Antitrust Law Daily Wrap Up, ANTITRUST—5th Cir.: Conspiracy to exclude non-wood baseball bats from college, high school sports not adequately alleged, (May 7, 2014)

By Jeffrey May, J.D.

A baseball bat manufacturer failed to adequately allege that the implementation of a standard regulating the use of aluminum and composite bats in high school and collegiate baseball games was the result of a conspiracy between the National Collegiate Athletic Association (NCAA) and the National Federation of State High School Associations (NFHS) to restrain trade in the market for non-wood baseball bats, the U.S. Court of Appeals in New Orleans has ruled. Dismissal of the manufacturer's antitrust claims was affirmed (Marucci Sports, L.L.C. v. National Collegiate Athletic Assn., May 6, 2014, Stewart, C.).

The Bat-Ball Coefficient of Restitution (BBCOR) standard measures how fast a baseball comes off the bat on contact. If the bat is too “hot,” then it will not meet the certification standard, which is intended to enhance player safety and reduce technology-driven homeruns and other big hits.

Marucci Sports, L.L.C., a fairly new baseball bat manufacturer, objected to the NCAA's decision to decertify some of its aluminum bat models under the standard. Marucci filed an antitrust action, alleging that the BBCOR standard was designed to exclude new entrants like Marucci in order to protect the NCAA’s interest in receiving sponsorship money from larger bat manufacturers, such as Rawlings, Easton, DeMarini, and Louisville Slugger.

It was clear that the NCAA and NFHS worked in concert with other parties to establish and enforce the BBCOR Standard, according to the court. However, Marucci failed to allege any specific facts demonstrating an intention on the part of the NCAA, NFHS, and the larger bat manufacturers to engage in a conspiracy. The allegations did not make it plausible that the NCAA and NFHS adopted a conscious commitment to a common scheme designed to achieve an unlawful objective.

Injury to competition. Marucci also failed to demonstrate that the BBCOR standard injured competition in the market for non-wood baseball bats. The only plausible injury Marucci asserted was its own injury. It contended that the NCAA and NFHS’s enforcement of the BBCOR standard harmed it and other unnamed “market entrants” by favoring large manufacturing companies. However, these “new market entrants” were not identified, and Marucci did not demonstrate when and how the BBCOR standard had been arbitrarily and unfairly applied to their products.

The decertification of four of Marucci’s bats likely had a very minimal, if any, effect on the market, it was noted. “Marucci’s predominate focus on its own injury was misguided because antitrust laws are designed to protect competition, not competitors,” the court explained.

The court concluded that the challenged regulation was “a rule defining the conditions of the contest that is entitled to a procompetitive presumption.” Thus, the court refused to accept as true Marucci’s conclusory assertion that the BBCOR standard was created and implemented to protect the major baseball bat manufacturers.

Denial of motion to amend. The appellate court refused to overturn the lower court's decision to deny, without explanation, Marucci's motion to amend its complaint for a third time. The denial was not an abuse of discretion because allowing an amendment would have been futile. Even though the district court did not follow the preferred course of explaining its reasons for denying the motion to amend, the record reflected ample and obvious grounds for the denial.

The Third Amended Complaint provided insufficient factual information to demonstrate that there was a meeting of the minds between the NCAA, NFHS, and other alleged co-conspirators, the court noted. Rather than demonstrating that the BBCOR standard injured the relevant market, the Third Amended Complaint simply provided more specific details about how the BBCOR Standard was enforced to the detriment of small manufacturers like Marucci.

The case is No. 13-30568.

Attorneys: Kevin Oliver Ainsworth (Jones Walker LLP) for Marucci Sports, L.L.C. Philip D. Bartz (Bryan Cave, LLP) for National Collegiate Athletic Assn. Shelton Dennis Blunt (Phelps Dunbar, LLP) for National Federation of State High School Associations.

Companies: Marucci Sports, L.L.C.; National Collegiate Athletic Assn.; National Federation of State High School Associations

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