Apr

18

Posted by : Matthew Wild | On : April 18, 2008

Today, an Italian executive agreed to plead guilty for his involvement in the Marine Hose Cartel. His plea agreement includes incarceration of one year and one day and a $20,000 fine. In addition, a Long Island defense contractor agreed to plead guilty to bid rigging and a conspiracy to commit wire fraud for his participation in a conspiracy to rig bids on Navy contracts for straps which are used to secure munitions. His sentence was left entirely to the Court’s discretion. Most criminal cases brought by the Antitrust Divisions are resolved by plea agreements. As discussed in the March 15, 2008 Post, the trial record of the Criminal Section (Antitrust Division) has been spotty. It has lost three trials within the last year.

Apr

10

Posted by : Matthew Wild | On : April 10, 2008

In Madison Square Garden, L.P. v. Nat’l Hockey League, No. 07-4927-CV, 2008 WL 746524 (2d Cir. Mar. 19, 2008), the Second Circuit denied Madison Square Garden — owner of the Rangers — a preliminary injunction against threatened fines for non-compliance with the NHL’s internet policy. That policy requires that all team websites had to be migrated to a common technology platform managed by the NHL and linked to the NHL’s website. When threatened, MSG brought suit seeking preliminary and permanent injunctive relief based on alleged violations of Section 1 of the Sherman Act and the Donnelly Act. The Southern District of New York denied MSG’s motion for a preliminary injunction and the Second Circuit affirmed holding that “MSG failed to establish a likelihood of success on the merits or sufficiently serious questions” on the merits. Id. at *2. The Second Circuit refused to apply a “quick look” because “the likelihood of anticompetitive effects is not] so obvious that ‘an observed with even a rudimentary understanding of economics could conclude that the arrangements in question would have an anticompetitive effect on customers and markets.'” Id. (citations omitted). In applying the rule of reason, the Second Circuit held that “MSG did not show that the NHL’s website ban has had an actual adverse effect on competition in the relevant market. Nor did MSG demonstrate that the many procompetitive benefits of the NHL’s restriction could be achieved through an alternative means that is less restrictive of competition. While there will certainly be substantive issues for the district court to address on the merits-for example, how the antitrust laws apply to the NHL as a sports league, and what the relevant market is in this case-the district court’s conclusion that preliminary injunctive relief was unwarranted falls well within the range of permissible decisions, and did not constitute an abuse of discretion.” Id. This case illustrates the difficulty of a sports team’s ability to challenge league action which benefits the league collectively. It should be noted, however, that NHL is unlikely to receive immunity under the Copperweld doctrine. See, e.g., Nat’l Hockey League Players Ass’n v. Plymouth Whalers Hockey Club, 419 F.3d 462 (6th Cir. 2005) (courts considering the actions of professional sports leagues have found the leagues to be joint ventures whose members act in concert (i.e., agree ) to promulgate league rules, rather than one solitary acting unit”).

Feb

25

Posted by : Matthew Wild | On : February 25, 2008

January 7, 2008.  In Kentucky Speedway, LLC v. Nat’l Ass’n of Stock Car Auto Racing, Inc., Civil Action No. 05-138 (WOB), 2008 WL 113987 (E.D.K.y. Jan. 7, 2008), the district court granted summary judgment dismissing plaintiff’s Section 1 and 2 claims.   Kentucky Speedway sued because NASCAR refused to sponsor a NEXTEL race at its track.  The Court considered it a “jilted distributor” case.  It found that Kentucky Speedway failed to come forward with sufficient proof of relevant product market — an essential of element of both its Section 1 and 2 claims.   It rejected the proposed relevant markets of a sanctioning market for the NEXTEL race and a hosting market for the same race.  It granted NASCAR’s Daubert motion to exclude Kentucky Speedway’s expert because he did no study to determine the cross-elasticity of demand between NEXTEL races and other potential substitutes such as sporting events in general.  Rather, Kentucky Speedway’s expert assumed only that a Bush NASCAR race event was a potential substitute.