Antitrust lawyer: Players losing injunction might not be all bad

Posted April 04, 2011 @ 7:04 p.m.
Posted By Eric Edholm

U.S. District Judge Susan Nelson will be pulled into the NFL's tug of war with the players' association this week when she hears the players' case that aims to end the lockout that the owners enacted on March 12.

In front of Nelson on Wednesday, the players will attempt to have a preliminary injunction end the lockout and perhaps begin the business of football temporarily, even without a new Collective Bargaining Agreement.

The players dissolved as a union on March 11, then filed an antitrust suit against the NFL teams' owners after they locked the players out the following day. The suit asked the Minnesota court, which holds jurisdiction over NFL matters, to lift the lockout. In a separate case, the players are seeking damages from what they say were "ill-gotten gains" from TV deals that would have paid the owners even in the case of a lockout through the 2011 season.

There has been a common belief that the players hold the upper hand in the injunction suit — that the owners unfairly are suspending football and that the judge will determine as much — and subsequently will win the injunction. But one legal expert doesn't see it that way.

Matthew Cantor, a partner at Constantine Cannon, whose legal team won the largest antitrust settlement in U.S. history, believes the players' injunction case doesn't hold water like your garden-variety injunction suit might.

"I expect the judge to write an opinion that is very careful in its wording and draws upon black and white legal doctrine," Cantor said by telephone Monday morning. "And it's because of that that I think ultimately the judge is going to deny the injunction."

Why? Well, Cantor reasons that the players' claims that irreparable harm is being done in the interim won't hold up. The court must find that the plaintiffs — the former union — cannot sustain the financial damages that are being caused by the lockout unless the injunction is granted, and that the NFL's practices to this point have been illegal.

"That's a pretty extraordinary thing to ask for in a report, right?" Cantor said. "And the court has to find that, 'You know what? You're right. If I don't grant you this release, you're really going to be harmed and later on, there's no way you're ever going to be able to get any relief to compensate you for the harm you have (suffered) right now.'

"That's not this case. These players all have stipulated contracts for set monetary amounts. And they are seeking treble damages (in the TV suit). So if Tom Brady is right at the end of the day, that what the NFL is trying to impose on the players represents an antitrust violation, he's going to get (his salary) times how ever many years (are in his contract) times three."

Typically, Cantor said, injunctions are granted in cases where it is difficult to calculate the irreparable damages. He used a trademark infringement case as an example: Let's say Johnson & Johnson — a good family brand with an excellent reputation — has its brand name exploited by having its name posted on a disreputable website. It would be near impossible to account for the damage that was done from that. This case, Cantor said, would be comparatively easy to calculate.

"It's easy to quantify the (potential) damages, so for me — particularly when I see in cases where you have smaller players who are being crushed by larger entities — where courts say, 'I know you may go out of business, but the fact of the matter is that you probably will get monetary relief at the end of the day, so we're not going to give you the injunction.' If that's going to happen in that scenario, you can't grant an injunction in this scenario."

Interestingly, the players losing this initial case might not lengthen the lockout or strengthen the owners' case. In fact, Cantor predicts it could lead to further negotiations and, ultimately, a new CBA and the lifting of the lockout.

"If they win, (the players) will have extraordinary leverage," Cantor said. "If they lose, there will be a press hit and they'll look unfavorable in the (media). But the fact of the matter is none of the owners want to sacrifice the 2011 season. None of the players want to sacrifice the season. Certainly the television networks don't want that.

"I think the denial of the injunction will lead to the players to come back to the (negotiating) table, and while there might be a public-relations hit, I don't think there will be a substantial hit. From a legal perspective, I would expect that there is going to be a deal. Whether you're going to lose the preseason or a (regular-season) game or two, I don't know, but there is going to be football in 2011."

As for the timetable of how long this process will take, it's very difficult to predict. The NFL has asked Judge Nelson to wait for the National Labor Relations Board to rule on the owners' suit, which claims that the players' decertification is a tactical engagement in order to gain leverage in the negotiations and not a real labor claim. The NFL's 57-page brief to Judge Nelson spends nearly 25 pages dissecting this point, arguing that no individual player will be at any additional disadvantage vis-à-vis all the other players — that they're all being locked out.

Cantor says that Nelson could arrive Wednesday with a bench reading and a ruling ready to go on that day. Short of that, knowing that the preseason is not too far off in the distance, Cantor predicts that Nelson will have a carefully worded memo within a few weeks' time.

What is nearly universally believed is that no matter the outcome of the antitrust suit, there will be an appeal in the Eighth Circuit Court. Both sides — although certainly the NFL more than the players — have the financial resources to go through the appeals process and wait for the results they hope for. But a ruling in favor of the NFL on the irreparable harms matter, Cantor surmises, would be far more likely to hold up in appellate court.

"If she denies this injunction for lack of irreparable harm, I cannot see any circuit (court) reversing it," he said.

Nelson's ruling by itself might not have the greatest bearing on the labor strife between the two parties. But if Cantor is right, a loss by the players might actually spur more activity towards the bargaining of a new deal. He said he believes the players' legal team — which he praised several times — viewed the injunction strategy as a worthy risk, perhaps viewing it as a one-in-three shot to win. If they do win, Cantor said, it could lead to an emboldening of the players — and perhaps less direct activity towards returning to the field.

"I think that if the players win (the injunction), they'll sit back. The players are going to say, 'these are our demands, and if you don't give it to us you're facing treble damages.'"

That could lead to further legal wrangling and — the fans' worst nightmare — more pain before gains towards playing football in 2011.