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UNITED STATES FOOTBALL LEAGUE v. NFL

April 24, 1986

UNITED STATES FOOTBALL LEAGUE, et al., Plaintiffs, against NATIONAL FOOTBALL LEAGUE, et al., Defendants


The opinion of the court was delivered by: LEISURE

LEISURE, District Judge :

The United States Football League and certain of its member clubs (collectively referred to as the "USFL"), have sued the National Football League, its commissioner and certain of its member clubs (hereinafter collectively referred to as the "NFL"), to obtain declaratory and injunctive relief and to recover damages resulting from alleged violations of Sections 1 and 2 of the Sherman Anti-Trust Act, 15 U.S.C. §§ 1 & 2, and the common law.

 The NFL has moved, in limine, pursuant to Fed. R. Evid. 402 and 403 to strike from plaintiffs' First Amended Complaint ("amended complaint") any reference, and excluding from trial any evidence, which pertains to: (1) previous antitrust litigation against the defendants; (2) the All America Football Conference ("AAFC") or the World Football League ("WFL"); (3) alleged conduct by the NFL against the American Football League ("AFL"); and (4) any matter concerning sports-related legislation enacted by Congress in 1961 and 1966, other than the fact of such legislation. In a parallel motion, the NFL has moved to strike from the amended complaint any reference, and excluding from trial, any evidence, which pertains to litigation between the Los Angeles Raiders football franchise and the NFL, and between the City of Oakland, California and the Los Angeles Raiders football franchise.

 Procedural Considerations

 Before the Court addresses the substance of these motions, it is necessary to determine, as a matter of procedure, whether the Court has the authority to grant all of the relief requested. Federal Rules of Evidence 402 and 403, when read together, authorize the Court to rule, in limine, that certain evidence should be excluded, either because it is irrelevant, or if relevant, its probative value is substantially outwieghed by considerations of prejudice and confusion. In addition, however, the NFL asks the Court to strike certain allegations of the amended complaint as well. Fed. R. Civ. P. 12(f) authorizes the court to strike "from any pleading . . . any redundant, immaterial, impertinent, or scandalous matter." But, a motion to strike shall be made before responding to a pleading or within twenty days after the service of a pleading if no responsive pleading is required or permitted. Id. In this case, the NFL has clearly exceeded the twenty day limit set forth in the rule. In addition, on a Rule 12(f) motion, "[m]atter outside the pleadings normally is not considered." 5 Wright & Miller, Federal Practice & Procedure: Civil § 1380 at 787 88 (1969), citing Ciprari v. Servicos Aeroes Cruzeiro do sul, S.A. (Cruzeiro), 245 F. Supp. 819, 820 (S.D.N.Y. 1965), aff'd on other grounds, 359 F.2d 855 (2d Cir. 1966). When confronted with matters outside the pleadings, some courts have treated the motion to strike as one for partial summary judgment. Ciprari, 245 F. Supp. at 820; Banana Distributors, Inc. v. United Fruit Co., 19 F.R.D. 11, 13 (S.D.N.Y. 1955). In considering whether it is appropriate to treat the motion to strike as motions for partial summary judgment, the Court is mindful of the Second Circuit's admonition in Lipsky v. Commonwealth United Corp., 551 F.2d 887 (2d Cir. 1976), that ordinarily a court should not "decide to strike a portion of the complaint - on the grounds that the material could not possibly be relevant - on the sterile field of the pleadings alone." Id. at 893 (citations omitted). But where, as here, the party opposing the motion to strike has presented over 150 exhibits, there is little danger that the Court will be unable to determine questions of relevancy and admissibility that generally "require the context of an ongoing and unfolding trial in which to be properly decided." Id. The NFL's motion to strike shall therefore be treated as a motion for partial summary judgment.

 As such, the Court shall apply the same standards it would apply when considering the merits of any other motion for partial summary judgment. On a motion for partial summary judgment, the court's purpose is not to try issues of fact, but rather to determine whether or not there are material issues of fact to be tried. Meiri v. Dacon, 759 F.2d 989, 992 (2d Cir.), cert. denied, 474 U.S. 829, 106 S. Ct. 91, 88 L. Ed. 2d 74 (1985). The party opposing summary judgment must present to the court specific facts showing there is a genuine issue to be tried. Rule 56(e). The Court may consider only "admissible evidence showing any genuine issue to be tried." Barnett v. Howaldt, 757 F.2d 23, 26 (2d Cir. 1985). If the moving party carries its preliminary burden of demonstrating that there is no genuine issue as to any material fact, the opposing party may not defeat the motion unless it produces "significant probative evidence tending to support [its position]." United States v. Pent-R-Books, Inc., 538 F.2d 519, 529 (2d Cir. 1976), cert. denied, 430 U.S. 906, 97 S. Ct. 1175, 51 L. Ed. 2d 582 (1977) (quotation omitted). The factual record should be viewed in the light most favorable to plaintiffs as the nonmoving parties, Barnett, 757 F.2d at 26, meaning that all inferences must be construed in their favor. Eastway Construction Corp. v. City of New York, 762 F.2d 243, 249 (2d Cir. 1985). With these standards in mind, we now turn to the substantive issues presented by the NFL's motions.

 Contentions of the Parties

 "Television is at the heart of this case." Memorandum of Law in Support of Plaintiffs' Motion for Summary Judgment and in Opposition to Defendants' Motions In Limine, at 10; see also Transcript of Proceedings at 32 (April 11, 1986) ("This case is a TV case.") The USFL alleges that its inability to obtain a network television contract for the Fall of 1986 was a result of "coercive" pressure applied by the NFL to the three networks not to agree to a Fall 1986 contract with the USFL. In addition, the USFL alleges that the existence of the NFL's three network television contracts has the effect of precluding a new major professional football league from ever having its games televised, thereby depriving it of the television revenues and nationwide exposure a new league requires to be able to compete successfully against the NFL.

 The NFL contends that none of the "factual" allegations about the other professional football leagues, the prior antitrust suits against the NFL, or the events surrounding the 1961 and 1966 legislation are probative of any factual issue relating to the USFL's alleged antitrust injury and damages. The USFL contends that the NFL's record of antitrust violations and the history of competition in major league professional football are admissible for two reasons. First, both topics evidence the nature, sources and use of the NFL's market power since Section 1 violations constitute evidence that establishes monopolistic intent, an element of the USFL's Section 2 claim. Second, prior illegal NFL antitrust conspiracies are admissible to establish the intent, motive and method of the NFL's Section 1 conspiracy against the USFL.

 Applicable Law

 The USFL argues that all three violations of Section 2 -- monopolization, attempted monopolization, and conspiracy to monopolize -- require proof of both anticompetitive intent and analysis of the defendants' market power, including the sources of that power. See, e.g., United States v. Grinnell Corp., 384 U.S. 563, 570-71, 16 L. Ed. 2d 778, 86 S. Ct. 1698 (1966) (monopolization requires proof of monopoly power and the willful acquisition or maintenance of monopoly power); Swift & Co. v. United States, 196 U.S. 375, 396, 49 L. Ed. 518, 25 S. Ct. 276 (1905) (attempted monopolization requires proof of a dangerous probability of success in monopolizing a given product market and specific intent to build monopoly); United States v. Yellow Cab Co., 332 U.S. 218, 91 L. Ed. 2010, 67 S. Ct. 1560 (1947) (conspiracy to monopolize requires proof of concerted action with intent to restrain trade and commission of an overt act).

 The USFL contends that in appropriate cases, prior antitrust violations and the history of the relevant market are admissible to establish market power and intent. Thus, in Grinnell, the Supreme Court noted that defendant's "monopoly was achieved in large part by unlawful and exclusionary practices." 384 U.S. at 576. These included: (1) "restrictive agreements that preempted for each company a segment of the market where it was free of competition of the others"; (2) "[p]ricing practices that contained competitors"; (3) acquisitions of competitors; and (4) control of co-defendants that eliminated the possibility of competition. Id. (footnote omitted). "By those acquisitions it perfected the monopoly power to exclude competitors and fix prices." Id. In United States v. Paramount Pictures, Inc., 334 U.S. 131, 92 L. Ed. 1260, 68 S. Ct. 915 (1948), the Court noted that "the fact that the power created by size was utilized in the past to crush or prevent competition is potent evidence that the requisite purpose or intent attends the presence of monopoly power." Id. at 174. In Lorain Journal Co. v. United States, 342 U.S. 143, 96 L. Ed. 162, 72 S. Ct. 181 (1951), the Court stated that "the substantial monopoly which was enjoyed in Lorain by the publisher from 1933 to 1948," id. at 152, was a circumstance that "illuminated" defendant's attempt to "regain the . . . pre-1948 substantial monopoly over the mass dissemination of all news and advertising." Id. at 153.

 The USFL also argues that evidence of conspiratorial conduct occurring before plaintiffs' damage period is admissible to establish the intent, motive and method of the defendants' conspiracies against the USFL. In Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 8 L. Ed. 2d 777, 82 S. Ct. 1404 (1962), the Court held that the trial court erred when it excluded evidence that the alleged conspiracy and monopolization had begun before the plaintiffs came into the industry. Id. at 709-10.

 This evidence was clearly material to petitioners' charge that there was a conspiracy and monopolization in existence when they came into the industry, and that they were eliminated in furtherance thereof. We do not mean that a trial court may not place reasonable limits upon such evidence or set a reasonable cut-off date, evidence before which point is to be considered too remote to have sufficient probative value to justify burdening the record with it.

 Id. at 710 (footnotes omitted). See also United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 228-31, 84 L. Ed. 1129, 60 S. Ct. 811 (1940) (exclusion of certain evidence describing background and operation of market upheld). While these general principles are virtually unassailable, the question presented is their application to the factual allegations objected to by the NFL.

 AAFC and WFL Allegations

 The NFL argues that there are no allegations in the complaint, nor have any facts been presented by the USFL, showing that the NFL caused the AAFC's dissolution in 1947 or the WFL's dissolution in 1975. According to the NFL, the mere fact that the two leagues existed and disbanded is irrelevant to any issue concerning the size of the 1980's professional football market, its structure, or operation or the NFL's alleged anticompetitive intent or alleged predatory conduct against the USFL. In the cases relied upon by the USFL, where plaintiffs have shown damages as a result of a conspiracy which predated plaintiff's entrance into the market, the courts have permitted evidence of prior conduct because the identical conspiracy was involved. Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 8 L. Ed. 2d 777, 82 S. Ct. 1404 (1962); Strobl v. New York Mercantile Exchange, 582 F. Supp. 770 (S.D.N.Y. 1984), aff'd, 768 F.2d 22 (2d Cir.), cert. denied, 474 U.S. 1006, 106 S. Ct. 527, 88 L. Ed. 2d 459 (1985). Unless the USFL is able to produce evidence that the NFL somehow caused the breakup of the two leagues, it is argued, the allegations concerning the two prior leagues are irrelevant to any claim of an ongoing conspiracy to monopolize the United States market for professional football. The NFL contends that the USFL has not presented admissible evidence showing that there is any material question of fact that the NFL unlawfully caused the demise of the WFL. In the absence of facts showing such causal connection, the NFL contends that no fact material to the USFL's charges against the NFL will be made more or less probable by evidence concerning the existence and disbandment of either league.

 At oral argument, the USFL conceded that the allegations concerning the AAFC appear in the pleadings for background purposes only. Transcript of Proceedings at 77 (April 11, 1986). Accordingly, with respect to the AAFC, the motion is granted. The USFL shall make no reference, and shall offer no evidence at trial, that implies that the NFL caused the demise of the AAFC. In addition, those portions of the amended complaint alluding to such matters shall be stricken. This ruling does not, however, preclude the USFL from referring to the AAFC in the context of a presentation for background purposes of the history of professional football in the United States.

 Two incidents have come to the Court's attention that provide a basis for allegations that the NFL harmed or attempted to harm the WFL. The first arose out of the 1973 attendance by Robert Wussler, then President of CBS Sports, at a WFL owners' meeting. The USFL claims that NFL Commissioner Rozelle let it be known to the networks that he considered Wussler's attendance to be an unfriendly act. The USFL relies upon this incident both to prove that the NFL entertained anticompetitive intent toward the WFL and to prove that in 1981-82 the NFL pressured the networks not to give the fledgling USFL a television contract. In December 1981, the USFL's publicity agent invited the President of CBS Sports to attend a January 1982 Florida meeting of prospective USFL owners. One CBS executive advised the other not to attend since-Wussler's ...


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