Laumann et al v. National Hockey League et al

Filing 257

OPINION AND ORDER re: (271 in 1:12-cv-03704-SAS-MHD) MOTION for Summary Judgment . filed by Pittsburgh Baseball, Inc, MLB Advanced Media L.P., Chicago White Sox, Ltd., The Phillies, L.P., The Baseball Club of Seattle, L.P., San Francisco Baseball Associates, L.P., Chicago Cubs Baseball Club, LLC, Major League Baseball Enterprises Inc., MLB Advanced Media, Inc., Colorado Rockies Baseball Club, Ltd., Athletics Investment Group, LLC, Officer of the Commissioner of Baseball, (280 in 1:12-cv-03704-SAS-MHD) MOTION for Summary Judgment . filed by New York Yankees Partnership, Yankees Entertainment and Sports Networks, LLC, (183 in 1:12-cv-01817-SAS) MOTION for Summary Judgment. filed by Com cast SportsNet Chicago, LLC, Comcast SportsNet Philadelphia, L.P., Comcast Corp., Comcast SportsNet California, LLC, Comcast Sportsnet Mid-Atlantic, L.P., (212 in 1:12-cv-01817-SAS) MOTION for Summary Judgment . filed by Chicago Blackhawks Hockey Team Inc, Lincoln Hockey LLC, Hockey Western New York LLC, NHL Interactive Cyberenterprises LLC, Comcast-Spectacor L.P., NHL Enterprises L.P., New Jersey Devils LLC, San Jose Sharks LLC, Lemieux Group, L.P., New Yo rk Islanders Hockey Club L.P., National Hockey League, (275 in 1:12-cv-03704-SAS-MHD) MOTION for Summary Judgment / Comcast Defendants revised Motion for Summary Judgment. filed by Comcast SportsNet Chicago, LLC, Comcast SportsNet Ph iladelphia, L.P., Comcast Corp., Comcast SportsNet California, LLC, (216 in 1:12-cv-01817-SAS) MOTION for Summary Judgment / Comcast Defendants revised Motion for Summary Judgment. filed by Comcast SportsNet Chicago, LLC, Comcast S portsNet Philadelphia, L.P., Comcast Corp., Comcast SportsNet California, LLC, Comcast Sportsnet Mid-Atlantic, L.P., (240 in 1:12-cv-03704-SAS-MHD) MOTION for Summary Judgment. filed by New York Yankees Partnership, Yankees Entertainment and Sports Networks, LLC, (239 in 1:12-cv-03704-SAS-MHD) MOTION for Summary Judgment. filed by Pittsburgh Baseball, Inc, MLB Advanced Media L.P., Chicago White Sox, Ltd., The Phillies, L.P., The Baseball Club of Seattle, L.P., San Fra ncisco Baseball Associates, L.P., Chicago Cubs Baseball Club, LLC, MLB Advanced Media, Inc., Colorado Rockies Baseball Club, Ltd., Athletics Investment Group, LLC, Office of the Commissioner of Baseball, Major League Baseball Enterprises In c, (241 in 1:12-cv-03704-SAS-MHD) MOTION for Summary Judgment. filed by Comcast SportsNet Chicago, LLC, Comcast SportsNet Philadelphia, L.P., Comcast Corp., Comcast SportsNet California, LLC, (180 in 1:12-cv-01817-SAS) MOTION for Summar y Judgment. filed by Chicago Blackhawks Hockey Team Inc, Lincoln Hockey LLC, Hockey Western New York LLC, NHL Interactive Cyberenterprises LLC, Comcast-Spectacor L.P., NHL Enterprises L.P., New Jersey Devils LLC, San Jose Sharks LLC, Lemieux Group, L.P., New York Islanders Hockey Club L.P., National Hockey League. For the foregoing reasons, all four motions for summary judgment are DENIED in full. The Clerk of the Court is directed to close these motions [Dkt. Nos. 180, 183 , 212, 216, 224 in Laumann, 12 Civ. 1817, and Dkt. Nos. 239, 240, 241, 261, 271, 275, 280 in Garber, 12 Civ. 3704]. A conference is scheduled for August 20, 2014 at 4:30 pm., ( Status Conference set for 8/20/2014 at 04:30 PM before Judge Shira A. Scheindlin.) (Signed by Judge Shira A. Scheindlin on 8/4/2014) (lmb)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

THOMAS LAUMANN, ROBERT SILVER,
GARRETT TRAUB, and DAYID DILLON,
representing themselves and all other similarly
situated,
OPINION AND
ORDER

Plaintiffs,
- against NATIONAL HOCKEY LEAGUE, et al.,
Defendants.

12-cv-1817 (SAS)

-------------------- x
MARC LERNER, DEREK RASMUSSEN, and
GARRETT TRAUB, representing themselves and all
other similarly situated,
12-cv-3704 (SAS)
Plaintiffs,
- against OFFICE OF THE COMMISSIONER OF BASEBALL,
et al.,
Defendants.

------------------~X

SHIRA A. SCHEINDLIN, U.S.D.J.:
I.

INTRODUCTION
Plaintiffs bring these putative class actions against the National

1

Hockey League (“NHL”) and various individual clubs in the league (the “NHL
Defendants”); Major League Baseball (“MLB”) and various individual clubs in the
league (the “MLB Defendants”) (together the “League Defendants”); multiple
regional sports networks (“RSNs”) that produce and distribute professional
baseball and hockey programming;1 two multichannel video programming
distributors (“MVPDs” or “distributors”), Comcast and DIRECTV (together with
the RSNs, the “Television Defendants” or “broadcasters”); Madison Square
Garden Company and the New York Rangers Hockey Club (the “MSG
Defendants”); and New York Yankees Partnership and Yankees Entertainment &
Sports Network, LLC (“YES”) (together the “Yankee Defendants”). Plaintiffs
allege violations under Sections 1 and 2 of the Sherman Antitrust Act (the
“Sherman Act”).
On July 27, 2012, the defendants jointly moved to dismiss the
Complaints in both actions, Garber v. Office of the Commissioner of Baseball
(“Garber”) and Laumann v. National Hockey League (“Laumann”). In an
Opinion and Order dated December 5, 2012, I granted the motion in part and

1

Several defendant RSNs are owned and controlled by defendant
Comcast, several are owned and controlled by defendant DIRECTV, and two are
independent of the MVPDs but share ownership with an individual club.
2

denied it in part.2 Plaintiffs Fernanda Garber and Peter Herman were dismissed
from both cases, and plaintiff Robert Silver was dismissed from the Garber case,
for lack of antitrust standing. Additionally, I dismissed plaintiffs’ claims under
Section 2 of the Sherman Act against the Television Defendants.3
On August 19, 2013, Comcast and its affiliated RSNs (the “Comcast
Defendants”) filed a motion to compel arbitration against Garrett Traub, Silver,
Vincent Birbiglia, Thomas Laumann, and Derek Rasmussen, and to stay the claims
of David Dillon and Marc Lerner pending resolution of the arbitration. Comcast’s
motion was granted as to Traub, Laumann, and Rasmussen, but denied as to Silver,
Birbiglia, Dillon, and Lerner. The same day, DIRECTV and its affiliated RSNs
(the “DIRECTV Defendants”) filed a motion to compel arbitration against Lerner.
DIRECTV’s motion was denied in full.4
The Comcast Defendants, the DIRECTV Defendants, the NHL
Defendants, and the MLB Defendants now move for summary judgment on the

2

See Laumann v. National Hockey League, 907 F. Supp. 2d 465
(S.D.N.Y. 2012).
3

See id. at 492.

4

See Garber, No. 12 Civ. 3704, Dkt. No. 222; Laumann, No. 12 Civ.
1817, Dkt. No. 167.
3

remaining claims.5 For the reasons that follow, all four motions are DENIED in
full.
II.

BACKGROUND
NHL is an unincorporated association of thirty major league

professional ice hockey clubs, nine of which are named as defendants in
Laumann.6 MLB is an unincorporated association of thirty professional baseball
clubs, nine of which are named as defendants in Garber.7 The clubs within each
League are competitors – both on the field and in the contest to broaden their fan
bases. However, the clubs must also coordinate in various ways in order to
produce live sporting events, including agreeing upon the game rules and setting a

5

The Yankee Defendants and the MSG Defendants have joined in the
other defendants’ motions. See Garber, No. 12 Civ. 3704, Dkt. No. 280 (indicating
that the New York Yankees “refer[] the Court to the memorandum of law and
statement of material facts filed today by the other Major League Baseball club
defendants in this action,” and that “YES, which is a regional sports network
(“RSN”), respectfully refers the Court to the memoranda of law and statements of
material facts filed today by the other RSN defendants in this action”). See also
Laumann, No. 12 Civ. 1817, Dkt. No. 217 (indicating the MSG Defendants’
joinder in the NHL Defendants’ revised motion for summary judgment).
6

See NHL Defendants’ Motion for Summary Judgment (“NHL Mem.”)

at 3.
7

See Memorandum of Law in Support of the MLB Defendants’ Motion
for Summary Judgment (“MLB Mem.”) at 4.
4

schedule of games for the season.8 Both leagues divide their member teams into
geographic territories and assign each team a home television territory (“HTT”) for
broadcasting purposes.9 Neither the Comcast Defendants nor the DIRECTV
Defendants played a role in the initial creation of the Leagues’ HTTs.10
The structure of the territorial broadcasting system is largely
uncontested. By League agreement, each club agrees to license its games for
telecast only within its designated HTT.11 The clubs then contract with RSNs
through Rights Agreements.12 The Rights Agreements generally provide each
RSN the exclusive right to produce a club’s games and telecast them in the HTT.13
8

See MLB Defendants’ Rule 56.1 Statement of Undisputed Material
Facts (“MLB 56.1”) ¶¶ 4–5. See also NHL Mem. at 3.
9

See Comcast’s Statement of Undisputed Material Facts Pursuant to
Local Rule 56.1 (“Comcast 56.1”) ¶ 2; NHL Mem. at 4–5; MLB 56.1 ¶ 68.
10

See Comcast 56.1 ¶ 4; The DIRECTV Defendants’ Rule 56.1
Statement of Undisputed Facts (“DIRECTV 56.1”) ¶ 4.
11

See MLB 56.1 ¶ 68; NHL Mem. at 5.

12

See NHL Mem. at 5; Comcast 56.1 ¶ 2.

13

MLB 56.1 ¶ 93; Comcast 56.1 ¶¶ 6, 14; DIRECTV 56.1 ¶ 6; NHL
Mem. at 5. Plaintiffs do not challenge the clubs’ right to grant production and
distribution rights for their own games to only one RSN (hereinafter “content
exclusivity”). Such exclusivity is to be distinguished from the exclusivity
established by the territorial rules, which prevent each RSN from televising its
programming outside the HTT and protect it from competing with the
programming of other teams’ games within the HTT (hereinafter “territorial
exclusivity”).
5

The Agreements do not permit the RSNs to license telecasts for broadcast outside
the HTTs.14 The Rights Agreements also require the RSNs to provide their
telecasts to the Leagues without charge for use in the out-of-market packages
(“OOM packages”).15 The clubs keep the revenue from their respective Rights
Agreements. There are significant differences in the economic value of the various
HTTs.16
In order to produce the telecasts of live games, the RSNs invest in
equipment, production facilities, and a large staff.17 They also produce “shoulder”
programming such as pre-game and post-game shows.18 The RSNs then sell their
programming to MVPDs like Comcast and DIRECTV through Affiliation
Agreements, and the MVPDs televise the programming through standard packages
sold to consumers within the HTT.19 Even when an MVPD agrees to carry a RSN,
it does not always distribute that RSN throughout its entire territory.20 The

14

See Comcast 56.1 ¶ 22.

15

See MLB 56.1 ¶¶ 68, 150; Comcast 56.1 ¶ 18; NHL Mem. at 6.

16

See MLB 56.1 ¶ 25; NHL Mem. at 4.

17

See MLB 56.1 ¶ 103; Comcast 56.1 ¶ 14.

18

See MLB 56.1 ¶ 104; DIRECTV 56.1 ¶¶ 17, 19; Comcast 56.1 ¶ 19.

19

See Comcast 56.1 ¶ 12; NHL Mem. at 5.

20

See MLB 56.1 ¶ 112; DIRECTV 56.1 ¶ 22.
6

MVPDs acquire the rights to broadcast the games subject to the territorial
restrictions in the RSNs’ agreements with the Leagues.21 The MVPDs black out
games in unauthorized territories in accordance with those restrictions.
Fans can watch out-of-market games in one of two ways. First, some
games are televised nationally through contracts between the Leagues and national
broadcasters like ESPN and Fox.22 The clubs have agreed to allow the Leagues to
negotiate national contracts on their behalf. The Leagues’ agreements with
national broadcasters contain provisions requiring the Leagues to preserve the
HTTs.23 The revenues from national broadcasts are shared equally among the
clubs.24
Second, the Leagues produce OOM packages in both television and
Internet format. The television packages – NHL Center Ice and MLB Extra
Innings – are available for purchase through MVPDs, including Comcast and
DIRECTV.25 The Internet packages – NHL GameCenter Live and MLB.tv – are

21

See Comcast 56.1 ¶ 22; DIRECTV 56.1 ¶ 21.

22

See MLB 56.1 ¶¶ 124–125; NHL Mem. at 4.

23

See MLB 56.1 ¶ 130; NHL Mem. at 2.

24

See MLB 56.1 ¶ 1; NHL 56.1 ¶ 14.

25

See Comcast 56.1 ¶ 30; Memorandum of Law in Support of the
DIRECTV Defendants’ Motion for Summary Judgment (“DIRECTV Mem.”) at 7.
7

available for purchase directly from the Leagues.26 The OOM packages are
comprised of local RSN programming from each of the clubs.27 As with the
national broadcasts, revenues from the OOM packages are shared equally among
the clubs.28
Each of the OOM packages requires the purchase of the full slate of
out-of-market games, even if a consumer is only interested in viewing the games of
one team. The OOMs exclude in-market games to “avoid diverting viewers from
local RSNs that produce the live game feeds that form the OOM packages.”29
In sum, each RSN is the sole producer of its club’s games30 and the
sole distributor of those games within the HTT aside from limited nationally
broadcasted games. The OOM packages do not show in-market games to avoid
competition with the local RSN. Additionally, the territorial broadcast restrictions
allow each RSN to largely avoid competing with out-of-market games produced by
other RSNs.

26

See Comcast 56.1 ¶ 31; DIRECTV Mem. at 4.

27

See MLB 56.1 ¶¶ 68, 150; Comcast 56.1 ¶ 18; NHL Mem. at 6.

28

See MLB 56.1 ¶ 153; NHL 56.1 ¶ 14.

29

MLB 56.1 ¶ 47. Accord Comcast 56.1 ¶ 33.

30

One exception is that the teams in each League have agreed to permit
the visiting team to produce a separate telecast of away games.
8

Internet streaming rights are owned by the Leagues and/or the clubs.31
The RSNs have no right to license their programming for Internet streaming
directly. The Internet OOM packages are the primary way for fans to view games
on the Internet. Additionally, some MVPDs have negotiated with the Leagues to
provide Internet streaming of out-of-market games to subscribers of the OOM
television packages.32 Internet streaming of in-market games remains largely
unavailable to consumers.33
III.

STANDARD OF REVIEW
Summary judgment is appropriate “only where, construing all the

evidence in the light most favorable to the non-movant and drawing all reasonable
inferences in that party’s favor, there is ‘no genuine issue as to any material fact

31

See MLB ¶ 157; DIRECTV 56.1 ¶ 29; Plaintiffs’ Response to
DIRECTV Defendants’ Local Rule 56.1 Statement of Undisputed Material Facts ¶
29.
32

See DIRECTV 56.1 ¶ 34. Fans must authenticate their OOM
television subscription in order to access the games online.
33

See MLB 56.1 ¶ 171 (revealing that only three baseball clubs have
reached agreements with MLB to permit in-market streaming of their games);
DIRECTV 56.1 ¶¶ 32, 36, 38 (noting that no NHL team has conducted in-market
streaming and only two baseball clubs have done so in the past, and also stating
that DIRECTV has unsuccessfully tried to negotiate for in-market streaming with
the Leagues).
9

and . . . the movant is entitled to judgment as a matter of law.’”34 “A fact is
material if it might affect the outcome of the suit under the governing law, and an
issue of fact is genuine if the evidence is such that a reasonable jury could return a
verdict for the nonmoving party.”35
“[T]he moving party has the burden of showing that no genuine issue
of material fact exists and that the undisputed facts entitle him to judgment as a
matter of law.”36 To defeat a motion for summary judgment, the non-moving party
must “do more than simply show that there is some metaphysical doubt as to the
material facts,”37 and “may not rely on conclusory allegations or unsubstantiated
speculation.”38
In deciding a motion for summary judgment, “[t]he role of the court is
not to resolve disputed issues of fact but to assess whether there are any factual

34

Rivera v. Rochester Genesee Reg’l Transp. Auth., 743 F.3d 11, 19 (2d
Cir. 2014) (quoting Fed. R. Civ. P. 56(c)) (some quotation marks omitted).
35

Windsor v. United States, 699 F.3d 169, 192 (2d Cir. 2012), aff’d, 133
S. Ct. 2675 (2013) (quotations and alterations omitted).
36

Coollick v. Hughes, 699 F.3d 211, 219 (2d Cir. 2012) (citations

omitted).
37

Brown v. Eli Lilly & Co., 654 F.3d 347, 358 (2d Cir. 2011) (quotation
marks and citations omitted).
38

Id. (quotation marks and citations omitted).
10

issues to be tried.”39 “‘Credibility determinations, the weighing of the evidence,
and the drawing of legitimate inferences’” are jury functions, not those of a
judge.40
IV.

APPLICABLE LAW
A.

Section 1 of the Sherman Act
Section 1 of the Sherman Act prohibits “[e]very contract, combination

in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce
among the several States.”41 “The crucial question in a Section 1 case is [] whether
the challenged conduct stems from independent decision or from an agreement,
tacit or express.”42 “In order to prove a conspiracy, the antitrust plaintiff should
present direct or circumstantial evidence that reasonably tends to prove that the
[defendant] and others had a conscious commitment to a common scheme designed

39

Brod v. Omya, Inc., 653 F.3d 156, 164 (2d Cir. 2011) (quotation
marks and citations omitted).
40

Barrows v. Seneca Foods Corp., 512 Fed. App’x 115, 117 (2d Cir.
2013) (quoting Redd v. New York Div. of Parole, 678 F.3d 166, 174 (2d Cir.
2012)).
41

15 U.S.C.A. § 1 (West 2014).

42

Mayor & Council of Baltimore v. Citigroup, Inc., 709 F.3d 129 (2d
Cir. 2013) (quotation marks and citations omitted).
11

to achieve an unlawful objective.”43 A business decision may be lawful when made
unilaterally but unlawful when made pursuant to an agreement.44
“Parallel conduct can be probative evidence bearing on the issue of
whether there is an antitrust conspiracy. However, parallel conduct alone will not
suffice as evidence of such a conspiracy, even if the defendants ‘knew the other
defendant companies were doing likewise. . . .’”45 Parallel conduct must be
accompanied by “plus factors,” such as “a common motive to conspire, evidence
that shows that the parallel acts were against the apparent individual economic

43

Anderson News, LLC v. American Media, Inc., 680 F.3d 162, 184 (2d
Cir. 2012) (quotation marks and citations omitted).
44

See Interstate Circuit, Inc. v. United States, 306 U.S. 208, 229–30
(1939) (finding that “[t]he fact that the restrictions may have been of a kind which
a distributor could voluntarily have imposed, but did not, does not alter the
character of the contract as a calculated restraint” in violation of the Sherman Act);
In re Publication Paper Antitrust Litig., 690 F.3d 51, 68 (2d Cir. 2012) (“[T]he
mere fact that following price increases announced by competitors may have been
consistent with [defendant’s] overall pricing strategy does not immunize
[defendant] from liability if it had an illegal agreement with [a competitor] to
adhere to that strategy.”); Levitch v. Columbia Broad. Sys., Inc., 495 F. Supp. 649,
672 (S.D.N.Y. 1980), aff’d, 697 F.2d 495 (2d Cir. 1983) (“So long as the refusal to
deal is the product of an independent determination, rather than an unlawful
understanding, tacit or expressed, the decision does not run afoul of the antitrust
laws.”).
45

Apex Oil Co. v. DiMauro, 822 F.2d 246, 253 (2d Cir. 1987) (quoting
Modern Home Inst., Inc. v. Hartford Accident & Indemnity Co., 513 F.2d 102, 110
(2d Cir. 1975)). Accord Publication Paper, 690 F.3d at 62 (“Conscious
parallelism alone, however, does not establish an antitrust violation. Such behavior
is consistent with both unlawful conspiracy and lawful independent conduct.”).
12

self-interest of the alleged conspirators, and evidence of a high level of interfirm
communications.”46 If the “parties to vertical agreements [] have knowledge that
other market participants are bound by identical agreements, and their participation
is contingent upon that knowledge, they may be considered participants in a
horizontal agreement in restraint of trade.”47
The Supreme Court has clarified that Section 1 “outlaw[s] only
unreasonable restraints.”48 To establish a Section 1 violation, a plaintiff must
demonstrate “concerted action between at least two legally distinct economic
entities” that “constitute[s] an unreasonable restraint of trade either per se or under
the rule of reason.”49
Certain agreements that have “manifestly anti-competitive effects and

46

Mayor & Council of Baltimore, 709 F.3d at 136.

47

Laumann, 907 F. Supp. 2d at 486–87. Accord Modern Home, 513
F.2d at 110 (“noting that “decisions [that are] interdependent . . . raise the inference
of a tacit agreement”); Levitch, 495 F. Supp. at 674 (“It must be demonstrated that
the parallel decisions were interdependent in order to raise the inference of a tacit
agreement.”).
48

Texaco Inc. v. Dagher, 547 U.S. 1, 5 (2006) (quotation marks and
citations omitted).
49

Primetime 24 Joint Venture v. National Broad., Co., 219 F.3d 92, 103
(2d Cir. 2000) (quotation marks and citations omitted). Accord E & L Consulting,
Ltd. v. Doman Indus. Ltd., 472 F.3d 23, 29 (2d Cir. 2006) (“A violation of Section
1 generally requires a combination or other form of concerted action between two
legally distinct entities resulting in an unreasonable restraint on trade.”).
13

lack . . . any redeeming virtue” are deemed per se violations of the Sherman Act.50
Outside this category of “necessarily illegal” restraints, “[t]he rule of reason is the
accepted standard for testing whether a practice restrains trade in violation of §
1.”51 “The rule [of reason] distinguishes between restraints with anticompetitive
effect that are harmful to the consumer and restraints stimulating competition that
are in the consumer’s best interest.”52 In applying the rule of reason, courts “weigh
all of the circumstances surrounding the challenged acts to determine whether the
alleged restraint is unreasonable,” taking into account “specific information about
the relevant business, the restraint’s history, nature, and effect, and [w]hether the
businesses involved have market power.”53 Certain challenged practices warrant
an “abbreviated or quick-look rule of reason analysis”54 where “the great likelihood

50

Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 887
(2007) (internal quotations and citations omitted). Categorizing a restraint as per
se illegal “eliminates the need to study the reasonableness of an individual restraint
in light of the real market forces at work.” Id. at 886.
51

Id. at 885–86.

52

Id. at 886.

53

Gatt Commc’ns, Inc. v. PMC Assoc., L.L.C., 711 F.3d 68, 75 n.8 (2d
Cir. 2013) (quotation marks and citations omitted).
54

Major League Baseball Prop., Inc. v. Salvino, Inc., 542 F.3d 290, 317
(2d Cir. 2008) (quotation marks and citations omitted).
14

of anticompetitive effects can be easily ascertained.”55
In applying the rule of reason, the Second Circuit employs a burdenshifting framework:
[P]laintiffs bear an initial burden to demonstrate the defendants’
challenged behavior had an actual adverse effect on competition
as a whole in the relevant market . . . . If the plaintiffs satisfy their
initial burden, the burden shifts to the defendants to offer evidence
of the pro-competitive effects of their agreement. . . . Assuming
defendants can provide such proof, the burden shifts back to the
plaintiffs to prove that any legitimate competitive benefits offered
by defendants could have been achieved through less restrictive
means. . . . Ultimately, the factfinder must engage in a careful
weighing of the competitive effects of the agreement – both pro
and con – to determine if the effects of the challenged restraint
tend to promote or destroy competition.56
Plaintiffs can meet their initial burden by showing that defendants had market
power and that their actions had an adverse effect on price, output, or quality.57
B.

Section 2 of the Sherman Act

55

Id. The Supreme Court found an abbreviated analysis appropriate
where a league agreement expressly limited the number of college football games
that could be televised and fixed minimum prices for those games. See National
Collegiate Athletic Ass’n v. Board of Regents of the Univ. of Oklahoma, 468 U.S.
85, 109–10 (1984) (“NCAA”) (“[W]hen there is an agreement not to compete in
terms of price or output, no elaborate industry analysis is required to demonstrate
the anticompetitive character of such an agreement.”).
56

Salvino, 542 F.3d at 317 (internal quotation omitted).

57

See United States v. Visa U.S.A., Inc., 344 F.3d 229, 238 (2d Cir.

2003).
15

Section 2 of the Sherman Act states that “[e]very person who shall
monopolize, or attempt to monopolize, or combine or conspire with any other
person or persons, to monopolize any part of the trade or commerce among the
several States, or with foreign nations, shall be deemed guilty of a felony . . . .”58
In order to state a claim for monopolization under Section 2, plaintiffs must
establish “‘(1) the possession of monopoly power in the relevant market and (2) the
willful acquisition or maintenance of that power as distinguished from growth or
development as a consequence of a superior product, business acumen, or historic
accident.’”59 Specifically, plaintiffs must establish that the defendant “(1) engaged
in predatory or anticompetitive conduct with (2) a specific intent to monopolize
and (3) a dangerous probability of achieving monopoly power.”60
C.

The Baseball Exemption
In 1922, in Federal Baseball Club of Baltimore v. National League of

Professional Baseball Clubs, the Supreme Court held that “the business [of] giving

58

15 U.S.C.A. § 2 (West 2014).

59

In re DDAVP Direct Purchaser Antitrust Litig., 585 F.3d 677, 687 (2d
Cir. 2009) (quoting PepsiCo, Inc. v. Coca-Cola Co., 315 F.3d 101, 105 (2d Cir.
2002)).
60

Affinity LLC v. GfK Mediamark Research & Intelligence, LLC, 547
Fed. App’x 54, 57 (2d Cir. 2013). Accord PepsiCo, 315 F.3d at 105.
16

exhibitions of baseball” was not subject to the Sherman Act.61 The plaintiff
baseball club alleged that the defendants had destroyed the Federal League, a
former competitor of the American and National Leagues, by poaching its
constituent clubs.62 The Court affirmed dismissal and held that “exhibitions of
base ball [] [were] purely state affairs” that did not constitute interstate commerce
subject to the antitrust laws.63
In 1953, the Court again addressed the so-called “baseball exemption”
in Toolson v. New York Yankees, Inc.64 In Toolson, a professional baseball player
sued multiple baseball clubs and leagues for antitrust violations stemming from
major league baseball’s ineligibility rules, which permitted teams to transfer
players without their consent. Any player who refused to comply with an
involuntary transfer was branded “ineligible” and banned from playing for any
other team.65 The plaintiff also argued in his written submissions that the
61

259 U.S. 200, 208 (1922).

62

See id. at 207.

63

Id. at 208.

64

346 U.S. 356 (1953). The Supreme Court in Toolson affirmed the
decisions in three different cases on appeal from the Sixth and Ninth Circuits. See
Corbett v. Chandler, 202 F.2d 428 (6th Cir. 1953); Kowalski v. Chandler, 202 F.2d
413 (6th Cir. 1953); Toolson v. New York Yankees, 200 F.2d 198 (9th Cir. 1952).
65

See Toolson v. New York Yankees, 101 F. Supp. 93, 93 (S.D. Cal.
1951) (“Toolson I”), aff’d, 200 F.2d 198 (9th Cir. 1952) (“Toolson II”), aff’d, 346
17

defendants’ territorial broadcasting restrictions constituted an illegal restraint of
trade in violation of the Sherman Act.66
The district court addressed solely the plaintiff’s allegations involving
the ineligibility rules67 and dismissed the case based on the Supreme Court’s
determination in Federal Baseball that the business of baseball did not constitute
interstate commerce.68 The court discussed television broadcasting only in the
context of evaluating the degree of baseball’s interstate nexus.69 The Ninth Circuit
affirmed the decision without comment.70
In Toolson III’s two companion cases, Kowalski v. Chandler and

U.S. 356 (1953) (“Toolson III”).
66

In his submissions to the Ninth Circuit, the plaintiff argued that
defendants had agreed amongst themselves that “no Major League club shall
authorize a broadcast or telecast of any of its games from a station outside its home
territory and within the home territory of any other baseball club, without the
consent of such other clubs.” Petitioner’s Opening Brief on Writ of Certiorari to
the United States Court of Appeals for the Ninth Circuit, Toolson II (No. 13228),
1953 WL 78316, at *6. As a result, plaintiff argued, the defendants had “greatly
lessened and eliminated all competition in the exhibition of baseball games by
means of broadcasting and televising among the several states.” Id. at *9.
67

The district court’s summary of the plaintiff’s claims omits any
mention of the broadcasting allegations. See Toolson I, 101 F. Supp. at 93.
68

See id. at 94–95.

69

See id. at 94.

70

See Toolson II.
18

Corbett v. Chandler, the Sixth Circuit affirmed dismissal of antitrust claims against
the League on interstate commerce grounds. As in Toolson, television
broadcasting was mentioned only in the context of deciding whether baseball had a
sufficient interstate nexus.71
The Supreme Court affirmed all three decisions in one paragraph,
reiterating Federal Baseball’s holding that “the business of providing public
baseball games for profit between clubs of professional baseball players [is] not
within the scope of the federal antitrust laws.”72 The Court noted that the business
of baseball had developed for thirty years in reliance on Federal Baseball, and that
“if there are evils in this field which now warrant application to it of the antitrust
laws it should be by legislation.”73 Thus, the Court affirmed the judgments below
“on the authority of Federal Baseball Club of Baltimore v. National League of
Professional Baseball Clubs, [] so far as that decision determine[d] that Congress
had no intention of including the business of baseball within the scope of the
federal antitrust laws.”74
71

See Kowalski, 202 F.2d at 414; Corbett, 202 F.2d at 413. In Corbett,
the Sixth Circuit affirmed the district court without comment except to reference its
decision in Kowalski, which was issued the same day.
72

Toolson III, 346 U.S. at 357.

73

Id.

74

Id.
19

In 1961, Congress enacted the Sports Broadcasting Act (“SBA”),
which created an antitrust exemption for certain types of professional sports
broadcasting agreements, particularly league-wide contracts for over-the-air
broadcasts.75 Aside from that limited exception, the SBA did not change the
applicability of the antitrust laws to professional sports.76 The Act expressly did
not apply to any agreement that “prohibits . . . [the] televising [of] any games
within any [geographic] area, except within the home territory of a member club of
the league on a day when such club is playing at home.”77 The Supreme Court
noted that the SBA:

75

See 15 U.S.C.A. § 1291 (West 2014) (“The antitrust laws . . . shall not
apply to any joint agreement by or among persons engaging in or conducting the
organized professional team sports of football, baseball, basketball, or hockey, by
which any league of clubs participating in professional football, baseball,
basketball, or hockey contests sells or otherwise transfers all or any part of the
rights of such league’s member clubs in the sponsored telecasting of the games of
football, baseball, basketball, or hockey, as the case may be, engaged in or
conducted by such clubs.”). See also NCAA, 468 U.S. at 104 n.28 (stating that the
SBA “grant[ed] professional sports an exemption from the antitrust laws for joint
marketing of television rights”).
76

See 15 U.S.C.A. § 1294 (West 2014) (“Nothing contained in this
chapter shall be deemed to change, determine, or otherwise affect the applicability
or nonapplicability of the antitrust laws to any act, contract, agreement, rule, course
of conduct, or other activity by, between, or among persons engaging in,
conducting, or participating in the organized professional team sports of football,
baseball, basketball, or hockey, except the agreements to which section 1291 of
this title shall apply.”).
77

Id. § 1292.
20

demonstrates Congress’ recognition that agreements among
league members to sell television rights in a cooperative fashion
could run afoul of the Sherman Act, and in particular reflects its
awareness of the decision in United States v. National Football
League, 116 F.Supp. 319 (E.D. Pa. 1953), which held that an
agreement among the teams of the National Football League [not
to telecast games in certain geographic areas at certain times]
violated § 1 of the Sherman Act.78
In 1972, the Supreme Court again addressed the baseball exemption
in Flood v. Kuhn.79 The plaintiff, a professional baseball player, challenged the
“reserve system,” which allowed teams to transfer players without their consent
and precluded players from independently signing with new teams. The Court
expressly held that baseball was “a business [] engaged in interstate commerce,”
undercutting the entire legal basis for the antitrust exemption as articulated in
Federal Baseball and Toolson.80 Nonetheless, the Court preserved the exemption
as “an aberration that has been with us now for half a century, one heretofore
deemed fully entitled to the benefit of stare decisis . . . .”81 Because the exemption
had been allowed to develop without any congressional interference despite “full

78

NCAA, 468 U.S. at 104 n.28.

79

See 407 U.S. 258 (1972).

80

Id. at 282.

81

Id.
21

and continuing congressional awareness,”82 the Court held that “the remedy, if any
is indicated, is for congressional, and not judicial, action.”83 The Court specifically
addressed the reserve clause in its discussion and holding, concluding that the
“reserve system enjoy[s] exemption from the federal antitrust laws,” and “Congress
as yet has had no intention to subject baseball’s reserve system to the reach of the
antitrust statutes.”84
Since Flood, the Court has expressly questioned the logic of the
baseball exemption, calling it “at best of dubious validity” and refusing to extend it
to other professional sports.85 The Court noted that, “were [it] considering the
question of baseball for the first time upon a clean slate,” it would not adopt an
antitrust exemption.86
In 1998, Congress passed the Curt Flood Act, which provided that
“conduct, acts, practices, or agreements of persons in the business of organized
professional major league baseball directly relating to or affecting employment of
major league baseball players” are “subject to the antitrust laws to the same extent”
82

Id. at 283.

83

Id. at 285.

84

Id. at 282–83 (emphasis added).

85

Radovich v. National Football League, 352 U.S. 445, 450 (1957).

86

Id. at 452.
22

as other sports.87 In other words, the Act removed employment-related agreements
from the common law baseball exemption. The Act did not alter the applicability
of the antitrust laws to “any conduct, acts, practices, or agreements other than . . .
employment of major league baseball players.”88
D.

Antitrust Standing Under Illinois Brick
The Supreme Court’s decision in Illinois Brick Co. v. Illinois

established that “[g]enerally, only direct purchasers have standing to bring civil
antitrust claims.”89 The rule serves to avoid the difficulties of “apportion[ing] the
recovery among all potential plaintiffs . . . from direct purchasers to middlemen to
ultimate consumers,” eliminates the possibility of duplicative recovery, and
promotes enforcement by purchasers who have been most directly injured by the
alleged violation.90 “[W]here intermediate purchasers in the chain of distribution .
. . [are] participants in the conspiracy, the first purchasers who are not part of the

87

15 U.S.C.A. § 26b(a) (West 2014).

88

Id. § 26b(b).

89

Simon v. KeySpan Corp., 694 F.3d 196, 201 (2d Cir. 2012) (citing
Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977)).
90

Illinois Brick, 431 U.S. at 728–33, 741–47. Accord Kansas v.
UtiliCorp United, Inc., 497 U.S. 199, 216 (1990) (affirming Illinois Brick and
cautioning that “the possibility of allowing an exception [to the direct purchaser
requirement], even in rather meritorious circumstances, would undermine the
rule”).
23

conspiracy ‘are entitled to collect damages from both the manufacturers and their
intermediaries if conspiracy and overcharges can be established.’”91
V.

DISCUSSION
A.

The Baseball Exemption Does Not Apply to Territorial
Broadcasting Restrictions
The continued viability and scope of the baseball exemption are far

from clear. The MLB Defendants argue that the territorial broadcasting restrictions
at issue here fall under the exemption and preclude their liability. They base their
argument principally on the holding in Toolson and the language of the Curt Flood
Act.92 Specifically, the MLB Defendants argue that the Supreme Court in Toolson
affirmed dismissal of all of the plaintiff’s claims, including the factual allegations
related to territorial broadcasting restrictions. Therefore, the Court must have
found those restrictions to be covered by the exemption.
However, none of the published opinions in the Toolson cases – at the
district, circuit, or Supreme Court levels – even mentioned the territorial
broadcasting allegations. Additionally, the Supreme Court expressly limited its

91

Laumann, 907 F. Supp. 2d at 482 (quoting Paper Sys. Inc. v. Nippon
Paper Indus. Co., 281 F.3d 629, 632 (7th Cir. 2002)).
92

See MLB Mem. at 10 (arguing that the Curt Flood Act and the official
Senate Report indicate that Congress did not intend the antitrust laws to apply to
broadcasting).
24

holding in Toolson to the contours of its decision in Federal Baseball, which rested
entirely on interstate commerce grounds and did not involve broadcasting-related
allegations. Indeed, because television broadcasting is an interstate industry by
nature, it cannot fall within the exemption defined by Federal Baseball. It would
be strange to read Toolson to expand Federal Baseball’s holding to territorial
broadcasting restrictions sub silentio.
Moreover, the language and structure of the SBA suggest that, as of
1961, Congress understood sports broadcasting agreements to fall outside the
baseball exemption. The provision of the SBA granting limited immunity to a
narrow category of broadcasting agreements would be meaningless if all baseball
broadcasting agreements were already covered by the common law exemption.93
Moreover, the SBA expressly excluded from its safe harbor most agreements
involving geographic broadcasting territories, suggesting that Congress intended
such agreements to be subject to the antitrust laws.94
Congressional understanding is relevant because Flood replaced

93

The SBA expressly applies to professional football, baseball,
basketball, and hockey. See 15 U.S.C.A. § 1291.
94

See id. § 1292 (“Section 1291 of this title shall not apply to any joint
agreement described in the first sentence in such section which prohibits any
person to whom such rights are sold or transferred from televising any games
within any area, except within the home territory of a member club of the league
on a day when such club is playing a game at home.”).
25

Federal Baseball’s and Toolson’s holdings based on interstate commerce with a
limited holding based only on stare decisis and inferred congressional intent.
Therefore, Congress’s understanding of the scope of the baseball exemption before
Flood is highly persuasive.
Moreover, in rejecting the holdings in Federal Baseball and Toolson,
the Flood Court made specific reference to the reserve system throughout its
analysis, permitting a narrower reading of the exemption.95 One district court
concluded that “the antitrust exemption created by Federal Baseball is limited to
baseball’s reserve system.”96 Other courts have interpreted Flood to preserve a
broader exemption for professional baseball.97 However, defendants cite no case

95

See 407 U.S. at 282 (“With its reserve system enjoying exemption
from the federal antitrust laws, baseball is, in a very distinct sense, an exception
and an anomaly.”); id. at 283 (“Congress as yet has had no intention to subject
baseball’s reserve system to the reach of the antitrust statutes.”).
96

Piazza v. Major League Baseball, 831 F. Supp. 420, 438 (E.D. Pa.

1993).
97

See, e.g., Charles O. Finley v. Kuhn, 569 F.2d 527, 541 (7th Cir.
1978) (concluding that the Supreme Court in Flood “intended to exempt the
business of baseball, not any particular facet of that business, from the federal
antitrust laws”); City of San Jose v. Office of Comm’r of Baseball, No.
C-13-02787, 2013 WL 5609346 (N.D. Cal. Oct. 11, 2013) (finding exemption
applicable to club relocation); Major League Baseball v. Butterworth, 181 F. Supp.
2d 1316, 1332 (N.D. Fla. 2001), aff’d on other grounds sub nom. Major League
Baseball v. Crist, 331 F.3d 1177 (11th Cir. 2003) (“It is difficult to conceive of a
decision more integral to the business of major league baseball than the number of
clubs that will be allowed to compete.”).
26

that applied the exemption to broadcasting restrictions except one judge’s
comments from the bench in granting a motion to dismiss several years before the
SBA was enacted.98 The only published federal court opinion to address the
question after the SBA, Henderson Broadcasting Corp. v. Houston Sports
Association, found the exemption inapplicable to a baseball club’s radio
broadcasting agreements.99 Henderson reasoned as follows:
[The Supreme Court] has implied that broadcasting is not central
enough to baseball to be encompassed in the baseball exemption
. . . Congressional action does not support an extension of the
exemption to radio broadcasting . . . [and] lower federal courts
have declined to apply the baseball exemption in suits involving
business enterprises which, like broadcasting, are related to but
separate and distinct from baseball.100
All of these arguments apply with equal force here.

98

See Hale v. Brooklyn Baseball Club, Inc., No. 1294 (N.D. Tex. 1958),
Ex. 1 to MLB Mem.
99

See 541 F. Supp. 263 (S.D. Tex. 1982).

100

Id. at 265. As Henderson noted, a line of cases has found the
exemption inapplicable to club or player contracts with third parties. See Crist,
331 F.3d at 1183 (noting that “the antitrust exemption has not been held to
immunize the dealings between professional baseball clubs and third parties”);
Postema v. National League of Prof’l Baseball Clubs, 799 F. Supp. 1475, 1489
(S.D.N.Y. 1992), rev’d on other grounds, 998 F.2d 60 (2d Cir. 1993) (finding
baseball exemption inapplicable to League and club employment relations with
umpires). In another case involving player contracts with third parties, the court
did not discuss the baseball exemption at all. See Fleer Corp. v. Topps Chewing
Gum, Inc., 658 F.2d 139 (3rd Cir. 1981) (addressing baseball card licensing
agreements between players’ union and third party retailer).
27

Defendants argue that the Curt Flood Act reveals a congressional
consensus that sports broadcasting agreements are covered by the baseball
exemption. They point to language from a Congressional Budget Office (“CBO”)
cost estimate suggesting that the Act would retain the antitrust exemption for a
variety of topics, including “league expansion, franchise location, the amateur
draft, and broadcast rights.”101 However, a CBO cost estimate is not persuasive
evidence of congressional intent. The statutory language expressly does not
change “the application of the antitrust laws” with respect to any topic other than
“employment of major league baseball players,” including but not limited to “the
marketing or sales of the entertainment product of organized professional baseball
and the licensing of intellectual property rights owned or held by organized
professional baseball teams individually or collectively.”102 It is a tenuous
inference that Congress considered broadcasting exempt simply because “sales of
the entertainment product of organized professional baseball” and “licensing of
intellectual property rights” were included in a long list of topics that would remain
unchanged by the Act.103 The Curt Flood Act adds little to the analysis of whether

101

MLB Mem. at 10 (quoting S. Rep. No. 105-118, at 6 (1997)).

102

15 U.S.C.A. § 26b(b)-(b)(3) (West 2014).

103

Id.
28

territorial broadcasting restrictions fall under the common law baseball exemption.
Exceptions to the antitrust laws are to be construed narrowly.104
Moreover, the Supreme Court has expressly questioned the validity and logic of
the baseball exemption and declined to extend it to other sports.105 I therefore
decline to apply the exemption to a subject that is not central to the business of
baseball, and that Congress did not intend to exempt — namely baseball’s
contracts for television broadcasting rights.
B.

The League Defendants Are Not Entitled to Summary Judgment
While territorial divisions of a market are normally per se

violations,106 the Supreme Court has held that a per se approach is inappropriate in
the context of sports broadcasting restrictions due to the necessary interdependence

104

See Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 476 U.S.
409, 421 (1986) (“[E]xemptions from the antitrust laws are strictly construed and
strongly disfavored. . . .”). See also F.T.C. v. Phoebe Putney Health Sys., Inc., 133
S. Ct. 1003, 1010 (2013) (“But given the fundamental national values of free
enterprise and economic competition that are embodied in the federal antitrust
laws, state-action immunity is disfavored, much as are repeals by implication.”)
(quotation marks and citations omitted).•
105

See Radovich, 352 U.S. at 451–52 (football); United States v.
International Boxing, 348 U.S. 236, 242–43 (1955) (boxing).
106

See Salvino, 542 F.3d at 315 (“Among the practices that have been
held to be per se illegal are geographic division of markets. . . .”) (citing United
States v. Topco Assoc., Inc., 405 U.S. 596 (1972)).
29

of the teams within a League.107 On the other hand, the procompetitive benefit of
the challenged scheme here is not so obvious that the case can be resolved in favor
of defendants in the “‘twinkling of an eye.’”108 Therefore the rule of reason is the
appropriate standard in this case.109
Plaintiffs have carried their initial burden of showing an actual impact
on competition. The clubs in each League have entered an express agreement to
limit competition between the clubs – and their broadcaster affiliates – based on
geographic territories. There is also evidence of a negative impact on the output,
price, and perhaps even quality of sports programming. Plaintiffs’ expert, Dr.
Roger G. Noll, attests that consumers pay higher prices for live game telecasts, and
have less choice among the telecasts available to them, than they would in the
absence of the territorial restrictions.110 Similarly, Dr. Noll estimates that the price
107

See NCAA, 468 U.S. at 117 (“Our decision not to apply a per se rule to
this case rests in large part on our recognition that a certain degree of cooperation
is necessary if the type of competition that petitioner and its member institutions
seek to market is to be preserved.”).
108

American Needle, Inc. v. National Football League, 560 U.S. 183, 203
(2010) (quoting NCAA, 468 U.S. at 109 n.39). Accord Salvino, 542 F.3d at 316
(“Per se treatment is not appropriate . . . where the economic and competitive
effects of the challenged practice are unclear.”).
109

The facts of this case could conceivably be amenable to a “quick
look” in favor of the plaintiffs. However, it is unnecessary to consider this
alternative given that the defendants’ motions fail under the rule of reason.
110

See Declaration of Roger G. Noll (“Noll Decl.”) at 6–8.
30

of OOM packages would decrease by about fifty percent in a world without the
restrictions.111 Finally, defendants have not argued in these motions that the
Leagues lack market power.112
Defendants respond by identifying various procompetitive effects of
the territorial broadcast restrictions. They claim that the rules: 1) prevent free
riding, 2) preclude competition with joint venture products, 3) incentivize
investment in higher quality telecasts, 4) maintain competitive balance, 5) preserve
a balance between local loyalty and interest in the sport as a whole, and 6) increase
the overall number of games that are telecast. Plaintiffs deny that the territorial
rules serve the above interests and also challenge the validity of the interests in
light of the territorial rules’ overall economic impact on competition.
First, defendants argue that the territorial rules prevent free riding.
Although avoiding free riding can be a legitimate procompetitive goal in certain
contexts, it is not clear how free riding would pose a threat in this case.
Defendants argue that the clubs would “free ride” on the popularity and publicity

111

See id. at 104.

112

See MLB Mem. at 12 n.22 (preserving the MLB Defendants’ right to
challenge plaintiffs’ definition of relevant market and market power although “not
addressed in this motion”); NHL Mem. at 3 n.3 (“While the NHL Defendants
vigorously contest Plaintiffs’ proposed market definition and the assertion that
NHL Defendants possess market power in any cognizable market, they are not
moving for summary judgment on these issues in this motion.”).
31

of the Leagues if they were permitted to license their games nationally.113
However, the same argument could be made for any revenue-producing activity
that an individual team undertakes, including local ticket sales. Defendants also
claim that the clubs would “free ride” off the OOM packages by nationally
licensing individual club broadcasts, but it is the clubs and RSNs who create the
programming in the first place. If anything, the OOM packages benefit from the
labor and investment of the clubs and RSNs, not the other way around.
Defendants’ theory of free riding is unclear and unpersuasive.
Second, defendants argue that the Leagues have an unassailable right
to prevent the clubs from competing with the “joint venture.” However, no case
cited by defendants stands for the proposition that a joint venture may always
prevent its members from competing with the venture product regardless of
anticompetitive consequences. Rather, in each case, the court concluded based on
the facts presented that the restraint in question caused no actual harm to
competition.114 “If the fact that potential competitors shared in profits or losses

113

See MLB Mem. at 18; NHL Mem. at 15–16.

114

See United States v. Penn-Olin Chem. Co., 378 U.S. 158, 169 (1964)
(observing that “[i]f the parent companies are in competition, or might compete
absent the joint venture, it may be assumed that neither will compete with the
progeny in its line of commerce,” but specifically noting that this aspect of a joint
venture “often creates anticompetitive dangers”); Rothery Storage & Van Co. v.
Atlas Van Lines, Inc., 792 F.2d 210, 214 (D.C. Cir. 1986) (holding that defendant’s
32

from a venture meant that the venture was immune from § 1, then any cartel could
evade the antitrust law simply by creating a joint venture to serve as the exclusive
seller of their competing products.”115•
Third, defendants argue that territorial exclusivity encourages the
RSNs to invest in higher-quality telecasts, including high-definition cameras,
announcers, audio-visual effects, and related pre-game and post-game
programming. However, the incentive for added investment is inflated profit
stemming from limited competition. “[T]he Rule of Reason does not support a
defense based on the assumption that competition itself is unreasonable.”116 To the
extent that the Leagues defend content exclusivity rather than territorial

“market share [was] far too small for the restraint to threaten competition or to
have been intended to do so”); Madison Square Garden, L.P. v. National Hockey
League, No. 07 Civ. 8455, 2007 WL 3254421, at *7 (S.D.N.Y. Nov. 2, 2007),
aff’d, 270 Fed. App’x 56 (2d Cir. 2008) (noting in dicta that some courts have
“[upheld] agreements among parents of a joint venture not to compete in the
market in which the joint venture operates” without suggesting that all such
agreements are lawful).
115

American Needle, 560 U.S. at 201 (quotation marks and citations

omitted).
116

National Soc’y of Prof’l Eng’rs v. United States, 435 U.S. 679,
695–96 (1978) (“The Sherman Act reflects a legislative judgment that ultimately
competition will produce not only lower prices, but also better goods and
services.”). Cf. FTC v. Superior Ct. Trial Lawyers Ass’n, 493 U.S. 411, 423
(1990) (rejecting argument that otherwise unlawful boycott to increase lawyer fees
is justifiable by improved quality of representation).
33

exclusivity, Dr. Noll predicts that increased competition would overall improve
output and consumer satisfaction, an argument that applies with equal force to the
quality of telecasts.117
Fourth, defendants argue that the territorial restrictions foster
competitive balance between the teams and prevent excessive disparities in team
quality. Maintaining competitive balance is a legitimate and important goal for
professional sports leagues.118 However, it is unclear whether the territorial
restrictions at issue here really serve that purpose. On the one hand, the restrictions
protect less popular clubs from competition with more popular teams in their own
HTTs. On the other hand, the system requires small market teams to refrain from
broadcasting in larger, more populous markets, while big market teams forego only
smaller, less populous markets.119 It is not immediately clear whether the
restrictions help or harm competitive balance overall.120
117

See Noll Decl. at 107, 109.

118

See American Needle, 560 U.S. at 204 (noting that “‘the interest in
maintaining a competitive balance’ among ‘athletic teams is legitimate and
important’”) (quoting NCAA, 468 U.S. at 117). See also Salvino, 542 F.3d at 331
(stating that “the need for competitive balance among the Clubs is essential to the
well-being of [professional sports] Leagues”).
119

See Noll Decl. at 117.

120

See id. (“Economic research provides no reason to believe that
restrictions in competition for television rights contribute to competitive balance,
no matter how balance is defined, and some reason to believe that these restrictions
34

Defendants also claim that the revenue sharing aspects of the OOM
packages and national broadcasts foster competitive balance. However, there is
support in the economic community for the theory that revenue sharing in fact
exacerbates competitive imbalance.121 Even accepting the premise that revenue
sharing is beneficial, defendants have not explained why broadcasting contracts are
a better mechanism than more direct, limited forms of revenue sharing.122
Fifth, defendants claim that they have a legitimate pro-competitive
interest in maintaining “a balance between the promotion of [hockey and baseball]
as [] national game[s] and the need to incentivize Clubs to build their local fan
bases.”123 Aside from the fact that these two goals appear to conflict, defendants
have not explained what the ideal balance would be, or how they might quantify it.
There is no objective measure the Leagues could aspire to attain. Therefore
defendants cannot establish that this particular balance between local and national
interests is better for consumers, or for demand, than the balance that would prevail
in a free market. Moreover, the Leagues purport to bolster regional interest and
actually make balance worse.”).
121

See id. at 118–19.

122

See id. at 119–20 (“Both leagues already share revenues. . . . If the
leagues wish to share revenue more equally, simply increasing the share of total
revenue that is shared is a much simpler mechanism for achieving this goal. . . .”).
123

NHL Mem. at 2. Accord MLB Mem. at 15–16.
35

team loyalty by consciously depriving consumers of out-of-market games they
would prefer, which is generally not a permissible aim under the antitrust laws.124
Finally, defendants argue that the number of telecasts created and
broadcast is greater under the territorial restrictions than it would be in the
plaintiffs’ “but-for” world. According to defendants, while almost every game is
currently available to consumers in one format or another (national broadcast, local
RSN, or OOM package), a system dependent on consumer demand could not
guarantee that every game would be available everywhere because less popular
teams would struggle to get their games produced or televised on their own.125
Destroying the HTTs would also destroy content exclusivity because OOMs and
both competing teams would be able to sell the same game in the same areas.126 As
a result, RSNs would be loathe to give their telecasts to the Leagues to create OOM
packages, depriving consumers of the ability to access any and all out-of-market

124

See NCAA, 468 U.S. at 107 n.34 (“Perhaps the most pernicious aspect
is that under the controls, the market is not responsive to viewer preference. . . .
Many games for which there is a large viewer demand are kept from the viewers,
and many games for which there is little if any demand are nonetheless televised.”)
(quotation marks and citations omitted).
125

See MLB Mem. at 14, 19–20; NHL Mem. at 13 n.6, 21–22. See also
MLB Mem. at 19 (arguing that “certain currently less popular or less successful
clubs inevitably will be inherently unable to compete fully effectively on their own
in the national market for the sale of live game video rights” (quotations omitted)).
126

See MLB Mem. at 13.
36

games as they do now.127 Similarly, national broadcasters would refuse to enter
into national contracts without the assurance of exclusivity.128 Because plaintiffs
do not challenge the legality of the OOM packages or national broadcasts,
defendants argue, the territorial system is also immune from challenge as a matter
of law.
These arguments are far from compelling. Just because plaintiffs do
not directly challenge the legality of the OOM packages and national broadcasts
does not mean that preserving them is sufficient justification for the territorial
rules.129 Even the complete disappearance of OOM packages would not
necessarily cause consumer harm if the same content could be distributed in
another form (such as by RSNs nationwide). The OOMs are simply one form of
delivering the content to consumers – a form made necessary by the territorial rules
themselves. Moreover, it is certainly conceivable that the OOMs would continue
to exist absent the territorial restrictions, given the low added cost of creating the

127

See id. at 14 n.28.

128

See NHL Mem. at 11, 14 n.7.

129

The same argument applies to content exclusivity, which, although
not directly offending the antitrust laws, may nonetheless fail to justify a range of
other anticompetitive effects.
37

packages and the convenience of bundling to many consumers.130
Defendants’ assumption that market demand would be insufficient to
ensure access to the same number of games is questionable.131 Indeed, the
Television Defendants insist that the sports rights are so valuable that they would
compete for those rights vigorously even in the absence of the territorial rules.132
Moreover, “[a] restraint that has the effect of reducing the importance of consumer
preference in setting price and output is not consistent with th[e] fundamental goal
of antitrust law.”133 While defendants have identified some conceivable
procompetitive effects from the territorial rules, plaintiffs have produced equally
plausible (if not more plausible) arguments in opposition. It certainly cannot be
said that defendants have established procompetitive benefits to the economy as a
matter of law.
Defendants cite Virgin Atlantic Airways Ltd. v. British Airways PLC
130

See Noll Decl. at 114 (“Because the profit margin of the league
package is so large, the league could lose a very large share of the customers for its
league package and still profit from continuing to offer it. Likewise . . . [t]he
continued existence of national telecasts of games in college sports demonstrates
that such national packages are financially viable even when the broadcaster does
not enjoy exclusive rights to broadcast a particular sport in a particular time
period.”).
131

See id. at 95–97, 110.

132

See Comcast Mem. at 7; DIRECTV Mem. at 13–14.

133

NCAA, 468 U.S. at 107.
38

for the proposition that plaintiffs must identify a less restrictive alternative for any
procompetitive effect defendants can identify, even if the overall effect on the
economy is overwhelmingly anticompetitive.134 Such an interpretation, however,
is inconsistent with the Supreme Court’s mandate that “the essential inquiry [under
the rule of reason] . . . [is] whether or not the challenged restraint enhances
competition.”135 Indeed, in United States v. Visa U.S.A., Inc., the Second Circuit
balanced the alleged procompetitive and anticompetitive effects of the exclusivity
rules before requiring the Government to propose any less restrictive
alternatives.136
Most of defendants’ claimed pro-competitive effects are disputable,
and the overall effect on the economy is even less conclusive, especially in light of
Dr. Noll’s testimony that abolishing the territorial restrictions would decrease the
cost of sports programming without diminishing output.137 Far from being

134

See 257 F.3d 256, 264 (2d Cir. 2001).

135

NCAA, 468 U.S. at 104. Accord Leegin Creative Leather Prod., Inc.
v. PSKS, Inc., 551 U.S. 877, 886 (2007) (“The rule of reason is designed and used
to ascertain whether transactions are anticompetitive or procompetitive.”).
136

See 344 F.3d 229, 243 (2d Cir. 2003) (affirming district court’s
finding of Section 1 liability after non-jury trial because “the defendants have
failed to show that the anticompetitive effects of their exclusionary rules are
outweighed by procompetitive benefits”).
137

See Noll Decl. at 104, 109–10.
39

implausible, plaintiffs’ “but-for” world is at least as likely as defendants’
prognostications. Plaintiffs have raised a genuine issue of material fact regarding
the overall competitive impact of the territorial rules, foreclosing the possibility of
summary judgment for the Leagues under the rule of reason.
C.

The Television Defendants Are Not Entitled to Summary
Judgment
1.

Liability for the Vertical Agreements

The Television Defendants argue that downstream distributors who
simply implement the restrictions of an upstream conspiracy through vertical
agreements, without further involvement, cannot be deemed participants in the
conspiracy as a matter of law.138 They argue that the RSNs and MVPDs played no
role in creating the territorial restrictions, which were presented to them on a nonnegotiable basis, and have never sought to enforce the restrictions against other
horizontal participants. Therefore, they have not engaged in any “concerted
action” and cannot be held liable for the territorial limits in the Rights Agreements
even if those limits violate the Sherman Act.
The Television Defendants cite Bowen v. New York News, Inc.,139

138

See Comcast Mem. at 1; DIRECTV Mem. at 10–12, 18.

139

522 F.2d 1242 (2d Cir. 1975).
40

Fuchs Sugars & Syrups, Inc. v. Amstar Corp.,140 Levitch v. Columbia Broadcasting
System, Inc.,141 and Virgin Atlantic142 for the proposition that a downstream entity
must either request the restraint or attempt to enforce the restraint in order to be
liable. However, none of these cases support the Television Defendants’
assertions. The courts in Fuchs, Virgin Atlantic, and Levitch found insufficient
evidence of any agreement between the downstream and upstream entities. In all
three cases, the upstream entity implemented a unilateral policy change that did not
require assent, participation, or forbearance of any kind by the alleged
conspirators.143 Here, contracts with the downstream entities explicitly incorporate
the challenged restrictions. The Leagues require the assent and assistance of the
RSNs to implement the restrictions, and the RSNs require the same level of
140

602 F.2d 1025 (2d Cir. 1979).

141

495 F. Supp. at 649.

142

257 F.3d at 256.

143

See id. at 263 (airline’s unilateral decision to offer discounts and
incentives to corporate partners and travel agents did not constitute concerted
action with the partners and agents); Fuchs, 602 F.2d at 1031 (finding that sugar
manufacturer made unilateral decision to change its policy in a manner that
benefitted the defendant brokers, but without any involvement by the brokers);
Levitch, 495 F. Supp. at 673 (finding no agreement between broadcast networks
and affiliate television stations where networks made unilateral decision to use
only documentaries produced in-house, and “nothing contained in any of the
affiliation agreements, or any of the other contractual agreements executed by the
network defendants and their affiliates, [] preclude[d] the affiliates from
purchasing independently produced documentary or news programs”).
41

participation from the MVPDs.
The Television Defendants also cite Bowen, in which a newspaper
publisher switched to a system of exclusive franchise dealers instead of the many
competing independent dealers it had previously employed. The newspaper
limited each franchise dealer to a specified exclusive territory, and attempted to cut
off supply to the independent dealers to prevent competition. The court mused in
dicta that “unilateral establishment and enforcement [by an upstream entity] of
exclusive territories and customer limitations . . . might conceivably be upheld.”144
However, the court refrained from deciding the question given that the newspaper
and the franchise dealers had agreed to cut off supply to the independent dealers,
which the court found to be a violation of the Sherman Act. Although the court
noted that the dealers had asked the newspaper to cut off supply to the
independents, it did not necessarily rely on that fact in reaching its conclusion.
Instead, it emphasized that the newspaper’s conduct was “undertaken pursuant to
an agreement with the franchise dealers and for the purpose of restricting”
competition.145
None of the decisions relied on by the Television Defendants held that

144

Bowen, 522 F.2d at 1256.

145

Id.
42

a downstream entity must request or enforce a restraint in order to be liable for
adopting it through agreement.146 Nor did they indicate that each party to an
allegedly unlawful agreement must have equal or even substantial negotiating
power in adopting the agreement’s terms.147 Moreover, a downstream entity need

146

The Television Defendants cite dicta from Fuchs for the proposition
that both parties to an unlawful agreement in restraint of trade must have “knowing
and active participation . . . in a scheme to coerce compliance with anticompetitive
activity.” Fuchs, 602 F.2d at 1032. The Television Defendants argue that “mere
acceptance of vertical distribution rights” is insufficient to meet that standard.
Reply Memorandum of Law in Support of Television Defendants’ Motions for
Summary Judgment at 2. However, Fuchs based its holding on the fact that the
alleged co-conspirators were not independent entities, and that the challenged
action was unilateral rather than the product of agreement. It did not hold that
“mere acceptance” of contractual terms was insufficient participation to establish
concerted action.
Additionally, a fact finder could reasonably conclude that the
Television Defendants actively participated in a “scheme to coerce compliance” by
signing the Rights Agreements knowing their competitors would be subject to the
same terms, even if they did not personally attempt to enforce the restrictions.
Moreover, there is evidence that the RSNs and MVPDs have on some occasions
tried to protect and preserve the territorial structure. See infra Part V.C.2.
147

The Television Defendants also cite Toscano v. Professional Golfers’
Ass’n, 258 F.3d 978 (9th Cir. 2001), in which the Ninth Circuit found no concerted
action between a sports league and its sponsors because the league independently
imposed certain contractual restrictions and the sponsors merely accepted them.
See id. at 985 (“The [sponsor] defendants played no role in the creation or
enforcement of those rules and regulations. . . .”). However, Toscano is not
binding law in the Second Circuit. Moreover, there was no evidence in Toscano
that the “sponsors [had] an economic interest in the eligibility and participation
rules challenged.” Toscano v. PGA Tour, Inc., 70 F. Supp. 2d 1109, 1117 n.10
(E.D. Cal. 1999), aff’d sub nom. Toscano v. Professional Golfers Ass’n, 258 F.3d
978 (9th Cir. 2001). In fact, the district court noted that the rules might actually
contravene the sponsors’ economic interests. See id. at 1117.
43

not participate in the initial creation of the restraints in order to be liable for
adopting them later. “It is elementary that an unlawful conspiracy may be and
often is formed without simultaneous action or agreement on the part of the
conspirators.”148
Indeed, it would defy common sense to require proof that the
Television Defendants enforced the territorial restrictions when they knew that the
structure would be secured through a series of parallel contracts effectively policed
by the Leagues. Nevertheless, plaintiffs have produced some evidence that the
Television Defendants have defended the territorial structure on the rare occasions
that it has been threatened. In 2008, MLB attempted to adjust the territorial lines
to serve customers who could not watch local games, which would have required
clubs and RSNs to cede some territory to the OOM packages. The Comcast RSNs
vehemently opposed the proposal and sent the following letter to MLB:
If MLB were to adopt any new MLB rule permitting MLB Extra
148

Interstate, 306 U.S. at 227 (finding that “each distributor early
became aware that the others had joined, [and] [w]ith that knowledge [] renewed
the arrangement and carried it into effect for the two successive years”). Accord
United States v. Masonite Corp., 316 U.S. 265, 275 (1942) (Even if it were “not
clear at what precise point of time each [defendant] became aware of the fact that
its contract was not an isolated transaction but part of a larger arrangement . . . it is
clear that as the arrangement continued each became familiar with its purpose and
scope.”); Ross v. American Exp. Co., No. 04 Civ. 5723, 2014 WL 1396492, at *26
(S.D.N.Y. Apr. 10, 2014) (“Indeed, interdependent parallel conduct may be
simultaneous or sequential.”).
44

Innings and/or MLB.TV to be distributed in unserved or
underserved portions of a club’s exclusive home television
territory, the scope of the exclusivity purchased by the RSN would
be unilaterally changed and the financial impact on the prospects
and performance of the Comcast RSNs (and, by implication, on
the clubs whose rights they hold) would likely be immediate and
significant. Accordingly, the Comcast RSNs are unlikely to
consider favorably the release of any portion of a home television
territory as to which an RSN currently has exclusive rights. In
providing distribution information herewith, the Comcast RSNs
specifically reserve all of their respective rights and remedies with
respect to any change in MLB’s current rules and practices that
negatively impacts the clubs’ respective home television
territories and the breadth of the exclusive rights heretofore
granted to their corresponding Comcast RSNs.149

Moreover, the MVPDs’ 2007 contracts with MLB for the television OOM package
have clauses that read in part: “[t]he Home Television Territory of any Club shall
not be materially expanded by [MLB] except in connection with and directly
related to any increase or decrease in the number of franchises . . . or in connection
with any club relocation.”150 While the clause does not permit the MVPDs to

149

Re: Request for Information – MLB Extra Innings and MLB.TV, Ex.
24 to 5/24/14 Declaration of Edward A. Diver, plaintiffs’ counsel (“Diver Decl.”),
at 2. Defendants argue that Comcast was simply preserving its exclusive right to
broadcast local games through its entire in-market territory, rather than protecting
itself from the broadcasts of out-of-market games. Nonetheless, the letter reveals
one mechanism by which the Television Defendants can “enforce” the various
forms of exclusivity they have purchased from the League Defendants.
150

MLB Contract with DIRECTV for Extra Innings, Ex. 11 to Diver
Decl., at 22–23; MLB Contract with iN Demand for Extra Innings, Ex. 12 to Diver
Decl, at 16. According to plaintiffs, iN demand’s majority owner is Comcast, and
45

enforce the territorial restrictions against competitors, it applies pressure on the
Leagues to retain the current territorial restrictions or face monetary repercussions.
Similarly, former MLB President Robert DuPuy testified that the RSNs “insist” on
“changed circumstances” clauses in the Rights Agreements that permit the RSNs to
pay less if their exclusivity is abridged.151 The above examples indicate that the
Television Defendants are more than passive participants in a unilaterally imposed
restriction.
2.

The Existence of a Horizontal Agreement

The Television Defendants argue that there are no plus factors that
might signal interdependent action among the RSNs and MVPDs as opposed to
merely parallel conduct. They point out that the Rights Agreements with the
various RSNs are staggered and often have terms of several years, making
coordinated action difficult.152 They further argue that plaintiffs have produced no
evidence of a high volume of interfirm communications among the Television
Defendants.153 Finally, they argue that it is in the economic interest of an RSN to
Comcast CEO Brian Roberts played a central role in determining iN demand’s
carriage of Extra Innings. See Pl. Mem. at 70.
151

10/23/13 DuPuy Dep., Ex. 42 to Diver Decl., at 74:24-75:5.

152

See DIRECTV Mem. at 2.

153

Plaintiffs have produced one email exchange indicating that in 2010,
Comcast asked DIRECTV’s Pittsburgh RSN to lift its blackout of Flyers games in
46

enter into a Rights Agreement regardless of what the other RSNs do.154 In the
absence of plus factors, parallel conduct is insufficient to survive summary
judgment on a theory of horizontal conspiracy.
However, the potential for significantly increased profits from the
restraint is a “strong motive for concerted action.”155 “This plus factor speaks to
whether [the Television Defendants] also had a ‘rational economic motive’ to
adopt those clauses jointly, as opposed to going it alone.”156 The Television
Defendants argue that the plaintiffs’ alleged conspiracy makes no economic sense
because it would inflate the sports rights fees paid by the Television Defendants to
the Leagues, and no entity would “conspire[] to pay more than they would
otherwise pay.”157 This argument ignores the fact that the Television Defendants
pay higher rights fees because their revenues from consumers are correspondingly

Penguin territory in exchange for increased distribution of a DIRECTV RSN on
Comcast systems in Pennsylvania. DIRECTV apparently declined the offer. See
Pl. Mem. at 62; 7/9/10–7/14/10 Email Exchange, Ex. 13 to Diver Decl.
154

See Comcast Mem. at 7; DIRECTV Mem. at 1–2.

155

Interstate, 306 U.S. at 222.

156

Ross, 2014 WL 1396492, at *28 (citing Matsushita Elec. Indus. Co.,
Ltd. v. Zenith Radio Corp., 475 U.S. 574, 596 (1986)).
157

Comcast Mem. at 1.
47

greater.158
Indeed, plaintiffs have presented ample evidence that the territorial
restrictions are valuable to the Television Defendants. Boston Red Sox owner
John Henry stated that the “primary benefit” of the territorial restrictions is “not to
have to compete with other clubs or with [] baseball itself in your home television
territory.”159 According to Henry, such exclusivity is “very valuable to
broadcasters” and therefore “important to all clubs.”160 Similarly, John Tortora,
former NHL Director of Team Television, testified that RSNs would be harmed by
“bringing another club’s games into another team’s sphere of influence” because
“the benefit of [the RSNs’] bargaining with [the clubs] [is] exclusivity in the
marketplace.”161 In fact, the League Defendants claim that the territorial
restrictions are so central to the profitability of broadcasting that the RSNs would
stop producing many telecasts without them.162 The potential for higher revenues

158

See Noll Decl. at 84, 104–105.

159

1/12/14 Henry Dep., Ex. 43 to Diver Decl., at 63:19-64:1.

160

Id. at 63:18, 64:10. Henry also testified that he was not aware of any
other purpose for the territorial restrictions aside from protecting the clubs from
competition in their home territories.
161

10/8/13 Tortora Dep., Ex. 45 to Diver Decl., at 253:1-10.

162

See MLB Mem. at 13–14, 19; NHL Mem. at 13 n.6, 21–22.
48

stemming from collective action constitutes a strong motive to collude.163
Additionally, plaintiffs plausibly argue that the terms of the Rights
Agreements and Affiliation Agreements would contravene the individual economic
interests of the Television Defendants in the absence of the territorial restrictions.
Although the Television Defendants would likely continue to purchase
broadcasting rights without the restrictions, plaintiffs have adduced evidence that
they would not do so at the same price. In that sense their behavior is contingent
on the knowledge that other RSNs and MVPDs are bound by the same contractual
limits. Given the clear existence of parallel conduct and several plausible plus
factors, a fact-finder could permissibly conclude that the RSNs’ and MVPDs’
decisions to enter the contracts – at the prices negotiated – were interdependent
rather than unilateral.
Defendants cite PepsiCo, Inc. v. Coca-Cola Co. to argue that a series
of parallel vertical restrictions, even coupled with knowledge that the restrictions
will be uniformly enforced, is insufficient to establish the existence of a horizontal
agreement. In PepsiCo, Coca-Cola prohibited its distributors from distributing
163

While plaintiffs have produced little direct evidence at this stage that
the MVPDs profit from the territorial restrictions, it is a plausible inference that
each entity in the chain of distribution negotiates for some share of the revenue
generated through limited competition and increased prices. At this stage all
reasonable inferences must be drawn in favor of the non-moving party. See
Rivera, 743 F.3d at 19.
49

Pepsi products.164 Although Coca-Cola assured the distributors that it would
enforce the same restriction against the other distributors and encouraged them to
report violations, the court found insufficient evidence of a horizontal
agreement.165 However, in PepsiCo there was no evidence that the distributors
benefitted from the restriction or paid higher prices to Coca-Cola to obtain it.
Here, by contrast, the combination of parallel conduct, knowledge of assured
enforcement, strong motive to conspire, attempts to protect the restrictions, and
evidence that the Television Defendants would not have entered the contracts at the
prices prescribed but for the territorial restrictions, is sufficient evidence from
which a fact finder could infer a tacit horizontal agreement among the RSNs and
MVPDs.
Whether plaintiffs have presented sufficient evidence to demonstrate
concerted action between the Television Defendants and the League Defendants, or
a tacit agreement among the Television Defendants, is difficult to discern at this
stage. Consequently, these questions are not suitable for disposition as a matter of
law and are properly reserved for the fact finder in light of the totality of the
evidence presented at trial. It is an unfortunate trend that judges increasingly

164

See 315 F.3d at 104 (affirming district court’s grant of summary
judgment in favor of Coca-Cola).
165

See id. at 110.
50

resolve trial-worthy disputed fact issues or characterize cases as
implausible, thereby disposing of them on motion rather than
allowing them to proceed to trial. . . . [A] motion designed simply
for identifying trial-worthy issues has become, on occasion, a
vehicle for resolving trial-worthy issues. . . . The effect is to
compromise the due process underpinnings of the day-in-court
principle and the constitutional jury trial right without any
empirical basis for believing that systemic benefits are realized
that offset these consequences.166
Because plaintiffs have presented sufficient evidence to raise a genuine dispute of
material fact, the Television Defendants’ motion for summary judgment is denied.
D.

Illinois Brick Does Not Bar the Television Plaintiffs’ Suit
I previously held that the first non-conspirator in the chain of

distribution is entitled to collect damages from all of the co-conspirators.167 The
television plaintiffs purchased the relevant sports programming from the MVPDs.
Therefore, their standing to sue the other defendants is contingent on the MVPDs’

166

Arthur R. Miller, Simplified Pleading, Meaningful Days in Court, and
Trials on the Merits: Reflections on the Deformation of Federal Procedure, 88
N.Y.U. L. Rev. 286, 312 (2013) (discussing the increasing use of summary
judgment and other trends in federal civil procedure). Accord S.E.C. v. EagleEye
Asset Mgmt., 975 F. Supp. 2d 151, 159 (D. Mass. 2013) (“Too often, judges
substitute their own judgment for that of the jury. . . . This cognitive illiberalism
has been rightly condemned as a form of judicial arrogance. . . . Juries have not
only the duty, but also the right to decide cases. Encroaching upon the province of
juries to decide questions of fact, such as the determination of a defendant’s state
of mind, violates not only the constitutional rights of the parties in a suit, but also
the constitutional rights of the jurors themselves.”).
167

See Laumann, 907 F. Supp. 2d at 481–83.
51

role in the conspiracy. As discussed previously, the television plaintiffs have
produced sufficient evidence that a reasonable fact-finder could find the MVPDs
complicit in the alleged conspiracy. Therefore, the television plaintiffs’ claims are
not barred at this stage.
E.

The Section 2 Claim
The League Defendants do not address the merits of plaintiffs’

monopolization claim under Section 2 of the Sherman Act. The MLB Defendants
do not address the Section 2 claim at all, and the NHL Defendants argue only that
the Section 2 claim must be dismissed because the Section 1 claim fails.168
Because the League Defendants’ motion for summary judgment on the Section 1
claim is denied, their sole argument for dismissal of the Section 2 claim has no
merit.
VI.

CONCLUSION
For the foregoing reasons, all four motions for summary judgment are

DENIED in full. The Clerk of the Court is directed to close these motions [Dkt.
Nos. 180, 183, 212, 216, 224 in Laumann, 12 Civ. 1817, and Dkt. Nos. 239, 240,
241, 261, 271, 275, 280 in Garber, 12 Civ. 3704]. A conference is scheduled for
168

See NHL Mem. at 22 (“Plaintiffs’ Section 2 claim fails for the same
reasons as their Section 1 claim. . . . [C]onduct that fails to give rise to a claim
under Section 1 cannot be the basis of a monopolization scheme under Section 2.”)
(quotation marks and citations omitted).
52

August 20, 2014 at 4:30 pm.

Dated:

August 4, 2014
New York, New York

53

- Appearances For Plaintiffs:
Edward A. Diver, Esq.
Howard I. Langer, Esq.
Peter E. Leckman, Esq.
Langer Grogan & Diver, P.C.
Three Logan Square, Suite 4130
1717 Arch Street
Philadelphia, Pennsylvania 19103
[phone]
Kevin M. Costello, Esq.
Gary E. Klein, Esq.
Klein Kavanagh Costello, LLP
85 Merrimac St., 4th Floor
Boston, Massachusetts 02114
[phone]
Michael Morris Buchman, Esq.
John A. Ioannou, Esq.
Pomerantz Haudek Block Grossman & Gross LLP
600 Third Avenue
New York, New York 10016
[phone]
Alex Schmidt, Esq.
Mary Jane Fait, Esq.
Wolf Haldenstein Adler Freeman & Herz LLP
270 Madison Avenue
New York, New York 10016
[phone]
Robert LaRocca, Esq.
Kohn, Swift & Graf, P.C.
One South Broad Street
54

Suite 2100
Philadelphia, Pennsylvania 19107
[phone]
J. Douglas Richards, Esq.
Jeffrey Dubner, Esq.
Cohen, Milstein, Sellers & Toll, PLLC
88 Pine Street
New York, New York 10005
[phone]

For Defendants Office of the Commissioner of Baseball, Major League
Baseball Enterprises Inc., MLB Advanced Media L.P., MLB Advanced
Media, Inc., Athletics Investment Group, LLC, The Baseball Club of
Seattle, L.L.P., Chicago White Sox, Ltd., Colorado Rockies Baseball Club,
Ltd., The Phillies, Pittsburgh Baseball, Inc., and San Francisco Baseball
Associates, L.P.
Bradley I. Ruskin, Esq.
Carl Clyde Forbes, Esq.
Helene Debra Jaffe, Esq.
Jennifer R. Scullion, Esq.
Robert Davis Forbes, Esq.
Proskauer Rose LLP
11 Times Square
New York, New York 10036
[phone]
Thomas J. Ostertag, Esq.
Senior Vice President and General Counsel
Office of the Commissioner of Baseball
245 Park Avenue
New York, New York 10167
[phone]
For Defendants National Hockey League, NHL Enterprises, L.P., NHL
Interactive Cyberenterprises, LLC, Chicago Blackhawk Hockey Team, Inc.,
55

Comcast-Spectacor, L.P., Hockey Western New York LLC, Lemieux Group,
L.P., Lincoln Hockey LLC, New Jersey Devils LLC, New York Islanders
Hockey Club, L.P. and San Jose Sharks, LLC
Shepard Goldfein, Esq.
James A. Keyte, Esq.
Paul M. Eckles, Esq.
Matthew M. Martino, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
[phone]
For Defendants DIRECTV, LLC, DIRECTV Sports Networks, LLC,
DIRECTV Sports Net Pittsburgh, LLC a/k/a Root Sports Pittsburgh,
DIRECTV Sports Net Rocky Mountain, LLC a/k/a Root Sports Rocky
Mountain, and DIRECTV Sports Net Northwest, LLC a/k/a Root Sports
Northwest
Andrew E. Paris, Esq.
Joann M. Wakana, Esq.
Louis A. Karasik, Esq.
Alston & Bird LLP
333 South Hope Street
Los Angeles, California 90071
[phone]
For Defendants Comcast Corporation, Comcast SportsNet Philadelphia, L.P.,
Comcast SportsNet Mid-Atlantic L.P., Comcast SportsNet
California, LLC, and Comcast SportsNet Chicago, LLC
Arthur J. Burke, Esq.
James W. Haldin, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
[phone]

56

For Yankees Entertainment and Sports Networks, LLC and New York
Yankees Partnership
Jonathan D. Schiller, Esq.
Alan Vickery, Esq.
Christopher Duffy, Esq.
Boies, Schiller & Flexner LLP
575 Lexington Avenue, 7th Floor
New York, New York 10022
[phone]
For Defendants The Madison Square Garden Company and New York
Rangers Hockey Club
Stephen R. Neuwirth, Esq.
Richard I. Werder, Jr., Esq.
Ben M. Harrington, Esq.
Quinn Emanuel Urquhart Oliver and Sullivan LLP
51 Madison Avenue, 22nd Floor
New York, New York 10010
[phone]

57