Lockout questions (cont.)
U.S. Supreme Court review of interlocutory order
Assuming the losing party fails to obtain an en banc rehearing, the party could then pursue an interlocutory appeal before the U.S. Supreme Court. Its odds of getting heard by the Supreme Court, let alone winning an appeal, would be remote. The Supreme Court accepts only one or two percent of writs of certiorari. Also, the Supreme Court usually declines to review interlocutory orders unless, as it has previously stated, "[I]t is necessary to prevent extraordinary inconvenience and embarrassment in the conduct of the cause."
The Supreme Court has accepted writs for a variety of reasons, but there are two typical rationales: to resolve a split in authority among federal circuits or to address a novel question of law. It is possible that the Supreme Court could deem it appropriate to address the murky relationship between labor law and antitrust law in the context of a professional sports league lockout and a players' association decertification, especially considering the NBA and its players association are headed down the same path and likely in a different federal circuit, which could present a circuit split.
The Supreme Court could also find it important to assess the potential unfairness of a players' association using the court system to obtain relief under antitrust law and the league using an administrative agency (in this case, the National Labor Relations Board -- the NLRB) to do so under labor law, when only the players' complaint may get heard before the start of the 2011 season.
Consider that while both a federal district judge and federal court of appeals will have addressed the players' antitrust complaints by next month, the NLRB, which is investigating the NFL's unfair labor practices charge against the NFLPA and its decertification, could take until the fall or winter before it asks an administrative law judge to preside over a trial. Given that the key date in this labor dispute is the start of the 2011 season, the NFL's unfair labor practices charge may be rendered inconsequential by the litigation/administrative calendar. This is problematic for two reasons: 1) the administrative law process is supposed to be faster, not slower, than a traditional court hearing; and 2) the relative slowness of the NLRB process could give the players a huge tactical advantage should the Eighth Circuit rule in the players' favor.
6. How does Judge Doty's decision on TV broadcasting rights fit into the players' strategy?
Even if the players fail to convince the Eighth Circuit to bar the lockout, they still possess a major bargaining card: Judge Doty's decision that the league cannot rely on $4 billion in network television revenues in the event of a lost 2011 season. The players convinced Judge Doty that the guaranteed payments violated the recently expired collective bargaining agreement. On May 12, Judge Doty held a hearing to determine fines assessed to the league and how to allocate the $4 billion. Depending on Judge Doty's configuration of damages, owners could become substantially more motivated to play a 2011 season.
The NFL, however, will likely appeal Judge Doty's decision to the Eighth Circuit -- the same circuit that may be poised to rule in favor of the league and its lockout -- once Judge Doty issues a final, appealable order. Plus, even if Judge Doty's decision stands, owners, though undoubtedly harmed by the loss of some of the $4 billion, may not view the lost TV revenue as sufficient justification to capitulate on their more substantial demands. With their enormous wealth and varied sources of non-NFL income, owners seem less likely to "blink first" in the negotiations.
7. Will the players stay unified during the lockout?
If the players lose before the Eighth Circuit next month, the unified players' front may splinter into factions. Here's why:
The major advantage for players to decertify was that it empowered them to bring a very threatening antitrust case against the league. Decertification meant that the NFLPA no longer represented NFL players in negotiations with the NFL over employment conditions. As a result, the federal labor exemption, which immunizes collectively bargained rules from antitrust scrutiny, was taken off the table, thus exposing core parts of NFL football -- the draft, the salary cap, restricted free agency, etc. -- to antitrust review. The NFL is very vulnerable to losing an antitrust case, and a loss would command that the owners pay treble damages, likely in the billions of dollars.
The decertification strategy seemed successful on April 25, when Judge Nelson issued a preliminary injunction against the NFL lockout. The injunction meant the lockout was lifted, the league had to figure out new employment rules which would prove compatible with federal antitrust law and players were positioned to eventually win their antitrust litigation. The players, in other words, had all the leverage.
Everything changed on April 29, when the Eighth Circuit granted the temporary stay of the preliminary injunction. If the Eighth Circuit rules in favor of the league next month, and assuming neither the Eighth Circuit grants an en banc rehearing nor the Supreme Court favorably intervenes on behalf of players, the antitrust litigation path would essentially be punted to 2012 or beyond, when a trial on Brady v. NFL might happen. By that time, some current players will be too old to play; others might fail to stay in top condition and not be able to get it back.
Such a situation could cause the players to rethink the decertification strategy and possibly contemplate recertification.
One leading reason to remain decertified is that recertification would support the NFL's argument that decertification was a sham. The NFL has filed an unfair labor practices charge with the NLRB on such a ground; the NLRB will likely decide on the charge by early next year. If NFL players recertify soon after their antitrust strategy failed, it would imply that decertification was only pursued to bring an antitrust case. That would play right into the owners' wheelhouse for the NLRB charge.
But there are downsides to remaining decertified. Foremost, players have abandoned the collective bargaining framework and are essentially acting on their own or, if they so choose, as factions of players. There is already discussion of players abandoning the NFLPA/Brady litigation and pursuing their own strategies, with their own attorneys and advisors. Expect that discussion to only amplify should the Eighth Circuit rule against the players in June. The NFLPA cannot prevent any players from negotiating with teams or the league; recertification would be required to do so. The NFL could take advantage of that situation by reaching a deal with one group of players and those players then convincing others to recertify, but perhaps with different NFLPA leadership in place.
This situation is unique and could place the NFLPA in a difficult position. Normally when there are splinter groups of employees, the employer takes a major risk by speaking with them, because Section 9(a) of the National Labor Relations Act commands that the employer speak to the duly-elected union representatives. Here, however, the NFLPA maintains that it has disclaimed interest in representing NFL players. In fact, if the NFLPA now tries to deny a splinter group a seat at the table, the NFL could argue this supports its position that the NFLPA's disclaimer was a sham.
Then again, the NFL may be wary of meeting with the splinter group. If the league does so, it could signal that the NFL acknowledges that the NFLPA has disclaimed interest in representing NFL players. Such a signal would undercut the league's argument to the NLRB that the decertification was a sham and that the NFLPA only decertified for purposes of bringing an antitrust case.
In short, if the players lose before the Eighth Circuit next month, the players and the league will have to think long and hard, not only about what to offer in a negotiation, but with whom to negotiate.
8. Are there third parties who could complicate the NFL's choice to cancel a 2011 season?
Often lost in the discussion of whether the owners or players will agree on a deal to play the 2011 season is the public's stake in the matter. While the public does not enjoy legal standing in a general sense to bring a lawsuit, certain individuals and communities might. So, too, might banks and lenders.
For starters, Ken Lanci, a holder of 10 Personal Seat Licenses to Cleveland Browns games, has filed a lawsuit demanding that games be played in the fall. The lawsuit faces a number of obstacles, including that his contract with the Browns reportedly includes language that bars such a claim and that no games have been missed (yet). Still, if these types of lawsuits are filed across the country against NFL teams, owners could find themselves dealing with a good deal of unwanted and aggravating litigation.
Communities that publicly financed stadiums
Communities that have spent hundreds of millions of tax dollars to help finance the construction of privately owned NFL stadiums may be another legally entitled stakeholder in a 2011 season. These communities committed tax dollars to ensure that their favorite teams would not relocate. Tax dollars were also provided on the expectation that a new stadium would generate jobs and economic activity in the surrounding area. Without football games this fall, much of that activity and many of those jobs -- be they restaurant workers, street vendors, parking attendants and many others -- could be lost. Making matters worse, many of these communities have laid off teachers and others to avoid budget shortfalls or the imposition of tax increases.
A community may thus argue that teams have violated the terms of their public assistance -- which was premised on the playing of games -- by not playing games. Like lawsuits brought by aggrieved ticket holders, these types of lawsuits would probably be barred by a lack of guarantee that games be played as a condition of the assistance, but they are conceivable.
Private Lending Institutions
A lost 2011 season would cause team owners to lose substantial revenue, be it revenue evenly shared among teams (such as national TV and radio), revenue partially shared/partially retained (ticket sales) or revenue retained by teams (concessions, parking and local media). While owners would still generate some revenue during a lockout, such as through sponsorships, and would avoid paying players' salaries, Judge Doty's decision means they will not be able to rely on $4 billion in national TV revenue. The private institutions that lent these owners money will still demand payments. Should any owner be unable to satisfy those demands because of a lost season, the private institutions could take action against the owner. Such action is unlikely to compel the playing of games, but would motivate the owner to encourage his/her fellow owners to play a 2011 season.
Michael McCann is a sports law professor and Sports Law Institute director at Vermont Law School and the distinguished visiting Hall of Fame Professor of Law at Mississippi College School of Law. He also teaches a sports law and analytics reading group at Yale Law School. Follow him on Twitter.