On April 4, 2014, the U.S. District Court for the Northern District of Illinois made three important rulings in American Needle, Inc. v. New Orleans Saints, et al., No. 04-cv-7806, 2014 U.S. Dist. LEXIS 47527 (N.D. Ill. Apr. 4, 2014).
As background, in a 2010 decision concerning the National Football League (NFL), the U.S. Supreme Court had considered claims by plaintiff American Needle and others challenging the NFL's decision to award an exclusive apparel license to Reebok, and rejected the NFL's defense that it was a single entity incapable of conspiring under Sherman Act Section 1. American Needle, Inc. v. National Football League, 130 S. Ct. 2201 (2010). The Supreme Court remanded the case.
The district court (1) rejected American Needle's request to apply a "quick look" analysis to the NFL's licensing practices, holding that a full rule of reason analysis was required because the net anticompetitive effects were not obvious; (2) declined to grant summary judgment to the NFL on the issue of causation; and (3) denied the NFL's summary judgment motion that had argued that American Needle failed to establish a relevant market. As to the latter decision, the district court held that proof of actual detrimental effects—such as lower output and higher prices—can obviate the need for an inquiry into market power and definition, which is a surrogate for such effects. The court also held in the alternative that American Needle had provided sufficient evidence of a submarket for the "wholesale market for NFL trademarked hats."
A copy of the decision can be found here.
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