Source: http://antitrustcommentary.com/?cat=371
Timestamp: 2019-04-26 08:39:07+00:00

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In Right Field Rooftops, LLC v. Chicago Cubs Baseball Club, LLC, No. 16-3582, 2017 U.S. App. LEXIS 16847 (7th Cir. Sept. 1, 2017), the Seventh Circuit affirmed dismissal of monopolization (and attempted monopolization) claims against the Chicago Cubs based on professional baseball’s antitrust exemption. Plaintiffs-appellants were owners of two buildings that sold tickets to view Cubs’ games from their roofs. In support of their monopolization claim, the rooftop owners alleged, among other things, that the Cubs “attempt[ed] to set a minimum ticket price, purchas[ed] rooftops, threaten[ed] to block rooftops with signage that did not sell to the Cubs and beg[an] construction at Wrigley Field” that would obstruct views from rooftops. Id. at *13-14. The Seventh Circuit found that these allegations fell within baseball’s antitrust exemption because they part of the “business of baseball.”. In doing so, the Seventh Circuit followed the U.S. Supreme Court precedent in which the Supreme Court long ago held “that the Sherman Act had no application to the ‘business of giving exhibitions [of] business of base ball’ . . .” (Id. at *12, quoting Toolson v. New York Yankees, Inc., 346 U.S. 356, 357 (1953), followed by Flood v. Kuhn, 407 U.S. 258 (1972)).
As discussed in the previous post, it remains curious that baseball is the only sport that has an antitrust exemption.
In Wyckoff v. Officer of the Commissioner of Baseball, No. 16-3795-cv, 2017 U.S App. LEXIS 16728 (Aug. 31, 2017), the Second Circuit affirmed dismissal of a putative antitrust class action brought by professional baseball scouts against Major League Baseball. The scouts alleged that the Major League Baseballs teams conspired to depress competition in their labor market in violation of § 1 of the Sherman Act. However, in 1922, the Supreme Court created antitrust immunity for the “business of baseball,” and “repeatedly reaffirmed baseball’s antitrust exemption.” Id. at *3 (citations omitted). Because the scouts’ claim fell squarely within baseball’s antitrust exemption, their antitrust claim failed.
This case illustrates the vitality of baseball’s antitrust exemption. It is curious that no other sport has such an exemption.
On September 6, 2011, the United States District Court for the Eastern District of New York denied summary judgment for vitamin C manufacturers in In re Vitamin C Antitrust Litig., MDL No. 1738 (Decision (Vit C)). The Court rejected defendants’ act of state defense under which defendants claimed immunity contending that Chinese law required them to fix prices.
The Chinese government provided support for defendants, by providing a statement that the scheme was required by the Chinese legal system (the Chamber also filed an amicus brief). The Court disagreed – what at first glance appears surprising is explained by the fact that the Chinese government did not explain many aspects of the law and was vague on other aspects.
The Court acknowledged that trying to apply some foreign legal systems to U.S. law is akin to fitting a round peg in a square hole. For example, experts explained to the Court that “law” in China is not based so much on the written law, but rather a mix of law (as we understand it) and voluntary behavior.
After analyzing these cultural differences, the Court found that the Chinese legal and regulatory system was not sufficiently concrete to justify a finding that the otherwise illegal (within the U.S. Court’s jurisdiction) behavior was required by the Chinese law. Thus, while the behavior was legal under the Chinese system, it was not required. The lack of a requirement to comply with a law was, inter alia, fatal to the defendants. The Court was unconvinced of compulsion because the statement of Chinese law read like a litigation position and the Chinese government had made contrary representations to the WTO.
As an aside, the U.S. recognized China’s market economy status in 2010.
This post was co-authored by Adrian Render.
In January 2009, the United States Court of Appeals for the Second Circuit affirmed a district decision granting a motion to dismiss an action alleging that defendants “conspired to influence the FCC.” The Court held that such activity cannot give rise to antitrust liability under the Noerr-Pennington doctrine. Kahn v. iBiquity Digital Corp., No. 07-0475-cv, 2009 WL 102810 (2d Cir. Jan. 15, 2009). That doctrine provides immunity for, among other things, lobbying the government including agencies which is precisely what the defendants were alleged to have done. In another case, the United States Court of Appeals for the Ninth Circuit upheld application of the Noerr-Pennington doctrine in Kaiser Health Foundation, Inc. v. Abbott Laboratories, Inc., Nos. 06-55687, 06-55748, 2009 WL 69269 (Jan. 13, 2009). This time defendant’s commencement of litigation against generic drug manufacturers was protected. The Noerr-Pennington doctrine also shields litigation as a basis for antitrust liability unless it is “sham” litigation. The Ninth Circuit affirmed dismissal of the monopolization claims based on Abbott’s seventeen patent infringement lawsuits against generic drug manufacturers noting that it could hardly be sham litigation when Abbott prevailed in seven of them and Abbott “had a plausible argument on which it could have prevailed” in the other ten suits. Id. at *13. In Wolfe v. City of Anaheim, No. 07-56031, 2008 WL 542079 (9th Cir. Dec. 31, 2008), the Ninth Circuit affirmed dismissal on summary judgment based on the Local Government Antitrust Act of 1984, 15 U.S.C. section 35(a). That statute immunizes municipalities from antitrust damages. Plaintiff had sought to recover damages from the City of Anaheim for alleged wrongful denial of a taxicab franchise under, inter alia, the Sherman Act. The statute clearly precluded such liability.

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