Opinion ID: 195635
Heading Depth: 2
Heading Rank: 3

Heading: Causation of Injury in Fact

Text: -24- The NFL next argues that Sullivan did not present sufficient evidence to support a finding by the jury that the NFL's public ownership policy caused injury in fact to Sullivan. An antitrust plaintiff must prove that he or she suffered damages from an antitrust violation and that there is a causal connection between the illegal practice and the injury. Associated General Contractors, Inc. v. California State Council of Carpenters, 459 U.S. 519, 532-33 & n.26 (1983); Blue Shield of Virginia v. McCready, 457 U.S. 465, 476-78 (1982); Engine Specialties, Inc. v. Bombardier Ltd., 605 F.2d 1, 13 (1st Cir. 1979), cert. denied, 446 U.S. 983 (1980). Plaintiffs need not prove that the antitrust violation was the sole cause of their injury, but only that it was a material cause. Engine Specialties, 605 F.2d at 14. Sullivan asserted at trial that the NFL's ownership policy forced him to sell the Patriots at a depressed price, far below what the team would have been worth in a market that included public ownership of the team. But for the NFL's policy, Sullivan claims, he would have been able to offer 49% of the Patriots to the public for $70 million, pay off his debts, and retained ownership of a much more valuable and profitable team. The NFL contends that Sullivan failed to establish a causal connection between his forced sale of the Patriots and the NFL's ownership policy because (1) Sullivan never officially requested a vote on his proposals to amend or waive the policy so -25- there is no way of knowing whether the policy would have prevented a public offering in the first place; and (2) Sullivan never established that the public stock sale was feasible or potentially successful and thus an alternative to what ultimately happened (i.e., even if the NFL did not have a policy against public ownership, Sullivan would still have had to sell his team because the Patriots stock sale would not have happened or would not have raised enough money to pay off Sullivan's debts and prevent a fire sale of the team). Although the evidence of causation is not overwhelming, it is nevertheless sufficient to support the verdict. Regarding the NFL's first claim that Sullivan never called for a vote from the owners to change or waive the ownership policy, Sullivan presented sufficient evidence to show that the NFL essentially rejected Sullivan's request, even though no official vote was taken. Under certain circumstances, an antitrust plaintiff must make a demand on the defendant to allow the plaintiff to take some action or obtain some benefit, which the defendant's challenged practice is allegedly preventing the plaintiff from taking or obtaining, in order to prove that the practice caused injury in fact to the plaintiff. See Wells Real Estate, Inc. v. Greater Lowell Bd. of Realtors, 850 F.2d 803, 816 (1st Cir.), cert. denied, 488 U.S. 955 (1988); Out Front Productions, Inc. v. Magid, 748 F.2d 166, 170 (3d Cir. 1984). Such a requirement only applies, however, where the plaintiff cannot otherwise prove that the illegal practice exists or that -26- the practice is preventing the plaintiff from competing in the relevant market; in such cases, a refused demand is the only reliable evidence of causation. Out Front, 748 F.2d at 169-70. In cases like the present one, an official request and official refusal is not necessary to establish causality because there is other evidence showing that defendant's practice caused injury in fact to the plaintiff. Zenith Radio Corp. v. Hazeltine Research, 395 U.S. 100, 120 n.15 (1969); Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 699-702 (1962). There is certainly no blanket requirement, as the NFL maintains, in Wells or any other case, that Sullivan must call for a vote and obtain an official refusal from the NFL, even if such a request would be futile. See, e.g., Wells, 850 F.2d at 816 (finding failure to request access to multiple listing service was critical because [t]here was no evidence of a group boycott; although court noted request may have been futile, there was no evidence to indicate that it would have been, so an actual request was required); Chicago Ridge Theatre Ltd. Partnership v. M & R Amusement Corp., 855 F.2d 465, 470 (7th Cir. 1988) (futility obviates the need for a demand). Certainly, if Sullivan can prove futility independent of any official request, he need not show that he actually called for a vote and received a denial from the other NFL owners. The jury in this case heard evidence that would allow it to conclude that the NFL effectively denied Sullivan's request for a waiver or amendment of the public ownership policy, and -27- that an official vote would indeed have been futile. The NFL's policy against public ownership was long-standing, and the policy withstood several efforts to change it over the years as proffered amendment proposals were never brought to a vote. Sullivan requested a wavier of, or amendment to, the policy at a meeting of the owners on October 27, 1987. His request was tabled. After further discussions, then-Commissioner Pete Rozelle said that he opposed the proposal and that the chances for league approval were very dubious. Although Sullivan was only four votes shy of winning a vote, with seven votes still undecided, the jury could reasonably conclude that, in light of the Commissioner's statement, Sullivan tried but failed to convince those undecided owners to vote in his favor and that an actual vote would have been futile. The evidence is thus sufficient to support a finding that the NFL's policy was effectively enforced against Sullivan and that the policy did in fact, when considered with the evidence discussed below, prevent Sullivan from making his public offering of 49% of the Patriots. Sullivan also presented sufficient evidence to support a finding that the Patriots stock sale was both feasible and potentially successful. Sullivan met with Stephens, Inc., an investment banking firm, to discuss a deal whereby Stephens would arrange for a loan of $80 million to Sullivan and his son, half of which would be paid back out of the proceeds of the Patriots stock offering, which Stephens would also arrange. In a subsequent letter, Stephens stated that it had been retained to -28- assist in the private placement of $80 million of debt and set out some preliminary terms and conditions. Although specifics of the public offering were not discussed, and Stephens did not determine whether the stock offering was ultimately feasible, Stephens repeatedly made it clear to Sullivan that NFL approval was required -- indeed Stephens specifically singled out NFL approval as the prerequisite -- before Stephens could proceed any further with efforts to prepare for the placement of Patriots stock. As discussed above, NFL approval was never obtained. Therefore, the jury could conclude that lack of approval was the reason Stephens was unwilling to proceed with the deal, even though Stephens also expressed some concern about Sullivan's financial and legal troubles. The jury also heard testimony that Charles Allen, a prominent investment banker in New York, thought the Patriots public offering was feasible and that he was potentially interested in arranging the deal. Sullivan himself testified that the stock sale was feasible based on his experience with the previous public offering of Patriots stock in 1960, and based on the public offering of the Boston Celtics. Finally, one of Sullivan's experts, Patrick Brake, testified that the public offering would have been feasible had the NFL not blocked it. In addition, despite significant financial and legal problems with the Patriots, the evidence is sufficient to support a finding that Sullivan could have solved these problems in the -29- course of the public offering and, further, that he could have brought off a successful stock sale that would have raised at least $70 million. The NFL focusses its challenge to the potential success of Sullivan's offering on the testimony of Patrick Brake, who provided the $70 million figure as the value for the stock sale. According to the NFL, Brake's testimony could not support the jury's finding on causation because it was not supported by any facts, it was not grounded in any rational methodology, and it ignored important factors indicating that the Patriots offering would not be a success. The NFL does not challenge the admissibility of Brake's opinion but, instead, claims that his opinion cannot support the jury's finding that the Patriots stock sale would have been a success if the NFL had allowed it to happen. When an expert opinion is not supported by sufficient facts to validate it in the eyes of the law, or when indisputable record facts contradict or otherwise render the opinion unreasonable, it cannot support a jury's verdict. Brooke Group, Ltd. v. Brown & Williamson Tobacco Corp., 113 S. Ct. 2578, 2589 (1993); accord Price v. General Motors Corp., 931 F.2d 162, 165 (1st Cir. 1991); Richardson v. Richardson-Merrell, Inc., 857 F.2d 823, 829 (D.C. Cir. 1988), cert. denied, 493 U.S. 882 (1989). A jury verdict cannot rest solely on an expert's bottom line conclusion, without some underlying facts and reasons, or a logical inferential process to support the expert's opinion. -30- Mid-State Fertilizer Co. v. Exchange National Bank, 877 F.2d 1333, 1339 (7th Cir. 1989). We agree that the facts and reasoning underlying Brake's opinions and testimony leave much to be desired from the standpoint of a factfinder charged with determining the facts. As a matter of law, however, Brake provided enough of a basis for his opinions and had sufficient facts to back his opinions up, to support, in combination with the evidence from other sources, a jury finding of potential success of the Patriots stock sale venture. To begin with, Brake stated in his testimony that his opinion was based on a review of documents and depositions in the case, a review of the prospectus for the Boston Celtics public offering, the fact that future television revenues for the Patriots were likely to increase due to the Patriots' appearance in the Super Bowl, and the fact that the public stock for NFL teams, like the Patriots, would trade at a premium value over what the club would otherwise be worth. Brake also stated that he looked at a financial statement of the Patriots and was apprised of some of the debt and loss history of the club. Other testimony and evidence at trial supported the claim that stock of NFL teams would sell for a premium above the club's private sale value and the claim that TV revenues to the NFL teams would increase. Sullivan himself testified that a public offering would be successful based upon the success of his earlier offering of Patriots stock and on the results of the Celtics public offering. There was also testimony -- highly disputed, -31- but potentially credible testimony nonetheless -- to the effect that the Celtics' stock offering was a success and that the Patriots stock offering could be patterned after the Celtics offering. As for the source of Brake's specific $70 million figure for the likely proceeds from a sale of 49% of the Patriots, Brake explained a two-step public offering process which, after subtracting underwriting fees, would yield the Sullivan's $70 million. Brake arrived at this figure after starting with a base value of $150 million for the Patriots. Given the $80 million private sale price of the Patriots obtained by Sullivan when he actually sold the team, and given the testimony by Brake and others that public stock of NFL teams would sell at a premium, we cannot say that the opinion by Brake, an investment banking expert, was unreasonable or not supported by sufficient facts to validate it in the eyes of the law. Brooke Group, 113 S. Ct. at 2589. Brake's testimony was not merely conclusory. Rather, it was embellished by various explanations and justifications. His testimony was also not overwhelmingly contradicted by the weight of the evidence or inherently contradictory, unreasonable or irrational. Brake did overlook some important factors that contradicted his opinion, but he was questioned about these factors on cross-examination and the NFL argued them before the jury. The factors do not invalidate Brake's opinion as a matter of law; rather, they merely go to the weight and credibility of -32- his opinions which are matters for the jury to consider. The basis of the opinion regarding the success of the Patriots public offering may be flimsy, but it is not nonexistent or irrational as a matter of law. Although we share the NFL's skepticism that Sullivan would have succeeded in his public offering if the NFL had allowed him to try it, we cannot say that, as a matter of law, the evidence was so overwhelming that no reasonable jury could find that the NFL's policy harmed Sullivan by preventing him from doing something he would otherwise have been able to do. We therefore reject the NFL's claim that it is entitled to a judgment in its favor on the basis that Sullivan failed to prove his injury was caused by the alleged antitrust violation.