American Needle, Inc. v. National Football League

560 U.S. 183 (2010) Supreme Court of the United States 2010-05-24

civil; summary judgment for defendants on single-entity defense, affirmed by CA7; certiorari; only the antecedent question whether the league, teams and their licensing corporation are capable of concerted action is decided (result: remanded)

Facts

  1. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    Originally organized in 1920, the NFL is an unincorporated association that now includes 32 separately owned professional football teams.
  2. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    Each team has its own name, colors, and logo, and owns related intellectual property.
  3. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    In 1963, the teams formed National Football League Properties (NFLP) to develop, license, and market their intellectual property.
  4. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    In December 2000, the teams voted to authorize NFLP to grant exclusive licenses, and NFLP granted Reebok International Ltd. an exclusive 10-year license to manufacture and sell trademarked headwear for all 32 teams.
  5. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    In their answer to the complaint, the defendants averred that the teams, the NFL, and NFLP were incapable of conspiring within the meaning of § 1 “because they are a single economic enterprise, at least with respect to the conduct challenged.”
  6. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    The key is whether the alleged “contract, combination ... , or conspiracy” is concerted action — that is, whether it joins together separate decisionmakers.
  7. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    Because the inquiry is one of competitive reality, it is not determinative that two parties to an alleged § 1 violation are legally distinct entities. Nor, however, is it determinative that two legally distinct entities have organized themselves under a single umbrella or into a structured joint venture.
  8. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    The NFL teams do not possess either the unitary decision-making quality or the single aggregation of economic power characteristic of independent action.
  9. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    The teams compete with one another, not only on the playing field, but to attract fans, for gate receipts, and for contracts with managerial and playing personnel.
  10. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    Directly relevant to this case, the teams compete in the market for intellectual property. To a firm making hats, the Saints and the Colts are two potentially competing suppliers of valuable trademarks.
  11. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    But it is not dispositive that the teams have organized and own a legally separate entity that centralizes the management of their intellectual property.
  12. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    The justification for cooperation is not relevant to whether that cooperation is concerted or independent action.
  13. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    The mere fact that the teams operate jointly in some sense does not mean that they are immune.
  14. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    NFLP’s licensing decisions are made by the 32 potential competitors, and each of them actually owns its share of the jointly managed assets.
  15. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    Agreements made within a firm can constitute concerted action covered by § 1 when the parties to the agreement act on interests separate from those of the firm itself,
  16. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    For that reason, decisions by NFLP regarding the teams’ separately owned intellectual property constitute concerted action.
  17. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    Unlike typical decisions by corporate shareholders, NFLP licensing decisions effectively require the assent of more than a mere majority of shareholders.
  18. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    The 32 teams capture individual economic benefits separate and apart from NFLP profits as a result of the decisions they make for NFLP.
  19. 1 Concerted action ("contract, combination ... or conspiracy") between separate economic decisionmakers satisfied law
    In making the relevant licensing decisions, NFLP is therefore “an instrumentality” of the teams.