St. Louis Convention & Visitors Commission v. National Football League
1998 U.S. App. LEXIS 21483, 154 F.3d 851 (1998)
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Rule of Law:
A plaintiff in a Sherman Act § 1 case alleging harm from a conspiracy that deters competition must present evidence of causation that tends to exclude the possibility that the alleged co-conspirators acted for independent business reasons. Mere speculation that the conspiracy created an anticompetitive 'atmosphere' is insufficient without proof that a specific competitor was actually deterred from competing by the conspiratorial conduct.
Facts:
- After the St. Louis Cardinals football team moved to Phoenix in 1988, the St. Louis Convention and Visitors Center (CVC) oversaw the construction of a new, publicly-funded stadium to attract a new NFL team.
- After failing to secure an expansion franchise, CVC began negotiations with the Los Angeles Rams for the team to relocate to St. Louis.
- During negotiations, the Rams informed CVC that they would cease discussions if CVC approached any other team, and CVC made a conscious decision to negotiate exclusively with the Rams.
- CVC and the Rams reached an agreement for the team to relocate and lease the new stadium.
- The NFL's constitution, under Article 4.3, requires a three-fourths vote of team owners to approve any team's relocation to a new city.
- The NFL owners initially voted against the Rams' proposal to move to St. Louis.
- Following further negotiations between the Rams and the NFL, the relocation was approved after the Rams agreed to pay a $29 million relocation fee to the league.
- CVC had a clause in its contract with the Rams allowing it to cancel the deal if the relocation fee exceeded $7.5 million, but it chose not to exercise this option and instead agreed to pay $20 million of the $29 million fee.
Procedural Posture:
- CVC sued the NFL and twenty-four of its member teams in the U.S. District Court for the Eastern District of Missouri, alleging violations of the Sherman Antitrust Act and tortious interference with contract.
- The NFL filed a motion for summary judgment, arguing it was a single entity incapable of conspiracy, which the district court denied.
- The district court ruled that CVC's Sherman Act § 1 claim would be analyzed under the rule of reason, not the per se rule.
- The case proceeded to a jury trial.
- At the close of CVC’s case, the NFL moved for judgment as a matter of law. The district court granted the motion as to CVC’s Sherman Act § 2 and tortious interference claims.
- Near the end of the trial, after the defense had presented most of its evidence, the NFL renewed its motion for judgment as a matter of law on the remaining Sherman Act § 1 claim.
- The district court granted the NFL's motion, entering judgment in its favor on all claims.
- CVC appealed the dismissal of its Sherman Act § 1 and tortious interference claims to the U.S. Court of Appeals for the Eighth Circuit.
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Issue:
Does a plaintiff establish the necessary causation for a Sherman Act § 1 violation by arguing that a sports league's relocation rules created an 'atmosphere' that deterred competition, without providing direct evidence that any specific competitor was actually interested in and deterred from bidding by those rules?
Opinions:
Majority - Murphy, Circuit Judge.
No. A plaintiff cannot establish causation for a Sherman Act § 1 claim merely by arguing that a sports league's rules created an anti-relocation 'atmosphere' that discouraged competition. The plaintiff must provide sufficient evidence to prove that the alleged conspiracy was the actual, material cause of its injury, which requires showing that at least one other team was interested in bidding but was specifically deterred by the challenged rules. CVC failed to meet this burden. It presented no evidence that any other team was interested in moving to St. Louis or that the failure of any team to bid was due to the NFL’s policies. The testimony from CVC's witnesses was speculative and could not exclude the possibility that other teams declined to bid for independent business reasons, such as existing stadium leases or loyalty to their home cities. Furthermore, CVC made no effort to solicit other bids and, in fact, agreed to negotiate exclusively with the Rams. Without proof of a direct causal link between the NFL's rules and a lack of bidders, and without evidence of an actual suppression of competition, CVC failed to establish either causation or an antitrust injury.
Analysis:
This decision significantly raises the evidentiary bar for plaintiffs bringing antitrust challenges against sports leagues' relocation rules. It establishes that a generalized claim of a 'chilling effect' or an anticompetitive 'atmosphere' is insufficient to prove causation. Instead, plaintiffs must provide specific, concrete evidence linking the league's rules to the deterrence of an actual, identifiable competitor. This holding makes it substantially more difficult for cities to challenge league rules, as they must now demonstrate not only that the rules are anticompetitive in theory, but that they were the direct cause-in-fact of a tangible loss of competition.
