Mucky Duck v. Directv, LLC (In re Nat'l Football League's Sunday Ticket Antitrust Litig.)

933 F.3d 1136 (2019) United States Court of Appeals for the Ninth Circuit 2019-08-13

civil; Sunday Ticket subscribers sued the NFL, its teams and DirecTV under §§ 1 and 2, challenging the pooling of telecast rights and the exclusive satellite distribution agreement; district court dismissed the complaint under Rule 12(b)(6); CA9 reversed (result: remanded)

Facts

  1. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied conceded
    The 32 individual NFL teams, each of which is a separate "independently owned, and independently managed business," Am. Needle , 560 U.S. at 196, 130 S.Ct. 2201, entered into an agreement with the NFL ("Teams-NFL Agreement") to pool their telecasting rights and give the NFL the authority to exercise those rights, rather than exercising those rights individually.
  2. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied conceded
    The defendants do not dispute that the complaint adequately alleges that defendants have contracts for the purpose of restraining trade, the first and second elements.
  3. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied conceded
    According to the complaint, the NFL members vote to approve the contract between DirecTV and the NFL.
  4. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied conceded
    The Supreme Court has held that a horizontal agreement among competitors to pool separate property rights and enter into an agreement to license their rights vertically can constitute a Section 1 violation.
  5. 7 Private antitrust injury and fact of damage (Clayton Act §§ 4, 16; Brunswick Corp. v. Pueblo Bowl-O-Mat) satisfied pleaded
    Fans who want to watch other out-of-market games cannot purchase games individually or by team, but are required to buy the entire package of NFL games.
  6. 7 Private antitrust injury and fact of damage (Clayton Act §§ 4, 16; Brunswick Corp. v. Pueblo Bowl-O-Mat) satisfied pleaded
    In 2015, the cost of a basic Sunday Ticket package was $251.94 annually for residential subscribers.
  7. 7 Private antitrust injury and fact of damage (Clayton Act §§ 4, 16; Brunswick Corp. v. Pueblo Bowl-O-Mat) satisfied pleaded
    To plead the fourth element, antitrust standing or antitrust injury, plaintiffs must allege that they were harmed by the injury to competition.
  8. 7 Private antitrust injury and fact of damage (Clayton Act §§ 4, 16; Brunswick Corp. v. Pueblo Bowl-O-Mat) satisfied pleaded
    This output limitation in turn results in prices for out-of-market games being higher than they would be in the absence of the conspiracy.
  9. 7 Private antitrust injury and fact of damage (Clayton Act §§ 4, 16; Brunswick Corp. v. Pueblo Bowl-O-Mat) satisfied pleaded
    Accordingly, we conclude that Illinois Brick is not applicable here because the complaint adequately alleges that DirecTV conspired with the NFL and the NFL Teams to limit the production of telecasts to one per game, and that plaintiffs suffered antitrust injury due to this conspiracy to limit output.
  10. 8 Antitrust standing / efficient enforcer test (Associated General Contractors; Illinois Brick) satisfied pleaded
    Additionally, in order to subscribe to the Sunday Ticket, consumers must also purchase a basic television package from DirecTV.
  11. 8 Antitrust standing / efficient enforcer test (Associated General Contractors; Illinois Brick) satisfied pleaded
    In other words, when co-conspirators have jointly committed the antitrust violation, a plaintiff who is the immediate purchaser from any of the conspirators is directly injured by the violation.
  12. 8 Antitrust standing / efficient enforcer test (Associated General Contractors; Illinois Brick) satisfied pleaded
    According to the complaint, the conspiracy involves both the Teams-NFL agreement and the NFL-DirecTV agreement, which work together as a single conspiracy to limit the output of NFL telecasts.
  13. 8 Antitrust standing / efficient enforcer test (Associated General Contractors; Illinois Brick) satisfied pleaded
    Even though DirecTV is the immediate seller to the plaintiffs, the plaintiffs' allegation that they were directly injured by the conspiracy among the NFL teams, the NFL, and DirecTV is sufficient to allege antitrust standing for purposes of surviving a motion to dismiss.