The National Football League (“NFL”) has been defending against antitrust suits for over fifty years. From draft disputes to suits from outside leagues, it has grown accustomed to, and weary of, defending itself against a continuing barrage of lawsuits by groups who are forum shopping for the most favorable circuits.
The most recent chapter of NFL antitrust liability has arisen out of a lawsuit over officially licensed NFL merchandise. Prior to 2001, the NFL had many vendors for its officially licensed apparel. However, in 2001, for multiple reasons, the NFL signed a $250 million, exclusive ten-year contract for Reebok to produce on-field apparel for all thirty-two teams. One of the NFL’s former vendors, hat manufacturer American Needle, filed a lawsuit in the Federal District Court for the Northern District of Illinois, claiming that the NFL had violated sections 1 and 2 of the Sherman Act. By 2008, American Needle Inc. v. National Football League had worked its way to the Seventh Circuit Court of Appeals.
Throughout this case, the NFL has asserted a single entity defense. Section 1 of the Sherman Act states, in part, that “[e]very person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony.” This language ultimately requires multiple actors; common sense would say that a company cannot engage in a conspiracy with itself. Unfortunately, common sense does not always abound in antitrust jurisprudence—for a long time it was possible to have a conspiracy within the same entity under the intra-enterprise conspiracy doctrine. The single entity defense, which relies on this common sense argument, has become more popular since the passage of Copperweld Corp. v. Independence Tube Corp., the case that abolished the intra-enterprise conspiracy doctrine.