445 F.Supp.3d 587
N.D. Cal.2020Background
- Oakland sued the Raiders, the NFL, and the other NFL clubs after the Raiders sought and received NFL approval to relocate from Oakland to Las Vegas (owners approved relocation in March 2017 with a $378 million relocation fee).
- Claims in the First Amended Complaint (FAC): Sherman Act §1 antitrust claim (challenging relocation approval/fee and NFL membership limits), breach of contract (NFL relocation policy), and unjust enrichment/quantum meruit under California law.
- The Court had earlier dismissed Oakland’s original complaint with leave to amend for failure to plead antitrust injury and other defects; Oakland filed the FAC but did not cure key deficiencies.
- Major contested issues: whether Oakland alleged antitrust injury and standing (directness and type of injury), whether it pleaded a valid relevant market, and whether its alleged damages are compensable under the Clayton Act.
- The Court granted defendants’ Rule 12(b)(6) motion: dismissed the Sherman Act claim with prejudice (futility of further amendment) and declined supplemental jurisdiction over state-law claims, dismissing them without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether relocation fee/joint approval produced antitrust injury | Fee and owners’ joint approval enabled supra-competitive transfers to clubs and harmed Oakland as a host city | The fee makes relocation less likely at the application stage and, once paid, facilitates approval—these effects do not produce antitrust injury to incumbent cities | Dismissed: fee/approval theory fails—harm does not ‘flow from’ anticompetitive conduct and is not the type antitrust laws redress; claim dismissed with prejudice |
| Whether the NFL’s 32-team structure and alleged supply restriction created antitrust injury and a cognizable market | Oakland: NFL teams are a unique product; cities are the relevant market (hosting NFL teams); limited teams create excess demand and supra-competitive bargaining power | Defendants: Oakland fails to plead what would have occurred absent the limit (who would form teams, locate where, or be buyers); market definition is consumer-based and legally deficient | Dismissed: injury too speculative (no plausible allegation that Oakland would have retained or gained a team absent the cap); failure to cure defects makes further amendment futile |
| Whether Oakland — an indirect landlord/municipal actor — suffered direct, compensable injury under Clayton Act | Oakland: it has proprietary economic interests (Coliseum value, lost municipal revenues, bonds, ticket-related funds) and prior course of dealing with NFL | Defendants: injuries are indirect (leases and rights held/assigned via OACCA), sovereign-type or speculative (lost tax revenue, municipal investment), and precluded by precedent (landlord/shareholder rules) | Dismissed: alleged damages are indirect or sovereign/noncompensable under Clayton Act (and R.C. Dick / Rohnert Park principles apply) |
| Whether to retain supplemental jurisdiction over state-law claims (breach of NFL relocation policy; unjust enrichment) | Oakland seeks to pursue these claims in federal court alongside federal claim | Defendants ask dismissal of federal claims and, if so, the Court to dismiss state claims | Court declined to exercise supplemental jurisdiction after dismissing federal claim; state claims dismissed without prejudice |
Key Cases Cited
- Texaco Inc. v. Dagher, 547 U.S. 1 (rule-of-reason presumption governs most restraints)
- Am. Needle, Inc. v. Nat’l Football League, 560 U.S. 183 (league restraints require rule-of-reason analysis when product depends on coordinated conduct)
- L.A. Mem’l Coliseum Comm’n v. Nat’l Football League, 726 F.2d 1381 (9th Cir. 1984) (league structure affects per se analysis; restraints on relocation have competitive effects)
- Somers v. Apple, Inc., 729 F.3d 953 (9th Cir. 2013) (antitrust injury is a substantive pleading requirement)
- Brunswick Corp. v. Pueblo Bowl‑O‑Mat, Inc., 429 U.S. 477 (antitrust injury must flow from the unlawful conduct)
- Saint Alphonsus Med. Ctr.‑Nampa Inc. v. St. Luke’s Health Sys., 778 F.3d 775 (9th Cir. 2015) (SSNIP test and defining relevant product/geographic market)
- Newcal Indus., Inc. v. Ikon Office Sol., 513 F.3d 1038 (9th Cir. 2008) (markets defined by consumers are generally impermissible)
- R.C. Dick Geothermal Corp. v. Thermogenics, Inc., 890 F.2d 139 (9th Cir. 1989) (landlords/receivers may lack direct antitrust standing for reduced receipts)
- City of Rohnert Park v. Harris, 601 F.2d 1040 (9th Cir. 1979) (municipal recovery for lost investment or broad sovereign economic injury is not cognizable under Clayton Act)
- Illinois Brick Co. v. Illinois, 431 U.S. 720 (limits on antitrust damage standing and concerns about duplicative recovery)
- Montreal Trading Ltd. v. Amax Inc., 661 F.2d 864 (10th Cir. 1981) (nonpurchaser plaintiffs priced out of market often lack standing due to speculative/difficult damages)
- In re Nat’l Football League’s Sunday Ticket Antitrust Litig., 933 F.3d 1136 (9th Cir. 2019) (rule-of-reason analysis and evidentiary posture for market/output restrictions)
- Hawaii v. Standard Oil Co. of Cal., 405 U.S. 251 (states may sue in proprietary capacity but not for sovereign economic injuries)