Antitrust Law Daily Wrap Up, ANTITRUST—D. Minn.: NFL players association denied reopening of antitrust settlement for second time, (Sep 9, 2015)

By Linda O’Brien, J.D., LL.M.

The National Football League Players Association (NFLPA) failed to show that the National Football League (NFL) engaged in fraud, misrepresentation, or other misconduct to coerce the association into dismissing unknown claims in order to reopen a settlement that resolved allegations of collusion among football team owners to secretly cap players’ salaries, the federal district court in Minneapolis has ruled (White v. National Football League,September 8, 2015, Davis, M.).

Background. The NFLPA is a labor union that represents players in the NFL. In 1992, Reggie White and four other football players filed a class action suit against the NFL, alleging that certain practices—such as free agency, the college draft, and use of standard form contracts—violated antitrust laws. The suit was resolved with the signing of an extensive collective bargaining agreement, the Stipulation and Settlement Agreement (SSA). Set to expire in 1996, the SSA was extended in 1996, 2000, 2002, and 2006. In 2008, the NFL decided not to extend the SSA and as a result, during the 2010 season, there was no limit (salary cap) on the amount of money that teams could pay their players.

In March 2011, the SSA expired and the NFL ceased league operations until a new labor agreement could be signed. The NFLPA filed suit, alleging that the NFL teams colluded to suppress competition for free agents during the 2010 season. In August 2011, the NFL and NFLPA came to terms on a new collective bargaining agreement. As part of the agreement, the lawsuit was settled by signing a dismissal. In 2012, the NFLPA petitioned the court pursuant to Federal Rule of Civil Procedure 60(b) to reopen the suit, citing new evidence of public statements by NFL team owners about alleged collusion of a secret salary cap in 2010. The court denied the petition and the association appealed.

In reversing and remanding the district court decision, the Eighth Circuit concluded that the district court had jurisdiction to consider the motion on the merits. Before the court was the NFLPA’s motion to vacate the stipulation of dismissal (SOD) purporting to release its claims against the NFL.

NFL actions. The court determined that the NFLPA failed to demonstrate that the NFL engaged in fraud or other misconduct to force the association to sign the SOD. The NFLPA’s argument that the NFL’s concealment of the 2010 salary cap and last minute demands were coercive and not a legitimate litigation tactic was rejected. The court noted that a lockout is a legitimate tactic under labor laws for an employer to bring economic pressure to bear in support of its bargaining position. The NFLPA had sophisticated counsel with experience negotiating collective bargaining agreements in the sports industry. There was no deadline for a deal. Rather convenience, public relations, and a preference not to prolong the lockout that stood in the way of the NFLPA to continue to negotiate. Thus, declarations that the players had no real choice but to acquiesce to NFL demands due to pressure to avoid canceling preseason games and reports that a deal had been reached were unpersuasive.

Furthermore, hard bargaining does not invalidate a settlement. According to the court, there is no case law to support the argument that it is improper for a party to ask for a release of unknown claims as a condition of settlement. The NFLPA made the decision to agree to such a release in order to achieve an end to the lockout at that time. The evidence showed that the association at least suspected that there was a 2010 salary cap but made a calculated decision to release those claims.

The NFLPA’s assertion that it was misled by the NFL regarding the legal effect of the settlement also was rejected. The court noted that the association understood that dismissal with prejudice of unknown claims meant that the NFLPA could not later seek to bring claims of what it did not know at the time of the settlement, including claims related to conduct that alleged violated the expired SSA. It was irrelevant that the NFLPA now claimed that it was unaware at the time of the settlement that it might have a claim for collusion.

Finally, there was no misconduct based on the failure of the NFL to obtain court approval of the SOD. Evidence submitted by the NFLPA demonstrated only that the NFL wanted to end the litigation quickly, the court concluded.

The case is No. 4:92-cv-00906-MJD.

Attorneys: David A. Barrett (Latham & Watkins), Jeffrey L. Kessler (Winston & Strawn LLP), James W. Quinn (Gotshal & Manges LLP), Barbara P. Berens (Berens & Miller, P.A.), and Mark A. Jacobson (Lindquist & Vennum, LLP) for Reggie White and National Football Players Players Assn. Daniel J. Connolly (Faegre Baker Daniels LLP) and Benjamin C. Block (Covington & Burling LLP) for the National Football League.

Companies: National Football League Players Assn.; National Football League

Cases: Antitrust MinnesotaNews