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Nat'l Football League's Sunday Ticket Antitrust Litig. v. DirecTV, LLC

United States Court of Appeals for the Ninth Circuit

December 7, 2018, Argued and Submitted, Pasadena, California; August 13, 2019, Filed

No. 17-56119

Opinion

 [*1143]  IKUTA, Circuit Judge:

Every Sunday during football season, millions of National Football League (NFL) fans tune in to watch their team play. If they live in the same area as their favorite team—such as Los Angeles Rams fans who live in Los Angeles—they can tune into their local Fox or CBS station to enjoy their team's game on free, over-the-air television. But if NFL fans happen to live far away from their favorite team—such as Seattle Seahawks fans residing in Los Angeles—they can watch every Seahawks game only if they purchase DirecTV's NFL Sunday Ticket, a bundled package of all NFL games available exclusively to subscribers of DirecTV's satellite television service.

The plaintiffs, a putative class of Sunday Ticket subscribers, claim that this arrangement harms NFL fans because it eliminates competition in the market for live telecasts of NFL games. Without this arrangement restricting the televising of NFL games, plaintiffs argue, the individual teams would create multiple telecasts of  [*1144]  each game and would compete [**5]  against one another by distributing telecasts of their games through various cable, satellite, and internet channels. We conclude that at this preliminary stage, plaintiffs have stated a cause of action for a violation of Sections 1 and 2 of the Sherman Act that survives a motion to dismiss. We therefore reverse the district court's decision to the contrary.

To analyze the challenged arrangement between the NFL teams, the NFL, and DirecTV, it is necessary to understand the history of television broadcasting of NFL games. The NFL, an association of "separately owned professional football teams," was formed in 1920. Am. Needle, Inc. v. Nat'l Football League, 560 U.S. 183, 187, 130 S. Ct. 2201, 176 L. Ed. 2d 947 (2010). While the NFL had a rocky first two decades, its teams gradually became successful. See U.S. Football League v. Nat'l Football League, 842 F.2d 1335, 1343 (2d Cir. 1988). Indeed, by 1959, a majority of NFL team owners felt that there was a "growing interest in professional football and the healthier financial condition of the NFL teams." Am. Football League v. Nat'l Football League, 205 F. Supp. 60, 67 (D. Md. 1962), aff'd, 323 F.2d 124 (4th Cir. 1963). And as professional football gained popularity, so did the telecasts of its games.

In the 1950s, the right to telecast NFL games was "controlled by individual teams," which independently licensed the telecasts of their games to television networks. U.S. Football League, 842 F.2d at 1346.3 For example, in 1951, the "Dumont network televised five regular season [**6]  games (twelve by 1954), as well as the championship game each year." Id. Additionally, in the mid-1950s, "the Columbia Broadcasting System ('CBS') began broadcasting certain NFL regular season games for $1.8 million per year, and the National Broadcasting Company ('NBC') acquired the right to televise the NFL championship game." Id.

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933 F.3d 1136 *; 2019 U.S. App. LEXIS 24041 **; 2019-2 Trade Cas. (CCH) P80,870; 2019 WL 3788253

IN RE NATIONAL FOOTBALL LEAGUE'S SUNDAY TICKET ANTITRUST LITIGATION,NINTH INNING, INC., DBA The Mucky Duck; 1465 THIRD AVENUE RESTAURANT CORP., DBA Gael Pub; ROBERT GARY LIPPINCOTT, JR.; MICHAEL HOLINKO, an individual, for himself and all others similarly situated, Plaintiffs-Appellants, v. DIRECTV, LLC; DIRECTV HOLDINGS, LLC; NATIONAL FOOTBALL LEAGUE, INC.; NFL ENTERPRISES, LLC; ARIZONA CARDINALS, INC.; ATLANTA FALCONS FOOTBALL CLUB LLC; BALTIMORE RAVENS, LP; BUFFALO BILLS, INC.; PANTHERS FOOTBALL, LLC; CHICAGO BEARS FOOTBALL CLUB, INC.; CINCINNATI BENGALS, INC.; CLEVELAND BROWNS, LLC; DALLAS COWBOYS FOOTBALL CLUB, LTD.; DETROIT LIONS, INC.; GREEN BAY PACKERS, INC.; HOUSTON NFL HOLDINGS, LP; INDIANAPOLIS COLTS, INC.; JACKSONVILLE JAGUARS, LTD.; KANSAS CITY CHIEFS FOOTBALL CLUB, INC.; MIAMI DOLPHINS, LTD.; MINNESOTA VIKINGS FOOTBALL CLUB, LLC; NEW ENGLAND PATRIOTS, LP; NEW ORLEANS LOUISIANA SAINTS, LLC; NEW YORK FOOTBALL GIANTS, INC.; NEW YORK JETS FOOTBALL CLUB, INC.; OAKLAND RAIDERS, LP; PHILADELPHIA EAGLES FOOTBALL CLUB, INC.; PITTSBURGH STEELERS SPORTS, INC.; SAN DIEGO CHARGERS FOOTBALL CO.; SAN FRANCISCO FORTY NINERS, LTD.; THE RAMS FOOTBALL COMPANY, LLC; BUCCANEERS, LP; TENNESSEE FOOTBALL, INC.; WASHINGTON FOOTBALL, INC.; FOOTBALL NORTHWEST LLC; DENVER BRONCOS FOOTBALL CLUB, Defendants-Appellees.

Subsequent History: Counsel Amended August 15, 2019.

Later proceeding at Ninth Inning, Inc. v. DirecTV, LLC (In re NFL Sunday Ticket Antitrust Litig.), 2019 U.S. App. LEXIS 26606 (9th Cir. Cal., Sept. 3, 2019)

Rehearing denied by, En banc Ninth Inning Inc. v. DirecTV (In re NFLs Sunday Ticket Antitrust Litig.), 2019 U.S. App. LEXIS 30400 (9th Cir. Cal., Oct. 10, 2019)

Stay granted by In re NFL Sunday Ticket Antitrust Litig., 2019 U.S. App. LEXIS 30822 (9th Cir. Cal., Oct. 16, 2019)

Petition for certiorari filed at, 02/07/2020

Motion granted by NFL v. Ninth Inning, Inc., 2020 U.S. LEXIS 1522 (U.S., Mar. 9, 2020)

Prior History:  [**1] Appeal from the United States District Court for the Central District of California Beverly. D.C. No. 2:15-ml-02668-BRO-JEM. Reid O'Connell, District Judge, Presiding.

In re NFL Sunday Ticket Antitrust Litig., 2017 U.S. Dist. LEXIS 121354 (C.D. Cal., June 30, 2017)

Disposition: REVERSED.

CORE TERMS

telecasts, teams, games, television, conspiracy, broadcast, rights, output, league, antitrust, consumer, purchaser, football, sports, alleges, interlocking, conspired, network, defendants', monopolize, professional football, price-fixing, plaintiffs', horizontal, co-conspirator, competitors, subscribers, satellite, compete, cable

Civil Procedure, Appeals, Standards of Review, De Novo Review, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Antitrust & Trade Law, Sherman Act, Claims, Scope, Monopolization Offenses, Monopolies & Monopolization, Conspiracy to Monopolize, Sherman Act, Price Fixing & Restraints of Trade, Per Se Rule & Rule of Reason, Per Se Violations, Cartels & Horizontal Restraints, Vertical Restraints, Nonprice Restraints, Copyright Law, Scope of Copyright Protection, Subject Matter, Specific Subject Matter, Ownership Interests, Initial Ownership, Elements