Sherman Antitrust Act

Synonyms
Sherman Act

American Needle, Inc. v. National Football League, et al.

Issues

Is a professional sports league a single entity under Section 1 of the Sherman Act?

 

In 2001, the National Football League ("NFL") granted Reebok International Ltd. ("Reebok") an exclusive license to manufacture headwear featuring the logos and trademarks of every professional football team in the NFL. Because of this new arrangement, American Needle, Inc. (“ANI”) lost its 20-year license to manufacture such apparel. ANI argues that the NFL's contract with Reebok violates the Sherman Act, because the NFL and its member teams should not be considered a single economic entity. The NFL and Reebok contend that the member teams are united to produce a common product, namely professional football games, and thus are a single entity that is not subject to the regulations of the Sherman Act. In this case, the U.S. Supreme Court will decide whether or not the NFL is a single entity under Section 1 of the Sherman Act.

Questions as Framed for the Court by the Parties

1. Are the NFL and its member teams a single entity that is exempt from rule of reason claims under Section 1 of the Sherman Act simply because they cooperate in the joint production of NFL football games?

2. Is the agreement of the NFL teams among themselves and with Reebok International, in which the teams agreed not to compete with each other in the licensing and sale of consumer headwear and clothing decorated with the teams' respective logos and trademarks, and not to permit any licenses to be granted to Reebok's competitors for a period of ten years, subject to a rule of reason claim under Section 1 of the Sherman Act?

Respondent, National Football League (“NFL”), is an unincorporated association of 32 professional football teams that produces an annual season of football games and the Super Bowl championship game. See American Needle, Inc. v.

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Additional Resources

·      Wex: Antitrust

·      Washington Post: Trust-busting the NFL

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Credit Suisse Securities (USA) v. Billing

Issues

The Securities and Exchange Commission (SEC) heavily regulates public offerings of securities. Does the SEC’s jurisdiction automatically displace the application of antitrust law to these offerings, or does antitrust immunity for an offering of securities only occur when Congress has specifically expressed the intent to exempt a particular practice from antitrust liability?

 

Glen Billing and other investors filed a class action lawsuit against Credit Suisse First Boston Ltd. and other Wall Street investment firms, alleging that the firms violated the Sherman Antitrust Act, by artificially inflating the prices of securities in initial public offerings. The Court of Appeals for the Second Circuit, splitting with other courts, held that since Congress had not specifically immunized this conduct from antitrust liability, the Sherman Act should apply despite the Securities and Exchange Commission’s regulation of this area. The Supreme Court’s decision in this case will help resolve whether conduct already heavily regulated by the SEC should be automatically immune from antitrust liability, or whether antitrust immunity should only be granted where Congress has expressed a specific intent to immunize the conduct at issue.

Questions as Framed for the Court by the Parties

Whether, in a private damages action under the antitrust laws challenging conduct that occurs in a highly regulated securities offering, the standard for implying antitrust immunity is the potential for conflict with the securities laws or, as the Second Circuit held, a specific expression of Congressional intent to immunize such conduct and a showing that the SEC has power to compel the specific practices at issue..

Glen Billing and other investors filed a class action lawsuit against Credit Suisse First Boston Ltd. (“Credit Suisse”) and other Wall Street investment firms. In re Initial Public Offering Antitrust Litigation, 287 F.Supp.2d 497 (S.D.N.Y. 2003) (“In re IPO”). Billing alleged that the firms had violated the Sherman Antitrust Act, 15 U.S.C.

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Leegin Creative Leather Products v. PSKS, Inc.

Issues

Should the Court review resale price maintenance agreements on a case-by-case basis instead of holding such agreements illegal on their face, given that resale price maintenance could enhance competition and benefit consumers?

 

Kaye’s Kloset, a boutique apparel store in Texas, claims that Leegin Creative Leather Products, a manufacturer of brand-name leather products, has violated U.S. antitrust law by requiring retailers to maintain a price floor on Brighton-brand accessories. Under Supreme Court precedent, resale price maintenance (RPM) agreements are per se illegal. However, Leegin argues that RPM agreements should instead be evaluated under a rule of reason because RPM has significant pro-competitive effects. Kaye’s Kloset responds that RPM is never pro-competitive and thus the per se rule against RPM should stand. In this case, the Supreme Court will re-examine the economics of a controversial marketing strategy. The Court’s decision will impact how manufacturers distribute their products, how industries market these products, and how consumers shop for these products. 

Questions as Framed for the Court by the Parties

This Court has held that antitrust “per se rules are appropriate only for conduct that . . . would always or almost always tend to restrict competition.”  Modern  economic analysis establishes that vertical minimum resale price maintenance does not meet this condition because the practice often has substantial competition-enhancing effects. The question presented is whether vertical minimum resale price maintenance agreements should be deemed per se illegal under Section 1 of the Sherman Act, or whether they should instead be evaluated under the rule of reason.

 

Leegin Creative Leather Products (“Leegin”) is a California-based leather manufacturer that produces and markets women’s accessories. Brief for Petitioner at 2.

Acknowledgments

The authors would like to thank for Professor George Hay for his insight into this case.

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