US SUPREME COURT DECISIONS

NATIONAL FOOTBALL LEAGUE et al.
v.
NORTH AMERICAN SOCCER LEAGUE et al
No. 81-2296

Supreme Court of the United States

December 6, 1982

On petition for writ of certiorari to the United States Court of Appeals for the Second Circuit.

The petition for a writ of certiorari is denied.

Justice REHNQUIST, dissenting.

This lawsuit is an attack under 1 of the Sherman Act by the North American Soccer League and most of its member teams ("NASL") on the cross- ownership rule imposed by the National Football League ("NFL") on the owners of its member teams. The rule, in essence, prohibits NFL owners from obtaining a controlling interest in any other major league professional sports team. The Court of Appeals found that the rule violates 1 under the Rule of Reason, and enjoined the NFL from enforcing it.

Page 459 U.S. 1074, 1075

The NASL's complaint alleged that the cross-ownership rule excludes it from a substantial share of the market for "professional sports capital and entrepreneural skill." The NFL contended that the relevant market was for capital generally, and that the rule does not exclude anyone from a significant share of the capital market. The District Court decided that the relevant market is in between-a market for "sports capital"-but did not define precisely the extent of this market. It then decided that any competition between the NFL and the NASL in that market is competition between two single economic entities. 505 F.Supp. 659 (SDNY 1980). It thus held that 1 of the Sherman Act does not apply because the NFL is a single economic entity that cannot combine or conspire with itself. Id., at 689.

The Court of Appeals rejected this view. 670 F.2d 1249 (CA2 1982). It thought "[t]he characterization of the NFL as a single economic entity does not exempt from the Sherman Act an agreement between its members to restrain competition." See Perma Life Mufflers, Inc. v. International Parts Corp., 392 U.S. 134, 141-142, 88 S.Ct. 1981, 1985-1986, 20 L.Ed.2d 982 (1968); Timken Roller Bearing Co. v. United States, 341 U.S. 593, 598, 71 S.Ct. 971, 974 (1951). The Court of Appeals thought the objective of the cross-ownership rule is to protect individual teams as well as the league from competition.

At this point, the Court of Appeals had dealt with the District Court's entire holding. The District Court expressly declined to consider whether the cross-ownership rule violates the Rule of Reason. 505 F.Supp., at 689. The application of the Rule of Reason is to be made by "the factfinder [who] weighs all of the circumstances of a case." Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 49, 97 S.Ct. 2549, 2557, 53 L.Ed.2d 568 (1977). See, e.g., Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263, 302 (CA2 1979). The proper course for the Court of Appeals thus would have been to remand for findings by the District Court. However, it proceeded to decide the merits on its own. [459 U.S. 1074, 1076]

Full Text of Opinion