Opinion ID: 471004
Heading Depth: 2
Heading Rank: 2

Heading: Compensation Due the NFL

Text: 99 I also agree that the value of the Los Angeles opportunity, improperly conferred upon the Raiders by the district court's injunction, should be returned to the NFL. However, I do not agree that this value should be offset from pre-trebled actual antitrust damages. By offsetting before trebling in order to compensate the NFL for the lost value of the injunction, the majority effectively requires the Raiders to pay the League three times the value of an opportunity that was only once received. It is my view that the overbroad equitable relief the majority attacks is adequately and properly addressed by deducting the value of the injunction after trebling. 9 100 This case presents a unique situation. Pursuant to its equitable powers, the district court issued an injunction against the antitrust violator. That injunction prohibited the NFL's ongoing, illegal restraint of the Oakland Raiders' move into Los Angeles. After liability attached, and the move had been made, this court raised sua sponte the issue of whether to deduct the value of the district court's injunction (the value of the opportunity to play football in Los Angeles less the value of the opportunity to play football in Oakland) from the pre-trebled antitrust damages. In addressing this issue of first impression, the majority has failed to seek guidance from cases involving related policy concerns. 101 In all of the cases discussed below, the governing principle is that the court should separately assess all offsets which are not related to the pre-trebled damage calculation. That is, offsets which do not flow from the violation itself should be deducted after trebling. 10 102 A. The Policy Concerns That Motivated Both the Flintkote Decision and the Numerous Antitrust Settlement Cases That Followed It, Apply to this Case 103 It is by now well-established that if an antitrust plaintiff settles with one defendant, the amount of the settlement is to be set off after damages against the remaining defendants have been trebled, and not before. 11 The Ninth Circuit established this rule in Flintkote Co. v. Lysfjord, 246 F.2d 368, 397-98 (9th Cir.), cert. denied, 355 U.S. 835, 78 S.Ct. 54, 2 L.Ed.2d 46 (1957). Other courts have adopted it as well. See, e.g., Burlington Industries v. Milliken & Co., 690 F.2d 380, 393 (4th Cir.1983), cert. denied, 461 U.S. 914, 103 S.Ct. 1893, 77 L.Ed.2d 283 (1983); Hydrolevel Corp. v. ASME, 635 F.2d 118, 130 (2d Cir.1980), aff'd on other grounds, 456 U.S. 556, 102 S.Ct. 1935, 72 L.Ed.2d 330 (1982); Baughman v. Cooper-Jarrett, Inc., 530 F.2d 529, 534 (3d Cir.), cert. denied sub nom. Wilson Freight Forwarding Co. v. Baughman, 429 U.S. 825, 97 S.Ct. 78, 50 L.Ed.2d 87 (1976); Wainwright v. Kraftco Corp., 58 F.R.D. 9, 12 (N.D.Ga.1973); Vandervelde v. Put & Call Brokers & Dealers Ass'n, 344 F.Supp. 157, 162 (S.D.N.Y.1972); Semke v. Enid Automobile Dealers Ass'n., 320 F.Supp. 445, 446-47 (W.D.Okla.1970), rev'd on other grounds but specifically approved on this point, 456 F.2d 1361, 1371 (10th Cir.1972). 104 In Flintkote, the Ninth Circuit provided three persuasive reasons for deducting settlement proceeds after trebling damages. 246 F.2d at 397-98. First, the antitrust laws provide that the plaintiff should receive three times the actual antitrust damages. If a court deducts settlement proceeds before trebling, the plaintiff's total award would be less than what the law requires. Second, Congress designed the antitrust laws to encourage suits by private plaintiffs. Offsetting before trebling would diminish the statutory incentive through judicial construction. Third, offsetting before trebling would discourage plaintiffs from settling, for every dollar received in settlement would result in a three dollar reduction in the final judgment. See also Burlington Industries, 690 F.2d at 393; Hydrolevel, 635 F.2d at 130; Note, Contribution and Antitrust Policy, 78 Mich.L.Rev. 889, 906 n. 87 (1980). While the third concern does not apply to the question of when to offset the value of the district court's injunction, the first and second clearly do. Accordingly, we should heed the plain language of Flintkote: 105 [A] niggardly construction of the treble damage provisions would do violence to the clear intent of Congress. The private antitrust action is an important and effective method of combatting unlawful and destructive business practices. The private suitor complements the Government in enforcing the antitrust laws. The treble damage provision was designed to foster and stimulate the interest of private persons in maintaining a free and competitive economy. Its efficacy should not be weakened by judicial construction. 106 246 F.2d at 398. 107 Admittedly, in Flintkote, Burlington Industries, Hydrolevel, Baughman, Wainwright, Vandervelde, and Semke, the offsets represented settlements by defendants whereas, here, the offset under consideration is the value of an injunction. Nonetheless, I find no support in authority or reason for the contention that this factual distinction is material. Thus, these cases reinforce my belief that we should offset after trebling. 108 B. Analogies to Either (1) the Sole Antitrust Case Involving Both a Counterclaim and an Offset Where Plaintiff Did Not Contribute to His Antitrust Injury, or (2) Cases Involving Violations of Orders Setting Rental Ceilings, Suggest the Same Result: Offset After Trebling 109 Of the antitrust cases involving offsets where the plaintiff did not participate in the antitrust scheme, 12 only one case deals with counterclaims rather than settlements. In Jerard Associates v. Stanley Works, 1966 Trade Cases (CCH) p 71,820 (S.D.N.Y.), the court held that the rationale of Flintkote applied equally well to counterclaims and, thus, decided to offset after trebling. The court went on to say: We see no reason in law or justice why we should emasculate the treble damage provision by artificially trebling defendant's counterclaim.... One might equally well remark in the present context that there appears to be no reason in law or justice why this court should emasculate the treble damage provision by deducting the value of the injunction before trebling--i.e., artificially trebling the value of the injunction. Indeed, in Jerard, the court specifically stated that [t]he purpose of the treble damage provision requires that any set-off to an antitrust judgment be deducted after trebling because a narrow construction of Sec. 4 would do violence to the congressional purpose of aiding the enforcement of the antitrust laws by providing an incentive for private antitrust actions ... [citations omitted, emphasis added]. 110 Another analogy may be drawn to cases dealing with violations of orders setting rental ceilings under the Emergency Price Controls acts of World War II. Under those acts, courts awarded treble damages to the tenants of landlords who willfully violated rental ceiling orders. The cases held that actual damages should be trebled first, and that only afterwards should the amount of any unpaid rent be deducted from the trebled figure. In other words, offsets which do not flow from the violation itself should occur only after damages have been trebled. See Waters v. Turner, 76 F.Supp. 279 (E.D.Pa.1948); Sampson v. Thomas, 76 F.Supp. 691 (E.D.Mich.1948). 111 Together with Flintkote and Jerard, these cases demonstrate that where the law has a punitive objective in trebling compensatory damages, offsets from the judgment must be made after the actual damages are trebled in order to serve that objective properly. The antitrust law applicable to the present case, 15 U.S.C. Sec. 15, provides that the plaintiff shall recover threefold the damages by him sustained. This court should have followed the Ninth Circuit's decision in Flintkote by holding that the purpose of those words would best be carried out by offsetting the value of the injunction after the jury verdict had been trebled.