The US Supreme Court [official website; JURIST news archive] on Monday ruled [opinion, PDF] unanimously in American Needle v. NFL [Cornell LII backgrounder; JURIST report] that the National Football League (NFL) [league website] and its member teams are not a single entity that is exempt from rule of reason claims under Section 1 of the Sherman Antitrust Act [text]. The US Court of Appeals for the Seventh Circuit ruled [opinion, PDF] that the NFL and its member teams are a single entity under the Sherman Act. Reversing the decision below, Justice John Paul Stevens wrote:
Football teams that need to cooperate are not trapped by antitrust law. "[T]he special characteristics of this industry may provide a justification" for many kinds of agreements. The fact that NFL teams share an interest in making the entire league successful and profitable, and that they must cooperate in the production and scheduling of games, provides a perfectly sensible justification for making a host of collective decisions. But the conduct at issue in this case is still concerted activity under the Sherman Act that is subject to s. 1 analysis.The case was remanded to the district court for further proceedings.
The NFL and its 32 member teams teams reached an agreement with Reebok [corporate website] to license and sell consumer headwear and clothing with the respective teams' logos and not to grant licenses to Reebok's competitors for 10 years. The antitrust suit was brought by American Needle [corporate website], which argued that the contract violated the Sherman Act.