.),
"NASL").
____
cert.
____
denied,
______
On the
other hand,
things like
459 U.S.
it is
and the
(1982)
(hereinafter
well established
both on and off
support, players,
broadcast revenues,
Mid-South Grizzlies
___________________
1074
that NFL
the field,
coaches, ticket
sale of
sales,
team paraphernalia.
F.2d 772,
____________________
(1984); L.A.
____
The question
of
of their
competition, is
ultimately a
question of
fact.
The NFL
do not compete against each other for the sale of their ownership
interests.
relies on
a series
of cases
which allegedly
720 F.2d at
transfers of
teams,
not
stand for
the
National
________
479 U.S.
772; Levin v.
_____
do
or acquire an
sports
National
________
These cases,
team ownership or
the
broad
the creation
proposition
of new
that no
NFL
ownership policy
F.2d at
1259-61 (finding
ownership
of
NFL
leagues, which
other
teams
and
See, e.g.,
___ ____
franchises
in
franchises
from
purchasing
cross-
competing
sports
NASL, 670
____
sports
NFL
teams,
injured
competition between the NFL and competing sports leagues and thus
-11-
violated
of the
cases
cited by
that was
the
NFL considered
found by the
Mid-South
Grizzlies
_____________________
competition
when
considered
sports
league
decisions found
jury in
the
this
Seattle Totems
______________
potential
inter-league
_____
rejected
plaintiffs'
no injury to competition
at 785-86.
Those
were not competing with the defendant sports leagues, but rather,
were seeking to join those leagues.
______________
1350;
Mid-South Grizzlies,
____________________
720
F.2d
at
785-86.
potential intra-league
_____
clubs could
be harmed
Mid-South
_________
by the
such competition.
Mid____
Association's
attempts to
Levin,
_____
and
Levin cases
_____
("N.B.A.")
385 F.
Supp. at
150-51.
against, the
Supp.
at
N.B.A.
152.
of
to join
Fishman, 807
_______
Neither case
rejection
the
plaintiffs'
based their
considered
than compete
National
concerned
F.
competition
As pointed out
in Piazza v.
______
1993),
Fishman
_______
explicitly
competition in
plaintiff
failed to
had
recognized
members.
the
raise
the
Piazza,
______
issue,
(E.D.Pa.
potential
ownership of teams,
Supp. 420
for
although the
and
Levin
_____
simply
Supp. at
430-31 &
n.16
F. Supp. at
152).
The
cited by
important distinction
the NFL
and the
to make
present case
between the
is
that here
cases
Sullivan
restricts
between
competition
ownership interests,
whereas
league's refusal to
approve a
team
merely
league,
but
themselves.
prevented
did
not
To put it
clubs
in
the
for
the
aforementioned
particular outsiders
limit
sale
competition
of
their
cases,
or a
new
from
joining
the
between
the
teams
replacement of one
competition --
it compromises
the entire
process by
which
2
This same argument distinguishes cases cited by the NFL for
the proposition that a franchisor's disapproval of a proposed
sale of a franchise does not give rise to an antitrust injury.
See Kestenbaum v. Falstaff Brewing Corp., 514 F.2d 690 (5th Cir.
___ __________
______________________
1975), cert. denied, 424 U.S. 943 (1976); McDaniel v. General
____
______
________
_______
Motors Corp., 480 F. Supp. 666 (E.D.N.Y. 1979).
Individual
_____________
decisions to block the sale of a franchise do not implicate the
harm to competition that is caused by a policy restricting all
sales of a certain type of ownership interest. Only the broad-13-
the NFL to
under
of the
are unable
to
public
ownership
Court's holding
467
the effect
argument
U.S. 752
overturns
policy.
The NFL
in Copperweld Corp. v.
________________
(1984),
controls
the
that
the Supreme
of
this
case
and
asserts
of conspiring
with each
other
under
1.
See
___
L.A.
____
do
corporation and
not
its
agree
wholly
that
Copperweld,
__________
owned subsidiary
which
to
be
found
a
single
enterprise
applies
for purposes
of
1, Copperweld,
__________
at 771,
concerning
the NFL.
to be separate
1).
467 U.S.
entities capable of
of a corporation, although
itself, "pursue[d] the
interests
Copperweld,
__________
separate
467
from
U.S. at
those
770.
of
As
the
corporation
emphasized in
itself."
City of Mt.
____________
____________________
based policy
has
competitive process
relevant market.
the potential
for the buying
to
compromise the entire
and selling of a good in a
-14-
Pleasant, Iowa v.
_______________
F.2d 268
(8th Cir. 1988), upon which the NFL relies for the application of
Copperweld
__________
alleged
to this
case,
the critical
antitrust conspirators
whether, instead,
diverse from
"any of
those of
have a
inquiry is
"unity of
the cooperative
whether the
interests" or
pursued interests
itself."
Id. at
__
274-77
the
defendants
competitors").
are,
As we
or
have
have
been,
already
actual
noted, NFL
or
potential
member
clubs
compete in several ways off the field, which itself tends to show
that the teams pursue diverse interests and thus are not a single
enterprise under
1.
Ultimately,
finding that NFL teams compete against each other for the sale of
their
both
ownership interests.
the
NFL's
competition
challenge to
and
the
Insufficient proof
in
NFL's
Proof
the
of such
competition defeats
existence
Copperweld
__________
of
an injury
argument
as
to
well.
require a judgment
Copperweld.
__________
exists
As we
competition
teams
for the
sale
that there
of
ownership
contends
that
Sullivan
did
not
present
competition
-15-
interests, or (2) a
an increase in prices,
a detrimental effect
decrease in output,
on
of harm to
competition in the
the evidence
is rather thin,
we disagree that
favor.
With
competition
for
respect
the
to
sale
evidence
of
of
ownership
the
existence
interests,
from owning
Dr.
all or part --
market
an NFL franchise."
of
one
of
competing with
them, people
might be
more effective
as
Arthur
that
investment capital in
ownership interests
Rooney II of the
will
be able
Ralph
Wilson of the
in particular.
For example,
teams
to compete
in a letter
or family owned
with the
consolidated groups."
-16-
the
team and
franchises.
make it
competitive" than
the other
about
is
it
is
which
the same
not
precisely
Noll,
Rooney,
competition at
issue
clear
and
that
Wilson
here --
of ownership interests -- a
the
were
that is
jury could
The statements
of the
NFL owners
of ownership
imply that
greater access
to
capital
all
the
particularly
obstacle
statements
the
"consolidated
competitive
that
public
access.
is not
not
affect
pressure
in
generally to whoever
of
reveal
rule against
groups"
does
teams
will
put
preventing such
ownership
for all
the
ownership
fact that
necessarily
the
the
conclusion
selling
their
that capital,
ownership,
The
increased
is the
potential
_________
such
726
F.2d
at
same as
that
public
teams
ownership
face
interests
not necessary as
1394
main
ownership by
long as the
rules,
(discussing
See L.
___ __
significance
of
competition so
that it
is not evident
in practice).
It
-17-
would
be
difficult
indeed
to
provide
direct
evidence
of
NFL
focusses
on
the fact
that
Professor
Noll
NFL points
distorts Professor
This argument
Noll's testimony.
souvenir buyers
The
would be one
Professor
Noll
portion of
the
investment
purposes.
would serve to bid up the price of the stock above what the price
would
normally be if
testimony
against
did not
each
preclude
other
for
a finding
investment
regular company.
that
NFL teams
capital via
the
His
compete
sale
of
ownership interests.
The record
also
contains sufficient
evidence of
the
normal incidents of injury to competition from the NFL's policy - reduced output, increased prices,
support the
jury's verdict.
As
pointed
out in
his
NFL
restricts
There
share of stock
officials
the market
is thus
in a professional football
themselves
for
admitted
investment capital
little dispute
that
-18-
the NFL's
that
team."
the
policy
among NFL
teams.
ownership policy
the quantity of
their
ownership of stock.
overall.
In
other
words,
the
NFL
is
literally
if
sales to
justification,
it
Professor Noll
the public
were
a premium on
has
been over
of ownership
allowed.
Even former
years,
that
[the
ownership policy] does restrict your market and, very likely, the
price you
of our franchises if
you wanted to
points
out that
the
alleged effect
of
its
-19-
ownership
interests,
policy is
to
rather than
reduce
______
prices
to raise
prices which
of NFL
E.g.,
____
team
ownership
is normally
the
Monahan's
_________
relevant market.
determining
NCAA, 468
____
price
whether there
U.S. at 107.
has
In this
been an
injury to
per se, in
______
competition.
case, regardless of
the exact
the
policy
are
plainly
unresponsive to
fans of
some
of
this product.
the public
basketball
the testimony,
professional
sports teams.
NFL's policy
injured competition
that fans
Moreover, evidence
was
Boston Celtics
demonstrated,
interest
for
offering of the
team which
fan
demand
presented concerning
professional
teams.
consumer
in buying
according to
ownership
of
relevant market
Id.3
__
____________________
3
The NFL maintains that price and output are not affected
because its ownership policy does not limit the number of games
or teams, does not raise ticket prices or the prices of game
telecasts and does not affect the normal consumer of the NFL's
product in any other way.
Such facts might be relevant to an
-20-
Sullivan's
experts
testified that
hindered
efficiency
gains, and
that allowing
the
NFL's
policy
public ownership
be "more
efficient and
football
team" from
publicly owned
much better
owning teams.
NFL teams
ownership
rule
structures which
teams,
Lamar
excluded
higher
Hunt, acknowledged
improve
prepared
team's
Dr.
would likely be
resulting in
running a
would be better
at
Noll also
stated that
managed, and
produce
management
more efficient in
running the
types
franchise values.
that increased
operations
professional
One
access to
and performance.
NFL owner,
capital can
A
memorandum
____________________
4
Although the product at issue in the relevant market is
"ownership interests," efficiency in production of that product
can be measured by the value of the ownership interest. That is,
an improved product produced more efficiently will be reflected
in the value of the output in question (regardless of the price).
In this case, the value of the product depends on the success of
the Patriots' football team, the overall efficiency of its
operations, and the success of the NFL in general.
-21-
public ownership
the league
has a strong
interest in
having
large amount
of evidence
to the
NFL presented a
now claims on
evidence was so
overwhelming that no
and in favor
of Sullivan.
We
position was
have reviewed
Ancillary Benefits
Ancillary Benefits
injures competition in
a relevant
market, it
should be
with the
proposition that
certain joint
We take no
ventures enable
We also
do
not dispute
that
a "restraint"
that
is ancillary
to
the
Rothery Storage & Van Co. v. Atlas Van Lines, Inc., 792 F.2d 210,
_________________________
_____________________
-22-
accept,
controlling who
for
472 U.S.
purposes
of
284,
1033 (1987);
v.
295-96 (1985).
this
appeal,
that
public
______
one example
rule.
Finally,
ownership
function
we accept
policy
as an
functioning
the
contributes
effective
would
be
to
sports
impaired
We
rules
Pacific
_______
NFL's
of such
claim
the ability
against
an ancillary
that its
of
to a
the
public
NFL
to
league,
and that
the
NFL's
if publicly
owned
teams
were
the league
as a whole.
establish as a matter of
among joint
efficient
of the
activity -- the
injury to
reason" out
weighed against
to legitimate and
competition must
still be
in violation of
ancillary
restraint
did
not constitute
per se
_______
-23-
____________________
472 U.S. at 293-98 (same); see also SCFC ILC, Inc. v. Visa U.S.A.
________ ______________
___________
Inc.,
____
existence of
a joint venture
may save
a restraint from
per se
______
is
its
not reasonable,
harm
to
restrictive alternative
the same benefits as
F.2d
at 1396.
competition,
is,
its benefits
if
cannot
reasonable,
a given
less
evidence of a
clearly less
Sullivan points
individual.
reasonable for
member clubs
and
all
stock to the
the
a jury
to conclude
is maintained,
other
conflicts of interest
"benefits"
of
the
NFL's
control of
are avoided,
joint
venture
arrangement are preserved while at the same time teams would have
access to
through the
-24-
The
NFL
next argues
sufficient evidence to
that
support a
Sullivan
did not
finding by the
present
jury that
the
to Sullivan.
Associated General
__________________
519, 532-33
McCready, 457
________
&
n.26 (1983);
v.
U.S.
antitrust
that
983
(1980).
"Plaintiffs
need
not
prove that
the
14.
Sullivan
asserted at
trial that
the NFL's
ownership
below
what the
included
public
team
would have
ownership of
been
the team.
ownership of a
worth in
a market
"But for"
the NFL's
much more
that
valuable and
his debts,
profitable
team.
The NFL
contends that
Sullivan failed to
establish a
and
there
is no
prevented
never
way
of
knowing
whether
the
policy
would
have
established that
the
public stock
sale was
feasible or
even if the
NFL did
not have a
policy against
public
because
not
have raised
prevent a
enough money
fire sale
of
to pay
the team).
off Sullivan's
Although
debts and
the evidence
of
causation is
not overwhelming, it is
nevertheless sufficient to
vote
ownership policy,
the NFL's
first
from
owners to
the
claim that
Sullivan never
change
or
waive
the
official
antitrust
vote was
Under certain
circumstances, an
taken.
challenged practice is
benefit, which
in order to
Estate, Inc. v. Greater Lowell Bd. of Realtors, 850 F.2d 803, 816
____________
______________________________
(1st
Cir.),
cert.
____
denied,
______
Productions, Inc. v.
_________________
Such
a requirement
488
Magid, 748
_____
U.S.
(1988);
only applies,
955
Out Front
__________
(3d Cir.
however, where
the plaintiff
1984).
or that
the practice is
relevant
market; in
such cases,
from competing in
a refused
demand is
the
the only
at 169-70.
and official
because there is
U.S.
100, 120
n.15 (1969);
v. Union
_____
699-702 (1962).
There is
Wells
_____
other case, that Sullivan must call for a vote and obtain
See, e.g.,
___ ____
request access
"[t]here was
noted
no evidence
that it
required);
of a
would
group
boycott;" although
have been,
so
the need
855 F.2d
for a
465,
demand).
request
show that he
a vote
was
v. M & R
_______
Cir. 1988)
Certainly, if
court
no evidence to
an actual
470 (7th
to
Amusement Corp.,
_______________
obviates
indicate
prove
(futility
Sullivan can
denial
allow
or amendment
of the public
ownership policy,
and
-27-
that an official
futile.
The NFL's
several
efforts
proffered
amendment
to
change
proposals were
of the
tabled.
owners
After
Rozelle
on October
further
brought
27, 1987.
His
years
to a
as
vote.
request was
then-Commissioner
Pete
votes still
in light of
the
statement,
Commissioner's
of winning a
the
votes shy
over
never
discussions,
it
vote
sufficient
would
have been
to support
Sullivan
tried
but
failed
to
finding
that
The
the
evidence is
NFL's
policy
thus
was
finding that
potentially
the Patriots
successful.
stock sale
Sullivan met
was both
feasible and
with Stephens,
Inc., an
offering,
which
Stephens
son, half
would
also
arrange.
In
retained to
-28-
set
Although specifics of
the
and Stephens
public offering
determine whether
were
the
not discussed,
stock offering
required --
indeed
was ultimately
Stephens specifically
did not
feasible,
approval
singled out
NFL
efforts to
placement of
Patriots
stock.
As discussed above,
Therefore,
NFL approval
was never
obtained.
reason
Stephens was
though
Stephens
unwilling
to proceed
also expressed
some
with the
deal, even
concern about
Sullivan's
Patriots
public
offering
potentially interested
testified
that
the
was
feasible and
sale
was
that
he
was
Sullivan himself
feasible
based
on
his
on the
public offering of
the Boston
Celtics.
public offering
would have
been feasible
had the
NFL not
blocked it.
In
addition, despite
significant financial
and legal
in the
-29-
course
he could have
brought off a
successful stock
have raised
at
Sullivan's offering on
the testimony
of Patrick
NFL, Brake's
testimony could
Brake, who
facts,
in any rational
not
be
admissibility of
The NFL
Brake's opinion
by any
methodology, and it
success.
the
does
not
offering
challenge
the
that his
opinion cannot support the jury's finding that the Patriots stock
sale
would have
been a
success if
the NFL
had allowed
it to
happen.
"When an expert opinion
facts
contradict
or
otherwise
render
the
opinion
Brooke Group,
_____________
162, 165
jury verdict
conclusion,
logical
cannot rest
without
solely on
some underlying
inferential process
to
an
expert's "bottom
facts
support the
and
line"
reasons, or
expert's
opinion.
-30-
v.
F.2d
agree
that
the
facts
and
reasoning
underlying
standpoint of
a factfinder
the facts.
his opinions and had sufficient facts to back his opinions up, to
support, in combination
jury
finding of
venture.
potential success
of the
sources, a
Patriots stock
sale
his
a review of the
offering,
the
fact
future television
Patriots, would
the
trade at a
worth.
financial statement
revenues
of
for NFL
premium value
over
and
was
Other
and
the claim
increase.
would
Sullivan
be successful
offering
public
that TV
himself
based
of Patriots
offering.
revenues to
testified that
upon
stock and
There
the NFL
the
a public
success
on the
teams would
of
his
results of
offering
earlier
the Celtics
-- highly disputed,
-31-
but potentially
that
the
Patriots
Celtics' stock
offering was
stock offering
could
to the effect
success and
be patterned
that the
after the
Celtics
specific $70
million
offering.
As
for
figure for
the
Patriots,
Brake
which,
after
Sullivan's
starting
the source
likely
proceeds
explained
subtracting
$70 million.
with a
of
base value
Brake's
from a
a two-step
sale
public
underwriting fees,
Brake arrived
of $150
at
of
49%
of
the
offering process
would
yield
this figure
million for
the
after
the Patriots.
Given the $80 million private sale price of the Patriots obtained
by
Sullivan
testimony
when
he actually
by Brake
sold
and others
the
team,
that public
and given
stock of
the
NFL teams
sufficient facts
to validate
it in
the eyes
of the
law."
embellished by various
testimony was
weight of
also not
explanations and
Rather,
justifications.
overwhelmingly contradicted
by the
or irrational.
contradicted
opinion, but
he
merely conclusory.
questioned about
that
these
the
opinion as a matter
and credibility of
-32-
his
jury to consider.
The
or irrational
Although we
would
have succeeded
allowed him to
the
his public
evidence was so
skepticism that
offering
Sullivan
if the
NFL
that, as a matter
overwhelming that no
had
of law,
find that the NFL's policy harmed Sullivan by preventing him from
doing
something he
therefore
reject
would otherwise
the
NFL's claim
have been
that
it
able to do.
is
We
entitled to
prove
sale
Sullivan and
buyers "all
other
those
Sullivan transferred
to
KMS
L.P.,
that
between
claim when he
Patriots,
provided
contract
the
the term
should be
None of the
According
interpreted
____________________
broadly to include
disagree.
the present
Absent some
express
the very
Sullivan
the
least,
"causes of
action,"
requirement in
contract
that
Gulfstream that
__________
find
that
the buyers of
v.
Gulfstream
__________
112 (3d
Cir. 1993)
assignment of
claim
of whatsoever nature").
the
We
effect
we cannot
(affirming
to the
antitrust claim to
language
action.
Patriots.
antitrust cause of
for the
the
and demands
appears in
Patriots, Sullivan
did not
of
us
pause.
Upon
careful
of
the issues,
a plausible
one and
support it.
consideration
evidence sufficient to
TRIAL ERRORS
TRIAL ERRORS
judgment in
favor of
the NFL,
had we
decided any
of those
-34-
issues in the NFL's favor, we now turn to the NFL's claim that it
is
entitled to a new
instructions
trial because of
and other
trial
errors.
In particular,
the NFL
jury with
in order to
dispositive
of the
verdict.
The NFL
argues that
the court's
a new trial.
Determining whether the failure to
instructions
actually
explained
is
given
error
to
the
depends
on
whether
the
jury,
taken
as
whole,
they tended to
instructions
adequately
confuse or mislead
the jury
on
the controlling
issues
of
the case.
Davet
_____
v.
Cir. 1990);
see also L.A. Coliseum, 726 F.2d at 1398 ("The question, then, is
________ _____________
whether,
viewing the
jury instructions
jury fully
also
whether
consider
Cir.
1989).
apprises
"As
exact instruction
party."
NFL's
proposed
as
of the
requested
the judge's
We
must
instructions
are
987 (1st
instruction
properly
failure to
give the
applicable law,
does not
trial
case to
long
the jury
whole, the
the
accurate or misleading.
as a
prejudice
the
objecting
354
-35-
(1st Cir.
1989), cert.
____
quotations omitted).
denied,
______
496 U.S.
937 (1990)
(internal
have its
by the
law and
by the evidence,
Sales, Inc. v.
___________
presented to the
Jerlyn Yacht
_____________
jury.
at 1398.
68 (1st Cir.
An error in
the jury
trial only if, upon review of the record as a whole, the error is
determined
to be
prejudicial.
Davet, 973
_____
F.2d at
26; Jerlyn
______
instructions was
the NFL's
As a result of Sullivan's
was
barred from
laws pursuant to
bringing a damages
action under
the antitrust
doctrine.
The
the availability
of the
defense because
it found
that the
____________________
6
The court's failure to instruct on the complete involvement
defense was prejudicial error and, by itself, sufficient grounds
for reversal and a new trial.
We do not decide whether any of
the other errors, standing alone, are prejudicial. We do hold,
however, that all the errors taken together are prejudicial.
-36-
evidence
showed
involvement in
and
that
Sullivan
"had
very
little,
if
any,
National
Football
prejudicial error
League
rule."
This
ruling
absolute defense to an
constituted
defense" is an
evidence
voluntary, and
in an illegal practice
substantially
CVD, Inc.
__________
v. Raytheon Co., 769 F.2d 842, 856 (1st Cir. 1985), cert. denied,
____________
____ ______
475
Inc.
____
Cir.
Berner, 472
______
defense in securities
"equal
involvement" defense, an
by a preponderance of
least
law context).
In order
restriction by creating,
an
actively
to establish
bears at
for an anticompetitive
supporting, relying
upon, or
otherwise utilizing
or her benefit.7
and
General
_______
____________________
7
The Supreme
Leaseways,
_________
essential
author
the defense
that
the
F.2d at 856.
It is not
plaintiff actually
helped
maintaining and
General
otherwise
Leaseways,
830
effectuating the
F.2d
at
723
policy.
See,
___
(applying
equal
____
__________________
involvement defense
in the
actual
adoption of
substantially involved
the
policy).8
benefitted
On
the
policy although
in supporting, enforcing
the other
hand,
plaintiff
was
and maintaining
proof that
the
plaintiff
policy, without
more, is
equal
participation."
"mere
participation" in
not sufficient to
See id.,
___ __
830 F.2d
the challenged
show "substantially
at 725
(noting that
policy is
not enough).
otherwise)
into
supporting
the
policy,
that
the
plaintiff
involvement defense.
a merger
agreement signed
by Sullivan,
to adopt
the NFL's
Sullivan's son,
negotiations.
of
Patriots
in
1976.
transaction, Sullivan
In
listed
the
proxy
the NFL's
statement
policy
for
against
that
public
letter from the NFL justifying the public ownership policy and
explaining
that the
conflicted
with
continued presence
the interests
of
of
public stockholders
the league.
Sullivan also
former shareholders
merger.
and the
justifications underlying
following the
Patriots
the reasons
-39-
for
There
is no evidence that
of the team.
or objected to
together,
jury to
this
conclude
responsibility
for
the
evidence
is
that Sullivan
NFL's
sufficient for
bears substantially
public
ownership
policy
to consider
The
this
light
of the
equal
involvement defense.
Sullivan
which
claims that
he was
not at
of the AFL
the meetings
in
committee, agreed to
in
advance that the old NFL's public ownership rule would be adopted
by the
new NFL.
he
always spoke for the entire AFL committee at his various meetings
the
other
AFL
owners,
including
Moreover, Sullivan's
from the
responsibility
circumstances
the policy.
to
weigh
like this
before
decision to adopt
Sullivan,
the
Sullivan was
In any event,
evidence
where
and
the same
any
a reasonably
involved in
it is the
make a
the
jury's
choice
evidence supports
in
two
by failing to
-40-
the opportunity to
The court's
versions of the
facts.
in the public
The
court's view that the NFL imposed the ownership policy on the AFL
owners, rendering
unsupported
factual
provided
by
their
the
questions
participation involuntary,
record.
for the
Ultimately,
jury
and none
however,
of
is
largely
these
are
the instructions
erred in
refusing
to give
Therefore, the
the NFL's
proffered
on
the
equal
involvement
defense,
the
district
court
lawsuit.
The NFL presented facts that could have led to a dismissal of the
case if they were believed by
the NFL could have
While
highlight, some
ownership policy
in its closing
argument before
the jury,
this effort was limited to the argument that the NFL's policy was
"reasonable"
rule of reason
analysis.
The
NFL did not, and could not, argue to the jury that it should rule
in favor
of
adoption
and
the NFL
because
maintenance of
complete,
voluntary
and
proffered
instruction,
Sullivan's participation
the
public
substantially
the jury
had
in
the
ownership policy
was
equal.
no
Without
occasion to
the
consider
-41-
whether Sullivan
should be deprived of a
district
court's
refusal
to send
the
As a result,
equal
involvement
establish
discussed
that the
policy
in
II.C. above,
actually caused
amend its
request a
finding
that Sullivan
"spring
into action"
that Sullivan
was
to the
he
former Commissioner
was "time
to file
NFL's policy.
owners after
support a
who did
not
suit."
Out
___
instead, Sullivan
a "dormant
until it
NFL's policy
any plan
While
contrary finding.
his request
to
to
himself,
ownership.
order
injury to
seven owners
in
Section
that the
Sullivan would have failed to prove that his injury was caused by
the antitrust policy, and judgment for the NFL would be required.
The
NFL
proposed
instructions concerning
Sullivan's
-42-
in judgment
for the
Sullivan to make
give the
NFL if
it was reasonable
such a request.
to
that to do so
would be to
comment on the evidence, and the court did not want to comment on
any
of the
evidence
presented at
is
crucial
point
trial.
We
understand
law
contained
in
the
this case,
the
NFL's
jury
was instructed
generally
that
is,
on
the issue
of
determine whether
whether the
policy,
the
alleged
49% public
offering of
his
team.
Although the
NFL
for a vote
injury to Sullivan,
argument.
Sullivan to
critical
The
failure
of
request
vote is
If the
essentially disappears.
practice, the
Therefore, the
jury should
as to whether the
was enforced
jury will
have
-43-
cause
proffered
by the
NFL
may
public offering.
need
to
Sullivan was
The instructions
be tailored
to
avoid
owners, but
instruction
commenting on
NFL
at all
on
the issue.
The
failure
from giving no
to give
some
was error.
C.
C.
sell Patriots
stock
the entire
option
club.
The
that the
been an
absolute bar to
any public
stock
that
Sullivan therefore
could
causation.
and
The
NFL's
introduced at trial.
position
was
supported
Murray
sale of
not
by
prove
evidence
because it
Murray
the position
would have
Patriots
was not
NFL took
have, blocked a
public offering by
received
into
refused to admit
stopped
evidence.
The
Murray's statement
deposition testimony
district
that he
court,
however,
would indeed
have
if
be
to exclude
court's wide
Murray's "speculative"
latitude of
testimony is well
discretion in making
within the
such evidentiary
(1984); Doty v.
____
Sewall,
______
908
Sullivan's
F.2d
(1st
Cir.
1990),
we note
that
speculative.
proceeded
NFL's
1053, 1058
public
conjecture.
ownership
successful in the
policy
was a
matter
absence of the
of
considerable
NFL to present
event, the
NFL's proffered
specifically
jury
the
the
consequences
of
legal
law of
to give
options,
options
under
because if
The Murray
Sullivan did
a legal
right to
sell
Patriots stock to the public, he did not suffer any harm from the
NFL's
been entitled to
this argument
the
NFL.
Sullivan argues
that
the NFL's
-45-
proposed
instruction
would have singled out one factual issue related to causation for
the jury's special attention,
prejudiced Sullivan.
would
have
generated
countering
instructions
on other
legal
option issue
and ultimately
arguments
notwithstanding,
These
suitable
instructions
are
feel
that,
provided covering
the jury.
as
the
long
basic
as
legal
points
unduly
confused.
instruction -- due
NFL's
defenses
depriving
the jury
to the
--
is
not sufficient
to
decide whether
the
court's
refusal
justify
from the
one of
the
effectively
Murray option
of prejudice
constituted
an
to instruct
on
the
law of
options
Anticompetitive Effects
Anticompetitive Effects
Market
Market
weighing
of
the
injury
attributable to a practice
laws.
and
the
benefits
to
competition
F.2d at 526.
The
district court
instructed the
competition
in
competition in
claiming
the
relevant
market
that all
with
market.
procompetitive
the
benefits
The NFL
effects of
to
protested,
its policy,
even
-46-
those
in a
market
restraint operated,
premised on
was
should be
that
in which
considered.
the
The NFL's
alleged
case was
public ownership
as a
joint venture.
this
beneficial
interests
the
different from
NFL
Although
effect
applied
its
to the
market
apparent that
for
ownership
by the jury,
should necessarily
compare what
that
is
it
impossible
anticompetitive
and
to
Sullivan
are essentially
conduct
procompetitive
apples and
a
of
cannot be
oranges, and
balancing
effects
be
of
a
alleged
challenged
analysis
is
defining the
a
deceptive
proper scope of
body
of
water,
a rule
of
containing
unforeseen currents
of an
by
the Supreme
extensive
analysis
Court's
examples of
-- where
procompetitive
decision in
the
the
NCAA -____
one
Court performing
Court considered
effects
that
the
rule of
value of
existed outside
of the
of
the
more
reason
certain
relevant
games
in
and
the
maintaining
NCAA's
"legitimate and
competitive
balance
important"
between
amateur
-47-
athletic teams
as a justification for a
football games).9
similar confusion.
See,
___
at
issue"
but then
considering
at 1381,
of the
wide variety
of
alleged
benefits,
and then
directing
the
finder
of fact
competition",
where
the
two types
to
the loss of
of
competition
issue.
concern
On
over the
knowledge, no authority
the one
use of
otherwise
anticompetitive
particular
justifications
correlation
hand,
several courts
wide ranging
practice,
to
be
have expressed
interests to
and
others
incomparable
of trade.
justify an
have
and
found
not
in
Smith v. Pro
_____
___
1978); Brown v.
_____
Chicago
_______
9
The Supreme Court did not expressly consider the issue
presented here. Therefore, it is impossible to tell whether the
Court was consciously applying the rule of reason to include a
broad area of procompetitive benefits in a variety of markets, or
whether the Court was simply not being very careful
and
inadvertently extended the rule of reason past its proper scope.
There is certainly no language, as Sullivan suggests, indicating
that
the Court
was considering
the alleged
benefit of
"competitive
balance" only
to
the extent
that it
had
procompetitive effects in the market for televised football
games.
-48-
(N.D.Ill. 1991).
question
under
the
practice
promotes or
rule
We agree
of reason
suppresses
is
that the
whether
competition.
ultimate
challenged
Thus, it
seems
simply
because
the
practice
produces
some
unrelated
the other
hand,
several
courts,
including
this
balance the
in other markets.
858 F.2d
Coliseum,
________
at 1381,
726 F.2d
district court's
F.2d 973,
986
of
(1st Cir.
1392, 1397,
1399.
Hoosier
_______
1984);
L.A.
____
Moreover, the
Cir. 1988);
See,
___
competition
between
the
and
other
forms
of
between NFL
is arguably refuted by
sale of
their
36 (1977).
effects on
interbrand
_____
effects
on intrabrand
_____
competition can
competition.
interbrand and
intrabrand
justify
Id.
__
at
anticompetitive
51-59.
Although
-49-
1983), there is
714
to
with
related to the
procompetitive
other forms
of
entertainment
in
one
football in
-- is
be
compared
closely
that the
to
the
anticompetitive harms
only be answered
in the other.
Clearly this
question can
we
note
that although
balancing
harms and
apply all
the time.
Indeed, Justice
Brandeis'
______________________________________
_____________
rule of
to explain
policies
and
practices;
however,
courts
maintain some
unrelated
the challenged
to
collateral
attempt to
in
practice
that
salvage a practice
should
also
that are so
they amount
that is
for
to
decidedly in
restraint of trade.
In any event, we need not enter these
to
resolve the
consider its
policy
instant dispute.
proffered justifications
cause.
The NFL
the
wanted the
jury to
for the
public ownership
NFL's ability to
conflicting interests
These
dangerous waters
that public
procompetitive justifications
product
ownership
should have
of reason analysis.
As we point out in
note [4] above, and as Sullivan himself points out, to the extent
the NFL's
NFL clubs through, for example, more valuable teams, the jury may
reason analysis.
the verdict
thinking
form is
that
it
that they
was
may have
precluded
mislead the
from
considering
jury
should
competition
in
be
informed
the
relevant
jury into
the
NFL's
form should be
removed, or else
that
of
benefits
to
include
evidence
of
evidence
market can
have
beneficial
impact
on
competition
in
the
objections by the
pretrial
NFL, the
hear
numerous references
NFL.
may, in
market
appropriate cases,
power,
conspiracy.
intent
to
motion
in limine
__________
and
repeated
the jury
antitrust cases
to
against the
admissible to
monopolize,
show things
motive,
or
method
like
of
v. National Football
_________________
the inherently
however, evidence
only
those
such evidence,
admissible if
underlying
prejudicial nature of
Sullivan
prior
can demonstrate
judgments
had
that the
conduct
direct,
logical
-52-
USFL,
____
United Shoe
___________
Mach. Corp., 315 F.2d 449, 454 (1st Cir.), cert. denied, 375 U.S.
___________
____ ______
820 (1963) (plaintiff
Cir. 1975).
or his counsel
In many of
made references to
to satisfy this
burden.
Sullivan argues
that
the prior
cases
were
relevant
either to
reasonableness of the
the
mentioned at
here,
relevant
market.
Because
none
of
the
cases
evidence of
those
prior cases
is
not relevant
to
the
The
defining the
trial
relevant market.
are relevant to
the issue of
commentary at
primarily on
without
the
issue of
unreasonable.
any
whether
As
balancing
the NFL's
public
to
was
justify its
-53-
examination,
cross-examination,
and at
argument), and
they
contained
references
context
of
upon
a new
which particular
it
variety
would be
trial.
different
be repeated in
references to prior
useful
to
point
of identifying
inadmissible, we think
more
generally
relevant to the
that
issue of
be excluded if they
out
These
Therefore, instead
more
information.
-54-
were at