Sullivan v. Tagliabue, 1st Cir. (1994)
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Transcript of Sullivan v. Tagliabue, 1st Cir. (1994)
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USCA1 Opinion
UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT ____________________
No. 93-2153
CHARLES W. SULLIVAN,
Plaintiff, Appellant,
v.
PAUL TAGLIABUE, ET AL.,
Defendants, Appellees.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Edward F. Harrington, U.S. District Judge] ___________________
____________________
Before
Breyer,* Chief Judge, ___________ Coffin, Senior Circuit Judge, ____________________ and Torruella, Circuit Judge. _____________
____________________
Joseph L. Alioto with whom Angela M. Alioto, Frederick P.________________ _________________ ____________
Bruce J. Wecker, Michael P. Lehmann and Alan R. Hoffman were o________________ __________________ _______________
for appellant.
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John Vanderstar with whom Sonya D. Winner, Ethan M.________________ _________________ _________
Jeremiah T. O'Sullivan, Sarah Chapin Columbia, Joseph W. Cotc______________________ ______________________ ______________
Susan Illston were on brief for appellees. _____________
____________________
June 6, 1994 ____________________
____________________
*Chief Judge Stephen Breyer heard oral argument in this matter
not participate in the drafting or the issuance of theopinion. The remaining two panelists therefore issue thispursuant to 28 U.S.C. 46(d).
COFFIN, Senior Circuit Judge. Plaintiff Charles Sull _____________________
brought this action individually and as assignee of the asset
Stadium Management Corporation (SMC) challenging, as an ill
restraint in trade, a National Football League (NFL)
prohibiting the sale of shares in an NFL franchise to any co
not engaged in the business of professional football,
violation of Sections 1 and 2 of the Sherman Act.1 See
__
U.S.C. 1, 2. The district court held that plaintiff la
standing to bring this claim and granted summary judgment
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defendants.2 After a review of the record, we affirm.
____________________
1Sullivan also alleged supplemental state law claims of breacfiduciary obligations, interference with prospective advanta
contract, unfair trade practices, and intentional inflictioemotional distress. When the district court granted su
judgment on the federal antitrust claims, it declined to exer supplemental jurisdiction over the state law claims.
Sullivan v. Tagliabue, 828 F. Supp. 114, 120 n.6 (D. Mass. 19 ________ _________
2Defendants named in this action are the NFL, currentCommissioner Paul Tagliabue and his predecessor Pete Roze
Paragraph 7 of the complaint also names the followinorganizations owning NFL franchises: The Five Smiths, I
Indianapolis Colts, Inc.; Buffalo Bills, Inc.; Chicago B Football Club, Inc.; Cincinnati Bengals, Inc.; Cleveland Bro Inc.; Dallas Cowboys Football Club, Ltd.; PDB Sports, Ltd.;
Detroit Lions, Inc.; Green Bay Packers, Inc.; Houston Oil Inc.; Los Angeles Rams Football Co.; Minnesota Vikings Foot Club, Inc.; New Orleans Saints LP; New York Jets Football C Inc.; B & B Holdings, Inc.; Pittsburgh Steelers, Inc.; Tampa
Area NFL Football, Inc.; Pro-Football, Inc.; Chargers Foot Co.; and Seattle Professional Football Club, Inc. The caption of plaintiff's complaint names a sli different set of defendants. It fails to include either the
Angeles Rams Football Co. or the Charges Football Co.defendants, and adds the New York Football Giants, Inc. tolist.
-2-
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I. Factual Background. __________________
Charles Sullivan (plaintiff or Sullivan) is the fo
owner and sole stockholder of SMC, which owned the stadium
the New England Patriots play their games. His father, Wil
Sullivan, was the Patriots' owner at all relevant times.
In 1987, William Sullivan sought to sell a 49% interes
the Patriots to an investment banking firm not in the busines
football, which, in turn, was to sell the shares to the pub
Through this transaction, plaintiff, through SMC, expecte
obtain financing for his stadium.
Under the terms of the NFL Constitution and By-Laws, me
teams are not permitted to sell shares to the public un
three-fourths of the members approve. William Sullivan
unable to persuade the other NFL owners to allow his prop
deal, and in October 1988, he instead sold the team to a pri
buyer. In February 1988, SMC filed a Chapter 11 petitio
bankruptcy, and the stadium subsequently was sold for
"bargain basement price" of $25 million.
In May 1991, William Sullivan sued the NFL, alleging
its policy against public ownership violated the fe
antitrust laws because it unreasonably restrained trade
ownership interests in NFL teams.3 Charles Sullivan filed
lawsuit several months later against the NFL and other par
____________________
3On October 22, 1993, a jury awarded William Sullivanmillion, which was reduced by the district court upon motiothe defendants to $17 million, before trebling. Thedefendants have appealed this verdict.
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-3-
allegedly responsible for enforcing the challenged rule.
claims that, had the public offering of Patriots' stock
permitted, SMC would have received a $40 million dollar loan
the investment banking firm that would have been used to pay
debts and to make significant renovations to the stadium.
addition, in 1987, the stadium held a lease with the Patr
which extended until 2002, which Sullivan alleges would have
extended for 20 years had the sale of the Patriots stock
through. Finally, he claims, the NFL policy prevented
Patriots from making their own investment in the maintenanc
the stadium, thus undermining SMC's ability to keep the Patr
from breaking their lease with SMC and moving to ano
location.4
As damages, plaintiff claims the amount of the enha
market value of the stadium that would have resulted from
planned renovations and the lease extension.
____________________
4During the bankruptcy proceedings, plaintiff receiveassignment of all SMC's causes of action in consideration of
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release of claims against SMC by plaintiff.The NFL argues that Sullivan, as SMC's assignee,
precluded from pursuing its antitrust claims against thedefendants because SMC did not disclose these claims durincourse of the bankruptcy proceedings. They contend thatleast by October, 1990, when he entered into a stipulationthe bankruptcy trustee resolving claims by and againstSullivan was fully aware of all of the facts upon whic
complaint is based and that his antitrust claims should haveraised in the bankruptcy proceedings. In their view, Stherefore estopped from bringing a legal action to enforceclaims against the NFL defendants.
For the purposes of this decision, we assume, wit deciding, that SMC is not estopped from bringing a legal ac to enforce these claims.
-4-
The district court granted summary judgment for defenda
holding that Sullivan lacked antitrust standing. The c
reached this conclusion by determining that the mater
submitted indisputably showed that the injury plaintiff suff
was not within the type contemplated by the antitrust laws;
its impact was too indirect; and that the damages claimed
too speculative. Plaintiff now appeals.
Our review of a grant of summary judgment is plen
Mendes v. Medtronic, Inc., 18 F.3d 13, 15 (1st Cir. 1994).______ _______________
II. General Principles of Antitrust Standing ________________________________________
Sullivan asserts that under Section 4 of the Clayton Act
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U.S.C. 15(a) (1994), he has standing both individually an
behalf of SMC to maintain a private damage action against
NFL. Under Section 4, "[A]ny person who shall be injured in
business or property by reason of anything forbidden in
antitrust laws may sue therefor in any district court of
United States in the district in which the defendant reside
is found . . . without respect to the amount in controversy,
shall recover threefold the damages by him sustained, an
cost of the suit, including a reasonable attorney's fee."5
This statutory language is broad, conferring the rig
sue on "any person" claiming an injury causally related to
____________________
5It is unquestioned that the requirements of antitrust stan exceed those of standing in a constitutional sense.
Associated General Contractors, Inc. v. California State Cou ____________________________________ ____________________ of Carpenters, 459 U.S. 519, 535 n.31 (1977); see also Da _____________ ___ ____ Berger & Roger Bernstein, An Analytical Framework for Antit _________________________________ Standing, 86 Yale L.J. 809, 813 n.11 (1977). ________
-5-
antitrust injury. However, the class of persons entitle
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recover damages under Section 4 has been limited by cas
through the doctrine of "antitrust standing." See Associ ___ _____
General Contractors of California, Inc. v. California S ___________________________________________ ____________
Council of Carpenters, 459 U.S. 519, 529-35 (1983); Blue S _____________________ _______
of Virginia v. McCready, 457 U.S. 465, 472-73 (1982). ___________ ________
In Associated General Contractors, the Supreme C _________________________________
outlined a series of factors to be evaluated on a case-by-
basis to determine whether a plaintiff has standing to brin
antitrust action.6 These factors are: (1) the causal connec
between the alleged antitrust violation and harm to
plaintiff; (2) an improper motive; (3) the nature of
plaintiff's alleged injury and whether the injury was of a
that Congress sought to redress with the antitrust
("antitrust injury"); (4) the directness with which the all
market restraint caused the asserted injury; (5) the specula
____________________
6Prior to Associated General Contractors, circuit courts
_______________________________ crafted a variety of tests to determine whether a party inj by an antitrust violation had standing to bring an action
treble damages under Section 4 of the Clayton Act. The twocommonly stated tests focused on the "directness of the inj
to the alleged antitrust violation, and whether a plaintiffin the "target area" of the antitrust conspiracy. See Associ
___ _____ General Contractors, 459 U.S. at 535-36 & n.33 (citat ____________________
omitted); Phillip E. Areeda & Herbert Hovenkamp, Antitrust La___________
334.1 (1993 Supp.). A third test considered whether the in was "`arguably within the zone of interests protected by
antitrust laws.'" Associated General Contractors, 459 U.S
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_______________________________ 536 n.33 (citation omitted). In Associated General Contract __________________________ the Court, noting that it was "virtually impossible to announ
black-letter rule that will dictate the result in every ca 459 U.S. at 536, drew on these tests to outline a serie
factors to guide courts in deciding whether a private plain should have standing to pursue an antitrust action i
particular case. See id. at 536-46. ___ ___
-6-
nature of the damages; and (6) the risk of duplicative reco
or complex apportionment of damages. 459 U.S. at 537-45;
also Lovett v. General Motors Corp., 975 F.2d 518, 520 (8th____ ______ ____________________
1992) (listing factors).
Though Associated General Contractors outlined___________________________________
comprehensive approach to the question of antitrust standin
gives little guidance as to how to weigh the various factors,
whether the absence of a particular factor would be fata
standing in every instance. In Associated General Contrac __________________________
itself, the Court found that two factors, the causal connec
between the Union's alleged injuries and the violation of
antitrust laws, and the allegation of improper motive, suppo
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a grant of standing, 459 U.S. at 537, but that a consideratio
the remaining relevant factors weighed heavily against stan
id. at 545. The Court concluded that, in the circumstance___
that case, these latter factors were controlling, and de
standing to the plaintiffs. Id. at 545-46. ___
We draw from the Court's discussion in Associated Gen _____________
Contractors the requirement that courts consider the balanc___________
factors in each case in an effort to guard against "engraft[
artificial limitations on the 4 remedy." McCready, 457 U.S________
472. See also Los Angeles Memorial Coliseum v. NFL, 791_________ ______________________________ ___
1356, 1363 (9th Cir. 1986) ("Most cases will find some fac
tending in favor of standing . . . , and some against . . . ,
a court may find standing if the balance of factors
instructs."); accord Southaven Land Co. v. Malone & Hyde, I ______ ___________________ ________________
-7-
715 F.2d 1079, 1085-86 (6th Cir. 1983); Ashmore v. Nort _______ ____
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Petroleum Corp. of Cape Cod, 843 F. Supp. 759, 765 (D. Me. 19 ___________________________
III. Application to Claims Brought on Behalf of SMC ______________________________________________
A. Factors Supporting Standing ___________________________
Sullivan argues that the district court was correct
evaluating the relevant factors as they applied to claims bro
on behalf of SMC, it found that plaintiff had alleged,
presented evidence of, a causal connection between the all
antitrust violation and the harm to the plaintiff, an
improper motive on the part of defendants; and when it foun
significant risk of duplicate recoveries or danger of co
apportionment in this case. He maintains, however, that
court erred in its determination that the absence of
remaining Associated General Contractors factors required________________________________
court to deny standing. He contends that he has satisfie
remaining factors, and that the court should have granted
standing to press his antitrust suit, both individually an
behalf of SMC.
We agree that the district court correctly found
Sullivan's complaint met three of the Associated Gen ______________
Contractors factors. Sullivan alleged, and presented evide ___________
of a causal connection between the application of the NFL
and SMC's inability to refinance the stadium because the sal
Patriots' stock to the public was prohibited. Sullivan
alleged an improper motive on the part of defendants in that
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"sought to restrain and monopolize interstate commerce
-8-
professional football" and took the actions they di
furtherance of that goal. In addition, Sullivan indicated
defendants intended to block the refinancing of the stadiu
their actions, or, at the very least, that such a harm
foreseeable consequence of the application of the Rule to
Patriots.7 Nor does there appear to be a significant ris
duplicate recovery or danger of complex apportionment in
case, as the injuries of which Sullivan complains
sufficiently distinct from those alleged by William Sullivan,
only other plausible litigant in this case.8
B. Factors Defeating Standing
__________________________
We are not persuaded, however, by Sullivan's argument
he satisfies the remaining Associated General Contract ____________________________
factors. The existence of antitrust injury is a central fa
in the standing calculus.9 In this case, its absence, toge
____________________
7Of course, as the Supreme Court has noted, the presence ofimproper motive on the part of the defendants is not, by its
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determinative of antitrust standing. See Associated Gen ___ _____________ Contractors, 519 U.S. at 537 & n.37 (noting that "[ ___________ availability of the 4 remedy to some person who claims
benefit is not a question of the specific intent ofconspirators") (quoting McCready, 457 U.S. at 479).
________
8We recognize that there is a risk of duplicate recoverycomplex apportionment of damages as between Sullivan, inindividual capacity, and SMC, in light of their seemi
overlapping injuries. We think that this can be avoi however, given that plaintiff brings this single action
damages suffered by both.
9Some courts have concluded that a consideration of antit
injury is of threshold significance in the Section 4 stan inquiry. See, e.g., Balaklaw v. Lovell, 14 F.3d 793, 797-
___ ____ ________ ______ n.9 (2d Cir. 1994); Todorov v. DCH Healthcare Authority, 921
_______ ________________________ 1438, 1449 (11th Cir. 1991); see also State of South Dakot
___ ____ ____________________
-9-
with the indirectness of the injury to Sullivan, and
speculative nature of the claimed damages, outweighs
remaining factors. We therefore conclude that plaintiff l
standing to pursue the claims brought on behalf of SMC.
1. The Nature of the Injury: Is it Antitrust Injury? _________________________________________________
Sullivan contends that he has suffered "antitrust inju
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that is, the type of injury that the antitrust laws were desi
to prevent. He relies principally on McCready, 457 U.S. at________
and Los Angeles Coliseum, 791 F.2d at 1356, to support_____________________
claim.
The Supreme Court first articulated the concept
"antitrust injury" in Brunswick Corp. v. Pueblo Bowl-O-Mat,_______________ _________________
U.S. 477 (1977). In Brunswick, several small bowling cen _________
brought suit, challenging the acquisition of several of t
competitors by the much larger Brunswick Corporation as
anticompetitive merger under Section 7 of the Clayton Act,
U.S.C. 18, and seeking treble damages under Section 4
____________________
Kansas City Southern Industries, 880 F.2d 40, 46 (8th Cir. 1 ________________________________ (noting primacy of antitrust injury requirement). Cf. Car ___ ___ Inc. v. Montfort of Colorado, Inc., 479 U.S. 104, 110, n.5 (1 ____ __________________________ (pointing out, in the course of considering antitrust in requirement for private plaintiffs seeking an injunction u
Section 16 of the Clayton Act, that a showing of antitrust in was a necessary (though not always sufficient) element
standing to sue for damages under Section 4).We agree that the absence of antitrust injury weighs hea
against a grant of standing. We need not consider, howe whether this should be fatal to standing in every insta because in the circumstances of this case, we conclude that
balance of factors as a whole weighs against a grant of stan
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profits they would have made had the acquired centers gone ou
business. Id. at 480-81.___
Although plaintiffs had alleged that Brunswick had en
in predatory practices designed to lessen competition in
markets it had entered, they could prove only that Brunswi
acquisitions had deprived them of profits they would have
had the acquired firms closed. Id. at 488, 490 & nn.15, 16.___
Court noted that, in essence, plaintiffs were not complai
that Brunswick's actions had reduced competition, but prese
it, thereby depriving plaintiffs of the benefits of incre
concentration. Id. at 488. Rejecting the lower court's hol ___
that any loss "causally linked" to "the mere presence of
violator in the market" was compensable, id. at 486-87, the C ___
found that plaintiffs' injury was not of "`the type
[antitrust laws] were intended to forestall,'" 429 U.S. at 48
(citation omitted). The Court held that to recover tr
damages under Section 4, a plaintiff must prove "antit ____
injury, which is to say injury of the type the antitrust
were intended to prevent and that flows from that which
defendants' acts unlawful." Id. at 489 (emphasis in original
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___
In Blue Shield of Virginia v. McCready, 457 U.S. 465 (19 _______________________ ________
the first case explicitly to address antitrust standing,
Court incorporated a focus on "antitrust injury" into its Sec
4 standing inquiry. The plaintiff in McCready was a subscr ________
of Blue Shield, a health insurance plan that did not pro
reimbursement for psychotherapy treatment rendered
-11-
psychologists (unless "prescribed" by and billed throu
medical doctor), while providing reimbursement for the
treatment if given by a psychiatrist. McCready was treated
psychologist, and Blue Shield refused to reimburse her for
treatment. McCready brought suit, alleging that Blue Shiel
an association of psychiatrists had engaged in an unla
conspiracy "`to exclude and boycott clinical psychologists
receiving compensation under'" the Blue Shield plans, and
Blue Shield's failure to reimburse was in furtherance of
conspiracy. McCready, 457 U.S. at 470. ________
The defendants argued that McCready had not suff
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"antitrust injury" because her injury did not reflect the a
competitive effect of the alleged antitrust violation. Id.__
481-82. McCready had not paid inflated fees for psychotherap
psychiatrists, the supposed beneficiaries of the conspiracy;
had she alleged that her psychologists' bills were higher
they would have been had the conspiracy not existed. Id. at___
The Court, however, refused to so limit recovery. While
a competitor of the conspirators, the injury McCready suffere
sanction in the form of the unreimbursed psychologists' ser
-- "was inextricably intertwined with the injury the conspira
sought to inflict" on the market. Id. at 483-84. McCr ___
suffered injury by virtue of the role she played in Blue Shie
anticompetitive scheme. Denying reimbursement to patients
psychologists was the "very means" by which Blue Shield coe
-12-
her to choose between becoming an unwilling participant in
illegal campaign to boycott the services of psychologists, o
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pay the costs of treatment for the therapist of her choice
her own pocket. The harm to McCready was thus a "necessary
in effecting the ends of the alleged illegal conspiracy." I_
479. The Court therefore found that McCready's injury "`flo
from that which makes defendants' acts unlawful,' within
meaning of Brunswick," falling "squarely within the area_________
congressional concern." Id. at 484. ___
Sullivan argues that the logic of McCready supports
________
standing. In Sullivan's view, the NFL rule at issue affe
competition in the market for football stadia by preventin
from obtaining refinancing to pay for renovations that would
led the Patriots to extend their lease, and by interfering
the Patriots' capacity to invest money in the maintenance
their stadium, thus undermining SMC's ability to keep
Patriots from breaking their lease with SMC and moving to ano
location. Further, the injury to SMC was "inextric
intertwined" with that to the owner of the New England Patri
since SMC expected to benefit from a joint proposal to condu
public offering of a minority ownership in the team; and was
"integral aspect" of the conspiracy against the owner of
Patriots and was likely to result from the implementation of
conspiracy.
Like McCready, Sullivan claims, neither the fact that
stood in a vertical relationship to the intended victim of
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alleged antitrust violation (purchasers of NFL franchises),
the fact that SMC's injuries might be characterized as "indir
deprive SMC of standing. Likewise, Sullivan's failure to sho
increase in price or a lessening of supply in the stadia mar
and the fact that Sullivan's personal losses might be deriva
of those suffered by SMC are not dispositive. Sullivan po
out that McCready's losses, for example, were at least in
derivative of those suffered by her employer, who as the di
purchaser of the group health insurance from Blue Shi
presumably did not get the benefit of its bargain with
Shield.
We disagree that McCready favors Sullivan's right to su________
Sullivan is correct that McCready did stand, in part, for________
Court's refusal to limit recovery to those whose injuries re
from the anti-competitive effect of the violation, and to ex
available recovery at least to some parties who stand in vert
relationship (such as customers) to the direct victim of
antitrust violation.10 Thus, the fact that SMC was no
competitor in the market for professional football teams,
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direct victim of the alleged antitrust violation, but in
related market for football stadia, does not by itself mean
____________________
10In this respect, we disagree with defendants' argumentSMC, merely by virtue of its status as the Patriots' landlor
necessarily barred from bringing suit for injury to its ten Whether a landlord has standing to sue for injury to its te depends, in part, on the relationship of the landlord to
relevant market and to the antitrust violation. For exampllandlord may have standing to sue for injuries to a tenant b
on its status as a competitor in an adjacent market, see__
Angeles Coliseum, 791 F.2d at 1363-65. ________________
-14-
he lacks standing here. See McCready at 472 (refusing to en ___ ________
artificial constraints on Section 4, stating that "`the sta
does not confine its protection to consumers, or to purchas
or to competitors, or to sellers'") (internal citation omitt
The circuits are split, however, over the question
whether a plaintiff must be either a consumer or competito
the market harmed by the antitrust violation at issue in orde
establish antitrust injury. Some courts have held tha
plaintiff may establish antitrust injury by proof that he
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consumer or competitor in the relevant market, or by showing__
his injury was "inextricably intertwined" with the injury
competition, in that the plaintiff was "`manipulated or util
by [d]efendant as a fulcrum, conduit or market force to in
competitors or participants in the relevant product
geographic market.'" Province v. Cleveland Press Pub. Co.,________ _________________________
F.2d 1047, 1052 (6th Cir. 1986) (quoting Southaven, 715 F.2_________
1086); see Ostrofe v. H.S. Crocker Co., Inc., 740 F.2d 739,
___ _______ ______________________
46 (9th Cir. 1984) (though neither a consumer nor competito
the relevant market, fact that injury to plaintiff wa
necessary means to achieve the conspirators' illegal
sufficient to establish antitrust injury); Ashmore v. Nort _______ ____
Petroleum Division of Cargill, 843 F. Supp. 759, 769-70 (sa _____________________________
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Donahue v. Pendleton Woolen Mills, 633 F. Supp. 1423, 143 _______ _______________________
(S.D.N.Y. 1986) (following Ostrofe).11 _______
Other courts have interpreted Supreme Court caselaw an
antitrust laws more narrowly, holding that a plaintiff must
market participant in order to establish antitrust injury.
Bichan v. Chemetron Corp., 681 F.2d 514, 519 (7th Cir. 1 ______ ________________
(Section 4 protects only parties injured as customers
competitors in a defined market, or in a discrete area of
economy); see also Winther v. DEC International, Inc., 62___ ____ _______ ________________________
Supp. 100, 102-03 (D. Colo. 1985). We need not resolve
conflict, because even under a broad reading of McCready,________
cannot support its claim of antitrust injury.
Read broadly, McCready extends antitrust standing to par ________
who can establish that their injury was a "necessary step"
the "means" employed by the conspirators to achieve their ill
ends, regardless of the parties' direct market participat
See McCready, 457 U.S. at 479, 484 n.21; Ostrofe, 740 F.2___ ________ _______
745-46; Ashmore, 843 F. Supp. at 768-70 & nn.16, 18. Un _______
McCready and her co-plaintiffs, neither Sullivan nor SMC
"necessary" instruments to effectuate the alleged conspir
Denying stadium refinancing was not a "necessary step"
____________________
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11These courts reason that the injury suffered by a plain used as a means to effect an antitrust violation is within
core of Congressional concern underlying the antitrust l which is "to create a private enforcement mechanism that
deter violators and deprive them of the fruits of their ill actions and would provide ample compensation to the victi
antitrust violations." Ashmore, 843 F. Supp. at 770 (quo _______
McCready, 457 U.S. at 472); see also Ostrofe, 740 F.2d at 746 ________ ___ ____ _______
-16-
restraining competition in the market for professional foot
franchises, nor the "very means" by which the defendants so
to do so. Indeed, according to plaintiff's own complaint,
purpose of the NFL policy was to "exclude competitive entry
the business of professional football by . . . televi
companies, motion picture producers, investment bankers, o
of other professional sports teams, home entertainment compan
and entertainment companies generally." The policy is
alleged to have a similar anticompetitive effect on sta
Moreover, the instruments of the alleged conspiracy were the
and member club owners, not Sullivan or SMC.
Nor does the Ninth Circuit's holding in Los Angeles Coli
_______________
bolster Sullivan's claim that he suffered antitrust injury.
that case, the Los Angeles Coliseum and the Oakland Rai
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attempted to negotiate a deal to relocate the Raiders to
Angeles to play in the Coliseum (the Rams' old home fie
following the Rams' move to Anaheim. In its effort to block
move, the NFL invoked a league rule requiring three-fourt
the member teams to approve a team's relocation into ano
team's league territory. The Coliseum and the Raiders bro
suit, claiming that this was an unlawful restraint of trade
violation of Section 1 of the Sherman Act, 15 U.S.C. 1. A
found that the NFL rule violated the antitrust laws, and awa
damages to both the Coliseum and the Raiders.
In holding that the Coliseum had standing to bring
antitrust action, the court found that the Coliseum had suff
-17-
"antitrust injury," because the NFL had "restrained competiti
. . among football stadia by restraining the Raiders['] att
to move and operate in Los Angeles." 791 F.2d at 1364 (emp _______
in original). Had the Raiders been permitted to move to
Angeles, the Coliseum would have been able to bid effectivel
have them as a tenant. The rule restraining such a move,
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court held, was precisely of the type that the antitrust
were designed to prevent. Id. ___
The rule at issue here posed no similar restraint on S
capacity to compete for a pro football team's tenancy. In f
in 1987, the year of the attempted sale, SMC and the Patriots
a lease that ran until the year 2002, regardless of the te
ownership.
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2. Directness of the Injury ________________________
Sullivan argues that SMC suffered direct harm as a resul
the NFL's restraints on the stadia market. He maintains that
Angeles Coliseum supports this claim, and compares SMC's st ________________
to that of the Coliseum.
In Los Angeles Coliseum, the Coliseum had been engaged____________________
bidding struggle with a rival stadium for the tenancy of
Oakland Raiders when the NFL's invocation of its restric
relocation rule foreclosed further negotiations, thus depri
the Coliseum of expected revenue for leasing the facility to
Raiders for their games. 791 F.2d at 1365. The Ninth Cir
concluded that the NFL's illegal territorial restraints dire
and foreseeably restrained competition in the stadia market
which the Coliseum participated, and that the harm it suff
was a direct result of the NFL's illegal territorial restrai
Id.___
In an attempt to limit the reach of this holding, the c
stated that it was "confident that [this] ruling will no
misinterpreted as being a broad endorsement of antitrust stan
for all parties who might have contracted with the Raiders
they not been restrained in their relocation plans. Foot
stadia constitute a special market distinguished from t
comprised by, say, hotels, laundering establishments,
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limousine services, by their indispensable and inti
connection with professional football and football teams.
injury such as that suffered by the Coliseum in the present
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cannot be characterized fairly as an indirect `ripple effec
Id. at 1365. ___
Sullivan seems to argue that since SMC, like the Colis
is a participant in the market for football stadia, it en
similar distinguished status by virtue of its "indispensable
intimate connection with professional football and foot
teams," and should be able likewise to recover. The injur
SMC, and its relation to the rule at issue in this case,
however, clearly distinguishable.
The rule at issue in Los Angeles Coliseum affected whe____________________ __
team could be located. In precluding a team from relocating
particular area, the rule necessarily restrained competitio
the related market for football stadia. Once the NFL invoke
rule to block the Raiders from moving into the Rams' territ
the Coliseum (and, indeed, all other stadia in that location)
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barred from competing with other stadia for the Raiders' tena
The rule at issue in this case had no similar direct ef
on SMC, nor on the market in which it was a particip
Plaintiff claims that the NFL rule restricting public owner
of NFL teams was the "but for" cause of the loss of his sta
injuring SMC as follows: the NFL rejected William Sullivan's
to sell 49% of his stock to an investment bank, which, in t
would sell the stock to the public; as a result, SMC did not
refinancing; SMC therefore could not pay its debts, nor comp
renovations; SMC could not get an extension on its lease (
was contingent on the sale of Patriots' stock), and was force
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file for bankruptcy. We think that any injury suffered by S
a result of the NFL rule was indirect, and a consequence of
direct injury inflicted on the Patriots' owner.
In addition, the fact that William Sullivan, the party
directly harmed by the alleged violation, has pursued
indeed, obtained a verdict in) his own antitrust ac
diminishes another possible rationale for allowing Sullivan
proceed in this case. See Associated General Contractors,___ _______________________________
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U.S. at 542 (existence of an identifiable class of persons
self-interest likely to motivate them to vindicate the pu
interest in antitrust enforcement diminishes the justifica
for allowing a more remote party to sue).12
3. Speculative Nature of the Damages _________________________________
____________________
12Contrary to plaintiff's assertion, the district court's fin that there was no significant risk of duplicative recoverie
danger of complex apportionment of damages is not at oddsits determination that the fact that William Sullivanpursuing his own antitrust action weighed against a granstanding. In considering the risk of duplicativeness and co
apportionment of damages, courts are concerned with kee antitrust actions within judicially manageable limits
curtailing litigation involving apportionment of damages amonarray of parties claiming injury. See Associated Gen
___ ______________ Contractors, 459 U.S. at 543-45 & nn.50-51; see also Southa ___________ ___ ____ _____ 715 F.2d at 1087. In considering directness, courts
concerned with the question of which among the affected par are most likely to be motivated to pursue an antitrust act While in the usual case, this would be those most dire affected by the antitrust violation, in some cases, more re parties might be more likely to detect and pursue an antit action. See Associated General Contractors, 459 U.S. at 542;
___ ______________________________also Ashmore, 843 F. Supp. at 766-67 (appropriate to____ _______
standing to employees discharged for refusal to imple discriminatory pricing system, because purchasers, t directly damaged by anticompetitive effect of violation,
least likely to discover it).
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The district court found that "[g]iven that an exte
chain of independent events would have had to have occurre
give credence to the Plaintiff's damages claim on behalf of S
the damages claims were "at best, highly speculative." 82
Supp. at 118. Sullivan claims that damages to SMC are measur
in terms of the enhanced market value of the stadium which
have resulted from the planned renovations, the extension of
lease with the Patriots, and the potential for deals
promoters for other entertainment and sports events. We t
that calculating these damages would "necessitate wide ran
speculation," Southaven Land Co., 715 F.2d at 1088, about___________________
future value of a refinanced, renovated, debt-free stadium wi
new lease. Because the harm to SMC was indirect, and was cau
in part, by independent intervening factors (notably, its p
serious indebtedness, as well as its failure to secure additi
sources of commercial financing), we agree with the dist
court that SMC's damages claims are "highly speculative," an
an additional factor weighing against a grant of standing in
case. See Associated General Contractors, 459 U.S. at___ ________________________________
(finding that damages were speculative because injury
indirect, and because it may have been produced by indepen
intervening factors).
The Ninth Circuit's holding in Los Angeles Coliseum is____________________
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to the contrary. In that case, the estimated damages claime
the Coliseum included claims for lost profits that would
been earned had luxury stadium boxes been built in the Coli
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and rented for the 1980 football season. 791 F.2d at 1366.
court noted these estimates may have been unfounded due to
of proof of causation. Id. Nonetheless, the court uphel___
damages award, holding that even without considering the ele
in question (lost profits from would-have-been luxury box
there was sufficient evidence, including attendance and
price estimates offered by the Raiders, to uphold the total a
of damages. Id. ___
Los Angeles Coliseum is distinguishable in several impor ____________________
respects. As the Ninth Circuit found, the Coliseum suff
direct harm as a result of the NFL's antitrust violation: but
the NFL's interference in its negotiations with the Raiders,
Coliseum likely would have secured their tenancy. Id. at 1 ___
The damages suffered were therefore intimately connected wit
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antitrust violation. Moreover, losses based on attendance
ticket price estimates were the foreseeable result of t
damages, and are precisely the type of damages courts
calculate easily. By contrast, the asserted harm here
indirect, and likely the result, at least in part, of indepen
intervening factors; nor is the enhanced market value o
refinanced, renovated, debt-free stadium with a new lease eas
calculate. It is the combination of these factors that lea
to conclude that any damages to SMC as a result of the all
antitrust violation are highly speculative. See Associ ___ _____
General Contractors, 459 U.S. at 542. ___________________
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Having considered the relevant Associated Gen _______________
Contractors' factors, we conclude that the balance in this____________
weighs against a grant of standing. We therefore conclude
Sullivan may not pursue an antitrust action on behalf of SMC.
IV. Application to Sullivan's Personal Damages Claims _________________________________________________
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Sullivan also claims that the NFL's restrictive
directly damaged him in his individual capacity, by chargin
with an array of expenses arising out of the SMC bankrup
including the payment of legal and other professional
associated with the bankruptcy proceeding itself,
opportunity to purchase debt at a discounted rate,
compensation and benefits, and anguish and emotional distr
In that, as the district court found, these damages "merely
from the alleged injuries to SMC," 828 F. Supp. at 120, they
that much further removed from the injuries claimed on behal
SMC. We therefore conclude, consistent with our conclusion
SMC did not suffer "antitrust injury," and that any da
suffered were too indirect and speculative to sustain an ac
on its behalf, that Sullivan likewise lacks standing to pursu
antitrust action for damages suffered in his individual capac
The decision of the district court is AFFIRMED. ______________________________________________
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